Bessinger v. Food Lion, Inc.

Decision Date20 November 2003
Docket NumberC/A Nos. 3:03-2828-17, 8:03-2874-17, 4:03-2807-17, 8:03-2810-17.
CourtU.S. District Court — District of South Carolina
PartiesMaurice BESSINGER and Piggie Park Enterprises, Inc., Plaintiffs, v. FOOD LION, INC. and Bobby Dalton, Defendants. Maurice Bessinger and Piggie Park Enterprises, Inc., Plaintiffs, v. Winn-Dixie, Inc. and Mike Graybeal, Defendants. Maurice Bessinger and Piggie Park Enterprises, Inc., Plaintiffs, v. Sam's Club, Inc., Defendants. Maurice Bessinger and Piggie Park Enterprises, Inc., Plaintiffs, v. Wal-Mart Stores, Inc., Defendants.

Glen Winston La Force, Sr., Glen La Force Law Office, Hilton Head, SC, for plaintiffs.

Paul D. Harrill, Jonathan M. Milling, McNair Law Firm, Columbia, SC, Cheryl A. Falvey, Akin, Gump, Strauss, Hauer and Feld, McLean, VA, Donald A. Cockrill, Ogletree, Deakins, Nash, Smoak and Stewart, Greenville, SC, E. Raymond Moore III, Murphy and Grantland, Columbia, SC, for defendants.

ORDER

JOSEPH F. ANDERSON, JR., District Judge.

These four cases come before the court on (1) the motion by the plaintiffs to remand two of the cases removed to this court, and (2) the motion by the defendants in all four cases to dismiss the plaintiffs' claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. After reading the briefs and hearing from all of the parties at a proceeding conducted at the University of South Carolina School of Law on October 20, 2003, the court orally denied the plaintiffs' motions to remand and granted the defendants' motions to dismiss. The court now issues its written order setting forth the reasons for having so ruled.

FACTS

The plaintiffs, Maurice Bessinger ("Bessinger") and his South Carolina Corporation, Piggie Park Enterprises, Inc. ("Piggie Park"), has been described by some as South Carolina's version of the Horatio Alger story. Bessinger built his now-famous barbecue business from the ground up, relying on hard work and a good product. The first of what would become a chain of eleven barbecue restaurants opened in Charleston, South Carolina in 1953. Eventually, a large packaging and bottling plant was built to process barbecue sauce and meat for sale in stores. For many years, Bessinger sold his products to the defendants' stores: they, in turn, supplied South Carolinians and citizens of surrounding states with tasty mustard-based barbecue sauce. In September of the year 2000, the defendants discontinued selling the plaintiffs' products.

The plaintiffs allege the defendants discontinued the products in retaliation against Mr. Bessinger's exercise of his free speech rights. When the confederate flag was removed from the South Carolina state capitol in July 2000, Bessinger responded by flying the flag at each of his eleven barbecue restaurants.1 In August 2000, an article in The State newspaper highlighted Bessinger's controversial political and religious views, focusing chiefly upon his support for the confederate flag. The article was followed by a series of print, radio, and television news stories also focusing on Bessinger's support of the confederate flag. In September 2000, the defendants Winn-Dixie, Inc. ("Winn-Dixie"), Food Lion, Inc. ("Food Lion"), Sam's Club, Inc. ("Sam's Club"), and Wal-Mart Stores, Inc. ("Wal-Mart") discontinued selling the plaintiffs' products.

The plaintiffs' sole cause of action against all defendants is a state law claim for violations of the South Carolina Unfair Trade Practices Act, S.C.Code Ann. § 39-5-10, et seq. ("SCUTPA") (Cumm.Supp.2002). The first such SCUTPA complaint filed by the plaintiffs then removed to this court was captioned Maurice Bessinger and Piggie Park Enterprises, Inc. v. Harris Teeter, Inc. and Jeff Lewis, C/A No. 0:03-02728-17. In that case, the plaintiffs filed their complaint in the Sixteenth Judicial Circuit of York County, South Carolina on August 1, 2003. On August 20, 2003, the defendants removed the case to federal court based on diversity jurisdiction, 28 U.S.C. § 1332.2 The plaintiffs alleged in their complaint that the co-defendant, store manager Jeff Lewis ("Lewis"), was a citizen of South Carolina. However, attached to the notice of removal was an affidavit and a copy of Lewis's driver's license attesting to the fact that he was a citizen of North Carolina. On August 27, 2003, the plaintiffs filed a stipulation of voluntary dismissal and the case was closed. On August 28, 2003, the plaintiffs filed a new lawsuit against Harris Teeter in the Ninth Judicial Circuit of Charleston County, South Carolina. This time, the plaintiffs joined store manager and South Carolina resident Randy Rasmussen as a co-defendant. The action was removed to this court on October 3, 2003, but it is not before the court at this time. Maurice Bessinger and Piggie Park Enterprises, Inc. v. Harris Teeter, Inc. and Randy Rasmussen, C/A No. 2:03-3152-17.3

