Andrews v. Amerco
Andrews v. Amerco
Opinion of the Court
Before the Court is Plaintiffs Lauren Andrews and Charles Thompson’s (“Plaintiffs”) Motion for Remand,
I. Background
A. Factual Background
Plaintiffs in this action are both Louisiana citizens.
Plaintiffs allege that the accident was caused by the fault and negligence of Defendants for failing to property secure the trailer to the vehicle, providing an inadequate warning, manufacturing a defective product, designing a defective product, and they seek relief under Louisiana law.
B. Procedural Background
On July 13, 2012, Defendants, including U-Haul Co. of Louisiana, were listed on a notice of removal to this Court.
On August 6, 2012, Plaintiffs filed the pending motion to remand.
II. Parties’ Arguments
In support of the pending motion, Plaintiffs claim that the notice of removal was untimely because it was filed more than thirty days after service of process to defendants U-Haul International, Inc. and AMERCO on June 4, 2012 and Gregson, LLC on June 11, 2012.
However, Plaintiffs briefly address the issue of fraudulent joinder, and argue that it may only be invoked if the removing party can prove either (1) actual fraud in the pleading of jurisdictional facts; or (2) the inability of the plaintiff to establish a cause of action against the non-diverse party in state court.
In opposition, AMERCO, U-Haul International, Inc. and Gregson, LLC (collectively “Diverse Defendants”) argue that the case law relied upon by Plaintiffs to claim untimeliness is “outdated and inapplicable to this case.”
(B) Each defendant shall have 30 days after receipt by or service on that defendant of the initial pleading or summons described in paragraph (1) to file the notice of removal.
(C) If defendants are served at different times, and a later-served defendant files a notice of removal, any earlier-served defendant may consent to the removal even though that earlier-served defendant did not previously initiate or consent to removal.
Diverse Defendants further explain that this act became effective on January 6, 2012 and applies to all cases filed in state courts after that date.
Diverse Defendants again address the issue of U-Haul Co. of Louisiana’s alleged fraudulent joinder. Diverse Defendants contend that in the memorandum in support, Plaintiffs “essentially concede that they have no knowledge of U-Haul Co. of Louisiana’s connection to this lawsuit, and ask for discovery in the hopes that they can establish such a connection.”
In Plaintiffs’ supplemental memorandum, Plaintiffs argue that Diverse Defendants’ arguments made in opposition fail because the amended 28 U.S.C. § 1446(b)(2)(B) and (C) only allow an earlier-served defendant to consent to removal — not remove the action themselves after 30 days from when they were served — and that they cannot consent to the removal of an action based on diversity when the removing defendant is a Louisiana corporation that is not diverse from Plaintiffs.
Defendants, including U-Haul Co. of Louisiana, argue that the “forum-defendant” rule does not prevent removal by a fraudulently joined defendant.
A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.
Defendants maintain that this provision is not applicable because U-Haul Co. of Louisiana is not “properly joined” here. Defendants cite Bova v. United States Bank, N.A,
In Plaintiffs’ surreply to Defendant’s surreply, Plaintiffs argue that the notice of removal was “filed solely by diverse defendants more than thirty days after service
Plaintiffs maintain that even if the Court was to assume that U-Haul Co. of Louisiana filed the notice of removal, and it was fraudulently joined, “then it had no standing to seek removal, and that it may not remove because the federal court has no subject matter over that defendant.”
Finally, Plaintiffs cite to Fifth Circuit authority instructing courts to construe strictly removal statutes against removal
III. Law and Analysis
A Propriety of the Notice of Removal
A defect in the procedure for removal, if timely asserted within 30 days, may be grounds for remand to state court.
(B) Each defendant shall have 30 days after receipt by or service on that defendant of the initial pleading or summons described in paragraph (1) to file the notice of removal.
(C) If defendants are served at different times, and a later-served- defendant files a notice of removal, any earlier-served defendant may consent to the removal even though that earlier-served defendant did not previously initiate or consent to removal.
As Plaintiffs have correctly stated, removal statutes are to be strictly construed against removal.
Here, the notice of removal lists AMER-CO, U-Haul International, Inc., U-Haul Co. of Louisiana, and Gregson, LLC as the parties noticing the removal of this action.
As discussed above, Diverse Defendants could not have removed this action, but could only have consented to removal. Assuming, arguendo, that U-Haul Co. of Louisiana as a non-diverse party could remove, it was the only defendant who could still timely file a notice of removal based upon when it was served in this matter. Plaintiffs argue that as an non-diverse party, U-Haul Co. of Louisiana is a “non-party” and cannot remove.
