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Byers v. Central Transport, LLC

United States District Court, D. New Mexico

May 21, 2019

SUSAN BYERS, Individually; and RACHEL HIGGINS, as Personal Representatives of the Estate of Darelle Byers, Deceased, Plaintiffs,


         On 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.[1] (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.[2] 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).[3] 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 Dismiss.


         On July 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. 1-16).

         On 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).[4] (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.


         Initially, 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.


         The 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).

         The CT 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.

         Nevertheless, “[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).

         “To 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) (citations omitted).

         The law 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.”).


         In 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 ...

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