Geppert v. The Church of Jesus Christ of Latter-day Saints, Inc.

Background

Rohno Geppert originally filed the action in Santa Clara County Superior Court against ten unnamed defendants under California Code of Civil Procedure section 340.1(l). He served three church-related entities: The Church of Jesus Christ of Latter-Day Saints, Inc. (the Church), the Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints, Inc. (CPB), and the Corporation of the President of the San Jose Stake of the Church of Jesus Christ of Latter-Day Saints (CPSJS).

The Church and CPB were identified as Utah residents, while CPSJS was identified as a California resident. CPB removed the case to federal court based on diversity jurisdiction. In an earlier round of this case, another judge remanded the action because unnamed defendants do not create diversity jurisdiction.

After Geppert amended the complaint to name defendants for Does 1 through 3, the Church removed the case again, again claiming diversity jurisdiction. The amended complaint asserted negligence and intentional infliction of emotional distress claims against all three named defendants. The Church argued that CPSJS was a sham defendant with no connection to the allegations and that its California citizenship should therefore be disregarded.

Legal standard

A federal court may hear a state-court case based on diversity jurisdiction only when the parties are completely diverse and the amount in controversy exceeds $75,000. Complete diversity means that every plaintiff has different citizenship from every defendant. The party removing the case bears the burden of establishing federal jurisdiction, and doubts are resolved against removal.

A court may disregard the citizenship of a nondiverse defendant if that defendant was fraudulently joined. The removing defendant must meet a heavy burden by showing either actual fraud in the pleading or extraordinarily strong evidence that the plaintiff could not possibly prevail against the nondiverse defendant.

Court’s analysis

The court held that the Church did not meet that burden. First, the court found that the Church had not shown actual fraud. Geppert alleged that CPSJS jointly operated the Milpitas Ward with the Church and CPB. The court noted that the Milpitas Ward was a unit of the San Jose Stake and that CPSJS’s corporate purposes included holding property for the Stake and administering and managing its affairs. The court also found it unclear whether CPSJS and the San Jose Stake were separate entities or whether Geppert intentionally added CPSJS as a sham defendant.

Second, the court held that the Church had not shown that Geppert had no possibility of prevailing against CPSJS. Geppert alleged that CPSJS owed him a duty to prevent Kenneth Jenks from using the tasks, premises, and authority associated with his position to abuse him. Under California law, negligence requires a duty, breach, causation, and injury.

The court found the Church’s evidence insufficient to eliminate any possible negligence claim. A declaration stated that CPSJS did not own certain property and did not employ Jenks, but the declaration did not address whether CPSJS owned the swimming pool involved, organized the youth swimming excursion, or otherwise authorized Jenks to act. It also did not address Geppert’s allegations that Jenks volunteered or otherwise performed services for CPSJS. The court concluded that, if Jenks used CPSJS’s property or authority to groom and sexually abuse Geppert, CPSJS could possibly have caused harm for which it could be liable.

Disposition

Judge Jeffrey White concluded that the Church had not established fraudulent joinder of CPSJS. Because CPSJS’s citizenship could not be disregarded, complete diversity did not exist. The court GRANTED Geppert’s motion to remand, ordered the matter remanded to state court, and directed the clerk to close the federal court’s file. The order addressed federal jurisdiction and remand; it did not decide whether Geppert would ultimately prevail on his negligence or intentional-infliction-of-emotional-distress claims.