In Pate v. Adell Compounding, Inc.,
In Jewell v. Dudley L. Moore Insurance, Inc.,
[Tjhere can be no doubt that this federal court lacks the power to act upon any substantive motion submitted by a non-diverse party in a diversity case or to exercise subject matter jurisdiction over that party in any fashion. If the non-diverse party has not been fraudulently joined, the court must remand the case. If the non-diverse party has been fraudulently joined, the proper procedure is to simply ignore his presence; he is no longer considered a party defendant. In neither event will the federal court exercise jurisdiction as to the non-diverse party by motion or otherwise, for to do so would deprive the court of subject matter jurisdiction.57
More recently, in Moreno Energy, Inc. v. Marathon Oil Co.,
This Court has not been presented with any case where a court has squarely decided this issue. While Pate and Jewell are not binding authority on this Court and did not directly address the issue of whether a non-diverse and allegedly fraudulently joined defendant may remove an action, they are persuasive, and reenforce Fifth Circuit precedent instructing district courts to construe removal statutes strictly and generally against removal.
Moreover, several sections of this Court have favorable cited Jewell for the principle that a federal court may not act upon any motion of a non-diverse party.
Regardless of which party or parties filed the notice of removal, the notice was likely defective. Either Diverse Defendants improperly moved to remove this action past the allowable period or U-Haul Co. of Louisiana was the party seeking removal, and as a non-diverse defendant, this Court should ignore its presence, but to do so would further enforce the principle that no subject matter jurisdiction exists. To put it another way, following the principles articulated in fraudulent joinder cases, if the Court were to find that the non-diverse defendant is the party that removed the action, its presence in the lawsuit for purposes of determining subject matter jurisdiction should be ignored, and therefore the removal of the action would be untimely because Diverse Defendants, the only defendants this Court may consider, did not seek removal timely. Any other construction of the Last-Served Defendant rule to removal would spin the rule on its head and allow a party that arguably is not a party to the lawsuit to have the power to remove it. This Court also notes that if U-Haul Co. Of Louisiana had never been joined, as Diverse Defendants claim it should not have been, then Diverse Defendants would have no color-able claim to remove because each diverse defendant’s thirty day window to file a notice of removal had elapsed.
B. Fraudulent or Improper Joinder
Independent of which party could or could not have removed this action, removal would nonetheless be improper if
For a defendant to prevail on this theory, it must prove “that there is no possibility of recovery by the plaintiff against an in-state [or non-diverse] defendants S]tated differently [this] means that there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against an in-state [or non-diverse] defendant.”
A district court may resolve this inquiry in two manners. First, the court may conduct a Rule 12(b)(6) inquiry by looking at the allegations in the pleading.
While the decision regarding the procedure necessary in a given case must lie within the discretion of the trial court, we caution that a summary inquiry is appropriate only to identify the presence of discrete and undisputed facts that would preclude plaintiffs recovery against the in-state defendant. In this inquiry the motive or purpose of the joinder of in-state defendants is not relevant. We emphasize that any piercing of the pleadings should not entail substantial hearings. Discovery by the parties should not be allowed except on a tight judicial tether, sharply tailored to the question at hand, and only after a showing of its necessity. Attempting to proceed beyond this summary process carries a heavy risk of moving the court beyond jurisdiction and into a resolution of the merits, as distinguished from an analysis of the court’s diversity jurisdiction by a simple and quick exposure of the chances of the claim against the instate defendant alleged to be improperly joined. Indeed, the inability to make the requisite decision in a summary manner itself points to an inability of the removing party to carry its burden.67
Beginning with a Rule 12(b)(6) inquiry, Plaintiffs’ petition alleges that U-Haul Co. of Louisiana and Diverse Defendants are liable from injuries allegedly caused by a U-Haul trailer.
In the notice of removal, Defendants attempt to refute any possibility of liability of U-Haul of Louisiana by directing the Court to several affidavits.
In this matter, the Court exercises its discretion and declines to conduct a “summary inquiry” and consult matters outside the pleadings. There are many potential facts that could expose U-Haul Co. of Louisiana to liability in this action, and therefore a limited discovery to establish “discrete and undisputed facts that would preclude [Plaintiffs’] recovery,” does not appear feasible.
Moreover, Defendants claim that “Plaintiffs apparently joined the fourth defendant, U-Haul Co. of Louisiana, for the sole purpose of avoiding diversity jurisdiction.”
IV. Conclusion
While it is unclear exactly which defendants filed the notice of removal, either possibility presents potential defects in removal. If Diverse Defendants were the movants, as the record indicates is the case, removal was • defective because each diverse defendant had allowed its time to remove to lapse. Therefore, at the time of removal, they could only consent to removal. If U-Haul Co. of Louisiana was the removing party, its ability to do so as a non-diverse party is doubtful. However, because of the absence of definitive case law on this issue, the Court has reviewed whether U-Haul Co. of Louisiana was properly joined, because if it was, this Court would lack subject matter jurisdiction regardless of the propriety of the notice of removal. After consulting the relevant case law on this issue and examining the allegations in the petition, the Court finds that U-Haul Co. of Louisiana was not fraudulently or improperly joined, and as a result diversity does not exist. Therefore, this Court is without subject matter jurisdiction to hear this matter. Accordingly,
IT IS HEREBY ORDERED that Plaintiffs’ Motion for Remand
. Rec. Doc. 13.
