Anderson v. 3M Co.

1

JOHN ANDERSON, et al., Plaintiffs, v. 3M COMPANY, et al., Defendants.

No. 7:22-CV-68-REW-CJS

United States District Court, E.D. Kentucky, Southern Division, Pikeville

March 28, 2023

OPINION & ORDER

Robert E. Wier United States District Judge

I. BACKGROUND

Plaintiffs in this case “worked as coal miners within the Commonwealth of Kentucky” and allege that they were “exposed to coal, rock or sand dust as a result of such coal mine employment.” DE 1-2 at 51-52. Plaintiffs claim that they wore respirators manufactured or distributed by Defendants (“Respirators”) and, as a result of the failure of the Respirators, now suffer from “Coal Workers' Pneumoconiosis,” also referred to as “Black Lung.” See id. at 52. Defendants in this case are split into two categories: Manufacturer Defendants^[1]and Supplier Defendants.^[2]Manufacturer Defendants manufactured the various Respirators. See id. at 50. Supplier Defendants then sold the Respirators to Plaintiffs' employers for Plaintiffs' use while they were working coal mining jobs. See id. at 51 61-62 (¶¶ 44, 45, 48). Plaintiffs bring negligence strict liability, intentional misrepresentation, and breach of warranty claims against Manufacturer Defendants, see id. at 53-59, and Plaintiffs bring negligence and strict liability claims against Supplier Defendants, see Id. at 59-62.

On July 15, 2022, only two months out from trial (for one named plaintiff but not all joined plaintiffs), 3M removed this case from Pike Circuit Court, claiming diversity jurisdiction under § 1332 on grounds that the Kentucky Supplier Defendants were fraudulently joined to the action. DE 1 (Notice of Removal) at 8. Plaintiffs moved to remand the case to state court. DE 17 (Motion to Remand). 3M filed a response, DE 19, and Plaintiffs filed a reply, DE 20. The matter is ripe for review.

II. ANALYSIS

Absent a federal question, a party invoking the Court's removal jurisdiction must demonstrate complete diversity of citizenship at the time of removal; that is, all plaintiffs must be diverse from all defendants. 28 U.S.C. § 1332(a)(1); id. § 1441(a); Coyne v. Am. Tobacco Co., 183 F.3d 488, 492 (6th Cir. 1999). The Court must resolve all doubts about the propriety of removal in favor of remand and strictly construe the removal statutes. Eastman v. Marine Mech. Corp., 438 F.3d 544, 549-50 (6th Cir. 2006); Coyne, 183 F.3d at 493. When joinder of a non-diverse party destroys complete diversity, “the removing defendant may avoid remand only by demonstrating that the non-diverse party was fraudulently joined.” Jerome-Duncan, Inc. v. Auto-By-Tel, LLC, 176 F.3d 904, 907 (6th Cir. 1999).

Plaintiffs sued two Kentucky Defendants. See DE 1-2 at 50. That joinder nominally defeats complete diversity. 3M, which waited years to make the argument, alleges that the two Kentucky Defendants-Kentucky Mine Supply Company and Mine Service Company, both Supplier Defendants-were fraudulently joined to this action to destroy subject matter jurisdiction based on diversity of citizenship. See DE 1 (3M's Notice of Removal) at 10-18; DE 19 (3M's Response) at 4-13. To support its argument, 3M points to Plaintiffs' failure to engage in discovery with or “develop a case against the Supplier Defendants.” See DE 1 at 13. 3M also claims that Plaintiffs' fraudulent joinder of Supplier Defendants here is part of a broader pattern and practice. See id. at 16. Plaintiffs argue that 3M fails to cite undisputed facts in the record to negate their colorable claim; Plaintiffs reject the fraudulent joinder depiction. See DE 17 (Motion to Remand) at 10-16. Further, Plaintiffs reject the argument that either failure to engage in discovery or a litigation strategy pursued in another case is evidence of fraudulent joinder. See id. at 13-16.

A removing party faces a heavy burden in attempting to demonstrate fraudulent joinder. Kent State Univ. Bd. of Trs. v. Lexington Ins. Co., 512 Fed.Appx. 485, 489-90 (6th Cir. 2013). Joinder of a non-diverse defendant is fraudulent only if it is “clear that there can be no recovery [against that defendant] under the law of the state on the cause alleged or on the facts in view of the law.” Alexander v. Elec. Data Sys. Corp., 13 F.3d 940, 949 (6th Cir. 1994). In other words, the removing party must show that there is no “colorable basis for predicting that a plaintiff may recover against [that defendant].” Coyne, 183 F.3d at 493. “If the plaintiff has even a ‘glimmer of hope,' then any charge of fraudulent joinder fails, and the Court must remand the case to state court for want of subject matter jurisdiction.” Christensen v. ATS, Inc., 24 F.Supp.3d 610, 613 (E.D. Ky. 2014) (internal citation omitted); see also Hartley v. CSX Transp., 187 F.3d 422, 426 (4th Cir. 1999) (“Once the court identifies this glimmer of hope for the plaintiff, the jurisdictional inquiry ends.”). Further, “[t]he non-moving party's motive for joining the non-diverse party to the lawsuit is ‘immaterial to our determination regarding fraudulent joinder.'” Walker v. Philip Morris USA, Inc., 443 Fed.Appx. 946, 951 (6th Cir. 2011) (citing Jerome-Duncan, 176 F.3d at 907).

