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Byers v. Central Transport LLC

United States District Court, D. New Mexico

November 14, 2019

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


         On July 17, 2019, Defendants Central Transport, LLC and Gerardo Herrera-Montoya (collectively, “CT Defendants”) invoked the doctrine of fraudulent joinder with regards to non-diverse Defendant Mike's Tires & Services, Inc. (“Mike's Tires”) and filed a notice (“Second Notice of Removal”) removing the case from state court to federal court on the basis of diversity jurisdiction under 28 U.S.C. §§ 1332 and 1441(a).[1] This is CT Defendants' second attempt to invoke the doctrine of fraudulent joinder to remove the case from state court to federal court.[2]

         On August 27, 2019, Plaintiffs filed a Motion for Remand requesting that the Court remand the case to state court a second time.[3] The Motion for Remand is fully briefed.[4] Shortly after Plaintiffs filed their Motion for Remand, Mike's Tires moved to dismiss Plaintiffs' single claim against it under Federal Rule of Civil Procedure 12(b)(1).[5] The Court will grant Plaintiffs' Motion to Remand. Because the Court concludes that it lacks subject matter jurisdiction over this case, the Court will not address Mike's Tires' 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 Mike's Tires. Doc. No. 1 at ¶ 5; ORIGINAL COMPLAINT, Doc. No. 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 Doc. No. 1 at ¶ 6. Plaintiffs allege that Defendant Mike's Tires had performed work on the Byers' vehicle and missed a defect that contributed to the vehicle stalling. Id. at ¶ 7. 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 operated by Defendant Herrera-Montoya struck the Byers' vehicle from the rear. Id. Sometime after filing the complaint, Darelle 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. No. 1-16.

         On February 8, 2019, CT Defendants invoked the doctrine of fraudulent joinder and removed the case from state court to federal court under 28 U.S.C. §§ 1332 and 1441(a).[6] See No. 19-cv-107, NOTICE OF REMOVAL, Doc. No. 1. On February 15, 2019, Defendant Mike's Tires 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 Mike's Tires and to terminate Mike's Tires as a defendant for lack of subject matter jurisdiction. No. 19-cv-107, MOTION TO DISMISS PLAINTIFF'S [sic] FIRST AMENDED COMPLAINT FROM DEFENDANT MIKE'S TIRES, Doc. No. 5. On May 21, 2019, the Court held that CT Defendants did not meet their burden of establishing fraudulent joinder and remanded the case to the First Judicial District Court, County of Santa Fe, State of New Mexico. See Mem. Op. and Order at 13. CT Defendants have now attempted to remove this case for a second time. Doc. No. 1.


         Section 1446(b) permits a party to file a second notice of removal if subsequent pleadings or events reveal a new and different basis for removal. See 28 U.S.C. 1446(b)(3); see, e.g., In re Diet Drugs, 282 F.3d 220, 232 n.8 (3rd Cir. 2002) (“The removal statute . . . does not categorically prohibit the filing of a second removal petition following remand . . . . [i]f subsequent pleadings or conduct by the parties or various other circumstances brings a case that was not previously removable within the removal jurisdiction of the federal courts.” (internal citations and quotation marks omitted)); S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 492 (5th Cir. 1996) (“The prohibition against removal ‘on the same ground' does not concern the theory on which federal jurisdiction exists (i.e., federal question or diversity jurisdiction), but rather the pleading or event that made the case removable.” (citing O'Bryan v. Chandler, 496 F.2d 403, 410 (10th Cir. 1974)). The United States Supreme Court has explained that

if, after an order to remand has been made, it results, from the subsequent pleadings or conduct of the parties to the cause, that the cause is removable, on the development of such situation a second application to remove may be made, and the right to do so because of the changed aspect is not controlled by the previous order remanding the cause.

Fritzlen v. Boatmen's Bank, 212 U.S. 364, 372 (1909). Thus, once a federal court remands a case to state court, the law precludes a defendant from seeking a second removal on the same grounds. See id.

         CT Defendants claim that additional evidence obtained through discovery further “demonstrates a complete lack of evidence to support Plaintiffs' negligence claims against Mike's Tires.” Doc. No. 1 at ¶ 20. CT Defendants also note that, based on this lack of evidence, Mike's Tires filed a motion for summary judgment in state court seeking dismissal of Plaintiffs' action against it. Id. at ¶ 18. Finally, CT Defendants have introduced an affidavit of Ralph C. Callaway, a friend of Susan and Darelle Byers, which CT Defendants allege demonstrates actual fraud on the part of Plaintiffs to conceal information. Id. at ¶¶ 24, 26; see also AFFIDAVIT OF RALPH C. CALLAWAY, Doc. No. 1-62.


         CT Defendants removed this case under 28 U.S.C. § 1332(a) on the ground that this Court has diversity jurisdiction. 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. Doc. No. 1, ¶ 46; Mem. Op. and Order at 4. But both Plaintiffs and Defendant Mike's Tires are New Mexico citizens. Doc. No. 1, ¶ 4; Doc. No. 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). For the second time, CT Defendants urge the Court to find that Plaintiffs fraudulently joined Mike's Tires in an attempt to avoid federal jurisdiction. “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 (alteration in original). Under both methods, “[t]he 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.” Id. Further, “fraudulent joinder, like any other allegation of fraud, must be pleaded with particularity and proven with certainty. It cannot be inferred from a mere misjoinder of parties or causes of action.” McLeod v. Cities Serv. Gas Co., 233 F.2d 242, 246 (10th Cir. 1956). Finally, the Court is instructed that it 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). Here, CT Defendants seek to establish fraudulent joinder by both methods. CT Defendants claim that evidence discovered in the state court proceeding supports their second removal to federal court.

         A. Ability to establish ...

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