United States District Court, D. Oregon, Portland Division
FINDINGS AND RECOMMENDATION
V. ACOSTA UNITED STATES MAGISTRATE JUDGE.
Keith Valley (“Valley”) filed this lawsuit in
state court against his former employers alleging claims for
wage violations, retaliation, and breach of contract.
Defendants timely removed the lawsuit to this court asserting
diversity jurisdiction and identifying defendant Amanda Lowe
(“Lowe”) as a “sham defendant.”
Presently before the court is Valley's motion to remand,
and his request for attorney fees and costs related to his
court finds Valley failed to state a cause of action against
Lowe according to the settled rules of the state, Lowe should
be disregarded for jurisdictional purposes, and complete
diversity exits. Alternatively, Valley seeks to recover sums
wrongfully collected as a tax, thereby raising a substantial
issue of federal law. Accordingly, the court has diversity
and federal question jurisdiction over this action, removal
was proper, and the motion to remand and Valley's request
for attorney fees and costs should be denied.
Seterus, Inc. (“Seterus”), is a fully-integrated
mortgage loan servicing company and a wholly-owned subsidiary
of defendant International Business Machine Corporation
(“IBM”) (Lowe Decl., ECF No. 20, ¶¶ 2,
4.) From October 24, 2015, to May 25, 2017, Valley worked for
Seterus as a bankruptcy asset specialist at a loan servicing
center in Beaverton, Oregon. (Compl. ECF No. 1-1, ¶
5;Terbenche Decl. ECF No. 21, ¶ 4.) Initially, Valley
was hired by a third party and assigned to IBM as a
contractor. (Terbenche Decl., ¶ 4.) In October 2016, IBM
hired Valley directly. (Terbenche Decl. ¶ 5; Ex.
working at Seterus, Valley reported directly to Maggie
Parrish (“Parrish”) and Megan Snyder
(“Snyder”), both of whom worked in Seterus's
Beaverton office and served as Valley's day- to-day
managers. (Lowe Decl. ¶ 6.) Parrish and Snyder reported
to Shannon Stock (“Stock”), Assistant Vice
President of the Bankruptcy group, who worked out of the
Raleigh, North Carolina office and was only infrequently at
the Beaverton office. (Lowe Decl. ¶¶ 6. 13.) Lowe
was the Assistant Vice President of Operational Controls
responsible for general operations of the foreclosure
department as well as risk and compliance, and worked out of
the Beaverton office. (Lowe Decl. ¶¶ 3, 4.) Both
Stock and Lowe reported to Michael Perry
(“Perry”), Vice President of Default Management.
(Lowe Decl. ¶ 6.)
alleges he was not allowed rest breaks or meal periods, and
IBM and Seterus withheld too much money from his paychecks,
did not paid wages in a timely manner, and did not properly
report and pay taxes, all in violation of Oregon law. (Compl.
¶¶ 7, 9, 14, 16, 17, 18.) With regard to improper
withholding, Valley specifically alleges “[a]t the time
of hire Plaintiff claimed two dependen[t]s on his W-4 form.
More money was being deducted from his gross wages than
required.” (Compl. ¶ 9.) In November 2016, Valley
contacted the human resources and payroll departments to
complain about “additional deductions from his gross
wages.” (Compl. ¶ 9.) The payroll department
advised Valley that “employees made mistakes and
miscalculated the deductions and withholdings of
Plaintiff's wages and other recently hired employees. As
a result, Plaintiff['s] net wage payment was lower than
it should have been.” (Compl. ¶ 10.) IBM and
Seterus promised Valley he would receive the
“additional deduction from his wages in the form of a
separate check, ” which never arrived. (Compl. ¶
11.) Valley alleges his communications with other coworkers
about the payroll issues and his advocacy on the issue
“did not endear [him] to management, ” and he was
terminated “[a]pproximately six months after his
efforts to address company wide wage theft, ” along
with other employees who complained about wage theft. (Compl.
