United States District Court, W.D. Arkansas, Fayetteville Division
STEPHANIE CLAYTON CURRY, Special Administratrix of the Estate of Joe W. Clayton, Deceased PLAINTIFF
SAM'S WEST, INC. D/B/A SAM'S CLUB; WALMART STORES, INC. D/B/A SAM'S CLUB; and SCHUMACHER ELECTRIC CORPORATION DEFENDANTS
MEMORANDUM OPINION AND ORDER
TIMOTHY L. BROOKS UNITED STATES DISTRICT JUDGE
case was originally filed in the Circuit Court of Benton
County, Arkansas, on May 23, 2016. Plaintiff Stephanie
Clayton Curry, Special Administratrix of the Estate of Joe W.
Clayton, alleged in the lawsuit that her father, Joe W.
Clayton, suffered a wrongful death on May 24, 2013, caused by
a defective battery charger manufactured by Defendant
Schumacher Electric Corporation ("Schumacher") and
sold by Defendants Sam's West ("Sam's") and
Walmart Stores, Inc. ("Walmart"). Defendants
jointly removed the case to this Court on June 24, 2016.
pending before the Court are two motions: a Motion to Remand
(Doc. 14) filed by Plaintiff, and a Motion to Dismiss (Doc.
4) filed by all Defendants collectively. Plaintiffs Motion to
Remand was accompanied by a Brief in Support (Doc. 15).
Defendants' Motion to Dismiss was also accompanied by a
Brief in Support (Doc. 5), and Plaintiff filed a Response in
Opposition (Doc. 16) and Brief in Support (Doc. 17). Although
Defendants never filed a formal brief in opposition to the
Motion to Remand, they filed a Reply (Doc. 28) to the Motion
to Dismiss, and their Notice of Removal (Doc. 1) also
contains a memorandum of law that explains their arguments in
favor of finding that Sam's and Walmart were fraudulently
joined, and that the Court has proper subject-matter
jurisdiction over the remaining Defendant.
August 19, 2016, the Court conducted a hearing on both
pending Motions and heard argument from counsel before taking
the matter under advisement. The Court is now prepared to
rule, and for the reasons explained in detail herein, the
Motion to Remand (Doc. 14) is denied, the Motion to Dismiss
(Doc. 4) is granted, and the case is dismissed.
Curry was appointed Special Administratrix of the Estate of
her father, Joe W. Clayton, by the Circuit Court of Benton
County, Arkansas, on or about May 23, 2016. (Doc. 3, p. 2).
Neither she nor the decedent hail from Arkansas. They are
citizens of Texas. The Court understands that the state
court's appointment of Plaintiff was done for the limited
purpose of prosecuting the instant wrongful death action.
24, 2016, Sam's, Walmart, and Schumacher collectively
filed a Notice of Removal (Doc. 1) from state court,
asserting that the Court should dismiss Defendants Sam's
and Walmart because they were fraudulently joined. After they
are dismissed, Defendants assert that the Court will then
have federal subject matter jurisdiction over this dispute
due to the presence of complete diversity of citizenship of
the remaining parties, pursuant to 28 U.S.C. § 1332.
See Id. at p. 3. As stated previously, Plaintiff is
a citizen of Texas. This is so because her father, the
decedent, was a citizen of Texas. See 28 U.S.C.
§ 1332(c)(2) ("the legal representative of the
estate of a decedent shall be deemed to be a citizen only of
the same State as the decedent"). As for the three
Defendants, Sam's and Walmart are both citizens of
Arkansas, while Schumacher is a citizen of
reason why the Court lacks original jurisdiction over the
case now, prior to deciding the fraudulent joinder issue, is
due to a provision in the law at 28 U.S.C. § 1441(b)(2),
which involves a further jurisdictional restriction on
removal actions. This restriction is commonly known as the
"forum defendant rule, " and it provides that
"[a] civil action otherwise removable solely on the
basis of the jurisdiction under section 1332(a) of this
title"-that is, on the basis of diversity
jurisdiction-"may not be removed if any of the parties
in interest properly joined and served as defendants is a
citizen of the State in which such an action is
brought." Id. In the case at bar, the forum
defendant rule applies because two of the Defendants,
Sam's and Walmart, are citizens of Arkansas, the forum in
which the state court action was brought.
