Yount v. Shashek

472 F.Supp.2d 1055

Keith YOUNT and Cindy Yount, Plaintiffs, v. Lisa SHASHEK, Cassens Auto Group, LLC, Cassens & Sons, Inc., Cassens Corporation, Cottrell, Inc., Bankhead Transportation Equipment Company, Bankhead Enterprises, Inc., Jeff Cassens, Allen Cassens, Allen Cassens Trust, Albert Cassens Trust, Albert Cassens, A.C. Leasing Company, KSC Leasing, LLC, Jeff Cassens Leasing, Inc., FTL, Inc., Marysville Releasing, Inc., Cassens Transport Company, Dwight Kay, Mark Shashek, and Unknown Defendants, Defendants.

No. CIV. 06-753-GPM.

United States District Court, S.D. Illinois.

December 7, 2006.

Thomas G. Maag, Wendler Law P.C., Edwardsville, IL, for Plaintiffs.

Benjamin W. Powell, Burroughs, Hepler et al., Edwardsville, IL, Daniel J. Carpenter, Bryan Cave, St. Louis, Mo, for Defendants.

MEMORANDUM AND ORDER

MURPHY, Chief Judge.

This matter is before the Court on the motion for remand brought by Plaintiffs Keith Yount and Cindy Yount (Doc. 7). For the following reasons, the motion is GRANTED.

INTRODUCTION

Mr. and Mrs. Yount bring this action in connection with an accident that occurred in Fenton, Missouri, on March 11, 2004, in which Mr. Yount, an employee of Cassens Transport, Inc., suffered injuries to his left elbow and arm while operating a chain and ratchet system on an automobile transport trailer. Defendant Cottrell, Inc. ("Cottrell"), which is the manufacturer of the trailer that allegedly injured Mr. Yount and against which Mr. and Mrs. Younts' operative complaint asserts claims for relief based upon strict products liability, negligence, and loss of consortium, has removed this case from the Circuit Court of the Third Judicial Circuit, Madison County, Illinois, to this Court in federal diversity jurisdiction. Cottrell asserts that all of its co-Defendants, namely, Lisa Shashek, Cassens Auto Group, LLC, Cassens & Sons, Inc., Cassens Corporation, Bankhead Transportation Equipment Company, Bankhead Enterprises, Inc., Jeff Cassens, Allen Cassens, the Allen Cassens Trust, the Albert Cassens Trust, Albert Cassens, A.C. Leasing Company, KSC Leasing, LLC, Jeff Cassens Leasing, Inc., FTL, Inc., Marysville Releasing, Inc., Cassens Transport Company, Dwight Kay, and Mark Shashek, have been fraudulently joined to defeat diversity jurisdiction. The Younts have moved for remand of this case to state court on the basis of procedural defects in removal. The motion for remand has been fully briefed, and the Court now is prepared to rule.

DISCUSSION

A. Legal Standard

Removal based on diversity requires that the parties be of diverse state citizenship, that is, no plaintiff may be a citizen of the same state as any defendant, and that the amount in controversy exceed $75,000, exclusive of interest and costs. See 28 U.S.C. § 1332; Id. § 1441. See also Rubel v. Pfizer Inc., 361 F.3d 1016, 1017 (7th Cir.2004); Cassens v. Cassens, 430 F.Supp.2d 830, 832-33 (S.D.Ill.2006); Littleton v. Shelter Ins. Co., No. 99-912-GPM, 2000 WL 356408, at * 1 (S.D.Ill. Mar.9, 2000).¹ The party seeking removal has the burden of establishing federal jurisdiction. See Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir.1993). "Courts should interpret the removal statute narrowly and presume that the plaintiff may choose his or her forum." Id. Put another way, there is a strong presumption in favor of remand. See Jones v. General Tire & Rubber Co., 541 F.2d 660, 664 (7th Cir. 1976). See also Littleton, 2000 WL 356408, at * 1 ("The removal statute, 28 U.S.C. § 1441, is construed narrowly, and doubts concerning removal are resolved in favor of remand."). Cf. McNichols v. Johnson & Johnson, No. CIV. 06-160-GPM, 2006 WL 3360542, at * 1 (S.D.Ill. Apr.19, 2006) (quoting Market St. Assocs. Ltd: P'ship v. Frey, 941 F.2d 588, 590 (7th Cir.1991)) ("Because a federal court's jurisdiction is limited, it has a `nondelegable duty to police the limits of federal jurisdiction with meticulous care.'").

