1 The Honorable Richard A. Jones 2 3 4 5 6 7 UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE 9
10 PATRICK KELLEY, an individual, Case No. 2:18-cv-01808-RAJ 11 Plaintiff, ORDER REMANDING ACTION TO 12 KING COUNTY SUPERIOR v. 13 COURT THE BOEING COMPANY, a Delaware 14 corporation, and BRIAN BAIRD, an individual, 15 Defendants. 16
17 This matter comes before the Court on Defendant’s Motion to Dismiss (Dkt. # 14). 18 For the reasons stated below, the Court concludes that it does not have subject matter 19 jurisdiction over this matter. Defendant’s Motion to Dismiss (Dkt. # 14) is therefore 20 terminated and this matter is remanded to King County Superior Court. 21 I. BACKGROUND 22 The following is taken from Plaintiff’s First Amended Complaint (Dkt. # 13), 23 which is assumed to be true for the purposes of this motion to dismiss. Sanders v. Brown, 24 504 F.3d 903, 910 (9th Cir. 2007). Plaintiff Patrick Kelley (“Mr. Kelley” or “Plaintiff”) 25 was employed by Defendant the Boeing Company (“Boeing”) for 32 years, until August 26 1 2018, when he was terminated. Dkt. # 13 at ¶ 2.2. According to Mr. Kelley, he was 2 terminated in retaliation for statements he gave as a witness in an internal ethics 3 investigation into wage complaints filed by two former Boeing employees. Id. at ¶¶ 3.11- 4 3.12. 5 In November 2017, Mr. Kelley was employed as Boeing’s Director of Supplier 6 performance. Id. at ¶ 2.35. Part of his responsibilities included assigning individual 7 performance scores (“performance scores”) for the employees reporting to him. Id. 8 These performance scores heavily impacted employee annual compensation packages 9 and long-term incentive payouts. Id. Mr. Kelley reported to Defendant Brian Baird 10 (“Defendant Baird”) who was responsible for reviewing and approving all of the 11 performance scores Mr. Kelley assigned. Dkt. # 13 at ¶ 2.36. 12 In 2017, Mr. Kelley reviewed two Boeing employees, Robert Thornton and Daniel 13 Tulcan (the “employees”). Dkt. # 13 at ¶ 2.37. Mr. Kelley assigned the employees high 14 performance scores, but upon review, Defendant Baird lowered the scores for both 15 employees, resulting in a “significantly reduced” annual compensation package for both 16 men. Dkt. # 13 at ¶ 2.40. After learning of the changes to the employees’ performance 17 scores, Mr. Kelley confronted Defendant Baird and asked why he lowered the scores. Id. 18 at ¶ 2.43. Defendant Baird indicated that he lowered the scores because he believed the 19 employees were “surplus” and he intended to terminate them. Id. Mr. Kelley told 20 Defendant Baird that he thought his decision was unethical. Id. According to Mr. 21 Kelley, Defendant Baird “responded heatedly.” Dkt. # 13 at ¶ 2.43. 22 In early 2018, the employees filed an internal ethics complaint against Defendant 23 Baird, alleging that the reduction in their performance scores was improper. Dkt. # 13 at 24 ¶¶ 2.44-2.45. Boeing initiated an ethics investigation into both complaints and 25 interviewed Mr. Kelley regarding Mr. Thornton’s complaint. Id. at ¶ 2.48. Mr. Kelley 26 told the investigator that he believed Defendant Baird acted unethically when he lowered 1 Mr. Thornton’s performance score. Id. Boeing closed the investigation in May/June of 2 2018 and two months later, Mr. Kelley was terminated. Id. at ¶¶ 2.49-2.51. 3 Boeing cited several old Human Resources allegations as the basis for Mr. 4 Kelley’s termination. Dkt. # 13 at ¶ 2.54. Mr. Kelley contends that these complaints 5 were never communicated to him and they are a pretext for the real retaliatory basis for 6 his termination – the concerns he raised regarding Defendant Baird’s misconduct. Dkt. # 7 13 at ¶ 3.15. 