Jefferson County School v. Lead Industries Ass'n, CIV.A. 5:01-CV-211BN.

• Decision Date: 06 March 2002
• Docket Number: No. CIV.A. 5:01-CV-211BN.,CIV.A. 5:01-CV-211BN.
• Citation: 223 F.Supp.2d 771
• Parties: JEFFERSON COUNTY SCHOOL DISTRICT Plaintiff v. LEAD INDUSTRIES ASSOCIATION, INC., et al. Defendants
• Court: U.S. District Court — Southern District of Mississippi

223 F.Supp.2d 771

JEFFERSON COUNTY SCHOOL DISTRICT Plaintiff v. LEAD INDUSTRIES ASSOCIATION, INC., et al. Defendants

No. CIV.A. 5:01-CV-211BN.

United States District Court, S.D. Mississippi, Western Division.

March 6, 2002.

Order Denying Reconsideration May 17, 2002.

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Myron Lamar Arrington, Jr., Jeffrey A. Varas, Varas & Morgan, Hazlehurst, MS, George M. Fleming, Robert R. Herring, Anita F. Kawaja, Sylvia R. Davidow, Russell T. Abney, J. Ken Johnson, Fleming & Associates, Ralph D. McBride, Ronald Scott, Patricia G. Chapman, Bracewell & Patterson, Houston, TX, Robert K. Morgan, Varas & Morgan, Madison, WI, for Plaintiff.

Raymond L. Brown, Brown, Buchanan & Sessoms, PA, Pascagoula, MS, Patrick R. Buchanan, Brown, Buchanan & Sessoms, Biloxi, Reuben V. Anderson, Phelps Dunbar, Jackson, Philip H. Curtis, Bruce Robinson Kelly, Arnold & Porter, New York City, John H. Whitfield, Phelps Dunbar, LLP, Gulfport, MS, William H. King, Jr., Scott B. Murray, Steven R. Williams, J. Tracy Walker, IV, McGuire, Woods, Battle & Boothe, Richmond, VA, Terrence Kent Knister, Paul E. Harrison, Sarah E. Iiams, Deborah D. Kuchler, Amy L. Maccherone, Abbott, Simses, Knister & Kuchler, New Orleans, LA, William N. Reed, Baker, Donelson, Bearman & Caldwell, Jackson, MS, Lawrence E. Abbott, Abbott, Simses & Kuchler, Covington, LA, Darren Milton Guillot, Abbott, Simses & Kuchler, New Orleans, LA, James E. Upshaw, Finisse Ewin Henson, III, Upshaw, Williams, Biggers, Beckham & Riddick, Greenwood, MS, Mark C. Carroll, William H. Gillon, IV, Upshaw, Williams, Biggers, Beckham & Riddick, Jackson, Donald M. Lewis, Michael T. Nilan, Amanda Cialkowski, Halleland, Lewis, Nilan, Sipkins & Johnson, Minneapolis, MN, Michael D. Jones, Antony B. Klapper, Timothy S. Hardy, Kirkland & Ellis, Washington, DC, Donald E. Scott, Bartlit, Beck, Herman, Palenchar & Scott, Denver, CO, John G. Corlew, Virginia T. Munford, Katherine K. Smith, Watkins & Eager, Jackson, MS, Joseph Michael David, Jr., Jones, Day, Reavis & Pogue, Washington, DC, Charles H. Moellenberg, Jr., Paul Michael Pohl, Jones, Day, Reavis & Pogue, Pittsburgh, PA, Fred Krutz, III, Thomas W. Tardy, III, Roland M. Slover, Forman, Perry, Watkins, Krutz & Tardy, Jackson, MS, William N. Graham, Aultman, Tyner, Ruffin & Yarborough, Ltd, Hattiesburg, MS, Luke Dove, Dove & Chill, Jackson, MS, Thomas H. Cassel, III, Rimmer, Rawlings, Macinnis & Hedglin, P.A., Madison, MS, Stephen W. Rimmer, Watkins Ludlam Winter &amp Stennis, P.A., Jackson, MS, J. Tucker Mitchell, Copeland, Cook, Taylor & Bush, Ridgeland, MI, Lucien C. Gwin, III, Gwin, Lewis & Punches, Natchez, MS, J. Price Coleman, Bradley W. Smith, Baker, Donelson, Bearman & Caldwell, Jackson, MS, William Lee Guice, III, Rushing & Guice, Biloxi, MS, Spencer J. Flatgard, Baker, Donelson, Bearman & Caldwell, Jackson, MS, Lee Davis Thames, Jr., Varner, Parker & Sessums, Vicksburg, MS, Richard W. Mark, Daniel J. Thomasch, Carol E. Dixon, Orrick, Herrington & Sutcliffe, LLP, New York City, for Defendants.

OPINION AND ORDER

BARBOUR, District Judge.

This cause is before the Court on the Motions of Plaintiff to Remand and to Supplement Motion to Remand. Having considered the Motions, Responses, Rebuttal, Sur-rebuttal, attachments to each, and supporting and opposing authorities, the Court finds that the Motion of Plaintiff to Supplement is well taken and should be granted, but the Motion to Remand is not well taken and should be denied.

I. Background and Procedural History

The Jefferson County School District maintains a number of school buildings including elementary and middle schools that were built in 1956, a high school that was built in 1957 and expanded in 1990, and a vocational-technical school that was built in 1969. On April 6, 2000, Plaintiff Jefferson County School District filed suit in the Circuit Court of Jefferson County, Mississippi, alleging that Defendants produced, manufactured, distributed, marketed and sold lead-based paint and/or certain components of lead-based paint as fit for use as a paint on or in schools and other structures owned by Plaintiff and that Defendants knew that their products were not fit for such a use. Plaintiff asserted causes of action for, among other things, strict liability, restitution, negligence, fraudulent and negligent misrepresentation, conspiracy and public nuisance.

