RESTANI, Judge:
Plaintiff Department of Fair Employment and Housing ("DFEH") and Plaintiff-Intervenor Steven J. Carauddo appeal the district court's grant of summary judgment in favor of Defendant Lucent Technologies, Inc. ("Lucent"), Carauddo's former employer, on claims that he was terminated in violation of the California Fair Employment and Housing Act ("FEHA"). In addition, DFEH challenges the district court's finding of diversity jurisdiction under 28 U.S.C. § 1332 and Carauddo challenges the district court's denial of his motion to intervene. For the following reasons, we affirm.
Carauddo began working as a telecommunications installer ("installer") for Western Electric, Lucent's predecessor, in 1966. An installer's duties consist mostly of physical activities including running cable, drilling holes, setting frames, and wiring cell cabinets filled with electronic components. These activities require an installer to lift and maneuver various items often weighing over thirty pounds.
In January 2005, Carauddo suffered a back injury while performing his job and requested a paid sickness disability benefit period ("disability period") pursuant to Lucent's Sickness and Accident Disability Benefit Plan ("plan"). Lucent's plan requires a member of Lucent's medical department, usually a nurse, to communicate with the employee and his health care providers throughout the disability period. If an employee does not return to work after fifty-two weeks, he is terminated from Lucent's active payroll. An employee, however, may apply for an additional unpaid disability leave of absence if his prognosis is for a full recovery within six months. If an employee's health care provider disagrees with Lucent's decision, the employee may appeal to the Benefit Claim and Appeal Committee within 180 days of the notice of termination.
Shortly after the commencement of Carauddo's disability period, one of Lucent's nurses, Karen Utermahlen, contacted him. In February 2005, Carauddo's physician, Theodore Yee, provided Utermahlen with a Healthcare Provider Report ("report") stating that Carauddo could return to work within three weeks, but could not climb, reach above shoulder level, or lift anything over twenty pounds. Utermahlen presented Carauddo's supervisors with this information, but they determined that no accommodation was available given these restrictions. In April 2005, Carauddo's new physician, Satish Sharma, informed Utermahlen that the previous restrictions
In October 2005, Sachdev provided Utermahlen with an updated list of restrictions that indicated Carauddo could not do repetitive bending, twisting, or lifting over twenty-five pounds. Utermahlen presented this information to Carauddo's supervisors, but they determined that no accommodation was possible. In November 2005, Carauddo's new health care provider, Allen Kaisler-Meza, prepared an updated report listing Carauddo's work restrictions as limited twisting and bending, and no lifting or carrying over ten pounds. In January 2006, Kaisler-Meza provided Utermahlen with a note stating that Carauddo was not allowed to lift, carry, push or pull an object exceeding ten pounds and that these restrictions were to continue until his next examination scheduled for January 17, 2006. Utermahlen again contacted Carauddo's supervisors regarding available accommodations, but they determined that none were available given these restrictions.
On January 18, 2006, Utermahlen telephoned Carauddo to inquire as to the results of his latest examination, and he informed her that he had been released to work and could lift fifty pounds. On January 23, 2006, Utermahlen received an updated report from Kaisler-Meza, which was signed on January 17, 2006, indicating that Carauddo could return to work on January 25, 2006, and that he could "occasionally" lift or carry weights of twenty-one to fifty pounds. Upon receipt of this report, Utermahlen telephoned Carauddo and informed him that she could not return him to work without a further explanation from his physician and that she could not reach Kaisler-Meza.
On January 25, 2006, the final day of his disability period, Carauddo reported to work, but was informed by his supervisor that he could not return to active duty without approval by Lucent's Medical Department. On January 27, 2006, Lucent's Benefits Department sent Carauddo a letter informing him that his disability period had expired and that his employment was terminated effective January 25, 2006. On January 31, 2006, Carauddo underwent a scheduled functional capacity examination ("FCE") that determined he could lift up to forty-five pounds. In February 2006, however, Kaisler-Meza provided Utermahlen with updated work restrictions for Carauddo, stating that he could lift a maximum of thirty pounds. Utermahlen contacted Carauddo's supervisors with this updated information, but they again determined that no accommodation was feasible. In March 2006, Kaisler-Meza issued a report clearing Carauddo for unrestricted work, including the lifting of fifty pounds.
In June 2007, DFEH sued Lucent in California state court, claiming that Carauddo's termination violated the FEHA. Lucent removed the lawsuit to federal court and DFEH moved to remand, but the district court concluded that it possessed diversity jurisdiction as Carauddo, not California, was the real party in interest. Cal. Dep't of Fair Emp't & Hous. v.
