Barnes v. Southwestern Bell Telephone Co.

• Decision Date: 06 November 1984
• Docket Number: Civ. No. 84-5153.
• Citation: 596 F. Supp. 1046
• Parties: Howard BARNES, Plaintiff, v. SOUTHWESTERN BELL TELEPHONE COMPANY and Linda Merten, Defendants.
• Court: U.S. District Court — Western District of Arkansas

596 F. Supp. 1046

Howard BARNES, Plaintiff, v. SOUTHWESTERN BELL TELEPHONE COMPANY and Linda Merten, Defendants.

Civ. No. 84-5153.

United States District Court, W.D. Arkansas, Fayetteville Division.

November 6, 1984.

C. Thomas Pearson, Jr., Pearson, Woodruff & Evans, Fayetteville, Ark., for plaintiff.

Patricia J. Nobles, D.D. Dupre, Timothy D. Brewer and Ronald D. Young, Little Rock, Ark., for defendants.

MEMORANDUM OPINION

H. FRANKLIN WATERS, Chief Judge.

On March 13, 1984, plaintiff filed suit against defendant, Southwestern Bell Telephone Company, in the Circuit Court of Washington County, Arkansas. In that lawsuit, plaintiff attempted to state a cause of action against Southwestern Bell Telephone Company only. Linda Merten, an additional defendant in this suit, was not a party in the first one.

In the initial complaint filed in state court, plaintiff alleges that he was engaged in the business of livestock transportation from his place of business in Fayetteville, Arkansas, to which the defendant telephone company provided telephone service. He claims that when he moved his business to a new address in Fayetteville, he contracted with an employee and agent of the defendant telephone company to have the removal and reinstallation at the new address made at a specified rate. He alleges that after the telephone equipment and service was disconnected from the old address and moved to the new one, the company billed him in an amount over three times the amount agreed to and, when he refused to pay the bill, his telephone service was discontinued without notice to him, at a time when he was out of town on other business, resulting in damages in the total amount of $11,516.36. He also prayed for punitive damages in the amount of $10,000.00.

The telephone company then removed the case to this court (Civil No. 84-5046), and subsequently filed a motion for partial summary judgment alleging that there was no genuine issue as to any material fact in relation to the claim for the cost of the service, since the amount that is to be charged for such service is controlled by tariffs approved by the Arkansas Public Service Commission and the Federal Communication Commission. Motion for partial summary judgment was filed on September 4, 1984, and on September 7, 1984, the plaintiff moved to dismiss his cause of action, without prejudice, and alleged that it was necessary for him to do so in order to add an additional necessary party. He claimed that the additional party could not be made a party defendant under the provisions of Rule 19 of the Federal Rules of Civil Procedure for the reason that joinder of such person would deprive the court of jurisdiction over the subject matter of the action. Defendant telephone company objected on the basis that dismissal should not be granted in view of the pendency of the motion for partial summary judgment. Defendant did not request, as an alternative, that any conditions be imposed in the event that the motion to dismiss was granted. The court, by order dated September 14, 1984, granted the motion and the case was dismissed without prejudice.

No appeal was taken from that order, and the time to do so has lapsed.

On September 20, 1984, the plaintiff filed a new lawsuit in the Circuit Court of Washington County, Arkansas. The substantive allegations of the complaint in respect to the claimed discontinuance of service are almost identical to the allegations contained in the initial complaint. However, in addition to Southwestern Bell Telephone Company, the defendant named Linda Merten, a resident of Fayetteville, as an additional defendant, and alleged that Ms. Merten was the agent of the telephone company with which he dealt and through which he made the "contract" to have his service disconnected and reinstalled at the new location at the rate that he and Ms. Merten agreed to. He claims that Ms. Merten is made a party to the lawsuit because the defendant telephone company contends that the contract made by her was without authority and was contrary to the laws of the state of Arkansas. He prays for judgment against the defendants jointly and severally, in amounts identical to the amounts claimed in the earlier lawsuit.

The defendants then removed the matter to this court alleging that Ms. Merten was fraudulently joined in order to defeat federal jurisdiction. Contemporaneously with the filing of the petition for removal, the defendants filed a motion for partial summary judgment which is substantially identical to the one filed in the earlier lawsuit. Plaintiff then moved to remand the matter to state court, the defendants responded, and the court is now prepared to rule.

It is appropriate to first discuss the principles applicable to removal jurisdiction in general, and those which apply where a fraudulent joinder to defeat jurisdiction is alleged. In determining whether a case should be remanded, a great number of cases hold that if federal jurisdiction is doubtful, such doubts should be resolved in favor of state court jurisdiction and the case remanded. See numerous cases cited in 14 Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction § 3739 n. 23. As is pointed out in that treatise, at p. 762, that rule rests on both the expediency and unfairness of exposing the plaintiff to the possibility that he will win a final judgment in federal court, only to have it determined on appeal that the court lacks subject matter jurisdiction. In this respect, the law clearly is that action by a federal court which lacks subject matter jurisdiction is a nullity and that either party, even the party that invoked the jurisdiction of the court, can attack the jurisdiction at any time even after judgment is rendered against him. Amer. Fire & Cas. Co. v. Finn, 341 U.S. 6, 71 S.Ct. 534, 95 L.Ed. 702 (1951). In short, what this case and other cases say is that if this court does not have subject matter jurisdiction of the cause of action, either party, including the telephone company which earnestly argues now that the court has jurisdiction, may, on appeal, attack any judgment rendered on the grounds that the court did not, in fact, have subject matter jurisdiction.

The right of removal from a state court to a federal court exists only in certain enumerated classes of actions, and in order to exercise the right of removal, it is essential that the case be shown to be one within one of those classes. Ches. & Ohio Ry. v. Cockrell, 232 U.S. 146, 34 S.Ct. 278, 58 L.Ed. 544 (1914). The burden of showing that removal was proper is always upon the party removing. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 42 S.Ct. 35, 66 L.Ed. 144 (1921). The removal statutes will be strictly construed in favor of state court jurisdiction. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941).

The principle that doubt should be resolved in favor of state court jurisdiction rather than federal jurisdiction enunciated by the cases cited above is also expressed in the cases considering whether a party has been fraudulently joined to defeat federal court jurisdiction. The cases hold that, in determining whether a joinder is fraudulent, the court is to consider whether there is a possibility that the plaintiff has stated a cause of action against the party who is allegedly fraudulently joined, and if it is determined that there is such a possibility, the case is to be remanded. Fitzgerald v. Perkins Oil Co. of Delaware, 89 F.2d 98 (8th Cir.1937); Wells v. Missouri Pacific Ry. Co., 87 F.2d 579 (8th Cir.1937). The Court of Appeals for the Eighth Circuit stated in Bolstad v. Central Surety & Ins. Corp., 168 F.2d 927 (8th Cir.1948), that the test is: "On the question of removal, it is unnecessary to consider more than whether there was a real intention to get a joint judgment, and whether there was a colorable ground for it shown." Citing Chicago, R.I. & Pac. Ry. Co. v. Schwyhart, 227 U.S. 184, 33 S.Ct. 250, 57 L.Ed. 473, and Pullman Co. v....