Cunningham v. Columbia State Bank

Summary

The United States District Court for the Eastern District of California grants Marcus Cunningham’s motion to remand an employment-related action to Sacramento County Superior Court. The court holds that the defendants failed to establish fraudulent joinder because California law leaves open the possibility of individual liability under Labor Code section 1102.5. The court also denies the pending motion to dismiss as moot and sanctions plaintiff’s counsel $200 for exceeding the reply brief page limit.

Holdings

1. Carlson was not fraudulently joined because there was a possibility that a California state court would find Cunningham's complaint stated a cause of action against her under California Labor Code section 1102.5. Carlson's citizenship therefore could not be disregarded, complete diversity was absent, and remand was required.
2. Cunningham adequately alleged the elements necessary to establish at least a possibility of a section 1102.5 claim against Carlson: retaliation, disclosure of information reasonably believed to concern unlawful conduct, and disclosure to an employee with authority to investigate, discover, or correct the violation.
3. Plaintiff's counsel was sanctioned $200 for filing a nine-page reply when the court's filing requirements limited the reply to five pages and imposed a $50-per-page sanction for excess pages.

Questions Presented

1. Whether Carlson was fraudulently joined so that her California citizenship could be disregarded for purposes of diversity jurisdiction.
2. Whether Cunningham's whistleblower-retaliation allegations under California Labor Code section 1102.5 created at least a possibility that a California court would find a claim against Carlson individually.
3. Whether sanctions should be imposed on plaintiff's counsel for filing a reply exceeding the court-ordered page limit.

Disposition

remanded