Court: Court of Appeals for the D.C. Circuit; March 20, 2018; Federal Appellate Court
The plaintiff filed a civil lawsuit against Trustify, Inc. and TriNet HR Corporation in the Superior Court of the District of Columbia, alleging disability discrimination and retaliation under the District of Columbia Human Rights Act. The case was removed to federal court by defendant TriNet on April 27, 2017, based on diversity jurisdiction, which the plaintiff did not contest. Following concerns about subject-matter jurisdiction, the court requested additional briefings from both parties on December 4, 2017.
The plaintiff, who worked as an Account Manager for Trustify from June 1, 2015, until his termination on December 8, 2015, claimed he suffers from Bipolar Disorder II. He alleged that he informed his Trustify managers of his disability and requested reasonable accommodations regarding his work schedule, adhering to a policy outlined in the TriNet Employee Handbook. This policy required employees needing accommodations to reach out to management or TriNet HR representatives. Ultimately, the court determined it must sua sponte remand the case back to Superior Court due to a lack of subject-matter jurisdiction.
The plaintiff claims that Trustify and TriNet failed to engage in the necessary interactive process regarding his disability accommodation requests. Following a period of decompensation related to his disability in late November and early December 2015, the plaintiff sought further accommodations, but Trustify proceeded to terminate his employment, with TriNet's approval. Additionally, both defendants allegedly opposed his efforts to obtain unemployment benefits.
In establishing his citizenship for diversity jurisdiction, the plaintiff's residency history is outlined: he lived in California from June 1992 to August 2011, during which he held a California driver's license, paid state taxes, and voted there. He enrolled at Georgetown University in August 2010 and resided in D.C. and Virginia until May 2016, when he returned to California, where he worked at Best Buy and reestablished his residency by obtaining a California driver's license and registering to vote. The plaintiff filed his initial complaint in December 2016, which TriNet removed to federal court in April 2017. The court noted that federal jurisdiction must be clearly established, as removal statutes are strictly interpreted. The burden of proof for establishing federal jurisdiction lies with the defendant seeking removal.
When a district court lacks subject matter jurisdiction over a case removed from state court, it must remand the case, as established by the D.C. Circuit. The court resolves ambiguities regarding the propriety of removal in favor of remand and may initiate a remand order on its own. The defendant, TriNet, claims diversity jurisdiction under 28 U.S.C. § 1332(a), which requires an amount in controversy exceeding $75,000 and complete diversity between parties. Complete diversity means no plaintiff shares a state citizenship with any defendant. The determination of removability is based on the record at the time of removal, with some courts requiring complete diversity at both removal and original filing stages.
In this case, the plaintiff does not dispute the amount in controversy, which is less than $75,000, but contests complete diversity. TriNet asserts it is a California citizen, while Trustify claims citizenship in Delaware and Virginia. The plaintiff is a citizen of the District of Columbia. The court confirms TriNet's California citizenship, as it is incorporated and has its principal place of business there, thus finding no complete diversity exists between the parties.
The plaintiff contests defendant TriNet's claim regarding his citizenship, asserting that he was a California citizen at the time he filed his Complaint and when TriNet filed its Notice of Removal, thus negating diversity jurisdiction as both parties would be citizens of the same state. For diversity jurisdiction, an individual is considered a citizen of a state if they are an American citizen domiciled there, determined by physical presence and intent to remain indefinitely. The plaintiff argues that his conduct supports his claim of California citizenship, citing an eighteen-year residency in California prior to attending Georgetown University, where he maintained a California driver's license, paid state taxes, registered to vote, and worked in California while on medical leave from Georgetown. He contends that when TriNet filed its Notice of Removal, he was uncertain about returning to the District of Columbia. Defendant TriNet claims the plaintiff is a domiciliary of the District of Columbia based on his lawsuit filed there, his professional presence, and his Georgetown student status, all indicating an ongoing connection to D.C. The Court acknowledges the plaintiff's undisputed evidence of his prior California residence as sufficient to establish his domiciliary status in California before attending Georgetown.
