Last week we wrote about Johnson v. DePuy Orthopaedics, Inc., 2012 U.S. Dist. LEXIS 74450 (N.D. Ohio May 30, 2012) and that court’s use of the TwIqbal motion to dismiss standard in deciding the issue of fraudulent joinder. That made perfect sense to us. On fraudulent joinder, defendant bears the burden of showing that plaintiffs can’t state a viable cause of action against the allegedly fraudulently joined defendant. On a motion to dismiss, defendant bears the burden of showing that plaintiffs can’t state a viable cause of action against the defendant. Seems like the same standard should apply. So, we decided to see if other courts agreed with us and with Johnson. What we found is that while courts generally agree that fraudulent joinder walks and talks like a motion to dismiss – it isn’t exactly a motion to dismiss. If it isn’t exactly a motion to dismiss, then what standard applies? What we learned is that question is answered in a myriad of different ways – some courts lean more toward a summary judgment standard because you are allowed to look beyond the pleadings, some look to whether there is a reasonable possibility that the plaintiff has asserted a valid claim, some look to state law – and yes, some do indeed look to Rule 12(b)(6).
First, we’ll quickly acknowledge that there are cases that say the fraudulent joinder standard is something quite different than TwIqbal. For instance, in Junk ex rel. Junk v. Terminix Int’l Co., 628 F.3d 439 (8th Cir. 2010), plaintiff alleged that a pesticide used by a pest control company in her home during and shortly after her pregnancy caused severe neurological problems for her son. Plaintiff sued both the company and the non-diverse employee who treated plaintiff’s house. In deciding plaintiff’s motion to remand, the court stated the “Rule 12(b)(6) standard is more demanding” and that the proper, more lenient, standard is “whether there is arguably a reasonable basis for predicting that the state law might impose liability based upon the facts involved.” Id. At 445 (court reversed denial of remand and reinstated and remanded claims against employee).
An even stronger anti-TwIqbal case we found was Stillwell v. Allstate Ins. Co., 663 F.3d 1329 (11th Cir. 2011). In holding that the district court erroneously applied the federal Rule 12(b)(6) standard to plaintiff’s motion to remand, the court said:
This [fraudulent joinder] standard differs from the standard applicable to a 12(b)(6) motion to dismiss. To survive a 12(b)(6) motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. This plausibility standard asks for more than a sheer possibility that a defendant has acted unlawfully. In contrast, all that is required to defeat a fraudulent joinder claim is a possibility of stating a valid cause of action.
Id. at 1333. The court further explained the distinction:
Nothing in our precedents concerning fraudulent joinder requires anything more than conclusory allegations or a certain level of...