¶ 12.) He claims his termination was based on his good
faith reports of conduct he believed to be illegal. (Compl.
asserts claims against IBM and Seterus for unlawful
deductions under Or. Rev. Stat 652.610(3); late wage payments
under Or. Rev. Stat. 652.120; breach of contract; and
whistleblower retaliation under Or. Rev. Stat. 659A.199.
Valley's sole claim against Lowe is for aider and abettor
liability under Or. Rev. STAT.659A.030(1)(g).
support of his claim against Lowe, Valley alleges:
At all times material to this action, Defendant Amanda Lowe
(herein referred to as “Lowe”) is a natural
person residing in Oregon. Defendant [Lowe] was employed by
Defendant IBM and Defendant Seterus and managed the Plaintiff
subject to his terms of employment.
Defendant Lowe, an Assistant Vice President, holds a
management role and was aware of the issues with Payroll
miscalculations. Defendant Lowe did not address the issues
raised by Plaintiff. A lack of response and leadership on the
part of Ms. Lowe allowed the wage and hour abuses to
Amanda Lowe aided, abetted, incited, compelled and/or coerced
the illegal wage theft and retaliation for his good faith
reports of conduct he believed to be illegal.
(Compl. ¶¶ 4, 13, 33.)
represents she did not supervise, hire, or review
Valley's performance, and had no authority to counsel,
discipline, or adjust Valley's grievances. (Lowe Decl.
¶ 7.) Parrish and Snyder were Valley's direct
supervisors in the Beaverton office and available to assist
him with any concerns. (Lowe Decl. ¶ 13.) However,
according to Valley, Lowe held a management role and was
generally the person of authority in the Beaverton office.
(Valley Decl., ECF No. 13, ¶¶ 3, 4.) Lowe admits
she provided administrative support to the bankruptcy team
from time-to-time by executing court documents or settlement
agreements requiring the signature of an Assistant Vice
President. (Lowe Decl. ¶ 13.)
employees in the Beaverton office from other departments and
over which Lowe had no control would come to her with
concerns. (Lowe Decl. ¶ 8.) In these instances, Lowe
generally consulted with human resources and let them work on
a resolution. (Lowe Decl. ¶ 8.) On one occasion in
November 2016, Valley approached Lowe regarding an error in
his first IBM payroll check. (Lowe Decl. ¶ 9.) Lowe
relayed Valley's complaint to human resources and Stock,
and believed human resources was working on the issue. (Lowe
Decl. ¶ 9.) Lowe represents she was not involved in, and
did not provide any input into, Valley's termination,
which was a part of a reduction in workforce due to financial
circumstances. (Lowe Decl. ¶¶ 11, 12.)
Terbenche (“Terbenche”), Managing Director for
Seterus, stated the error in Valley's first paycheck
directly from IBM resulted from a delay in entering
Valley's W-4 information. (Terbenche Decl. ¶ 10.) As
a result, Valley's withholding allowance was set at
“0” rather than the “2” claimed by
Valley on his W-4 for his November 15, 2016 payroll check.
(Terbenche Decl. ¶ 10.) While Terbenche advised Valley
the errors would be remedied and he would receive an
appropriate refund in his December 15, 2016 payroll check,
the adjustment and refund were actually reflected in his
November 30, 2016 payroll check. (Terbenche Decl.
¶¶ 9, 11.)
filed this action in the Circuit Court of the State of Oregon
for the County of Multnomah on August 8, 2017. IBM, Seterus,
and Lowe (collectively “Defendants”), filed a
notice of removal on September 8, 2017, identifying Lowe, the
sole defendant with Oregon citizenship, as a sham defendant
fraudulently joined to defeat diversity jurisdiction. Valley
filed a motion to remand contending he has alleged a viable
claim against Lowe, thereby defeating Defendants alleged
diversity jurisdiction. In their opposition brief, Defendants
assert for the first time the existence of federal question
jurisdiction based on Valley's claim for a refund of
federal taxes erroneously withheld from his paycheck.