Reading v. Archer-Daniels-Midland Co.
| Decision Date | 16 August 2011 |
| Docket Number | Case No. 2:11CV0045 JCH |
| Parties | RUSSELL READING and JERRY EPPERSON, Plaintiffs, v. ARCHER-DANIELS-MIDLAND COMPANY and JEROME J. WISNIEWSKI, Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
This matter is before the court on Defendants' Motion to Dismiss (ECF No. 12), Plaintiffs' Motion for Leave to File Plaintiffs' First Amended Complaint (ECF No. 19), and Plaintiffs' Motion for Remand (ECF No. 22). These motions have been fully briefed and are ready for disposition.
Plaintiffs filed their Petition in the Circuit Court of Ralls County, Missouri on or around April 28, 2011. . Plaintiffs allege claims for Negligence against Jerome J. Wisniewski and Archer-Daniels-Midland Company ("ADM") (Count I), Negligence Per Se for Violation of §256.516, R.S. Mo. against ADM (Count II), Negligence Per Se for Violation of §411.518, R.S. Mo. against ADM (Count III), Negligence Per Se for Violation of §78.416, R.S. Mo. against ADM (Count IV), Breach of Contract against ADM (Count V).
Defendants removed this action to this Court on June 7, 2011, despite the lack of complete diversity on the face of the Complaint. (ECF No. 1).1 In its Notice of Removal, Defendants assertthat diversity jurisdiction exists pursuant to 28 U.S.C. § 1332(a) because the only non-diverse defendant, Wisniewski, was fraudulently joined as a defendant to this action. (ECF No. 1, ¶¶ 5, 9- 41).
"Removal statutes are strictly construed, and any doubts about the propriety of removal are resolved in favor of state court jurisdiction and remand." Manning v. Wal-Mart Stores East, Inc., 304 F.Supp.2d 1146, 1148 (E.D.Mo. 2004) (citing 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, 139 L. Ed. 2d 753, 118 S. Ct. 852 (1998)). The party seeking removal and opposing remand has the burden of establishing jurisdiction. Cent. Iowa Power Coop. v. Midwest Indep. Transmission Sys. Operator, 561 F.3d 904, 912 (8th Cir. 2009).
A civil action brought in state court may be removed to the proper district court if 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.2 Manning, 304 F.Supp.2d at 1148 (citing 28 U.S.C. § 1332(a)(1)). Actions where jurisdiction is predicated solely on diversity are "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). Defendants asserts that diversity exists because Wisniewski, the only non-diverse party, was fraudulently joined. (Doc. No. 1, ¶¶ 14-32).
"When a court is assessing whether diversity jurisdiction exists over a particular case, it may ignore the citizenship of parties fraudulently joined." Moss v. Defender Servs., No. 1:08-CV-88, 2009 U.S. Dist. LEXIS 2337, at *3 (E.D. Mo. Jan. 14, 2009)(citing Anderson v. Home Ins. Co., 724 F.2d 82, 84 (8th Cir. 1983)). Joinder is fraudulent and removal is proper "when a plaintiff files a frivolous or illegitimate claim against a resident defendant solely to prevent removal." Junk v. Terminix Int'l Co., 628 F.3d 439, 445 (8th Cir. 2010) (citation omitted). However, "joinder is fraudulent only when there exists no reasonable basis in fact and law supporting a claim against the resident defendants." Wilkinson v. Shackelford, 478 F.3d 957, 964 (8th Cir. 2007) (citation and internal quotations omitted) (emphasizing that the fraudulent joinder inquiry does not focus on the "artfulness of the pleadings" but on the ability of the plaintiff to state a colorable claim). The party invoking federal jurisdiction and seeking removal has the burden of "establishing jurisdiction by a preponderance of the evidence, and all doubts about jurisdiction are to be resolved in favor of remand." Nicely v. Wyeth, Inc., No. 4:11CV338, 2011 U.S. Dist. LEXIS 64380, at *7 (E.D.Mo. June 17, 2011) (citing In re Prempro Prods. Liab. Litig., 591 F.3d 613, 620 (8th Cir. 2010)). The Eighth Circuit has described the fraudulent joinder standard as follows:3
A proper review should give paramount consideration to the reasonableness of the basis underlying the state claim. Where applicable state precedent precludes the existence of a cause of action against a defendant, joinder is fraudulent. "[I]t is well established that if it is clear under governing state law that the complaint does notstate a cause of action against the non-diverse defendant, the joinder is fraudulent and federal jurisdiction of the case should be retained." ... 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 Railway Co., 336 F.3d 806, 810 (8th Cir. 2003) (internal citations and footnote omitted; emphasis in original). This reasonableness standard requires "the defendant to do more than merely prove that the plaintiff's claim should be dismissed pursuant to a Rule 12(b)(6) motion." Knudson v. Systems Painters, Inc., 634 F.3d 968, 980 (8th Cir. 2011); Junk, 628 F.3d at 445( that the Fed.R.Civ.P. 12(b)(6) standard is "more demanding" than the Filla standard applied in the fraudulent joinder context). In making a prediction as to whether state law might impose liability based on the facts alleged, "the district court should resolve all facts and ambiguities in the current controlling substantive law in the plaintiff's favor" and should not "step from the threshold jurisdictional issue into a decision on the merits. Manning, 304 F.Supp.2d at 1148 (internal quotations and citations omitted).
