Fraudulent Joinder Determination Turns Only on Factual and Legal Basis, Not Intent U.S. District Court for the Western District of Missouri, Central Division, October 3, 2017

MISSOURI — Kansas resident plaintiffs filed an action in the Circuit Court of Jackson County, Missouri, alleging mesothelioma and asbestosis arising out of work first performed in the state of Missouri. Two defendants named in the state court petition were also residents of Kansas, and the rest were from various states. Defendant Athene Annuity & Life Assurance Company removed the case on the basis of diversity. In response to the plaintiffs’ motion to remand, Athene alleged that the plaintiffs had no intention of prosecuting claims against the Kansas defendants. The plaintiffs countered by expressing their intention to seek default judgment from one of the Kansas defendants, Fuhrco, Inc.

As the party seeking to remove, Athene had the burden of establishing subject matter jurisdiction. In briefs, Athene did not contend that the plaintiffs’ claims against Fuhrco were without a factual and legal basis. Instead, they argued that the plaintiffs had no intention of prosecuting claims against Fuhrco, rendering the plaintiffs joinder of Fuhrco fraudulent. The court entertained Fuhrco’s case law, but came to the conclusion that none of the cited decisions turned on intent, and in all examples the decisions were based on whether a rational basis in law and fact existed for naming the non-diverse party as a defendant. “Thus, notwithstanding Athene’s arguments, the law is settled. The Plaintiffs’ intent to prosecute Fuhrco is irrelevant in light of the undisputed fact that they have a reasonable basis in fact and law to sue Fuhrco.”

Read the full decision here.

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