Sweeney v. Sherwin Williams Co.

• Decision Date: 26 January 2004
• Docket Number: No. CIV.A.3:03CV602BN.,CIV.A.3:03CV602BN.
• Citation: 304 F.Supp.2d 868
• Court: U.S. District Court — Southern District of Mississippi
• Parties: John Henry SWEENEY; Rickey Lewis; Earnest Lewis; Phillip Owens; George A. Harris; Roosevelt Lewis; and John Gaines Plaintiffs v. The SHERWIN WILLIAMS COMPANY; CNA Holdings, Inc., F/K/A Devoe & Raynolds Paints; Millennium Inorganic Chemicals, Inc., F/K/A Glidden Paints; Benjamin Moore & Company; PPG Industries, Inc., D/B/A and Successor in Interest to Pittsburgh Paints; Seabrook Paint Company of Mississippi; Mobile Paint Manufacturing Company of Delaware, Inc.; and, Evans Investments, Inc., F/K/A Evans Lumber Company; and John Does 1-10 Defendants

304 F.Supp.2d 868

John Henry SWEENEY; Rickey Lewis; Earnest Lewis; Phillip Owens; George A. Harris; Roosevelt Lewis; and John Gaines Plaintiffs v. The SHERWIN WILLIAMS COMPANY; CNA Holdings, Inc., F/K/A Devoe & Raynolds Paints; Millennium Inorganic Chemicals, Inc., F/K/A Glidden Paints; Benjamin Moore & Company; PPG Industries, Inc., D/B/A and Successor in Interest to Pittsburgh Paints; Seabrook Paint Company of Mississippi; Mobile Paint Manufacturing Company of Delaware, Inc.; and, Evans Investments, Inc., F/K/A Evans Lumber Company; and John Does 1-10 Defendants

No. CIV.A.3:03CV602BN.

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

January 26, 2004.

Timothy W. Porter, Porter & Malouf, Jackson, MS, Michael J. Casano, Foxworth & Casano, P.A., Gulfport, MS, for Plaintiffs.

John G. Corlew, Katherine K. Smith, Julie L. Hussey, Watkins & Eager, Jackson, MS, Robert S. Walker, Jones, Day, Reavis & Pogue, Cleveland, OH, Peter Larkin Doran, Jeffrey P. Hubbard, Wells, Moore, Simmons & Hubbard, Jackson, MS, James E. Upshaw, Upshaw, Williams, Biggers, Beckham & Riddick, Greenwood, MS, William H. Gillon, IV, Upshaw, Williams, Biggers, Beckham & Riddick, Ridgeland, MS, Donald M. Lewis, Michael T. Nilan, Amanda Cialkowski, Halleland, Lewis, Nilan, Sipkins & Johnson, Minneapolis, MN, Dudley Collier Graham, Jr., Jeremy L. Birdsall, Wise, Carter, Child & Caraway, Mark W. Garriga, W. Scott Welch, III, Butler, Snow, O'Mara, Stevens & Cannada, Jackson, MS, Michael J. Sweeney, Dickie, McCamey & Chilcote, Pittsburg, PA, Robert O. Allen, Allen, Allen, Boerner & Breeland, Brookhaven, MS, Paul E. Rogers, Paul Rogers, Attorney, William N. Reed, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Jackson, MS, for Defendants.

OPINION AND ORDER

BARBOUR, District Judge.

This cause is before the Court on Plaintiffs' Motion to Remand. After considering the Motion, Response, Rebuttal and all attachments to each, as well as supporting and opposing authority, the Court finds that the Motion is well taken and that it should be granted.

I. Factual Background and Procedural History

All Plaintiffs in this cause have work histories involving painting, scraping paint and sanding painted surfaces. Some of the paints allegedly contained lead. Plaintiffs contend that the lead based paints were manufactured, distributed, sold and/or supplied by the Defendants herein. Plaintiffs further contend that

[a]s a direct and proximate result of having inhaled, ingested or otherwise been exposed to lead containing paints manufactured, sold, distributed and/or supplied by the Defendants, the Plaintiffs have received severe injuries and an increased susceptibility to physical, mental, intellectual, emotional, sexual and reproductive diseases, defects, damages, disorders, cancers and death, among other injuries.