In October 2008, Lucent moved for summary judgment. The district court held that Lucent did not violate the FEHA because the evidence demonstrated that Lucent communicated frequently with Carauddo during his disability period, that Lucent reasonably accommodated Carauddo, and that DFEH failed to establish that Lucent's legitimate reason for terminating him was merely pretextual. Cal. Dep't of Fair Emp't & Hous. v. Lucent Techs., Inc., No. C073747PJH, 2008 WL 5157710, at *11-12, *13-14, *14-15, 2008 U.S. Dist. LEXIS 98960, at *30, *35-36, *39-40 (N.D.Cal. Dec. 8, 2008) ("Lucent III"). DFEH and Carauddo now appeal.
"We review de novo a district court's determination that diversity jurisdiction exists." Kroske v. U.S. Bank Corp., 432 F.3d 976, 979 (9th Cir.2005) (internal quotation marks omitted). Similarly, "[w]e review de novo a district court's denial of a motion to intervene as of right." United States v. Aerojet Gen. Corp., 606 F.3d 1142, 1148 (9th Cir.2010). The denial of permissive intervention, however, is reviewed for abuse of discretion. Perry v. Proposition 8 Official Proponents, 587 F.3d 947, 955 (9th Cir.2009)
"We review a district court's decision to grant summary judgment de novo." Carver v. Holder, 606 F.3d 690, 695 (9th Cir.2010). "[W]e must determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law." Adkins v. Mireles, 526 F.3d 531, 538 (9th Cir.2008).
At the outset, we will review the district court's determination that it possessed jurisdiction over this lawsuit. It remains clear that "[d]espite a federal trial court's threshold denial of a motion to remand, if, at the end of the day and case, a jurisdictional defect remains uncured, the judgment must be vacated." Caterpillar Inc. v. Lewis, 519 U.S. 61, 76-77, 117 S.Ct. 467, 136 L.Ed.2d 437 (1996); see also Ex parte Hoard, 105 U.S. 578, 579, 26 L.Ed. 1176 (1881). Nevertheless, "when there is no appeal of a denial of a remand motion . . . the issue on appeal is whether the federal court would have had jurisdiction had the case been filed in federal court in the posture it had at the time of the entry of the final judgment." Carpenters Health & Welfare Trust Fund v. Tri Capital Corp., 25 F.3d 849, 852 (9th Cir. 1994) (quoting Lewis v. Time, Inc., 710 F.2d 549, 552 (9th Cir. 1983), overruled on other grounds, S. Cal. IBEW-NECA Trust Funds v. Std. Indus. Elec. Co., 247 F.3d 920 (9th Cir.2001)); see Caterpillar Inc., 519 U.S. at 76-77, 117 S.Ct. 467. Thus, we will consider whether diversity jurisdiction would have existed if the case had been filed in the posture it had at the time summary judgment was granted.
"The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000 . . . and is
DFEH contends that it is a real party in the controversy for the purposes of diversity jurisdiction because the statute itself states that California has its own interest in such litigation. The relevant statutory language provides that "it is necessary to protect and safeguard the right and opportunity of all persons to seek, obtain, and hold employment without discrimination" because "the practice of denying employment opportunity and discriminating in the terms of employment . . . foments domestic strife and unrest, deprives the state of the fullest utilization of its capacities for development and advancement, and substantially and adversely affects the interest of employees, employers, and the public in general," and is "against public policy." Cal. Gov't Code § 12920.
Although there is little doubt that this provision supports a finding that California is a real party in interest for the purposes of a standing, see EEOC v. United Parcel Serv., 860 F.2d 372, 374 (10th Cir.1988), this language fails to render it a real party in the controversy for the purposes of diversity jurisdiction because these articulated interests are the very "general governmental interest[s]" that the Supreme Court has stated cannot satisfy the diversity requirement,
Next, DFEH argues that it is a real party in the controversy for the purposes of diversity jurisdiction because it sought equitable relief. In its prayer for relief, DFEH asked the court to order Lucent to 1) "cease and desist from discriminating against Real Party and other employees on the basis of physical or mental disability;" 2) "develop, implement, and disseminate a policy that clearly advises management and supervisors of their obligation[s] under the FEHA;" 3) "train all management-level employees, and all supervisors in the chain of command, regarding [Lucent's] duties" under the FEHA; and 4) "post an order in a conspicuous place in all work locations that dispatch Installers in the State of California, stating that Defendant has been found in violation of the FEHA, and specifying the remedies ordered." ER 671.
