The plaintiff filed an action against multiple defendants for his alleged mesothelioma as a result of his occupational exposure to asbestos. The case was removed to federal court. Discovery took place over the course of eleven months. The plaintiff passed away and The defendant’s motion to dismiss was granted as the estate and family did not substitute plaintiffs. The family then filed a survival and wrongful death action in state court but added a new allegation that the plaintiff had been exposed to asbestos insulation while working at Poulan Chainsaw in Louisiana in the 1970s. The plaintiffs added two defendants, Graves Insulation and Taylor Insulation, who were alleged to have been non-diverse defendants who performed insulation contract work in Louisiana. The case was timely removed by co-defendant Georgia Pacific. Georgia Pacific argued that Graves and Taylor’s citizenship should be ignored as they were improperly joined and that discovery was ”substantially complete.” The plaintiffs moved for remand and in support added an affidavit from one of its attorneys that it was likely that the plaintiff’s exposure was caused by work at Poulan for which Graves and Taylor were responsible. At the hearing on remand, both sides relied on deposition testimony. In his first deposition, when asked about exposure at Poulan, the plaintiff stated “it is very possible.” However, in his second deposition he was asked about insulation of pipes and stated that he did not remember anyone doing insulation work at Poulan.
The Magistrate remanded to state court. The plaintiff appealed and the District Court on appeal, “pierced the pleadings”, and reversed finding that Graves and Taylor had been improperly joined. On appeal, the U.S. Court of Appeals first analyzed whether the order of the magistrate was a non-dispositive or dispositive matter, i.e., which standard of review would be used. Relying on Gomez v. United States, 490 U.S. 858, 863-64 (1989), the court concluded that the order of remand was dispositive and review would be de novo because “constitutional lines” were approached by the magistrate’s order and that in some instances a federal court may not review a case de novo during its entire time in federal court.
As for improper joinder, the court analyzed that improper joinder is available only through 1) fraud and 2) where “defendant has demonstrated that there is no possibility of recovery by a plaintiff against an in-state defendant.” In this case, the court was concerned with the latter. The court stated that the burden for improper joinder is a “heavy one” but did not agree with the plaintiff that the District Court had abused its discretion in looking at the discovery to determine the evidence in the case.
However, the court agreed with the plaintiffs’ contention that the District Court erred in finding improper joinder. In a lengthy analysis, the court stated that the standard for improper joinder is unlike summary judgment. Relying in part on Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568 (5th Cir. 2004) (en banc), the court discussed that “lack of substantive evidence as to the non-diverse defendant does not support a conclusion that he was improperly joined even though that may support summary judgment.” In particular, the court recognized that most of the defendants’ arguments attacked the lack of the plaintiffs’ evidence thus far but had not “negated’ the possibility of liability on the part of Graves and Taylor. It made sense that the evidence in the first case would not have implicated Graves and Taylor because the plaintiffs had not added those two as parties. That lack of evidence did not render joinder improper.