8 Mr. Kelley initially brought this suit in King County Superior Court, alleging 9 wrongful termination against Boeing and Defendant Baird (collectively the 10 “Defendants”) and breach of implied contract, estoppel, and wrongful withholding of 11 wages against Boeing. Dkt. # 1, Ex. A. Defendants later removed the case to federal 12 court. Dkt. # 1. In the Notice of Removal, Defendants allege that removal is proper 13 under 28 U.S.C. § 1332 even though Defendant Baird is a resident of Washington, 14 because Defendant Baird was fraudulently joined. Id. Mr. Kelley filed an amended 15 complaint, including additional allegations against Defendant Baird. Dkt. # 13. 16 Defendants now move to dismiss the entirety of Mr. Kelley’s amended complaint for 17 failure to state a claim. Dkt. # 14. 1 18 II. DISCUSSION 19 The Court may raise the issue of subject matter jurisdiction sua sponte at any time 20 during an action. Allstate Indem. Co. v. Pacheco, No. 3:14-cv-05366-KLS, 2014 U.S. 21 Dist. LEXIS 150069, *11 (W.D. Wash. 2014); Fed. R. Civ. Proc. 12(h)(3) (“If the court 22 determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the 23 action.”). Absent jurisdiction, any determination on the merits would be void. Watts v. 24 Pickney, 752 F.2d 406, 409 (9th Cir. 1985). 25 1 The court has received and reviewed Plaintiff’s supplemental authority filed on the 26 docket (Dkt. ## 21 and 26). 1 Here, it appears that Mr. Kelley and Defendant Baird are both residents of 2 Washington. Diversity jurisdiction typically requires complete diversity, but “one 3 exception to the requirement for complete diversity is where a non-diverse defendant has 4 been fraudulently joined.” Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th 5 Cir. 2001). Defendants argue that the Court has subject matter jurisdiction over this 6 matter because Defendant Baird is a fraudulently joined “sham defendant” and any 7 claims against Defendant Baird should be dismissed. Dkt. # 1 at 4. 8 The “sham defendant” or “fraudulent joinder” doctrine is an exception to the 9 requirement of complete diversity that permits removal where a non-diverse defendant 10 has been “fraudulently joined.” See, e.g., Morris v. Princess Cruises, Inc., 236 F.3d 11 1061, 1067 (9th Cir. 2001). “Fraudulent joinder is a term of art and does not require an 12 ill motive.” Arden v. Property and Cas. Ins. Co. of Hartford, No. C13-5296 BHS, 2013 13 WL 3421986 at *2 (W.D. Wash. July 8, 2013). Rather, joinder is deemed fraudulent 14 where a plaintiff fails to state a cause of action against the resident defendant. Id. 15 A defendant can establish fraudulent joinder by demonstrating the “inability of the 16 plaintiff to establish a cause of action against the non-diverse party in state court.” 17 Hunter v. Philip Morris USA, 582 F.3d 1039, 1044 (9th Cir. 2009) (quoting Smallwood v. 18 Illinois Central R.R. Co., 385 F.3d 568 (5th Cir. 2004) (en banc)). “A merely defective 19 statement of the plaintiff’s action does not warrant removal[.]” Albi v. St. & Smith 20 Publications, 140 F.2d 310, 312 (9th Cir. 1944). “In borderline situations, where it is 21 doubtful whether the complaint states a cause of action against the resident defendant, the 22 doubt is ordinarily resolved in favor of the retention of the cause in the state court.” Id. 23 Plaintiff advances three bases for his wrongful termination claim against 24 Defendant Baird. Dkt. # 13 at 9-10.