DFEH's claim that these equitable remedies constitute a substantial state interest is unavailing, as most of these forms of equitable relief could be obtained by the individual aggrieved. In fact, Carauddo's prayer for relief includes a request "[f]or a permanent and mandatory injunction prohibiting Defendants from committing future violations of the laws and public policies" of the FEHA. ER 646. Any remaining interests that are unique to DFEH's lawsuit, namely the training of Lucent's employees, are tangential to the alleged relief sought for Carauddo and, thus, cannot render DFEH a real party to the controversy under these circumstances.
For these reasons, the statutory scheme does not support a finding that DFEH is a real party in the controversy for the purposes of diversity jurisdiction. Accordingly, the district court correctly determined that it possessed jurisdiction.
An applicant has a right to intervene if he "claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest." Fed. R.Civ.P. 24(a)(2). The Ninth Circuit has provided that in order for an applicant to intervene, as a right:
DBSI/TRI IV Ltd. v. United States, 465 F.3d 1031, 1037 (9th Cir.2006) (internal quotation marks omitted).
Both parties agree that the first three prongs of this test were satisfied in this case. Carauddo claims that he also satisfied the fourth prong because he was inadequately represented. He asserts that DFEH "litigate[s] in order to further the societal goal of ending discrimination, without regard to whether the result is the most advantageous that could be achieved on behalf of the individual victim." This claim lacks merit.
"In the absence of a very compelling showing to the contrary, it will be presumed that a state adequately represents its citizens when the applicant shares the same interest." Arakaki v. Cayetano, 324 F.3d 1078, 1086 (9th Cir.2003) (internal quotation marks omitted). "[M]ere[] differences in [litigation] strategy . . . are not enough to justify intervention as a matter of right." Perry, 587 F.3d at 954 (internal quotation marks omitted). Carauddo's vague speculation falls far short of a "very compelling showing."
Nor does public policy support Carauddo's unconditional right to intervene. Although the FEHA provides that in employment discrimination cases brought by DFEH, "the person claiming to be aggrieved shall be the real party in interest and shall have the right to participate as a party and be represented by his or her own counsel," Cal. Gov't Code § 12965(c)(2), state law cannot negate the requirement of the federal rule that Carauddo demonstrate that he is not adequately represented by California, see Patch, 136 F.3d at 208 (providing that "[a] state statute can inform the Rule 24(a)(2) calculus, but it cannot displace the requirement that a would-be intervenor satisfy each of the rule's prerequisites").
Although the district court denied Carauddo's motion to intervene as a right, it allowed him to intervene permissibly pursuant to Fed.R.Civ.P. 24(b). Lucent II, 2008 WL 283798, at *1-2, 2008 U.S. Dist. LEXIS 10851, at *4-5. The district court stated that:
Id. at *2, 2008 U.S. Dist. LEXIS 10851 at *5. Carauddo claims that these limitations were unreasonable. This claim lacks merit.
Under Fed.R.Civ.P. 24(b), "the court may permit anyone to intervene who... has a claim or defense that shares with the main action a common question of law or fact." Fed.R.Civ.P. 24(b). When making this discretionary determination, a district court "must consider whether the intervention will unduly delay or prejudice the adjudication of the original parties' rights." Fed.R.Civ.P. 24(b)(3). "The district court's discretion ... under Rule 24(b), to grant or deny an application for permissive intervention includes discretion to limit intervention to particular issues." Van Hoomissen v. Xerox Corp., 497 F.2d 180, 181 (9th Cir.1974); see Columbus-Am. Discovery Grp. v. Atl. Mut. Ins. Co., 974 F.2d 450, 469 (4th Cir.1992) (providing that "[w]hen granting an application for permissive intervention, a federal district court is able to impose almost any condition"); Beauregard, Inc. v. Sword Servs. LLC, 107 F.3d 351, 352-53 (5th Cir.1997).
Carauddo first argues that the district court denied him representation when it prohibited his counsel from making any argument regarding DFEH's claims at the summary judgment hearing.
Next, Carauddo argues that it was unreasonable for the district court to preemptively limit attorneys' fees. The preemptive nature of this ruling, however, does not render it unreasonable, as a court may deny a plaintiff-intervenor attorney's fees in a civil rights action if "they played a de minimis role." Seattle Sch. Dist. No. 1 v. Washington, 633 F.2d 1338, 1349 (9th Cir.1980); see Grove v. Mead Sch. Dist. No. 354, 753 F.2d 1528, 1535 (9th Cir.1985) ("Awards to intervenors should not be granted unless the intervenor plays a significant role in the litigation.").
The district court did not abuse its discretion in placing various limitations on Carauddo as an intervenor.
