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Bellman v. NXP Semiconductors USA, Inc.

United States District Court, D. New Mexico

March 31, 2017


          David J. Jaramillo Jaramillo Law Firm, P.C. Albuquerque, New Mexico and David Bricker Waters Kraus & Paul El Segundo, California and Maria E. Touchet Touchet Law Firm, P.C. Albuquerque, New Mexico and Charles Siegel Waters Kraus & Paul Dallas, Texas Attorneys for the Plaintiffs

          Daniel L. Ring Mayer Brown, L.L.P. Chicago, Illinois and William P. Slattery Dana S. Hardy Hinkle, Hensley, Shanor & Martin, L.L.P. Santa Fe, New Mexico Attorneys for Defendants NXP Semiconductors USA, Inc., Philips Electronics North America Corporation, and Philips Semiconductors, Inc.

          Jeremy K. Harrison Susan Miller Bisong Modrall Sperling Roehl Harris & Sisk, P.A. Albuquerque, New Mexico Attorneys for Defendant Rinchem Company, Inc.


         THIS MATTER comes before the Court on the Plaintiffs' Motion for Remand and Memorandum in Support Thereof, filed March 23, 2016 (Doc. 8)(“Motion”). The Court held a hearing on July 11, 2016. The primary issue is whether the Court should remand the case pursuant to 28 U.S.C. § 1447(c) for lack of subject matter jurisdiction, because the parties are not completely diverse under 28 U.S.C. § 1332(a)(1). To decide this issue, the Court must determine whether the Plaintiffs joined Defendant Rinchem Company, Inc., a non-diverse party and citizen of New Mexico, fraudulently to defeat federal diversity jurisdiction. The Court concludes that the Plaintiffs have stated possibly viable claims against Rinchem Co., and thus, that Rinchem Co. is not fraudulently joined. Accordingly, because the Court lacks diversity jurisdiction under 28 U.S.C. § 1332(a)(1), the Court will grant the Motion and remand the case to the First Judicial District Court, County of Santa Fe, State of New Mexico.


         This action involves allegations concerning serious injuries to Plaintiffs Randy Bellman, Jr., Brett Booth, and Brittany Booth, stemming from their mothers' exposure to chemical products and substances while working at a semiconductor manufacturing plant in Albuquerque, New Mexico. Defendants NXP Semiconductors USA, Inc., Philips Electronics North America Corp., and Philips Semiconductors, Inc. (the “Signetics Defendants”) owned and operated the plant at all times relevant to this action. Rinchem Co. allegedly supplied the chemicals that the Plaintiffs contend caused their injuries. R. Bellman, Jr., Brett Booth, and Brittany Booth bring negligence, products liability, and warranty claims against the Signetics Defendants and Rinchem Co. Their parents -- Plaintiffs Jacqueline Bellman, Randy Bellman, Vicki Goss, and Anthony Booth -- bring derivative claims for damages.

         The Court takes its recitation of the facts from the Complaint for Personal Injuries, filed February 2, 2016 (Doc. 1-1)(filed January 8, 2016, in Bellman, Jr. v. NXP Semiconductors USA Inc., D-101-CV-2016-00045)(“Complaint”). The Court relies on this factual account for background purposes only, particularly because the Signetics Defendants advance several objections to the Complaint's allegations concerning Rinchem Co. The Court recognizes that the Complaint's factual account is largely the Plaintiffs' version of events.

         The Court will provide a brief overview of the parties and then review the Complaint's factual allegations.

         1. Overview of the Parties.

         R. Bellman, Jr. was born on January 21, 1991. See Complaint ¶ 14, at 3. J. Bellman and R. Bellman are his parents. See Complaint ¶ 14, at 3. Brett Booth and Brittany Booth were born on December 29, 1988. See Complaint ¶¶ 15-16, at 3. Brett Booth and Brittany Booth are siblings, and V. Goss and A. Booth are their parents. See Complaint ¶¶ 15-16, at 3.

         The Signetics Defendants are foreign corporations organized under the laws of Delaware. See Complaint ¶¶ 8-10, at 2. At all times relevant to this action, the Signetics Defendants owned and operated a semiconductor manufacturing facility in Albuquerque. See Complaint ¶ 18, at 3. The Signetics Defendants operated the facility as “Signetics” or “Signetics Corporation.” Complaint ¶ 18, at 3. Rinchem Co. is a domestic corporation that allegedly supplied, transported, formulated, reformulated, mixed, sold, and/or distributed chemical products and substances to the Signetics Corp. facility and its employees. See Complaint ¶ 11, at 2; id. ¶¶ 22-23, at 5-6.

         2. The Complaint's Factual Allegations.

         From April 1987 to 2000, J. Bellman worked at Signetics Corp.'s Albuquerque facility manufacturing semiconductor products or components. See Complaint ¶ 19, at 3. V. Goss worked at the facility in a similar capacity from July 1983 to 1989. See Complaint ¶ 19, at 3-4. While there, J. Bellman and V. Goss “worked with, in proximity to and/or were exposed to, ” a wide variety of chemical products and substances[1] that were used in the manufacture of semiconductor products or components. See Complaint ¶ 20, at 4. Rinchem Co. supplied, and Signetics Corp. prescribed, specified, and approved, these chemicals. See Complaint ¶¶ 23, 26, at 6. Signetics Corp. monitored some of its employees' exposure to these chemicals; generally monitored its employees' medical, including reproductive, health; tracked the incidence of adverse reproductive outcomes among its employees' offspring; and tracked the potential disease burden to its employees and their families that exposure to these chemicals posed. See Complaint ¶¶ 28-31, at 6-7.

         The chemicals that Signetics Corp. used included known or suspected teratogenic, genotoxic, and/or reproductively toxic chemical products and/or substances. See Complaint ¶ 33, at 7. Before and during J. Bellman's and V. Goss' employment at Signetics Corp.'s Albuquerque facility, Signetics Corp. had “developed, approved and/or promulgated industrial hygiene policies and procedures to be followed” at the facility. Complaint ¶ 37, at 9. These policies “did not include any warnings to workers about the potential for reproductive harm resulting from exposure to the [] chemical[s]” that the facility used, Complaint ¶ 38, at 9, nor did they include methods, processes, or controls to mitigate excessive exposure to, or standards, regulations, or guidelines to minimize the danger from exposure to, those chemicals, see Complaint ¶¶ 39-41, at 10. Likewise, although Signetics Corp. had training programs for its employees, those programs did not include warnings about reproductive harm that might result from chemical exposure, such as “miscarriage, stillbirth and/or birth defects[] among their offspring.” Complaint ¶¶ 43-44, at 10. Finally, although employees in “wafer processing areas” wore protective equipment, that equipment was designed to protect Signetics Corp.'s semiconductor products/components from particulates and not to protect workers from chemical exposure. Complaint ¶ 51, at 11.

         During their periods of gestation, R. Bellman, Jr., Brett Booth, and Brittany Booth all sustained injuries in utero that are linked to their mothers' exposure to chemicals at Signetics Corp. See Complaint ¶¶ 69-70, at 16. R. Bellman, Jr.'s injuries include pheochromocytoma, Von Hippel-Lindau disease, adrenal gland tumors, other tumors, resection of the adrenal glands, and internal injuries. See Complaint ¶ 76, at 17. Brett Booth's injuries include congenital heart defects, single ventricle, transportation of the great arteries, and cirrhosis of the liver, resulting in numerous heart surgeries and a heart transplant. See Complaint ¶ 78, at 17. Brittany Booth experiences seizures as a result of her chemical exposure. See Complaint ¶ 80, at 18.


         The Plaintiffs commenced this action on January 8, 2016, in the First Judicial District Court, County of Santa Fe, State of New Mexico. See Complaint at 1; Bellman, Jr. v. NXP Semiconductors USA Inc., D-101-CV-2016-00045, Register of Actions Activity. The Complaint asserts three counts against the Signetics Defendants for (i) negligence, see Complaint ¶¶ 32-81, at 7-18; (ii) punitive damages, see Complaint ¶¶ 82-93, at 18-23; and (iii) strict liability, see Complaint ¶¶ 104-17, at 27-29. The Complaint also asserts two counts against Rinchem Co. for (i) negligence, see Complaint ¶¶ 94-98, at 24-26; and (ii) breach of express and implied warranties, see Complaint ¶¶ 99-103, at 26. R. Bellman, Jr., Brett Booth, and Brittany Booth seek damages for medical care and treatment, pain and suffering, lost earnings, loss of future earning capacity, loss of future household services, and other damages. See Complaint ¶¶ 119.a-d, at 29-30. J. Bellman, R. Bellman, V. Goss, and A. Booth bring derivative claims for damages for interference in their parent-child relationships, mental and emotional anguish, medical expenses, and other injuries and damages. See Complaint ¶¶ 120-123, at 30-31.

         On February 16, 2016, the Signetics Defendants removed the case under 28 U.S.C. § 1446. See Notice of Removal at 1, filed February 16, 2016 (Doc. 1)(“Notice of Removal”). The Signetics Defendants invoke federal diversity jurisdiction pursuant to 28 U.S.C. § 1332, arguing that “[c]omplete diversity exists between the properly joined parties to this action.” Notice of Removal ¶¶ 10-16, at 3-4. The Signetics Defendants say that, although Rinchem Co. -- a New Mexico citizen -- is also named as a Defendant, its consent to removal is not required, because it was “fraudulently joined.” Notice of Removal ¶ 3, at 2 (citing, among others, Dutcher v. Matheson, 733 F.3d 980, 987-88 (10th Cir. 2013)). They explain that removal cannot be defeated by fraudulent joinder of a non-diverse resident defendant against whom a plaintiff is unable to establish a cause of action. See Notice of Removal ¶ 17, at 4 (citing Dutcher v. Matheson, 733 F.3d at 988). Here, the Signetics Defendants argue, “New Mexico law precludes Plaintiffs from recovering against Rinchem[.]” Notice of Removal ¶ 18, at 5.