The Court has established that the plaintiff was domiciled in California until he began attending Georgetown. The primary question is whether defendant TriNet has proven that the plaintiff established a domicile in the District prior to filing his lawsuit or before removal. There is a presumption of continuing domicile, meaning the previous domicile remains until a new one is established. The burden of proof lies with the party claiming a change in domicile.
The plaintiff resided in the District from August 2010 to May 2016 while attending Georgetown but also lived outside the District during part of that time. At the time of filing and removal, the plaintiff was residing in California, having returned in May 2016. While his residency in the District supports TriNet's position, it does not alone establish the necessary citizenship for diversity jurisdiction.
The Court also examines the intent element of domicile, noting that college students are generally presumed to intend to return to their home state after completing their studies. This presumption is rebuttable if the student shows a firm commitment to remain in the state where they are studying. Courts have typically viewed out-of-state college students as temporary residents. Consequently, the Court presumes that the plaintiff intended to return to California after his studies, and TriNet must provide sufficient evidence to demonstrate a commitment to remain in the District post-graduation to rebut this presumption.
Defendant TriNet has not successfully disproven the presumption that the plaintiff intends to return to California post-studies. TriNet argues that the plaintiff's business in the District and his role as president, which he managed remotely during his absence from 2016 to 2017, indicate a commitment to the District. However, this remote management does not imply an intention to stay in the District after graduation. TriNet also cites the plaintiff's D.C. driver's license, valid until 2021, as evidence of his domicile. Still, this is weakened by the plaintiff's more recent California driver's license obtained in 2016. Although the plaintiff worked at Trustify in the District, TriNet fails to demonstrate that this employment signals a permanent intention to reside there, as similar cases show transient jobs do not establish domicile.
Additionally, TriNet mentions the plaintiff's lawsuit filed in the District, but lacks legal support for its relevance to his intent to remain. The plaintiff’s past statement of intending to return to Georgetown and his actual return to the District for studies do not clarify long-term intentions. Furthermore, the plaintiff's LinkedIn listing indicating a District location does not prove intent to stay. Overall, the evidence presented by TriNet is insufficient to counter the presumption of the plaintiff's return to California, particularly since the plaintiff had not severed ties to California at the time of the lawsuit. Past cases demonstrate that even strong indicators of domicile, like voter registration, can be overridden by significant ties to another state.
The plaintiff has established substantial connections to California, evidenced by maintaining a California driver's license and voting in state elections as early as 2011, shortly after enrolling at Georgetown. After being terminated from Trustify, the plaintiff returned to California for a year, during which he again obtained a California driver's license, worked as a retail sales associate at Best Buy, registered to vote as a California resident, and filed taxes in California. This return and subsequent actions counter the defendant TriNet’s argument that the plaintiff intended to remain in the District of Columbia after completing his studies. TriNet's claims lack support as it has not shown that the plaintiff registered to vote, registered a vehicle, or paid taxes in the District, all important factors for determining domiciliary status. Previous court rulings emphasize that the absence of such indicators significantly undermines claims of establishing domicile in a new location, reinforcing the presumption that a student intends to return to their home state. The district court's decision to uphold the presumption of the plaintiff's domicile in California, rather than the District, is consistent with these precedents.
Defendant TriNet's argument regarding the plaintiff's intent to remain in the District hinges on the plaintiff establishing a business, briefly working for Trustify, and obtaining a D.C. driver's license in 2014. However, the Court finds that TriNet's evidence does not overcome the presumption that the plaintiff intends to return to California after completing studies, especially given the plaintiff's strong ties to California. As a result, TriNet has not demonstrated that the plaintiff ever intended to remain indefinitely in the District, leading to the conclusion that complete diversity of citizenship among parties does not exist.
