Hutchen v. Wal-Mart Stores East I, Lp, 1:08-CV-27 CAS.
| Decision Date | 10 April 2008 |
| Docket Number | No. 1:08-CV-27 CAS.,1:08-CV-27 CAS. |
| Citation | 555 F.Supp.2d 1013 |
| Parties | William B. HUTCHEN, Plaintiff, v. WAL-MART STORES EAST I, LP and Debbie Juden, Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
J. Michael Ponder, Cook and Barkett, Cape Girardeau, MO, for Plaintiff.
James E. Whaley, John D. Kershman, Brown and James, P.C., St. Louis, MO, for Defendants.
This removed matter is before the Court on plaintiff William B. Hutchen's motion to remand the case to state court. Defendants Wal-Mart Stores East I, LP and Debbie Juden (collectively referred to as "defendants") oppose the motion and plaintiff has filed a reply. Plaintiff asserts that this Court lacks diversity jurisdiction because he has asserted a colorable claim against defendant Juden, a Missouri resident. Defendants assert that Juden was fraudulently joined in this action and therefore her citizenship should be disregarded, with the result that complete diversity of citizenship exists. For the following reasons, the Court will grant plaintiffs motion to remand.
Background.
Plaintiff filed this action in the Circuit Court of Stoddard County, Missouri, asserting that he sustained personal injuries from E. coli poisoning and HUS1 in September 2006 after he purchased and consumed fresh spinach from the WalMart store in Dexter, Missouri. The petition contains only one count, but appears to assert claims of products liability, breach of warranty and negligence against the defendants. The defendants are Wal-Mart Stores East!, LP ("Wal-Mart") and Debbie Juden, manager of the Dexter Wal-Mart store.
On February 27, 2008, defendants removed the action to this Court pursuant to 28 U.S.C. § 1441, asserting diversity jurisdiction under 28 U.S.C. § 1332. The following facts gleaned from the petition and the Notice of Removal are relevant to diversity jurisdiction. Plaintiff and defendant Juden are citizens of Missouri. Wal-Mart is a foreign limited partnership comprised of the following two partners: WSE Management, LLC, general partner, and WSE Investment, LLC, limited partner. WSE Management, LLC and WSE Investment, LLC are foreign limited liability companies. The sole member of WSE Management, LLC and WSE Investment, LLC at all relevant times was Wal-Mart Stores East, Inc., an Arkansas corporation with its principal place of business in the State of Arkansas. Wal-Mart is therefore a citizen of Arkansas.
Discussion.
This Court must "be attentive to a satisfaction of jurisdictional requirements in all cases." Sanders v. Clemco Indus., 823 F.2d 214, 216 (8th Cir.1987). The party invoking jurisdiction bears the burden of proof that all prerequisites to jurisdiction are satisfied. Hatridge v. Aetna Cas. & Sur. Co., 415 F.2d 809, 814 (8th Cir.1969). Removal statutes are strictly construed, and any doubts about the propriety of removal are resolved in favor of state court jurisdiction and remand. Wilkinson v. Shackelford, 478 F.3d 957, 963 (8th Cir.2007) (quoting Transit Cas. Co. v. Certain Underwriters at Lloyd's of London, 119 F.3d 619, 625 (8th Cir.1997), cert. denied, 522 U.S. 1075, 118 S.Ct. 852, 139 L.Ed.2d 753 (1998)).
A civil action brought in a state court may be removed to the proper district court where the district courts have original jurisdiction of the action. 28 U.S.C. § 1441(a). Federal district courts have original jurisdiction in all civil actions between citizens of different states if the amount in controversy exceeds $75,000.00, exclusive of interest and costs. 28 U.S.C. § 1332(a)(1). Such an action is removable "only 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." 28 U.S.C. § 1441(b). In this case, plaintiff asserts that this action is not removable because Juden is a citizen of Missouri. Defendants counter that Juden's joinder is fraudulent and therefore her citizenship is not a bar to removal.
