Miller v. Walmart Inc.

Background

Miller filed the case in the Superior Court of Contra Costa County against Walmart Associates, Inc., Walmart, Inc., Walmart employee Emmy Rodriguez, and unnamed defendants. She alleged 23 causes of action, including harassment under California’s Fair Employment and Housing Act and intentional infliction of emotional distress. The allegations concerned pregnancy-related treatment, disability, workplace harassment, retaliation, leave issues, termination and reinstatement, denied promotions, and other workplace conduct.

Walmart removed the case to federal court based on diversity jurisdiction, which generally requires the opposing parties to be citizens of different states. Walmart argued that Rodriguez was a “sham defendant”—a defendant improperly included because Miller could not state a valid claim against her—and that Rodriguez’s presence therefore should not defeat diversity jurisdiction. Miller moved to remand, meaning to send the case back to state court.

Court’s analysis

The court explained that defendants bear the burden of showing that removal is proper and that doubts generally favor remand. For fraudulent joinder, Walmart had to show by clear and convincing evidence that it was obvious under settled California law that Miller could not state any claim against Rodriguez. If there was a possibility that a California court would find a claim stated against Rodriguez, remand was required. The court also had to consider whether Miller could cure pleading problems by amending her complaint.

Only two of Miller’s claims, as pleaded, implicated Rodriguez: pregnancy-disability harassment under the Fair Employment and Housing Act and intentional infliction of emotional distress. The court found that the complaint’s specific allegations against Rodriguez largely concerned work-schedule changes and did not presently show harassment severe or pervasive enough to alter Miller’s working conditions. It also found that the complaint did not clearly identify the conduct supporting the emotional-distress claim or show the extreme and outrageous conduct required for that claim.

However, the court concluded that amendment might cure these problems. The complaint included broader references to inappropriate comments about rest breaks, stalking, ongoing harassment, retaliation, and repeated efforts to get rid of Miller. Those allegations created a possibility that Miller could plead pregnancy-related harassment or sufficiently outrageous conduct with additional details. The court rejected Walmart’s argument that Miller’s verified complaint prevented amendment, reasoning that adding details would not necessarily omit or contradict facts already pleaded.

Disposition

The court held that Miller’s present allegations might not amount to actionable harassment or intentional infliction of emotional distress, but Walmart had not proved that Miller could not possibly state claims against Rodriguez. Because fraudulent joinder was not established, the court granted Miller’s motion to remand. The order did not decide whether Miller’s underlying state-law claims would ultimately succeed.