In addressing the defendants' claim of fraudulent joinder, the Court notes that this argument was raised for the first time in a reply brief, which is generally disfavored and not considered. Even if the argument had been timely, it would fail under the fraudulent joinder doctrine, which allows a court to disregard the citizenship of certain defendants to establish jurisdiction. The removing party must show either that the plaintiff cannot establish a cause of action against the joined defendant or that jurisdictional facts were fraudulently pled. TriNet's argument focuses on the plaintiff's inability to state a viable claim under the D.C. Human Rights Act (DCHRA), but the Court's role is limited to assessing whether there is any possibility of relief based on the pled claims, without engaging in a detailed merits analysis.
In Simon v. Hofgard, the court emphasized that if a plaintiff can potentially establish a cause of action against a defendant based on the alleged facts, diversity jurisdiction is incomplete, necessitating remand. The plaintiff must show that their claims are not wholly nonsensical. The defendants, particularly TriNet, contend that the plaintiff cannot claim they were his employer under the D.C. Human Rights Act (DCHRA), arguing that the plaintiff failed to allege sufficient facts for a joint employer relationship with Trustify. TriNet noted the absence of any interaction relevant to the plaintiff's claims of discrimination and retaliation. In response, the plaintiff asserted that TriNet's issuance of paychecks, provision of medical insurance, maintenance of employment records, and designation as an employer on tax documents demonstrated a joint employer status. The DCHRA prohibits discrimination based on disability, and the court recognized that individuals can be employed by joint employers. To determine joint employment, the tests established in Browning-Ferris and Spirides are applicable, with the court showing a preference for the Browning-Ferris test in cases involving DCHRA claims.
The Court is applying the Browning-Ferris test to determine if TriNet can be considered a joint employer of the plaintiff, who was employed by Trustify. This test examines whether TriNet retained enough control over the plaintiff’s employment conditions. Key factors include the alleged employer's authority to hire and fire, set work rules, supervise employees, and manage employee records.
The plaintiff claims that TriNet approved Trustify's decision to terminate him, indicating some level of control over hiring and firing, countering TriNet's assertion that it had no such authority. The Court notes that if there are factual disputes, they must be resolved in favor of the plaintiff for assessing TriNet's potential liability.
Further, the plaintiff alleges that TriNet issued paychecks, provided medical insurance, maintained employee records, and established employment terms through its handbook, supporting the argument that TriNet significantly influenced his employment conditions.
The Court concludes that the plaintiff has demonstrated a slight possibility of relief against TriNet, determining that TriNet was improperly joined in the case. Consequently, the Court orders the case to be remanded to the Superior Court of the District of Columbia.
The plaintiff alleges that TriNet had authority over certain employment conditions for Trustify employees, including compensation, benefits, and payment methods. Key points include claims that TriNet provided an employee handbook, issued biweekly paychecks, is listed as the employer on the plaintiff's W-2 form, and provided medical insurance. Regarding the Browning-Ferris test, the plaintiff asserts that TriNet maintained employee records for its 'worksite' employees, which TriNet does not dispute. TriNet acknowledges providing administrative services, including payroll and benefits.
While TriNet argues that the plaintiff did not allege day-to-day supervision or control over his schedule, the court finds this omission does not undermine the plaintiff's claim regarding joint employment. The court notes that not all Browning-Ferris factors need to support the plaintiff’s case for a claim to proceed. Furthermore, TriNet's assertion that the plaintiff must have directly interacted with TriNet to establish liability is not supported by legal authority, as the focus remains on control over employment terms and conditions. The court is not convinced by TriNet's arguments that dismiss the plaintiff's claims.
Employee interactions with a joint employer can indicate control, but such interactions are not mandatory to prove control. TriNet contends that the "administrative services" it provided do not substantiate the plaintiff's claims, arguing the plaintiff has not established TriNet’s authority regarding hiring, firing, work rules, daily supervision, or control over pay. TriNet asserts that without these factors, it cannot be deemed a joint employer for the statutory claims presented. However, the plaintiff has alleged facts suggesting the presence of some of these attributes. Moreover, the cases cited by TriNet do not mandate the necessity of all traditional indicators of joint employment for liability to apply and are not controlling authority in this context. The right to terminate or supervise employees is crucial for establishing joint employment, yet courts have acknowledged that joint employer status could exist without all traditional hallmarks. The decisions cited by TriNet were decided under summary judgment or motion for judgment standards, which are more stringent than the standard applicable to fraudulent joinder claims, where only a reasonable basis for liability prediction is needed. Additionally, while TriNet references other district court decisions asserting that professional employer organizations are not joint employers, those decisions are not binding and do not definitively negate the plaintiff's claims.
