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Washington v. Skechers USA, Inc.

United States District Court, N.D. Georgia, Atlanta Division

July 24, 2019

La'Ketra Washington, Plaintiff,
Skechers USA, Inc. and Daniel Siegel, Defendants.

          OPINION & ORDER


         Plaintiff La'Ketra Washington moves to remand this action to state court. (Dkt. 12.) Defendants Skechers USA, Inc. and Daniel Siegel oppose her motion. (Dkt. 16.) Because the Court lacks subject matter jurisdiction, the Court grants Plaintiff's motion.

         I. Background

         Plaintiff managed a Skechers store in Atlanta, Georgia. (Dkt. 1-1 ¶ 1.) Defendant Siegel was her supervisor. (Id. ¶ 2.) After an internal investigation, Defendant Skechers fired her for alleged theft of sales commissions. (Id. ¶ 24.) It also reported her to local police, leading to her arrest and prosecution. (Id. ¶¶ 33-34.) Plaintiff claims that she was “prosecuted based on the false accusations of Skechers and Seigel.” (Id. ¶ 34.) Plaintiff also alleges that Defendant Siegel (and others) told people outside the company that Skechers fired her for theft and law enforcement was prosecuting her. (Id. ¶ 32.) Plaintiff claims that Siegel testified against her at trial and a jury acquitted her of all charges. (Id. ¶ 34.)

         Plaintiff sued Skechers for libel and slander in the State Court of DeKalb County, Georgia. See Complaint, Washington v. Skechers USA, Inc., No. 18A68441 (State Court of DeKalb Cty. Ga. Mar. 12, 2018) (No. 1). Skechers removed that action to federal court based on diversity of citizenship. Notice of Removal with Complaint, Washington v. Skechers USA, Inc., No. 1:18-cv-01561 (N.D.Ga. Apr. 11, 2018), ECF No. 1 (“Washington I”). Plaintiff voluntarily dismissed the action five days later. Washington I, ECF No. 5.

         In July 2018, Plaintiff filed this case, again in state court. (Dkt. 1-1.) This time, Plaintiff named both Skechers and Siegel as defendants. She made no allegations about her or Defendant Siegel's citizenship. Defendants, however, assert that both Plaintiff and Defendant Siegel are citizens of Georgia. (Dkt. 1 ¶¶ 4-5.) Skechers, however, is a Delaware corporation with its principal place of business in California. (Id. ¶ 6.) In August 2018, Defendants removed the action to federal court, asserting that Plaintiff fraudulently joined Defendant Siegel in this action to destroy diversity of citizenship. (Id. ¶¶ 13-16.)

         In August 2018, Defendants moved to dismiss Plaintiff's complaint for failure to state a claim. (Dkt. 7.) Plaintiff then moved to remand this action to state court and also filed an amended complaint. (Dkts. 12, 13.) The Court stayed Defendants' time for responding to the amended complaint pending its ruling on Plaintiff's motion to remand. (Dkt. 11 at 1-2.)

         II. Legal Standard

         Removal from state to federal court is proper if the federal court has original jurisdiction over the action. See 28 U.S.C. § 1441. Aside from cases arising out of the Constitution or laws of the United States, district courts have diversity jurisdiction over civil actions between citizens of different states with an amount in controversy exceeding $75, 000. See 28 U.S.C. § 1332(a)(1). Diversity jurisdiction requires complete diversity, meaning “the citizenship of every plaintiff must be diverse from the citizenship of every defendant.” Legg v. Wyeth, 428 F.3d 1317, 1320 n.2 (11th Cir. 2005). When a party removes a case on diversity jurisdiction, a federal court must remand the action if there is not complete diversity between the parties. See Stillwell v. Allstate Ins. Co., 663 F.3d 1329, 1332 (11th Cir. 2011) (citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267 (1806)).

