McCown v. Hyundai Motor Am.

• Decision Date: 23 April 2021
• Docket Number: No. 7:20-CV-152-REW,7:20-CV-152-REW
• Parties: DANNY McCOWN, JR., Plaintiff, v. HYUNDAI MOTOR AMERICA, et al., Defendants.
• Court: U.S. District Court — Eastern District of Kentucky

DANNY McCOWN, JR., Plaintiff, v. HYUNDAI MOTOR AMERICA, et al., Defendants.

No. 7:20-CV-152-REW

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF KENTUCKY SOUTHERN DIVISION PIKEVILLE

April 23, 2021

OPINION & ORDER*** *** *** ***

Plaintiff Danny McCown, Jr., sued Defendants Hyundai Motor America ("HMA") and Tim Short Pikeville, LLC ("Tim Short") in Floyd Circuit Court alleging product liability claims. See DE 1-1 (State Court Record). McCown's claims are based on injuries he allegedly sustained when a car (made by Hyundai, sold by car dealer Tim Short) rolled back and struck him. DE 1-1 at 7. The case proceeded under the normal course until Plaintiff failed to respond to requests for admission submitted by Tim Short. HMA then removed this action to federal court. DE 1. Plaintiff moved to remand, noting that Tim Short is non-diverse.¹ DE 6. After the matter was fully briefed, see DE 8 (HMA's response), DE 11 (Tim Short's Response), DE 12 (Plaintiff's Reply), Magistrate Judge Edward B. Atkins recommended that Plaintiff's motion be granted.² DE 13 (Report andRecommendation). HMA timely objected. DE 16. McCown and Tim Short did not respond to HMA's objection. The Court, treating the remand recommendation as dispositive, now reviews the objected to matters de novo. See Vogel v. U.S. Off. Prods. Co., 258 F.3d 509, 517 (6th Cir. 2001) (holding that "remand motions are dispositive and, as such, can only be entered by district courts"). Because HMA has not met its burden to show fraudulent joinder, the Court GRANTS the remand motion.

HMA, as the removing party, has the burden of establishing the Court's jurisdiction. Alexander v. Elec. Data Sys. Corp., 13 F.3d 940, 948-49 (6th Cir. 1994) The Court construes the removal statute strictly and resolves doubtful facts against the exercise of jurisdiction. Huff v. AGCO Corp., 5:18-cv-00469-GFVT, 2019 WL 1177970, at *2 (E.D. Ky. 2019) (citing Eastman v. Marine Mech. Corp., 438 F.3d 544, 549 (6th Cir. 2006), and Cole v. Great Atl. & Pac. Tea Co., 728 F. Supp. 1305, 1307 (E.D. Ky. 1990)). The removal landscape, or perhaps the lens for assessment, can change as the underlying state matter develops. "A defendant's removal right, however, may extend beyond what is asserted in the plaintiff's complaint to the time when it may first be ascertained that the case is one which is removable." Peters v. Lincoln Elec. Co., 285 F.3d 456, 465 (6th Cir. 2002). 28 U.S.C. § 1446(b)(3) instructs:

[I]f the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.

HMA seeks to invoke the "other paper" portion of § 1446(b)(3); that receipt of proof demonstrating operation of Ky. R. Civ. P. 36.01 to effectuate admissions first made this case removable.

The other paper term under § 1446(b)(3) is considered "expansive" and encompasses "a wide array of documents within its scope." 14C Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. Juris. § 3731 (4th ed. 2009) "Thus, as a general matter, 'documents such asdeposition transcripts, answers to interrogatories and requests for admissions, . . . amendments to ad damnum clauses of complaints, and correspondence between the parties and their attorneys or between the attorneys" may constitute "other papers" under § 1446(b)(3)."³ Berera v. Mesa Med. Grp., PLLC, 779 F.3d 352, 365 (6th Cir. 2015) (quoting Wright & Miller, supra, § 3731).

HMA bases its removal attempt on diversity jurisdiction. See DE 1. To exercise jurisdiction, there must be complete diversity between the parties. See 28 U.S.C. § 1332(a)(1); Jerome-Duncan, Inc. v. Auto-By-Tel, LLC, 176 F.3d 904, 907 (6th Cir. 1999) ("Diversity of citizenship, the basis for jurisdiction in the present case, exists only when no plaintiff and no defendant are citizens of the same state."). HMA concedes that Tim Short is a Kentucky citizen and that the named parties are not fully diverse. DE 1 at 3. Instead, HMA argues that the Court should disregard Tim Short's citizenship on the basis of fraudulent joinder. Id. at 3-5.

