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Should the Eighth Circuit recognize procedural misjoinder?

I. INTRODUCTION

In the Eighth Circuit and elsewhere, traditional fraudulent joinder occurs when a plaintiff sues a diverse defendant in state court and joins a nondiverse defendant even though the plaintiff has no reasonable basis for a claim against the nondiverse defendant. (1) For example, consider a situation in which a plaintiff brings an action for breach of contract in state court against an out-of-state insurance company and, for the sole purpose of defeating diversity jurisdiction, joins a state resident, such as his local insurance agent, against whom the plaintiff has no true claim. (2) In such circumstances, the insurance agent is said to have been fraudulently joined, and the insurance company may remove the action on diversity grounds and seek to have the unviable claim against the jurisdictional spoiler (the agent) dismissed in order to preserve jurisdiction.

Conversely, procedural or fraudulent misjoinder typically occurs when a plaintiff sues a diverse defendant in state court and joins a nondiverse defendant against which the plaintiff has a reasonable basis for a claim, but that claim has little or nothing to do with the plaintiff's claim against the diverse defendant. (3) Imagine, for example, a plaintiff who brings a common law action for product liability in state court against a nonresident manufacturer and in the same action joins a valid--but completely unrelated--state law claim for the collection of a debt against his next-door neighbor, a resident of the forum state. Prior to an amendment to the removal statute passed by Congress in 1990, the joined defendants would have been authorized to immediately remove the case to federal court on the basis of diversity jurisdiction and ask the district court to sever the unrelated claims. (4) Following the congressional amendment, some defendants in such circumstances found themselves, to their presumably undying annoyance, joined at the hip with what they believed to be an unrelated claim against another defendant and deprived of a previously available express procedural mechanism in federal court for separating the state law claims, so as to support diversity jurisdiction over the action.

To address this situation, many courts, led by the Eleventh Circuit in Tapscott v. MS Dealer Service Corp., (5) have relied upon a judicially created solution known as "procedural misjoinder" or "fraudulent misjoinder." (6) Under this emerging and somewhat controversial doctrine, as articulated in Tapscott, a federal district court remains empowered to separate misjoined state law claims while keeping the claim with diversity and remanding the other, if it concludes that the plaintiff's attempt to join them in a single action was "so egregious as to constitute fraudulent joinder." (7)

This article respectfully suggests that if the Eighth Circuit is ever presented with the question, it should be inclined to resist the temptation to adopt the judicially expedient doctrine of procedural misjoinder. (8) Rather, the Eighth Circuit should consider the intent of Congress in eliminating such claims from those authorized to be removed under diversity jurisdiction and instead rely upon the state court in which the action was originally filed to separate unrelated state claims. Once unrelated state law claims have been unlinked in the state proceedings, a diverse defendant, shed of the jurisdictional spoiler, may then seek to remove the action to federal court on diversity grounds.

II. REMOVAL OF A STATE ACTION TO FEDERAL COURT ON THE BASIS OF DIVERSITY JURISDICTION

"Federal courts are courts of limited jurisdiction." (9) Federal district courts are authorized to assume jurisdiction over a case only if granted authority by both Article III of the United States Constitution and an authorizing federal statute. (10) As the United States Supreme Court has explained, "[j]urisdiction of the lower federal courts is further limited to those subjects encompassed within a statutory grant of jurisdiction." (11) Pursuant to statute, the federal courts have jurisdiction over cases arising under federal law (12) or cases based upon diversity of citizenship. (13)

Generally, a defendant may remove a state court action to federal court only where the federal court would have original jurisdiction over the case. (14) In resolving a motion to remand, courts typically may not consider a ground for removal that was not stated in the defendant's notice of removal. (15) Once a case has been removed, the plaintiff may make a motion to remand the case to state court. (16) Upon such a motion, or at any time, if "it appears that the district court lacks subject matter jurisdiction, the case shall be remanded" to the state court from which it was removed. (17) As the Supreme Court has made clear, removal statutes are to be strictly construed in favor of state court jurisdiction. (18) Significantly, a district court's order remanding a case to state court for lack of subject matter jurisdiction may not be appealed. (19)

As a necessary element of diversity jurisdiction, the citizenship of each plaintiff must be diverse from the citizenship of each defendant. (20) In addition, Congress has chosen to make a district court's diversity jurisdiction on removal narrower than it is with cases originally filed in district court. (21) For cases originally filed in federal court, the citizenship element of diversity jurisdiction simply requires that the parties be citizens of different states, regardless of their relation to the forum state. (22) Pursuant to section 1441(b), however, an action filed in state court may only be removed on the basis of diversity jurisdiction if "none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." (23) As Chief Judge Arnold succinctly explained in a case in which a defendant from Missouri attempted to remove an action filed in Missouri state court to federal court on the basis of diversity jurisdiction,
   Title 28 U.S.C. [section] 1441(b) makes diversity jurisdiction in
   removal cases narrower than if the case were originally filed in
   federal court by the plaintiff. A defendant may not remove to
   federal court on the basis of diversity if any of the defendants is
   a citizen of the state where the action was filed. As we have
   stated, defendant Rose is a citizen of Missouri. The fact that
   [plaintiff) Irene Hurt could have invoked the original jurisdiction
   of the federal court initially is irrelevant. She did not. The
   jurisdiction of the lower federal courts, both original and
   removal, is entirely a creature of statute. If one of the statutory
   requirements is not met, the district court has no jurisdiction.
   (24)


Thus, a defendant may not remove a state court action to federal court on the basis of diversity jurisdiction unless there is: (1) complete diversity between the parties and (2) no defendant is a resident of the forum state.

III. THE TRADITIONAL DOCTRINE OF FRAUDULENT JOINDER

As the Eighth Circuit has explained, where the plaintiff has joined a forum resident or otherwise nondiverse party as a defendant in a state action, a removing party may avoid a remand "only by demonstrating that the additional party was fraudulently joined." (25) As it has been traditionally understood, fraudulent joinder is "the filing of a frivolous or otherwise illegitimate claim against a non-diverse defendant solely to prevent removal[.]" (26) The term "fraudulent joinder" is somewhat deceptive because, as the courts have explained, "[a] party does not need to demonstrate fraudulent intent on the part of the plaintiff in order to prove fraudulent joinder." (27) Rather, to establish fraudulent joinder a party must demonstrate "the absence of any possibility that the opposing party has stated a claim under state law." (28)

The Eighth Circuit recently clarified the governing standard for determining fraudulent joinder. (29) In Filla v. Norfolk Southern Railway Co., (30) the Eighth Circuit held that "despite the semantical differences" between various articulations of the standard among the courts, the "common thread" between them was "reason." (31) In order to determine whether a defendant has been fraudulently joined, the district court must simply determine "whether there is arguably a reasonable basis for predicting that the state law might impose liability" against the nondiverse defendant. (32) In other words, "if there is a 'colorable' cause of action--that is, if the state law might impose liability on the resident defendant under the facts alleged-then there is no fraudulent joinder." (33) In contrast, "[w]here applicable state precedent precludes the existence of a cause of action against a defendant, joinder is fraudulent.'" (34) Put yet another way, "joinder is fraudulent ... when there exists no reasonable basis in fact and law supporting a claim against the resident defendants." (35) However, "if there is a reasonable basis in fact and law supporting the claim, the joinder is not fraudulent." (36)

Both the United States Supreme Court and the Eighth Circuit have held that fraudulent joinder is to be determined "on the face of plaintiffs state court pleadings." (37) Thus, "[t]he right of removal is generally determined from the record and the status of the pleadings at the time the petition for removal is filed." (38) The burden of proving fraudulent joinder is on the removing party opposing remand. (39) Unless a defendant was fraudulently joined under the standard established by the Eighth Circuit, district courts lack subject matter jurisdiction and the case must be remanded to state court. (40) The Eighth Circuit has further cautioned that "where the sufficiency of the complaint against the non-diverse defendant is questionable, 'the better practice is for the federal court not to decide the doubtful question in connection with a motion to remand but simply to remand the case and leave the question for the state courts to decide." (41)

IV. THE (EMERGING?) DOCTRINE OF PROCEDURAL MISJOINDER

Occasionally, an action is filed in state court against both diverse and nondiverse defendants in which it is readily apparent that the traditional fraudulent joinder doctrine has no application because the plaintiff has a reasonable basis for bringing a claim against both defendants. But what if the claim against the resident defendant, although viable, is not related at all to the cause of action brought against the nonresident? In other words, to borrow some familiar terminology, what if the claims do not arise from the same "nucleus of operative facts"? In such cases, the nonresident defendant sometimes removes the action to federal court anyway, contending that the federal court should sever the claims to create jurisdiction over the diverse defendant, and send only the defendant that had spoiled diversity back to state court. And sometimes, a district court will agree to do just that on the basis of a new judicial concept known as procedural or fraudulent misjoinder.

