United States Court of Appeals
Fifth Circuit
F I L E D
In the January 13, 2006
United States Court of Appeals Charles R. Fulbruge III
for the Fifth Circuit Clerk
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m 04-41584
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JOHNNY CROCKETT, ET AL.,
Appellants,
JOHNNY CROCKETT,
INDIVIDUALLY, AND AS HEIRS TO THE ESTATE OF VERONICA FAYE CROCKETT;
ANDRA KITCHEN,
INDIVIDUALLY, AND AS HEIRS TO THE ESTATE OF VERONICA FAYE CROCKETT;
ROBERT KITCHEN,
INDIVIDUALLY, ANS AS HEIRS TO THE ESTATE OF VERONICA FAYE CROCKETT,
Plaintiffs-Appellants,
VERSUS
R.J. REYNOLDS TOBACCO COMPANY, ET AL.,
Defendants,
R.J. REYNOLDS TOBACCO COMPANY; R.J.R. NABISCO, INC.;
PHILIP MORRIS USA INC.; PHILIP MORRIS COMPANIES, INC.;
BROWN AND WILLIAMSON TOBACCO CORPORATION;
BATUS TOBACCO SERVICES, INC.; B&W JAPAN, INC.;
H.E.B. BUTT GROCERY COMPANY,
Defendants-Appellees.
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Appeal from the United States District Court
for the Southern District of Texas
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Before GARWOOD, SMITH, and DEMOSS, the non-diverse health care defendants had
Circuit Judges. been fraudulently joined to defeat removal
jurisdiction. The district court determined that
JERRY E. SMITH, Circuit Judge: there had been no fraudulent joinder and re-
manded to state court.
Johnny Crockett and other heirs of the es-
tate of Veronica Faye Crockett (collectively On remand, the tobacco defendants, over
“Crockett”) challenge the removal to federal Crockett’s objection, successfully moved to
court of their wrongful death and survival suit sever Crockett’s claims against the health care
against R.J. Reynolds Tobacco Company and defendants. Upon issuance of the severance
other tobacco companies (collectively the “to- order, the tobacco defendants again removed,
bacco defendants”). Concluding that there is arguing that the severance of the non-diverse
jurisdiction, we affirm the judgment on the parties cured the lack of complete diversity.
merits. Immediately after filing their notice of remov-
al, the tobacco defendants also filed a motion
I. for judgment on the pleadings.
Crockett filed a wrongful death and survival
suit against the tobacco defendants and Dr. Once back in federal court, Crockett moved
William Peterek and the Gulf Coast Medical to remand, arguing that the tobacco defen-
Group (collectively the “health care defen- dants’ second attempt to remove was improper
dants”) in state court seeking damages for the because diversity had not been created through
cancer-related death of Veronica Faye Crock- a voluntary act of the plaintiffs. Instead of
ett, a long-time smoker. Crockett alleges that first ruling on Crockett’s motion, the district
the tobacco defendants’ defective cigarettes court held against him on the merits by grant-
and the health care defendants’ negligence in ing the tobacco defendant’s motion for judg-
failing to diagnose the decedent’s cancer com- ment on the pleadings, then denied as moot the
bined to cause her death. motion to remand.1 Crockett appeals, claiming
Because Crockett and the health care de- 1
fendants are citizens of Texas, there is not Although it reached the correct result, the dis-
complete diversity of citizenship. Federal jur- trict court should not have decided to bypass the
jurisdictional question presented in the motion to
isdiction also is barred by the fact that the
remand and proceed directly to the merits. See
health care defendants are citizens of the state
Steel Co. v. Citizens for a Better Env’t, 523 U.S.
in which the action is brought. The tobacco 83, 94-95 (1998) (rejecting the notion that a court
defendants nevertheless removed, claiming that (continued...)
2
the district court lacked subject matter juris- which is or has become removable, except
diction. that a case may not be removed on the ba-
sis of [diversity of citizenship] more than
II. one year after commencement of the action.
“We review questions of subject matter jur-
isdiction de novo.” Bissonnet Invs., LLC v. Id.
Quinlan, 320 F.3d 520, 522 (5th Cir. 2003).
Because Crockett does not contest the district This suit was initially nonremovable be-
court’s decision on the merits, so the only is- cause the health care defendants were non-di-
sue on appeal is whether the district court had verse and were citizens of Texas, in which the
removal jurisdiction, leading us to apply the de action was brought. The tobacco defendants
novo standard. argue, however, that the state court’s order
severing Crockett’s claims against the health
As a general matter, care defendants produced complete diversity
and obviated the “in-state defendant” barrier
any civil action brought in a State court of posed by § 1446(b). The tobacco defendants
which the district courts of the United assert that a severance order qualifies as an
States have original jurisdiction, may be re- “order or other paper from which it may first
moved by the defendant or the defendants, be ascertained that the case is one which . . .
to the district court of the United States for has become removable.” § 1446(b).
