United States District Court, M.D. Louisiana
MILTON BANKS, JR.
HIAB USA, INC., ET AL.
RULING AND ORDER
A. JACKSON, CHIEF JUDGE
the Court is a Motion for Summary Judgment (Doc. 23) and a
Motion for Sanctions and Attorneys Fees (Doc. 24) filed by
Deep South Equipment Company ("Deep South"). In its
motions, Deep South alleges that Plaintiff is unable to
produce sufficient evidence to prove its claims against Deep
South and asks that the Court impose sanctions because of
Plaintiffs failure to dismiss the "frivolous factually
unsupportable claims" it asserted against Deep South.
Oral argument is not necessary.
about March 14, 2014, Milton Banks, Jr.
("Plaintiff") was delivering lumber on his
employer's behalf to a residential construction site in
Zachary, Louisiana, when he was seriously injured while
operating a Moffett M5500 Truck-Mounted Lift, Model No.
G190258 ("the Lift"). (Doc. 1-2 at p. 1). The
accident rendered Plaintiff a paraplegic. Plaintiff filed
this action in the Nineteenth Judicial District Court for the
Parish of East Baton Rouge, State of Louisiana, on March 13,
2015. (Doc. 1-2). In his Petition, Plaintiff alleges that
HIAB USA, Inc., the manufacturer of the Lift, and Deep South,
which Plaintiff identifies as the "seller" of the
Lift (collectively "Defendants"), are responsible
for the physical injuries sustained by Plaintiff while he was
operating the Lift. (Id. at p. 1).
filed a timely notice of removal with the Court on April 24,
2015, asserting that this Court has subject-matter
jurisdiction based on diversity of citizenship pursuant to 28
U.S.C. § 1332. (Doc. 1 at p. 2). In their Notice of
Removal, Defendants assert that Deep South Equipment Company
("Deep South"), "a domestic corporation
organized and existing under the law of the state of
Louisiana, " has been improperly joined in this matter
to defeat diversity jurisdiction and that consequently its
presence in this suit should be disregarded. (Id. at
South thereafter filed a motion for summary judgment and a
motion for sanctions on June 24, 2016, arguing that Plaintiff
is unable to produce sufficient evidence to prove its claims
against Deep South and asking that the Court impose sanctions
because of Plaintiff's failure to dismiss the
"frivolous factually unsupportable claims" it
asserted against Deep South. (See Doc. 24-2 at p. 3). On
January 18, 2017, before ruling on the pending substantive
motions, the Court initiated a sua sponte inquiry
into this Court's subject-matter jurisdiction and ordered
the parties to submit briefs specifically addressing the
fraudulent joinder allegations and potential jurisdictional
issues flagged by Defendants in their Notice of Removal. (See
Doc. 39). Pursuant to the Court's Order, Defendants filed
a joint brief, in which they reasserted many of the arguments
contained in their Notice of Removal and Deep South's
motion for summary judgment.
federal courts are courts of limited jurisdiction, the Court
is required to inquire into the potential jurisdictional
defect and must first determine whether it has subject-matter
jurisdiction over this action before turning to Deep
South's motion for summary judgment and motion for
sanctions. See Mclin v. H & H Lure Co., 102
F.Supp.2d 341, 343 n. 2 (M.D. La. June 2, 2000) ("Before
the Court can rule on the motion..., the Court must first
determine if the Court has subject-matter jurisdiction. To
determine if the Court has subject-matter jurisdiction, the
Court must first determine if there was a fraudulent joinder.
If the Court finds there was a fraudulent joinder, it is in
effect finding that the plaintiffs have no cause of action
against the non-diverse defendant.").
defendant may generally remove a civil action filed in state
court if the federal court has original jurisdiction over the
action. See 28 U.S.C. § 1441(a). The removing party
bears the burden of showing that federal jurisdiction exists.
