Wash v. Skechers USA, Inc.

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

Case No. 1:18-cv-03731

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION

July 24, 2019

Michael L. Brown United States District Judge

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 arecitizens 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 thecitizenship 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 convincingevidence. 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." TaylorNewman Cabinetry, Inc. v. Classic Soft Trim, Inc., 436 F. App'x 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 F. App'x 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 noticetheory 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 standards. See Stillwell, 663 F.3d at 1334-35 ("[I]t is, at the very least, possible that a Georgia state court would conclude that Stillwell's allegations against Edwards satisfied [Georgia's notice-pleading] standard.").

A. Libel and slander

Plaintiff asserts claims of slander and libel against Defendant Siegel (and Defendant Skechers). Defendants argue these claims are barred by Georgia's statute of limitations and fail as a matter of law — thus preventing them from supporting Defendant Siegel's proper joinder.

Under Georgia law, libel, or written defamation, is a false and malicious defamation expressed in print, writing, pictures, or signs that tends to injure the reputation of the person and exposes her to public hatred, contempt, or ridicule. See GA. CODE ANN. § 51-5-1. A libelous statement is published as soon as one person communicates it to any person other than the party libeled. § 51-5-3. Georgia law defines slander, or oral defamation, as (1) imputing to another a crime punishable by law; (2) charging a person with having a contagious disorder or being guilty of a debasing act that may exclude him from society; (3) making charges against another about his trade, office, or profession, calculated to injure him therin; or (4) uttering any disparaging words productive of special damage that flows naturally therefrom. § 51-5-4. Under Georgia law, "when the claim alleged is a traditionally disfavored cause of action, such as malicious prosecution,libel, and slander, the courts tend to construe the complaint by a somewhat stricter standard." Willis v. United Family Life Ins., 487 S.E.2d 376, 379 (Ga. Ct. App. 1997).

Libel and slander claims have a one-year statute of limitations under Georgia law. See GA. CODE ANN. § 9-3-33; see also Lee v. Gore, 472 S.E.2d 164, 168 (Ga. Ct. App. 1996). A statute of limitations bar is an affirmative defense, and a plaintiff need not negate affirmative defenses in her complaint. La Grasta v. First Union Sec., Inc., 358 F.3d 840, 845 (11th Cir. 2004) (quoting Tregenza v. Great Am. Comm'rs Co., 12 F.3d 717, 718 (7th Cir. 1993)). Thus, for the Court to find there is no...