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reaching the same result where a plaintiff failed to supplement its complaint to controvert the defendant's affidavit, which established facts that showed improper joinder
Summary of this case from Wornner v. Christian Home Health Care, Inc.Opinion
Civil Action No. 00-3615 Section "K"(5)
October 25, 2001
Before the Court is a Motion to Remand filed by plaintiffs Julius Jackson and Shirley Jackson ("Jackson") (Doc. 26). Previously, plaintiffs had filed a Motion to Remand (Doc. 7) with Pneumatic Production Corporation ("PPC") and AWC, Inc. ("AWC") as party defendants. The Court deferred ruling on that Motion to Remand for thirty days to permit plaintiffs time to conduct depositions and propound discovery. The deposition of an AWC representative revealed that AWC was not the proper defendant, plaintiffs filed a Motion to Dismiss Without Prejudice (Doc. 13), and the Court dismissed AWC as a defendant. Plaintiffs were granted leave of Court to file a First Supplemental and Amending Complaint (Doc. 28) which named Air and Process Systems Inc. ("APS") as an additional defendant. Jackson now moves the Court, pursuant to 28 U.S.C. § 1447(c), to remand this action to the 25th Judicial District Court for the Parish of Plaquemines, State of Louisiana, claiming that complete diversity is lacking between plaintiffs and all defendants (Doc. 26). PPC opposes this motion. Having reviewed the pleadings, memoranda and applicable law, the Court finds as follows.
Shirley Jackson is Julius Jackson's wife, and she brings a loss of consortium claim against the Defendants.
PPC previously removed this action to federal court based on diversity jurisdiction. 28 U.S.C. § 1441 and 1332.
Background
This suit arises out of an incident on November 1, 1999, in which plaintiff Julius Jackson was allegedly injured while on the job by a defective strap or ring that came loose from a nearby air dryer due to an allegedly defective nut or bolt that failed to hold. Defendants PPC and APS are alleged to have manufactured, designed, constructed, distributed, sold and/or marketed the strap/ring and nut/bolt that were involved in the incident (Doc. 28). PPC is a Delaware corporation with its principle place of business in Florida and therefore diverse from plaintiffs, who are Louisiana citizens. APS, however, is a Louisiana corporation with its principle place of business in Louisiana, and thus not diverse from Jackson.
Plaintiffs have subsequently focused their allegations against APS in their Memorandum in Support of Motion to Remand, and now contend that MS only took part in the sale, installation and serving of the air dryer involved in this lawsuit (Doc. 26).
PPC contends that APS's citizenship should be disregarded for purposes of determining diversity jurisdiction under 28 U.S.C. § 1441(b), because MS has been fraudulently joined as a defendant solely for the purpose of defeating diversity jurisdiction. Jackson, on the other hand, avers that because a valid cause of action against MS can be maintained, they have not fraudulently joined APS as defendants. Accordingly, Jackson contends that removal to this court was improper and that the matter should be remanded.
Burden of Proof and Standard of Review with Respect to Fraudulent Joinder
As was previously articulated by this Court:
The burden is on the defendant, as the moving party, to prove that jurisdiction exists for removal purposes. See Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42 (5th Cir. 1992); B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir. 1981). Where there have been allegations of "fraudulent joinder", it is clear that the burden is on the removing party to prove the alleged "fraud". See id. The burden of persuasion placed upon those who "cry fraudulent joinder" is indeed a heavy one. See id.; In re Gas Water Heater Prods. Liability Litigation, No. Civ. A. 96-2484, 1996 WL732525, at 1 (E.D. La. Dec. 12, 1996) (Duval, J.).
In determining removal jurisdiction, district courts have been cautioned against pre-trying a case or conducting a full evidentiary hearing See Carriere v. Sears, Roebuck and Co., 893 F.2d 98, 100 (5th Cir.), cert. denied, 498 U.S. 817 (1990); Ford v. Elsbury, 32 F.3d 931, 935 (5th Cir. 1994). Instead, the Fifth Circuit disposes of fraudulent joinder claims in a summary judgment-like procedure, permitting the Court to "pierce the pleadings" and consider evidence outside the pleadings, such as affidavits and depositions accompanying the notice of removal or the motion to remand, as well as the controlling state law. See Burden v. General Dynamics Corp., 60 F.3d 213, 217 (5th Cir. 1995); Ford, 32 F.3d. at 935; Carriere, 893 F.2d at 100; In re Gas Water Heater Prods. Liability Litigation, 1996 WL 732525, at 1. Furthermore, in evaluating fraudulent joinder claims, all disputed questions of fact and all ambiguities in the controlling state law are resolved in favor of the nonmoving party. See id Dodson, 951 F.2d at 42.
