Opinion
CIVIL ACTION NO. 02-1983 SECTION "A" (5)
September 6, 2002
ORDER AND REASONS
Before the Court is a Motion to Remand (Rec. Doc. 7) filed by Plaintiffs. Defendant, Lumberman's Mutual Casualty Company, opposes the motion. The motion, set for hearing on August 28, 2002, is before the Court on the briefs without oral argument. For the reasons that follow, the motion is GRANTED and this matter is remanded to state court.
Factual Background
Plaintiff's allege injuries arising out of a head on collision caused when driver John Doe illegally crossed over the double-centerline in a no passing zone. Plaintiffs sued Lumbermen's Mutual Casualty Company (uninsured motorist carrier for Charter Communications, Inc., the owner of Plaintiffs' vehicle), State Farm Mutual Automobile Insurance Company (excess uninsured motorist carrier), and Tanye Thomas (the owner of the vehicle driven by Doe) in the 21st JDC, Parish of Tangipahoa. Lumbermen's removed the case to this Court alleging diversity jurisdiction even though Plaintiffs and defendant Thomas are all citizens of Louisiana. In its notice of removal Lumbermen's asserted without elaboration that Plaintiffs fraudulently joined Thomas without good cause.
After the case was removed from state court and transferred to this Section where Lumbermen's declaratory judgment action was already pending, the Court sua sponte questioned its subject matter jurisdiction in the removed case given the absence of complete diversity of citizenship. Accordingly, the Court ordered the parties to brief the subject matter jurisdiction issue and the instant motion to remand and opposition were filed.
Lumbermen's filed a declaratory judgment action against Plaintiffs in this Court prior to the Plaintiffs having filed their tort suit in state court. In Civil Action 02-142, Lumbermen's seeks a judgment declaring that its policy does not provide coverage to Plaintiffs.
The Parties' Contentions
Plaintiffs first argue that the removal was procedurally defective because all defendants have not joined or concurred in the removal. Second, Plaintiffs argue that Lumbermen's has not met its burden of showing that Thomas was fraudulently joined. Specifically, they argue that Lumbermen's has not established that Plaintiffs have no possibility of recovering against Thomas on their negligence theories.
In opposition, Lumbermen's argues that the removal was not defective because State Farm has consented to the removal. As for the fraudulent joinder issue, Lumbermen's argues that Thomas cannot be located or served at this time so Plaintiff cannot possibly establish a cause of action against her. Thus, she has been fraudulently joined.
Discussion
If the removing party alleges jurisdiction on the basis that parties of non-diverse citizenship have been fraudulently joined, then the removing party must prove the existence of fraud. Jernigan v. Ashland Oil, Inc., 989 F.2d 812, 815 (5th Cir. 1993) (citing Carrier v. Sears, Roebuck Co., 893 F.2d 98 (5th Cir. 1990)). To prove its allegation of fraud, defendant "must show either that there is no possibility that the plaintiff would be able to establish a cause of action against the in-state defendant in state court; or that there has been outright fraud in the plaintiff's pleadings of jurisdictional facts." Id. (citing B., Inc. v. Miller Brewing Co., 663 F.2d 545 (5th Cir. 1981)). In determining whether the joinder was fraudulent, the court must consider all factual allegations in the light most favorable to plaintiff, and resolve all contested issues of substantive fact in favor of plaintiff. Id. (citingB., Inc., 663 F.2d at 549). If there is "arguably a reasonable basis for predicting that the state law might impose liability on the facts involved," then there is no fraudulent joinder. Id. (citing Bobby Jones Garden Apts. v. Suleski, 391 F.2d 172 (5th Cir. 1968)).
Based on the foregoing, the Court concludes that Lumbermen's has failed to meet its burden of establishing fraudulent joinder. The Court sees no evidence of outright fraud on the part of Plaintiffs and Lumbermen's has failed to show that Plaintiffs have no possibility of establishing a cause of action against Thomas. To the contrary, the negligent entrustment theory upon which Plaintiffs sued Thomas is a recognized cause of action under Louisiana law. See Joseph v. Dickerson, 754 So.2d 912 (La. 2000). Further, Lumbermen's attempts to argue the merits of this claim in its opposition memorandum are unpersuasive in light of Lumbermen's own admission that Thomas has not been deposed or interviewed. Nor is such a determination on the merits appropriate in a fraudulent joined analysis.
Finally, the fact that Thomas has not been served does not create a fraudulent joinder situation. See, e.g., In re Norplant Contraceptive Prods. Liability Litigation, 889 F. Supp. 271 (D.C. Tex. 1995). The existence vel non of subject matter jurisdiction simply cannot, as a practical matter, fade in and out depending upon the temporal situation of a party's inability to serve a particular defendant.
In sum, the Court concludes that complete diversity of citizenship is lacking thereby depriving this Court of subject matter jurisdiction. Remand pursuant to 28 U.S.C. § 1447(c) is appropriate. Because subject matter jurisdiction is lacking any issues relating defects in removal are moot.
Accordingly;
IT IS ORDERED that the Motion to Remand (Rec. Doc. 7) filed by Plaintiffs should be and is hereby GRANTED. This matter is REMANDED to the 21st Judicial District Court for the Parish of Tangipahoa.