Eighth Circuit has made clear that the violation of the forum
defendant rule "is a jurisdictional defect and 'not
a mere procedural irregularity capable of being
waived.'" Horton v. Conklin, 431 F.3d 602,
604 (8th Cir. 2005) (quoting Hurt v. Dow Chem. Co.,
963 F.2d 1142, 1145 (8th Cir. 1992)). Defendants correctly
state, however, that the Court may find an exception to the
forum defendant rule if the forum Defendants, Sam's and
Walmart, were fraudulently joined in the action, that is,
"if the plaintiffs claim against the diversity
destroying defendant[s] has 'no reasonable basis in fact
and law.'" Knudson v. Sys. Painters, Inc.,
634 F.3d 968, 977 (8th Cir. 2011) (quoting Filla v.
Norfolk S. Ry. Co., 336 F.3d 806, 810 (8th Cir. 2003),
and observing that "the Filla standard remains
good law in this circuit, " 634 F.3d at 977 n.7).
disagrees that she has fraudulently joined Sam's and
Walmart. She maintains she has asserted valid claims against
them under Arkansas law, and in her Motion to Remand, she
asks that the case be returned to state court for further
proceedings. Defendants respond that Texas law, rather than
Arkansas law, applies to the claims in this case, and no
reasonable basis exists under Texas law to find Sam's or
Walmart liable for the torts alleged in the Complaint, all of
which arise from the alleged wrongful death of Mr. Clayton.
Defendants have also filed a Motion to Dismiss in which they
state that all claims against Schumacher are time-barred
under the Texas two-year statute of limitations for wrongful
death actions. Plaintiff, on the other hand, believes her
claims were timely filed under Arkansas law, which has a
three-year statute of limitations for wrongful death actions.
The Court will consider below the merits of both pending
Motion to Remand
the Court must resolve the Motion to Remand. Plaintiff
contends that, due to the application of the forum defendant
rule, the Court lacks subject-matter jurisdiction over the
case and must send it back to state court. Defendants believe
that subject-matter jurisdiction is proper in this Court once
the forum Defendants, Sam's and Walmart, are dismissed on
the basis of fraudulent joinder. "While fraudulent
joinder-the filing of a frivolous or otherwise illegitimate
claim against a non-diverse defendant solely to prevent
removal-is rather easily defined, it is much more difficulty
[sic] applied." Filla, 336 F.3d at 809. In the
past, district courts have employed varying standards to
evaluate whether valid claims exist against a defendant or
defendants at the removal stage, including "something
close to a dismissal standard." Id. at 810.
However, the Eighth Circuit in Filla v. Norfolk Southern
Railway Company clarified that the general
"reasonableness" of the underlying state law claims
is of "paramount consideration" when conducting a
fraudulent joinder analysis:
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 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. v. Medicine Bow
Coal Co., 556 F.2d 400, 406 (8th Cir. 1977) (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 the facts alleged- then there is
no fraudulent joinder. See Foslip Pharmaceuticals, Inc.
v. Metabolite Intern., Inc., 92 F.Supp.2d 891, 903
(N.D.Iowa 2000). As we recently stated in Wiles [v.
Capitol Indemnity Corp., 280 F.3d 868 (8th Cir. 2002],
". . . joinder is fraudulent when there exists no
reasonable basis in fact and law supporting a claim against
the resident defendants." 280 F.3d at 871. Conversely,
if there is a reasonable basis in fact and law supporting the
claim, the joinder is not fraudulent.
336 F.3d at 810 (footnote omitted).
Court's job, therefore, is to "simply determine
whether there is a reasonable basis for predicting that the
state's law might impose liability against the
defendant." Id. at 811. If there is any doubt
involved in making that prediction, "the district court
should resolve all facts and ambiguities in the current
controlling substantive law in the plaintiffs favor, "
not make a final decision, and remand the case,