Under this new and unsettled doctrine, procedural misjoinder occurs when a plaintiff sues a diverse defendant in state court and joins a viable claim involving a nondiverse party, or a resident defendant, even though the plaintiff has no reasonable procedural basis to join them in one action because the claims bear no relation to each other. (42) In such cases, some courts have concluded that diversity is not defeated where the claim that destroys diversity has "no real connection with the controversy" involving the claims that would qualify for diversity jurisdiction. (43) Thus, as explained in the Wright, Miller and Cooper treatise, "procedural misjoinder may represent a third type of fraudulent joinder, the others being lack of any possibility of the plaintiff having a claim against a joinedTarty and outright fraud by the plaintiff in the statement of jurisdictional facts." (44)

A. TAPSCOI T V. MS DEALER SERVICE CORP.

Fraudulent or procedural misjoinder is far from an accepted doctrine of removal jurisprudence. Since its unveiling by the Eleventh Circuit in 1996, only one additional federal appellate court appears to have recognized the doctrine in a reported decision. The Eleventh Circuit remains the only circuit on record to have expressly adopted and utilized the procedural misjoinder doctrine. In Tapscott v. MS Dealer Service Corp., the Eleventh Circuit discovered and recognized "egregious" procedural misjoinder as a new and distinct type of fraudulent joinder. (45) In that case, one group of plaintiffs seeking to represent a class sued a group of defendants for statutory fraud arising from the sale of automobile service contracts. (46) Another group of plaintiffs representing a separate proposed class sued another defendant for statutory fraud arising from the sale of retail product service contracts. (47) The sole defendant on the claim involving retail products was diverse, but the defendants on the automobile claims were not. (48) The diverse defendant removed the action, and the plaintiffs' motion to remand was denied. (49)

On appeal, the plaintiffs conceded that the two groups of claims were not properly joined but contended that procedural misjoinder of nondiverse parties could not constitute fraudulent joinder. (50) The Eleventh Circuit disagreed, announcing the doctrine of "fraudulent misjoinder" and holding that the claims had been misjoined because on the face of the complaint there was no claim against the two groups of defendants that even remotely arose from the same transaction or occurrence. (51) The court emphasized, however, that misjoinder is tantamount to fraudulent joinder not simply when claims are misjoined but when they are egregiously misjoined, cautioning: "[w]e do not hold that mere misjoinder is fraudulent joinder, but we do agree with the district court that Appellants' attempt to join these parties is so egregious as to constitute fraudulent joinder." (52) Unfortunately, though perhaps inevitably, the Eleventh Circuit did not provide any guidance on the perplexing question of how one might distinguish "egregious misjoinder" from "mere misjoinder." (53)

B. IN RE BENJAMIN MOORE & CO.

By all appearances, the Fifth Circuit is the only other federal circuit to even discuss the procedural misjoinder doctrine in a reported decision. (54) In In re Benjamin Moore & Co., (55) the Fifth Circuit did not reach the issue of procedural misjoinder because it was compelled to dismiss the apppeal from the district court's remand order for lack of appellate jurisdiction. (56) The Fifth Circuit expressed receptiveness to the doctrine, however, explaining: "[t]hus, without detracting from the force of the Tapscott principle that fraudulent misjoinder of plaintiffs is no more permissible than fraudulent misjoinder of defendants to circumvent diversity jurisdiction, we do not reach its application in this case." (57) It thus seemed likely that the Fifth Circuit would follow the Eleventh Circuit and adopt egregious procedural misjoinder as a new and distinct type of fraudulent joinder. However, in a subsequent en banc decision, the Fifth Circuit indicated that it only recognized the two traditional methods of establishing improper joinder: "(1) actual fraud in the pleading of jurisdictional facts [and] (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court." (58)The status of procedural misjoinder in the Fifth Circuit accordingly may be considered unsettled. (59)

Despite so few federal appellate courts having recognized or even discussed the doctrine, many district courts have considered the concept of procedural misjoinder, producing disparate results. Numerous district courts have chosen to adopt the doctrine in one form or another, though disagreeing on the extent to which misjoinder must be "egregious" in order to be considered fraudulent and therefore warrant the denial of a motion to remand the action for lack of diversity. (60) On the other side of the fence, some courts have completely rejected the procedural misjoinder doctrine, finding it to be unsupported by the federal rules, inconsistent with congressional intent, and too nebulous to be applied with any consistency. (61) Suffice it to say, the undeveloped doctrine of procedural misjoinder stands as one of the most controversial and least delineated quadrants in the otherwise relatively uncontroversial and highly delineated universe of federal removal jurisdiction. (62)

V. PROCEDURAL MISJOINDER IN THE EIGHTH CIRCUIT

Like most appellate courts, the Eighth Circuit has not had occasion to pass upon the validity of the procedural misjoinder doctrine crafted by the Eleventh Circuit in Tapscott. (63) However, two recently published district court decisions within the Eighth Circuit have addressed the doctrine without having to expressly adopt or reject it. In particular, these decisions are instructive in demonstrating how a seemingly fundamental question involving removal jurisdiction such as the validity of procedural misjoinder could remain largely unaddressed for so long among the federal appellate courts.

A. BOWLING v.. KERRY, INC.

In Bowling v. Kerry, Inc., (64) a district court from the Eastern District of Missouri was presented with an assertion that diversity jurisdiction existed because the parties to a removed state court action had been procedurally misjoined. (65) Two former employees of a popcorn packaging plant brought an action in Missouri state court alleging respiratory injuries resulting from exposure to substances contained in the popcorn flavoring. (66) After the action was removed to federal court, the plaintiffs filed a motion to remand, alleging that diversity of citizenship was lacking. (67) One of the plaintiffs (Amesquita) was from Illinois and the other (Bowling) was from Missouri. (68) Three of the four corporate defendants were from Illinois, the other from Missouri. (69) The defendants asserted that the Illinois plaintiff was "fraudulently misjoined" to defeat diversity jurisdiction and that the Missouri corporation was an improper defendant that should be dismissed and the correct defendant corporation, a Delaware corporation with its principal place of business in Ohio, substituted in its place. (70) If the citizenship of the Illinois plaintiff was disregarded and the Missouri defendant was replaced, there would have been complete diversity over the action. (71) As Judge Perry aptly discerned the defendants' procedural misjoinder argument:
   Defendants here do not assert one of these garden-variety arguments
   of fraudulent joinder of a party, but instead argue that the claims
   of Fidel Amesquita and the Bowlings were improperly joined to
   defeat diversity jurisdiction. This theory has been referred to as
   "fraudulent misjoinder" or "procedural misjoinder," and requires
   the court to look to whether different claims have been improperly
   joined together. Unlike traditional fraudulent joinder arguments,
   this is a question of state court procedure, and does not require
   the court to look at the substantive merits of the claims under
   state law. (72)


After identifying the Tapscott decision as the progenitor of procedural misjoinder and observing that "[d]istrict court cases reach widely varying results when faced with this argument[,]" the district court gave voice to criticisms expressed by some commentators and courts that the doctrine is "inherently ambiguous," as well as extraneous, since "[r]equiring misjoinder to be addressed in state court does not impair the ability of a defendant to remove an action following the dismissal or severance of the improperly joined party." (73) The district court also noted that "[t]he Eighth Circuit has not considered the theory of procedural misjoinder, which is not surprising given that 28 U.S.C. [section] 1447(d) prevents appellate review of remand decisions based on lack of subject-matter jurisdiction." (74) Ultimately, however, the district court discerned no present need to wade into the controversy concerning the availability and scope of the procedural misjoinder doctrine because it was clear on the face of the pleadings that the claims had not been misjoined in any sense. (75) As a result, the action was remanded to state court. (76)

