Schultz v. Doe 1

Background

Dawn Schultz, David Jenks, and Danai Moonyham filed this action in Santa Clara County Superior Court. They alleged that a church leader, Kenneth Jenks, sexually abused them when they were children and that the defendant church entities failed to take reasonable steps to protect them. The complaint asserted negligence and intentional infliction of emotional distress.

The complaint named the church-related entities as Doe defendants under California Code of Civil Procedure § 340.1. That statute extends the filing deadline for certain childhood-sexual-abuse claims and, in some circumstances, requires defendants to be identified as Does until corroborating facts are shown. The complaint identified Doe 1 and Doe 2 as Utah corporations and Doe 3 as a California corporation.

Doe 1 removed the action to federal court based on diversity jurisdiction. Diversity jurisdiction generally requires every plaintiff to be a citizen of a different state from every defendant. The notice of removal acknowledged that David Jenks was domiciled in California and that Doe 3 was incorporated in California, but argued that the citizenship of Doe defendants should be disregarded. Doe 1 also argued that Doe 3 was a nominal or sham defendant whose citizenship should not count.

Analysis

The court explained that Doe 1 had the burden of showing that removal was proper and that doubts about removal jurisdiction are resolved in favor of returning the case to state court.

The court declined to make a final determination about whether the removal statute required it to disregard the citizenship of the Doe defendants. It concluded that the result was the same either way. If the citizenship of the Doe defendants were disregarded, the court stated, diversity jurisdiction would not exist under the reasoning of related decisions. If their citizenship were considered, diversity jurisdiction also would not exist because Doe 3 was alleged to be a California corporation and David Jenks was alleged to be a California citizen.

The court separately rejected Doe 1’s argument that Doe 3 was fraudulently joined. Fraudulent joinder is a rule that can allow a federal court to disregard a nondiverse defendant when the plaintiff plainly has no possible claim against that defendant. The removing defendant carries a heavy burden to show that the defendant cannot be liable under any theory.

The evidence showed that plaintiffs intended to sue the Corporation of the President of the San Jose Stake, Church of Jesus Christ of Latter-Day Saints, as Doe 3. Doe 1 submitted evidence describing that corporation’s current role as holding property and asserting that it had no connection to the Milpitas Ward. The court found that the evidence did not address the corporation’s role when it was formed or during the decades when the alleged abuse occurred. Because the corporation held property, including property related to a youth camp, the court could not conclude that it would be impossible for plaintiffs to establish liability against Doe 3.

Ruling and effect

The court found that Doe 1 failed to establish diversity jurisdiction. It therefore granted the plaintiffs’ motion to remand, ordered the Clerk to remand the case to Santa Clara County Superior Court, and closed the federal file. The order addressed federal jurisdiction and the proper court; it did not decide whether the plaintiffs ultimately proved their negligence or intentional-infliction-of-emotional-distress claims. Judge Beth Labson Freeman signed the order.