DFEH appeals the district court's conclusion that Lucent's interaction with Carauddo was sufficient under California law. Lucent III, 2008 WL 5157710, at *14-15, 2008 U.S. Dist. LEXIS 98960, at *39-40. For the following reasons, we agree with the district court.
Under the FEHA,
During Carauddo's disability period, he was in contact with at least two Lucent employees, Utermahlen and his immediate supervisor, Claudine Strange, yet failed to bring to Lucent's attention any possible accommodations that it had not considered. Any failure to interact adequately, therefore, was caused by Carauddo and, as a result, Lucent cannot be held liable. See Barnett v. U.S. Air, Inc., 228 F.3d 1105, 1115 (9th Cir.2000) ("[C]ourts should attempt to isolate the cause of the breakdown [in the interactive process] and then assign responsibility so that liability ... ensues only where the employer bears responsibility for the breakdown." (internal quotation marks omitted)), rev'd on other grounds, 535 U.S. 391, 122 S.Ct. 1516, 152 L.Ed.2d 589 (2002). Thus, this undisputed evidence fails to raise a genuine issue of material fact as to DFEH's failure to interact claim.
DFEH appeals the district court's decision to grant summary judgment to Lucent on DFEH's reasonable accommodation claim, arguing there was a genuine issue of material fact as to whether Lucent failed to reasonably accommodate Carauddo. Lucent III, 2008 WL 5157710, at *13-15, 2008 U.S. Dist. LEXIS 98960, at *34-36. For the following reasons, we agree with the district court.
Pursuant to the FEHA, it is unlawful "[f]or an employer ... to fail to make reasonable accommodation for the known physical ... disability of an ... employee." Cal. Gov't Code § 12940(m). An employer, however, is not required to provide "an accommodation that is demonstrated by the employer ... to produce undue hardship to its operation." Id. "Reasonable accommodation may include either ... [m]aking existing facilities used by employees readily accessible to, and usable by, individuals with disabilities" or "[j]ob restructuring, part-time or modified work schedules, reassignment to a vacant position, acquisition or modification of equipment or devices, adjustment or modifications of examinations, training materials or policies, the provision of qualified readers or interpreters, and other similar accommodations for individuals with disabilities." Cal. Gov't Code § 12926(n). An "employer cannot prevail on summary judgment on a claim of failure to reasonably accommodate unless it establishes through undisputed facts" that "reasonable accommodation was offered and refused," that "there simply was no vacant position within the employer's organization for which the disabled employee was qualified and which the disabled employee was capable of performing with or without accommodation," or that "the employer did everything in its power to find a reasonable accommodation, but the informal interactive process broke down because the employee failed to engage in discussions in good faith." Jensen v. Wells Fargo Bank, 85 Cal.App.4th 245, 102 Cal.Rptr.2d 55, 68
The essential functions of the installer position included "frequently" lifting up to thirty pounds from waist to overhead, "occasionally" lifting up to fifty pounds from floor to waist, and "frequently" carrying up to fifty pounds for as long as one hundred feet.
DFEH next challenges the district court's decision to grant summary judgment to Lucent on DFEH's disability discrimination claim, arguing, inter alia, that genuine issues of material fact exist as to pretext. Lucent III, 2008 WL 5157710, at *13-14, 2008 U.S. Dist. LEXIS 98960, at *34-36. For the following reasons, we affirm.
"The FEHA prohibits discrimination against any person with a disability but, like the ADA, provides that the law allows the employer to discharge an employee with a physical disability when that employee is unable to perform the essential duties of the job even with reasonable accommodation." Green v. California, 42 Cal.4th 254, 64 Cal.Rptr.3d 390, 165 P.3d 118, 119 (2007); see Cal. Gov't Code § 12940(a)(1). "California has adopted the three-stage burden-shifting test established by the United States Supreme Court for trying claims of discrimination... based on a theory of disparate treatment" because "such claims must usually be proved circumstantially."
To demonstrate a legitimate, nondiscriminatory reason for its decision to terminate Carauddo, Lucent "must show that the procedure by which [he] was terminated was validly and fairly devised and
Cal. Gov't Code § 12940(a)(1).
As previously discussed, there is no genuine issue of material fact as to Carauddo's inability to perform the essential functions of the installer position, and Lucent's inability to reasonably accommodate him.