         First, they aver, the Uniform Commercial Code's four-year statute of limitations on personal injury claims predicated on breach of warranty bars the Plaintiffs' breach-of-warranty claim. See Notice of Removal ¶¶ 19-22, at 5-6 (relying on Badilla v. Wal-Mart Stores East Inc., 2015-NMSC-029, 357 P.3d 936). Second, they contend that New Mexico law precludes the Plaintiffs' negligence claim against Rinchem Co., because it “had no duty to warn the Plaintiffs regarding risks associated with use of any chemicals it may have delivered to the Signetics plant at any point in time, ” and because “Rinchem did not manufacture or blend any of the chemicals and provided Signetics . . . safety information” and warnings about the chemicals. Notice of Removal ¶ 30, at 9-10 (relying on Parker v. E.I. Du Pont de Nemours & Co., 1995-NMCA-086, 909 P.2d 1 (“Parker”); Restatement (Second) of Torts, § 388 cmt. l (Am. Law Inst. 1965)). The Signetics Defendants contend that, accordingly, “diversity jurisdiction exists because New Mexico law precludes Plaintiffs' putative claims against Rinchem.” Notice of Removal ¶ 17, at 4.

         With respect to diversity jurisdiction's amount-in-controversy requirement, the Signetics Defendants contend that a “fair reading” of the Complaint demonstrates that the Plaintiffs' claims against them independently exceed the $75, 000.00 minimum. Notice of Removal ¶¶ 31-34, at 10-11. They aver that the “Plaintiffs' allegations of injury are at least as significant as others that have been found to satisfy the amount in controversy requirement.” Notice of Removal ¶ 33, at 11 (relying on, among others, Gebbia v. Wal-Mart Stores, 233 F.3d 880, 881-83 (5th Cir. 2000)). The Signetics Defendants conclude that, because there is complete diversity and an amount in controversy of more than $75, 000.00, this case is removable. See Notice of Removal ¶ 34, at 11.

         1. The Motion to Remand.

         On March 23, 2016, the Plaintiffs moved to remand the case to state court. See Motion at 1. The Plaintiffs assert that the Court does not have diversity-of-citizenship jurisdiction, because all the Plaintiffs, as well as Rinchem Co., are citizens of New Mexico for diversity purposes. See Motion at 2. With respect to whether Rinchem Co. was fraudulently joined, the Plaintiffs contend that “‘the defendant seeking removal bears a heavy burden of proving fraudulent joinder, and all factual and legal issues must be resolved in favor of the plaintiff.'” Motion at 2 (alteration omitted)(quoting Dutcher v. Matheson, 733 F.3d at 988 (quoting Pampillonia v. RJR Nabisco, Inc., 138 F.3d 459, 461 (2d Cir. 1998))). The Plaintiffs aver that fraudulent joinder requires either (i) “actual fraud in the pleading of jurisdictional facts”; or (ii) the “inability of the plaintiff to establish a cause of action against the non-diverse party in state court.” Motion at 2-3 (quoting Dutcher v. Matheson, 733 F.3d at 988 (quoting Cuevas v. BAC Home Loans Servicing, LP, 648 F.3d 242, 249 (5th Cir. 2011))(internal quotation marks omitted). The Plaintiffs argue that the Signetics Defendants have not met these standards.

         First, the Plaintiffs posit that the Complaint states a viable negligence claim against Rinchem Co. See Motion at 3. The Plaintiffs interpret the Notice of Removal as asserting that the “sophisticated user” doctrine bars negligence liability on these facts. Motion at 3. The Plaintiffs argue that Parker, upon which the Signetics Defendants principally rely, “in fact demonstrates why fraudulent joinder cannot be found here.” Motion at 3. The Plaintiffs note that, in Parker, the Court of Appeals of New Mexico affirmed the trial court's grant of summary judgment as to strict liability and negligence claims asserted against Du Pont Co., a supplier of substances used in the manufacture of artificial temporomandibular joints. See Motion at 3-4. With respect to strict liability, the Plaintiffs assert that the Court of Appeals of New Mexico relied on “DuPont's [sic] extensive and unrebutted factual showing” that the substances it supplied were inert, safe for use and were “not inherently defective or dangerous, ” and that Du Pont Co. had no agency relationship with the manufacturer. Motion at 4 (citing Parker, 1995-NMCA-086 ¶¶ 14-15, 909 P.2d at 6-7). The Plaintiffs contend that, based on this factual showing, the Court of Appeals of New Mexico held that Du Pont Co. had no duty to perform further tests or to provide warnings to other consumers, including the plaintiffs. See Motion at 4 (citing Parker, 1995-NMCA-086 ¶ 17, 909 P.2d at 7). Turning to negligence, the Plaintiffs contend that the Court of Appeals of New Mexico affirmed summary judgment, because Du Pont Co. advised the manufacturer in writing that its substances “were not made for medical use” and that a medical study had found that the substance, when used in a hip replacement cup, tended to abrade. Motion at 6 (citing Parker, 1995-NMCA-086 ¶ 36, 909 P.2d at 11-12).

         The Plaintiffs assert that these holdings do not stand for an “absolute rule of immunity for suppliers in Rinchem's position; rather, their liability depends on the facts in any given case.” Motion at 5. The Plaintiffs posit, further, that this case is distinguishable from Parker, because here the Plaintiffs are suing the supplier as well as the “ultimate user of the product in question, ” i.e., the Signetics Defendants. Motion at 7. The Plaintiffs contend that the Signetics Defendants “will of course strenuously dispute plaintiffs' allegations about their knowledge of the hazards of the substances to which the employee plaintiffs were exposed.” Motion at 7. In the Plaintiffs' view, the Signetics Defendants “have simply raised a possible defense that Rinchem may or may prove at trial, and the Signetics Defendants will be doing all they can at trial to establish Rinchem's liability and diminish their own.” Motion at 7.

         The Plaintiffs contend, moreover, that the sophisticated-user doctrine cases upon which the Signetics Defendants rely are inapposite, because none were decided in the removal context. See Motion at 8. The Plaintiffs argue that, rather, those cases “all concern trial or summary judgment records.” Motion at 8. According to the Plaintiffs, “the standard for a finding of fraudulent joinder is ‘more exacting than that for dismissing a claim under Rule 12(b)(6)[ of the Federal Rules of Civil Procedure], ' let alone for summary judgment.” Motion at 8 (quoting Montano v. Allstate Indem. Co., 211 F.3d 1278, 2000 WL 525592, at *2 (10th Cir. 2000)(unpublished table decision)). The Plaintiffs also argue that some courts “have recognized that the sophisticated-user and related doctrines are not appropriate for application as grounds for a finding of fraudulent joinder.” Motion at 8 (relying on Sherman v. A.J. Pegno Const. Corp., 528 F.Supp.2d 320 (S.D.N.Y. 2007)(Sullivan, J). Those courts, the Plaintiffs contend, hold that a determination whether a supplier gives adequate warnings to the purchaser of its product “is necessarily fact-specific, and is not suited for resolution in the removal context.” Motion at 9.

         Finally on the negligence issue, the Plaintiffs argue that “there is no question that plaintiffs' pleadings set out cognizable claims for relief under New Mexico law, ” and that the Signetics Defendants “simply assert a defensive theory that Rinchem may itself eventually plead and prove, even as defendants themselves will be arguing the opposite.” Motion at 11. The Plaintiffs contend that “[t]hese issues will be resolved on a fully-developed factual record in state court, but they do not form a basis for federal jurisdiction here.” Motion at 11. The Plaintiffs conclude that, “[a]s there is ‘even a possibility that a state court would find that the complaint states a cause of action against any one of the resident defendants, the federal court must find that the joinder was proper and remand the case to the state court.'” Motion at 11 (emphasis in original)(quoting Couch v. Astec Ind., Inc., 71 F.Supp.2d 1145, 1147 (D.N.M. 1999)(Baldock, J.)(quoting Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998))).

         Turning second to the Complaint's breach of warranty claim against Rinchem Co., the Plaintiffs contend that, if Rinchem Co. asserts the Uniform Commercial Code's four-year statute of limitations as a defense, the Plaintiffs “will argue that the tolling provision of N.M. Stat. § 37-1-10 applies.” Motion at 12. The Plaintiffs aver that this provision “tolls the running of limitations against incapacitated persons” and that it applies here, because “the UCC provision upon which defendants rely, N.M. Stat. § 55-2-725, provides in subsection (4) that it ‘does not alter the law on tolling of the statute of limitations.'” Motion at 12. Ultimately, the Plaintiffs argue, “[t]his will . . . be a fact issue that cannot be resolved at the present state.” Motion at 12.

         2. The Response.

         The Signetics Defendants responded on April 11, 2016. See Signetics Defendants' Response Brief in Opposition to Plaintiffs' Motion for Remand, filed April 11, 2016 (Doc. 17)(“Response”). The Signetics Defendants contend that “upon specific allegations of fraudulent joinder the court may pierce the pleadings, . . . consider the entire record, and determine the basis for joinder by any means available.” Response at 2 (quoting Dodd v. Fawcett Pubs., Inc., 329 F.2d 82, 85 (10th Cir. 1964))(internal quotation marks and alteration omitted). Accordingly, the Signetics Defendants argue, the Court may “pierce” the pleadings, evaluate the sufficiency of the Complaint's factual allegations, and assess how New Mexico law “may affect Plaintiffs' claims against Rinchem.” Response at 2. In conducting this analysis, the Signetics Defendants assert that the Court should consider the removal standard “in conjunction with the United States Supreme Court's recent jurisprudence regarding the viability of complaints under a Rule 12(b)(6) analysis.” Response at 3. The Signetics Defendants argue that “[t]his analysis requires a litigant to do more than simply recite the bare elements of a claim, and in many ways resembles that applied to remand motions where removal has been premised on a claim of fraudulent joinder.” Response at 3 (citing Ashcroft v. Iqbal, 556 U.S. 662 (2009)(“Iqbal”); Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)(“Twombly”)). Under these cases, the Signetics Defendants posit, the Complaint's allegations against Rinchem Co. “are deficient because the complaint sets forth a litany of labels, conclusions, and formulaic recitations, and there are glaring (and fatal) omissions in the factual predicates that might otherwise support those claims and render them ‘plausible.'” Response at 3.

