Laroe v. Cassens & Sons, Inc.

• Decision Date: 30 November 2006
• Docket Number: No. CIV. 06-713-GPM.,CIV. 06-713-GPM.
• Court: U.S. District Court — Southern District of Illinois
• Parties: Noal LAROE, Plaintiff, v. CASSENS & SONS, INC., Cassens Corporation, Cottrell, Inc., KSC Leasing, LLC, and Kay S. Cassens, Defendants.

472 F.Supp.2d 1041

Noal LAROE, Plaintiff, v. CASSENS & SONS, INC., Cassens Corporation, Cottrell, Inc., KSC Leasing, LLC, and Kay S. Cassens, Defendants.

No. CIV. 06-713-GPM.

United States District Court, S.D. Illinois.

November 30, 2006.

COPYRIGHT MATERIAL OMITTED

David C. Nelson, John H. Fredrick, Jr., Nelson & Nelson, Belleville, IL, for Plaintiff.

Benjamin W. Powell, Gordon R. Broom, Hepler, Broom, MacDonald, Hebrank, True & Noce, LLC, Edwardsville, IL, John L. McMullin, III, Brown & James, Amy J. Lorenz-Moser, Bryan M. Groh, Dan H. Ball, Daniel J. Carpenter, Bryan Cave, St. Louis, MO, for Defendants.

MEMORANDUM AND ORDER

MURPHY, Chief Judge.

This matter is before the Court on the motion for remand brought by Plaintiff Noal LaRoe (Doc. 26). For the following reasons, the motion is GRANTED. The hearing on the pending motions in this case currently scheduled for December 4, 2006, at 11 a.m. is CANCELLED.

INTRODUCTION

This action arises from an incident that occurred near East St. Louis, Illinois, on August 12, 2004, in which LaRoe, while working as an operator and driver for Cassens Transport Company, suffered personal injuries as a result of falling off an automobile transport trailer. LaRoe originally filed this action on June 30, 2006, in the Circuit Court of the Twentieth Judicial Circuit, St. Clair County, Illinois, asserting claims for negligence and strict products liability against Defendants Cassens & Sons, Inc., and Cassens Corporation. On August 8, 2006, LaRoe amended his complaint to join as party Defendants Cottrell, Inc. ("Cottrell"), KSC Leasing, LLC, and Kay S. Casssens. Cottrell has timely removed the action to this Court in federal diversity jurisdiction, alleging that Cassens & Sons, Inc., and Cassens Corporation, both of which are, like LaRoe, Illinois citizens, have been fraudulently joined to defeat diversity.

The chain of distribution of the trailer which LaRoe claims caused his injury is alleged to be as follows. Cottrell, a Georgia citizen, is alleged to have manufactured the trailer, then sold it to Cassens & Sons, Inc. Cassens & Sons, Inc., is alleged to have sold the trailer to Kay S. Cassens, a Montana citizen, who then sold the trailer to KSC Leasing, LLC, a limited liability company of which she is the only member. KSC Leasing, LLC, is alleged to have sold or leased the trailer to LaRoe's employer, Cassens Transport Company. The gist of Cottrell's allegations of fraudulent joinder in this case is that, because Cassens & Sons, Inc., and Cassens Corporation are not the manufacturers of the trailer alleged to have caused LaRoe's injuries, those Defendants are subject to dismissal from this action under Illinois law. Additionally, Cassens & Sons, Inc., Cassens Corporation, KSC Leasing, LLC, and Kay S. Cassens have all moved for summary judgment as to LaRoe's claims on the grounds that they are non-manufacturer Defendants and thus subject to dismissal under Illinois law. LaRoe in turn has moved for remand of this action to state court for lack of subject matter jurisdiction. The motion for remand has been fully briefed, and the Court now is prepared to rule.

DISCUSSION

A. Legal Standard

Removal based on diversity requires that the parties be of diverse state citizenship and that the amount in controversy exceed $75,000, exclusive of interest and costs. See 28 U.S.C. § 1332; Id. § 1441. See also Rubel v. Pfizer Inc., 361 F.3d 1016, 1017 (7th Cir.2004); Littleton v. Shelter Ins. Co., No. 99-912-GPM, 2000 WL 356408, at *1 (S.D.Ill. Mar. 9, 2000). The party seeking removal has the burden of establishing federal jurisdiction. See Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir.1993). "Courts should interpret the removal statute narrowly and presume that the plaintiff may choose his or her forum." Id. Put another way, there is a strong presumption in favor of remand. See Jones v. General Tire & Rubber Co., 541 F.2d 660, 664 (7th Cir.1976). See also Littleton, 2000 WL 356408, at *1 ("The removal statute, 28 U.S.C. § 1441, is construed narrowly, and doubts concerning removal are resolved in favor of remand.").