On July 5, 2001, Defendants American Cyanamid Co. (a Maine corporation with its principal place of business in New Jersey), E.I. DuPont De Nemours & Co. (a Delaware corporation with its principal place of business in Delaware), The Glidden Company (a Delaware corporation with its principal place of business in Ohio), SCM Chemicals (a Delaware corporation with its principal place of business in New York), NL Industries (a New Jersey corporation with its principal place of business in Texas), and Sherwin Williams Company (an Ohio corporation with its principal place of business in Ohio) (collectively "Manufacturer Defendants") removed the case on ground that 28 Mississippi defendants, including Feltus Brothers, a Mississippi corporation with its principal place of business in Natchez, Mississippi, and Claiborne Hardware, a Mississippi corporation with its principal place of business in Port Gibson, Mississippi, (collectively "Local Retailers") were fraudulently joined to defeat diversity jurisdiction.¹ Plaintiff filed the instant Motion to Remand on August 9, 2001.

II. Legal Standard

Under 28 U.S.C. § 1441(a), "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed ... to the district court of the United States for the district and division embracing the place where such action is pending." The removing party has the burden of proving that the federal court has jurisdiction to hear the case. See Jernigan v. Ashland Oil, Inc., 989 F.2d 812, 815 (5th Cir.1993), cert. denied, 510 U.S. 868, 114 S.Ct. 192, 126 L.Ed.2d 150 (1993); Laughlin v. Prudential Ins. Co., 882 F.2d 187, 190 (5th Cir.1989) (holding that the "removing party bears the burden of establishing federal jurisdiction."). In cases in which the removing party alleges diversity of citizenship jurisdiction on the basis of fraudulent joinder, "it has the burden of proving the fraud." Laughlin, 882 F.2d at 190; Carriere v. Sears, Roebuck & Co., 893 F.2d 98, 100 (5th Cir.1990), cert. denied 498 U.S. 817, 111 S.Ct. 60, 112 L.Ed.2d 35 (1990). To establish fraudulent joinder, the removing party must prove: (1) that there was actual fraud in the plaintiff's pleading of the jurisdictional facts or (2) that the plaintiff has no possibility of establishing a cause of action against the non-diverse defendant in state court. Griggs v. State Farm Lloyds, 181 F.3d 694, 699 (5th Cir.1999) (citations omitted); Burden v. General Dynamics Corp., 60 F.3d 213, 217 (5th Cir.1995); Cavallini v. State Farm Mutual Auto Ins. Co., 44 F.3d 256, 259 (5th Cir.1995).

When considering whether a non-diverse defendant has been fraudulently joined to defeat diversity of citizenship jurisdiction, courts should "pierce the pleadings" and consider "summary judgment-type evidence such as affidavits and deposition testimony." See e.g. Cavallini, 44 F.3d at 256. See also LeJeune v. Shell Oil Co., 950 F.2d 267, 271 (5th Cir.1992) (holding that "a removing party's claim of fraudulent joinder to destroy diversity is viewed as similar to a motion for summary judgment.... A court is to pierce the pleadings to determine whether, under controlling state law, the non-removing party has a valid claim against the non-diverse parties."). Under this standard, plaintiffs "may not rest upon the mere allegations or denials of [their] pleadings." Beck v. Texas State Bd. of Dental Examiners, 204 F.3d 629, 633 (5th Cir.2000). See also Badon v. RJR Nabisco, Inc., 236 F.3d 282, 286 n. 4 (5th Cir.2000) (finding that the "mere theoretical possibility of recovery under local law" does not preclude removal. Plaintiffs must show that there exists "a reasonable basis for predicting that state law would allow recovery in order to preclude a finding of fraudulent joinder."). Further, conclusory or generic allegations of wrongdoing on the part of the non-diverse defendant are not sufficient to show that that defendant was not fraudulently joined. See Badon v. RJR Nabisco, Inc., 224 F.3d 382, 392-93 (5th Cir.2000); Peters v. Metropolitan Life Ins. Co., 164 F.Supp.2d 830, 834 (S.D.Miss. 2001) (J. Bramlette) (holding that the allegations against non-diverse defendants "must be factual, not conclusory, because conclusory allegations do not state a claim."). Therefore, when responding to a charge of fraudulent joinder, a plaintiff must allege specific acts of wrongdoing on the part of the non-diverse defendant in the complaint and submit evidence to support those claims. See Badon, 224 F.3d at 390 (holding that removal is not precluded merely because the state court complaint, on its face, sets forth a state law claim against a non-diverse defendant. Removal is proper "if the plaintiff's pleading is pierced and it is shown that as a matter of law there is no reasonable basis for predicting that the plaintiff might establish liability on that claim against the instate defendant.").

When conducting a fraudulent joinder analysis, a court must resolve all disputed questions of fact and ambiguities of law in favor of the non-removing party, see Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42 (5th Cir.1992), but "only when there exists an actual controversy, i.e. when both parties have submitted evidence of contradictory facts." Badon, 224 F.3d at 394. A court should not, "in the absence of any proof, assume that the nonmoving party could or would prove the necessary facts" to support his claims against the non-diverse defendant. Id. (citing Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994)) (alteration in...