         Before reaching their legal argument, the Signetics Defendants proffer several facts that they deem salient to the Court's resolution of the Motion. See Response at 4-9. They note that R. Bellman, Jr. sustained the injuries alleged in the Complaint twenty-five years ago, and that Brett and Brittany Booth sustained their alleged injuries twenty-eight years ago, all during their respective gestation periods. See Response at 4. They assert that the Complaint contains no allegations of the nature and scope of J. Bellman's and V. Goss' respective employment at Signetics during their children's gestation periods, nor does the Complaint contain allegations regarding the chemicals with which J. Bellman and V. Goss would have come in contact during their children's gestation periods. See Response at 5. The Complaint is further deficient, they assert, in that it contains no allegations regarding how J. Bellman and V. Goss “would have acquired percipient knowledge of Rinchem's provision of any matériel to the Signetics' facility during [their children's] gestation period[s].” Response at 5. They note that the Complaint provides no specific allegations of (i) how or when J. Bellman and V. Goss were exposed to chemicals at Signetics Corp.; (ii) which of the chemicals to which J. Bellman and V. Goss were exposed Rinchem Co. supplied; or (iii) whether Rinchem Co. was the “sole ‘supplier' of the enumerated chemical products and substances during the ‘relevant' time periods.” Response at 6. Indeed, they assert, the Complaint's allegations with respect to Rinchem Co. are all “conclusory”; the Complaint simply asserts that Rinchem Co. had a duty to exercise reasonable care in its manufacture and supply of the “generically identified products, ” and that Rinchem Co. made express and implied warranties, but it does not identify which chemicals Rinchem Co. supplied, nor does it allege the terms of Rinchem Co.'s warranties. Response at 7.

         The Signetics Defendants posit a contrary version of events. See Response at 8. They assert that Rinchem Co. “was not a manufacturer, ‘blender, ' or designer of any of the chemicals enumerated in [the Complaint.]” Response at 8 (citing Affidavit of Willaim [sic] Moore ¶ 4, at 1 (executed February 16, 2016), filed February 16, 2016 (Doc. 1-2)(“Moore Aff.”)). They allow that Rinchem Co. “may have delivered certain chemicals to Signetics that were sold to Signetics by various manufacturers, but Rinchem's role was limited to the transport or delivery of the chemicals, and Rinchem was paid as a public warehouse to store, transport, and deliver the chemicals.” Response at 8 (citing Moore Aff. ¶¶ 7-8, at 2). They aver that, although “Rinchem occasionally sold certain low purity/industrial grade chemicals that would not have been appropriate for use in semiconductor production, Rinchem has no records that any of those chemicals were ever sold to Signetics.” Response at 8 (citing Moore Aff. ¶¶ 11-12, at 2-3). Accordingly, the Signetics Defendants assert that Rinchem Co. “could not have ‘manufactured, blended, designed, marketed, distributed, sold, and supplied' any of the chemicals listed by Plaintiffs in a semiconductor quality grade.” Response at 8 (citing Moore Aff. ¶¶ 4-7, at 1-2; id. ¶¶ 10-11, at 2-3)(alterations omitted).

         Turning to the Plaintiffs' negligence claim against Rinchem Co., the Signetics Defendants contend that, given the above factual analysis, the claim “is, at best, ‘theoretical' and therefore insufficient to justify remand.” Response at 9 (quoting Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 312 (5th Cir. 2002)). The Signetics Defendants assert that (i) the “Plaintiffs have set forth a generic laundry list of chemicals and chemical categories”; (ii) the “Plaintiffs have not asserted specific allegations as to how or when Ms. Bellman and Ms. Goss came into contact with those chemicals during the 1988 and 1990 gestation periods . . ., merely asserting in conclusory fashion that they were exposed to ‘some or all' of those substances”; and (iii) the Complaint proffers “a set of perfunctory ‘labels and conclusions' to the effect that” Rinchem Co. formulated, distributed, and supplied “some of the . . . chemical products and substances.” Response at 9-10 (emphases omitted). The Signetics Defendants contend that this “lack of factual specificity is precisely what the Supreme Court has warned against.” Response at 10 (citing Iqbal, 556 U.S. at 678).

         The Signetics Defendants argue, moreover, that, “to defeat diversity, Plaintiffs have joined a defendant with no meaningful connection to their negligence claim.” Response at 10. They advance that Rinchem Co. “was a warehousing and transport/delivery entity, ” and that it “did not ‘manufacture, blend, design, market, distribute, or sell'” the chemicals to which the Complaint refers. Response at 10. They posit that, accordingly, the “Plaintiffs' negligence claim against Rinchem is an attempt to camouflage a kind of ‘chain of distribution' strict liability theory against Rinchem without having to satisfy the requirements for such a claim.” Response at 10 (citing Smith v. Bryco Arms, 2001-NMCA-090, ¶ 10, 33 P.3d 638). They contend that, under New Mexico law, “there is no liability imposed on all actors in the ‘chain of distribution, '” and that the Plaintiffs are attempting to impose such liability “on a warehousing and delivery operation that had no legally consequential role in the industrial uses to which delivered products have been put.” Response at 11 (citations omitted). The Signetics Defendants press that the “products cases that raise negligence claims uniformly involve defendants that actually manufactured, designed, or sold a product, ” and avow that they “have not identified any New Mexico case in which a viable products negligence action was brought based on a defendant's simple transport and delivery of materials designed, manufactured, and/or sold by others.” Response at 12 (citations omitted). The Signetics Defendants conclude that, “whether the court assesses the ‘plausibility' or ‘possibility' of plaintiffs' negligence claim under a sophisticated user analysis, a bulk supplier analysis, or the pleading and ‘chain of distribution' analysis . . ., no negligence cause of action exists against Rinchem[.]” Response at 13.

         Regarding the Complaint's warranty claims against Rinchem Co., the Signetics Defendants maintain that the “claims arise under the Uniform Commercial Code and are time-barred.” Response at 14 (citing Badilla v. Wal-Mart Stores East Inc., 2015-NMSC-029, 357 P.3d 936). They aver that the Plaintiffs' “tolling argument . . . lacks merit, ” because the Complaint “plead[s] no grounds for tolling . . ., nor have [the Plaintiffs] submitted affidavits to support such an argument.” Response at 14. They argue, further, that the Complaint's express warranty claim is deficient, because “there are no allegations (nor could there be) that Rinchem ‘sold' anything to Plaintiffs or that in the course of that non-existent sale Rinchem made express affirmations or representations to the Plaintiffs regarding the nature of any goods or products.” Response at 15. The Signetics Defendants contend that an express warranty under New Mexico law and associated UJIs requires “a sale between a buyer and seller and some form of affirmation or representation by the seller to the buyer that forms part of the basis of the bargain.” Response at 15. On the Complaint's implied warranty claim, the Signetics Defendants contend that, under the UCC and the UJIs, an implied warranty “customarily arises in the context of a sale, by a merchant, to a buyer.” Response at 15-16. The Signetics Defendants advance that “there are no allegations in the complaint . . . that Rinchem and the Plaintiffs were involved in any sale or that Rinchem held itself out to Plaintiffs as a ‘merchant' within the meaning of the Uniform Commercial Code.” Response at 16. Finally, the Signetics Defendants contend that the Complaint's implied warranty claim fails as a matter of law, because the Plaintiffs were neither in “vertical” nor “horizontal” privity with the Signetics Defendants or Rinchem Co., as the UCC requires for statutory warranties. Response at 16-17.

         3. The Reply.

         The Plaintiffs filed a Reply on May 9, 2016. See Plaintiffs' Reply Brief in Support of Their Motion for Remand at 1, filed May 9, 2016 (Doc. 19)(“Reply”). The Plaintiffs begin by asserting that the Response concedes the Motion's arguments concerning the sophisticated-user doctrine and that it impermissibly raises “entirely new grounds for removal.” Reply at 1. The Plaintiffs contend that “[a] removing defendant cannot raise new arguments for federal jurisdiction outside the normal 30-day period for removal, ” nor “can a defendant present new grounds for removal for the first time in opposition to a motion for remand.” Reply at 2 (quoting N.M. ex rel. Balderas v. Valley Meat Co., LLC, 2015 U.S. Dist. LEXIS 72874, at *25 (D.N.M. 2015)(Browning, J.)). Here, the Plaintiffs argue, the Signetics Defendants “have not sought leave to amend their notice of removal” and have instead “raised entirely new contentions” as well as “abandon[ed] any argument to support the theories in the notice of removal.” Reply at 2-3. The Plaintiffs request that the Court “decline to consider the arguments raised in defendants' response, and confine its review of this motion to the original grounds for fraudulent joinder asserted in the notice of removal -- grounds which defendants have not defended.” Reply at 4 (footnote omitted).