In evaluating diversity of citizenship, a court must disregard a defendant that has been fraudulently joined. See Schwartz v. State Farm Mut. Auto. Ins. Co., 174 F.3d 875, 878 (7th Cir.1999); Smith v. Shipping Utils., Inc., No. Civ. 05-500-GPM, 2005 WL 3133494, at *1 (S.D.Ill. Nov. 23, 2005). A defendant is fraudulently joined when "there is no possibility that a plaintiff can state a cause of action against [the] nondiverse defendant[] IN state court, or where there has been outright fraud in plaintiffs pleading of jurisdictional facts." Gottlieb v. Westin Hotel Co., 990 F.2d 323, 327 (7th Cir.1993). A defendant seeking removal based on alleged fraudulent joinder has the "heavy" burden of proving that, after the court resolves all issues of law and fact in the plaintiffs favor, there is no possibility the plaintiff can establish a cause of action against a diversity-defeating defendant in a state court. Poulos v. Naas Foods, Inc., 959 F.2d 69, 73 (7th Cir.1992).

B. Fraudulent Joinder

1. Applicability of 735 ILCS 5/2-621 to LaRoe's Claims

Under Illinois law, all entities in the chain of distribution for an allegedly defective product are subject to strict liability in tort. See Hammond v. North Am. Asbestos Corp., 97 Ill.2d 195, 73 Ill. Dec. 350, 454 N.E.2d 210, 216-17 (1983); Skarski v. Ace-Chicago Great Dane Corp., 138 Ill.App.3d 301, 93 Ill.Dec. 102, 485 N.E.2d 1312, 1315 (1985). Pursuant to 735 ILCS 5/2-621, there is a "seller's exception" in products liability actions whereby any non-manufacturing defendant who has not contributed to the alleged defect is entitled automatically to dismissal:

Product liability actions. (a) In any product liability action based in whole or in part on the doctrine of strict liability in tort commenced or maintained against a defendant or defendants other than the manufacturer, that party shall upon answering or otherwise pleading file an affidavit certifying the correct identity of the manufacturer of the product allegedly causing injury, death or damage. The commencement of a product liability action based in whole or in part on the doctrine of strict liability in tort claim against such defendant or defendants shall toll the applicable statute of limitation and statute of repose relative to the defendant or defendants for purposes of asserting a strict liability in tort cause of action.

(b) Once the plaintiff has filed a complaint against the manufacturer or manufacturers, and the manufacturer or manufacturers have or are required to have answered or otherwise pleaded, the court shall order the dismissal of a strict liability in tort claim against the certifying defendant or defendants, provided the certifying defendant or defendants are not within the categories set forth in subsection (c) of this Section. Due diligence shall be exercised by the certifying defendant or defendants in providing the plaintiff with the correct identity of the manufacturer or manufacturers, and due diligence shall be exercised by the plaintiff in filing an action and obtaining jurisdiction over the manufacturer or manufacturers.

* * * * * *

(c) A court shall not enter a dismissal order relative to any certifying defendant or defendants other than the manufacturer even though full compliance with subsection (a) of this Section has been made where the plaintiff can show one or more of the following:

(1) That the defendant has exercised some significant control over the design or manufacture of the product, or has provided instructions or warnings to the manufacturer relative to the alleged defect in the product which caused the injury, death or damage; or

(2) That the defendant had actual knowledge of the defect in the product which caused the injury, death or damage; or

(3) That the defendant created the defect in the product which caused the injury, death or damage.

735 ILCS 5/2-621(a)-(c).¹ The purpose of this provision is to allow defendants whose sole basis of liability is their role as a member of the distributive chain to extract themselves from a products liability action at an early stage, before they incur the expense of fully litigating the dispute. See Kellerman v. Crowe, 119 Ill.2d 111, 115 Ill.Dec. 591, 518 N.E.2d 116, 117 (1987); Cherry v. Siemans Med. Sys., Inc., 206 Ill.App.3d 1055, 151 Ill.Dec. 944, 565 N.E.2d 215, 218 (1990).

The Court concludes as an initial matter that 735 ILCS 5/2-621 constitutes state substantive law so as to authorize dismissal of non-manufacturer defendants in federal court. Because federal courts lack constitutional power to fashion broad swathes of federal common law, in general state law furnishes the rule of decision in federal court absent a countervailing federal interest that mandates the application of federal law. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); 19 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure § 4520 (3d ed. 1998 & Supp.2006) (collecting cases). Conversely, federal law, rather than state law, governs matters of procedure in federal court. See Hanna v. Plumer, 380 U.S. 460, 464-65, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965). The standard for determining whether state law is procedural or substantive so as to apply in federal court is the "outcome-determinative" test, which requires a court to examine whether a given state law reflects an intent by a state to influence substantive outcomes of cases and whether a refusal to apply state law would encourage parties to forum-shop in federal court. See id. at 471-73. The United States Court of Appeals for the Seventh Circuit has held that, in applying the outcome-determinative test,

[one] class of pretty easy cases is where the state procedural rule, though undeniably "procedural" in the ordinary sense of the term, is limited to a particular substantive...