B. CULHANE COMMUNICATIONS V. FULLER

Another recently published decision relates a similar tale from the District of South Dakota. In Culhane Communications v. Fuller, (77) a South Dakota corporation and its owner, both South Dakota residents, filed an action alleging seven state law claims arising out of a disputed transaction involving a radio station in Yankton, South Dakota. (78) Three of the claims were brought against two Iowa defendants collectively referred to as Fuller) with whom the plaintiffs had been negotiating. (79) Four additional claims were brought against a resident of South Dakota (Solberg) who had a financial interest in the negotiation of the disputed transaction. (80) After the Iowa defendants removed the action to federal court, the plaintiffs filed a motion for remand. (81) As Judge Piersol summarized the defendants' asserted basis for opposing the remand,

Fuller is not making the usual fraudulent joinder argument in this case.
   He does not contest that Plaintiffs state valid claims against
   Solberg under the facts alleged in the Complaint, but instead he
   argues that Solberg was fraudulently "misjoined" under the Federal
   Rules of Civil Procedure because the claims against him do not
   arise out of the same transaction or agreement as the claims
   against Fuller. The crux of Fuller's argument is that Plaintiffs'
   claims against Fuller are entirely distinct, factually and legally,
   from Plaintiffs' claims against Solberg and, therefore, they cannot
   be joined together in one lawsuit. (82)


After discussing the Tapscott decision and observing that its ambiguity has "left courts struggling with application of this theory," the district court, like the court in Bowling, readily concluded that there was no need to explore the substance or validity of a doctrine that, even if valid, was plainly not applicable to the action under consideration. (83) As the court explained: "The Eighth Circuit has not addressed procedural misjoinder, but the questions surrounding the doctrine need not be resolved in this case because the Court finds that Solberg was not misjoined, either merely or egregiously." (84) The action accordingly was remanded to state court. (85) As was true in Bowling, because the motion to remand was granted, the defendants were procedurally barred from appealing the order. (86)

VI. THE EIGHTH CIRCUIT SHOULD CONSIDER REJECTING THE

DOCTRINE OF PROCEDURAL MISJOINDER

If it is ever directly presented with the question, the author respectfully suggests that the Eighth Circuit should consider declining what will presumably be a tempting invitation to endorse the procedural misjoinder doctrine. Although there are persuasive arguments on both sides of the equation, (87) the judicial decisions declining to recognize procedural misjoinder as a new variant of fraudulent joinder appear to be better reasoned and in greater accord with the expressed intention of Congress.

A. CONGRESSIONAL INTENT

Nothing in the current federal removal statutes explicitly permits a court to disregard the citizenship of a state court party when assessing whether the suit qualifies for diversity jurisdiction. (88) Prior to 1990, the federal removal statute, 28 U.S.C. [section] 1441(c), provided that an action containing both removable and non-removable state law claims could be removed and the claims severed if they were deemed to be "separate and independent." (89) Claims were separate and independent within the meaning of that statute if they did not arise out of the same common nucleus of facts and if they sought completely separate redress for unrelated legal injuries. (90) Under the pre-1990 version of section 1441(c), where claims did not share their genesis in a common factual nucleus and sought separate redress for unrelated injuries, a diverse defendant was authorized to remove an entire case, and district courts were authorized to accept jurisdiction over the removable claims and remand the non-removable claims involving nondiverse defendants to state court. (91)

In 1990, however, Congress amended section 1441(c) to eliminate diversity cases from its scope and restrict its application to cases involving a claim arising under federal law. (92) In so doing, Congress specifically intended that removal on grounds of diversity would no longer be authorized where the removing defendants contend that diverse state law claims have been joined with nondiverse state law claims that are separate and independent from each other.

The legislative history is quite clear on this point:

SECTION 109. REMOVAL OF SEPARATE AND INDEPENDENT CLAIMS
   This section implements, in modified form, the recommendation of
   the Federal Courts Study Committee on pages 94 and 95 of the
   Report, which advocated a simple repeal of 28 U.S.C. section
   1441(c). Section 109 would amend section 1441 (c) so as to
   eliminate most of the problems that have been encountered in
   attempting to administer the "separate and independent claim or
   cause of action" test. Most of the cases have involved the
   requirement of absolute diversity to establish diversity removal
   jurisdiction. The plaintiff, for example, might sue a diverse
   defendant for breach of contract and join a claim against a
   nondiverse defendant for inducing the breach. Courts have found the
   test very difficult to administer and have reached confusing and
   conflicting results. At the same time, the need to provide removal
   for diverse defendants is not great.

   The amendment would, however, retain the opportunity for removal in
   the one situation in which it seems clearly desirable. The joinder
   rules of many states permit a plaintiff to join completely
   unrelated claims in a single action. The plaintiff could easily
   bring a single action on a federal claim and a completely unrelated
   state claim. The reasons for permitting removal of federal question
   cases applies [sic] with full force. In addition, the amended
   provision could actually simplify determination of removability. In
   many cases the federal and state claims will be related in such a
   way as to establish pendant jurisdiction over the state claim.
   Removal of such cases is possible under Sec. 1441(a). The amended
   provision would establish a basis for removal that would avoid the
   need to decide whether there is pendant jurisdiction. (93)


As the legislative history confirms, Congress retained the ability to remove joined claims and remand some of them for the reason that they are not sufficiently related in only "one situation" that it deemed desirable-where a removable "federal claim" has been joined with a "completely unrelated state claim." (94) In cases where both removable and non-removable claims arise under state law, section 1441(c) no longer authorizes the removal of the case on diversity grounds even if the claims are totally separate and independent. In other words, "one of the situations that [section] 1441(c) was originally designed to prevent--allowing a plaintiff to defeat federal court diversity jurisdiction simply by joining removable and non-removable claims in a single state court action--no longer falls within the ambit of the statute." (95)

As some courts have observed in rejecting the doctrine, procedural misjoinder appears to be a judicially created response to Congress's narrowing of the removal statute, utilizing the concept as a means for allowing the removal of a case where a state claim that falls within diversity jurisdiction is joined with a state claim that does not. (96) Courts adopting the procedural misjoinder doctrine "have purported to replace the 'separate and independent claim' analysis with a test that evaluates the propriety of the joinder of claims under state law." (97) As the legislative history indicates, by changing [section] 1441 (c) in a plain effort to reduce the number of diversity cases removed to federal court, Congress intended to render cases in which state claims against diverse defendants are joined with viable state claims against nondiverse or resident defendants as non-removable, regardless of how related or unrelated the various claims may be. It is difficult to reconcile how the creation of a judicial doctrine that operates to circumvent this amendment to the federal removal statute could not be deemed contrary to congressional intent. (98)

B. LIMITED JURISDICTION

Federal courts, it will be recalled, are courts of limited jurisdiction established by the Constitution and federal statute. (99) This very carefully delineated jurisdiction "is not to be expanded by judicial decree." (100) As emphasized by Chief Judge Arnold in Hurt v. Dow Chemical Co., (101) "[t]he jurisdiction of the lower federal courts, both original and removal, is entirely a creature of statute." (102) The Supreme Court has established a presumption "that a cause lies outside this limited jurisdiction," has instructed that the federal removal statutes must be strictly construed in favor of state court jurisdiction, and has held that "the burden of establishing the contrary rests upon the party asserting jurisdiction." (103) The primary purpose of placing this high burden of proof upon a removing defendant is to ensure that district courts do not exceed the scope of their limited jurisdiction and thereby intrude upon the jurisdiction reserved to state courts. (104) With some justification, some courts have viewed the Tapscott notion of procedural misjoinder as an "improper expansion of the scope of federal diversity jurisdiction by the federal courts." (105)

This raises the corollary issue of whether the contours of federal removal jurisdiction should be permitted to fluctuate from district to district and be dependent upon the state in which a federal court resides. The United States Supreme Court has made clear that state procedural provisions cannot control the privilege of removal granted by federal statute. (106) As the Rutherford court noted, "the federal courts traditionally have held that matters of state civil procedure, including, presumably, joinder of parties and claims, have no bearing on the existence or nonexistence of federal subject matter jurisdiction in a given case." (107) In Shamrock Oil & Gas Corp. v. Sheets, (108) of course, the Supreme Court spoke directly to this issue:
   But at the outset it is to be noted that [this] decision turns on
   the meaning of the removal statute and not upon the
   characterization of the suit or the parties to it by state statutes
   or decisions. The removal statute which is nationwide in its
   operation, was intended to be uniform in its application,
   unaffected by local law definition or characterization of the
   subject matter to which it is to be applied. Hence the Act of
   Congress must be construed as setting up its own criteria,
   irrespective of local law, for determining in what instances suits
   are to be removed from the state to the federal courts. (109)


