Morris v. Walmart Stores E., L.P.

LUCINDA MORRIS, Plaintiff, v. WALMART STORES EAST, L.P., et al., Defendants.

No. 6:20-CV-150-REW

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF KENTUCKY SOUTHERN DIVISION LONDON

January 20, 2021

OPINION AND ORDER*** *** *** ***

Plaintiff Lucinda Morris alleges that she was injured after slipping on a "puddle of a slippery substance" while shopping in the Hazard, Kentucky Walmart on July 5, 2019. DE 1-3 at 4 ¶ 9. She sues Walmart and Jason Higgins, the manager of the store where the alleged injury occurred, for negligence. DE 1 at 1 ¶ 1. See also DE 1-2 at 2 (Affidavit of Jason Higgins). The issue now before the Court is not the underlying merit of Morris's allegation. It is whether the Court has jurisdiction over the dispute. Because Morris's claims arise under state law, this Court may only hear the dispute if each plaintiff is diverse from each defendant. Here, Plaintiff Morris and Defendant Higgins are both Kentucky citizens. Defendants, who removed, counter that Higgins was fraudulently joined to the suit. If true, he would not spoil diversity. However, on review, the Court finds Higgins a valid defendant. A defendant is fraudulently joined only if the plaintiff has no glimmer of hope to recover against him. Here, Morris may conceivably make a successful claim against Higgins under Kentucky state law. Therefore, Higgins is validly joined. The Court lacks jurisdiction and may not hear the suit. Accordingly, DE 8, Defendant's Motion to Dismiss is DENIED and DE 19 (Morris's remand motion) is GRANTED. Further, finding that Defendants' effort at removal was not objectively unreasonable, Plaintiff's motion for attorney fees (DE 6) is DENIED.

I. Background

On April 5, 2020, Morris sued Defendants Walmart Stores East, L.P. (Walmart) and store manager Jason Higgins (Higgins) (together, Defendants) in Perry Circuit Court¹ seeking damages for her injuries from the fall. DE 1 at 1.² Her claims arise under Kentucky law. DE 1-3 at 2-8.³ On July 18, 2020, Defendants removed to federal court, within thirty days of learning, via Plaintiff's discovery responses, that the amount in controversy exceeded the minimum amount required for diversity jurisdiction. DE 1. See also 28 U.S.C. §§ 1332(a), 1446(b)(3).⁴ In their notice of removal, Defendants argue that this Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332 (a) and (c) because "there is diversity of citizenship between Plaintiff and Walmart and the total amount claimed by Plaintiff exceeds the jurisdictional minimum of $75,000."⁵ DE 1 at 1 ¶ 2. § 1332(a).Diversity jurisdiction under § 1332(a) requires each plaintiff to be diverse from each defendant. If a single plaintiff shares state citizenship with a single defendant, there is no diversity jurisdiction. Coyne v. Am. Tobacco Co., 183 F.3d 488, 492 (6th Cir. 1999).

Here, Defendant Walmart is, for diversity purposes, a citizen of Arkansas and Delaware.⁶ But Defendant Higgins and Plaintiff Morris are both Kentucky citizens.⁷ Accordingly, Higgins's presence in the suit destroys diversity. Defendants, while conceding that Higgins, like Morris, is a citizen of Kentucky, argue instead that the Court should disregard Higgins's citizenship because the lack of "colorable basis for Plaintiff's claim against him" means that he was "fraudulently joined to the action[.]" DE 1 at 2 ¶ 5. Echoing those same arguments, Higgins moved to bedismissed from the suit. DE 8. Morris filed her response opposing Defendant Higgins's motion to dismiss. DE 10. She then filed a dovetailing motion to remand due to lack of subject matter jurisdiction. DE 18; DE 19.⁸ Plaintiff also seeks attorney fees pursuant to 28 U.S.C. § 1447(c). DE 6. Defendants oppose the motion. DE 14. All discovery, at Walmart's urging, has been stayed pending resolution of Defendant's motion to dismiss. DE 13; DE 27.⁹ The matter, now fully briefed, is ripe for review.

