Lam Sing v. Sunrise Senior Management, Inc.

Background

Lana Kei Lam Sing sued Sunrise Senior Management, Inc., T.F., and Does 1–20 in San Mateo County Superior Court. The complaint asserted fourteen claims based on California statutes and common-law tort theories. Lam Sing alleged that T.F., a resident of Sunrise’s San Mateo facility, sexually assaulted her. She also alleged that Sunrise failed to address the situation and wrongfully terminated her after she took time off because of the alleged assault.

Sunrise was served on February 1, 2023, and removed the case to the Northern District of California on February 17, 2023. Sunrise relied on diversity jurisdiction under 28 U.S.C. § 1332. Lam Sing later served T.F. with the state-court summons. Lam Sing and Sunrise also stipulated to binding arbitration and requested that the federal court retain jurisdiction to confirm or enforce any arbitration award unless the case was remanded.

Analysis

The court explained that diversity jurisdiction generally requires complete diversity: every plaintiff must be a citizen of a different state from every defendant, and the amount in controversy must exceed $75,000. The court stated that the case did not arise under federal law and that the parties identified no other basis for federal jurisdiction.

Lam Sing was a California resident, and T.F. was also a California resident. Because T.F. remained a defendant and had not been severed or found to be an improper party, complete diversity was absent from the beginning of the state-court action. The court therefore held that removal based on diversity jurisdiction was improper.

The court also rejected two possible ways Sunrise might have tried to support removal. First, the claims against Sunrise and T.F. were not separate and independent because all of them arose from the same alleged incidents. Second, Sunrise did not argue, and the record did not show, that T.F. had been fraudulently joined. Fraudulent joinder is an exception that can sometimes prevent a nondiverse defendant from defeating diversity, but the court found no basis for applying it here.

The court further rejected Sunrise’s reliance on “snap removal,” which refers to removing a case before a forum-state defendant has been served. The court explained that the forum-defendant rule applies only when diversity jurisdiction already exists. It does not create diversity jurisdiction when a resident defendant’s citizenship otherwise prevents complete diversity.

Disposition

The court granted Lam Sing’s motion to remand under 28 U.S.C. § 1447(c). It denied as moot Lam Sing and Sunrise’s stipulation asking the federal court to retain jurisdiction to confirm or enforce a possible arbitration award. The opinion did not decide the merits of Lam Sing’s underlying assault, employment, or other claims.