In assessing whether joinder was fraudulent, the Court employs “a test similar to, but more lenient than, the analysis applicable to a Rule 12(b)(6) motion to dismiss.” Casias v. Wal-Mart Stores, Inc., 695 F.3d 428, 433 (6th Cir. 2012). As with a 12(b)(6) motion, the Court “must resolve ‘all disputed questions of fact and ambiguities in the controlling . . . state law in favor of the non[-]removing party.'” Coyne, 183 F.3d at 493 (quoting Alexander, 13 F.3d at 949). In evaluating fraudulent joinder, the Court can pierce the pleadings and consider the sort of evidence it would at summary judgment but solely “for the limited purpose of determining whether there are undisputed facts that negate the [plaintiffs'] claim[s].” Casias, 694 F.3d at 433 (internal quotation marks omitted).

The law of the forum state “provides the substantive law governing diversity cases.” K&T Enters., Inc. v. Zurich Ins. Co., 97 F.3d 171, 176 (6th Cir. 1996) (citing Erie R.R. Co. v. Thompson, 58 S.Ct. 817 (1938)). Therefore, in this case, the Court will apply Kentucky substantive law. The Kentucky Middleman Statute provides that, in a products liability case, distributors are generally shielded from liability when they sell a product in its “original manufactured condition or package” so long as the manufacturer is identified and subject to the court's jurisdiction. KY. REV. STAT. § 411.340. The exception to this rule is when the distributor “knew or should have known at the time of distribution or sale of such product that the product was in a defective condition, unreasonably dangerous to the user or consumer.” Id. If a distributor falls within this exception, the statutory immunity vanishes. See id. The burden of showing the predicate, by a preponderance of the evidence, is on the distributor. See id. Showing the exception falls on the claimant. See Weixler v. Paris Co., No. 302-CV-390-H, 2003 WL 105503, at *1 (W.D. Ky. Jan. 2, 2003); see also Flint v. Target Corp., No. 3:07-CV-600-R, 2009 WL 87469, at *3-4 (W.D. Ky. Jan. 13, 2009), aff'd, 362 Fed.Appx. 446 (6th Cir. 2010).

Plaintiffs' Complaint expressly alleges that each Supplier Defendant “knew or should have known at the time of sale that the dust mask/[R]espirators it sold were defective and unreasonably dangerous when used in a coal mine.” See DE 1-2 at 59. As preliminary proof for this contention, Plaintiffs referenced, in the Complaint itself, numerous scientific, industry, and governmental publications that were available to Supplier Defendants to inform them that at least some of the Respirators would lose effectiveness in certain applications and/or would leak from ill fit. See Id. at 60-61. Notice of such product characteristics or risks could, therefore, be notice of a defective condition. Further, the Complaint specifically alleges (¶¶ 6, 12, 13) that Supplier Defendants sold Respirators to Plaintiffs or Plaintiffs' coal mining employers for employees' use. See id. at 61; see also id. at 59.

To defeat a fraudulent joinder claim, Plaintiffs need not show that they will prevail against Supplier Defendants at trial; instead, they need only show that they have a “colorable basis” for recovery. See Coyne, 183 F.3d at 493. They have met that low bar in this case. Given that the Kentucky Middleman Statute does not absolve distributors and suppliers from liability when they know or should have known of a product's defect, and given the allegations in the Complaint, it is far from “clear that there can be no recovery” against Supplier Defendants. See Alexander, 13 F.3d at 949. Kentucky law generally holds product sellers liable for putting a defective product in the stream of commerce, resulting in injury. See Thacker v. Ethicon, Inc., 47 F. 4th 451, 459 (6th Cir. 2022); KY. REV. STAT. § 411.340. A middleman meeting his burden on non-alteration may get immunity (assuming manufacturer amenability to suit), but a middleman on actual or constructive notice of a defect enjoys no such protection.

3M's argument that Supplier Defendants were fraudulently joined because Plaintiffs have not built or displayed a case against Defendants fails. “[I]n determining whether a defendant has been fraudulently joined, a district court's task is limited to determining ‘whether there is arguably a reasonable basis for predicting that the state law might impose liability on the facts involved.'” Adams v. Minn. Mining & Mfg. Co., 4:03-CV-182, 4:04-CV-2, 2004 WL 718917, at *3 (W.D. Ky. March 30, 2004) (quoting Alexander, 13 F.3d at 949). “The question is not whether the [P]laintiffs will recover from [Defendants]” but rather “whether the [P]laintiffs could recover from [D...