The four cases now before the court include: Maurice Bessinger and Piggie Park Enterprises, Inc. v. Food Lion, Inc. and store manager Bobby Dalton, C/A No. 3:03-2828-17; Maurice Bessinger and Piggie Park Enterprises, Inc. v. Winn-Dixie, Inc. and store manager Mike Graybeal, C/A No. 8:03-2874-17; Maurice Bessinger and Piggie Park Enterprises, Inc. v. Sam's Club, Inc., C/A No. 4:03-2807-17;4 Maurice Bessinger and Piggie Park Enterprises, Inc. v. Wal-Mart Stores, Inc., C/A No. 8:03-2810-17.5 The plaintiffs originally filed the lawsuits in state court, and the defendants removed them to federal court.6

The court will first resolve the jurisdictional questions of remand and fraudulent joinder before addressing the motions for dismissal.

DISCUSSION
I. Motions to Remand for Lack of Subject Matter Jurisdiction
A. Removal and Fraudulent Joinder

Removal is technically effective upon the defendants' filing of their notice of removal, 28 U.S.C. § 1446. However, when a state law claim is before the federal court solely on the basis of diversity pursuant to 28 U.S.C. § 1332, the defendants' ability to keep that cause of action in the federal forum is restricted. The "complete diversity" rule limits diversity jurisdiction to only those cases where no shared citizenship exists between the adverse parties. Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806). If a party not diverse to the plaintiff has been joined as a defendant prior to the removal, the complete diversity rule is not satisfied and the district court is typically deprived of subject matter jurisdiction to hear the case. Mayes v. Rapoport, 198 F.3d 457, 461 (4th Cir.1999). Without subject matter jurisdiction, the district court must remand the case to state court. 28 U.S.C. § 1447(c) ("If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.").

The judicially-created "fraudulent joinder doctrine" is an exception to the complete diversity rule that "effectively permits a district court to disregard, for jurisdictional purposes, the citizenship of certain nondiverse defendants at the time the case is removed." Id. at 461. In the Fourth Circuit, the removing party has a heavy burden of showing fraudulent joinder. All issues of law and fact must be resolved in the plaintiff's favor and the plaintiff will prevail even where "only the possibility of a right to relief" is asserted. Marshall v. Manville Sales Corp., 6 F.3d 229, 232-33 (4th Cir.1993). To be successful, the removing party must show "either that there is no possibility that the plaintiff would be able to establish a cause of action against the in-state defendant in state court; or that there has been outright fraud in the plaintiff's pleading of jurisdictional facts." Id. at 232 (quoting B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir.1981) (emphasis in original)). Once the defendants raise a colorable claim of fraudulent joinder, the court may look beyond the pleadings to determine whether the nondiverse party has indeed been fraudulently joined. Auto Ins. Agency, Inc. v. Interstate Agency, Inc., 525 F.Supp. 1104, 1106 (D.S.C.1981).

B. SCUTPA Claims Against Nondiverse Store Managers

Food Lion and Winn-Dixie contend the plaintiffs fraudulently joined nondiverse store managers Bobby Dalton and Mike Graybeal in their respective causes of action for the sole purpose of defeating federal subject matter jurisdiction. No defendant claims the plaintiffs committed outright fraud in pleading jurisdictional facts. Consequently, to prevail, Food Lion and Winn-Dixie must show that, under South Carolina law, the plaintiffs have no possibility of recovery against the store managers for alleged SCUTPA violations.7

Section 39-5-20(a) sets forth conduct that gives rise to liability under the SCUTPA:

Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.

S.C.Code Ann. § 39-5-20(a) (Cumm.Supp.2002). Section 39-5-140 of the SCUTPA provides a private right of action for actual damages arising from violations of Section 39-5-20:

Any person8 who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by another person of an unfair or deceptive method, act or practice declared unlawful by § 39-5-20 may bring an action individually, but not in a representative capacity, to recover actual damages....

S.C.Code Ann. § 39-5-140(a) (Cumm.Supp.2002).

To maintain a private cause of action under SCUTPA, a plaintiff must establish: (1) the defendant engaged in an unlawful trade practice; (2) the plaintiff suffered actual, ascertainable damages as a result of the defendant's use of the unlawful trade practice; and (3) the unlawful trade practice engaged in by the defendant had an adverse impact on the public interest. Havird Oil Co. v. Marathon Oil Co., 149 F.3d 283, 291 (4th Cir.1998) (citing S.C.Code Ann. § 39-5-140; Daisy Outdoor Advertising Co. v. Abbott, 322 S.C....

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