Free access — add to your briefcase to read the full text and ask questions with AI
1 The Honorable Richard A. Jones 2 3 4 5 6 7 UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE 9
10 PATRICK KELLEY, an individual, Case No. 2:18-cv-01808-RAJ 11 Plaintiff, ORDER REMANDING ACTION TO 12 KING COUNTY SUPERIOR v. 13 COURT THE BOEING COMPANY, a Delaware 14 corporation, and BRIAN BAIRD, an individual, 15 Defendants. 16
17 This matter comes before the Court on Defendant’s Motion to Dismiss (Dkt. # 14). 18 For the reasons stated below, the Court concludes that it does not have subject matter 19 jurisdiction over this matter. Defendant’s Motion to Dismiss (Dkt. # 14) is therefore 20 terminated and this matter is remanded to King County Superior Court. 21 I. BACKGROUND 22 The following is taken from Plaintiff’s First Amended Complaint (Dkt. # 13), 23 which is assumed to be true for the purposes of this motion to dismiss. Sanders v. Brown, 24 504 F.3d 903, 910 (9th Cir. 2007). Plaintiff Patrick Kelley (“Mr. Kelley” or “Plaintiff”) 25 was employed by Defendant the Boeing Company (“Boeing”) for 32 years, until August 26 1 2018, when he was terminated. Dkt. # 13 at ¶ 2.2. According to Mr. Kelley, he was 2 terminated in retaliation for statements he gave as a witness in an internal ethics 3 investigation into wage complaints filed by two former Boeing employees. Id. at ¶¶ 3.11- 4 3.12. 5 In November 2017, Mr. Kelley was employed as Boeing’s Director of Supplier 6 performance. Id. at ¶ 2.35. Part of his responsibilities included assigning individual 7 performance scores (“performance scores”) for the employees reporting to him. Id. 8 These performance scores heavily impacted employee annual compensation packages 9 and long-term incentive payouts. Id. Mr. Kelley reported to Defendant Brian Baird 10 (“Defendant Baird”) who was responsible for reviewing and approving all of the 11 performance scores Mr. Kelley assigned. Dkt. # 13 at ¶ 2.36. 12 In 2017, Mr. Kelley reviewed two Boeing employees, Robert Thornton and Daniel 13 Tulcan (the “employees”). Dkt. # 13 at ¶ 2.37. Mr. Kelley assigned the employees high 14 performance scores, but upon review, Defendant Baird lowered the scores for both 15 employees, resulting in a “significantly reduced” annual compensation package for both 16 men. Dkt. # 13 at ¶ 2.40. After learning of the changes to the employees’ performance 17 scores, Mr. Kelley confronted Defendant Baird and asked why he lowered the scores. Id. 18 at ¶ 2.43. Defendant Baird indicated that he lowered the scores because he believed the 19 employees were “surplus” and he intended to terminate them. Id. Mr. Kelley told 20 Defendant Baird that he thought his decision was unethical. Id. According to Mr. 21 Kelley, Defendant Baird “responded heatedly.” Dkt. # 13 at ¶ 2.43. 22 In early 2018, the employees filed an internal ethics complaint against Defendant 23 Baird, alleging that the reduction in their performance scores was improper. Dkt. # 13 at 24 ¶¶ 2.44-2.45. Boeing initiated an ethics investigation into both complaints and 25 interviewed Mr. Kelley regarding Mr. Thornton’s complaint. Id. at ¶ 2.48. Mr. Kelley 26 told the investigator that he believed Defendant Baird acted unethically when he lowered 1 Mr. Thornton’s performance score. Id. Boeing closed the investigation in May/June of 2 2018 and two months later, Mr. Kelley was terminated. Id. at ¶¶ 2.49-2.51. 3 Boeing cited several old Human Resources allegations as the basis for Mr. 4 Kelley’s termination. Dkt. # 13 at ¶ 2.54. Mr. Kelley contends that these complaints 5 were never communicated to him and they are a pretext for the real retaliatory basis for 6 his termination – the concerns he raised regarding Defendant Baird’s misconduct. Dkt. # 7 13 at ¶ 3.15. 8 Mr. Kelley initially brought this suit in King County Superior Court, alleging 9 wrongful termination against Boeing and Defendant Baird (collectively the 10 “Defendants”) and breach of implied contract, estoppel, and wrongful withholding of 11 wages against Boeing. Dkt. # 1, Ex. A. Defendants later removed the case to federal 12 court. Dkt. # 1. In the Notice of Removal, Defendants allege that removal is proper 13 under 28 U.S.C. § 1332 even though Defendant Baird is a resident of Washington, 14 because Defendant Baird was fraudulently joined. Id. Mr. Kelley filed an amended 15 complaint, including additional allegations against Defendant Baird. Dkt. # 13. 