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Rockwell v. Coram Specialty Infusion Services, Inc.

United States District Court, D. New Mexico

April 2, 2018

CORAM SPECIALTY INFUSION SERVICES, INC., a Foreign Corporation, and KELLY COWAN, an individual, Defendants.



         THIS MATTER is before the Court on Plaintiffs' Motion to Remand and Brief in Support [Doc. 10]. The Court has considered the parties' submissions and the relevant law, and is otherwise fully informed. For the following reasons, the Court GRANTS Plaintiffs' Motion.

         I. Background

         Plaintiffs David Rockwell and Amanda Gale Salazar (Plaintiffs) filed a complaint in the First Judicial District Court against their employer, Coram Specialty Infusion Services, Inc. (Coram), and another Coram employee, Kelly Cowan (Cowan; collectively, Defendants). [Doc. 1-2] In the Complaint, Plaintiffs assert claims of retaliatory discharge against Coram and tortious interference with contractual relations against Cowan. [Doc. 1-2] Plaintiffs state that they are residents of New Mexico and allege that Defendant Cowan is also a New Mexico resident. [Doc. 1-2, ¶¶ 1, 2, 5] Defendants removed the matter to this Court, invoking this Court's jurisdiction under 28 U.S.C. § 1332(a). They provided an affidavit stating that Coram is a limited liability company whose only member is a corporation incorporated in Delaware with its principal place of business in Rhode Island. [Doc. 1-3] See Americold Realty Trust v. Conagra Foods, Inc., 136 S.Ct. 1012, 1015 (2016) (affirming the Tenth Circuit's holding that “the citizenship of any ‘non-corporate artificial entity' is determined by considering all of the entity's ‘members, ' which include, at minimum, its shareholders.” (internal quotation marks and citation omitted)); 28 U.S.C. § 1332(c)(1) (stating that “a corporation shall be deemed to be a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business.”). The parties do not dispute that, while Defendant Coram is a foreign entity, Defendant Cowan is not, and, therefore, complete diversity is not present here. [Doc. 1, ¶ 5; Doc. 10, pg. 1] In the Notice of Removal, Defendants argued that although all of the parties are not diverse, as required under 28 U.S.C. § 1332(a), this Court should nevertheless exercise jurisdiction because Defendant Cowan was joined solely to defeat removal, i.e., fraudulently joined.[1][Doc. 1] Plaintiffs now move for remand, contending that they have a viable claim against Defendant Cowan and that this Court lacks jurisdiction over their Complaint. [Doc. 10]

         II. Discussion

         Federal law provides that the United States District Courts have original jurisdiction over all civil actions where the matter in controversy exceeds the sum or value of $75, 000 and is between citizens of different states. See 28 U.S.C. § 1332(a). Diversity jurisdiction depends upon all parties to one side of the case having a different citizenship from all parties to the opposing side. See City of Neodesha v. BP Corp. N. Am., 355 F.Supp.2d 1182, 1185 (D. Kan. 2005).

         An action initially brought in a state court may be removed to a federal district court pursuant to the authority set forth in 28 U.S.C. § 1441, which states, in pertinent part, that

[e]xcept as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.

28 U.S.C. § 1441(a).

         “‘Removal statutes are strictly construed, and any doubts about the propriety of removal are resolved in favor of remand.'” See City of Neodesha, 355 F.Supp.2d at 1185 (quoting Boyer v. Snap-on Tools Corp., 913 F.2d 108, 111 (3rd Cir.1990)). When removal is challenged, the burden rests with the removing party to prove that the federal district court has original jurisdiction. City of Neodesha, 355 F.Supp.2d at 1185.

         In some instances, where the parties are not diverse, a removing party may nevertheless assert diversity jurisdiction on the ground that a non-diverse party was fraudulently joined. Our Tenth Circuit has explained that

[u]pon specific allegations of fraudulent joinder the court may pierce the pleadings, consider the entire record, and determine the basis of joinder by any means available. The joinder of a resident defendant against whom no cause of action is stated is patent sham and though a cause of action be stated, the joinder is similarly fraudulent if in fact no cause of action exists. 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.

Dodd v. Fawcett Publications, Inc., 329 F.2d 82, 85 (10th Cir. 1964) (citations omitted); see Nerad v. AstraZeneca Pharm., Inc., 203 Fed.Appx. 911, 913 (10th Cir. 2006) (unpublished[2]) (stating that “[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. Thus, in cases where fraudulent joinder is claimed, we have directed courts to pierce the pleadings, consider the entire record, and determine the basis of joinder by any means available.” (internal quotation marks and citation omitted)). The party asserting fraudulent joinder bears a “heavy burden” inasmuch as that party “‘must demonstrate that there is no possibility that the non-removing party would be able to establish a cause of action against the joined party in state court.'” See Montano v. Allstate Indem., 211 F.3d 1278, *1-2 (10th Cir. 2000) (unpublished) (alterations omitted) (quoting Hart v. Bayer Corp, 199 F.3d 239, 246 (5th Cir. 2000)). “This standard 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 was commenced.” Montano, 211 F.3d at *2.

         After initially resolving all disputed questions of fact and all ambiguities in the controlling law in favor of the non-removing party, the Court's task is “then to determine whether that party has any possibility of recovery against the party whose joinder is questioned.” Id. at * 1 (internal quotation marks and citation omitted). “[R]emand is required if any one of the claims against the non-diverse defendant . . . is possibly viable.” Id. at * 2 (citing Green v. Amerada Hess Corp.,707 F.2d 201, 206 (5th Cir. 1983)). The Court examines state law to determine whether any of Plaintiffs' claims are “possibly viable.” Montano, 211 F.3d at *2; see Hart, 199 F.3d at 246 (“To prove their allegation of fraudulent joinder [removing parties] must ...

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