In relying on fraudulent joinder, the removing party faces a steep burden. Walker v. Philip Morris USA, Inc., 443 F. App'x 946, 954 (6th Cir. 2011). The standard for determining fraudulent joinder is whether the plaintiff states a "colorable cause of action" against the non-diverse defendant. Jerome-Duncan, Inc., 176 F.3d at 907. "Asked another way, the question is 'whether there is arguably a reasonable basis for predicting that the state law might impose liability on thefacts involved.'" Alexander, 13 F.3d at 949 (quoting Bobby Jones Garden Apartments, Inc. v. Suleski, 391 F.2d 172, 176 (5th Cir. 1968)). If Plaintiff's claims against Tim Short "ha[ve] even a 'glimmer of hope,' there is no fraudulent joinder." Murriel-Don Coal Co., Inc. v. Aspen Ins. UK Ltd., 790 F. Supp. 2d 590, 597 (E.D. Ky. 2011) (quoting Hartley v. CSX Transp., Inc., 187 F.3d 422, 426 (4th Cir. 1999)).

The Court may "pierce the pleadings" and "consider summary-judgment-type evidence (such as depositions, affidavits, etc.)[.]" Walker, 443 F. App'x at 954. However, when considering such evidence, the standard of review does not change; the standard is "akin to that of a Rule 12(b)(6) motion to dismiss" and the Court must construe any contested issues (of law and facts) in McCown's favor. Id. The Court does not weigh the merits and apply a summary judgment rubric. Rather, the pleading piercing only allows a sifting for "the presence of discrete and undisputed facts that would preclude plaintiff's recovery against the in-state defendant." Id. at 953.

Defendants argue that Plaintiff's failure to timely respond to requests for admission means that the requested matters are admitted and conclusively decided. DE 8 at 8-11; DE 11 at 2-4. The admissions, according to Defendants, act to completely negate McCown's claims against Tim Short. DE 8 at 11-15; DE 11 at 3-4. Thus, per HMA, with evidence of a claim demonstrably foreclosed, Tim Short has been fraudulently joined, and its citizenship can be ignored for purposes of determining diversity jurisdiction. DE 8 at 15; DE 11 at 4-6. Plaintiff argues that Defendants are not entitled to use fraudulent joinder because HMA did not carry its burden to prove that the claims against Tim Short are fully untenable. DE 6-2 at 7-9; DE 12 at 3-4.

Judge Atkins determined that the requests for admission went unanswered and that they are "deemed admitted under Ky. CR 36.01." DE 13 at 8. No party objected to this finding. DE 16at 12 (noting agreement with Judge Atkins's admission conclusion). The Court agrees.⁴ If there is no answer or objection to the request, the admissions ripen by operation of law and passage of time. See Ky. R. Civ. P. 36.01(2) ("The matter is admitted unless, within 30 days after service of the request . . . the party to whom the request is directed serves upon the party requesting the admission a written answer or objection addressed to the matter, signed by the party or by his attorney[.]" (emphasis added)). After a Rule 36 admission takes effect, either automatically or by answer, the admission sticks absent relief prompted by motion. See Ky. R. Civ. P. 36.02 ("Any matter admitted under Rule 36 is conclusively established unless the court on motion permits withdrawal or amendment of the admission." (emphasis added)).

Tim Short served the requests on October 8, 2020. McCown did not respond, timely or otherwise. The Rule operated to deem the matters admitted on or about November 9, 2020. Plaintiff sought no relief in the state forum, pre-removal (on December 2), and his motion in this Court is to remand. Amazingly, the record still contains no effort at substantive responses to the requests.⁵ "Once a party has been served with a request for admissions, that request cannot simply be ignored with impunity. . . . [A]n inattentive party served with a request for admissions may run the risk of having judgment entered against him based upon the failure to respond."⁶ Harris v. Stewart, 981 S.W.2d 122, 124 (Ky. App. 1998).

Judge Atkins concluded that the admissions were "not enough to meet HMA's burden." DE 13 at 8. However, with all respect to Judge Atkins's helpful product, HMA's burden was not so high that subsequent conclusive factual determinations, permissible because of § 1443(b)(3), could not foreclose the Complaint's avenue to relief. Changes in a state record, through, e.g., admissions, could snuff any glimmer of hope. The facts in this case are not so unlike a plaintiff's response to deposition questioning. The Sixth Circuit has held that deposition responses can be the "other paper" for the purposes of § 1443(b)(3). See Peters, 285 F.3d at 466. The Peters court explained that the purpose of § 1446(b)(3) is to "make sure that a defendant has an opportunity to assert the congressionally bestowed right to remove upon being given notice in the course of the case that the right exists." Id. (quoting Huffman v. Saul Holdings Ltd. P'ship, 193 F.3d 1072, 1077 (10th Cir. 1999)). The Circuit held that such an effect on removal is necessary to "discourage[] disingenuous pleading by plaintiffs in state court to avoid removal."⁷ Id. (quoting Addo v. Globe Life Accident Ins. Co., 230 F.3d 759, 762 (5th Cir. 2000). Admissions are surely more conclusive than deposition testimony. The admissions here do not merely dispute the Complaint's factual allegations; where applicable, the admissions displace them. The admissions are "unassailablestatement[s] of fact" that are "binding" on (i.e., not disputable by other evidence from) the admitting party. Sec'y U.S. Dep't of Labor v. Kwasny, 853 F.3d 87, 91 (3d Cir. 2017).

The Court has scrutinized the requests for admission and the claims in the suit. While the admissions cede a lot, t...