It seems entirely appropriate, moreover, that questions regarding whether viable state law claims have been misjoined, however "egregiously," under state law are matters best resolved by the state court system in which an action is originally filed. (110) AS the Rutherford court somewhat colorfully observed,
   [A]ny jurisdictional principle that requires federal courts as a
   regular matter to construe state procedural rules and to pronounce
   on the propriety of joinder thereunder strikes the Court as an
   exceptionally weird and pernicious intrusion by federal courts into
   matters properly I of state concern and a disruption of the orderly
   development of state law. (111)


C. AVOIDING JURISDICTIONAL CONFUSION

Policy considerations also lend some comfort to those courts rejecting the procedural misjoinder doctrine's apparent expansion of federal removal jurisdiction. As the courts have observed, some principal virtues of jurisdictional rules are simplicity, clarity, ease of objective implementation, predictability, and uniform application. (112) A principle as important and fundamental as the presence or absence of federal jurisdiction begs for clarity and concreteness, and should not turn upon vague, subjective, and easily malleable concepts that serve to engender litigation and consume judicial resources.

Unpredictability and confusion appear to be precisely what the Tapscott decision has produced in its wake. In the eleven years since Tapscott emerged, many courts have "foundered on shoals of tautology" in trying to discern and define when misjoinder should be considered as having slipped from mere misjoinder into the surly realm of egregiousness. (113) Some district courts have even thrown up their hands and diluted the standard to the point that any misjoinder (mere, medium, not quite egregious, utterly egregious, or otherwise) should give rise to federal removal jurisdiction. (114) This latter path goes far beyond the standard even for fraudulent joinder, requiring federal courts to determine whether parties have been misjoined even where the governing state procedural law may be unclear. (115)

As explained in the House Judiciary Committee report quoted above, the inescapable confusion produced by the application of an amorphous standard to the federal jurisdictional determination was precisely the problem that Congress was seeking to remedy when it amended section 1441(c) to remove actions involving only state law claims from its scope. (116) With the advent of procedural misjoinder in the federal courts, the process appears to have come full circle-the very procedural quagmire that Congress sought to eliminate in amending section 1441 (c) has been created anew by the invention of a judicial doctrine seemingly aimed at circumventing the congressional amendment.

D. AVAILABILITY OF A STATE REMEDY

Importantly, rejection of the newly minted concept of procedural misjoinder as an addition to the well-established doctrine of fraudulent joinder does not leave diverse defendants who believe that they have been misjoined with nondiverse parties or resident defendants without a remedy for separating the claims. Rather, the issue of whether claims have been misjoined under state law would simply be deferred to the state court in which the action was filed, where such questions logically should be resolved. (117) In addition, the federal removal statute allows a thirty-day window from the receipt or service of the complaint for a defendant to file a notice of removal to federal court. (118) However, if the case as stated by the initial pleading is not removable, the thirty-day clock does not begin ticking until the filing of an "amended pleading, motion, order or other paper" that allows the case to be removed. (119) Because the removal statute provides for a new window of opportunity to remove the action at whatever stage in which a case first qualifies for removal jurisdiction, the initial thirty-day time limit for removing an action should not affect a defendant's ability to first secure resolution of the misjoinder in state court before removing the claim. (120)

The removal statute also establishes an overall one-year time limit for removing a case based upon diversity jurisdiction that begins to run from the commencement of the action. (121) This deadline does not reset nor is it dependent upon the date that an action first becomes removable. (122) Thus, a defendant hoping to remove a suit to federal court would still need to ensure that misjoined claims are severed in the state court within a year of the commencement of the action. (123) It is doubtful that such a time frame would present a significant obstacle in the vast majority of cases to even the most minimally diligent of defendants. (124)

Because a diverse defendant may remove a claim to federal court once misjoined state law claims have been unlinked in the state proceeding, some courts have deemed the procedural misjoinder doctrine to be a complicated and unnecessary contrivance. As the Osborn court explained, "the better rule would require [the removing defendant] to resolve the claimed misjoinder in state court, and then, if that court severed the case and diversity then existed, it could seek removal of the cause to federal court." (125) The Wright, Miller and Cooper treatise also appears to endorse this view. (126) And as the Bird court concluded, "this rule permits the state courts to resolve the joinder issues without reference to a standard such as 'egregious misjoinder' and preserves the integrity of the concept that state procedural irregularities cannot have an effect o[n] the existence or nonexistence of federal court jurisdiction." (127)

Whether the procedural misjoinder doctrine is adopted or not, federal claims will continue to be heard in federal court, even when misjoined with unrelated state claims. Even if some defendants in actions based exclusively upon state law claims find themselves ultimately "trapped" in state court, where they might otherwise have been eligible to "escape" to the federal system on diversity grounds if procedural misjoinder was available, that result, at least in the view of Congress, does not appear to be inherently tragic. In the grand order of things, as Congress explained in withdrawing previous authorization to remove and sever unrelated state law claims for the purpose of creating diversity, "the need to provide removal for diverse defendants is not great." (128)

VII. CONCLUSION

For all of these reasons--fidelity to expressed congressional intent, enforcement of the limited nature of federal jurisdiction, as well as some important policy considerations--the author very respectfully suggests that, in the absence of additional direction from Congress or the Supreme Court, the Eighth Circuit should consider declining a future invitation to endorse the doctrine of procedural misjoinder as introduced by the Eleventh Circuit in Tapscott. As noted, some commentators have made a persuasive case that policy considerations strongly support allowing district courts to employ their considerable equitable powers in fashioning an expedient federal remedy for blatantly misjoined state law claims. (129) Nonetheless, it must be remembered that the controlling question before a court in considering whether to adopt such a doctrine is ultimately one of procedure rather than policy.

The issue on the table is not whether misjoined state law claims should be severed, but rather which system--the state or federal courts--is presently charged under the governing framework with undertaking the state law analysis and issuing its order to enforce the appropriate outcome. As in most cases of statutory interpretation, the question of which procedural rule represents the more preferable outcome should ultimately defer to express legislative intent as reflected in the carefully selected language of the removal statutes that Congress has ordained. (130) The availability of procedural misjoinder as a federal tool for shaping certain actions to meet diversity jurisdiction may well be the better rule, but is it the rule that is currently established under governing law? Congress, moreover, is well positioned and presumably inclined to craft any amendments it deems necessary to the removal statute or other statutes that are tailored to address specific or unique circumstances such as multi-district litigation or class actions. (131) Short of additional clarification or guidance, the Eighth Circuit should presumably adhere to the expressed intention of Congress and the plain language of the removal statute and deem that even misjoined state law claims, in which diversity is lacking, may not be removed to federal court unless and until they have been properly separated and made eligible for removal on the basis of diversity jurisdiction in the appropriate state court in which the action was originally filed.

VIII. EPILOGUE: WILL THIS ISSUE EVER REACH THE EIGHTH CIRCUIT?

Even those who have championed the doctrine must acknowledge that the availability and scope of procedural or fraudulent misjoinder as an equitable tool for shaping the contours of diversity jurisdiction in the federal courts is, at a minimum, a procedural grey area with some persuasive shades on both ends of the policy spectrum. And though perhaps not in the highest stratosphere of priority in our steadily collapsing universe of unresolved procedural questions, it is surely an issue that merits resolution. As demonstrated above, the federal district courts have produced widely disparate results when asked to declare that state law claims have been procedurally misjoined. As Professor Hines and Professor Gensler have observed in their excellent work in defense of procedural misjoinder, "[t]hat this question has received virtually no attention so far is surprising, to say the least." (132)

A. THE BARRIERS TO APPELLATE REVIEW

Unfortunately, certain structural barriers effectively prevent or strongly inhibit the possibility of federal appellate review of the application or rejection of the doctrine of procedural misjoinder. Most significantly, a district court's order remanding an action to state court may not be appealed. (133) Thus, where a district court remands a case either because it has declined to adopt the doctrine of procedural misjoinder or it has held that the doctrine does not apply because the state law claims have not been "egregiously misjoined," the state court reassumes jurisdiction and the district court's decision is never subject to federal appellate review. (134) If one presumes that it is relatively rare for a plaintiff to actually join state law claims that are so completely unrelated as to be characterized as "egregiously misjoined," then in all likelihood we will continue to see appropriately reserved decisions from the district courts along the order of Bowling and Culhane Communications that sagely avoid unnecessary elaboration regarding the sticky question of procedural misjoinder where it is readily apparent that no misjoinder of any kind has occurred. And because such cases are then swiftly remanded to the state court from whence they came, the procedural misjoinder issue will likely continue to evade appellate review.