         A district court should look at the case at the time of removal to determine whether it has subject matter jurisdiction. See Pintando v. Miami-Dade Hous. Agency, 501 F.3d 1241, 1244 n.2 (11th Cir. 2007); see also Leonard v. Enter. Rent A Car, 279 F.3d 967, 972 (11th Cir. 2002). As a result, this Court assesses jurisdiction at the time of and based on the original complaint, not the amended complaint.

         III. Analysis

         Plaintiff claims this Court lacks jurisdiction because both she and Defendant Siegel reside in Georgia. (Dkt. 12 at 1.) Defendants counter that Plaintiff fraudulently joined Defendant Siegel purely to defeat diversity jurisdiction. (Dkt. 16 at 1.)

         Under Eleventh Circuit precedent, the removing defendant has the “heavy” burden of establishing fraudulent joinder by clear and convincing evidence. See Stillwell, 663 F.3d at 1332. Fraudulent joinder generally arises when “there is no possibility that the plaintiff can prove a cause of action against the resident (non-diverse) defendant” or “there is outright fraud in the plaintiff's pleading of jurisdictional facts.” Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998). Defendants do not argue the second scenario but concentrate on the first - arguing Plaintiff's allegation against Defendant Siegel cannot state a claim, making his joinder fraudulent.[1]

         In considering whether to remand a case, the district court “must evaluate the factual allegations in the light most favorable to the plaintiff and must resolve any uncertainties about state substantive law in favor of the plaintiff.” Stillwell, 663 F.3d at 1333. “If there is even a possibility that a state court would find that the complaint states a cause of action against any one of the resident defendants, the federal court must find that joinder was proper and remand the case to the state court.” Taylor Newman Cabinetry, Inc. v. Classic Soft Trim, Inc., 436 Fed.Appx. 888, 890 (11th Cir. 2011) (citing Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir. 1997)). Federal courts apply state substantive law when considering cases that arise under their diversity jurisdiction. See Royalty Network, Inc. v. Harris, 756 F.3d 1351, 1357 (11th Cir. 2014). Georgia law thus applies here.

         In making this assessment, the federal court “must necessarily look to the pleading standards applicable in state court, not the plausibility pleading standards prevailing in federal court.” Ullah v. BAC Home Loans Servicing LP, 538 Fed.Appx. 844, 846 (11th Cir. 2013) (quoting Stillwell, 663 F.3d at 1334). “The pleading standard in Georgia is lower than the standard applicable to a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6).” Id. (citing Stillwell, 663 F.3d at 1334 n.3.). “Under Georgia law, fair notice of the nature of the claim is all that is required, and the elements of most claims can be pled in general terms.” Id. (citing Bush v. Bank of N.Y. Mellon, 720 S.E.2d 370, 374 (Ga.Ct.App. 2011)). Pleading conclusions, rather than facts, may be enough to state a claim for relief. See Stillwell, 663 F.3d at 1334; see also Ledford v. Meyer, 290 S.E.2d 908, 909-10 (Ga. 1982) (holding that under the notice theory of pleading adopted in Georgia “it is immaterial whether a pleading states ‘conclusions' or ‘facts' as long as fair notice is given”).

         Georgia courts find a plaintiff has failed to state a claim against a party on which relief can be granted only when “(1) the allegations of the complaint disclose with certainty that the claimant would not be entitled to relief under any state of provable facts asserted in support thereof; and (2) the movant establishes that the claimant could not possibly introduce evidence within the framework of the complaint sufficient to warrant a grant of the relief sought.” Sherman v. Fulton Cty. Bd. of Assessors, 701 S.E.2d 472, 474 (Ga. 2010) (internal quotation marks omitted) (quoting Southstar Energy Serv. v. Ellison, 691 S.E.2d 203, 204 (Ga. 2010)). Whether Plaintiff fraudulently joined Defendant Siegel thus depends on whether a state court could possibly find that Plaintiff has sufficiently alleged a claim against Defendant Siegel under Georgia's notice-pleading ...

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