United States District Court, D. New Jersey
August 4, 2004.
BOBBY WARE, et al., Plaintiffs,
CIBA SPECIALTY CHEMICALS CORPORATION, et al., Defendants.
The opinion of the court was delivered by: JEROME SIMANDLE, District Judge
Residents of Alabama filed this class action complaint in the
Superior Court of New Jersey, Law Division, Atlantic County,
alleging that they were harmed when defendant companies
negligently manufactured, transported, and disposed solid and
liquid wastes near McIntosh, Alabama. The defendant companies are
Ciba Specialty Chemicals Corp. ("Ciba"), Ciba-Geigy Corp.
("Ciba-Geigy"), Novartis Corp.*fn1 ("Novartis"), Freehold
Cartage, Inc. ("Freehold"), Olin Corp. ("Olin"), and Arch
Chemicals, Inc. ("Arch").
Defendant Freehold is a New Jersey corporation. Defendants
removed the case to this Court citing diversity jurisdiction,
arguing that the New Jersey citizenship of Freehold should be
disregarded notwithstanding 28 U.S.C. § 1441(b)'s requirement
that, in a diversity case removed to federal court, no defendant
may be a citizen of the forum state. Defendants assert that even
though Defendant Freehold is a citizen of New Jersey, it is not a
"properly joined" defendant but is instead a defendant which was
improperly joined to defeat removal jurisdiction.
For the reasons set forth herein, this Court finds that
Freehold was properly included as a defendant. Therefore, this
Court does not have subject matter jurisdiction because a proper
defendant, Freehold, is a citizen of the forum state, and the
removal violates 28 U.S.C. § 1441(b). The Court will remand the
case to New Jersey Superior Court.
On January 20, 2004, Plaintiffs filed this class action in the
Superior Court of New Jersey, Atlantic County, alleging that
Defendants negligently and/or purposely manufactured harmful
liquid and solid wastes, transported hazardous wastes, and
created inadequate disposal areas for the waste at plants located
near McIntosh, Alabama (Compl., Count I, ¶ 3, Count III, ¶ 2),
which has placed Plaintiffs, who are all Alabama residents, in a
position of enhanced risk of injury. (Id. ¶ II.4.) The issue on
this motion is whether Freehold is a proper defendant in the
action, so the Court will limit its discussion to this issue.
Since 1952, Ciba,*fn2 Ciba-Geigy,*fn3 and
Novartis*fn4 have operated a chemical manufacturing plant on
property located two miles northeast of McIntosh, Alabama.
(Id., Count I, ¶ 1.) Ciba-Geigy also owns and operates a
chemical manufacturing plant in Toms River, New Jersey, from
which it allegedly transported its hazardous waste to the
McIntosh, Alabama, site for disposal at a rate of approximately
710,000 pounds per year. (Id. ¶ I.2.) For this transportation
from New Jersey to Alabama, Ciba-Geigy allegedly hired Freehold
Cartage, a New Jersey corporation. (Id. ¶ I.3.) Plaintiffs have
alleged that Freehold negligently transported the hazardous waste
from New Jersey to the Ciba plant in Alabama, where it was
negligently disposed of by the Ciba defendants. (Id., Count II,
Based in part on certain environmental tests at the Alabama
site, Plaintiffs filed the present action seeking medical
monitoring to ensure that any health issues from their exposure
to the hazardous chemicals would be immediately detected. In
addition to the present suit, there are two putative class action
lawsuits pending in the United States District Court for the
Southern District of Alabama, seeking relief for property damage
from the same exposure. Plaintiffs filed one suit against the
Ciba Defendants,*fn6 and one against the Olin
Defendants;*fn7 neither includes a claim against Defendant
Freehold. (Def. Ciba Br. at 2; Def. Olin Br. at 4.)
On April 8, 2004, the Ciba Defendants removed the case to this
court, asserting diversity jurisdiction. (Bennett Cert., Exs. F,
G, H.) Noting that Freehold is a New Jersey corporation, the
Court raised the question of removability sua sponte in a
letter to counsel on April 14, 2004.