Removal will not be defeated by collusive or fraudulent joinder of a resident defendant. See Anderson v. Home Ins. Co., 724 F.2d 82, 84 (8th Cir.1983). When a party seeking removal alleges fraudulent joinder, the removing party bears the bears the burden of proving the alleged fraud. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 66 L.Ed. 144 (1921). "[I]t is well established that if it is clear under governing state law that the complaint does not state a cause of action against the nondiverse defendant, the joinder is fraudulent and federal jurisdiction of the case should be retained." Iowa Public Service Co. v. Medicine Bow Coal Co., 556 F.2d 400, 406 n. 6 (8th Cir. 1977.) "However, 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." Filla v. Norfolk Southern Ry. Co., 336 F.3d 806, 810 (8th Cir.2003). Filla, 336 F.3d at 810.2 "[I]f the nondiverse plaintiff is a real party in interest, the fact that his joinder was motivated by a desire to defeat federal jurisdiction is not material." Iowa Public Service Co., 556 F.2d at 404 (citations omitted).
"[A] proper review should give paramount consideration to the reasonableness of the basis underlying the state claim." Menz v. New Holland North America, Inc., 440 F.3d 1002, 1004 (8th Cir.2006) (quoting Filla, 336 F.3d at 810; internal quotation marks omitted). Thus, "the district court's task is limited to determining whether there is arguably a reasonable basis for predicting that the state law might impose liability based upon the facts involved." Filla, 336 F.3d at 811.3 "In making such a prediction, the district court should resolve all facts and ambiguities in the current controlling substantive law in the plaintiffs favor." Id. In deciding whether joinder is fraudulent, the court may not step from the threshold jurisdictional issue into a decision on the merits. Boyer v. Snap-On Tools Corp., 913 F.2d 108, 112 (3rd Cir.1990) (), cert. denied, 498 U.S. 1085, 111 S.Ct. 959, 112 L.Ed.2d 1046 (1991); see Filla, 336 F.3d at 811 ().
The issue in this case is whether there is a reasonable basis in state law to support a claim against defendant Juden under the facts alleged. See Menz, 440 F.3d at 1004. If it is clear under Missouri law that the complaint does not state a cause of action against Juden, then her joinder is fraudulent and federal jurisdiction of the case should be retained. See Iowa Public Service, 556 F.2d at 406. On the other hand, if there is "arguably a reasonable basis for predicting that the state law might impose liability based upon the facts involved," Filla, 336 F.3d at 811, then joinder is not fraudulent and diversity jurisdiction does not exist.
In the petition, plaintiff alleges that Juden was an agent and employee of defendant Wal-Mart and was acting within the scope and course of her employment. Petition, ¶ 4. Plaintiff alleges that the spinach he purchased from defendants was infected with E. coli bacteria, was unfit for human consumption, was in a defective condition and unreasonably dangerous, and was unmarketable and unfit for the purpose for which it was intended. Id., ¶¶ 10-11. Plaintiff alleges that the defendants were negligent in the following ways:
a. Defendants failed to have in place proper and appropriate processing procedure for the detection of contaminated food, and in particular contaminated Spinach though they knew or should have known of the risk of such contamination;
b. Defendants continued to market contaminated Spinach though they knew or should have known of the contamination of the product in other states and stores;
c. Defendants continued to market contaminated Spinach though they knew or should have known of a recall of the product in other states and stores;
d. Defendants failed to remove contaminated Spinach from the shelves in a timely fashion or warn of possible contamination;
e. Defendants sold contaminated Spinach to the Plaintiff.
The Court concludes that Missouri law might reasonably impose liability on Juden based upon the facts involved. Under Missouri law, employees may be held personally liable to a third party in certain instances. "First, when an employee has or assumes full and complete control of his employer's premises, his liability to the public or to invitees is the same as that of his employer." State ex rel. Kyger v. Koehr, 831 S.W.2d 953, 956 (Mo.App. E.D.1992) (citation omitted). "A second situation involves liability on the part of the employee who does not have complete control of the premises but may be liable for injury to third persons when he breaches some duty which he owes to such third person." Id. (citation omitted). In the second situation, "The test is whether [the employee] has breached his legal duty or been negligent with respect to something over which he did have control." Id. (citation omitted).
It is well established under Missouri law that a "seller of a product who neither knows nor has reason to know the product is dangerous is not liable in a negligence action for harm caused by the product's dangerous condition because of the seller's failure to discover the danger by an inspection or test of the product before selling it." Dorman v. Bridgestone/Firestone, Inc., 992 S.W.2d 231, 239 (Mo.Ct.App.1999) (). The defendants primarily rely on this principle in asserting that plaintiff cannot state a claim against Juden.
It is also well established under Missouri law, however, that a seller...
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