Opposite Outcomes in Recent Removals Based on Diversity Hone in on Status of Remaining Defendants

A string of recent decisions on remand motions illustrates that diversity challenges are alive and well in asbestos litigation. As the landscape of defendants changes as trial approaches, so do the defenses. Whether by settlement or dismissal, the remaining defendant or defendants have taken advantage of diversity issues to remove cases to more favorable federal jurisdictions with stark contrast in results. That contrast should give defendants cause for pause prior to removal.

Recently, in Wieland v. Arvinmeritor, Inc., a brake defendant removed the case from the Third Judicial Circuit, Madison County, Illinois arguing that removal was proper pursuant to 28 U.S.C. Section 1332 or diversity jurisdiction. Interestingly, the plaintiffs were citizens of New Mexico. The brake defendant argued that it and another trucking defendant, both out of state defendants, were the only remaining defendants in the matter and therefore complete diversity existed. The plaintiffs filed an emergency motion to remand the case. At the hearing on the emergency motion, the plaintiffs took the position that Caterpillar, with a principal place of business in Illinois, remained as a defendant. The court quickly concluded that although the plaintiffs engaged in settlement discussions with Caterpillar, no agreement had been reached. Therefore, Caterpillar was still a defendant, which destroyed diversity. The case was remanded to state court. Jurisdiction over the plaintiffs’ request for fees and sanctions remained with the federal court.

Another decision out of West Virginia, highlights the tough standard to prove fraudulent joinder to assert proper removal on diversity. In Boggs v. 3M Company, the defendant, Greyhound, removed the case despite a remaining defendant being a non-diverse defendant. Vimasco, a West Virginia Corporation, had filed for summary judgment in state court prior to Greyhound’s notice of removal. No opposition to the motion had been filed at the time of the removal. Removal took place the same day trial was set to begin. On the plaintiff’s motion for remand, the court noted that the burden for proving fraudulent joinder was on the party seeking removal and the standard was high. Essentially, fraudulent joinder may find removal proper when there is no possibility that a plaintiff could prevail on his or her claims against the non-diverse defendant. Here, Greyhound argued that the unresolved motion for summary judgment should be resolved. The court found that argument implausible and remanded the case to state court. The court also ordered that motions for fees and costs be filed.

Yet another recent Illinois case implicating fraudulent joinder had a totally different outcome. In Hicks v. Ford Motor Co., the plaintiff alleged that he developed mesothelioma from exposure to asbestos from friction products associated with Ford while working for the City of Bloomington. He also claimed that he was exposed to asbestos from sealing technology products from his wife’s work at General Electric. Like the other cases, Ford removed the case, arguing that it really was the only remaining defendant. The plaintiff countered and stated that the sealing technology defendant had filed for summary judgment and that the plaintiff had opposed the motion. However, the court looked closely to see if fraudulent joinder would permit removal. Here, the court relied on the Chambers decision whereby a token resistance to summary judgment was insufficient to suggest that plaintiff had any success on appeal. Simply put, was the plaintiff likely to prevail on his or her claims against the defendant now being examined as a non-target defendant? The court found it farfetched that the plaintiff could win on appeal against the sealing technology defendant since no new evidence was available. As a last effort, the plaintiffs tried to argue that the common defense exception applied and prohibited the application of fraudulent joinder. Basically, the plaintiffs argued that their claims against the sealing technology defendant were as valid as their claims against Ford. The court disagreed considering that the claims against Ford were for the plaintiff’s direct exposure whereas his claims against the other defendant were for secondary exposure through his wife’s employment. Consequently, the plaintiff’s motion for remand was denied.

In sum, the decisions have swayed in such polar opposites from a potentially sanctioned removing defendant to denial of the plaintiff’s motion for remand. Despite these differing results it seems that the court’s decisions are based largely on the status of the non-targeted or soon to be disposed of remaining defendant’s status immediately prior to removal. Whether or not a written opposition to summary judgment has been filed, whether settlement negotiations have taken place and the strength of the allegations against the non-targeted defendant are all to be considered in a removal for complete diversity pursuant to 28 U.S.C. Section 1332. Otherwise, a defendant removing a case to federal court based on diversity may find itself faced with fees and costs.