"Once the employer makes a sufficient showing ... then the discharged employee seeking to avert summary judgment must ... demonstrate either ... that the defendant's showing was in fact insufficient or ... that there was a triable issue of fact material to the defendant's showing." Hanson, 87 Cal.Rptr.2d at 493 (internal quotation marks omitted). The employee can satisfy its burden by "produc[ing] substantial responsive evidence that the employer's showing was untrue or pretextual." Id. (internal quotation marks omitted). A "plaintiff may establish pretext either directly by persuading the court that a discriminatory reason more likely motivated the employer or indirectly by showing that the employer's proffered explanation is unworthy of credence." Godwin, 150 F.3d at 1220 (internal quotation marks omitted). If a plaintiff uses circumstantial evidence to satisfy this burden, such evidence "must be specific" and "substantial." Id. at 1221. "An employee in this situation can not simply show the employer's decision was wrong, mistaken, or unwise." Morgan v. Regents of the Univ. of Cal., 88 Cal.App.4th 52, 105 Cal.Rptr.2d 652, 670 (2000) (internal quotation marks omitted). "Rather, the employee must demonstrate such weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions in the employer's proffered legitimate reasons for its action that a reasonable factfinder could rationally find them unworthy of credence ... and hence infer that the employer did not act for the ... non-discriminatory reasons." Id. (internal quotation marks, emphasis, and citation omitted).
Next, DFEH and Carauddo argue that Lucent's skepticism about Carauddo's ability to lift fifty pounds is evidence of pretext. This argument, however, lacks merit because the evidence most favorable to Carauddo shows that in January he was released to work with certain restrictions, including only occasionally carrying amounts up to fifty pounds. The job description, however, required "frequent" carries of fifty pounds. His post-termination FCE and doctor report were even more limited.
DFEH and Carauddo also argue that the circumstances surrounding the scheduling of Carauddo's FCE raise a genuine issue of material fact. Carauddo additionally argues that Lucent's failure to consider the results of the FCE could establish a pretext. The evidence suggests that Utermahlen originally requested an FCE for Carauddo on January 20, 2006, but cancelled this request three days later. On January 31, 2006, six days after his termination, Carauddo underwent a scheduled FCE and was cleared to return to work, but with various hour restrictions below that required of an installer. Furthermore, fatigue prevented Carauddo from physically demonstrating that he could lift or carry fifty pounds at the FCE. The scheduling of the FCE, therefore, fails to raise a genuine issue of material fact as to pretext, as it did not show that Carauddo could perform the essential functions of the installer position.
Additionally, DFEH and Carauddo argue that Lucent has a one-hundred percent healed policy and that this raises a genuine issue of material fact as to pretext. Although Utermahlen informed Carauddo's wife that he "must be one-hundred percent to return to gainful employment" and Lucent's policy provides disabled employees with an additional six months of unpaid leave only if their "prognosis for full recovery is within six months of the expiration of [their] sickness disability benefits," this evidence does not establish pretext because here the undisputed facts demonstrate that Lucent attempted to accommodate him by continually assessing him on an individual basis. ER 354, 441; see Gelfo, 43 Cal.Rptr.3d at 886 n. 11 (a "policy requiring an employee be '100 percent healed' before returning to work is a per se violation" when the employer does not make an individualized assessment of whether the employee can perform essential
DFEH's contention that Lucent's continual reference to the degenerative nature of Carauddo's disability establishes a pretext is similarly unavailing. DFEH cites evidence that Utermahlen characterized Carauddo's condition as a "multilevel disc disease, in itself ... a long term condition, which includes physical limitations," ER 357, "degenerative in nature," ER 358, and a "multi level disc disease," ER 357. Utermahlen also characterized Carauddo's ability to lift fifty pounds as a "miracle recovery." ER 519. Indeed the January "occasional"-fifty-pounds assessment did not hold. In any case, this fleeting evidence does not establish a pretext because it is ambiguous and insubstantial. See Godwin, 150 F.3d at 1221.
Finally, Carauddo argues that Lucent's failure to provide him with an additional six months of leave pursuant to its policy established pretext. Lucent informed Carauddo of his right to apply for an additional six month leave of absence, but he failed to do so. Thus, this evidence does not raise a genuine issue of material fact as to pretext.
For the aforementioned reasons, DFEH has failed to raise a genuine issue of material fact as to pretext. Accordingly, the district court's grant of summary judgment was not in error.
The district court granted Lucent summary judgment on DFEH's claim that Lucent unlawfully failed to take all reasonable steps necessary to prevent discrimination because there was no viable claim for discrimination. Lucent III, 2008 WL 5157710, at *15-16, 2008 U.S. Dist. LEXIS 98960, at *41. We affirm.