. Rec. Doc. 1-2.
. Id. at ¶ 1. The Court notes that the citizenship of Gregson, LLC was not properly pled in the Petition as the citizenship of a limited liability company is determined by the citizenship of its constituent members. Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1079-80 (5th Cir. 2008). However, Gregson, LLC’s citizenship is later properly alleged in the notice of removal.
. Rec. Doc. 1-2 at ¶ 2.
. Id.
. Id.
. Id. at ¶¶ 3-4
. Rec. Doc. 1.
. Id. at pp. 1-2.
. Id. at p. 2.
. Id. at p. 3.
. Id. at p. 5.
. Rec. Doc. 13.
. Rec. Doc. 16.
. Rec. Doc. 21.
. Rec. Doc. 25.
. Rec. Doc. 29.
. Rec. Doc. 13-1 atp. 2.
. Id. (citing Getty Oil Corp. v. Ins. Co. of N. Am., 841 F.2d 1254, 1263 (5th Cir. 1988)).
. Id. at pp. 2-3.
. Id.
. Id. (citing Smallwood v. Illinois Ctr. R.R., 385 F.3d 568, 573 (5th Cir. 2004)).
. Id. (quoting Smallwood, 385 F.3d at 573).
. Id. at pp. 3-4.
. Id. atp. 5.
. Rec. Doc. 16 atp. 2.
. Pub. L. 112-63, 125 Stat. 758, Sec. 103.
. Rec. Doc. 16 at p. 2.
. Rec. Doc. 16 at p. 3 (citing Pub. L. 112-63, 125 Stat. 758, Sec. 105).
. Id. at pp. 3-4 (citing Elchehabi v. Chase Home Fin., No. 12-1486, 2012 WL 3527178 (S.D.Tex. Aug. 15, 2012)).
. Id. at p. 5.
. Id. at pp. 5-6 (emphasis in original).
. Id. atp. 6.
. Id. at p. 7 (citing Smith v. Chevron, No. 04-1020, 2004 WL 1488569 (E.D.La. July 1, 2004)).
. Rec. Doc. 21 at pp. 1-2.
. Id. at p. 2.
. Id. atp. 3.
. Rec. Doc. 25 atp. 1.
. 446 F.Supp.2d 926, 931-32 (S.D.Ill. 2006)
. Rec. Doc. 25 at p. 3 (citing Moreno Energy, Inc. v. Marathon Oil Co., 884 F.Supp.2d 577 (S.D.Tex. 2012)).
. Rec. Doc. 29 at p. 1.
. The Court assumes this was a mistake, and that Plaintiffs meant to say "diverse.”
. Id.
. Id. at p. p. 3-4.
. Id. at p. 2.
. Id. at p. 4 (citing Brown v. Demco, Inc., 792 F.2d 478, 482 (5th Cir. 1986)).
. Id.
. Caterpillar Inc. v. Lewis, 519 U.S, 61, 69, 117 S.Ct. 467, 136 L.Ed.2d 437 (1996).
. Brown, 792 F.2d at 482.
. Coury v. Prot, 85 F.3d 244, 248 (5th Cir. 1996).
. Rec. Doc. 1 atp. 1.
. Rec. Doc. 1-3.
. 970 F.Supp. 542 (M.D.La. 1997).
. Id. at 548.
. Id.
. 872 F.Supp. 1517 (M.D.La. 1995).
. Id. at 1520 (internal citations omitted).
. 884 F.Supp.2d 577 (S.D.Tex. 2012).
. Id.
. See Augustine v. Alliance Ins. Agency Servs., Inc., No. 06-9062, 2007 WL 38320, at *2, n. 1. (E.D.La. Jan. 3, 2007) (Feldman, J.); see also Comeaux v. Allstate Ins. Co., No. 06-10495, 2007 WL 1063238, at *1 (E.D.La. Apr. 5, 2007) (Zainey, J.).
. Jewell, 872 F.Supp. at 1520.
. Smallwood, 385 F.3d at 573.
. Id.
. Id.
. Id. (emphasis added).
. Id. at 573-74
. See generally Rec. Doc. 1-2.
. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).
. Rec. Doc. 1 atp. 5.
. Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999).
. Rec. Doc. 1 at p. 7.
. Id. atp. 3.
. Id. atpp. 1-2.
. Rec. Doc. 13.
Reference
- Full Case Name
- Lauren ANDREWS v. AMERCO
- Cited By
- 2 cases
- Status
- Published