         In any case, the Plaintiffs contend that the Signetics Defendants' “new arguments” do not establish fraudulent joinder. Reply at 4. The Plaintiffs concede the Signetics Defendants' assertion that “there is no automatic liability on all actors in a chain of distribution, ” but argue that this “truism . . . proves nothing.” Reply at 4-5. The Plaintiffs allow that they “must establish, at trial, facts that would support a finding of negligence against Rinchem, but at the present stage defendants must establish facts that conclusively negate such a possibility.” Reply at 5. The Plaintiffs assert that the Signetics Defendants “have made no such showing, ” because they

merely argue that Rinchem never sold any products to Signetics to which plaintiffs would have been exposed, but even defendants acknowledge that a defendant in a negligence case need not have sold a product. As defendants state, N.M.U.J.I. 13-1402 states that a supplier “must use ordinary care to warn of risk of injury.” Response at 11. And while defendants state that they “do not concede that Rinchem should even be deemed a ‘supplier, '” and that “[a] transporter of a product is not necessarily the ‘supplier' of that product[, ]” id. at 11 n. 2, these are simply factual issues that remain to be controverted through discovery and trial.

Reply at 5 (emphasis and alterations in original). Thus, the Plaintiffs request that the Court remand the case for lack of subject-matter jurisdiction pursuant to 28 U.S.C. § 1447(c). See Reply at 5.

         4. The Hearing.

         The Court held a hearing on the Motion on July 11, 2016. See Draft Transcript of Motion Hearing (taken July 11, 2016)(“Tr.”).[2] The Plaintiffs began argument by addressing the breach-of-warranty claim against Rinchem Co. See Tr. at 4:13-5:13 (Siegel). The Plaintiffs contended that, should Rinchem Co. raise a statute-of-limitations affirmative defense, they will “plead a tolling on the basis of incapacity.” Tr. at 4:14-23 (Siegel). The Plaintiffs thus concluded that they have a viable breach-of-warranty claim. See Tr. at 5:8-13 (Siegel). As to negligence, the Plaintiffs argued that the Court's decision in N.M. ex rel. Balderas v. Valley Meat Co., LLC provides clear guidance. See Tr. at 5:14-25 (Siegel). The Plaintiffs averred that the Court held that fraudulent joinder requires a showing that “there is no possibility that the plaintiff might recover on her stated state [claim.]” Tr. at 6:6-14 (Siegel). The Plaintiffs asserted that the Signetics Defendants have not made such a showing with respect to the negligence claim. See Tr. at 6:14-15 (Siegel). Here, they averred, there is no evidence that would obviously and categorically preclude negligence liability against Rinchem Co., particularly on the sophisticated-user doctrine, the primary basis upon which the Notice of Removal relies for removing the case. See Tr. at 6:25-8:11 (Siegel). The Plaintiffs added that the Court's cases establish that “this showing is even harder than the showing required to get a case dismissed at the pleadings stage under Federal Rule 12(b)(6).” Tr. at 8:11-15 (Siegel). The Plaintiffs allowed that the sophisticated-user doctrine defense may be viable here, but asserted that there has not yet been a conclusive evidentiary showing that Rinchem Co. is entitled to the defense. See Tr. at 8:18-9:20 (Siegel). The Plaintiffs maintained that, absent more extensive discovery, it would be premature to conclude at the outset that Rinchem Co. is not liable for negligence. See Tr. at 10:20-11:10 (Siegel). See also id. at 11:8-10 (Siegel)(“[W]e don't think that is appropriate for resolution as part of a fraudulent joinder [] inquiry.”).

         The Court interposed, stating that it does not believe a plaintiff has “an obligation to plead all the facts [] to avoid [] the statute of limitations defense.” Tr. at 11:23-25 (Court). The Court noted, however, that a complaint's factual allegations can establish that a claim is time-barred; for example, a complaint that pleads only dates is “subject to a [motion] to dismiss.” Tr. at 11:25-12:5 (Court). The Court noted that, here, “just from a date standpoint, ” the Complaint's allegations appear to be time-barred and that it is unclear whether further discovery would be “enough to avoid the statute of limitations.” Tr. at 12:10-14 (Court). In response, the Plaintiffs stated that New Mexico state courts permit plaintiffs to allege tolling either in the complaint or in response to a motion to dismiss, and that, accordingly, failure to “affirmatively ple[a] a basis for tolling would not be fatal to our claims.” Tr. at 13:1-12 (Siegel). The Plaintiffs added that, “under the normal course of events in federal court too, we would be allowed to raise a tolling defense.” Tr. at 13:21-23 (Siegel). See id. at 13:23-14:1 (Siegel)(“[A]n affirmative defense . . . may never be[] raised by the defendant so an exception to the affirmative defense need not initially be pled by the plaintiff.”). The Plaintiffs concluded that “this sort of limbo status between the federal and state pleading practice here . . . on fraudulent joinder” should not lead the Court to disregard “how this would work out under either pleading regime.” Tr. at 14:2-9 (Siegel).

         The Signetics Defendants took up argument, addressing first the standard for removal. See Tr. at 18:24 (Hardy). The Signetics Defendants contended that “the presumption against removal, ” which the Court “has recognized on numerous occasions . . . [, ] cannot be interpreted as hostility toward removal.” Tr. at 18:24-19:5 (Hardy). The Signetics Defendants added that “the evidentiary standard that applies in evaluating removal jurisdiction . . . is preponderance of the evidence” and that removal on the basis of diversity jurisdiction is proper if there is no “reasonable basis for the plaintiff's claim” against a non-diverse defendant. Tr. at 19:6-18 (Hardy)(asserting that the Court's cases have equated this standard with the “no possibility of a claim” standard that the Plaintiffs argue applies). The Signetics Defendants also noted that “the standard for fraudulent joinder is higher than the standard that needs to be considered on a motion to dismiss.” Tr. at 19:18-22 (Hardy).

         The Court interjected and speculated that it will “have to do a boatload of work to decide” the complex issue whether New Mexico state courts recognize the sophisticated-user doctrine. Tr. at 19:23-20:7 (Court). The Court extrapolated that, if the issue requires such extensive work, it likely does not meet fraudulent joinder's heightened standard. See Tr. at 20:4-6 (Court). In response, the Signetics Defendants asserted that the negligence claim must be plausible under Twombly and Iqbal. See Tr. at 20:8-16 (Hardy). The Court observed that those cases seem inapposite in the context of a motion to remand, where fraudulent joinder is the primary issue, because in this context the Court can “consider anything, ” including facts that do not appear on the complaint's face. Tr. at 20:17-21:4 (Court). The Signetics Defendants replied that those cases “inform the standard of fraudulent joinder, ” because the cases that involve fraudulent joinder and removal hold that the standard is “higher[] than the standard on the motion to dismiss.” Tr. at 21:8-20 (Hardy, Court). The Signetics Defendants added that “whether a claim is implausible or plausible is similar to whether it's possible or impossible.” Tr. at 23:1-4 (Hardy). The Signetics Defendants allowed, however, that these standards involve different burdens, i.e., that the Signetics Defendants have the burden of showing that the Complaint's allegations against Rinchem Co. are “impossible” while the Plaintiffs' burden is to state a “plausible” claim. Tr. at 23:1-12 (Hardy).

         The Signetics Defendants next pivoted to the issue of Rinchem Co.'s precise role in the case. See Tr. at 23:13-17 (Hardy). The Signetics Defendants asserted that “Rinchem did not manufacture or blend any chemicals, ” and that “it is primarily a warehousing ground transportation and chemical waste collection company.” Tr. at 23:16-23 (Hardy, Court). The Signetics Defendants explained that Rinchem Co.'s customers were chemical manufacturers, and that it primarily warehoused and transported chemicals for companies like Signetics Corp., but that Rinchem Co. was “paid for doing that by the chemical manufacturers, not by facilities[] such as Signetics.” Tr. at 23:20-24:6 (Hardy). In essence, the Signetics Defendants stated, Signetics Corp. purchased chemicals directly from manufacturers, and Rinchem Co. warehoused and delivered those chemicals, but it did not mix or repackage them. See Tr. at 24:7-19 (Court, Hardy). The Signetics Defendants acknowledged that Rinchem Co. directly sold some chemicals to facilities, but argued that “they would not have been at a semiconductor grade.” Tr. at 24:25-25:5 (Hardy).

         Turning to the Complaint's negligence claims against Rinchem Co., the Signetics Defendants asserted that “the basic issue” is that “Rinchem had no duty to warn the plaintiffs of risks associated with any chemicals it delivered. It did not manufacture or blend any of the chemicals.” Tr. at 26:24-27:2 (Hardy). The Signetics Defendants noted that the Restatement (Second) of Torts provides that a supplier of a chattel is liable if the supplier (i) “knows, or has reason to know that the chattel is or is likely to be dangerous for the use for which it is supplied”; (ii) “has no reason to believe that those for whose use the chattel is supplied will realize its dangerous condition”; and (iii) “fails [to] exercise reasonable care to inform them of its dangerous condition or of the facts which make it likely to be dangerous.” Tr. at 28:1-15 (Hardy)(relying on Restatement (Second) of Torts, § 388). The Signetics Defendants argued that Rinchem Co. can assert a “sophisticated user defense” under these provisions, because “Signetics was a regular user of the chemicals” and had “manufacturing safety information. So Rinchem would have had no reason to believe that Signetics wasn't [aware] of the risks.” Tr. at 28:16-29:12 (Hardy). Thus, the Signetics Defendants concluded, the Plaintiffs cannot recover against Rinchem Co., because “they can't establish that Rinchem was negligent.” Tr. at 30:1-3 (Hardy).