Fraudulent Joinder Analysis
To establish that an in-state defendant has been fraudulently joined, the removing party must either show 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 is outright fraud in the plaintiffs pleadings of jurisdictional facts. See B., Inc., 663 F.2d at 549 (citing Keating v. Shell Chemical Co., 610 F.2d 328, 331-32 (5th Cir. 1980)). The defendants have made no allegations of fraud in the plaintiffs' pleadings. Therefore, to defeat the Motion to Remand, defendants must show, as a matter of law, that no reasonable basis for recovery against MS exists. See id. at 549 n. 8; Burden, 60 F.3d at 217. If, after resolving all disputed questions of fact and resolving all ambiguities in the controlling state law in favor of Jackson, there is an arguable and reasonable basis for predicting that state law might impose liability on APS, then joinder of MS was not fraudulent and the case will be remanded to the state court. See In re Gas Water Heater Prods. Liability Litigation, 1996 WL 732525, at 2 (citing Jernigan v. Ashland Oil Inc., 989 F.2d 812, 816 (5th Cir.), cert. denied, 510 U.S. 868 (1993)).
Possibility of Recovery Against APS
Jackson's First Supplemental and Amending Complaint (Doc. 28) against the defendants alleges that PPC and MS manufactured, designed, constructed, distributed, repaired, sold and/or marketed the defective subject ring or strap which allegedly caused Jackson's injuries. The allegations against PPC and MS are identical, and are also identical to those allegations made against PPC and AWC in Jackson's Petition for Damages (Doc. 1). Plaintiffs merely substituted MS for AWC. The claims against the defendants arise out of the Louisiana Products Liability Act ("LPLA"). La. R.S. 9:2800. 51 et. seq. The LPLA provides a cause of action against manufacturers for the damage caused by their products. La. R.S. 9:2800.52. For purposes of the LPLA, a manufacturer is defined as (1) a person who labels a product as his own or otherwise hold himself out to be the manufacturer of the product; (2) a seller who exercises control over or influences a characteristic of the design, construction or quality of the product that causes damage; (3) one who incorporates into the product a component part or part manufactured by another manufacturer; and (4) a seller in the business of importing or distributing a product for resale and is the alter ego of a foreign manufacturer. La. R.S. 9:2800.53(1)(a)-(d). See also Floyd v. Wall Rope Indus., No. Civ. A. 00-0094, 2000 WL 306681, at 2 (E.D. La. Mar. 23, 2000) (Livaudais, J.) (quoting Zehner v. Nordskog Indus., Inc., No. Civ. A. 92-2508, 1992 WL 233984, at 2 (E.D. La. Sept. 2, 1992) (Feldman, J.)). Additionally, "Louisiana jurisprudence instructs that a non-manufacturer seller of a defective product may also be responsible for damages, but only if he knew or should have known that the product sold is defective. See La. C.C. 2545." Id. See also Parks v. Baby Fair Imports, Inc. 726 So.2d 62, 64 (La.App. 5th Cir. 1998); Ferruzzi. U.S.A., Inc. v. R.J. Tricon. Co., 645 So.2d 685, 688 (La.App. 4th Cir. 1994).
Although plaintiffs' First Supplemental and Amending Complaint (Doc. 28) seeks to hold MS liable as a manufacturer and/or seller of the defective product, plaintiffs subsequently narrowed their claims against MS and alleged that MS "was involved in the sale, installation and servicing of the [air dryer] unit." (Plaintiffs' Memorandum in Support of Motion to Remand at 1 (Doc. 26)). Defendants on the other hand maintain that MS "had no involvement with the part of the air dryer that allegedly caused Plaintiffs' injuries" and that MS was "not the manufacturer of the air dryer, and [it] was not the seller or distributor of the air dryer in question." (Defendant's Memorandum in Opposition to Motion to Remand at 2 (Doc. 33)). Accordingly, defendants assert that neither the LPLA nor the Louisiana jurisprudence imposes liability upon MS. To support these factual contentions, defendants submit the deposition of Michael Tackney (Doc. 33), President and CEO of APS, who states that MS only "upgraded" the air dryer unit to allow maintenance to be done without having to shut down the air dryer and that MS did not construct, manufacture, take control of or hold out the air dryer to the public as its own. (Doc. 33). As was the case with their previous Motion to Remand, plaintiffs have not submitted any evidence other than their conclusory allegations contained in their First Supplemental and Amending Complaint (Doc. 28) and Memorandum in Support of Motion to Remand (Doc. 26). Jackson merely submits that "Air and Process Systems, as a Louisiana Corporation, destroys complete diversity thereby requiring that the matter be remanded back to state court for lack of subject matter jurisdiction." (Plaintiffs' Memorandum in Support of Motion to Remand at 2 (Doc. 26)).