II. Fraudulent Joinder Rejected

A Finding of Fraudulent Joinder is Warranted Only if There Is No Reason to Believe that

the Plaintiff Could Recover Against the Joined Defendant

Because this dispute's only path to federal court is through diversity jurisdiction, Defendants may "avoid remand only by demonstrating that [Higgins] was fraudulently joined." Jerome-Duncan, Inc. v. Auto-By-Tel, LLC, 176 F.3d 904, 907 (6th Cir. 1999) (internal quotation omitted). Here, Defendant Higgins argues that "Plaintiff's complaint fails to state a colorable claim" and therefore he has been fraudulently joined to the suit. DE 8 at 1. Higgins has the burden here, and it is a heavy one. Kent State Univ. Bd. of Trs. v. Lexington Ins. Co, 512 F. App'x 485, 489-90 (6th Cir. 2013). A non-diverse defendant's joinder 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) (internal quotation omitted). 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, 183F.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."). "[T]he plaintiff's actual motive is irrelevant to the fraudulent-joinder inquiry." Freitas v. McKesson Corp. (In re Darvocet, Darvon & Propoxyphene Prod. Liab. Litig.), 889 F. Supp. 2d 931, 936-37 (E.D. Ky. 2012) (citing Jerome-Duncan, 176 F.3d at 907). Because of the significant resources wasted by a dispute's improper admission into federal court, federal jurisdiction should be construed narrowly when evaluating removal. Eastman v. Marine Mech. Corp., 438 F.3d 544, 550 (6th Cir. 2006). "[A]ny doubts regarding federal jurisdiction should be construed in favor of remanding the case to state court." Gaither v. Beam Partners, LLC, No. 3:16-CV-094-GFVT, 2017 WL 1217166, at *2 (E.D. Ky. Mar. 31, 2017).

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). "Courts ordinarily do not consider matters outside the pleadings on a motion to dismiss[.]" Dunnigan v. Fed. Home Loan Mortg. Corp., 184 F. Supp. 3d 726, 734 (D. Minn. 2016) (citing Fed. R. Civ. P. 12(d)).¹⁰ However, in evaluating fraudulent joinder, the Court can pierce the pleadings andconsider the sort of evidence it would at summary judgment solely "for the limited purpose of determining whether there are 'undisputed facts that negate the [plaintiff's] claim.'" Casias, 694 F.3d at 433 (quoting Walker v. Phillip Morris USA, Inc., 443 F. App'x 946, 952-54 (6th Cir. 2011)).¹¹

Morris Could Conceivably Make a Successful Claim Against Higgins Under State Law

A fraudulent joinder finding requires that there be no conceivable basis for the plaintiff to recover against the named defendant under state law. Coyne, 183 F.3d at 493; Christensen, 24 F. Supp. 3d at 613. A necessary corollary of this rule is that a fraudulent joinder determination generally requires adequate clarity in the pertinent substantive state law. Collins v. Montpelier U.S. Ins. Co., No. CIV. 11-166-ART, 2011 WL 6150583, at *1 (E.D. Ky. Dec. 12, 2011) ("[U]ntil Kentucky's courts decide the question, federal courts are left to wonder. Because of this ambiguity, the Court cannot find that Plaintiffs [ ] fraudulently joined Defendant[.]").

Here, the central issue is a manager's individual liability to an injured invitee under Kentucky law. The pivotal case on this question is Grubb v. Smith, 523 S.W. 3d 409 (Ky. 2017). In Grubb, the plaintiff broke her ankle, wrenched her knee, and spilled hot coffee all over herself after tripping on an "eroded patch of asphalt" at a Speedway gas station. 523 S.W. 3d at 412. She then sued Speedway and Roxanne Smith, the manager of the gas station, for negligence. Id. at 411-12. The Supreme Court of Kentucky split evenly, between two dueling opinions from Justice Hughes and Justice Venters, as to whether the manager was individually liable to the third-partyplaintiff.¹² See also Greer v. Kaminkow, No. 17:17-cv-120-REW-EBA, 2019 WL 2870092, at *9 n.16 (E.D. Ky. July 3, 2019) (discussing the differing opinions in Grubb).¹³ As a result, any review here should proceed with caution. "The landscape in Kentucky on manager liability is only as clear as a 3-3 split." Clark v. Lowe's Home Centers, LLC, No. 6:19-CV-114-REW, 2019 WL 5092941, at *4 (E.D. Ky. Oct. 11, 2019).

Defendant makes two distinct arguments to support his motion to dismiss. The first is that he "cannot be held liable as a premises owner because he lacked control over the alleged transient condition involved in Plaintiff's incident." DE 8 at 4. The second is that "Higgins cannot be held liable because he had no duty to remedy or warn against the alleged lotion on the floor." DE 8 at 4. Neither argument meets the "heavy burden" of demonstrating that Higgins has been fraudulently joined. Kent State Univ. Bd. of Trs., 512 F. App'x at 489-90.

The Court pauses to note the state of and content of the record. The Complaint alleges only that Morris fell when she encountered a "puddle of a slippery substance" on the Walmart floor. DE 1-3 at 4 ¶ 9. Higgins tries to inject facts outside the pleadings, such as an unauthenticated incident...