Case Remanded on Basis of Failure of Removing Party to Meet Burden of Proof on Improper Joinder

Plaintiff William Bozeman brought suit alleging exposure to asbestos and asbestos-containing products caused him to contract mesothelioma. Mr. Bozeman, a Louisiana resident, worked for Arizona Chemical Company, later known as International Paper Company, from 1975 to 1981 and 1981 to 1999 in Louisiana and claims he was exposed while on the job. He filed suit in the Civil District Court for Orleans Parish. On September 9, 2016 defendant Wyeth Holding Corp., formerly known as American Cyanamid Company removed the case to the U.S. District Court for the Eastern District of Louisiana on the basis of diversity jurisdiction days before trial was set to begin on September 12, 2016. Cyanamid maintained that as of August 12, 2016 all but four Louisiana defendants had settled or been dismissed, that on August 12 three of the remaining four defendants obtained summary judgment, and that at that time then came became removable because the only remaining non-diver defendant, Taylor-Seidenbach, Inc. (Taylor), was improperly joined. Cyanamid argued that Taylor was improperly joined because there was no reasonable basis for predicting that Plaintiffs could recover against this defendant in state court.

The District Court explained that the U.S. Court of Appeals for the Fifth Circuit recognizes two ways to establish improper joinder: “(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the nondiverse party in state court.” Smallwood v. Ill. Cent. R.R., 385 F.3d 568, 573 (5th Cir. 2004). The analysis in this case focused solely on the second method. The court explained that to determine whether a plaintiff has a reasonable basis of recovery under state law, a court may resolve the issue in one of two ways. First, the court may conduct a Rule 12(b)(6) analysis, looking initially at the allegations of the complaint to determine whether the complaint states a claim against the non-diverse defendant, and that it is generally held that if a plaintiff can survive a Rule 12(b)(6) challenge, there is no improper joinder. Second, in such cases where a plaintiff has stated a claim but has “misstated or omitted discrete facts” that would determine the appropriateness of joinder, the district court may use its discretion to “pierce the pleadings” and conduct a summary inquiry. In this case, the court stated that “given that discovery was complete and trial set to begin, we believe it would be an abuse of discretion not to pierce the pleadings in determining the appropriateness of joinder.”

The court explained that the burden on a party claiming improper joinder is a heavy one, and the defendant must put forward evidence that would negate a possibility of liability on the part of the nondiverse defendant. Here, the court found that the three pieces of evidence relied on by Cyanamid did not negate the possibility of recovery against Taylor. Cyanamid’s evidence (deposition testimony of the plaintiff, his co-workers, and the plaintiff’s social security earning statement) was offered to show that the plaintiff and his co-workers had no knowledge of Taylor, but the court rejected the conclusion that this negates the possibility of recovery against Taylor because the “fact that Plaintiff and his co-workers did not know the name of a potential supplier is not convincing evidence as to whether that supplier actually provided Plaintiff’s employer with asbestos-containing products at a time and place where he was working with, and exposed to, such products.” In sum, the court found that Cyanamid could not meet its heavy burden of proving improper joinder and granted the plaintiff’s motion to remand the case.

Read the full decision here.