Opinion
No. 1:02-CV-109.
May 24, 2002
MEMORANDUM
Plaintiff Kirk A. Wurdack initially filed this lawsuit in the Chancery Court for Hamilton County, Tennessee. On April 16, 2002, defendants removed the case to this Court on the basis of diversity jurisdiction under 28 U.S.C. § 1332. Plaintiff has filed a motion to remand this case. For the following reasons, this motion (Court File No. 2), shall be GRANTED and this case shall be REMANDED back to state court.
I. Background
The following facts are taken from the pleadings and affidavit testimony provided by the parties. On April 11, 2002, James A. Drescher, counsel for defendants, mailed a notice of removal to be filed with this Court. On that same date, Drescher phoned Michael A. Wagner, plaintiff's counsel, and left a voicemail message. The two attorneys spoke on April 12, 2002, during which time Drescher informed Wagner that defendants' removal documents had been sent via mail. Following that telephone conversation, Drescher received a copy of plaintiff's "First Amended Complaint," which had been filed that morning at 11:53 a.m.
In his amended complaint, plaintiff adds Patrick Camp as a defendant. Camp is a resident of Hamilton County, Tennessee, and his addition to the lawsuit destroys complete diversity of the parties for purposes of this Court's subject matter jurisdiction. Wagner asserts that he did not learn that Camp might be an agent/broker of defendants' products until shortly before the amended complaint was filed. As of May 8, 2002, Camp had not been served with process. Wagner did not realize that Camp's office had changed locations.
II. Analysis
Twenty-eight U.S.C. § 1332 grants federal district courts original jurisdiction over cases where the parties are diverse citizens and the amount in controversy exceeds $75,000. This Court can only exercise subject matter jurisdiction under 28 U.S.C. § 1332 when there is complete diversity of the parties. Wisconsin Dep't of Corrections v. Schacht, 524 U.S. 381, 388 (1998); Carden v. Arkoma Assocs., 494 U.S. 185, 187 (1990). The issue of complete diversity jurisdiction is resolved by looking to the complaint filed in state court at the time of removal. Coyne v. American Tobacco Co., 183 F.3d 488, 492 (6th Cir. 1999); Jerome-Duncan, Inc. v. Auto-By-Tel, L.L.C., 176 F.3d 904, 907 (6th Cir. 1999). Under FED. R. CIV. P. 5(e), a motion is considered filed when received by the clerk of court. Therefore, defendants' removal papers were not filed with this Court until after plaintiff's amended complaint was filed with the state court. It is undisputed that the addition of Camp as a defendant in this case destroys complete diversity.
There is an exception to the rule that complete diversity is determined by looking to the complaint at the time of removal. A fraudulent joinder of a non-diverse defendant will not defeat removal of a case to federal court. Coyne, 183 F.3d at 493. To prove fraudulent joinder, the removing party must demonstrate that no colorable cause of action exists against the non-diverse defendant. Jerome-Duncan, Inc., 176 F.3d at 907.
Plaintiff Wurdack asserts in his amended complaint that all causes of action named in the original complaint are also asserted against Camp. The parties have not briefed the issue of whether plaintiff's amended complaint contains a colorable cause of action against Camp. The information contained in the record is insufficient for the Court to make a determination on that issue. As the defendants have not borne their burden of establishing fraudulent joinder, the Court cannot find the plaintiff's amended complaint improper. Based upon the amended complaint, which therefore governs the issue, the parties to this action are not completely diverse.
Defendants argue that Camp should not be considered in determining diversity of the parties because he had not been served with process at the time of removal. They argue that the failure to serve a defendant with process obliterates a plaintiff's ability to rely on that party to defeat diversity. Defendants rely upon 28 U.S.C. § 1441(b) for this proposition.
While 28 U.S.C. § 1441(a), permits defendants to remove an action to this Court where original jurisdiction exists, § 1441(b) provides an additional limit on removability. See Pecherski v. General Motors Corp., 636 F.2d 1156, 1 (8th Cir. 1980) ("[s]ection 1441(b) does not qualify the requirement of complete diversity; rather, it further limits jurisdiction . . . ."). Under that subsection, diversity actions may only be removed "if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." As the Sixth Circuit has stated, "[w]here there is complete diversity of citizenship . . . the inclusion of an unserved resident defendant in the action does not defeat removal under § 1441(b)." McCall v. Scott, 239 F.3d 808, 813 n. 2 (6th Cir. 2001) (emphasis omitted).
This failure to serve rule only applies where the unserved defendant is a non-resident. Under Pullman Co. v. Jenkins, 305 U.S. 534 (1939), and its progeny, a failure to serve process upon a resident defendant does not render a case removable. Id. at 541; see also Beritiech v. Metropolitan Life Ins. Co., 881 F. Supp. 557, 560 (S.D.Ala. 1995); Republic Western Ins. Co. v. International Ins. Co., 765 F. Supp. 628, 629 (N.D.Cal. 1991). As Camp is a resident of Tennessee, plaintiff's failure to serve him with process does not render this case removable. Rather, the Court must still consider Camp's Tennessee citizenship in ruling on diversity. This case must be remanded to state court.
An order shall enter.