B. Defects in Removal Procedure

1. Forum Defendant Rule

The first ground for remand asserted by the Younts is the so-called "forum defendant" rule which holds of course that an action may not be removed to a federal court in a state of which a properly joined and served defendant is a citizen. See 28 U.S.C. § 1441(b) (providing that a case in which the asserted basis for federal subject matter jurisdiction is diversity "shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought."); LaMotte v. Roundy's, Inc., 27 F.3d 314, 315 (7th Cir.1994) (quoting 28 U.S.C. § 1441(b)) ("[C]ases not, involving federal questions are `removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.'"); Holmstrom v. Haracl, No. 05 C 2714, 2005 WL 1950672, at * 1 (N.D.Ill. Aug.11, 2005) (under the forum defendant rule, a plaintiff may "keep a case in state court if any defendant is a citizen of the State in which the action is filed."); Allstate Life Ins. Co. v. Hanson, 200 F.Supp.2d 1012, 1014-15 (E.D.Wis.2002) (because the basis for subject matter jurisdiction was 28 U.S.C. § 1335, not 28 U.S.C. § 1331, removal to federal court in Wisconsin was improper where a defendant properly joined and served at the time of removal was a citizen of Wisconsin).

A violation of the forum defendant rule is a procedural defect in removal, not a jurisdictional defect, see Hurley v. Motor Coach Indus., Inc., 222 F.3d 377, 378-79 (7th Cir.2000); Schillinger v. 360Networks USA, Inc., Civil No. 06-138-GPM, 2006 WL 1388876, at * 6 n. 6 (S.D.Ill. May 18, 2006), and therefore it may be waived if an objection is not raised within thirty days of the date a case is removed. See 28 U.S.C. § 1447(c) ("A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a)."); Bova v. U.S. Bank, N.A., 446 F.Supp.2d 926, 932 (S.D.Ill.2006) (an objection to removal based on untimeliness, which is a procedural defect in removal, was waived where it was raised for the first time in a reply brief filed more than thirty days after the date of removal); Fields v. Jay Henges Enters., Inc., Civil No. 06-323-GPM, 2006 WL 1875457, at * 2 (S.D.Ill. June 30, 2006) (citing In re Continental Cas. Co., 29 F.3d 292, 293-95 (7th Cir. 1994)) ("[A] procedural defect in removal ... is waived unless raised by a plaintiff within thirty days of the date of removal."). In this instance it is undisputed that at least two Defendants, Jeff Cassens and Cassens Corporation, are Illinois citizens who were properly joined and served when this action was removed, and the Younts have raised a timely objection to removal based on the forum defendant rule.² Therefore, this case is due to be remanded to state court.

There is of course an exception to the forum defendant rule where a forum defendant has been fraudulently joined to defeat diversity jurisdiction. In evaluating diversity of citizenship a court must disregard a defendant that has been fraudulently joined. See Schwartz v. State Farm Mut. Auto. Ins. Co., 174 F.3d 875, 878 (7th Cir.1999); Smith v. Shipping Utils., Inc., No. Civ. 05-500-GPM, 2005 WL 3133494, at * 1 (S.D.Ill. Nov.23, 2005). A defendant is fraudulently joined when "there is no possibility that a plaintiff can state a cause of action against [the] nondiverse defendant[] in state court, or where there has been outright fraud in plaintiff's pleading of jurisdictional facts." Rutherford v. Merck & Co., 428 F.Supp.2d 842, 846 (S.D.Ill.2006) (quoting Gottlieb v. Westin Hotel Co., 990 F.2d 323, 327 (7th Cir.1993)). "[W]here a resident defendant has been fraudulently joined, the forum defendant rule is irrelevant." Bova, 446 F.Supp.2d at 931 (in a lawsuit brought by mortgagors against a mortgage company and a law firm that had represented the mortgage company in a foreclosure proceeding against the mortgagors, the forum defendant rule did not bar removal where the in-state law firm was alleged to have been fraudulently joined to defeat diversity jurisdiction). Cf. Wesenberg v. Zimmerman, No. Civ. 02527PAMRLE, 2002 WL 1398539, at * 3 (D.Minn. June. 24, 2002) ("Because the Court finds that the Minnesota Defendants in this case were fraudulently joined, as opposed to being `properly joined,' the limitation of § 1441(b) [on removal in cases involving forum defendants] does not apply."); Merriweather v. Braun, 792 F.Supp. 659, 661 (E.D.Mo. 1992) ("Although a federal district court has original jurisdiction over any civil action between citizens of different states wherein the amount in controversy exceeds [$75,000] exclusive of interest and costs, such an action is not removable if any properly joined defendant is a citizen of the state in which the action is brought. ... If, however, the Court concludes from the face of the state court petition that the plaintiff has no cause of action against the resident defendant, removal is permitted.").

In this case the exception to the forum defendant rule for fraudulently joined Defendants has no relevance. It is undisputed that the Younts are Ohio citizens and that Defendants Jeff Cassens and Cassens Corporation are Illinois citizens. Fraudulent joinder is of course a device to defeat diversity jurisdiction. See generally 14 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure § 3641 (3d ed. 1998 & Supp. 2006) (collecting cases). "To show fraudulent joinder, defendants must show a flaw specific to the joinder of [a] non-diverse party," Brooks v. Merck & Co., 443 F.Supp.2d 994, 1004 (S.D.Ill.2006) (quoting Intershoe, Inc. v. Filanto S.P.A., 97 F.Supp.2d 471, 475 (S.D.N.Y.2000)) (emphasis added), and allegations that diverse defendants have been fraudulently joined amount merely to a contention that "the plaintiff's case [is] ill-founded as to...