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Lipson v. Metro Corp. Holdings, Inc.

United States District Court, D. New Jersey

June 27, 2019

CAROL LIPSON, Plaintiff,
v.
METRO CORP. HOLDINGS, INC., and DAVID H. LIPSON, JR., SHERRY LITWER, DEBRA CLAREMON, and BARTON WINOKUR as Co-Executors of the ESTATE OF D. HERBERT LIPSON, and THE ESTATE OF D. HERBERT LIPSON, Defendants.

          JOSHUA BENJAMIN KAPLAN MATTHEW ADAM GREEN OBERMAYER REBMANN MAXWELL & HIPPEL LLP On behalf of Plaintiff

          KERRI E. CHEWNING ARCHER & GREINER, PC ONE CENTENNIAL SQUARE FRANK P. TRAPANI, KREHER & TRAPANI LLP On behalf of Defendants

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         Presently before the Court is Plaintiff's motion to remand the matter to state court. Also pending is Defendant Metro Corp. Holdings, Inc.'s motion to dismiss for lack of personal jurisdiction. As set forth below, Plaintiff's motion will be granted, and Defendant's motion will be denied as moot.

         BACKGROUND

         On October 4, 2018, Plaintiff, Carol Lipson filed a complaint in New Jersey Superior Court, Atlantic County, against Defendants Metro Corp. Holdings, Inc., the Estate of D. Herbert Lipson (“Herb Lipson”), and the four co-executors of Herbert Lipson's estate. Plaintiff was Herb Lipson's spouse, Metro Corp. was Herb Lipson's company, and three of the four co-executors of Herb Lipson's estate are his children from a prior marriage.

         On November 2, 2018, Metro Corp. removed the action to this Court pursuant to 28 U.S.C. § 1441(b) based on diversity of citizenship under 28 U.S.C. § 1332(a)(1). Plaintiff is a citizen of New Jersey. Defendant Metro Corp. is a citizen of Pennsylvania. The other five Defendants are citizens of New Jersey.[1]

         Despite the lack of diversity between Plaintiff and five of the Defendants, Metro Corp. removed the action on the premise that the New Jersey citizenship of those Defendants must be disregarded because they were not properly joined as parties. Metro Corp. evokes the “fraudulent misjoinder” doctrine and argues that the joinder of Plaintiff's claims against Metro Corp. with Plaintiff's claims against the other Defendants was “egregious.” Metro Corp. argues that Plaintiff's claims against the New Jersey Defendants must be severed and remanded. Metro Corp. further argues that Plaintiff's remaining case against Metro Corp. must be dismissed for lack of personal jurisdiction.

         Plaintiff contests Metro Corp.'s position that the five Defendants are not properly joined, or that they were “fraudulently misjoined.” Plaintiff argues that the fraudulent misjoinder doctrine is not recognized in this District, and because Metro Corp. improperly removed her case from New Jersey state court, her chosen forum, she is entitled to attorney's fees and costs related to Metro Corp.'s improvident removal. Plaintiff further contests Metro Corp.'s lack of personal jurisdiction argument.

         DISCUSSION

         The removal statute provides, “A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title 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 action is brought.” 28 U.S.C. § 1441(b)(2). The removal statutes “are to be strictly construed against removal and all doubts should be resolved in favor of remand, ” and “a party who urges jurisdiction on a federal court bears the burden of proving that jurisdiction exists.” Boyer v. Snap-on Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990) (citation omitted). Moreover, a removing party who charges that a plaintiff has fraudulently joined a party to destroy diversity of jurisdiction has a heavy burden of persuasion. Id. (citation omitted).

         Under the well-established fraudulent joinder doctrine, joinder is 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 defendant or seek a joint judgment.” Id. (citation omitted). 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. Id. “If there is even a possibility that a state court would find that 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.” Id. (citation omitted).

         Under the more novel fraudulent misjoinder doctrine, [2] Federal Civil Procedure Rule 20 is invoked, [3] and a two-step analysis employed.

Rule 20(b) provides:
Persons . . . may be joined in one action as defendants if:
(A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series ...

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