Marcellus Clark v. Walgreens

Background

Marcellus Clark brought an employment discrimination lawsuit against Namarata Kapadia, Walgreens Co., Walgreen Co., Walgreen National Corporation, Walgreen Pharmacy, and Walgreens Boots Alliance, Inc. in the Superior Court of California for San Mateo County. Clark alleged claims under the California Fair Employment and Housing Act, including discrimination, hostile-work-environment harassment, retaliation, and failure to prevent discrimination, harassment, or retaliation. He also alleged wrongful termination in violation of public policy, breach of an implied-in-fact employment contract, negligent hiring, supervision, and retention, intentional infliction of emotional distress, and retaliation under California Labor Code section 1102.5.

The complaint alleged that Clark, a 63-year-old African American man, worked for Walgreens beginning in 1999 and was terminated in February 2020. His only claim against Kapadia was the FEHA hostile-work-environment claim.

Defendants removed the case to federal court based on diversity jurisdiction. Clark and Kapadia were both identified as California citizens, so defendants argued that Kapadia had been fraudulently joined to prevent federal jurisdiction. Defendants later moved to dismiss Clark’s first amended complaint, and Clark moved to remand the case to state court.

Remand analysis

A federal court may hear a case based on diversity jurisdiction when the amount in controversy exceeds $75,000 and the parties are citizens of different states. A defendant may still remove a case containing a non-diverse defendant by proving fraudulent joinder. Fraudulent joinder means either that jurisdictional facts were falsely pleaded or that the plaintiff cannot establish any viable claim against the non-diverse defendant in state court. The removing defendant bears a heavy burden and must prove fraudulent joinder by clear and convincing evidence.

The court stated that Clark’s allegations did not currently show that Kapadia’s conduct was severe or pervasive or that it contributed to a hostile work environment. But the court also concluded that defendants had not shown by clear and convincing evidence that Clark could not possibly prevail on a harassment claim against Kapadia if allowed to amend his complaint.

The court rejected defendants’ reliance on declarations denying that Kapadia made discriminatory comments or engaged in conduct related to Clark’s protected characteristics. A denial, even a sworn denial, did not prove that the allegations were false. The court also considered defendants’ argument that Kapadia’s attendance at the termination meeting involved protected management activity. It explained that some managerial actions can also communicate a hostile message and that defendants, rather than Clark, had to show that amendment could not possibly cure the alleged deficiency. Clark stated that Kapadia was directly involved in, and ratified, his termination, and the court found that he could possibly assert a claim against her if he alleged those facts along with other supporting facts.

Ruling

The court held that defendants failed to establish federal subject-matter jurisdiction. Judge Phyllis J. Hamilton therefore granted Clark’s motion to remand. The clerk was instructed to remand the case to San Mateo County Superior Court as case number 22-CIV-00385.

Because the federal court lacked subject-matter jurisdiction, it did not reach defendants’ motion to dismiss. The court terminated that motion rather than deciding it on the merits.