As a result, on April 26, 2004, the Ciba Defendants and the
Olin Defendants filed motions for a declaration that this Court
has subject matter jurisdiction based on the improper joining of
a New Jersey corporation. Freehold Cartage has since joined their
motions. Plaintiffs have opposed the Defendants' motions,
asserting that Freehold was properly joined as a defendant in
A. Standard of Review
Civil actions brought in a state court may generally be removed
to district court if the district court has original
jurisdiction. 28 U.S.C. § 1441(a). Where removal is premised on
diversity jurisdiction, as it is here, the action is "removable
only if none of the parties in interest properly joined and
served as defendants is a citizen of the State in which such
action is brought." 28 U.S.C. § 1441(b) (emphasis added). The
issue here is whether Freehold, a citizen of the State where this
action was brought, is a party that was "properly joined."
In the Third Circuit, the removing party has a "heavy burden"
to justify removal and may avoid remand only by demonstrating
that the defendant sued in his home state was fraudulently
joined. Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 (3d
Cir. 1992) (quoting Steel Valley Author v. Union Switch & Signal
Div., 809 F.2d 1006, 1012 n. 6 (3d Cir. 1987), cert.
dismissed, 484 U.S. 1021 (1988)). "Removal statutes are to be
strictly construed against removal and all doubts should be
resolved in favor of remand" Batoff, 977 F.3d at 851 (quoting
Steel Valley, 809 F.2d at 1010); see also Samuel-Bassett v.
KIA Motors America, Inc., 357 F.3d 392, 396 (3d Cir. 2004).
Therefore, "a district court must resolve all contested issues of
substantive fact in favor of the plaintiff and must resolve any
uncertainties as to the current state of controlling substantive
law in favor of the plaintiff." Boyer v. Snap-On Tools Corp.,
913 F.2d 108, 111 (3d Cir. 1990), cert. denied, 498 U.S. 1085
(1991). If even the possibility exists that a state court "would
find the complaint states a cause of action against any one of
the resident defendants, the federal court must find that joinder
was proper and remand the case to state court." Batoff, 977
F.2d at 851 (citing Boyer, 913 F.2d at 111).
A properly joined defendant is one against whom the plaintiff
states a colorable claim and intends to prosecute the action.
Batoff, 977 F.2d at 851. Joinder is therefore fraudulent "where
there is no reasonable basis in fact or colorable ground
supporting the claim against the joined defendant, or no real
intention in good faith to prosecute the action against the
defendants or seek a joint judgment." Id. (citing Boyer, 913
F.2d at 111). A claim is not colorable if it is "wholly
insubstantial and frivolous." Id. at 852 (citing Bell v.
Hood, 327 U.S. 678, 682-683 (1946)). The mere fact that
plaintiff's motive may be to defeat diversity does not itself
establish fraudulent joinder. Abels v. State Farm Fire &
Casualty Comp., 770 F.2d 26, 32 (3d Cir. 1985).
In considering whether a party was properly joined, the Court
must determine whether the allegations of the complaint state a
colorable claim, not whether the complaint would survive a motion
to dismiss or a motion for summary judgment. Batoff, 977 F.2d
at 852-853 (finding the court was "presented with a `colorable'
claim even if [the claim] ultimately may not withstand a motion
to dismiss in state court); see also Boyer, 913 F.2d at 112
(reversing district court grant of summary judgment because it
"stepped from the threshold jurisdictional issue into a decision
on the merits"). Where there are colorable claims asserted, "the
court may not find that the non-diverse parties were fraudulently
joined," even if the claim against that party is eventually
dismissed on the merits. Batoff, 977 F.2d at 852 (citing
Boyer 913 F.2d at 113).
The plaintiffs assert that they have properly joined Freehold,
the cartage company that transported the allegedly hazardous
chemicals from New Jersey to Alabama. The Ciba Defendants and
Olin Defendants, though, assert that the joinder was fraudulent
because (1) Alabama law applies to these claims, (2) neither
Alabama nor New Jersey law recognizes transporter liability under
the circumstances alleged in the complaint, and (3) Alabama law
does not recognize the cause of action for medical monitoring
1. Choice of Law
Defendants argue that Alabama law should apply to this action.
