United States District Court, D. New Mexico
SUSAN BYERS, Individually; and RACHEL HIGGINS, as Personal Representatives of the Estate of Darelle Byers, Deceased, Plaintiffs,
CENTRAL TRANSPORT, LLC; GERARDO HERRERA-MONTOYA; and MIKE'S TIRES & SERVICE, INC., Defendants.
MEMORANDUM OPINION AND ORDER
February 15, 2019, Defendant Mike's Tires & Service
Inc. (MTSI) filed a Motion to Dismiss under Federal Rule of
Civil Procedure 12(b)(1), requesting that the Court dismiss
MTSI from this civil action for lack of subject matter
jurisdiction over it. (Doc. 5). Plaintiffs Susan Byers and
Rachel Higgins, as personal representative of the Estate of
Darelle Byers (Plaintiffs), responded in opposition to the
Motion to Dismiss (Doc. 8), and it is fully
briefed. On March 11, 2019, Plaintiff filed a
Motion to Remand (Doc. 11), which Defendants Central
Transport, LLC and Gerardo Herrera-Montoya (CT Defendants)
oppose (Doc. 13). The primary issue, common to both motions,
is whether Plaintiffs have fraudulently joined Defendant MTSI
to avoid federal court jurisdiction. The Court, having
considered the parties' motions and applicable law, will
grant Plaintiffs' Motion to Remand and will remand the
case to the First Judicial District Court, County of Santa
Fe, State of New Mexico. Because it lacks jurisdiction, the
Court will not address Defendant MTSI's Motion to
17, 2018, Plaintiffs Darelle and Susan Byers filed a civil
action in New Mexico state court seeking damages for
negligence resulting in personal injury against Defendants
Central Transport, LLC, Gerardo Herrera-Montoya, and MTSI.
(Doc. 1 at ¶ 5; Original Complaint, Doc. 1-2). The
claims arise out of a collision that occurred on June 29,
2018 on Interstate 10 in New Mexico between a Central
Transport tractor-trailer operated by Defendant
Herrera-Montoya and the vehicle driven by Darelle Byers in
which his wife Susan was a passenger. (See Original
Complaint, Doc. 1-2 at ¶¶ 7-8). Plaintiffs allege
that Defendant MTSI had performed work on the Byers'
vehicle and missed a defect that contributed to the vehicle
stalling. (Doc. 1-2 at ¶¶ 9-10). Plaintiffs aver
that this caused Mr. Byers to attempt to move to the
highway's shoulder to restart the vehicle, at which time
the truck Defendant Herrera-Montoya was operating struck the
Byers' vehicle from the rear. (Doc. 1-2 at ¶¶
11-12). Sometime after the complaint was filed, Mr. Byers
died. As a result, on December 11, 2018, Plaintiffs filed
their First Amended Complaint, substituting Plaintiff Rachel
Higgins as Personal Representative of the Estate of Darelle
Byers for Plaintiff Darelle Byers, and adding a wrongful
death claim. (See First Amended Complaint, Doc.
February 8, 2019, Defendants Central Transport and
Herrera-Montoya (collectively, CT Defendants), invoked the
doctrine of fraudulent joinder and removed the case from
state court to federal court on the basis of diversity
jurisdiction under 28 U.S.C. §§ 1332 and
1441(a). (See Notice of Removal, Doc. 1).
On February 15, 2019, Defendant MTSI filed a motion under
Federal Rule of Civil Procedure 12(b)(1), also based on
fraudulent joinder, asking the Court to dismiss any claims in
the First Amended Complaint against MTSI and to terminate
MTSI as a defendant for lack of subject matter jurisdiction.
(Doc. 5). The CT Defendants do not oppose MTSI's request.
(Doc. 5). Plaintiffs responded in opposition to Defendant
MTSI's motion, but also separately filed a Motion to
Remand these proceedings to state court.
the Court must decide which of the two pending motions to
address first - Defendant MTSI's Motion to Dismiss or
Plaintiffs' Motion to Remand. “[T]here is no
unyielding jurisdictional hierarchy, ” requiring a
federal court to address one jurisdictional matter before the
other, Ruhrgas AG v. Marathon Oil. Co., 526 U.S.
574, 578 (1999), and courts have held that “the
district court has the discretion to decide which to take up
first.” Zufelt v. Isuzu Motors Am., L.C.C.,
727 F.Supp.2d 1117, 1125 (D. N.M. 2009). In this case, the
two pending motions are based on the same principal issue.
Because resolution of the Motion to Remand determines the
Court's jurisdiction to address MTSI's Motion to
Dismiss, the Court will first address the Motion to Remand.
federal statute providing for the removal of cases from state
to federal court was intended to restrict rather than enlarge
removal rights. Greenshields v. Warren Petroleum
Corp., 248 F.2d 61, 65 (10th Cir. 1957). As such, courts
are to strictly construe the removal statutes and resolve all
doubts against removal. Fajen v. Found. Reserve Ins. Co.,
Inc., 683 F.2d 331, 333 (10th Cir. 1982). The removing
party bears the burden of establishing the requirements for
federal jurisdiction. See Huffman v. Saul Holdings Ltd.
