United States District Court, E.D. Missouri, Eastern Division
OPINION, MEMORANDUM AND ORDER
EDWARD AUTREY, UNITED STATES DISTRICT JUDGE.
removed matter is before the Court on Plaintiffs' Motion
to Remand, [Doc. No. 25]. For the following reasons, the
Motion will be granted. The Court concludes that it lacks
subject matter jurisdiction. The matter will be remanded to
filed suit in the Circuit Court of St. Charles County,
Missouri, on February 6, 2018. The Petition sets forth eight
counts as follows: Count I against Liberty for Breach of
Indemnity Agreement; Count II against Liberty for Breach of
Covenant of Good Faith and Fair Dealing (General Agreement of
Indemnity); Count III against Liberty for Breach of
Performance Bond; Count IV against Liberty for Breach of
Covenant of Good Faith and Fair Dealing (Performance Bond);
Count V against Liberty for Tortious Interference with
Business Expectancy; Count VI against Liberty and St. Charles
for Negligence; Count VII against Liberty for Fraudulent
Misrepresentation; and Count VIII against Liberty for
Negligent Misrepresentation. In Count VI of Plaintiffs'
Petition, Plaintiffs allege Defendant Saint Charles Insurance
Agency, (“SCIA“), (as well as Liberty Mutual) was
negligent in failing to communicate to Wright Construction
that the State of North Carolina required all general
contractors to be licensed in North Carolina prior to
entering into North Carolina construction contracts.
Plaintiffs allege that this conduct was below the applicable
standard of care for a broker.
Liberty filed its Notice of Removal on March 30, 2018, based
on the Court's diversity of citizenship jurisdiction, 28
U.S.C. § 1332. Although SCIA and Plaintiffs share the
same citizenship, (both are citizens of Missouri), Liberty
claims that SCIA was not properly joined and therefore should
not be considered for the purposes of removal, under the
doctrine of fraudulent joinder.
filed a motion to remand on the basis that this Court does
not have subject matter jurisdiction over this matter because
there is not complete diversity as SCIA is a Missouri citizen
and is not fraudulently joined.
argues that SCIA was fraudulently joined because Plaintiffs
failed to state a colorable claim against SCIA in the
petition. The Court disagrees for the following reasons.
district courts have original jurisdiction over all civil
actions which are “between citizens of different States
and where the matter in controversy exceeds $75, 000. 28
U.S.C. § 1332. The party seeking the federal forum based
on diversity has the burden of pleading diversity of the
citizenship of the parties. Walker v. Norwest Corp.,
108 F.3d 158, 161 (8th Cir. 1997). The burden of establishing
diversity jurisdiction is by a preponderance of the evidence.
Sheehan v. Gustafson, 967 F.2d 1214, 1215 (8th Cir.
1992); Yeldell v. Tutt, 913 F.2d 533, 537 (8th Cir.
1990); Russell v. New Amsterdam Cas. Co., 325 F.2d
996, 997 (8th Cir. 1964).
court in Iowa Public Service Co. v. Medicine Bow Coal
Co., 556 F.2d 400, 406 (8th Cir. 1977) held, in regard
to diversity that:
[I]n a case where there are plural plaintiffs and plural
defendants a federal court does not have diversity
jurisdiction unless there is diversity between all plaintiffs
and all defendants.... [I]f the “nondiverse”
plaintiff is not a real party in interest, and is purely a
formal or nominal party, his or its presence in the case may
be ignored in determining jurisdiction.
556 F.2d 400, 403-404 (8th Cir. 1977) (internal citations
joinder of a non-diverse party does not prevent removal.
Anderson v. Home Ins. Co., 724 F.2d 82, 84 (8th Cir.
1983). See also, BP Chemicals Ltd. v. Jiangsu
Sopo Corp, 285 F.3d 677, 685 (8th Cir. 2002) (holding
that a defendant's right of removal based on diversity of
citizenship may not be defeated by fraudulently joining a
non-diverse party). The Eighth Circuit holds that
“[j]oinder is fraudulent and removal is proper when
there exists no reasonable basis in fact and law” to
support a claim against the defendant whose joinder would
preclude removal. Wiles v. Capitol Indem, Corp., 280
F.3d 868, 871 (8th Cir. 2002). “Conversely, if there is
a reasonable basis in fact and law supporting the claim, the
joinder is not fraudulent.” Filla v. Norfolk
Southern Ry. Co., 336 F.3d 806, 810 (8th Cir. 2003).
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 not state a
cause of action against the non-diverse defendant, the
joinder is fraudulent and federal jurisdiction of the case
should be retained.” Iowa Public Service Co.,
556 F.2d at 406 (emphasis added). However, if there is a
“colorable” cause of action-that is, if the state
law might impose liability on the resident defendant under