Peters v. Metropolitan Life Ins. Co., 5:00CV321.

• Decision Date: 14 September 2001
• Docket Number: No. 5:00CV321.,5:00CV321.
• Parties: John F. PETERS, et al. Plaintiffs v. METROPOLITAN LIFE INSURANCE COMPANY, f/k/a New England Mutual Life Insurance Company, et al. Defendants
• Court: U.S. District Court — Southern District of Mississippi

164 F.Supp.2d 830

John F. PETERS, et al. Plaintiffs v. METROPOLITAN LIFE INSURANCE COMPANY, f/k/a New England Mutual Life Insurance Company, et al. Defendants

No. 5:00CV321.

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

September 14, 2001.

Alfred Lee Felder, Alfred Lee Felder, Attorney, McComb, MS, William Lewis Garrison, Jr., James Callen Sparrow, Garrison, Scott, Gamble & Rosenthal, PC, Birmingham, AL, for John F. Peters, All Plaintiffs, Bonnie C. Peters, Sammye N. Bonney, as trustee for Daniel Marston Bonney Insurance Trust, Daniel M. Bonney, Gregory P. Dinkins, Mary Ann Dinkins, Sephronia A. Gaddy, Stephanie Lett, Geraldine M. Austin, James L. Austin, Sadie Bolton, Gene E. Faucett, F. Page Gamble, William L. Garrison, Jeffrey L. Gurosky, Marsha Rogers Howell, Walter Rish Wood, Emory O. Jackson, Bridgett A. Ogburn, Pamela B. Phillips, John C. Riddle, Maurice Rogers, John R. Sam, Robert V. Scalco, Richard Terrell, Robert C. Wieczorek, James H. Joiner, Kerry Shawell, Donald L. Kozlowski, Janice D. Price, plaintiffs.

Robert E. Hauberg, Jr., Sheryl M. Bey, Philip Williams Thomas, Tiffanee Nicole Wade-Henderson, Baker, Donelson, Bearman & Caldwell, Jackson, MS, for Metropolitan Life Insurance Company.

G. Todd Burwell, William L. Latham, Jason S. Rucker, Latham & Burwell, PLLC, Jackson, MS, James Douglas Minor, Jr., Pigott, Reeves, Johnson & Minor, P.A., Jackson, MS, for Jordan A. Fulton.

J. William Manuel, Jeffrey R. Blackwood, Bradley, Arant, Rose & White, LLP, Jackson, MS, for William S. Quinn, Jr., Peter Mims, Anthony Franco, Fred Holmes, defendants.

MEMORANDUM OPINION AND ORDER

BRAMLETTE, District Judge.

This cause is before the Court on the plaintiffs' motion to remand (docket entry no. 6), and on the defendant Metropolitan Life Insurance Company's motion to supplement its opposition to the plaintiffs' motion (docket entry no. 17). Having carefully reviewed the motions, responses, and memoranda of the parties, as well as the applicable law, the Court finds as follows:

On or about November 28, 2000, the plaintiffs commenced this action by filing a Complaint in the Circuit Court of Warren County, Mississippi, naming as defendants Metropolitan Life Insurance Company, f/k/a New England Mutual Life Insurance Company; New England Mutual Life Insurance Company; New England Financial; Metropolitan Life, Inc.; Fulton A. Jordan; Fulton A. Jordan, d/b/a Jordan & Associates; William S. Quinn, Jr.; Peter Mims; Anthony Franco; Fred Holmes; and various unnamed defendants. It is undisputed that there is complete diversity of citizenship between the plaintiffs and the insurance company defendants, that the amount in controversy, exclusive of interest and costs, exceeds $75,000, and that removal was timely and procedurally proper. It is also undisputed that the individual defendants are Mississippi residents, as are some of the plaintiffs.

On December 18, 2000, the insurance company defendants¹ timely filed a Notice of Removal. In their Notice of Removal, the removing defendants contend that this Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332. Although some of the plaintiffs and the individual defendants are residents of Mississippi, the insurance company defendants claim that the Court can properly exercise diversity jurisdiction over this matter because the plaintiffs fraudulently joined the individual defendants to defeat the complete diversity requirement found in 28 U.S.C. § 1331. The removing defendants maintain that the plaintiffs have no cognizable claim against the individual defendants and, therefore, complete diversity exists.

On January 17, 2001, the plaintiffs filed their Motion to Remand asserting that they did not fraudulently join the individual defendants, and accordingly, diversity jurisdiction does not exist.

The federal removal statute permits a defendant in a state court action to remove the lawsuit to federal district court if federal subject matter jurisdiction existed when the complaint was initially filed. 28 U.S.C. § 1441(a); see Baris v. Sulpicio Lines, Inc., 932 F.2d 1540, 1546 (5th Cir. 1991). In other words, removal of a case from state to federal court is proper if the case could have been brought originally in federal court. Id.

