State of Montana Properly Joined to Defeat Diversity Jurisdiction

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The plaintiff is the surviving spouse of Susan McDowell, who died from mesothelioma. The plaintiff alleged exposure to asbestos-contaminated vermiculite discarded from railcars while being transported from the Libby, Montana mine by Burlington Northern Santa Fe. The state of Montana (State) began inspecting the mine in the 1950s and found hazardous levels of asbestos within the vermiculite. The State did not correct the hazard or warn Libby residents. The plaintiff sued numerous entities, including BNSF and the State of Montana. The defendants removed this case to federal court on the basis of diversity jurisdiction; the plaintiff moved to remand, arguing that the State destroyed diversity. The magistrate judge recommended that the court grant the motion to remand. The court agreed and remanded.

BNSF argued that the plaintiff improperly joined the State to defeat diversity. The court disagreed. The plaintiff’s claims related to the mining and hauling of vermiculite, in which both BNSF and the State had roles. Pursuant to Federal Rule of Civil Procedure 20, “A plaintiff may properly join multiple defendants in a single action if the plaintiff’s claims against them arise from the ‘same transaction, occurrence, or series of transactions or occurrences’ or share a common question of law or fact.” The plaintiff’s choice to combine all defendants in one cause of action streamlined the litigation process. Although BNSF argued the court should sever the State because it was a nominal party, again the court disagreed; the State was not a nominal party because the plaintiff alleged the State committed torts that along with the defendants’ conduct caused Mrs. McDowell’s death.

Finally, BNSF argued that the court should adopt the concept of “fraudulent misjoinder” to sever the plaintiff’s claims against the State. Under Federal Rule of Civil Procedure 21, a court may use its discretion to add or drop a party, or sever claims. The court agreed with the magistrate judge’s finding that the State was not fraudulently joined, because BNSF did not assert that the negligence claim against the State was invalid on its face.

Read the full decision here.

Read the magistrate’s recommendation to remand filed on October 3, 2016.