Furthermore, it is well settled that a district court's order denying a motion to remand an action to state court is not a final order that may be appealed to a federal appellate court. (135) In such cases in which the district court retains jurisdiction, then, the action will either be settled or litigated to a resolution of some kind on the merits or an issue of law. Where a plaintiff loses a motion to remand an action to state court, loses the case on the merits, and then elects to appeal, it seems unlikely that precious, limited space in an appellate brief would be devoted to a procedural issue such as fraudulent misjoinder that cannot be effectively demonstrated as determinative in the outcome of the case. As a result, in almost two ensuing decades since Congress amended the removal statute to curtail diversity jurisdiction over certain joined state law claims, only two federal appellate courts have issued published decisions addressing the validity of procedural misjoinder as a judicial response to that amendment. (136)

B. THE POSSIBILITY OF INTERLOCUTORY REVIEW

The last, best hope for an appellate resolution of this issue would appear to be a grant of interlocutory review pursuant to 28 U.S.C. [section] 1292(b). That statute provides, in part, that
   When a district judge, in making in a civil action an order not
   otherwise appealable under this section, shall be of the opinion
   that such order involves a controlling question of law as to which
   there is substantial ground for difference of opinion and that an
   immediate appeal from the order may materially advance the ultimate
   termination of the litigation, he shall so state in writing in such
   order. (137)


Although district courts infrequently agree to allow a party to apply for interlocutory review by including the requisite findings in an order, this issue appears to be a rare, excellent candidate for such a prospect. Upon the inclusion of such language in an order denying a motion to remand, the Eighth Circuit would have discretionary jurisdiction over an immediate appeal if an application is made within ten days after the entry of the order. (138)

Thus, an enterprising plaintiff who suspects that it may be on the losing end of a district court's order denying a motion to remand should consider asking the district court to include the requisite statement pursuant to [section] 1292(b) regarding the procedural misjoinder issue. Of course, a district court could always decide to include the necessary language sua sponte. The Eighth Circuit, in turn, should give ample consideration to granting such an application for interlocutory review so that we may capture some welcome clarity regarding this arcane and perplexing procedural enigma. (139) A definitive resolution favoring either side of the procedural misjoinder discussion would be preferable to the present disparity and disarray. Notably, the Eleventh Circuit's pathfinding decision in Tapscott resulted from its rant of a petition for interlocutory review pursuant to 28 U.S.C. [section] 1292(b). (140)

C. THE COEUR D'ALENE-WILKINSON MANEUVER

In the alternative to an application for interlocutory review, a plaintiff in a removed action that unsuccessfully moves to have it remanded might be eligible to immediately appeal from the denial of its motion in certain, very limited, additional circumstances. In State ex rel. Nixon v. Coeur D'Alene Tribe, (141) the Eighth Circuit held that in a multiple defendant case, the voluntary dismissal of a remaining defendant without prejudice under Federal Rule of Civil Procedure 41(a) renders a previous order dismissing other defendants immediately appealable. (142) The Eighth Circuit has recently applied this rule in an action involving fraudulent joinder. In Wilkinson v. Shackelford, (143) the district court had denied Wilkinson's motion to remand her action to Missouri state court, holding that she had fraudulently joined a fellow Missouri resident, Shackelford, in her product liability action against Michelin North America, Inc. (144) After concluding that Shackelford had been fraudulently joined, the district court dismissed the claim against him. (145) Wilkinson subsequently voluntarily dismissed her remaining claims against Michelin without prejudice pursuant to Federal Rule of Civil Procedure 41(a). (146) She then filed a timely notice of appeal from the district court's dismissal of Shackelford. (147) At the court of appeals, Michelin raised a jurisdictional challenge, contending that Wilkinson should not be permitted to "manipulate" the dismissal of the claim against Shackelford into a final appealable order by dismissing the surviving claim against Michelin, and that Wilkinson's only potential avenue of appeal was the prospect of a Federal Rule of Civil Procedure 54(b) certification by the district court. (148) The Eighth Circuit held, however, that it had proper jurisdiction over the appeal under the rule of Coeur D'Alene. (149)

Under this analysis, then, it appears that in a situation in which a plaintiff's motion to remand an action has been denied by the district court, upon the ground that state law claims were procedurally or fraudulently misjoined, and the nondiverse defendant is dismissed from the action, a daring plaintiff could throw caution to the wind, risk the possibility of a statute of limitations crisis and a host of other potential hindrances that might result from extended delay, voluntarily dismiss the surviving claims against the remaining defendant without prejudice pursuant to Rule 41(a), and then file a notice of appeal from the previous order denying the motion to remand. (150) The presumed end result of this daredevil Coeur D'Alene-Wilkinson maneuver, as it shall henceforth be known for the ages, would be to place the issue of procedural misjoinder squarely and properly before the court of appeals.

(1.) Filla v. Norfolk S. Ry. Co., 336 F.3d 806, 810 (8th Cit. 2003); Culhane Commc'ns, 489 F. Supp. 2d at 961.

(2.) See, e.g., Palmquist v. Conseco Med. Ins. Co., 128 F. Supp. 2d 618, 622 (D.S.D. 2000) (holding that state resident insurance agent was fraudulently joined as defendant for purposes of destroying diversity jurisdiction).

(3.) Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1360 (11th Cir. 1996), abrogated by Cohen v. Office Depot, Inc., 204 F.3d 1069, 1072-73 (11th Cir. 2000). Of course, the reverse situation also occurs, in which one plaintiff having complete diversity with the defendant will join forces with another plaintiff, having an unrelated claim against the same defendant, but whose presence destroys diversity. See, e.g., Jones v. Nastech Pharm., 319 F. Supp. 2d 720, 727-29 (S.D. Miss. 2004).

(4.) Bird v. Carteret Mortgage Corp., No. 2:06-CV-0588, 2007 WL 43551, at *4 (S.D. Ohio Jan. 5, 2007) (discussing 1990 amendment to 28 U.S.C. [section] 1441(c)).

(5.) 77 F.3d 1353, 1360 (11th Cir. 1996).

(6.) See id. at 1360.

(7.) Id. at 1360.

(8.) In preparing this article, the author has drawn upon two excellent law review articles that thoroughly and thoughtfully examine the emerging doctrine of procedural or fraudulent misjoinder. See Laura J. Hines & Steven S. Gensler, Driving Misjoinder:: The Improper Party Problem in Removal Jurisdiction, 57 ALA. L. REV. 779 (2006); E. Farish Percy, Defining the Contours of the Emerging Fraudulent Misjoinder Doctrine, 29 HARV. J.L. & PUS. POL'Y 569 (2006). Although the present article proposes consideration of a slightly different outcome than advocated by Professor Percy, Professor Hines, and Professor Gensler, their scholarship is impeccable and indispensable for any court or litigant undertaking an examination of this interesting and complex, if not somewhat arcane, procedural issue. In addition, those interested in or in need of information regarding the traditional doctrine of fraudulent joinder as applied in the Eighth Circuit should not miss: Laura L. Asbury, Comment, A Practical Guide to Fraudulent Joinder in the Eighth Circuit, 57 ARK. L. REv. 913 (2005).

(9.) Oglala Sioux Tribe v. C & W Enters., 487 F.3d 1129, 1130 (8th Cir. 2007) (quoting Myers v. Richland County, 429 F.3d 740, 745 (8th Cir. 2005)).

(10.) Ins. Corp. of Ir., Ltd. v. Campagnie des Bauxites de Guinee, 456 U.S. 694, 701 (1982); ERWIN CHEMERINSKY, FEDERAL JURISDICTION 260 (4th ed., Aspen Publishers 2003) (1989) (explaining that "a federal court may adjudicate a case only if there is both constitutional and statutory authority for federal jurisdiction").