In considering disputes concerning jurisdiction, a "district court, in a challenged case, may retain jurisdiction only where its authority to do so is clear." Gorman v. Abbott Laboratories, 629 F.Supp. 1196, 1203 (D.R.I.1986). A removing defendant bears the burden of demonstrating that jurisdiction properly lies with the district court, and that removal was, indeed, proper. DeAguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir.1995); Jernigan v. Ashland Oil Inc., 989 F.2d 812, 815 (5th Cir.1993); Scott v. Communications Services, 762 F.Supp. 147, 149 (S.D.Tex.1991). A federal district court may assert jurisdiction in a case involving citizens of different states where the amount in controversy, exclusive of interest and costs, exceeds $75,000. See 28 U.S.C. § 1332(a). The removing party's responsibility "extends not only to demonstrating a jurisdictional basis for removal but also necessary compliance with the requirements of the removal statute." Albonetti v. GAF Corporation-Chemical Group, 520 F.Supp. 825, 827 (S.D.Tex. 1981). A defendant's failure to satisfy this burden requires remand. Furthermore, when doubt exists as to the right to removal in the first instance, ambiguities are to be construed against removal. Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42 (5th Cir.1992); Butler v. Polk, 592 F.2d 1293, 1296 (5th Cir.1979); Samuel v. Langham, 780 F.Supp. 424, 427 (N.D.Tex.1992); see also, Fellhauer v. Geneva, 673 F.Supp. 1445, 1447 (N.D.Ill.1987).

A federal district court may remand a case to state court if it finds that it lacks proper subject matter jurisdiction. 28 U.S.C. § 1447(c). Removal based on diversity jurisdiction is proper 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). Complete diversity is ordinarily required in cases based on diversity of citizenship under § 1332. This requirement advances the aim of diversity jurisdiction, which is to protect out-of-state litigants against possible prejudice in favor of a local litigant. J.A. Olson Company v. City of Winona, Mississippi, 818 F.2d 401, 404 (5th Cir.1987).

As previously stated, diversity jurisdiction requires an amount in controversy exceeding $75,000 and complete diversity of citizenship among the parties, both of which must exist at the time the original action is filed in state court and at the time removal is sought.² Scott, 762 F.Supp. at 150; Kilpatrick v. Arrow Co., 425 F.Supp. 1378, 1380 (W.D.La.1977); 28 U.S.C. § 1332(a). The court must make the necessary inquiries to establish its own jurisdiction when jurisdiction is placed in question. Foret v. Southern Farm Bureau Life Ins. Co., 918 F.2d 534, 537 (5th Cir. 1990). If at any time following removal and before final judgment the Court discovers it lacks subject matter jurisdiction, it may remand the action back to state court. 28 U.S.C. § 1447(c).

Following the requisite inquiry by the Court, when the parties are, indeed, diverse and the amount in controversy is sufficient, a defendant has the statutory right to remove an action from state court and maintain the suit in federal court. See 28 U.S.C. § 1332(a). Where diversity jurisdiction otherwise exists, it "cannot be defeated by a fraudulent joinder of a residential defendant having no real connection to the controversy." Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 66 L.Ed. 144 (1921). Thus, when determining whether complete diversity exists, courts shall disregard the citizenship of fraudulently joined defendants. See Tedder v. F.M.C. Corp., 590 F.2d 115, 117 (5th Cir.1979).

In the instant action, the removing defendants assert that the plaintiffs fraudulently joined the non-diverse individual defendants for the purpose of defeating diversity jurisdiction. "[T]he burden of proving that a plaintiff fraudulently joined non-diverse defendants is heavy," and requires a removing defendant to prove fraudulent joinder by clear and convincing evidence. Green v. Amerada Hess Corp., 707 F.2d 201, 205 (5th Cir.1983); see also Jernigan v. Ashland Oil, 989 F.2d 812, 814 (5th Cir.1993). In order to establish fraudulent joinder, the removing parties must demonstrate either that no possibility exists that the plaintiffs would be able to establish a cause of action against the non-diverse defendants under state law, or that an outright fraud exists in the plaintiffs' pleading of the facts. Id. In other words the removing defendants bear the responsibility of demonstrating by clear and convincing evidence that the plaintiffs cannot establish any cause of action against the individual defendants under Mississippi law or, alternatively, that the plaintiffs fraudulently pled the facts included in their complaint.

The Fifth Circuit has clearly described the procedure a district court should follow in deciding the issue of fraudulent joinder:

The district court must then evaluate all of the factual allegations in the light most favorable to the plaintiff, resolving all contested issues of substantive fact in favor of the plaintiff. Moreover, the district court must resolve any uncertainties as to the current state of controlling substantive law in favor of the plaintiff. If, having assumed all of the facts set forth by the plaintiff to be true and having resolved all uncertainties as to state substantive law against the defendants, the district court should find that there is no possibility of a valid cause of action being set forth against the in-state defendant(s), only then can it be said that there has been a "fraudulent joinder." However, if there is even a possibility that a state court would find a...