16 Defendants now move to dismiss the entirety of Mr. Kelley’s amended complaint for 17 failure to state a claim. Dkt. # 14. 1 18 II. DISCUSSION 19 The Court may raise the issue of subject matter jurisdiction sua sponte at any time 20 during an action. Allstate Indem. Co. v. Pacheco, No. 3:14-cv-05366-KLS, 2014 U.S. 21 Dist. LEXIS 150069, *11 (W.D. Wash. 2014); Fed. R. Civ. Proc. 12(h)(3) (“If the court 22 determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the 23 action.”). Absent jurisdiction, any determination on the merits would be void. Watts v. 24 Pickney, 752 F.2d 406, 409 (9th Cir. 1985). 25 1 The court has received and reviewed Plaintiff’s supplemental authority filed on the 26 docket (Dkt. ## 21 and 26). 1 Here, it appears that Mr. Kelley and Defendant Baird are both residents of 2 Washington. Diversity jurisdiction typically requires complete diversity, but “one 3 exception to the requirement for complete diversity is where a non-diverse defendant has 4 been fraudulently joined.” Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th 5 Cir. 2001). Defendants argue that the Court has subject matter jurisdiction over this 6 matter because Defendant Baird is a fraudulently joined “sham defendant” and any 7 claims against Defendant Baird should be dismissed. Dkt. # 1 at 4. 8 The “sham defendant” or “fraudulent joinder” doctrine is an exception to the 9 requirement of complete diversity that permits removal where a non-diverse defendant 10 has been “fraudulently joined.” See, e.g., Morris v. Princess Cruises, Inc., 236 F.3d 11 1061, 1067 (9th Cir. 2001). “Fraudulent joinder is a term of art and does not require an 12 ill motive.” Arden v. Property and Cas. Ins. Co. of Hartford, No. C13-5296 BHS, 2013 13 WL 3421986 at *2 (W.D. Wash. July 8, 2013). Rather, joinder is deemed fraudulent 14 where a plaintiff fails to state a cause of action against the resident defendant. Id. 15 A defendant can establish fraudulent joinder by demonstrating the “inability of the 16 plaintiff to establish a cause of action against the non-diverse party in state court.” 17 Hunter v. Philip Morris USA, 582 F.3d 1039, 1044 (9th Cir. 2009) (quoting Smallwood v. 18 Illinois Central R.R. Co., 385 F.3d 568 (5th Cir. 2004) (en banc)). “A merely defective 19 statement of the plaintiff’s action does not warrant removal[.]” Albi v. St. & Smith 20 Publications, 140 F.2d 310, 312 (9th Cir. 1944). “In borderline situations, where it is 21 doubtful whether the complaint states a cause of action against the resident defendant, the 22 doubt is ordinarily resolved in favor of the retention of the cause in the state court.” Id. 23 Plaintiff advances three bases for his wrongful termination claim against 24 Defendant Baird. Dkt. # 13 at 9-10. First, Plaintiff argues Defendants wrongfully 25 discharged him in violation of RCW § 49.32.030, a Washington statute that protects the 26 rights of non-unionized employees in wage disputes. Dkt. # 13 at ¶¶ 3.1-3.2. Next, Mr. 1 Kelley alleges that he was wrongfully discharged in violation of RCW § 49.58, a 2 Washington statute prohibiting “employers from retaliating against employees who bring 3 discrimination to light.” Dkt. # 13 at ¶¶ 3.3-3.6. Finally, Mr. Kelley argues that the 4 common-law exception to at-will employment – wrongful termination in violation of 5 public policy – applies because he was terminated in retaliation for reporting employer 6 misconduct. Dkt. # 13 at ¶¶ 3.7-3.15. Because the Court concludes that Mr. Kelley has 7 pled sufficient facts to survive a motion to dismiss with respect to his wrongful 8 termination in violation of public policy claim against Defendant Baird, the Court 9 declines to consider the other bases for his wrongful termination claim. 10 A. Wrongful Termination in Violation of Public Policy 11 As a general rule, employees in Washington work at-will, meaning they can be 12 terminated for any reason that is not unlawful. See Rose v. Anderson Hay & Grain Co., 13 358 P.3d 1139, 1141 (Wash. 2015). The tort of wrongful termination in violation of 14 public policy is a narrow exception to the at-will employment rule. See Thompson v. St. 15 Regis Paper Co., 102 Wash.2d 219, 232 (1984). The tort generally has been limited to 16 circumstances where an employee was fired for: (1) refusing to commit an illegal act, (2) 17 performing a public duty or obligation, (3) exercising a legal right or privilege, or (4) in 18 retaliation for reporting employer misconduct (i.e. whistle-blowing). Dicomes v. State, 19 113 Wash. 2d 612, 618 (1989). If an employee’s claim falls within one of these 20 categories, the employee must show his conduct was a “substantial factor” in the 21 employer’s termination decision. Rickman v. Premera Blue Cross, 184 Wash. 2d 300, 22 314 (2015), as amended (Nov. 23, 2015). 