         The Signetics Defendants then briefly addressed Sherman v. A.J. Pegno Const. Corp., which the Plaintiffs cite for the proposition that negligence liability “can't be decided prior to discovery.” Tr. at 31:1-15 (Hardy). That case is inapposite, the Signetics Defendants argued, because it involves a manufacturer and seller of a product, “so the issue was the adequacy of the warning under the bulk supplier doctrine which is similar to sophisticated user but it's a little bit different.” Tr. at 31:2-10 (Hardy). The Signetics Defendants also noted that, in Parker, the Court of Appeals of New Mexico held that “the adequacy of a warning does not become a factual issue until it is first determined that a duty to warn exists.” Tr. at 31:11-15 (Hardy). The Signetics Defendants contended that, here, because Rinchem Co. did not have a duty to warn pursuant to the sophisticated-user doctrine, there is no factual issue whether such a warning was adequate. See Tr. at 31:16-21 (Hardy)(arguing that “it's not a situation where discovery is required”). The Signetics Defendants asserted that this analysis resolves the Court's concern as to the complexity of the sophisticated-user doctrine's applicability in New Mexico state courts, because it illustrates that the doctrine is “clear” and “has been met.” Tr. at 31:22-32:4 (Hardy). Finally regarding negligence, the Signetics Defendants contended that the issues that the Notice of Removal raises are the same as in the Response, because they all fall under the “umbrella” of Rinchem Co.'s duty to warn. Tr. at 32:5-16 (Hardy).

         Turning to the Complaint's breach-of-warranty claims, the Signetics Defendants argued that the Plaintiffs “don't identify what the express warranties were, or to whom they were made.” Tr. at 32:17-21 (Hardy). The Signetics Defendants contended that the Supreme Court of New Mexico has held that the UCC's four-year statute of limitations governs breach-of-warranty claims and that “those claims accrue at the time tendered, regardless of a lack of knowledge of the breach.” Tr. at 33:3-9 (Hardy)(referencing Badilla v. Wal-Mart Stores East Inc.). The Plaintiffs' warranty claims are thus time-barred, the Signetics Defendants said, because the Plaintiffs' in utero injuries occurred between 1988 and 1991, and because “there is no evidence at all that the statute was tolled” since then, i.e., the Complaint does not allege incapacity and the Plaintiffs have not provided affidavits of incapacity. Tr. at 33:10-21 (Hardy). See id. at 33:21-22 (Hardy)(“There is just no evidence at all on that point.”). The Signetics Defendants further contended that the Complaint's warranty allegations fail to state a claim, because the UCC's warranty provisions apply to “sellers, ” and “Rinchem was not a seller of any semiconductor grade chemicals.” Tr. at 34:10-19 (Hardy). “There is also no privity between Rinchem and plaintiffs, ” the Signetics Defendants argued, and “there is no privity between the seller and the employees of the buyer.” Tr. at 34:10-19 (Hardy). Finally with respect to breach of warranty, the Signetics Defendants contended that the tolling statute “applies to children --it applies to minors and incapacitated persons” but not to fetuses, as the Plaintiffs appear to allege. Tr. at 34:23-35:5 (Hardy).

         The Signetics Defendants returned to the issue whether the Response asserts new reasons for removal that the Notice of Removal does not raise. See Tr. at 35:10 (Hardy). In the Signetics Defendants' view, “the case law precludes defendants from asserting a new basis for jurisdiction in its response, ” e.g., a new theory or a new statute. Tr. at 35:18-20 (Hardy). Here, the Signetics Defendants explained, the Notice of Removal and the Response both assert “diversity based on fraudulent joinder because plaintiffs cannot [su]stain their warranty and negligence claims under New Mexico law.” Tr. at 35:20-24 (Hardy). The Signetics Defendants stressed that the United States Court of Appeals for the Tenth Circuit “does not construe notices of removal so narrowly that defendants cannot flush them out or basically say anything else in their response to the motion to remand.” Tr. at 35:24-36:3 (Hardy). The Signetics Defendants suggested, for example, that a defendant would be precluded from “trying to change from diversity jurisdiction to federal question jurisdiction, ” but that a defendant is “permitted to flush out” grounds for removal in its response to a motion for remand. Tr. at 36:14-37:1 (Hardy).

         The Court then directed Rinchem Co. to take up argument. See Tr. at 37:25-38:2 (Court). Rinchem Co. began by explaining that it contracted with chemical companies, such as Du Pont Co., to deliver chemicals to clients in Albuquerque, such as Signetics Corp. See Tr. at 39:3-7 (Bisong). Rinchem Co. averred that it did not repackage or otherwise alter the chemicals that the Complaint lists before delivering them to Signetics Corp. See Tr. at 38:8-19 (Court, Bisong)(stating that “[i]t was simply a delivery”). The Court questioned how Rinchem Co. was paid, to which Rinchem Co. responded that Signetics Corp. directly paid the chemical supplier and that the supplier, in turn, paid Rinchem Co. See Tr. at 39:20-40:12 (Court, Bisong)(clarifying that Rinchem Co. directly sold some chemicals to clients, but that it did not sell to Signetics Corp. during the relevant time period). The Court asked whether Rinchem Co. “strictly warehous[ed]” chemicals, to which Rinchem Co. said “[c]orrect.” Tr. at 40:13-21 (Court, Bisong). Finally, Rinchem Co. argued that the Complaint, while listing a host of chemicals to which J. Bellman and V. Goss were exposed at Rinchem Corp., does not specify which of those chemicals Rinchem Co. allegedly delivered to Signetics Corp., nor does it isolate the specific chemicals that caused the children's injuries. See Tr. at 41:2-15 (Bisong).

         The Court pivoted back to the Plaintiffs and inquired why Rinchem Co. is not entitled to the sophisticated-user defense, assuming the Supreme Court of New Mexico would adopt the defense as the Restatement (Second) of Torts defines it. See Tr. at 41:6-12 (Court). The Plaintiffs responded that their position is not that the sophisticated-user defense is unviable, but rather that the defense is “an intensely fact laden matter” that requires further discovery to resolve. Tr. at 41:13-17 (Siegel). The Plaintiffs posited, however, that Rinchem Co. is unable to establish any of the sophisticated-user defense's three prongs. See Tr. at 41:18-21 (Court, Siegel). The Plaintiffs suggested that Rinchem Co. would have particular difficulty establishing the second prong, because there is no evidence “as to what Signetics knew or didn't know about the hazardousness” of the chemicals that Rinchem Co. supplied. Tr. at 43:16-25 (Siegel). The Plaintiffs allowed that the sophisticated-user defense may be viable, but argued that “it has not been established as a matter of law, and we say it can't be without discover[y].” Tr. at 44:14-17 (Siegel). Likewise, the Plaintiffs asserted that “there is a general duty on the part of all actors to exercise ordinary care in the circumstances” and that further discovery is necessary to determine whether Rinchem Co. breached that duty. Tr. at 45:10-46:10 (Siegel). Thus, the Plaintiffs averred that these issues are “not appropriate for removal and remand.” Tr. at 46:8-10 (Siegel). Indeed, the Plaintiffs pressed, because resolution of these issues would require the Court to “plung[e] into [] complicated question[s] of state law, both legally and factually, ” the Court should remand the case. Tr. at 46:24-47:2 (Siegel).

         Turning briefly to the tolling issue, the Plaintiffs argued that the statute of limitations tolls when “affected children['s] . . . limitations period would start accruing” and that there is no authority “for the idea that it can't apply to people who were damaged in the womb.” Tr. at 47:3-12 (Siegel). The Plaintiffs also argued that, contrary to the Signetics Defendant's assertion that tolling does not apply in breach-of-warranty cases, “the breach of warranty statute itself [] says . . . it does not alter the established law of [to]lling in this state.” Tr. at 47:13-19 (Siegel).

         The Court interjected and inquired whether the Plaintiffs dispute that Rinchem Co. “doesn't do anything to these chemicals” and that “it simply is a warehouse.” Tr. at 48:6-9 (Siegel). In reply, the Plaintiffs agreed that Rinchem Co. is a warehouse, but asserted that “it also is a supplier.” Tr. at 48:10-12 (Siegel). The Plaintiffs argued that, accordingly, Rinchem Co. can be liable for negligence as a seller or as a transporter of chemicals. See Tr. at 48:11-14 (Siegel). The Court questioned, as a follow-up, what the Plaintiffs intend to tell “the jury that Rinchem could do [or] should have done, ” e.g., “not sell the product, make a disclosure, what is it that they should have done.” Tr. at 48:25-49:4 (Court). The Plaintiffs answered that they will tell the jury that Rinchem Co. had a duty to “[w]arn about the hazards of products that they are either warehousing and conveying or in some instances selling, or if the knowledge [] rose to a certain level” that Rinchem Co. had a duty to “stop sell[ing] or conveying the product.” Tr. at 49:5-9 (Siegel).

         The Court speculated that, if New Mexico state courts adopt the sophisticated-user defense, this case's facts likely create the model circumstances in which the defense would apply. See Tr. at 50:9-17 (Court). In rejoinder, the Plaintiffs reiterated that they do not dispute that the defense may apply, but maintained that “it cannot be the basis for removal” on the grounds of fraudulent joinder. Tr. at 50:18-22 (Siegel). The Court queried why, if the Plaintiffs' joinder of Rinchem Co. was not a fraudulent attempt to defeat diversity jurisdiction, they did not also sue the chemical manufacturers. See Tr. at 50:23-24 (Court). See also id. at 50:1-5 (Court)(“[I]f you really want to . . . defeat diversity jurisdiction why didn't you camouflage it by suing the chemical manufacturers as well that they're buying from.”). The Plaintiffs responded that their theory of the case is that the Signetics Defendants caused the chemical exposure that resulted in the Plaintiff children's birth defects, but stated that “further discovery [may] suggest that we ought to sue the particular maker of one of those chemicals.” Tr. at 6-12 (Siegel). Despite this answer, the Court maintained that “it raises a red flag” that the Plaintiffs are “not suing the manufacturers who are probably the ones that have much better knowledge about the dangerousness of these chemicals than a warehouse person.” Tr. at 51:20-24 (Court).