Under the FEHA, it is unlawful "[f]or an employer ... to fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring." Cal. Gov't Code § 12940(k). The California courts have held that this subsection is a separate unlawful employment practice. Carter v. Cal. Dept. of Veterans Affairs, 38 Cal.4th 914, 44 Cal.Rptr.3d 223, 135 P.3d 637, 645 n. 4 (2006). Nevertheless, employers are not liable for failing to take necessary steps to prevent discrimination, "except where the [discriminatory] actions took place and were not prevented." Trujillo v. N. Cnty. Transit Dist., 63 Cal.App.4th 280, 73 Cal.Rptr.2d 596, 602 (1998); see Carter, 44 Cal.Rptr.3d 223, 135 P.3d at 645 n. 4. DFEH, therefore, cannot prevail on this claim because the evidence does not show that Lucent discriminated against Carauddo. Accordingly, the district court's grant of summary judgment on this claim was not in error.
The district court held that no genuine issue of material fact existed as to Carauddo's wrongful termination claim because DFEH could not prevail on any of its claims under the FEHA. Lucent III, 2008 WL 5157710, at *16, 2008 U.S. Dist. LEXIS 98960, at *42. We affirm.
Under California common law, although "an at-will employee may be terminated for no reason, or for an arbitrary or irrational reason, there can be no right to terminate for an unlawful reason or a purpose that contravenes fundamental public policy." Silo v. CHW Med. Found., 27 Cal.4th 1097, 119 Cal.Rptr.2d 698, 45 P.3d 1162, 1166 (2002) (internal quotation marks omitted). Nevertheless, "[t]his
For the foregoing reasons, the district court was correct to deny DFEH's motion to remand and Carauddo's motion to intervene as a right. Furthermore, the permissive intervention allowed was not improperly restrained and there is no genuine issue of material fact as to any of DFEH or Carauddo's claims. Accordingly, the district court's orders and grant of summary judgment are affirmed.
AFFIRMED.
IKUTA, Circuit Judge, dissenting:
The majority today purports to overrule longstanding Ninth Circuit precedent that is, quite literally, hornbook law: a party is an interested party for purposes of diversity jurisdiction when it has some control over the litigation. See Wright & Miller, Federal Practice & Procedure § 1556 (3d ed.) (citing Atchison, T. & S.F. Ry. Co. v. Phillips, 176 F. 663 (9th Cir.1910)). Based on this binding precedent, we must dismiss for lack of jurisdiction. I respectfully dissent.
The crucial question for jurisdiction in this case is whether the Department of Fair Employment and Housing (DFEH), a California agency, constitutes a party to this action for purposes of diversity jurisdiction. If DFEH is an interested party, then complete diversity is lacking, because DFEH is equivalent to the state and a state cannot be a citizen of itself. See Moor v. Alameda Cnty., 411 U.S. 693, 717, 93 S.Ct. 1785, 36 L.Ed.2d 596 (1973).
The answer to this question is established by long-standing precedent. Federal courts have diversity jurisdiction over controversies "between citizens of different states." U.S. Const. art. III, § 2, cl. 1. As a general rule, when jurisdiction depends on the party, the Court determines jurisdiction based on the party named in the record. Mo., Kan. & Tex. Ry. Co. v. Hickman (hereinafter Missouri Railway), 183 U.S. 53, 54, 22 S.Ct. 18, 46 L.Ed. 78 (1901) (citing Osborn v. Bank of United States, 22 U.S. (9 Wheat.) 738, 6 L.Ed. 204 (1824)).
Notwithstanding this general rule, under rare circumstances the presence of a non-diverse party on the record will not destroy diversity. In Walden v. Skinner, the Supreme Court explained that although the beneficiary of a trust had named the trust's executors as defendants in an action to obtain title to trust property, the executors' citizenship did not count for determining diversity jurisdiction because they had no "interest in or control over" the lawsuit and their only role "was to perform
Although the majority relies heavily on Missouri Railway, that case addressed a different issue: whether the state of Missouri was a real party in interest despite not being a party of record. 183 U.S. at 58, 22 S.Ct. 18. The Court noted that even when a state is not a named party, the state may still be a real party in interest "when the relief sought is that which inures to it alone, and in its favor the judgment or decree, if for the plaintiff, will effectively operate." Id. at 59, 22 S.Ct. 18. Nevertheless, the Court held that this exception was inapplicable in the case before it, because the state did not have any "direct, pecuniary interest in the result of the litigation," and the state's general interest in "the welfare of all its citizens, in compelling obedience to the legal orders of all its officials, and in securing compliance with all its laws," was too remote. Id. at 60, 22 S.Ct. 18.
