Vazquez v. DataRobot, Inc.

Background

Raquel Vazquez sued DataRobot, Inc., Dan Wright, and unidentified defendants. She alleged discrimination based on gender, ethnicity, veteran status, and post-traumatic stress disorder disability; wrongful termination; retaliation; fraud; intentional and negligent misrepresentation; and intentional infliction of emotional distress. She alleged that statements about DataRobot’s ability to quickly complete an initial public offering induced her to join the company. She also alleged that she was later terminated after reporting accounting problems and resisting efforts to falsify financial records.

Vazquez filed the case in state court. DataRobot removed it to federal court, asserting diversity jurisdiction. Vazquez argued that DataRobot’s principal place of business was in California and that Wright, a California citizen like Vazquez, prevented complete diversity. DataRobot argued that its principal place of business was Boston and that Wright was a sham defendant who had been fraudulently joined.

Motion to Remand

The court denied Vazquez’s motion to remand. It found that DataRobot was incorporated in Delaware and that its principal place of business was Boston. The court applied the federal diversity-jurisdiction rule identifying a corporation’s principal place of business as its nerve center—the place where its officers direct, control, and coordinate the company’s activities.

The court found that the evidence about DataRobot’s executive leadership was roughly divided between Boston and San Francisco. It concluded that DataRobot’s longstanding Boston headquarters broke that tie. The company held the Boston office out as its headquarters to customers, employees, government agencies, and the public, and the record did not show that the headquarters was being used to manipulate jurisdiction. The court therefore found diversity between Vazquez and DataRobot.

The court also found that Wright had been fraudulently joined. Under that doctrine, a nondiverse defendant does not defeat removal when the plaintiff cannot state a viable claim against that defendant under settled state-law rules. The court held that Wright’s alleged statements about DataRobot’s future initial public offering were forecasts, opinions, or statements of goals rather than actionable statements of existing fact. It also held that Vazquez could not establish the required detrimental reliance because she learned about the company’s business practices after starting work and continued working there until she was laid off. The court further held that Wright owed no duty to disclose information before Vazquez joined DataRobot, defeating the concealment claim.

Motions to Dismiss

Wright moved to dismiss the intentional misrepresentation, negligent misrepresentation, and concealment claims against him. The court granted Wright’s motion to dismiss with prejudice. Vazquez had conceded dismissal of the intentional-infliction-of-emotional-distress claim against Wright with prejudice.

DataRobot moved to dismiss the intentional misrepresentation, negligent misrepresentation, concealment, and intentional-infliction-of-emotional-distress claims. The court granted DataRobot’s motion to dismiss with leave to amend the misrepresentation and emotional-distress claims. For the misrepresentation claims, the court said Vazquez could amend to allege different misrepresentations and must identify who made them and when. The court deferred deciding whether the Worker’s Compensation Act’s exclusive-remedy rule barred the emotional-distress claim until after amendment.

The court agreed that punitive damages could not be based on the fraud claims, but it did not dismiss punitive damages to the extent they were based on the alleged discrimination claims under the California Fair Employment and Housing Act. Vazquez had also conceded dismissal of the promissory-fraud claim with prejudice against both defendants and dismissal of the emotional-distress claim against DataRobot without prejudice.

Disposition

The court denied the motion to remand, granted Wright’s motion to dismiss with prejudice, and granted DataRobot’s motion to dismiss with leave for Vazquez to amend the misrepresentation and emotional-distress claims. Any amended complaint had to be filed within four weeks and include a blackline comparison with the operative complaint. Judge Laurel Beeler signed the order.