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Kelley v. The Boeing Co.

United States District Court, W.D. Washington, Seattle

August 30, 2019

PATRICK KELLEY, an individual, Plaintiff,
v.
THE BOEING COMPANY, a Delaware corporation, and BRIAN BAIRD, an individual, Defendants.

          ORDER REMANDING ACTION TO KING COUNTY SUPERIOR COURT

          The Honorable Richard A. Jones, United States District Judge.

         This matter comes before the Court on Defendant's Motion to Dismiss (Dkt. # 14). For the reasons stated below, the Court concludes that it does not have subject matter jurisdiction over this matter. Defendant's Motion to Dismiss (Dkt. # 14) is therefore terminated and this matter is remanded to King County Superior Court.

         I. BACKGROUND

         The following is taken from Plaintiff's First Amended Complaint (Dkt. # 13), which is assumed to be true for the purposes of this motion to dismiss. Sanders v. Brown, 504 F.3d 903, 910 (9th Cir. 2007). Plaintiff Patrick Kelley (“Mr. Kelley” or “Plaintiff”) was employed by Defendant the Boeing Company (“Boeing”) for 32 years, until August 2018, when he was terminated. Dkt. # 13 at ¶ 2.2. According to Mr. Kelley, he was terminated in retaliation for statements he gave as a witness in an internal ethics investigation into wage complaints filed by two former Boeing employees. Id. at ¶¶ 3.11-3.12.

         In November 2017, Mr. Kelley was employed as Boeing's Director of Supplier performance. Id. at ¶ 2.35. Part of his responsibilities included assigning individual performance scores (“performance scores”) for the employees reporting to him. Id. These performance scores heavily impacted employee annual compensation packages and long-term incentive payouts. Id. Mr. Kelley reported to Defendant Brian Baird (“Defendant Baird”) who was responsible for reviewing and approving all of the performance scores Mr. Kelley assigned. Dkt. # 13 at ¶ 2.36.

         In 2017, Mr. Kelley reviewed two Boeing employees, Robert Thornton and Daniel Tulcan (the “employees”). Dkt. # 13 at ¶ 2.37. Mr. Kelley assigned the employees high performance scores, but upon review, Defendant Baird lowered the scores for both employees, resulting in a “significantly reduced” annual compensation package for both men. Dkt. # 13 at ¶ 2.40. After learning of the changes to the employees' performance scores, Mr. Kelley confronted Defendant Baird and asked why he lowered the scores. Id. at ¶ 2.43. Defendant Baird indicated that he lowered the scores because he believed the employees were “surplus” and he intended to terminate them. Id. Mr. Kelley told Defendant Baird that he thought his decision was unethical. Id. According to Mr. Kelley, Defendant Baird “responded heatedly.” Dkt. # 13 at ¶ 2.43.

         In early 2018, the employees filed an internal ethics complaint against Defendant Baird, alleging that the reduction in their performance scores was improper. Dkt. # 13 at ¶¶ 2.44-2.45. Boeing initiated an ethics investigation into both complaints and interviewed Mr. Kelley regarding Mr. Thornton's complaint. Id. at ¶ 2.48. Mr. Kelley told the investigator that he believed Defendant Baird acted unethically when he lowered Mr. Thornton's performance score. Id. Boeing closed the investigation in May/June of 2018 and two months later, Mr. Kelley was terminated. Id. at ¶¶ 2.49-2.51.

         Boeing cited several old Human Resources allegations as the basis for Mr. Kelley's termination. Dkt. # 13 at ¶ 2.54. Mr. Kelley contends that these complaints were never communicated to him and they are a pretext for the real retaliatory basis for his termination - the concerns he raised regarding Defendant Baird's misconduct. Dkt. # 13 at ¶ 3.15.

         Mr. Kelley initially brought this suit in King County Superior Court, alleging wrongful termination against Boeing and Defendant Baird (collectively the “Defendants”) and breach of implied contract, estoppel, and wrongful withholding of wages against Boeing. Dkt. # 1, Ex. A. Defendants later removed the case to federal court. Dkt. # 1. In the Notice of Removal, Defendants allege that removal is proper under 28 U.S.C. § 1332 even though Defendant Baird is a resident of Washington, because Defendant Baird was fraudulently joined. Id. Mr. Kelley filed an amended complaint, including additional allegations against Defendant Baird. Dkt. # 13. Defendants now move to dismiss the entirety of Mr. Kelley's amended complaint for failure to state a claim. Dkt. # 14.[1]

         II. DISCUSSION

         The Court may raise the issue of subject matter jurisdiction sua sponte at any time during an action. Allstate Indem. Co. v. Pacheco, No. 3:14-cv-05366-KLS, 2014 U.S. Dist. LEXIS 150069, *11 (W.D. Wash. 2014); Fed. R. Civ. Proc. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”). Absent jurisdiction, any determination on the merits would be void. Watts v. Pickney, 752 F.2d 406, 409 (9th Cir. 1985).

         Here, it appears that Mr. Kelley and Defendant Baird are both residents of Washington. Diversity jurisdiction typically requires complete diversity, but “one exception to the requirement for complete diversity is where a non-diverse defendant has been fraudulently joined.” Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001). Defendants argue that the Court has subject matter jurisdiction over this matter because Defendant Baird is a fraudulently joined “sham defendant” and any claims against Defendant Baird should be dismissed. Dkt. # 1 at 4.

         The “sham defendant” or “fraudulent joinder” doctrine is an exception to the requirement of complete diversity that permits removal where a non-diverse defendant has been “fraudulently joined.” See, e.g., Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001). “Fraudulent joinder is a term of art and does not require an ill motive.” Arden v. Property and Cas. Ins. Co. of Hartford, No. C13-5296 BHS, 2013 WL 3421986 at *2 (W.D. Wash. July 8, 2013). Rather, joinder is deemed fraudulent where a plaintiff fails to state a cause of action against the resident defendant. Id.

         A defendant can establish fraudulent joinder by demonstrating the “inability of the plaintiff to establish a cause of action against the non-diverse party in state court.” Hunter v. Philip Morris USA, 582 F.3d 1039, 1044 (9th Cir. 2009) (quotingSmallwood v. Illinois Central R.R. Co., 385 F.3d 568 (5th Cir. 2004) (en banc)). “A merely defective statement of the plaintiff's action does not warrant removal[.]” Albi v. St. & Smith Publications, 140 F.2d 310, 312 (9th Cir. 1944). “In borderline situations, where it is doubtful whether the complaint states ...


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