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Keane v. Northland Tool & Equipment, Inc.

United States District Court, D. New Hampshire

June 10, 2019

Nicholaus Keane
Northland Tool & Equipment, Inc. et al.


          Landya B. McCafferty United States District Judge

         The question before the court is whether to remand this case back to state court on the basis of its improper removal. The court answers this in the affirmative and remands the case to Hillsborough County Superior Court Northern District.


         In March 2018, Keane suffered severe injuries when he was pulled into a rotating lathe at work. He claims that the injuries caused permanent impairment and disability and in excess of $500, 000 in medical expenses.

         As a citizen of New Hampshire, Keane filed this action in Hillsborough County Superior Court Northern District against four defendants: (1) Okuma Corporation, the designer and manufacturer of the lathe; (2) Okuma America Corporation ("Okuma America"), allegedly responsible for distribution and maintenance of Okuma lathes in the United States; (3) Robert E. Morris Company, LLC, allegedly the exclusive distributor of Okuma lathes in New Hampshire; and (4) Northland Tool & Equipment, Inc. ("NTE"), which Keane alleges owned the lathe in question at the time of his accident. Like Keane, NTE is a citizen of New Hampshire.

         Okuma America removed the case to this court, alleging diversity jurisdiction. In the notice of removal, Okuma America asserted simply that NTE was "improperly joined." NTE is the only defendant with New Hampshire citizenship and, if permitted to remain in the case, NTE would defeat diversity jurisdiction. Keane has filed a motion to remand and requests compensatory sanctions in the form of attorney's fees for what he contends was a baseless removal.


         A removed case must be remanded if the district court lacks subject matter jurisdiction. 28 U.S.C. § 1447(c). The party who removes a case from state court bears the burden of showing that such federal jurisdiction exists. DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n.3 (2006); Pruell v. Caritas Christi, 645 F.3d 81, 84 (1st Cir. 2011). Federal courts have diversity jurisdiction under § 1332(a) when the amount in controversy exceeds $75, 000 and the action is between "citizens of different states." 28 U.S.C. § 1332(a). In a case with multiple defendants, the presence in the action of a single defendant that is a citizen of the same state as the plaintiff deprives the district court of diversity jurisdiction over the entire action. See Picciotto v. Cont'l Cas. Co., 512 F.3d 9, 21 (1st Cir. 2008).

         Here, Keane argues that remand is appropriate because Okuma America cannot establish diversity jurisdiction. Okuma America counters that Keane's joinder of NTE was improper and an attempt to defeat diversity jurisdiction.[1]

         I. Improper Joinder

         To establish federal subject matter jurisdiction based upon fraudulent or improper joinder, a defendant must plead improper joinder in its notice of removal and demonstrate this claim on the merits. See Nordin v. PB&J Resorts, LLC, No. 15-cv-509-JL, 2016 WL 2757696, at *2-3 (D.N.H. May 12, 2016). This rule is consistent with the requirement that 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." Id. at *2 (internal quotation marks and alteration omitted).

         Here, Okuma America must establish subject matter jurisdiction by persuading the court that, although there is a non-diverse party in the case, removal was appropriate because plaintiff fraudulently or improperly joined a non-diverse defendant. Okuma America makes no allegations of "fraud" on Keane's behalf; rather, Okuma America alleges only that Keane improperly joined NTE as a defendant.

         A party seeking to remove a non-diverse party on the basis of improper joinder must persuade the court that there is "no reasonable possibility that the state's highest court would find that the complaint states a cause of action upon which relief may be granted against the non-diverse defendant." Universal Truck & Equip. Co., Inc. v. Southworth-Milton, Inc., 765 F.3d 103, 108 (1st Cir. 2014). In the Fourth Circuit, the analysis is described as follows: "Once the court identifies a glimmer of hope for the plaintiff, the jurisdictional inquiry ends." Harris v. State Farm Fire & Cas. Co., No. 5:31-CV-61-BO, 2013 WL 3356582, at *1 (E.D. N.C. July 3, 2013) (internal citation omitted); see also Grancare, LLC v. Thrower by & through Mills, 889 F.3d 543, 548 (9th Cir. 2018) (remand appropriate in the Ninth Circuit where there is a "possibility" that a state court would find a basis for the claim).

         The party seeking removal must demonstrate improper joinder by "clear and convincing evidence." Nordin, 2016 WL 2757696, at *3 (internal quotations omitted). This is "a heavy burden." Id. In deciding whether a party has met this "heavy burden," the court may consider additional evidence beyond the pleadings. See Id. Contested factual issues and "any doubt as to the propriety of the removal" shall be resolved in favor of remand. Id. at *1 (citation omitted); see also Arriaga v. New England Gas Co., 483 F.Supp.2d 177, 182 (D.R.I. 2007) ...

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