In ruling on a motion to dismiss, the Court must view the allegations in the Complaint liberally in the light most favorable to Plaintiff. Eckert v. Titan Tire Corp., 514 F.3d 801, 806 (8th Cir. 2008) (citing Luney v. SGS Auto Servs., 432 F.3d 866, 867 (8th Cir. 2005)). Additionally, the Court "must accept the allegations contained in the complaint as true and draw all reasonable inferences in favor of the nonmoving party." Coons v. Mineta, 410 F.3d 1036, 1039 (8th Cir. 2005) (citation omitted). To survive a motion to dismiss, a complaint must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (). While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailedfactual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555; Huang v. Gateway Hotel Holdings, 520 F. Supp. 2d 1137, 1140 (E.D. Mo. 2007).
Before this Court are Defendants' Motion to Dismiss, Plaintiffs' Motion for Leave to File Plaintiffs' First Amended Complaint, and Plaintiffs' Motion for Remand. In response to Defendants' Motion to Dismiss and in support of Plaintiffs' Motion for Remand, Plaintiffs argue that the Court should allow Plaintiffs to file an amended Complaint to elucidate their claims. (Plaintiffs' Memorandum of Law in Opposition to Defendants' Motion to Dismiss ("Response"), ECF No. 24, p. 3; ECF No. 23, p. 3). On a motion for remand, however, the Court considers the complaint that is operative at the time of removal. That is, "removal jurisdiction is determined based on the circumstances at the time the notice of removal was filed." Trinity Hospice, Inc. v. Miles, No. 4:06CV1674, 2006 U.S. Dist. LEXIS 93399, at *5 (E.D. Mo. Dec. 27, 2006)(citing Horton v. Conklin, 431 F.3d 602, 605 (8th Cir. 2005)); "Abbott v. Trog, No. 2:09CV00015, 2010 U.S. Dist. LEXIS 2951, at *8 (E.D. Mo. Jan. 14, 2010)(citing Gossmeyer v. McDonald, 128 F.3d 481, 487-88 (7th Cir. 1997))("[o]nce an action is properly removed from state court to federal court, an amendment of the complaint rendering it outside the federal court's jurisdiction does not defeat the original removal."). Thus, the issue becomes whether state law might reasonably impose liability on the non-diverse defendant, Wisniewski, based on the facts alleged in the original complaint. See Filla, 336 F.3d at 810; Manning, 304 F.Supp.2d at 1149. Accordingly, the Court first addresses the issues raised in Plaintiffs' Motion to Dismiss.
Here, Cathy Gieseker held a Class IV grain dealer's license in Missouri from approximately 1993 until February 2009, when her state grain dealer's license was revoked. (Compl., ¶6). Plaintiffs allege that defendant Wisniewski, an employee of ADM, arranged for Gieseker to market grain with delayed or deferred pricing and hedge contracts (collectively referred to as "future pricing arrangements") to her customers. (Id., ¶¶4, 8-9). Gieseker, as a Class IV grain dealer, could not procure any pricing other than spot price contracts. (Id., ¶¶6, 10). Gieseker marketed future pricing arrangements to her customers, including Plaintiffs. (Id., ¶9). Plaintiffs claim that "[u]ntil February, 2009, when Gieseker's grain dealer's license was suspended by the State of Missouri, defendants ADM and Wisniewski made representations to the public that Gieseker was an authorized agent to enter into future price arrangements on behalf of ADM, in that defendant Wisniewski encouraged farmers to do business with Gieseker." (Id., ¶ 16). Plaintiffs further allege they were paid in accordance with Gieseker's...
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