         The Court further suggested that the law does not require a warehousing operation, such as Rinchem Co., to disclose the dangerous condition of the chemicals that it supplies. See Tr. at 54:16-18 (Court). The Plaintiffs demurred, arguing that Rinchem Co. is liable if it knows or has reason to know that the chemicals it supplies are dangerous and has no reason to believe that the purchaser, i.e. Signetics Corp., realizes the dangerous condition. See Tr. at 54:19-24 (Siegel). The Plaintiffs stated that they are entitled to a chance to prove these facts through additional discovery and that, in their view, such matters are not appropriate for a fraudulent joinder finding. See Tr. at 55:2-11 (Siegel). The Court, however, posited that fraudulent joinder does not always require discovery and noted that it struggled to see how the Plaintiffs will overcome the sophisticated-user defense. See Tr. at 55:12-18 (Court). The Plaintiffs again pressed that their pleadings are not presently conclusive and that the Signetics Defendants' knowledge of the chemicals' dangerousness has not yet been established as a matter of law. See Tr. at 55:19-24 (Siegel). The Plaintiffs added that the Signetics Defendants will “challenge and dispute the idea that they were sophisticated users.” Tr. at 56:19-57:5 (Siegel). The Plaintiffs posited that, in this context, where Rinchem Co. argues that the Signetics Defendants were sophisticated users, and the Signetics Defendants maintain that they were not sophisticated users, Rinchem Co.'s joinder could not be fraudulent. See Tr. at 58:4-11 (Siegel).

         Having heard argument from all parties, the Court stated that it was inclined to remand the case, “because of the very high standard for fraudulent joinder.” Tr. at 59:4-9 (Court). The Court allowed that the parties' arguments at the hearing “may have tightened up the issue a little bit, ” but suggested that it was still inclined to remand the case. Tr. at 59:9-12 (Court). The Court noted that the existence of factual issues pertaining to the sophisticated-user defense likely will warrant remand, “because that discovery should take place in state court rather than here.” Tr. at 59:16-20 (Court). Still, the Court declined to issue an oral ruling, because these issues' complexity requires careful consideration. See Tr. at 60:1-4 (Court)(“[T]his is going to take a little bit of work for me to be satisfied th[at] this goes back to state court and I'm not inclined to conclude that today.”).


         “Subject-matter jurisdiction under 28 U.S.C. § 1332(a)(1) requires: (i) complete diversity among the parties; and (ii) that ‘the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs.'” Thompson v. Intel Corp., 2012 U.S. Dist. LEXIS 126311, at *12 (D.N.M. 2012)(Browning, J.)(citing 28 U.S.C. § 1332(a)). As the Court has previously explained, “[t]he Supreme Court of the United States has described this statutory diversity requirement as ‘complete diversity, ' and it is present only when no party on one side of a dispute shares citizenship with any party on the other side of a dispute.” McEntire v. Kmart Corp., 2010 U.S. Dist. LEXIS 13373, at *3 (D.N.M. 2010)(Browning, J.)(citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267-68 (1806), overruled in part by Louisville & N. R. Co. v. Mottley, 211 U.S. 149 (1908); McPhail v. Deere & Co., 529 F.3d 947, 951 (10th Cir. 2008)). The amount-in-controversy requirement is an “estimate of the amount that will be put at issue in the course of the litigation.” Valdez v. Metro. Prop. & Cas. Ins. Co., 867 F.Supp.2d 1143, 1163 (D.N.M. 2012)(Browning, J.)(citing McPhail v. Deere & Co., 529 F.3d at 956). The Court will discuss the two requirements in turn.

         1. Diversity of Citizenship.

         For diversity jurisdiction purposes, a person's domicile determines citizenship. See Crowley v. Glaze, 710 F.2d 676, 678 (10th Cir. 1983). “A person's domicile is defined as the place in which the party has a residence in fact and an intent to remain indefinitely, as of the time of the filing of the lawsuit.” McEntire v. Kmart Corp., 2010 U.S. Dist. LEXIS 13373, at *3 (citing Crowley v. Glaze, 710 F.2d at 678). See Freeport-McMoRan, Inc. v. KN Energy, Inc., 498 U.S. 426, 428 (1991)(“We have consistently held that if jurisdiction exists at the time an action is commenced, such jurisdiction may not be divested by subsequent events.”). If neither a person's residence nor the location where the person has an intent to remain can be established, the person's domicile is that of his or her parents at the time of the person's birth. See Gates v. Comm'r of Internal Revenue, 199 F.2d 291, 294 (10th Cir. 1952)(“[T]he law assigns to every child at its birth a domicile of origin. The domicile of origin which the law attributes to an individual is the domicile of his parents. It continues until another domicile is lawfully acquired.”). Additionally, “while residence and citizenship are not the same, a person's place of residence is prima facie evidence of his or her citizenship.” McEntire v. Kmart Corp., 2010 U.S. Dist. LEXIS 13373, at *3 (citing State Farm Mut. Auto. Ins. Co. v. Dyer, 19 F.3d 514, 520 (10th Cir. 1994)). A corporation, on the other hand, is “‘deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.'” Gadlin v. Sybron Int'l Corp., 222 F.3d 797, 799 (10th Cir. 2000)(quoting 28 U.S.C. § 1332(c)(1)).

         2. Amount in Controversy.

         The statutory amount-in-controversy requirement, which presently stands at $75, 000.00, must be satisfied as between a single plaintiff and a single defendant for a federal district court to have original jurisdiction over the dispute; “a plaintiff cannot aggregate independent claims against multiple defendants to satisfy the amount-in-controversy requirement, ” nor can multiple plaintiffs aggregate their claims against a single defendant to exceed the threshold. Martinez v. Martinez, 2010 U.S. Dist. LEXIS 38109, at *18 (D.N.M. 2010)(Browning, J.). If multiple defendants are jointly liable, or jointly and severally liable, on some of the claims, however, the amounts of those claims may be aggregated to satisfy the amount-in-controversy requirement as to all defendants jointly liable for the claims. See Alberty v. W. Sur. Co., 249 F.2d 537, 538 (10th Cir. 1957); Martinez v. Martinez, 2010 U.S. Dist. LEXIS 38109, at *18. Similarly, multiple plaintiffs may aggregate the amounts of their claims against a single defendant if the claims are not “separate and distinct.” Martin v. Franklin Capital Corp., 251 F.3d 1284, 1292 (10th Cir. 2001)(Seymour, C.J.), abrogated on other grounds by Dart Cherokee Basin Operating Co. v. Owens, 135 S.Ct. 547 (2014). Multiple claims by the same plaintiff against the same defendant may be aggregated, even if the claims are entirely unrelated. See 14AA Charles A. Wright, Arthur R. Miller, Edward H. Cooper, Vikram D. Amar, Richard D. Freer, Helen Hershkoff, Joan E. Steinman, & Catherine T. Struve, Federal Practice and Procedure, Jurisdiction § 3704, at 566-95 (4th ed. 2011). While the rules on aggregation sound complicated, they are not in practice: if a single plaintiff -- regardless whether he or she is the only plaintiff who will share in the recovery -- can recover over $75, 000.00 from a single defendant -- regardless whether the defendant has jointly liable co-defendants -- then the court has original jurisdiction over the dispute between that plaintiff and that defendant. The court can then exercise supplemental jurisdiction over other claims and parties that “form part of the same case or controversy under Article III, ” 28 U.S.C. § 1367(a), meaning that they “derive from a common nucleus or operative fact, ” United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966).

         Satisfaction of the amount-in-controversy requirement must be established by a preponderance of the evidence. See McPhail v. Deere & Co., 529 F.3d at 953. In the context of establishing an amount-in-controversy, the defendant seeking removal could appear to be bound by the plaintiff's chosen amount of damages in the complaint, which would seem to allow a plaintiff to avoid federal jurisdiction “merely by declining to allege the jurisdictional amount [in controversy].” McPhail v. Deere & Co., 529 F.3d at 955. The Tenth Circuit's decision in McPhail v. Deere & Co. has foreclosed such an option from a plaintiff who wishes to remain in state court. McPhail v. Deere & Co. holds that a defendant's burden in establishing jurisdictional facts is met if the defendant proves “jurisdictional facts that make it possible that $75, 000 is in play.” 529 F.3d at 955.

         The Supreme Court recently clarified that a defendant seeking removal to federal court need only include in the notice of removal a plausible allegation that the amount in controversy exceeds the jurisdictional threshold. See Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. at 554. The district court should consider outside evidence and find by a preponderance of the evidence whether the amount in controversy is satisfied “only when the plaintiff contests, or the court questions, the defendant's allegation.” Dart Cherokee Basin Operating Co., LLP v. Owens, 135 S.Ct. at 554.


         If a civil action filed in state court satisfies the requirements for original federal jurisdiction --meaning, most commonly, federal-question or diversity jurisdiction -- the defendant may invoke 28 U.S.C. § 1441(a) to remove the action to the federal district court “embracing the place where such action is pending.” 28 U.S.C. § 1441(a). See Huffman v. Saul Holdings LP, 194 F.3d 1072, 1076 (10th Cir. 1999)(“‘When a plaintiff files in state court a civil action over which the federal district courts would have original jurisdiction based on diversity of citizenship, the defendant or defendants may remove the action to federal court.'”)(quoting Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996)). In a case with multiple defendants, there must be unanimous consent to removal; any one defendant may spoil removal and keep the case in state court. See 28 U.S.C. § 1446(b)(2)(A). Only true defendants have removal rights: plaintiffs defending counterclaims and third-party defendants may not remove an action, and their consent is not required for removal if all the true defendants consent. See Hamilton v. Aetna Life & Cas. Co., 5 F.3d 642 (2d Cir. 1993); Wiatt v. State Farm Ins. Co., 560 F.Supp.2d 1068 (D.N.M. 2007)(Browning, J.). “A plaintiff objecting to the removal may file a motion asking the district court to remand the case to state court.” Huffman v. Saul Holdings LP, 194 F.3d at 1076 (citing Caterpillar Inc. v. Lewis, 519 U.S. at 69).

