Opinion
CIVIL ACTION NO. 01-608 CC.
May 31, 2001
ORDER AND REASONS
Before the Court are six Motions to Remand filed by plaintiffs John Bertucci, et al.; Thomas Self, et al.; Alfred Christophe, et al.; Shelton Pollet, Jr., et al; John Schulin, et al.; and Orson Hood, et al. Also before the Court are three Motions to Sever filed by the plaintiffs, and twenty-four Motions to Sever, two Motions to Dismiss, and one Motion for Summary Judgment filed by the defendants. For the following reasons, the plaintiffs' Motions to Remand are GRANTED; and the remaining motions are DENIED for lack of jurisdiction.
BACKGROUND
On January 23, 2000, a severe hail storm struck the New Orleans metropolitan area, pelting thousands of homes and vehicles with golf ball-sized hail. Over 20, 000 residents filed insurance claims for hail damage to their cars and rooftops, and the total cost of the damage was estimated to be over $65 million. In January 2001, several groups of plaintiffs in St. Bernard and Orleans Parishes filed nine separate class action lawsuits against more than seventy-five insurance carriers. Each petition alleges that the insurers intentionally or negligently failed to adequately compensate their policy holders for legitimate hail damage claims.
In March 2001, the defendants removed the nine hail damage cases to federal court on the grounds of diversity jurisdiction. Each group of plaintiffs has filed a motion to remand, arguing that the parties are not completely diverse and that a sufficient amount in controversy does not exist.
All nine of the removed actions have been consolidated for trial before this Court.
LAW AND ANALYSIS
A defendant may remove a civil action brought in state court to a federal district court that would have had jurisdiction had the plaintiff opted to bring the action there. See 28 U.S.C. § 1441. Where, as here, jurisdiction is premised on diversity of citizenship, the parties must be diverse and the amount in controversy must exceed $75,000. See 28 U.S.C. § 1332(a). In the cases before the Court, several Louisiana insurance carriers have been named as defendants. The defendants contend that the Louisiana insurance companies have been improperly joined, that the misjoinder is so egregious as to be fraudulent, and that the presence of the fraudulently joined parties should be ignored in determining jurisdiction.
The Court agrees that the defendants have been improperly joined. Federal Rule of Civil Procedure 20(a) provides that:
All persons . . . may be joined in one action as defendants if there is asserted against them jointly, severally, or in the alternative, any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all defendants will arise in the action.
In the instant cases, the plaintiffs have not alleged any facts whatsoever that could support a theory of joint or several liability. Nor have they satisfied the "same transaction or occurrence" requirement. The only link among the defendants is the hail storm, but the hail storm has nothing to do with the "transaction or occurrence" that forms the basis of the class action lawsuits. The causes of action asserted in the cases before the Court do not arise from the hail storm; they arise from each insurance company's alleged bad faith refusal to pay the claims of its insureds. Because each defendant is only responsible for transactions with its own policy holders, the Court finds that the defendants have been improperly joined.
However, fraudulent joinder will not be inferred from misjoinder alone. See 7C CHARLES ALAN WRIGHT, ARTHUR R. MILLER EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE: JURISDICTION 3D § 3641 (3d ed. 1998); Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1360 (11th Cir. 1996) (holding that mere misjoinder is not fraudulent joinder, but that egregious misjoinder may be fraudulent). In determining whether a party has been fraudulently joined to a lawsuit, the Court must decide whether the plaintiff has any possibility of establishing a valid cause of action against the defendant in question. See Booty v. Shoney's, Inc., 872 F. Supp. 1524, 1529 (E.D.La. 1995); Laughlin v. Prudential Ins. Co., 882 F.2d 187 (5th Cir. 1989).
In the cases at bar, although the defendants have clearly established that they have been improperly joined, the Court does not find that they have proven there is no reasonable possibility of recovery against any of the non-diverse defendants. See Delgado v. Shell Oil Co., 231 F.3d 165, 179 (5th Cir. 2000) (holding that the party "crying foul" must show that there is no reasonable probability of recovery against the joined party or that there has been outright fraud in the pleading of jurisdictional facts). At this stage of the litigation, the defendants cannot say with certainty that no plaintiff has a cause of action against any of the non-diverse defendants. In light of the fact that over 20,000 insurance claims resulted from the hail storm, the Court does not find that the plaintiffs were unreasonable in believing that a cause of action may exist against every insurance company operating in the New Orleans metropolitan area. In other words, although the plaintiffs clearly erred by joining the insurance carriers as defendants, the evidence does not support a finding that the plaintiffs' error constitutes fraudulent joinder. Absent such a finding, the Court cannot ignore the presence of the non-diverse defendants; and the presence of these Louisiana insurance carriers eliminates this Court's jurisdiction to sever the improperly joined defendants. Accordingly, the plaintiffs' motions to remand are GRANTED.
CONCLUSION
For the reasons stated above, IT IS ORDERED that Civil Actions 01-608, 01-653, 01-657, and 01-753 are REMANDED to the 34th Judicial District Court for the Parish of St. Bernard; and Civil Actions 01-740, 01-863, 01-910, 01-915 and 01-980 are REMANDED to Orleans Parish Civil District Court.
IT IS FURTHER ORDERED that all other pending motions in Civil Action 01-608 and its consolidated cases are DENIED for lack of jurisdiction and remanded with their respective cases.