The Court determines that the plaintiff has presented sufficient allegations to potentially meet the requirement of demonstrating that defendant TriNet "knew or should have known" about the alleged unlawful conduct and failed to implement corrective measures. The plaintiff asserts that TriNet not only knew of discriminatory and retaliatory actions but also "permitted, approved, and joined in" those actions, particularly regarding the refusal of reasonable accommodations and the termination of the plaintiff's employment. The plaintiff cites TriNet's authority over accommodation requests as indicated in its Employee Handbook, which mandates that Trustify managers report accommodation matters to TriNet HR.
TriNet contends that the plaintiff fails to meet the necessary standard because he did not contact TriNet directly regarding accommodations and argues that it does not control such decisions. However, the Court disagrees, stating that the lack of direct contact does not negate TriNet's alleged knowledge of the requests, as the plaintiff claims TriNet allowed Trustify to deny those requests. The issue of TriNet’s control over employment decisions is deemed a factual matter to be resolved in favor of the plaintiff for the purpose of assessing a fraudulent joinder claim. Ultimately, while the plaintiff's claims against TriNet may not succeed, they are not considered "wholly nonsensical" or completely barred.
The joint employer determination relies heavily on case-specific facts, making it unsuitable for resolution before summary judgment. Referencing case law, it is emphasized that establishing whether two defendants are joint employers is a factual issue inappropriate for a motion to dismiss. The Court states that delving into the joint employment question would necessitate addressing the merits of the case, which is beyond the jurisdictional scope.
The Court concludes that defendant TriNet has not met its burden to prove the existence of diversity jurisdiction or that it was fraudulently joined. Therefore, the case will be remanded to the Superior Court of the District of Columbia.
Additionally, the plaintiff's name is noted as misspelled in the court records, with the correct spelling being Jairus. The Court reviewed several documents, including TriNet's motion to dismiss, the plaintiff's opposition, and Trustify's answer to the complaint. The plaintiff alleges multiple accommodation requests but fails to specify all accommodations sought, particularly regarding a work schedule. The absence of a specific monetary damages request in the plaintiff’s second amended complaint does not affect the jurisdictional assessment, as removability is judged based on the record at the time of removal, and once removed, a plaintiff may not amend the complaint to defeat federal jurisdiction.
The document addresses the legal arguments concerning the diversity jurisdiction and potential joint employment status related to defendant TriNet. TriNet asserts that it is correctly identified as TriNet HR III, Inc., previously known as TriNet HR Corporation. It claims that the plaintiff maintained a business presence in the District of Columbia, but fails to provide case law supporting that maintaining a business equates to physical presence for diversity jurisdiction. The plaintiff counters, stating that his business duties were performed from California without the need for presence in the District.
The Court notes the absence of relevant precedents from the District of Columbia regarding joint employment under the DCHRA but references the application of the Browning-Ferris and Spirides tests in similar cases under Title VII. It suggests that a local court might apply these tests in assessing the plaintiff's claims. The document discusses the criteria for evaluating fraudulent joinder, indicating that even a slight possibility of relief warrants consideration in favor of the plaintiff.
Additionally, TriNet argues about the implications of its Employee Handbook concerning accommodation requests and challenges the plaintiff’s claims about TriNet’s knowledge of those requests. The Court emphasizes that disputes regarding TriNet's awareness of accommodation requests must be resolved in favor of the plaintiff when assessing fraudulent joinder. Finally, the Court indicates it will issue an Order consistent with the findings in the Memorandum Opinion.
