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Carey v. CSX Transportation, Inc.

United States District Court, E.D. Kentucky, Northern Division, Ashland

January 11, 2019

DANIEL J. CAREY II, D.C., et al., PLAINTIFFS,
v.
CSX TRANSPORTATION, INC., et al., DEFENDANTS.

          MEMORANDUM OPINION AND ORDER

          Henry R. Wilhoit, Jr., Judge

         This matter is before the Court on its own motion based on the Court's inherent power and duty to insure the requirements for subject matter jurisdiction are satisfied in all cases.

         Notice of Removal [Docket No. 1] in the above-styled action states that this Court may exercise subject matter jurisdiction over this matter pursuant to 28 U.S.C. §1332. Upon review of the Notice, this Court found that a serious question existed as to whether it may properly exercise jurisdiction over this matter. Specifically, in setting forth the basis for removal, Defendants maintain that certain Defendants have been fraudulently joined as parties so as to defeat federal jurisdiction. This Court directed the parties to submit briefs in this regard. Having reviewed the parties' submissions, the Court finds that Defendants have not met the stringent requirements for establishing fraudulent joinder, and, as such, remand is warranted.

         I.

         Plaintiffs, Daniel J. Carey II and Shannon M. Johnson, are duly licensed chiropractors who frequently see and treat patients suffering from various ailments and working in various local industries, including the railroad industry.

         In mid-2017, Defendants began investigating Drs. Carey and Johnson, contending that they had conspired with their railroad patients to falsify medical records for the purpose of fraudulently obtaining health benefits.

         On July 14, 2017 CSX chief medical officer, Dr. Craig Heligman, sent the first of a series of letters to the U.S. Railroad Retirement Board (RRB), private health insurance provides, and the Kentucky and Ohio chiropractic licensing boards stating that Plaintiffs had engaged in excessive, inappropriate, and fraudulent treatment practices (collectively, the "Heligman Letters").

         Defendants also charged CSX employees who were treated by Plaintiffs during a certain time period with having engaged in dishonesty and fraud. Pursuant to the relevant labor agreements between the company and the respective unions, a series of internal disciplinary hearings were subsequently held. During these hearings, certain Defendants republished the Heligman Letters in pursuing charges of dishonesty and fraud against various CSX employees based on these statements. The charged individuals were ultimately dismissed from employment.

         Daniel J. Carey II, D.C.; Carey Chiropractic and Rehabilitation, Inc.; and Shannon M. Johnson, D.C., d/b/a Johnson Chiropractic (collectively, "Plaintiffs") filed this civil action against CSX, Dr. Heligman and various CSX employees in Greenup County Circuit Court in the case styled Daniel J. Carey II, D.C.; Carey Chiropractic and Rehabilitation, Inc.; and Shannon M. Johnson, D.C., d/b/a Johnson Chiropractic Case v. CSX Transportation, Inc.; CSX Corporation; Craig Heligman, M.D.; Gus Thoele; Curt Shogren;, Milton Storm; Dillon Doug Jones; Tom DeAngelo; Shawn Lusk; Elizabeth Creedon; and Kenneth Ray Emerson No. 18-CI- 00348.

         In their Complaint, Plaintiffs allege that the Defendants published known false and defamatory information about Plaintiffs, and that Defendants CSXT, CSX Corp. and Heligman, tortiously interfered with Plaintiffs' business activities.

         Defendants filed their Notice of Removal under 28 U.S.C. §§ 1332 and 1441 based. 28U.S.C.§1332 requires that the parties be citizens of different states and that the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332(a). In order for this Court to have diversity jurisdiction under 28 U.S.C. § 1332, there must be complete diversity, in other words, no defendant may have the same citizenship as the plaintiff. See Lincoln Property Co. v. Roche, 546 U.S. 81, 89(2005).

         The parties appear to have no quarrel as to the requisite amount in controversy, agreeing that it exceeds the jurisdictional minimum. As for diversity of citizenship, however, on the face of the Complaint, complete diversity does not exist. Plaintiffs are citizens of Kentucky and/or Ohio. [Complaint, Docket No. 1-1, ¶¶ 1-3]. Defendants CSXT and CSX Corp. are incorporated in Virginia and have their principal places of business in Florida. Id. ¶¶ 4 and 5. Defendant Heligman, the Chief Medical Officer for CSXT, is a citizen and resident of Florida. Id. ¶ 6. Defendant Thoele is a citizen and resident of Georgia. Id. ¶ 7. Defendant Shogren is a citizen and resident of West Virginia. Id. ¶ 8. Defendant DeAngelo is a citizen and resident of West Virginia. Id. ¶ 11. Complete diversity exists between Plaintiffs and these Defendants.

         However, the remaining Defendants are not diverse from Plaintiffs. Defendants Storm, Jones, Lusk, Creedon and Emerson are citizens and resident of Kentucky and/or Ohio. Id. ¶ ¶ 9, 10, 12, 13 and 14. Defendants argue that these Defendants have been fraudulently joined and, as such, their citizenship of these non-diverse parties ...


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