Plaintiffs argue that this Court should not engage in choice of
law analysis in determining whether it has subject matter
jurisdiction over this case. As noted above, this Court must not
decide whether joinder of the resident defendant was fraudulent
based on its view of the merits of the case, but only decide
whether there is a colorable basis for the Plaintiffs' cause of
action. Batoff, 977 F.2d at 851. Indeed, the Third Circuit has
expressly stated that "a federal court cannot engage in a choice
of law analysis where diversity jurisdiction is not first
established." Abels, 770 F.2d at 33 n. 10. Therefore, while
this Court does not decide which state's law applies, the Court
does find that Plaintiffs have stated a colorable claim that New
Jersey law could apply to the claims against Freehold.
New Jersey choice of law rules apply where New Jersey is the
forum for the litigation. Erny v. Estate of Merola,
171 N.J. 86, 94 (2002) (citing Fu v. Fu, 160 N.J. 108, 117-118 (1999)).
New Jersey rules "employ a flexible governmental-interest
analysis to determine which state has the greatest interest in
governing the specific issue that arises in the underlying
litigation." Erny, 171 N.J. at 94.
New Jersey employs an issue-by-issue approach to choice of law
analysis and "recommends that each issue be decided by `the local
law of the state which, with respect to that issue, has the most
significant relationship to the occurrence and the parties.'"
Id. at 95 (quoting Restatement (Second) of Conflict of Laws §
145(1)(1971)). Specifically, damages issues like the medical
monitoring in this case "are characterized as appropriate for an
issue-specific determination with respect to which state has the
dominant policy interest." Id. at 96. Furthermore, Erny
quotes the Restatement where it provides:
In an action for personal injury, the local law of
the state where the injury occurred determines the
rights and liabilities of the parties, unless, with
respect to the particular issue, some other state has
a more significant relationship . . . to the
occurrence and the parties, in which event the local
law of the other state will be applied.
Restatement, supra § 146 (quoted by Erny, 170 N.J. at 95-96).
A reasonable basis exists to conclude that New Jersey law could
apply to the claims against Freehold. Freehold's alleged
negligent transportation of New Jersey hazardous wastes
originated from a New Jersey-regulated facility, and it is not
wholly insubstantial to assert that the State of New Jersey has a
policy interest in regulating a New Jersey waste-hauling
corporation that is transporting an average of 710,000 pounds of
hazardous waste from a New Jersey plant to a different state. The
potential New Jersey interest may be heightened when one
considers that the New Jersey hazardous wastes are being
transported by a New Jersey corporation to an out-of-state
facility owned and operated by the same waste-generating company.
This Court does not decide whether New Jersey law applies to the
claims against Freehold; however, it does find that it is
possible that New Jersey law could apply. Therefore, Plaintiffs
do have a colorable basis for asserting that New Jersey law
applies to the complaints against Freehold.*fn8
2. Transporter Liability
The Court further finds that there is a reasonable basis for a
claim against Freehold based on New Jersey's common law cause of
action for transporter liability. (Def. Ciba Br. at 8.) The
defendants agree that New Jersey's standard for transporter
liability is outlined in Kenney v. Scientific, Inc.,
204 N.J. Super. 228 (Law Div. 1985). (Def. Ciba Br. at 9-10.)*fn9 To
state a valid claim, a plaintiff must allege among other things
that either (1) the hauler selected the disposal site which he
knew or had reason to know was hazardous or (2) the hauler did
not select the disposal site but knew or had reason to know "that
the site selected by the generator is dangerous or has become
dangerous" and continued to make deliveries. Kenney, 204 N.J.
Super. at 262.
Here, the defendants argue that there is no reason to believe
that Freehold, which did not select the disposal site, knew or
had reason to know that the selected site had become dangerous.
