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Romero v. Circle K Stores, Inc.

United States District Court, D. New Mexico

July 18, 2017

PETE ROMERO, Plaintiff,
v.
CIRCLE K STORES, INC., JAMES GROGAN, MARK STANNEBEIN, SAMUEL WILSON, and JOHN DOES I-X, Defendants.

          MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF'S MOTION TO REMAND

         THIS MATTER comes before the Court upon Plaintiff's Motion to Remand, filed May 18, 2017 (Doc. 7). Having reviewed the parties' briefs and applicable law, the Court finds that Plaintiff's motion is well-taken and, therefore, is granted.

         BACKGROUND

         This is a personal injury case. Plaintiff Pete Romero was an employee of Defendant Circle K Stores, Inc. (“Circle K” or “Defendant” for purposes of this opinion) and was stabbed on or about March 30, 2014 by two unknown male suspects when he attempted to block their exit from the store after they stole an 18-pack of Corona beer. After the criminals fled the store, Plaintiff realized he had been stabbed multiple times and sustained injuries which resulted in internal bleeding that required surgery and subsequent surgical procedures. Plaintiff alleges that he continues to suffer long-term effects from the attack.

         Plaintiff filed this lawsuit in the First Judicial District Court, County of Santa Fe on March 27, 2017, and Defendants removed the case to federal court on May 3, 2017 on the basis of diversity of citizenship. Doc. 1 at 2-3. In Count I of the complaint, Plaintiff alleges that Circle K deliberately chose not to provide adequate security and training, placing him in an inherently dangerous situation where it was expected he would be a crime victim and suffer harm or death. Doc. 1-2.[1] In Count II, Plaintiff claims Circle K disposed of or destroyed relevant evidence material to Plaintiff's claims. Id. In Count III, Plaintiff seeks compensatory and punitive damages.

         According to the Notice of Removal (Doc. 1), Plaintiff alleges that Circle K is a nonresident, for-profit corporation operating convenience stores in New Mexico. In the notice, Defendant further certifies that Circle K is a Texas corporation with its principal place of business in Tempe, Arizona. Circle K is a citizen of a state other than New Mexico. The dispute here is whether the individual Circle K employees and the John Doe Defendants are proper Defendants. Since these individual defendants are alleged to be residents of Albuquerque, New Mexico, their presence in this case would ordinarily destroy diversity. However, Defendant claims that they are not proper parties to this lawsuit because Plaintiff has not asserted any claim against them and their residences in New Mexico should not be considered when evaluating diversity of citizenship.

         DISCUSSION

         The question before the Court here is whether Plaintiff has fraudulently joined these individual defendants in order to deprive Circle K of the right to have this litigated in federal court. Plaintiff also challenges Defendants' contention that the amount-in-controversy is met for diversity jurisdiction.

         I. Legal Standard

         Federal courts are courts of limited jurisdiction; thus, there is a presumption against removal jurisdiction, which the defendant seeking removal must overcome. See Fajen v. Found. Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir.1982); Martin v. Franklin Capital Corp., 251 F.3d 1283, 1290 (10th Cir. 2001). Removal statutes are strictly construed, and ambiguities should be resolved in favor of remand.

         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. However, fraudulent joinder is an exception to the requirement of complete diversity. Black Iron, LLC v. Helm-Pacific, 2017 WL 2623846, at *4 (D.Utah, 2017). The joinder of a non-diverse party is “fraudulent” when it serves no purpose other than “to frustrate federal jurisdiction.”4 Dodd v. Fawcett Publ'ns, Inc., 329 F.2d 82, 85 (10th Cir. 1964). A defendant may remove a case to federal court based upon diversity jurisdiction in the absence of complete diversity if a plaintiff joins a non-diverse party fraudulently to defeat federal jurisdiction. See Am. Nat'l Bank & Trust Co. v. Bic Corp., 931 F.2d 1411, 1412 (10th Cir.1991). The citizenship of fraudulently joined defendants “should be ignored for the purposes of assessing complete diversity.” See Dutcher v. Matheson, 733 F.3d 980, 987-988 (10th Cir. 2013).

         The Tenth Circuit has stated that fraudulent joinder must be “established with complete certainty upon undisputed evidence.” Smoot v. Chicago, Rock Island & Pacific Railroad Co., 378 F.2d 879 (10th Cir.1967). In evaluating a claim of fraudulent joinder, “all doubts are to be resolved against removal.” Fajen v. Found. Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir. 1982).

         In other words, the removing party “bears a heavy burden of proving fraudulent joinder, and all factual and legal issues must be resolved in favor of the plaintiff.” See Dutcher, 733 F.3d at 988 (quoting Pampillonia v. RJR Nabisco, Inc., 138 F.3d 459, 461 (2d Cir. 1998)). This is a high bar for Defendants to meet, and poses a standard “more exacting than that for dismissing a claim under Fed.R..Civ.P. 12(b)(6)” and “which entails the kind of merits determination that, absent fraudulent joinder, should be left to the state court where the action was commenced.” Montano v. Allstate Indemnity, 2000 WL 525592 at **1-2 (10th Cir. 2000).[2]

         The party defending removal may carry this “heavy burden” and successfully assert fraudulent joinder by demonstrating either: (1) actual fraud in the pleading of jurisdictional facts, or (2) the inability of the plaintiff to establish a cause of action against the non-diverse party in state court. Dutcher v. Matheson, 733 F.3d 980, 988 (10th Cir. 2013); Black Iron, LLC v. Helm-Pacific, 2017 WL 2623846, at *4 (D.Utah, 2017); see also Montano v. Allstate, 2000 WL 525592 at **1-2 (to prove fraudulent joinder, the removing party 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).

         A fraudulent joinder analysis is a jurisdictional inquiry and therefore a district court should “pierce the pleadings, consider the entire record, and determine the basis of joinder by any means available, ” Dodd v. Fawcett Publ'ns, Inc., 329 F.2d 82, 85 (10th Cir.1964) (citations omitted); Albert v. Smith's Food & Drug Centers, Inc.356 F.3d 1242, 1247 (10th Cir. 2004)(fraudulent joinder analysis is a jurisdictional inquiry); Smoot, 378 F.2d at 882 (federal courts may ...


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