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Hill v. Olin Corp.

May 14, 2007


The opinion of the court was delivered by: Herndon, District Judge


This matter is before the Court on the motion for remand to state court brought by Plaintiff Robert Hill (Doc. 9). For the following reasons, the motion is GRANTED.

I. Introduction

This case arises from an accident that occurred on April 1, 2005, when Hill, as an employee of RCS Construction, Inc., ("RCS") was performing construction work at the Zone 17 plant in East Alton, Illinois, owned by Defendant Olin Corporation ("Olin"). Hill was injured when, while he was operating a crane owned by Olin to move equipment, material, and construction debris, a chain in the crane's lifting device fell, striking him. Hill filed suit against Olin and two employees of Olin, Defendants Michael L. Roark and Rick Kelley, in the Circuit Court of the Third Judicial Circuit, Madison County, Illinois, on December 5, 2006, alleging negligence under Illinois law. On January 19, 2007, Olin timely removed the case to this court, asserting that federal subject matter jurisdiction is proper in this case in diversity jurisdiction because Roark and Kelley have been fraudulently joined to defeat diversity. Hill in turn has moved for remand of the case to state court for lack of subject matter jurisdiction. The motion for remand has been fully briefed and is ripe for decision. Having reviewed carefully the submissions of the parties, the Court now is prepared to rule.

II. Discussion

A. Legal Standard

Under 28 U.S.C. § 1441, "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). The party seeking removal has the burden of establishing federal jurisdiction. See In re Brand Name Prescription Drugs Antitrust Litig., 123 F.3d 599, 607 (7th Cir. 1997); Potter v. Janus Inv. Fund, No. 06 CV 929 DRH, 06 CV 997 DRH, 2007 WL 1056676, at *2 (S.D. Ill. Apr. 6, 2007). "'Courts should interpret the removal statute narrowly and presume that the plaintiff may choose his or her forum.' Put another way, there is a strong presumption in favor of remand." Fuller v. BNSF Ry. Co., 472 F. Supp. 2d 1088, 1091 (S.D. Ill. 2007) (quoting Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993)). "All doubts about the propriety of removal are to be resolved in favor of remand." Ford v. Keck, No. 06-cv-667-DRH, 2007 WL 1022003, at *1 (S.D. Ill. Apr. 2, 2007). See also Disher v. Citigroup Global Mkts., Inc., Civil No. 04-308-GPM, 2007 WL 1231632, at *7 (S.D. Ill. Apr. 24, 2007) (noting "the familiar principle" that "the exercise of federal jurisdiction on removal is construed narrowly and doubts about the propriety of the exercise of such jurisdiction are resolved against removal and in favor of state court.").

Removal based on federal diversity jurisdiction requires, of course, that the parties to a case be of completely diverse state citizenship, that is, no plaintiff may be a citizen of the same state as any defendant, and that the amount in controversy exceed $75,000, exclusive of interest and costs. See 28 U.S.C. § 1332(a)(1); Carden v. Arkoma Assocs., 494 U.S. 185, 187 (1990); Rubel v. Pfizer Inc., 361 F.3d 1016, 1017 (7th Cir. 2004); Nicol v. Merck & Co., No. 06-926-GPM, 2006 WL 3804887, at *1 (S.D. Ill. Dec. 22, 2006). However, even where diversity of citizenship is not complete, a federal court may disregard the citizenship of a diversity-defeating defendant on removal when that defendant has been fraudulently joined, that is, "there is no possibility that a plaintiff can state a cause of action against [the] nondiverse defendant[ ] in state court, or where there has been outright fraud in [the] plaintiff's pleading of jurisdictional facts." Gottlieb v. Westin Hotel Co., 990 F.2d 323, 327 (7th Cir. 1993). See also Hoosier Energy Rural Elec. Coop., Inc. v. Amoco Tax Leasing IV Corp., 34 F.3d 1310, 1315 (7th Cir. 1994); Smith v. Merck & Co., 472 F. Supp. 2d 1096, 1098 (S.D. Ill. 2007); McNichols v. Johnson & Johnson, 461 F. Supp. 2d 736, 739 (S.D. Ill. 2006). A defendant seeking removal based on alleged fraudulent joinder has the "heavy" burden of proving that, after the court resolves all issues of law and fact in the plaintiff's favor, there is no possibility the plaintiff can establish a cause of action against a diversity-defeating defendant in a state court. Poulos v. Naas Foods, Inc., 959 F.2d 69, 73 (7th Cir. 1992); Bavone v. Eli Lilly & Co., Civil No. 06-153-GPM, 2006 WL 1096280, at *2 (S.D. Ill. Apr. 25, 2006).

