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Simmerman v. Ace Bayou Corp.

United States District Court, E.D. Kentucky, Central Division

November 21, 2014

ANDREW SIMMERMAN, Individually and as Administrator of ESTATE OF MKS (a minor), et al., Plaintiffs,
v.
ACE BAYOU CORPORATION, et al., Defendants

For Andrew Simmerman, as the Administrator of the Estate of M.K.S., Executor plaintiff: Christopher L. Thacker, John Nathan Billings, LEAD ATTORNEYS, Billings Law Firm PLLC, Lexington, KY; David J. Guarnieri, Douglas T. Logsdon, Jaron P. Blandford, LEAD ATTORNEYS, McBrayer, McGinnis, Leslie & Kirkland, PLLC - Lexington, Lexington, KY.

For Andrew Simmerman, individually, Terri Mills, Plaintiffs: Christopher L. Thacker, John Nathan Billings, LEAD ATTORNEYS, Billings Law Firm PLLC, Lexington, KY; David J. Guarnieri, Douglas T. Logsdon, Jaron P. Blandford, LEAD ATTORNEYS, McBrayer, McGinnis, Leslie & Kirkland, PLLC - Lexington, Lexington, KY.

For Ace Bayou Corp., Richard A. Davis, Murray S. Valene, Defendants: Barbara A. Kriz, LEAD ATTORNEY, Kriz, Jenkins, Prewitt & Jones, PSC, Lexington, KY.

For Wal-Mart Stores, Inc., Wal-Mart Stores East, Limited Partnership, Teresa Spears, Defendants: Jennifer Kincaid Adams, Thomas Edward Stevens, Blackburn, Domene & Burchett PLLC, Louisville, KY.

MEMORANDUM OPINION AND ORDER

Danny C. Reeves, United States District Judge.

This matter is pending for consideration of Defendant Teresa Spears' motion to dismiss [Record No. 8] and Plaintiffs Andrew Simmerman and Terri Mills' motion to remand [Record No. 16]. Because the Court concludes that Defendant Spears was fraudulently joined as a defendant to this proceeding, the plaintiffs' motion to remand will be denied while the motion to dismiss will be granted.

I.

This action arises out of the tragic death of three-year-old MKS after the child became enclosed in a purple bean-bag chair on September 12, 2012. [Record No. 16, pp. 2-3] The Complaint alleges that the defective chair was designed, manufactured, and sold by Ace Bayou through Wal-Mart Super center Store Number 1675 in Lebanon, Kentucky. [Record No. 1-1]

The plaintiffs originally filed suit in the Fayette Circuit Court, seeking damages under theories of negligence, strict liability, breach of implied warranties, outrageous conduct, and loss of consortium. [Record No. 1-1] All of the plaintiffs are citizens of Kentucky. With the exception of Defendant Spears, all other defendants have diverse citizenship.[1]

On September 30, 2014, the defendants removed the action to this Court. [Record No. 1-2] Although they acknowledge that Spears' status as a Kentucky citizen would normally destroy diversity jurisdiction, the defendants argue that Spears' citizenship may be disregarded because she has been fraudulently joined in an effort to defeat diversity. [Record Nos. 1-2, 19] Defendant Spears has filed a motion to dismiss the claims against her for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). [Record No. 18] However, the plaintiffs argue that an actionable claim has been asserted against Spears and, as a result, the case should be remanded to Fayette Circuit Court. [Record No. 15]

II.

A. Fraudulent Joinder Standard

A case filed in state court is removable only if it could have been brought in federal court originally. See 28 U.S.C. § 1441(a) (" [A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction[] may be removed . . . to the district court of the United States for the district and division embracing the place where such action is pending."); Lincoln Prop. Co. v. Roche, 546 U.S. 81, 83, 126 S.Ct. 606, 163 L.Ed.2d 415 (2005) (" [Section] 1441 . . . authorizes removal of civil actions from state court to federal court when the action initiated in state court is one that could have been brought, originally, in federal district court."). For this Court to have jurisdiction under 28 U.S.C. § 1332, there must be complete diversity among the parties -- " that is, that no party shares citizenship with any opposing party." Caudill v. N. Am. Media Corp., 200 F.3d 914, 916 (6th Cir. 2000).

An exception to the complete-diversity requirement arises where a non-diverse defendant has been fraudulently joined. See Caudill, 200 F.3d at 916. (" [The Sixth Circuit] has recognized that fraudulent joinder of non-diverse defendants will not defeat removal on diversity grounds."). A case need not be remanded as the result of fraudulent joinder if there is no " reasonable basis" to expect that the plaintiff's claims against the non-diverse defendant could succeed under state law. Coyne, 183 F.3d at 493 (citing Alexander v. Elec. Data Sys. Corp., 13 F.3d 940, 943 (6th Cir. 1994)). Although the plaintiff's actual motive is irrelevant to a fraudulent joinder inquiry, Jerome-Duncan, Inc. v. Auto-By-Tel Mktg. Corp., 176 F.3d 904, 907 (6th Cir. 1999), if " the plaintiff has no hope of recovering against the non-diverse defendant, the court infers that the only possible reason for the plaintiff's claim against [that defendant] was to defeat diversity and prevent removal." Smith v. ...


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