(11.) Ins. Corp. of Ir., 456 U.S. at 701.

(12.) 28 U.S.C. [section] 1331 (2006).

(13.) 28 U.S.C. [section] 1332(a) (2006).

(14.) 28 U.S.C. [section] 1441 (a) (2006).

(15.) See Lindsey v. Dillard's, Inc., 306 F.3d 596, 600 (8th Cir. 2002).

(16.) See 28 U.S.C. [section] 1447(c) (2006).

(17.) Id.

(18.) Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941).

(19.) 28 U.S.C. [section] 1447(d) (1996); Whittley v. Burlington N. & Santa Fe R. Co., 395 F.3d 829, 830 (8th Cir. 2005).

(20.) Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996).

(21.) Palmquist v. Conseco Med. Ins. Co., 128 F. Supp. 2d 618, 620 (D.S.D. 2000). See also 28 U.S.C. [section] 1441 (b) (2006); Hurt v. Dow Chem. Co., 963 F.2d 1142, 1145 (8th Cir. 1992).

(22.) 28 U.S.C. [section] 1332(a) (2006).

(23.) 28 U.S.C. [section] 1441 (b) (2006).

(24.) Hurt, 963 F.2d at 1145 (citing Cont'l Cablevision v. U.S. Postal Serv., 945 F.2d 1434, 1435 (8th Cir. 1991)).

(25.) See Filla v. Norfolk Southern Ry. Co., 336 F.3d 806, 809 (8th Cir. 2003).

(26.) Id.

(27.) Palmquist v. Conseco Med. Ins. Co., 128 F. Supp. 2d 618, 621 (D.S.D. 2000) (citing Fed. Beef Processors, Inc. v. CBS Inc., 851 F. Supp. 1430, 1435 (D.S.D. 1994)).

(28.) Filla, 336 F.3d at 809 n.9 (quoting 16 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE [paragraph] 107.14[2] [c][iv][A] (3d ed. 2000)).

(29.) See Asbury, supra note 8, at 927-35.

(30.) 336 F.3d 806 (8th Cir. 2003).

(31.) Id. at 810.

(32.) See id. at 811.

(33.) Id. at 810.

(34.) Id.

(35.) Wiles v. Capitol Indem. Corp., 280 F.3d 868, 871 (8th Cir. 2002) (citing Anderson v. Home Ins. Co., 724 F.2d 82, 84 (8th Cir. 1983)).

(36.) Filla, 336 F.3d at 810.

(37.) Anderson, 724 F.2d at 84. See also Great N. Ry. Co. v. Alexander, 246 U.S. 276, 281 (1918).

(38.) Palmquist v. Conseco Med. Ins. Co., 128 F. Supp. 2d 618, 621 (D.S.D. 2000) (quoting Farm Bureau Mut. Ins. Co., Inc. v. Eighmy, 849 F. Supp. 40,42 (D. Kan. 1994)).

(39.) Green v. Ameritrade, Inc., 279 F.3d 590, 596 (8th Cir. 2002).

(40.) See 28 U.S.C. [section] 1447(c) (2006); Filla, 336 F.3d at 809.

(41.) Filla, 336 F.3d at 811 (quoting Iowa Pub. Serv. Co. v. Med. Bow Coal Co., 556 F.2d 400, 406 (8th Cir. 1977)).

(42.) Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1360 (11th Cir. 1996), abrogated by Cohen v. Office Depot, Inc., 204 F.3 d 1069, 1072-73 (11th Cir. 2000).

(43.) See id. (quoting Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921)).

(44.) 14B CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE [section] 3723, 658 (2007 update).

(45.) Tapscott, 77 F.3d at 1360.

(46.) Id. at 1355.

(47.) Id.

(48.) Id.

(49.) Id.

(50.) Id. at 1360.

(51.) Id.

(52.) Id.

(53.) In Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1288-91 (11th Cir. 1998), the Eleventh Circuit subsequently refused to find fraudulent misjoinder as a basis for removal in a putative class action against a finance corporation and an automobile dealership, even though ninety-eight percent of the plaintiff class would not have a claim against the dealership. Id. at 1288. The plaintiff alleged that the financial corporation and the dealership both "defrauded him by misrepresenting and suppressing material facts with regard to automobile lease transactions." Id. at 1287. Because the claims arose out of the same transaction, occurrence, or series of transactions or occurrences and gave rise to common questions of law and fact, there was no fraudulent misjoinder. Id. at 1287-88.

(54.) See In re Benjamin Moore & Co., 318 F.3d 626, 630-31 (5th Cir. 2002).

(55.) 318 F.3d 626 (5th Cir. 2002).

(56.) See id. at 630-31. Except in civil rights cases, "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise. . . ." 28 U.S.C. [section] 1447(d) (2006). This likely explains, at least in part, why so few cases involving potential application of the fraudulent misjoinder doctrine have ascended to the courts of appeal. See Bowling v. Kerry, Inc., 406 F. Supp. 2d 1057, 1061 (E.D. Mo. 2005).

(57.) In re Benjamin Moore, 318 F.3d at 630-31.

(58.) Smallwood v. Ill. Cent. R. Co., 385 F.3d 568, 573 (5th Cit. 2004) (en banc) (quoting Travis v. Irby, 326 F.3d 644, 646-47 (5th Cit. 2003)).

(59.) Richmond v. Chubb Group of Ins. Cos., No. CIV.A.06-3973, 2006 WL 2710566, at *6 (E.D. La. Sept. 20, 2006); Schwartz v. Chubb & Sons, Inc., No. CIVA2:05CV6885SAFJK, 2006 WL 980673, at *4-5 (E.D. La. Apr. 11, 2006) (both finding that the Tapscott fraudulent misjoinder doctrine may not be recognized in the Fifth Circuit in light of Smallwood). The only other federal appellate decision discussing fraudulent misjoinder that the author could locate is an unreported case. In Cal. Dump Truck Owners Ass'n v. Cummins Engine Co., Inc., the Ninth Circuit assumed, without deciding, that the circuit would adopt the Tapscott fraudulent misjoinder doctrine and proceeded to apply it, but held that the joinder of the plaintiffs in that case "was not so improper as to be considered egregious[.]" No. CV-9911422-JSL, 2001 WL 1563913, at *1 (9th Cir. Dec. 5, 2001).

(60.) See, e.g., In re Diet Drugs Prods. Liab. Litig., 294 F. Supp. 2d 667, 673-78 (E.D. Pa. 2003) (following Tapscott and finding egregious and fraudulent misjoinder of plaintiffs); In re Silica Prods. Liab. Litig., 398 F. Supp. 2d 563, 648-54 (S.D. Tex. 2005) (finding "egregious" misjoinder of plaintiffs, but remanding because all plaintiffs asserted claims against a nondiverse defendant); Brazina v. Paul Revere Ins. Co., 271 F. Supp. 2d 1163, 1172 (N.D. Cal. 2003) (holding that if the court were to apply Tapscott, it would not find "egregious misjoinder" where plaintiffs claims had "enough of a connection"); In re Bridgestone/Firestone, Inc., 260 F. Supp. 2d 722, 727-31 (S.D. Ind. 2003) (defining fraudulent misjoinder as joining of claims without sufficient factual nexus to satisfy the permissive joinder standard, and finding no fraudulent misjoinder); In re Baycol Prods. Liab. Litig., No. 03-2931, 2003 WL 22341303, at *3-4 (D. Minn. 2003) (adopting doctrine, finding fraudulent misjoinder, and severing and remanding the claim of only plaintiff who asserted claim against non-diverse defendant).