B. Existence of Diversity Jurisdiction

As an initial matter, before addressing the issue of whether, as Olin claims, Roark and Kelley have been fraudulently joined to defeat federal diversity jurisdiction, the Court examines whether certain other prerequisites for the exercise of diversity jurisdiction on removal are satisfied in this case. The Court notes first that Olin's notice of removal alleges as to Hill's citizenship for diversity purposes only that Hill "resid[es] in the State of Illinois" and thus, "upon information and belief," he is an Illinois citizen. Doc. 2 ¶ 8. In general, of course, a notice of removal "must make the basis for the federal court's exercise of removal jurisdiction clear and contain enough information so that the district judge can determine whether removal jurisdiction exists." 14C Charles Alan Wright, Arthur R. Miller, Edward H. Cooper & Joan E. Steinman, Federal Practice & Procedure § 3733 (3d ed. 1998 & Supp. 2007) (collecting cases). This burden is not met by allegations of citizenship for diversity purposes based upon information and belief. See Progressive Preferred Ins. Co. v. Bane of Cincinnati, Inc., No. 1:07-CV-29, 2007 WL 922234, at *1 (N.D. Ind. Mar. 26, 2007); Lyerla v. AMCO Ins. Co., 462 F. Supp. 2d 931, 931 (S.D. Ill. 2006). Nor is this burden satisfied by allegations of a party's citizenship based upon that party's residence in a state rather than domicile in that state, see America's Best Inns, Inc. v. Best Inns of Abilene, L.P., 980 F.2d 1072, 1074 (7th Cir. 1992), a party's domicile being, of course, "the state where [the] party is physically present with an intent to remain there indefinitely." Cassens v. Cassens, 430 F. Supp. 2d 830, 833 (S.D. Ill. 2006).

On the other hand, the Court is entitled to consider the entire record in this case in evaluating the requirements for diversity jurisdiction. See Gay v. Ruff, 292 U.S. 25, 34 (1934); Harmon v. OKI Sys., 115 F.3d 477, 479-80 (7th Cir. 1997); Ford, 2007 WL 1022003, at *4; Kitson v. Bank of Edwardsville, Civil No. 06-528-GPM, 2006 WL 3392752, at *3 (S.D. Ill. Nov. 22, 2006). In this instance, Hill's own jurisdictional submissions to the Court state affirmatively that he is an Illinois citizen and, of course, he has moved for remand of this case to state court on the grounds that, because both Roark and Kelley are Illinois citizens, diversity of citizenship is not complete in this case. See Doc. 9 ¶¶ 5-7. Thus, while the Court ordinarily would require Olin to amend its notice of removal to allege properly Hill's citizenship for diversity purposes, see Lyerla v. Amco Ins. Co., 461 F. Supp. 2d 834, 836-37 (S.D. Ill. 2006); LaRoe v. Cassens & Sons, Inc., 472 F. Supp. 2d 1039, 1040-41 (S.D. Ill. 2006), on the state of the record the Court sees no reason not to assume for purposes of the instant motion for remand that Hill in fact is an Illinois citizen. See Yanow v. Weyerhaeuser S.S. Co., 250 F.2d 74, 75 (9th Cir. 1958) (the court may take the appearance of a plaintiff in federal court and a motion by the plaintiff for a jury trial as accepting as true the allegations in a notice of removal establishing diversity jurisdiction). See also Sierminski v. Transouth Fin. Corp., 216 F.3d 945, 947-49 (11th Cir. 2000) (calculations regarding the jurisdictional amount in controversy in a case removed to federal court in diversity offered by a defendant in a brief in opposition to a motion for remand established that the prerequisites for the exercise of diversity jurisdiction were met).*fn1