the district and division embracing the place
where such action is pending. Crockett contends, to the contrary, that
§ 1446(b) was enacted against the backdrop
28 U.S.C. § 1441(a). If jurisdiction is based of, and without the intent to abrogate, the ju-
on diversity of citizenship, however, the action dicially-created “voluntary-involuntary” rule
is removable only if there is complete diversity whereby “an action nonremovable when com-
and “none of the parties in interest properly menced may become removable thereafter only
joined and served as defendants is a citizen of by the voluntary act of the plaintiff.” Weems
the State in which such action is brought.” Id. v. Louis Dreyfus Corp., 380 F.2d 545, 547
§ 1441(b). If an action is not initially remov- (5th Cir. 1967). Because this suit became
able, but later becomes removable, arguably removable only after the issuance of
a severance order that was entered over
a notice of removal may be filed within Crockett’s objection, Crockett claims removal
thirty days after receipt by the defendant was improper under the voluntary-involuntary
. . . of a copy of an amended pleading, mo- rule.
tion, order or other paper from which it
may first be ascertained that the case is one The tobacco defendants counter that the
voluntary-involuntary rule is inapplicable be-
1
cause the health care defendants were not
(...continued) properly-joined parties. We agree.
can “assume” jurisdiction for the purpose of de-
ciding the merits, because such an approach “car-
Courts have long recognized an exception
ries the courts beyond the bounds of authorized
judicial action and thus offends fundamental princi-
to the voluntary-involuntary rule where a claim
ples of separation of powers”). against a nondiverse or in-state defendant is
3
dismissed on account of fraudulent joinder.2 eral law, defendants are properly joined if
Fraudulent joinder can be established by dem- (1) “there is asserted against them jointly, sev-
onstrating either “(1) actual fraud in the plead- erally, or in the alternative, any right to relief
ing of jurisdictional facts, or (2) inability of the in respect of or arising out of the same trans-
plaintiff to establish a cause of action against action, occurrence, or series of transactions or
the non-diverse party in state court.” Travis v. occurrences” and (2) “any question of law or
Irby, 326 F.3d 644, 646-47 (5th Cir. 2003).3 fact common to all defendants will arise in the
action.” FED. R. CIV. P. 20(a). Texas has
On the tobacco defendants’ first attempt to adopted the same requirements for proper
remove, the district court, after deciding that joinder. See TEX. R. CIV. P. 40(a). If these
the health care defendants had not been fraud- requirements are not met, joinder is improper
ulently joined, remanded on that basis. Crock- even if there is no fraud in the pleadings and
ett notes correctly that that decision is made the plaintiff does have the ability to recover
unreviewable by 28 U.S.C. § 1447(d).4 In against each of the defendants.5
addition, the severance order issued by the
state court cannot be considered equivalent to The state court severed Crockett’s claims
a finding of actual fraud in the pleadings or an against the health care defendants from his
inability of the plaintiffs to establish a cause of claims against the tobacco defendants because
action against the health care defendants. “the medical negligence and malpractice claim
Rather, that order merely established that and the burden of proof to sustain [that] claim
Crockett’s claims against the health care de- is totally different [from] the burden of proof
fendants should be tried in separate suits. . . . necessary to secure judgment for product
Crockett elected not to appeal that ruling. liability.”6 To the extent the severance deci-
Fraudulent joinder is therefore no longer an sion was tantamount to a finding of improper
issue in this case. joinder, we agree with that finding.
A party, however, can be improperly joined The fraudulent joinder exception to the vol-
without being fraudulently joined. Under fed- untary-involuntary rule is designed to prevent
plaintiffs from blocking removal by joining
nondiverse and/or in-state defendants who
2 should not be parties. That salutary purpose is
See, e.g., Insigna v. LaBella, 845 F.2d 249,
254 (11th Cir. 1988) (“Fraudulent joinder is a also served by recognizing an exception to the
well-established exception to the voluntary-invol- voluntary-involuntary rule where defendants
untary rule.”). are improperly, though not fraudulently,
joined. We therefore conclude that removal
3
Accord Smallwood v. Ill. Cent. R.R., 385 F.3d on the basis of an unappealed severance, by a
568, 573 (5th Cir. 2004) (en banc) (describing “the
test for fraudulent joinder” and quoting Travis, 326
5
F.3d at 646-47), cert. denied, 125 S. Ct. 1825 Cf. Tapscott v. MS Dealer Serv. Corp., 77
(2005). F.3d 1353, 1360 (11th Cir. 1996).
4 6
Section 1447(d) states that “[a]n order re- Crockett v. R.J. Reynolds Tobacco Co., No.
manding a case to the State court from which it 03CV1391 (10th Dist. Ct., Galveston County,
was removed is not reviewable on appeal or other- Tex., Aug. 18, 2004) (transcript of hearing on de-
wise” (adding an exception not relevant here). fendants’ motion to sever).
4
state court, of claims against improperly joined
defendants is not subject to the voluntary-
involuntary rule.7 Accordingly, removal
jurisdiction existed in this case upon the sev-
erance of Crockett’s claims against the nondi-
verse in-state health care defendants.
III.
Crockett has not challenged the district
court’s disposition on the merits. Accordingly,
because we conclude that the district court had
subject matter jurisdiction, its judgment grant-
ing the motion for judgment on the pleadings,
denying (as moot) the motion to remand, and
dismissing all claims with prejudice, is AF-
FIRMED.
7
This conclusion finds support the text of
§ 1441(b), which does not refer to “nonfraudulent-
ly joined” parties. Rather, it blocks removal only
where “properly joined” defendants are citizens of
the state in which the action is brought.
5