         To remove a case based on diversity, the diverse defendant must demonstrate that all of the usual prerequisites of diversity jurisdiction are satisfied. Under 28 U.S.C. § 1332(a), a federal district court possesses original subject-matter jurisdiction over a case when the parties are diverse in citizenship and the amount in controversy exceeds $75, 000.00. See 28 U.S.C. § 1332(a); Johnson v. Rodrigues (Orozco), 226 F.3d 1103, 1107 (10th Cir. 2000). Diversity between the parties must be complete. See Caterpillar Inc. v. Lewis, 519 U.S. at 68; Radil v. Sanborn W. Camps, Inc., 384 F.3d 1220, 1225 (10th Cir. 2004). In addition to the requirements of original jurisdiction, § 1441(b)(2) lays out the “forum-defendant rule, ” which provides that a case may not be removed on the basis of diversity jurisdiction if any defendant is a citizen of the state in which the state-court action was brought. The Tenth Circuit has noted

that § 1441(b)(2) -- the so-called forum-defendant rule -- provides as a separate requirement that “[a] civil action otherwise removable solely on the basis of [diversity] jurisdiction . . . may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.”

Brazell v. Waite, 525 F.App'x 878, 884 (10th Cir. 2013)(unpublished)(alterations in original)(quoting 28 U.S.C. § 1441(b)(2))). The forum-defendant rule applies to cases removed under only diversity jurisdiction; a defendant may remove a case brought against it in its home state on the basis of federal-question jurisdiction. See 28 U.S.C. § 1441(b). Last, a case cannot be removed if it began with a nondiverse party or a forum-citizen defendant, and only later came to satisfy the requirements of removal jurisdiction, unless: (i) the plaintiff voluntarily dismissed the removal-spoiling party, see DeBry v. Transamerica Corp., 601 F.2d 480, 488 (10th Cir. 1979);[3]Flores-Duenas v. Briones, 2013 U.S. Dist. LEXIS 173620, at *12 n.6, *26 (D.N.M. 2013)(Browning, J.)(describing the operation of the “voluntary-involuntary” rule); or (ii) the removal-spoiling party was fraudulently joined or procedurally misjoined.

         1. The Presumption Against Removal.

         Federal courts are courts of limited jurisdiction; thus, there is a presumption against removal jurisdiction, which the defendant seeking removal must overcome. See Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir. 1995); Fajen v. Found. Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir. 1982); Martin v. Franklin Capital Corp., 251 F.3d at 1290; Bonadeo v. Lujan, 2009 U.S. Dist. LEXIS 45672, at *4 (D.N.M. 2009)(Browning, J.)(“Removal statutes are strictly construed, and ambiguities should be resolved in favor of remand.”). The defendant seeking removal must establish that federal court jurisdiction is proper “by a preponderance of the evidence.” McPhail v. Deere & Co., 529 F.3d at 953. See Bonadeo v. Lujan, 2009 U.S. Dist. LEXIS 45672, at *4 (“As the removing party, the defendant bears the burden of proving all jurisdictional facts and of establishing a right to removal.”). See also McPhail v. Deere & Co., 529 F.3d at 955 (“It would have been more precise to say that the defendant must affirmatively establish jurisdiction by proving jurisdictional facts . . . .”). Because federal courts are courts of limited jurisdiction, the Tenth Circuit has ruled that “courts must deny such jurisdiction if not affirmatively apparent on the record.” Okla. Farm Bureau Mut. Ins. Co. v. JSSJ Corp., 149 F.App'x 775, 778 (10th Cir. 2005)(unpublished), abrogated on other grounds by Dart Cherokee Basin Operating Co. v. Owens, 135 S.Ct. 547 (2014). This strict construction and presumption against removal should not, however, be interpreted as hostility toward removal cases in the federal courts. See McEntire v. Kmart Corp., 2010 U.S. Dist. LEXIS 13373, at *2 (“Strict construction does not mean judicial hostility toward removal. Congress provided for removal, and courts should not create rules that are at tension with the statute's language in the name of strict construction.”)(citing Bonadeo v. Lujan, 2009 U.S. Dist. LEXIS 45672, at *12).

         2. The Procedural Requirements of Removal.

         Section 1446 of Title 28 of the United States Code governs the procedure for removal. “Because removal is entirely a statutory right, the relevant procedures to effect removal must be followed.” Thompson v. Intel Corp., 2012 U.S. Dist. LEXIS 126311, at *5. A removal that does not comply with the express statutory requirements is defective and must be remanded to state court. See Huffman v. Saul Holdings LP, 194 F.3d at 1077. See also Chavez v. Kincaid, 15 F.Supp.2d 1118, 1119 (D.N.M. 1998)(Campos, J.)(“The [r]ight to remove a case that was originally in state court to federal court is purely statutory, not constitutional.”).

         Section 1446(a) of Title 28 of the United State Code provides that a party seeking removal of a matter to federal court shall file a notice of removal in the district and division where the state action is pending, “containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action.” 28 U.S.C. § 1446(a). Such notice of removal is proper if filed within thirty days from the date when the case qualifies for federal jurisdiction. See Caterpillar Inc. v. Lewis, 519 U.S. at 68-69; 28 U.S.C. § 1446(b). The Tenth Circuit has further elaborated that, for the thirty-day period to begin to run, “this court requires clear and unequivocal notice from the [initial] pleading itself” that federal jurisdiction is available. Akin v. Ashland Chem. Co., 156 F.3d 1030, 1036 (10th Cir. 1998). The Tenth Circuit specifically disagrees with “cases from other jurisdictions which impose a duty to investigate and determine removability where the initial pleading indicates that the right to remove may exist.” Akin v. Ashland Chem. Co., 156 F.3d at 1036.[4]

         “When a civil action is removed solely under section 1441(a), [the standard removal statute, which excludes multiparty, multiforum jurisdiction, ] all defendants who have been properly joined and served must join in or consent to the removal of the action.” 28 U.S.C. § 1446(b)(2)(A). The failure of all defendants to consent to removal will result in remand. The rule of unanimity applies to all defendants, whether they are required parties under rule 19 or merely proper parties under rule 20. The defendants who have not been served, however, need not join in removal. See Kiro v. Moore, 229 F.R.D. 228, 230-32 (D.N.M. 2005)(Browning, J.).

         3. Amendment of the Notice of Removal.

         In Caterpillar, Inc. v. Lewis, the Supreme Court held that a defect in subject-matter jurisdiction cured before entry of judgment did not warrant reversal or remand to state court. See 519 U.S. at 70-78. Citing Caterpillar, Inc. v. Lewis, the Tenth Circuit has held that “a defect in removal procedure, standing alone, is not sufficient to warrant vacating judgment and remand to state court if subject matter jurisdiction existed in the federal court.” Browning v. Am. Family Mut. Ins. Co., 396 F.App'x 496, 505-06 (10th Cir. 2010)(unpublished). In McMahon v. Bunn-O-Matic Corp., 150 F.3d 651 (7th Cir. 1998)(Easterbrook, J.), the United States Court of Appeals for the Seventh Circuit noticed, on appeal, defects in the notice of removal, including that the notice of removal failed to properly allege diversity of citizenship. See 150 F.3d at 653 (“As it happens, no one paid attention to subject-matter jurisdiction . . . .”). The Seventh Circuit nevertheless permitted the defective notice of removal to be amended on appeal to properly establish subject-matter jurisdiction. See 150 F.3d at 653-54.

         The Tenth Circuit has allowed defendants to remedy defects in their petition or notice of removal. See Jenkins v. MTGLQ Investors, 218 F.App'x. 719, 723 (10th Cir. 2007)(unpublished)(granting unopposed motion to amend notice of removal to properly allege jurisdictional facts); Watkins v. Terminix Int'l Co., 1997 WL 34676226, at *2 (10th Cir. 1997)(per curiam)(unpublished)(reminding the defendant that, on remand, it should move to amend the notice of removal to properly allege jurisdictional facts); Lopez v. Denver & Rio Grande W. R.R. Co., 277 F.2d 830, 832 (10th Cir. 1960)(“Appellee's motion to amend its petition for removal to supply sufficient allegations of citizenship and principal place of business existing at the time of commencement of this action is hereby granted, and diversity jurisdiction is therefore present.”). The Tenth Circuit has further reasoned that disallowing amendments to the notice of removal, even after the thirty-day removal window had expired, when the defendant made simple errors in its jurisdictional allegations, “would be too grudging with reference to the controlling statute, too prone to equate imperfect allegations of jurisdiction with the total absence of jurisdictional foundations, and would tend unduly to exalt form over substance and legal flaw-picking over the orderly disposition of cases properly committed to federal courts.” Hendrix v. New Amsterdam Cas. Co., 390 F.2d 299, 301 (10th Cir. 1968). The Tenth Circuit has noted that a simple error in a jurisdictional allegation includes failing to identify a corporation's principal place of business or referring to an individual's state of residence rather than citizenship. See Hendrix v. New Amsterdam Cas. Co., 390 F.2d at 301. In McEntire v. Kmart Corp., when faced with insufficient allegations in the notice of removal -- allegations of “residence” not “citizenship” -- the Court granted the defendants leave to amend their notice of removal to cure the errors in some of the “formalistic technical requirements.” 2010 WL 553443, at *8 (citing Hendrix v. New Amsterdam Cas. Co., 390 F.2d at 300-02). Further, in Thompson v. Intel Corp., the Court permitted the defendant, Intel Corp., to amend its notice of removal to include missing jurisdictional elements, including evidence that its principal place of business and corporate headquarters -- the center of Intel Corp.'s direction, control, and coordination of activities -- is out of state, so that the diversity requirements were met. See 2012 WL 3860748, at *1.