The Court further clarified its test for determining when a party of record is a real party for jurisdictional purposes in United States Fidelity & Guaranty Company v. United States, 204 U.S. 349, 27 S.Ct. 381, 51 L.Ed. 516 (1907). In that case, a material man
From these Supreme Court cases and others, we distilled our own approach. See Atchison, 176 F. 663. In Atchison, we considered a wrongful death action brought by a surviving spouse against a railway company. Id. at 664-65. In order to establish that she was the sole beneficiary of her husband's estate, the plaintiff named her husband's parents as defendants. Id. at 665. The railway company claimed that the federal court lacked jurisdiction, because the parents and spouse were citizens of the same state. Id. at 666.
In determining whether the parents' citizenship counted for diversity jurisdiction purposes, we stated that under Supreme Court precedents, the key question was whether the parties have "a real interest in the cause." Id. at 667. But we further noted that for "[a] party to be `interested' in an action," it "need not be one who may gain or lose something therein." Id. Rather, "[t]he word has a broad meaning, and includes all those who as parties have some control over the action, whether they will be personally affected thereby or not."
Atchison thus made clear that either control of the case or a tangible interest in it suffices to make the citizenship of a party of record count for diversity purposes. Simply put, parties may have a "real interest" in a case if they have "some control over the action, whether they will be personally affected thereby or not." Id. at 667. This rule is not contrary to Missouri Railway. While that case concluded that the state's complete lack of interest in litigation was evidence that it was not a real party, it did not establish the opposite rule, namely, that obtaining a tangible benefit is necessary in order for a state to be a real party in interest. See 183 U.S. 53, 22 S.Ct. 18, 46 L.Ed. 78; see also U.S. Fid. & Guar. Co., 204 U.S. at 356-57, 27 S.Ct. 381. Because no subsequent decision of this court has cast any doubt on the Atchison rule, we are bound by it. See Hart v. Massanari, 266 F.3d 1155, 1170 (9th Cir.2001) ("If a court must decide an issue governed by a prior opinion that constitutes binding authority, the later court is bound to reach the same result, even if it considers the rule unwise or incorrect.").
The majority concedes that California "arguably" controls the litigation, but relies on Missouri Railway for the proposition that "control alone cannot render California a real party in interest because a state can always bestow upon itself control over virtually any lawsuit via legislation." Maj. op. at 738 n.4. The majority does not quote any language from Missouri Railway that supports this proposition. Nor could it, because in fact Missouri Railway provides no support for the majority's newly invented rule. Indeed, Missouri Railway does not even address the situation present in this case, where a state not only is a named party, but actually controls the litigation.
By contrast, Atchison enunciated a rule that is directly on point here: a party to an action "includes all those who as parties have some control over the action, whether they will be personally affected thereby or not." 176 F. at 667. In reaching this conclusion, Atchison did not suggest that this rule would apply only to private parties, not to the government. Rather, Atchison explained that Fidelity, "an action brought in the name of the United States for the benefit of materialmen and laborers on bonds given in pursuance of certain acts of Congress," stood for the "principle" that "the parties whose citizenship is important are those who have a tangible interest in the controversy or exercise some control over it." Id. at 668 (emphases added). Given that Missouri Railway is not on point, while Atchison is directly applicable, the majority's circumvention of our long-standing rule is inexplicable.
In this case, DFEH is the party of record. Moreover, DFEH is the party that brought the suit and is also in control of the litigation. Indeed, the majority does not dispute that this is DFEH's litigation; it holds that Carauddo had no right of intervention, see Maj. op. at 740-41,
Finally, although DFEH would obtain no monetary benefit from the litigation, I would conclude that DFEH's role in enforcing anti-discrimination laws gives it a sufficiently substantial interest for diversity jurisdiction purposes. The California Fair Employment and Housing Act (FEHA) authorizes DFEH to bring suit in the name of California to "provide effective remedies that will both prevent and deter unlawful employment practices," Cal. Gov't Code § 12920.5 (citing Cal. Const. art. XIV, § 1; Cal. Gov't Code §§ 12930(h), 12965), including injunctive measures such as training and policy changes, see id. §§ 12965(c)(3), 12970. Specifically, upon a finding of discrimination or harassment, DFEH's practice is to order the offending employer to "cease and desist the [discriminatory] practice, report the manner of compliance, and take other remedial action as appropriate." Peralta Cmty. Coll. Dist. v. Fair Emp't & Hous. Comm'n, 52 Cal.3d 40, 276 Cal.Rptr. 114, 801 P.2d 357, 365 (1990) (citing Cal. Gov't Code § 12973). In light of the FEHA's broad remedial purpose, see Cal. Gov't Code § 12920 (noting that employment discrimination "foments domestic strife and unrest, deprives the state of the fullest utilization of its capacities for development and advancement, and substantially and adversely affects the interests of employees, employers, and the public in general"), the California Supreme Court has characterized this procedure as serving "the statutory purpose of providing effective remedies that will eliminate the discriminatory practice and prevent its recurrence, not just as to the immediate victim, but as to all employees present and future," Peralta, 276 Cal.Rptr. 114, 801 P.2d at 365 (citing Cal. Gov't Code § 12920). DFEH's specific statutory responsibility to further a well-defined state interest in remedying discrimination is far removed from the general interest in good government that the Court held was insufficient to constitute an interest in the result of litigation in Missouri Railway.
