Remand of Trailer Manufacturer’s Removal Granted Based on Lack of Diversity

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U.S. District Court for the Eastern District of Louisiana

The plaintiffs brought the instant action alleging that decedent John Brindell was exposed to asbestos-containing products during his employment for Puerto Rico Marine Management (PRMM) as a mechanic at the Port of New Orleans. The plaintiffs filed a petition in the Civil District Court for the Parish of Orleans against several defendants including Utility Trailer Manufacturing Company, Taylor-Seidenbach, Inc., Eagle Inc., and Eagle’s insurers-First State Insurance Company, and United States Fidelity and Guaranty Company.

Defendant Utility removed the case to federal court asserting diversity jurisdiction pursuant to 28 U.S.C. § 1332 while acknowledging the plaintiffs and four of the defendants are Louisiana citizens for diversity purposes. Nevertheless, Utility asserts that each non-diverse defendant’s citizenship should be disregarded because each non-diverse defendant was improperly joined in order to defeat diversity jurisdiction.

The plaintiffs filed this instant motion to remand, arguing that the four non-diverse defendants were not improperly joined to defeat diversity jurisdiction. First, the plaintiffs argue that they have a “reasonable basis for recovery” against Taylor and Eagle as decedent’s former co-worker,Raymond Kain, testified in an affidavit that he directly witnessed Taylor and Eagle expose decedent to asbestos from 1976 to 1981. Second, the plaintiffs argue that Utility has not met its “heavy burden” of proving improper joinder. Lastly, the plaintiffs admit that in rare cases even if the plaintiff’s allegations survive a Rule 12(b)(6) analysis, the court may “pierce the pleadings and conduct a summary inquiry.” A summary inquiry is appropriate only to identify the presence of discrete and undisputed facts that would preclude a plaintiff’s recovery against the in-state defendant.

Defendant Utility argues that the depositions of Taylor and Eagle’s corporate representatives demonstrate that they are fraudulently joined. Utility also argues that Kain’s affidavit does not establish that his attestations are based on his personal knowledge. Lastly, Utility argues that this matter was not prematurely removed from state court.

The court noted the parties in this matter lack complete diversity of citizenship because the plaintiffs and four defendants—Taylor, Eagle, First State, and Fidelity—admittedly are Louisiana citizens. The Fifth Circuit recognizes an “improper joinder” exception to the complete diversity requirement. Improper joinder entails a plaintiff’s inability to plead a cause of action against the non-diverse defendant in state court. The test for improper joinder is “whether the defendant has demonstrated that there is no possibility of recovery by the plaintiff against an in-state defendant. The court reviewed the claims against Taylor and Eagle and found they were sufficient to state strict liability and negligence claims against those defendants. The court noted that both plaintiffs and Utility make arguments that relate to summary judgment evidence which creates a disputed issue of fact which must be resolved in plaintiff’s favor during a summary inquiry.

Consequently, the court remanded the plaintiff’s motion to remand under the summary-inquiry analysis and further found that there is a possibility of recovery against Taylor and Eagle.