It is clear that all disputed questions of fact are resolved in favor of the plaintiff See Burden, 60 F.3d at 217; Ford 32 F.3d at 935; Dodson, 951 F.2d at 42; Carriere, 893 F.2d at 100; In re Gas Water Heater Prods. Liability Litigation, 1996 WL 732525 at 1. However, as this Court previously stated:
Plaintiffs petition alone is not sufficient to rebut the [deposition of Mr. Tackney]. See Jernigan v. Ashland Oil Inc., 989 F.2d 812, 816 (5th Cir.), cert. denied, 510 U.S. 868 (1993) (citing Matsushita v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (the "mere assertion of metaphysical doubt" as to material facts is insufficient to create an issue if there is no basis for those facts)); Sullivan v. Gen-Corp., Inc., No. Civ. A. 95-709, 1995 WL 321743, at 2 (E.D. La. May 24, 1995) (Duval, J.).
As the plaintiffs have not proffered any evidence to supplement the contentions that they made in their amended complaint; subsequently the contentions of the defendants remain undisputed. Bruno v. Witco Corp., No. Civ. A. 99-2354, 2000 WL 275807, at 1 (E.D. La. Mar. 10, 2000) (McNamara, J.) ("Defendants have produced summary judgment type evidence showing that the plaintiff's allegations . . . are unsubstantiated. . . . Plaintiff has not responded to Defendant's summary judgment type evidence to support his allegations. . . ."), aff'd, 237 F.3d 631 (2000). In instances where the Court grants a motion to remand, substantial summary judgment-type evidence, such as affidavits and deposition transcripts, has been presented and along with the factual allegations in the pleadings evidence a dispute of fact to support the idea that recovery against the non-diverse defendant is possible. See Floyd, 2000 WL 306681, at 2 (plaintiff and defendant submitted affidavits); Tramonte v. Chrysler Corp., No. Civ. A. 95-2109, 1999 WL 440456, at 2 (E.D. La. June 28, 1999) (Fallon, J.) (court received briefs and heard oral argument on motion to remand); Peck v. Black and Decker, Inc., No. Civ. A. 93-1285, 1993 WL 441808, at 2 (E.D. La. Oct. 27, 1993) (Mentz, J.) (plaintiff and defendants submitted affidavits); Morreale v. Surgitek, Inc., No. Civ. A. 92-1391, 1992 WL 193489, at 1 (E.D. La. July 30, 1992) (Arceneaux, J.) (plaintiff conducted investigation" and defendant submitted affidavit). In their Memorandum in Support of Motion to Remand (Doc. 26) plaintiffs have not cited to a single case to support their claims against MS. In the instant case, all that plaintiffs have presented to the Court as evidence of the possibility of recovery against MS has been the First Supplemental and Amending Complaint (Doc. 28) and the Memorandum in Support of Motion to Remand (Doc. 26), both of which are controverted by the deposition testimony submitted by defendant PPC.
As this Court noted previously, even in cases where a motion to remand was denied based on a claim of fraudulent joinder, courts have received substantial summary judgment-type evidence from both parties.See Burden, 60 F.3d at 215 (Fifth Circuit affirmed district court denial of motion to remand where state court pleadings, affidavits, and other evidentiary materials were submitted); Pate v. Adell Compounding, Inc., 970 F. Supp. 542, 548-49 (M.D. La. 1997) (plaintiff submitted affidavit attesting that all allegations in petition were true and correct and defendant submitted two affidavits in support of its contentions); Zehner v. Nordskog Industries, Inc., No. Civ. A. 92-2508, 1992 WL 233984, at 3 (E.D. La. Sept. 2, 1992) (Feldman, J.) (deposition testimony was cited by plaintiff and defendant); Jones v. Hyatt Corp., No. Civ. A. 90-0722. 1991 WL 197161, at 2-3 (E.D. La. Sept. Il, 1991) (Wicker, J.) (plaintiff supported allegations with deposition and pleadings while defendant submitted affidavit and other evidentiary materials).
Accordingly, for the above and foregoing reasons,
IT IS ORDERED that the motion of plaintiffs Julius Jackson and Shirley Jackson to remand this action be DENIED.