That such an interest is sufficient to give DFEH an interest in the lawsuit for diversity purposes is suggested by the Supreme Court's standing doctrine. As in the context of determining if a party is a real party or merely a nominal party for diversity purposes, the Supreme Court has likewise distinguished between real and nominal parties for standing purposes. In this regard, the Supreme Court has indicated, a state has standing when it raises claims that implicate "its sovereign or quasi-sovereign interests," Pennsylvania v. New Jersey, 426 U.S. 660, 665, 96 S.Ct. 2333, 49 L.Ed.2d 124 (1976), and lacks "standing under the parens patriae doctrine" when it "is only a nominal party without a real interest in its own," Alfred L. Snapp & Son v. Puerto Rico, 458 U.S. 592, 600, 102 S.Ct. 3260, 73 L.Ed.2d 995 (1982). Because California's interest in vindicating its citizens' rights to a discrimination-free workplace is one that it has "attempt[ed] to address through its sovereign lawmaking powers," id. at 609, 102 S.Ct. 3260, California has parens patriae standing to pursue relief for Carauddo. Just as DFEH's interest in the litigation is sufficient to make it a real party for standing
In sum, DFEH is in control of the lawsuit which it is bringing pursuant to a strong state interest in vindicating the state's non-discrimination policies. Cf. U.S. Fid. & Guar. Co., 204 U.S. 349, 27 S.Ct. 381 (holding that the federal government's interest in vindicating the rights of third parties can constitute a pertinent interest in a lawsuit). Under the rule enunciated in Atchison, this is more than sufficient to make DFEH a party whose citizenship counts for diversity purposes. Because the parties are not completely diverse, we lack jurisdiction. Therefore, I dissent.
Although the concept of a quasi-sovereign interest was originally developed in the context of standing to maintain an action, see Missouri v. Illinois, 180 U.S. 208, 241, 21 S.Ct. 331, 45 L.Ed. 497 (1901); Louisiana v. Texas, 176 U.S. 1, 19, 20 S.Ct. 251, 44 L.Ed. 347 (1900), some district courts have held that a decree will effectively operate in favor of a state so long as these interests are present, thus rendering the state a real party in interest for the purposes of diversity, see Maine v. Data Gen. Corp., 697 F.Supp. 23, 25 (D.Me.1988); Dep't of Fair Emp't and Hous. v. Corrs. Corp. of Am., No. CVF091388LJODLB, 2009 WL 4730908, at *3-4, 2009 U.S. Dist. LEXIS 114446, at *7-11 (E.D.Cal. Dec.4, 2009); Wisconsin v. Abbott Labs., Amgen, Inc., 341 F.Supp.2d 1057, 1061-63 (W.D.Wis. 2004); West Virginia v. Morgan Stanley & Co., 747 F.Supp. 332, 338-39 (S.D.W.Va.1990); Missouri ex rel. Webster v. Freedom Fin. Corp., 727 F.Supp. 1313, 1317-18 (W.D.Mo.1989); New York v. Gen. Motors Corp., 547 F.Supp. 703, 706-707 (S.D.N.Y.1982). This use of quasi-sovereign interest to satisfy Missouri Railway's unique relief requirement is contradictory to the very language of that opinion and has never been suggested or endorsed by the Supreme Court. See Illinois v. SDS W. Corp., 640 F.Supp.2d 1047, 1051-52 (C.D.Ill. 2009). Furthermore, other circuit courts have declined such an understanding, as it would effectively render Missouri Railway moribund. See Md. Stadium Auth. v. Ellerbe Becket Inc., 407 F.3d 255, 261-63 (4th Cir. 2005); District of Columbia ex rel. Am. Combustion, Inc. v. Transamerica Ins. Co., 797 F.2d 1041, 1047 (D.C.Cir.1986).
