United States District Court, E.D. Kentucky, Central Division, Lexington
ANGELA R. HUFF, Individually and as Executrix of the Estate of David W. Huff Plaintiff,
AGCO CORPORATION, et al., Defendants.
MEMORANDUM OPINION & ORDER
GREGORY F. VAN TATENHOVE UNITED STATES DISTRICT JUDGE.
Plaintiff, Angela Huff, originally filed an action in state
court against AGCO and Cargill for claims relating to the
death of her husband. [R. 18 at 1.] Since complete diversity
existed, the Defendants removed the case to federal court.
Id. at 2. But Huff amended her complaint to add a
nondiverse defendant, Southern States, and sought remand.
Id. The Defendants objected that the joinder of
Southern States was fraudulent. Id. at 3. Judge
Caldwell disagreed and remand was granted. Id.
case found itself again proceeding in state court.
Id. Shortly thereafter, the state court dismissed
the claim against Southern States in a non-final judgment.
Id. The Defendants allege that this dismissal
restored federal jurisdiction. [R. 25.] As a rule, however,
involuntary dismissal does not reestablish federal
jurisdiction. [R. 18.] Nonetheless, the Defendants believe
that two exceptions to that bar on removal apply to this
case: fraudulent joinder and voluntary action rule. [R. 25.]
They are wrong. As a result, Huff's motion for remand [R.
18] is GRANTED. Because this ruling involved
application of unsettled law, Huff's request for attorney
fees [R. 18] is DENIED.
defendant may remove a civil action brought in state court to
federal court only if the action is one over which the
federal court could have exercised original jurisdiction.
See 28 U.S.C. §§ 1441, 1446. This Court
has original “diversity” jurisdiction over all
civil actions when “the matter in controversy exceeds
the sum or value of $75, 000, exclusive of interest and
costs, and the dispute is between” those who are
“citizens of different states.” 28 U.S.C. §
1332(a)(1). In making this assessment, the Court considers
whether federal jurisdiction existed at the time of removal.
See Everett v. Verizon Wireless, Inc., 460 F.3d 818,
822 (6th Cir. 2006).
diversity can be restored if a plaintiff voluntarily
dismisses all the non-diverse parties. Newton v. United
Coal Co., LLC, 2011 WL 2534323, *2 (E.D. Ky. 2011).
After the non-diverse parties are voluntarily dismissed, the
remaining defendants can remove to federal court.
Id. However, if the non-diverse defendant is
involuntarily dismissed, then the case is not usually
removable. Wiacek v. Equitable Life Assur. Soc'y of
U.S., 795 F.Supp. 223, 225 (E.D. Mich. 1992).
distinction between voluntary and involuntary dismissals is
not one without a difference. With an involuntary dismissal,
complete diversity may be only illusory if the appeals court
reverses the trial court's dismissal. Newton,
2011 WL 2534323 at 2. As a result, jurisdiction could be
destroyed at any time. Id. But no such fear exists
with a voluntary dismissal because the plaintiff has
terminated her pursuit of the non-diverse defendant.
Regardless, exceptions to this rule exist. The Defendants
believe two such exceptions apply to this case: (i)
fraudulent joinder and (ii) voluntary conduct. [R. 25.] The
Court explains, in turn, why both exceptions do not prevent
federal courts are courts of limited jurisdiction, “the
removal statute should be strictly construed, ” and any
doubts should be resolved in favor of remanding the case to
state court. Eastman v. Marine Mech. Corp., 438 F.3d
544, 549 (6th Cir. 2006); see also Cole, 728 F.Supp.
at 1307 (citations omitted).
joinder is a “judicially created doctrine that provides
an exception to the requirement of complete diversity.”
Coyne v. Am Tobacco Co., 183 F.3d 488, 493 (6th Cir.
1999) (quoting Triggs v. John Crump Toyota, Inc.,
154 F.3d 1284, 1287 (11th Cir. 1998)). This doctrine is used
by courts “when the non-removing party joins a party
against whom there is no colorable cause of action.”
Saginaw Housing Comm'n v. Bannum, Inc., 576 F.3d
620, 624 (6th Cir. 2009) (citing Jerome-Duncan Inc. v.
Auto-By-Tel, LLC, 176 F.3d 904, 907 (6th Cir. 1999)).
This doctrine was created to prevent plaintiffs from
asserting claims against nondiverse defendants “for the
sole purpose of preventing removal.” McLeod v.
Cities Serv. Gas Co., 233 F.2d 242, 246 (10th Cir.
1956). If Huff's claim has no hope of success, then the
“fraudulent joinder of non-diverse defendants will not
defeat removal on diversity grounds.” Saginaw
Housing Com'n, 579 F.3d at 624 (quoting Coyne v.
Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999)).
remains unsettled what test this Court should use when the
state court has dismissed the non-diverse party. Both parties
present competing tests. The Defendants argue that the Court
should “decide whether there is any reasonable
possibility that the judgment of the circuit court ... will
be reversed on appeal.” Lewis v. Armstrong Steel
Erectors, Inc., 992 F.Supp 842, 844 (S.D. W.V. 1998)
(quoting Arthur, 798 F.Supp. at 370); see also
Wiacek, 795 F.Supp. at 225. Huff, instead, urges that
the test should only ask whether there was a reasonable basis
for predicting that state law might impose liability at the
outset. Hardy v. Ajax Magnathermic Corp., 122
F.Supp.2d 757, 760 (W.D. Ky. 2000). Huff's rule is
preferable because it preserves judicial resources and is
respectful of state courts.
simple application of law-of-the-case to rulings on
fraudulent joinder saves judicial resources and assists in
the smooth administration of justice. Extension of this rule
makes it unnecessary to revisit prior decisions unless a
grave injustice will be done by not doing so.
Christianson v. Colt Industries Operating Corp., 486
U.S. 800, 817 (1988). And the remand standard, which resolves
all differences in favor of remand, highlights the belief
that state courts are equally able to administer justice.
Certainly, only in exceptional circumstances would a