P'ship, 194 F.3d 1072, 1079 (10th Cir. 1999).
Defendants removed this case under 28 U.S.C. § 1332(a),
on the ground that this Court has diversity jurisdiction. In
order to invoke diversity jurisdiction, “a party must
show that complete diversity of citizenship exists between
the adverse parties and that the amount in controversy
exceeds $75, 000.” Symes v. Harris, 472 F.3d
754, 758 (10th Cir. 2006). “Complete diversity is
lacking when any of the plaintiffs has the same residency as
even a single defendant.” Dutcher v. Matheson,
733 F.3d 980, 987 (10th Cir. 2013). The parties do not
dispute that the amount in controversy here exceeds $75, 000.
However, both Plaintiffs and Defendant MTSI are New Mexico
citizens. (Doc. 1, ¶ 4; Doc. 1-16 at ¶¶ 3-7).
Accordingly, as pleaded in the First Amended Complaint,
complete diversity does not exist in this case.
“[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, No. 06-cv-0407
MV/WPL, 2006 WL 2863486, *7 (D. N.M. July 7, 2006). Courts
have long held that the right of removal cannot be defeated
by “a fraudulent joinder of a resident defendant having
no real connection with the controversy.” Wilson v.
Republic Iron & Steel Co., 257 U.S. 92, 97
(1921). “Joinder may be deemed fraudulent if the
alleged facts are not sufficient to state a cause of action
against the defendant under the governing substantive law or
if it is clear that the plaintiff cannot succeed on the
merits.” Sakura v. Goodyear Tire & Rubber
Co., No. 12-cv-00791 RB/WPL, 2012 WL 13013066, at *2 (D.
N.M. Dec. 17, 2012).
establish [fraudulent] joinder, the removing party must
demonstrate either: (1) actual fraud in the pleading of
jurisdictional facts, or (2) inability of the plaintiff to
establish a cause of action against the non-diverse party in
state court.” Dutcher, 733 F.3d at 988
(internal quotation marks and citation omitted). The CT
Defendants seek to establish fraudulent joinder by the second
method. Under the second method, the CT Defendants
“must demonstrate that there is no possibility that
[plaintiffs] would be able to establish a cause of action
against [MTSI] in state court.” Montano v. Allstate
Indem., 211 F.3d 1278, 2000 WL 525592, at *1 (10th Cir.
2000) (quoting Hart v. Bayer Corp., 199 F.3d 239,
246 (5th Cir. 2000) (quotation marks omitted)). In
determining whether there is any possibility of recovery, the
Tenth Circuit has instructed that courts should “pierce
the pleadings, consider the entire record, and determine the
basis of joinder by any means available.” Dodd v.
Fawcett Publications, 329 F.2d 82, 85 (10th Cir. 1964)
places a “heavy burden” on the party asserting
fraudulent joinder in the context of a motion to remand, a
standard that “is more exacting than that for
dismissing a claim under” Federal Rule of Civil
Procedure 12(b)(6). Montano v. Allstate Indem., 211
F.3d 1278, 2000 WL 525592, *2 (10th Cir. 2000) (unpublished).
And “all factual and legal issues must be resolved in
favor of the plaintiff.” Dutcher, 733 F.3d at
988 (internal quotation marks and citation omitted). Where
the defendant's argument is based on a factual issue,
“the issue must be capable of summary determination and
be proven with complete certainty, ” and courts may not
“pre-try…doubtful issues of fact to determine
removability.” Smoot v. Chicago, R.I. & P.R.
Co., 378 F.2d 879, 882 (10th Cir. 1967). Moreover,
“[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.” Batoff v.
State Farm Ins. Co., 977 F.2d 848, 853 (3d Cir. 1992).
If the defendant fails to establish with complete certainty
upon undisputed evidence that the non-diverse defendant is
not liable, then the Court must remand the case back to the
state court without ruling further in the matter. See
Cunningham v. BHP Petroleum Gr. Brit. PLC, 414 F.3d
1169, 1175 (10th Cir. 2005); see also Bellman v. NXP
Semiconductors USA, Inc., 248 F.Supp.3d 1081, 1130 (D.
N.M. 2017) (“Fraudulent joinder must be established
with complete certainty upon undisputed evidence.”).
their Motion to Remand, Plaintiffs argue that the CT
Defendants have not met their “heavy” burden to
demonstrate that Plaintiffs fraudulently joined Defendant
MTSI to this action. (Doc. 11). Specifically, Plaintiffs
contend that the evidence the CT Defendants rely on in
support of fraudulent joinder - Plaintiffs' discovery
responses and a declaration from non-diverse Defendant
MTSI's general manager - cannot be used to establish with
“complete certainty on undisputed evidence” that
Plaintiffs have no cause of action against MTSI. To the
contrary, the CT Defendants maintain that there is no ...