Unreported / Non-Citable
Background
Plaintiff Juan Ochoa, Jr. filed this action in San Joaquin County Superior Court on December 15, 2025, against his employer Costco Wholesale Corporation, Costco manager Jesse Johnson, and employees “Luis” and “Ricky” (Individual Defendants). Ochoa, who has worked at Costco since 2013, suffers from multiple sclerosis, which Costco allegedly knew about since 2016. He alleges that in December 2024, Johnson instructed him to work in the coolers despite knowing his disability limited his ability to work in cold temperatures, and mocked him when he objected. Ochoa’s symptoms flared, causing missed work. In February 2025, Costco allegedly assigned him to work in “the box,” where cold temperatures again caused a flare-up.
Ochoa also alleges Luis and Ricky mocked his disability and ignored him after he reported the behavior. He asserts seven FEHA claims against Costco and a harassment claim against the Individual Defendants. Costco, a Washington corporation, removed the case to federal court on December 15, 2025, invoking diversity jurisdiction under 28 U.S.C. § 1332, asserting the Individual Defendants were fraudulently joined because they could not be liable for harassment as a matter of law. At the time of removal, the Individual Defendants had not been served. Ochoa moved to remand on March 6, 2026, arguing the Individual Defendants were properly joined California citizens, destroying complete diversity.
The Court’s Holding
The court granted Plaintiff’s motion to remand and denied Costco’s motion to dismiss as moot. Applying the fraudulent joinder standard, the court held that Costco failed to prove by clear and convincing evidence that there was no possibility a state court would find a cause of action for harassment against the Individual Defendants. While the Individual Defendants’ alleged comments (mocking Ochoa about cold temperatures) standing alone likely did not constitute extreme conduct sufficient for harassment, the court found that under California law, discriminatory conduct by the employer can contribute to a hostile work environment when viewed in context with coworker harassment. Relying on Cornell v.
Berkeley Tennis Club, the court concluded that Johnson’s alleged actions—ordering Ochoa to work in the coolers and “the box” despite knowledge of his disability, and mocking his restrictions—could be interpreted as enforcing the hostile message conveyed by the Individual Defendants’ comments. Taken together, the allegations raised a possibility that the harassment was severe or pervasive. Because the Individual Defendants were not fraudulently joined and are California citizens, complete diversity was lacking, requiring remand under 28 U.S.C. § 1447(c). The court did not reach Ochoa’s alternative arguments regarding amount in controversy or snap removal.
Key Takeaways
- The court applied the Ninth Circuit’s fraudulent joinder standard, requiring the removing defendant to prove by clear and convincing evidence that there is no possibility the plaintiff can state a claim against the non-diverse defendant.
- Under California FEHA law, coworker harassment claims are evaluated in context with the employer’s alleged discriminatory conduct; employer actions can “enforce the hostile message” conveyed by coworker comments, rendering otherwise non-extreme comments actionable as part of a hostile work environment.
- The court followed Cornell v. Berkeley Tennis Club, holding that a supervisor’s discriminatory employment actions (assigning plaintiff to cold environments despite known disability) combined with coworker mocking comments could support a harassment claim against the coworkers.
- Because the Individual Defendants were properly joined California citizens, complete diversity was destroyed and remand was mandatory; the court did not reach alternative remand arguments (amount in controversy, snap removal).
- Costco’s motion to dismiss and both requests for judicial notice were denied as moot.
Why It Matters
The remand ruling reinforces the demanding fraudulent-joinder standard. A removing defendant must eliminate every possibility of a viable state claim, and a federal court must resolve factual and legal uncertainties in the plaintiff’s favor. In a FEHA harassment case, workplace assignments and supervisory conduct may supply context that makes coworkers’ comments actionable as part of a severe or pervasive environment. With jurisdiction absent, the federal dismissal motion could not be decided.
Ochoa alleged that cold work assignments aggravated his multiple sclerosis and that coworkers and a manager mocked his restrictions. Costco argued the California employees were sham defendants whose citizenship could be ignored. The court emphasized that remand presents a more forgiving inquiry than final merits review: even a potentially curable claim defeats fraudulent joinder. Because California law permits managerial actions to reinforce a hostile message, the complaint left at least a possibility of individual harassment liability. The case returned to San Joaquin County Superior Court.