Second Amended Complaint, p. 2, ¶ 9. Based on these allegations, Plaintiffs filed suit in the Circuit Court of the First Judicial District of Hinds County, Mississippi, on December 30, 2002.¹ On April 30, 2003, Defendants removed the case to this Court on diversity of citizenship grounds.

All of the Plaintiffs are adult resident citizens of the State of Mississippi. The Defendants are divided into two groups for purposes of this Opinion and Order. The first group consists of Seabrook Paint Company of Mississippi (hereinafter "Seabrook Mississippi") and Evans Investments, Inc., f/k/a Evans Lumber Company (hereinafter "Evans"). Both of these Defendants are resident citizens of the State of Mississippi for purposes of this jurisdictional analysis. Plaintiffs allege that Seabrook Mississippi and Evans sold the lead based paint to them, or to the businesses at which they worked. Defendants contend that both Seabrook Mississippi and Evans were fraudulently joined. The second group of Defendants includes the businesses which allegedly manufactured the lead based paint used by Plaintiffs. This group of Defendants is collectively referenced as "the manufacturing Defendants." The manufacturing Defendants are all foreign corporations. In addition to Defendants' claim that Seabrook Mississippi and Evans were fraudulently joined, Defendants also contend that Plaintiffs fraudulently misjoined their claims for the purpose of defeating federal jurisdiction.

Plaintiffs filed the subject Motion to Remand on May 28, 2003. The Motion to Remand is now ripe for consideration by the Court.

II. Fraudulent Joinder 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. 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). 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. To establish fraudulent joinder, the removing party must prove: "(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court." Travis v. Irby, 326 F.3d 644, 647 (5th Cir.2003) (citing Griggs v. State Farm Lloyds, 181 F.3d 694, 698 (5th Cir.1999)).

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." Cavallini v. State Farm Mutual Auto Ins. Co., 44 F.3d 256, 263 (5th Cir.1995). 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).

In Travis, the United States Court of Appeals for the Fifth Circuit reiterated the standard by which a plaintiff's claims must be analyzed to determine the fraudulent joinder question. The Travis court held:

[T]he court determines whether that party has any possibility of recovery against the party whose joinder is questioned. If there is arguably a reasonable basis for predicting that the state law might impose liability on the facts involved, then there is no fraudulent joinder. This possibility, however, must be reasonable, not merely theoretical.

Travis, 326 F.3d at 648 (emphasis in original) (citing Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 312 (5th Cir.2002)). Further, conclusory or generic allegations of wrongdoing on the part of the non-diverse defendant are not sufficient to show that the defendant was not fraudulently joined. Badon v. RJR Nabisco, Inc., 224 F.3d 382, 392-93 (5th Cir.2000). Therefore, removal is not precluded merely because the state court complaint, on its face, sets forth a state law claim against a non-diverse defendant. Badon, 224 F.3d at 390. 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." Id.

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, 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 (emphasis in original). 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)). In the event the court, after resolving all disputed questions of fact and ambiguities of law in favor of the non-removing party, finds that there is "arguably a reasonable basis for predicting that the state law might impose liability on the facts involved, then there is no fraudulent joinder" and hence no basis for asserting diversity of citizenship jurisdiction. Jernigan, 989 F.2d at 816.

III. Analysis — Fraudulent Joinder

Diversity of citizenship jurisdiction requires satisfaction of the following two factors: (1) amount in controversy; and (2) diversity of citizenship. These requirements are set forth in 28 U.S.C. § 1332(a), which states in relevant part "[t]he district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between — (1) citizens of different States...." Although the ad damnum clause of the Complaint does not state a specific dollar amount of damages sought by Plaintiffs, Defendants' Notice of Removal states that potential damages exceed $75,000, and Plaintiffs do not contest that allegation. Based on Plaintiffs' silence on the issue, and based on the nature of the claims in this case, the Court finds that the amount in controversy requirement of § 1332(a) is met. The issue to be resolved is whether the non-diverse Defendants, Seabrook Mississippi and Evans, were fraudulently joined. If Plaintiffs assert a cause of action for which relief may be granted in Mississippi state court against either of these Defendants, then the case must be remanded to state court. As analyzed below, a potentially viable cause of action is asserted against Evans.

Defendants were allowed to proceed with remand related discovery in this case. During the discovery period, all Plaintiffs were deposed by Defendants. Defendants contend that Plaintiffs' own deposition testimony proves...