(61.) See, e.g., Bird v. Carteret Mortgage Corp., No. 2:06-CV-0588, 2007 WL 43551, at *5 (S.D. Ohio Jan. 5, 2007) (rejecting doctrine as inconsistent with congressional intent in amending 28 U.S.C. [section] 1441(c) to narrow diversity jurisdiction); Rutherford v. Merck & Co., 428 F. Supp. 2d 842, 851 (S.D. 111. 2006) (rejecting doctrine because nothing in Supreme Court jurisprudence "suggests that the joinder of non-fraudulent claims is a question that implicates the subject matter jurisdiction of a federal court" and because of policy favoring "simple, easy-to-apply jurisdictional rules"); Hardaway v. Merck & Co., Inc., Civ. No. 06-465-GPM, 2006 WL 2349965, at *3 (S.D. 111. Aug. 11, 2006) (explaining that "the Court has held in a number of previous orders that it does not recognize the doctrine of fraudulent misjoinder to defeat diversity"); A. Kraus & Son v. Benjamin Moore & Co., No. CV 05-5487(ARR)(VVP), 2006 WL 1582193, at *5 (E.D. N.Y. June 7, 2006) (explaining that "in the absence of any clear direction from the Supreme Court or Congress, this court is reluctant to extend the jurisdictional confines of the federal courts by wading into the uncharted waters of fraudulent-egregious misjoinder"); Bavone v. Eli Lilly & Co., Civ. No. 06-153-GPM, 2006 WL 1096280, at *4 (S.D. Ill. Apr. 25, 2006) (holding that the fraudulent misjoinder doctrine amounted to "improper expansion of the scope of federal diversity jurisdiction by the federal courts"); Osborn v. Metro Life Ins. Co., 341 F. Supp. 2d 1123, 1127 (E.D. Cal. 2004) (rejecting doctrine because it would introduce procedural complexity and because of "uncertainty as to how such a theory should be applied").

(62.) See Bryan v. Lexington Ins. Co., No. CA 06-0225-C, 2006 WL 2052524, at *8 n.8 (July 20, 2006) (explaining that "If he Eleventh Circuit's failure in Tapscott to define 'egregious misjoinder' as opposed to mere 'misjoinder' has left courts in its wake either struggling to define the term, or rejecting the theory of misjoinder as an inappropriate jurisdictional inquiry" (internal citations omitted)).

(63.) See Bowling v. Kerry, Inc., 406 F. Supp. 2d 1057, 1061 (E.D. Mo. 2005); Culhane Commc'ns v. Fuller, 489 F. Supp. 2d 959, 961 n.2 (D.S.D. 2007). Cf Wells' Dairy, Inc. v. Am. Indus. Refrigeration, Inc., 157 F. Supp. 2d 1018, 1036 n.4 (N.D. Iowa 2001). The Tapscott decision has appeared in passing in one Eighth Circuit decision, but in relation to a proposition unrelated to procedural misjoinder. See Crawford v. F. Hoffman-La Roche Ltd., 267 F.3d 760, 766 (8th Cir. 2001).

(64.) 406 F. Supp. 2d 1057 (E.D. Mo. 2005).

(65.) See id.

(66.) See id. at 1058.

(67.) See id.

(68.) See id. at 1058-59.

(69.) See id.

(70.) See id. at 1059.

(71.) See id.

(72.) Id. at 1060.

(73.) Id. at 1061 (citing WRIGHT, MILLER & COOPER, supra note 44, at 656-58).

(74.) Id.

(75.) See id. (explaining that "[f]or purposes of this decision, I will assume that there are some situations where misjoinder would be so egregious that it should not defeat removal jurisdiction. I need not determine how to define that egregiousness, however, because I conclude that the claims here were not misjoined at all").

(76.) Id. at 1064.

(77.) 489 F. Supp. 2d 959, 960 (D.S.D. 2007).

(78.) See id.

(79.) Id. at 959-60.

(80.) See id. at 960.

(81.) Id.

(82.) Id. at 961-62.

(83.) Id. at 961 n.2.

(84.) Id.

(85.) See id. at 963.

(86.) 28 U.S.C. [section] 1447(d) (2006). There is at least one unpublished decision from a district court located within the Eighth Circuit that has applied the doctrine of procedural misjoinder. In the District of Minnesota, a district court held that a plaintiffs claims had been fraudulently misjoined with the claims of other plaintiffs alleging damages resulting from the ingestion of a particular medication. See In re Baycol Prods. Liab. Litig., No. 03-2931, 2003 WL 22341303, at *2-4 (D. Minn. 2003) (explaining that "[t]he doctrine of fraudulent misjoinder has not yet been addressed by the Eighth Circuit Court of Appeals") (citing In re Rezulin Prods. Liab. Litig., 168 F. Supp. 2d 136, 147-48 (S.D. N.Y. 2001)). The court denied the plaintiffs' motion to remand on the basis of procedural misjoinder and retained jurisdiction over the action. Id. at *4.

(87.) See Percy, supra note 8, at 588-90; Hines & Gensler, supra note 8, at 803-21.

(88.) The only exception is the provision of 28 U.S.C. [section] 1441(a) that permits the citizenship of defendants sued under fictitious names, such as John Doe, to be disregarded. The traditional fraudulent joinder doctrine is a judicially created, well-established exception to the removal statutes. See Wecker v. Nat'l Enameling & Stamping Co., 204 U.S. 176, 185-86 (1907).

(89.) Bird v. Carteret Mortgage Corp., No. 2:06-CV-0588, 2007 WL 43551, at *4 (S.D. Ohio Jan. 5, 2007).

(90.) Id. at *3.

(91.) Id.

(92.) Judicial Improvements Act of 1990, Pub. L. No. 101-650, [section] 312, 104 Stat. 5089, 5114 (1990) (codified as amended at 28 U.S.C. [section] 1441(c) (2000)).

(93.) H.R. REP. No. 101-734, at 23 (1990), reprinted in 1990 U.S.C.C.A.N. 6860,6868-69.

(94.) Id. (emphasis added).

(95.) Bird, 2007 WL 43551, at *4.

(96.) Id.

(97.) Id.

(98.) See id. at *5 (explaining that "[f he Court does not believe that when Congress opted to take cases such as this one out of the purview of [section] 1441(c), it contemplated that a newly-created judicial doctrine would essentially restore such cases to the federal docket"); A. Kraus & Son v. Benjamin Moore & Co., No. CV 05-5487(ARR)(VVP), 2006 WL 1582193, at *5 (E.D. N.Y. June 7, 2006) (explaining that "[w]hat is clear, however, is that any finding of egregious misjoinder inevitably clashes with the well-recognized principle that federal courts are courts of limited jurisdiction"); Bavone v. Eli Lilly & Co., Civ. No. 06-153-GPM, 2006 WL 1096280, at *4 (S.D. 111. Apr. 25, 2006) (holding that "[i]n the Court's view, the fraudulent misjoinder doctrine is an improper expansion of the scope of federal diversity jurisdiction by the federal courts").

(99.) Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).

(100.) Id.

(101.) 963 F.2d 1142 (8th Cit. 1992).

(102.) Id. (citing Cont'l Cablevision v. U.S. Postal Serv., 945 F.2d 1434, 1435 (8th Cir. 1991)).

(103.) Kokkonen, 511 U.S. at 377. See also Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 32 (2002); Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108 (1941).

(104.) See Kokkonen, 511 U.S. at 377; Shamrock Oil, 313 U.S. at 108.

(105.) Rutherford v. Merck & Co., Inc., 428 F. Supp. 2d 842, 852 (S.D. 111. 2006).

(106.) See Chicago, R.I. & P.R. Co. v. Stude, 346 U.S. 574, 580 (1954); Shamrock Oil, 313 U.S. at 104.

(107.) Rutherford, 428 F. Supp. 2d at 851.

(108.) 313 U.S. 100 (1941).

(109.) Id. at 104 (internal citations omitted).

(110.) See Rutherford, 428 F. Supp. 2d at 851.

(111.) Id. at 854.

(112.) Id. at 852 (collecting cases).

(113.) Id. at 853-54 (explaining that "[t]he Court's review of the caselaw regarding the fraudulent misjoinder doctrine that has emerged in the ten years since Tapscott was decided discloses enormous judicial confusion engendered by the doctrine"); Walton v. Tower Loan of Miss., 338 F. Supp. 2d 691, 695 (N.D. Miss. 2004) (observing that "the governing legal standards regarding the fraudulent misjoinder doctrine are far from clear"); Bright v. No Cuts, Inc., No. Civ.A.03-640, 2003 WL 22434232, at *4 n.21 (E.D. La. Oct. 27, 2003) (explaining that "[w]hile the Tapscott [c]ourt was clear that 'mere misjoinder' is not equivalent to fraudulent misjoinder, this aspect of the Tapscott holding has engendered confusion among courts and commentators alike").