23 Here, Mr. Kelley alleges that his claim falls under the fourth category because he 24 “reported employer misconduct” when he participated in Boeing’s internal ethics 25 investigation and reported Defendant Baird’s unethical conduct. Dkt. # 13 at ¶¶ 3.11- 26 3.12. Whether Mr. Kelley is entitled to whistle-blower protection depends, to some 1 extent, on: (1) the degree of alleged employer wrongdoing, and (2) the reasonableness of 2 the manner in which [he] reported, or attempted to remedy, the alleged misconduct. 3 Dicomes, at 619. While whistle-blowing does not require a violation of an explicit 4 statutory requirement, it does require that the public benefit be more than remote and that 5 the conduct be more than “merely praiseworthy from a subjective standpoint.” Id. at 624 6 (1989). 7 The Court finds the Washington Supreme Court’s decision in Karstetter v. King 8 Cty. Corr. Guild, instructive. 444 P.3d 1185 (Wash. 2019). In that case the plaintiff, 9 Jared Karstetter, was working for the King County Corrections Officers Guild when he 10 was approached by the King County ombudsman’s office regarding a whistle-blower 11 complaint related to parking reimbursements for Guild members. Id. at 1187. Mr. 12 Karstetter reported this to the Guild and was instructed to cooperate with the 13 investigation. Id. at 1188. The Guild later consulted with an outside firm regarding the 14 investigation and was advised to terminate Mr. Karstetter, which it did. Id. Mr. 15 Karstetter sued the Guild alleging, among other things, wrongful discharge in violation of 16 public policy. Id. The Guild moved to dismiss Mr. Karstetter’s complaint for failure to 17 state a claim. Karstetter, at 1188. 18 On appeal, the Washington Supreme Court reversed the Court of Appeals’ 19 dismissal of Mr. Karstetter’s wrongful discharge claim. Id. at 1192. Specifically, the 20 Court noted that Mr. Karstetter’s claim fell squarely within the whistle-blower category 21 of the Dicomes test and that as such, he was entitled to whistle-blower protection. Id. 22 The Court rejected the Guild’s argument that Mr. Karstetter did not qualify for whistle- 23 blower protection because he only assisted with the investigation, noting that 24 “[p]rotecting only those who directly reveal information while sacrificing others who 25 assist them would unjustly narrow the scope of whistle-blower statutes and caution future 26 whistle-blowers to think twice before helping other whistle-blowers.” Id. (emphasis 1 added). Instead, the Court held that Mr. Karstetter’s allegation that “he assisted the 2 investigation of a whistle-blower complaint and … was fired for doing so” was sufficient 3 to survive the motion to dismiss phase. Karstetter, at 1192. 4 Here, Mr. Kelley alleges that he was terminated because he raised concerns about 5 his supervisor’s unethical conduct and participated in an internal investigation into said 6 conduct. Dkt. # 13 at ¶¶ 3.11-3.12. Mr. Kelley alleges that Defendant Baird knew he 7 gave statements “accusing him of unethical conduct” in the internal investigation and that 8 shortly after the investigation closed, he was terminated. Dkt. # 13 at ¶¶ 2.50-2.52. The 9 fact that Mr. Kelley only participated in the internal investigation and did not 10 independently report Defendant Baird’s misconduct is not dispositive. See Karstetter, at 11 1192. Because the Court finds Mr. Kelley has pled a prima facie case of wrongful 12 termination in violation of public policy against Defendant Baird, sufficient to survive a 13 motion to dismiss, the Court concludes that it does not have subject matter jurisdiction 14 over this action due to the lack of diversity jurisdiction under 28 U.S.C. § 1332. 15 III. CONCLUSION 16 For the foregoing reasons, the Court declines to exercise jurisdiction over this 17 matter due to a lack of subject matter jurisdiction. Defendant’s Motion to Dismiss is 18 terminated and the Clerk is directed to remand this action to King County Superior Court. 19 20 DATED this 30th day of August, 2019. 21 22 A
23 24 The Honorable Richard A. Jones United States District Judge 25