See Allen v. R & H Oil & Gas Co., 63 F.3d
1326, 1335 (5th Cir. 1995). In assessing whether removal was
appropriate, the Court is guided by the principle, grounded
in notions of comity and the recognition that federal courts
are courts of limited jurisdiction, that removal statutes
should be strictly construed. See, e.g., Manguno v.
Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723
(5th Cir. 2002); Neal v. Kawasaki Motors Corp., No.
95-668, 1995 WL 419901, at *4 (E.D. La. July 13, 1995).
Although the Court must remand to state court if at any time
before final judgment it appears that it lacks subject-matter
jurisdiction, the Court's jurisdiction is fixed at of the
time of removal. 28 U.S.C. § 1447(c); Doddy v. Oxy
USA, Inc., 101 F.3d 448, 456 (5th Cir. 1996).
diversity jurisdiction to exist, the amount in controversy
must exceed $75, 000, and there must be complete diversity
between plaintiffs and defendants. See 28 U.S.C.
§ 1332(a); Owen Equip. & Erection Co. v.
Kroger, 437 U.S. 365, 373 (1978). Here, the parties do
not dispute that the amount-in-controversy-requirement is
met, but they disagree about whether the complete diversity
requirement is satisfied. Plaintiff and Deep South both have
Louisiana citizenship, which would ordinarily destroy
complete diversity. See McLaughlin v. Miss. Power
Co., 376 F.3d 344, 353 (5th Cir. 2004). And when a
non-diverse party is properly joined as a defendant, no
defendant may remove the case under 28 U.S.C. § 1332.
But a defendant may remove by showing that the non-diverse
party was joined improperly. Smallwood v. III. Cent, R.
Co., 352 F.3d 220, 222 (5th Cir. 2003) (Smallwood
burden of demonstrating improper joinder is a heavy one, as
the doctrine is a narrow exception to the rule of complete
diversity. Id. A defendant may establish improper
joinder by showing either (1) actual fraud in pleading
jurisdictional facts, or (2) the inability of the plaintiff
to establish a cause of action against the non-diverse
defendant. Defendants do not contend that Plaintiffs
inclusion of Deep South in this litigation was the result of
actual fraud. As such, the Court will focus its inquiry on
Deep South's ability to satisfy the latter showing, the
test for which is "whether the defendant has
demonstrated that there is no possibility of recovery by the
plaintiff against an in-state defendant, which stated
differently means that there is no reasonable basis for the
district court to predict that the plaintiff might be able to
recover against an in-state defendant." Smallwood v.
Illinois Cent. R. Co., 385 F.3d 568, 574 (5th Cir. 2004)
(Smallwood II). The possibility must be reasonable,
not merely theoretical. Great Plains Trust Co. v. Morgan
Stanley Dean Witter & Co., 313 F.3d 305, 312 (5th
analyzing whether a plaintiff has demonstrated a reasonable
possibility of recovery, the district court may
"'conduct a Rule 12(b)(6)-type analysis, looking
initially at the allegations of the complaint to determine
whether the complaint states a claim under state law against
the in-state defendant.'" Menedez v. Wal-Mart
Stores, Inc., 364 Fed.App'x. 62, 69 (5th Cir. 2010)
(per curiam) (quoting Smallwood II, 385 F.3d at
scope of the inquiry for improper joinder, however, is even
broader than that for Rule 12(b)(6) because the Court may
"pierce the pleadings" and consider summary
judgment-type evidence to determine whether the plaintiff has
a basis in fact for his or her claim. Smallwood I,
352 F.3d at 223 n.8 (citing Travis v. Irby, 326 F.3d
644, 648-49 (5th Cir. 2003)). See also Hornbuckle v.
State Farm Lloyds,385 F.3d 538, 542 (5th Cir. 2004). In
conducting this inquiry, the Court must "take into
account all unchallenged factual allegations, including those
alleged in the complaint, in the light most favorable to the
plaintiff." Travis, 326 F.3d at 649. So, too,
must the Court resolve all ambiguities of state law in favor