(114.) See, e.g., Burns v. W. S. Life Ins. Co., 298 F. Supp. 2d 401, 403 (S.D. W. Va. 2004); In re Rezulin Prods. Liab. Litig., 168 F. Supp. 2d 136, 147-48 (S.D. N.Y. 2001) (applying "mere" misjoinder standard to misjoinder of plaintiffs only).

(115.) See Filla v. Norfolk S. Ry. Co., 336 F.3d 806, 811 (8th Cir. 2003) (holding that where sufficiency of the complaint against the nondiverse defendant is questionable, "the better practice is for the federal court not to decide the doubtful question in connection with a motion to remand but simply to remand the case and leave the question for the state courts to decide" (quoting Iowa Pub. Serv. Co. v. Med. Bow Coal Co., 556 F.2d 400, 406 (8th Cir. 1977))).

(116.) H.R. REP. No. 101-734, at 23 (1990), reprinted in 1990 U.S.C.C.A.N. 6860, 6868-69.

(117.) See Osborn v. Metro Life Ins. Co., 341 F. Supp. 2d 1123, 1127 (E.D. Cal. 2004).

(118.) 28 U.S.C. [section] 1446(b) (2006); Brown v. Tokio Marine and Fire Ins. Co., 284 F.3d 871, 873 (8th Cir. 2002). See also Asbury, supra note 8, at 918-20.

(119.) 28 U.S.C. [section] 1446(b) (2006); Dahl v. R.J. Reynolds Tobacco Co., 478 F.3d 965, 968 (8th Cir. 2007) (explaining that Congress has created exception to the 30-day time limit for situations in which the case was not removable as originally filed providing that the time limit begins to run upon receipt of the order or other pleading from which it may be first ascertained that the case is one that has become removable).

(120.) See Osborn, 341 F. Supp. 2d at 1127 n.10 (citing WRIGHT, MILLER & COOPER, supra note 44, at 656); Bowling v. Kerry, Inc., 406 F. Supp. 2d 1057, 1060-61 (E.D. Mo. 2005) (citing WRIGHT, MILLER & COOPER, supra note 44, at 656-58). In protest to this asserted justification for rejecting the doctrine of procedural misjoinder, Professor Percy has observed that "removal of a case after the state court has severed the misjoined claims arguably violates the 'voluntary/involuntary' rule which provides that a case unremovable upon filing only becomes removable if the plaintiff voluntarily creates complete diversity." Percy, supra note 8, at 589. Professor Hines and Professor Gensler have identified the same concern. See Hines & Gensler, supra note 8, at 811. However, the stated purpose of this equitable rule, which has not been codified and appears to conflict with the plain language of section 1446(b), does not appear to be served by preventing a misjoined defendant from removing an action to federal court once its case has been appropriately severed from an unrelated claim. See Great N. Ry. Co. v. Alexander, 246 U.S. 276, 282 (1918) (discussing purpose of rule as preserving a plaintiffs ability to choose its forum).

(121.) 28 U.S.C. [section] 1446(b) (2006); Osborn, 341 F. Supp. 2d at 1127 n.10 (citing WRIGHT, MILLER & COOPER, supra note 44, at 656). See also Asbury, supra note 8, at 921-24.

(122.) See 28 U.S.C. [section] 1446(b) (2006).

(123.) As noted by Professor Hines and Professor Gensler, "[s]ome courts have recently held that the one-year limit will not be enforced in certain equitable circumstances." Hines & Gensler, supra note 8, at 811 n.173 (citing Tedford v. Warner-Lambert Co., 327 F.3d 423, 426-28 (5th Cit. 2003)).

(124.) See Booth v. La. Citizens Coastal Plan, No. 2:06 CV 2149, 2007 WL 933665, at *3 (W.D. La. Feb. 16, 2007).

(125.) 341 F. Supp. 2d at 1127. See also Bowling, 406 F. Supp. 2d at 1061 (explaining that "[f]ederal courts, of course, could easily avoid this confusing standard if a removing party challenged misjoinder in state court before seeking removal").

(126.) WRIGHT, MILLER & COOPER, supra note 44, at 658.

(127.) Bird v. Carteret Mortgage Corp., No. 2:06-CV-0588, 2007 WL 43551, at *6 (S.D. Ohio Jan. 5, 2007).

(128.) H.R. REP. No. 101-734, at 23 (1990), reprinted in 1990 U.S.C.C.A.N. 6860,6868-69.

(129.) See Percy, supra note 8, at 588-90; Hines & Gensler, supra note 8, at 804-21.

(130.) See Hines & Gensler, supra note 8, at 803-08. Hines and Gensler further indicated,
   As set forth above, the current removal statute contains no
   exception for incomplete diversity cases; indeed, Congress has
   repealed similar mechanisms on several occasions. Taking as a given
   that federal courts cannot persist in practices that Congress has
   discarded, we attempt to reconcile the development of a limited
   procedural misjoinder doctrine with both the current text of the
   removal statute and with history.


Id. at 803.

(131.) See, e.g., Class Action Fairness Act of 2005, Pub. L. No. 109-2, 119 Stat. 4 (codified at 28 U.S.C. [section] 1332(d) (2006)).

(132.) Hines & Gensler, supra note 8, at 803.

(133.) 28 U.S.C. [section] 1447(d) (2006); Whittley v. Burlington N. & Santa Fe R. Co., 395 F.3d 829, 830 (8th Cir. 2005).

(134.) See, e.g., Culhane Commc'ns v. Fuller, 489 F. Supp. 2d 959, 961 (D.S.D. 2007); Bowling v. Kerry, Inc., 406 F. Supp. 2d 1057, 1061 (E.D. Mo. 2005).

(135.) See 28 U.S.C. [section] 1291 (2006). Because it is not a final order under this statute, such an order is not eligible for certification by the district court for entry of judgment as to fewer than all claims or parties pursuant to Federal Rule of Civil Procedure 54(b).

(136.) See In re Benjamin Moore & Co., 318 F.3d 626,630-31 (5th Cir. 2002); Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1360 (11th Cir. 1996), abrogated by Cohen v. Office Depot, Inc., 204 F.3d 1069, 1072-73 (11th Cir. 2000). In an unreported decision, a panel of the Ninth Circuit assumed, without deciding, that the court would accept the procedural misjoinder doctrine. See Cal. Dump Truck Owners Ass'n v. Cummins Engine Co., Inc., No. CV-99-11422-JSL, 2001 WL 1563913, at *1 (9th Cir. Dec. 5, 2001).

(137.) 28 U.S.C. [section] 1292(b) (2006).

(138.) Id.

(139.) A party considering this route should keep in mind that an application to appeal from an interlocutory order "shall not stay proceedings in the district court unless the district judge or the Court of Appeals or a judge thereof shall so order." 28 U.S.C. [section] 1292(b) (2006).

(140.) 77 F.3d at 1356 n.4.

(141.) 164 F.3d 1102 (8th Cit. 1999).

(142.) Id. at 1105-06. See Johnston v. Cartwright, 344 F.2d 773, 774 (8th Cit. 1965).

(143.) 478 F.3d 957 (8th Cit. 2007).

(144.) Id. at 958.

(145.) Id.

(146.) Id. at 962.

(147.) Id.

(148.) Id.

(149.) Id.

(150.) Professor Percy has noted that confusion abounds regarding whether a district court holding that state law claims have been procedurally misjoined should dismiss the severed claim against the nondiverse defendant without prejudice or remand it to the state court. See Percy, supra note 8, at 61621. The soon-to-be celebrated Coeur D'Alene-Wilkinson maneuver may not be available where the misjoined claim against a nondiverse defendant has not been dismissed from the action, but rather remanded to state court, as Professor Percy concludes is the more appropriate course. Id.

RONALD A. PARSONS, JR., J.D., University of South Dakota School of Law, 1997; B.A., University of Minnesota, 1994; Law Clerk, Honorable Roger L. Wollman, Circuit Judge, United States Court of Appeals for the Eighth Circuit, 1997-98; Partner, Johnson, Heidepriem, Janklow, Abdallah & Johnson, Sioux Falls, S.D. By way of full disclosure, the author was retained as counsel for the plaintiffs in Culhane Communications v. Fuller, 489 F. Supp. 2d 959 (D.S.D. 2007), after the case was removed by the defendants to federal court.
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Author:Parsons, Ronald A., Jr.
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Date:Mar 22, 2008
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