Plaintiffs, though, have alleged that Freehold "negligently
and/or purposefully transported hazardous waste" to a site where
"the chemicals and waste transported . . . were negligently and
improperly disposed of." (Compl., Count II, ¶¶ 3,4.) Thus, within
the bounds of this allegation is an assertion that Freehold
reasonably should have known that the disposal site was dangerous
and continued to negligently or purposefully transport waste
there. Plaintiffs are not required to prove their allegations
against Freehold in this forum in order to demonstrate that
joinder was not improper. The Court finds, based on the
circumstances alleged in the complaint, that Plaintiffs have a
reasonable basis for the cause of action against Freehold under
New Jersey law.
The Court does not here determine whether or not Plaintiffs
will be able to sustain this claim as the Court is not called
upon to predict whether the claim would survive a substantive
motion to dismiss. It is enough that Plaintiffs have asserted a
colorable claim against Freehold; therefore, this Court cannot
find that Freehold was not "properly joined."
3. Cause of Action for Medical Monitoring
Finally, the Court finds that, if new Jersey law is applied,
Plaintiffs have stated a colorable claim against Freehold for
medical monitoring. Defendants' argument is premised on the
undisputed fact that Alabama law does not recognize a cause of
action for medical monitoring. See Southern Bakeries, Inc. v.
Knipp, 852 So.2d 712, 718 (Ala. 2002); Hinton v. Monsanto
Co., 813 So.2d 827, 830 (Ala. 2001). For the reasons stated
above, though, the Court has found that there is a colorable
basis for application of New Jersey law, which does allow a cause
of action for medical monitoring. See Ayers v. Township of
Jackson, 106 N.J. 557, 608 (1987) (recognizing the use of a
court-supervised fund to "administer medical-surveillance
payments in mass exposure cases").
It is true that Defendants have sought only medical monitoring
relief in this action, stating that:
The members of the class are not currently seeking
damages in this proceeding for any diseases related
to their exposure to these site-related contaminants.
Plaintiffs and class members are seeking to establish
a program and/or fund for medical monitoring of all
class members for the potential adverse health
effects from exposure.
(Compl., Class Allegations, ¶ 4.) Defendants argue that
Plaintiffs, therefore, have a motive to sue in New Jersey to take
advantage of this law.
Regardless of the plaintiffs' motives for this suit, a federal
court cannot hear the suit unless federal subject matter
jurisdiction is first established. Abels, 770 F.2d at 33 n. 10.
Where there is a colorable basis for liability against Freehold
under New Jersey law, the Court cannot find that naming Freehold
as a defendant was improper. Accordingly, the Court will allow
the claims against Freehold to proceed and will remand this case
to the State court because this Court lacks jurisdiction over the
The proper forum is the Superior Court of New Jersey, which is
the court of competent jurisdiction to address the merits, if
any, of Plaintiffs' clams.
For the foregoing reasons, the Court holds that Freehold has
been properly joined and this Court does not have subject matter
jurisdiction upon removal pursuant to 28 U.S.C. § 1441(b);
therefore, the Court will remand this case to State court.
This matter having come before the Court upon the motions of
Defendants Ciba Specialty Chemicals Corp., Ciba-Geigy Corp.,
Novartis, Corp., Olin Corp., and Arch Chemicals, Inc., for a
declaration that this Court has subject matter jurisdiction
pursuant to 28 U.S.C. § 1441, [Docket Items 5-1, 9-1]; the Court
having reviewed the submissions of the parties; and the Court
finding, for the reasons stated in the Opinion of today's date,
that Plaintiffs' joinder of Defendant Freehold Cartage, Inc., was
IT IS this 4th day of August, 2004, hereby
ORDERED that the motion of Defendants Ciba Specialty
Chemicals Corp., Ciba-Geigy Corp., and Novartis, Corp., for a
declaration that this Court has subject matter jurisdiction,
[Docket Item 5-1], be, and hereby is, DENIED; and
IT IS FURTHER ORDERED that the motion of Defendants Olin
Corp. and Arch Chemicals, Inc., for a declaration that this Court
has subject matter jurisdiction, [Docket Item 9-1], be, and
hereby is, DENIED; and
IT IS FURTHER ORDERED that this case be REMANDED to New
Jersey Superior Court, Atlantic County, Case No. ATL-L-243-04.