Opinion
Civ. A. No. 2:99cv225-D-B.
Filed Date: January 20, 2000.
OPINION
Presently before the court is the motion of the plaintiff, Harry L. Moore, to remand this matter to state court. In addition, the plaintiff asks the court to award attorney's fees and also to stay the filing of initial disclosures as required in this court. The court finds that the motion to remand is well taken, and it shall be granted. The motion for attorney's fees is denied, and since this matter is remanded to state court, the need for filing initial disclosures is moot.
In addition, the defendant, Union Planters National Bank, has filed a motion to dismiss, claiming fraudulent joinder, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. This motion advances the same argument as the defendant's response to the plaintiff's motion to remand. Therefore, the court finds that this motion is redundant and it shall be denied.
Procedural and Factual History
Plaintiff filed suit in the Chancery Court of Quitman County, Mississippi alleging a violation of Miss. Code Ann. § 75-8-404(a)(1), which imposes liability upon the issuer of securities which transfers or registers those securities upon an ineffective or unauthorized endorsement. The defendants timely removed the action to this court pursuant to 28 U.S.C. § 1446 and 28 U.S.C. § 1332(a)(1) averring that this suit is between citizens of different states and the matter in controversy exceeds $75,000. The plaintiff filed this motion to remand arguing that complete diversity does not exist since the plaintiff is a Mississippi resident and the defendant, Union Planters National Bank, by law is deemed a Mississippi resident. Thereafter, the defendants responded alleging that this court does have jurisdiction because the defendant, Union Planters National Bank, was fraudulently joined.
Standard of Review
The Judiciary Act of 1789 provides in pertinent part, "[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant . . . to the district court of the United States for the district and division embracing the place where such action is pending . . ." 28 U.S.C. § 1441(a). Original jurisdiction exists "where the matter in controversy exceeds the sum or value of $75,000.00, exclusive of interest and costs, and is between . . . citizens of different states . . ." 28 U.S.C. § 1332(a). The phrase "citizens of different states" requires complete diversity. Sid Richardson Carbon Gasoline Co. v. Interenergy Resources, Ltd., 99 F.3d 746, 751 (5 th Cir. 1996). Therefore, should a plaintiff be a resident of Mississippi, no defendant can be a resident of Mississippi. In the case at hand, the plaintiff and one defendant are Mississippi residents. However, this fact will not destroy diversity jurisdiction if the Mississippi defendant was fraudulently joined in order to defeat diversity. Rodriguez v. Sabatino, 120 F.3d 589, 591 (5 th Cir. 1997).
A party invoking the removal jurisdiction of the federal courts bears a heavy burden. Carriere v. Sears, Roebuck Co., 893 F.2d 98, 100 (5 th Cir.), cert. denied, 498 U.S. 817, 11 S.Ct. 60, 112 L.Ed.2d 35 (1990). "To prove that non-diverse parties have been fraudulently joined in order to defeat diversity, the removing party must demonstrate either `outright fraud in the plaintiff's recitation of jurisdictional facts,' Burden v. General Dynamics Corp., 60 F.3d 213, 217 (5 th Cir. 1995), or that `there is absolutely no possibility that the plaintiff will be able to establish a cause of action against the in-state defendant in state court.' Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 259 (5 th Cir. 1995)." Rodriguez, 120 F.3d at 591.
The defendants are alleging that the second prong of the above stated rule is at issue here. As such, this court must evaluate "all of the factual allegations in the plaintiff's state court pleadings in the light most favorable to the plaintiff, resolving all contested issues of substantive fact in favor of the plaintiff" and examine "relevant state law and resolves all uncertainties in favor of the nonremoving party." Green v. Amerada Hess Corp., 707 F.2d 201, 205-06 (5 th Cir. 1983), cert. denied, 464 U.S. 1039, 104 S.Ct. 701, 79 L.Ed.2d 166 (1984).
In the evaluation of a claim of fraudulent joinder, this court need not reach a conclusion as to whether the plaintiff will prevail on the merits of the claim. Instead, the court determines if there exists a possibility that the plaintiff has stated a claim against the defendants. Burden v. General Dynamics Corp., 60 F.3d 213, 216 (5 th Cir. 1995). "Where the plaintiff's complaint is devoid of any factual allegations suggesting a basis for recovery against a particular defendant, there can be no ground for concluding that a claim has been stated." Doe v. Cloverleaf Mall, 829 F. Supp. 866, 870 (S.D.Miss. 1993).
Legal Analysis
28 U.S.C. § 1348 provides in part that "[a]ll national banking associations shall, for the purposes of all other actions by or against them, be deemed citizens of the States in which they are respectively located." 28 U.S.C. § 1348. To that end, federal courts have held that a national bank can be a citizen of any state in which it has branch offices. Norwest Bank Minnesota N.A. v. Patton, 924 F. Supp. 114 (D.C. 1996); Connecticut National Bank v. Iacono, 785 F. Supp. 30, 35 (R.I. 1992).
In the case at hand, Union Planters National Bank has seventy-two branch offices in Mississippi. It is, therefore, deemed a Mississippi resident and the defendants' argument concerning diversity fails. The court is of the opinion that complete diversity does not exist and that Congress intended a national banking association with branch offices in Mississippi to be regarded as a citizen of Mississippi for jurisdictional purposes. Since both plaintiff and defendant Union Planters National Bank are citizens of Mississippi, diversity of citizenship does not exist in this matter. The court must now address the defendants' argument of fraudulent joinder.
The defendant, Union Planters National Bank, argues that it has been fraudulently joined because the complaint filed in this matter alleges no set of facts establishing a cause of action against it. The plaintiff alleges a violation of Miss. Code Ann. § 75-8-404(a)(1), which imposes liability upon the "issuer" of securities which transfers or registers those securities upon an ineffective or unauthorized endorsement. Union Planters National Bank argues that there is no allegation that it is an "issuer" of any securities since the stock at issue in this case is the stock of Union Planters Corporation, another defendant. Union Planters National Bank states in its response to plaintiff's motion to remand that it "is undisputed that Union Planters National Bank acted as the transfer agent for Union Planters Corporation." Response to Motion to Remand, p. 2. See Complaint at ¶ 8. "As a transfer agent, Union Planters National Bank simply transmits stock certificates as directed for Union Planters Corporation and its customers to the Philadelphia Depository Trust Company." Response to Motion to Remand, p. 2.
However, Miss. Code Ann. § 75-8-407 provides that:
A person acting as authenticating trustee, transfer agent, registrar, or other agent for an issuer in the registration of a transfer of its securities, in the issue of new security certificates or uncertificated securities, or in the cancellation of surrendered security certificates has the same obligation to the holder or owner of a certificated or uncertificated security with regard to the particular functions performed as the issuer has in regard to those functions.
Miss. Code Ann. § 75-8-407 (emphasis added).
The defendant's argument fails insomuch as a transfer agent for an issuer of securities has the same obligation to a holder or owner of securities as an issuer. With the defendant's own statement not disputing that it acted as the transfer agent for Union Planters Corporation and Miss. Code Ann. § 75-8-407 taken together, this court finds that the plaintiff has set forth a set of facts establishing a cause of action against Union Planters National Bank. The court finds that the defendant, Union Planters National Bank, was not joined for the purpose of defeating diversity jurisdiction.
Accordingly, the motion to remand is well taken for the reasons stated herein, and this matter shall be remanded to the Chancery Court of Quitman County, Mississippi. A separate order will issue this day.
THIS the ___ day of January 2000.
GLEN H. DAVIDSON United States District Judge