         There are limits to the defects that an amended notice of removal may cure, however, as Professors Charles Alan Wright and Arthur R. Miller explain:

[A]n amendment of the removal notice may seek to accomplish any of several objectives: It may correct an imperfect statement of citizenship, state the previously articulated grounds more fully, or clarify the jurisdictional amount. In most circumstances, however, defendants may not add completely new grounds for removal or furnish missing allegations, even if the court rejects the first-proffered basis of removal, and the court will not, on its own motion, retain jurisdiction on the basis of a ground that is present but that defendants have not relied upon.

14 C. Wright & A. Miller, Federal Practice and Procedure § 3733, at 651-659 (4th ed. 2009) (footnotes omitted). Professor Moore has similarly recognized: “[A]mendment may be permitted after the 30-day period if the amendment corrects defective allegations of jurisdiction, but not to add a new basis for removal jurisdiction.” 16 J. Moore, D. Coquillette, G. Joseph, S. Schreiber, G. Vairo, & C. Varner, Moore's Federal Practice § 107.30[2][a][iv], at 107-317 to -18 (3d ed. 2013). Thus, where diversity jurisdiction is asserted as a basis for removal of an action to federal court, the district court may permit the removing defendant to amend its removal notice, if necessary, to fully allege facts that satisfy the requirements of diversity jurisdiction by a preponderance of the evidence. See Carrillo v. MCS Indus., Inc., 2012 WL 5378300, at *14 (D.N.M. 2012)(Browning, J.)(permitting party to amend its notice of removal when the removing party did “not assert[] a new basis for jurisdiction, or a new allegation not present in its Notice of Removal; rather, the . . . Amended Notice of Removal provides greater detail regarding the same basis for jurisdiction asserted in the . . . Notice of Removal”). Cf. New Mexico ex rel. Balderas v. Valley Meat Co., 2015 WL 3544288, at *25 (D.N.M. 2015)(Browning, J.)(denying amendment when it sought to assert a new jurisdictional basis that was not raised in the notice of removal).

         4. Fraudulent Joinder.

         A defendant may remove a case to federal court based upon diversity jurisdiction in the absence of complete diversity if a plaintiff joins a nondiverse party fraudulently to defeat federal jurisdiction. See Am. Nat'l Bank & Trust Co. v. Bic Corp., 931 F.2d 1411, 1412 (10th Cir. 1991); Hernandez v. Menlo Logistics, Inc., 2013 U.S. Dist. LEXIS 156746, at *14-17 (D.N.M. 2013)(Browning, J.). A defendant may remove on the basis of fraudulent joinder either while the nondiverse party is still joined or after it is dismissed from the case -- the doctrine can thus function as an exception to either complete diversity or the voluntary-involuntary rule. “‘[A] fraudulent joinder analysis [is] a jurisdictional inquiry, '” Bio-Tec Envtl., LLC v. Adams, 792 F.Supp.2d 1208, 1214 (D.N.M. 2011)(Browning, J.)(quoting Albert v. Smith's Food & Drug Ctrs., Inc., 356 F.3d 1242, 1247 (10th Cir. 2004)), and, thus, the Tenth Circuit instructs that the district court should “pierce the pleadings, consider the entire record, and determine the basis of joinder by any means available, ” Dodd v. Fawcett Pubs., Inc., 329 F.2d at 85 (citations omitted). “A district court may disregard a nondiverse party named in the state court complaint and retain jurisdiction if joinder of the nondiverse party is a sham or fraudulent.” Baeza v. Tibbetts, 2006 U.S. Dist. LEXIS 95317, at *3 (D.N.M. 2006)(Vazquez, J.). The Supreme Court has stated: “Merely to traverse the allegations upon which the liability of the resident defendant is rested or to apply the epithet ‘fraudulent' to the joinder will not suffice: the showing must be such as compels the conclusion that the joinder is without right and made in bad faith.” Chesapeake & Ohio Ry. Co. v. Cockrell, 232 U.S. 146, 152 (1914). The Tenth Circuit has explained that allegations of fraudulent joinder complicate the analysis whether removal is proper, because, “[w]hile a court normally evaluates the propriety of a removal by determining whether the allegations on the face of the complaint satisfy the jurisdictional requirements, fraudulent joinder claims are assertions that the pleadings are deceptive.” Nerad v. AstraZeneca Pharms., Inc., 203 F.App'x 911, 913 (10th Cir. 2006)(unpublished).

         The party asserting fraudulent joinder bears the burden of proof. See Montano v. Allstate Indemnity Co., 211 F.3d 1278, 2000 WL 525592, at *1 (“The case law places a heavy burden on the party asserting fraudulent joinder.”). “To justify removal based on diversity jurisdiction, a defendant must plead a claim of fraudulent joinder with particularity and prove the claim with certainty.” Couch v. Astec Indus., Inc., 71 F.Supp.2d at 1146-47. Before 2013, the most recent published Tenth Circuit decision to state the burden of proof for demonstrating fraudulent joinder was issued over forty years earlier in Smoot v. Chicago, Rock Island & Pacific Railroad Co., 378 F.2d 879 (10th Cir. 1967). The Tenth Circuit said that fraudulent joinder must be “established with complete certainty upon undisputed evidence.” Smoot v. Chi., Rock Island & Pac. R.R. Co., 378 F.2d at 882.

         Actual fraud -- e.g., a plaintiff colluding with a nondiverse defendant to defeat removal[5] -- suffices to establish fraudulent joinder, but it is not required. See McLeod v. Cities Serv. Gas Co., 233 F.2d 242, 246 (10th Cir. 1956)(“[C]ollusion in joining a resident defendant for the sole purpose of preventing removal . . . may be shown by any means available.”). In Smoot v. Chicago, Rock Island & Pacific Railroad Co., the Tenth Circuit stated two other bases for finding fraudulent joinder: (i) “[t]he joinder of a resident defendant against whom no cause of action is stated is a patent sham”; or (ii) “though a cause of action be stated, the joinder is similarly fraudulent if in fact no cause of action exists.” 378 F.2d at 882 (quoting Dodd v. Fawcett Pubs., Inc., 329 F.2d at 85. In Smoot v. Chicago, Rock Island & Pacific Railroad Co., the Tenth Circuit found fraudulent joinder, because the joined party's non-liability was “established with complete certainty upon undisputed evidence.” 378 F.2d at 882. “This does not mean that the federal court will pre-try, as a matter of course, doubtful issues of fact to determine removability; the issue must be capable of summary determination and be proven with complete certainty.” Smoot v. Chi., Rock Island & Pac. R.R. Co., 378 F.2d at 882. In Smoot v. Chicago, Rock Island & Pacific Railroad Co., the plaintiff died when his car collided with a freight train. See 378 F.2d at 881. The plaintiff's estate sued the railroad company and joined a non-diverse alleged employee as a defendant. See 378 F.2d at 881. It was undisputed that the diversity-destroying party's employment with the railroad company had “terminated almost fifteen months before the collision and that he was in no way connected with the acts of negligence ascribed to him.” 378 F.2d at 881.

         In recent unpublished decisions, the Tenth Circuit has adopted different articulations of the burden of proof for fraudulent joinder, two of which are from the United States Court of Appeals for the Fifth Circuit. In Montano v. Allstate Indemnity Co., the Tenth Circuit quoted favorably Hart v. Bayer Corp., 199 F.3d 239 (5th Cir. 2000), which states:

To prove their allegation of fraudulent joinder [the removing parties] must demonstrate that there is no possibility that [plaintiff] would be able to establish a cause of action against [the joined party], in state court. In evaluating fraudulent joinder claims, we must initially resolve all disputed questions of fact and all ambiguities in the controlling law in favor of the non-removing party. We are then to determine whether that party has any possibility of recovering against the party whose joinder is questioned.

Montano v. Allstate Indemnity Co., 211 F.3d 1278, 2000 WL 525592, at *4-5 (alterations in original)(quoting Hart v. Bayer Corp., 199 F.3d at 246)(internal quotation marks omitted). The Tenth Circuit stated that the standard for proving fraudulent joinder “is more exacting than that for dismissing a claim under Fed.R.Civ.P. 12(b)(6); indeed, the latter entails the kind of merits determination that, absent fraudulent joinder, should be left to the state court where the action commenced.” Montano v. Allstate Indemnity Co., 211 F.3d 1278, 2000 WL 525592, at *2. The Tenth Circuit in Montano v. Allstate Indemnity Co. also quoted from Batoff v. State Farm Insurance Co., 977 F.2d 848 (3d Cir. 1992), which states: “A claim which can be dismissed only after an intricate analysis of state law is not so wholly insubstantial and frivolous that it may be disregarded for purposes of diversity jurisdiction.” 977 F.2d at 853.

         In Nerad v. AstraZeneca Pharmaceuticals, Inc., the Tenth Circuit adopted a different articulation of the burden of proof. The Tenth Circuit stated that, where fraudulent joinder is asserted, “the court must decide whether there is a reasonable basis to believe the plaintiff might succeed in at least one claim against the non-diverse defendant.” Nerad v. AstraZenecaPharmaceuticals, Inc., 203 F.App'x at 913 (citing Badon v. RJR Nabisco, Inc., 224 F.3d 382, 393 (5th Cir. 2000)). The Tenth Circuit explained that “[a] ‘reasonable basis' means just that: the claim need not be a ...

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