Having determined that Hill's Illinois citizenship is adequately established on the record, the Court turns to the question of the amount in controversy. The parties do not dispute that a sum in excess of $75,000, exclusive of interest and costs is in controversy here, and the allegations of Hill's complaint, though somewhat conclusory and boilerplate in nature, are sufficient to show by a preponderance of the evidence that this is the case. See Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir. 2006). Specifically, Hill alleges that the accident giving rise to this case caused him extensive personal injuries and that as a consequence he has suffered and will continue to suffer disability and pain and suffering. See Doc. 2, Ex. A ¶ 6. Hill alleges further that he has incurred and will continue to incur medical expenses and lost wages, and requests damages in excess of $50,000. See id. The Court concludes that these uncontroverted allegations establish that the amount in controversy is met in this case. See Andrews v. E.I. Du Pont De Nemours & Co., 447 F.3d 510, 514-15 (7th Cir. 2006) (diversity jurisdiction was satisfied where the plaintiff's complaint sought damages "in excess of $50,000" and alleged "severe and permanent" injuries, and the plaintiff did not challenge the removing defendant's estimate of his potential damage); Rising-Moore v. Red Roof Inns, Inc., 435 F.3d 813, 815 (7th Cir. 2006) (diversity jurisdiction was satisfied where the plaintiff's medical expenses and lost earnings amounted to $45,000, so that "[a] modest allowance for pain, suffering, and future losses (either income foregone or medical expenses incurred) brings the total over the threshold."); Chase v. Shop 'N Save Warehouse Foods, Inc., 110 F.3d 424, 428-29 (7th Cir. 1997) (diversity jurisdiction was satisfied where the plaintiff's medical expenses amounted to $4,400 and the plaintiff sought damages for "future medical treatment and disability care, future pain and suffering, future mental anguish, loss of past wages and impairment of future earning capacity"); Fields v. Jay Henges Enters, Inc., Civil No. 06-323-GPM, 2006 WL 1875457, at **4-5 (S.D. Ill. June 30, 2006) (diversity jurisdiction was satisfied where the plaintiff's complaint alleged "chronic, severe skin disease, pain and suffering, and past and future medical expenses and lost earnings," and was accompanied by an affidavit pursuant to Rule 222 of the Illinois Supreme Court Rules seeking damages in excess of $50,000).

The Court turns at last to the issue of fraudulent joinder. As discussed, Hill, like Roark and Kelley, is a citizen of Illinois; Olin is a citizen of Virginia and Missouri. See 28 U.S.C. § 1332(c)(1). Olin insists, however, that complete diversity of citizenship exists in this case because Hill cannot establish a cause of action against Roark and Kelley under Illinois law. Olin asserts that Roark, who is Manager of Regulatory Compliance and Loss Prevention at Olin's East Alton facility, and Kelley, who is Senior Associate Engineer at the same facility and who was serving as acting Construction Supervisor on the day Hill was injured, were not in control of Hill's work at the time of the accident, and has submitted to the Court affidavits to this effect.*fn2 Hill in turn has submitted to the Court a letter from Roark to the Occupational Safety and Health Administration dated May 3, 2005, offering a professional opinion that the crane by which Hill was injured presents no safety hazards. See Doc. 9, Ex. B. Hill also has submitted to the Court an affidavit stating that on the day of the accident Kelley told him that he "would need to use Olin's overhead crane" in order to remove steel grating at the construction site. Id., Ex. A ¶ 5.

The Court has emphasized quite frequently that the test of fraudulent joinder to defeat diversity is extremely lenient for plaintiffs, confined as it is to examining the legal sufficiency of a plaintiff's allegations against a diversity-defeating defendant in the manner of an inquiry on a motion under Rule 12(b)(6) of the Federal Rules of Civil Procedure. "The scope of the Court's inquiry [in ruling on a claim of fraudulent joinder] is extremely narrow, namely, to determine whether, after resolving all issues of fact and law in [a plaintiff's] favor, [the] [p]laintiff[ ] [has] stated a claim against [a non-diverse defendant] upon which relief can be granted in . . . state court." Rutherford v. Merck & Co., 428 F. Supp. 2d 842, 847 (S.D. Ill. 2006). In evaluating a claim of fraudulent joinder, a court "conduct[s] 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 . . . . Ordinarily, if a plaintiff can survive a Rule 12(b)(6) challenge, there is no [fraudulent] joinder." Riddle v. Merck & Co., Civil No. 06-172-GPM, 2006 WL 1064070, at *2 (S.D. Ill. Apr. 21, 2006) (quoting Smallwood v. Illinois Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004)). Indeed, the inquiry on a claim of fraudulent joinder is even more lenient than the Rule 12(b)(6) inquiry because a federal court is required to interpret both law and fact in the light most favorable to a plaintiff. "[T]he test for fraudulent joinder . . . is a less searching test than the test under Rule 12(b)(6) . . . . In fact, a federal court may find that a nondiverse defendant is not fraudulently joined for the purposes of jurisdiction, and later a state court may find that the plaintiff failed to state a claim against the same nondiverse defendant, who will then be dismissed from the suit." Rutherford, 428 F. Supp. 2d at 847 (quoting Valentine v. Ford Motor Co., No. 2:03-CV-090-JDT-WGH, 2003 WL 23220758, at *4 (S.D. ...

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