Arriaga v. New England Gas Co.

483 F. Supp. 2d 177, 2007 U.S. Dist. LEXIS 27827, 2007 WL 1119888
CourtDistrict Court, D. Rhode Island
DecidedApril 16, 2007
DocketC.A. 06-45T
StatusPublished
Cited by2 cases

This text of 483 F. Supp. 2d 177 (Arriaga v. New England Gas Co.) is published on Counsel Stack Legal Research, covering District Court, D. Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arriaga v. New England Gas Co., 483 F. Supp. 2d 177, 2007 U.S. Dist. LEXIS 27827, 2007 WL 1119888 (D.R.I. 2007).

Opinion

OPINION AND ORDER

TORRES, District Judge.

Introduction

The plaintiffs, who reside in or near the Lawn Terrace Apartments in Pawtucket, Rhode Island, brought this action seeking equitable relief and monetary damages for what they allege is contamination of their residences by mercury belonging to the defendant, New England Gas Company (“NE Gas”), an unincorporated division of Southern Union Company, a Delaware Corporation (“Southern Union”).

Suit was brought in the Rhode Island Superior Court but NE Gas, with the consent of co-defendant Clean Harbors Environmental Services (“Clean Harbors”), removed the case on diversity grounds.

The plaintiffs have moved to remand the case to state court on the ground that complete diversity is lacking because Jason Smith (“Smith”) and Stephan Carber-ry (“Carberry”), the other two defendants, *181 are Rhode Island residents. NE Gas and Clean Harbors argue that diversity jurisdiction exists because Smith and Carberry have been fraudulently joined.

For the reasons hereinafter stated, the motion to remand is denied and, pursuant to Fed.R.Civ.P. 21, Smith and Carberry are dropped as parties. See Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 832, 109 S.Ct. 2218, 2222, 104 L.Ed.2d 893 (1989).

Background Facts

The complaint alleges that, in October 2004, Smith and Carberry stole mercury from an unsecured and unlicensed storage facility owned by NE Gas and that they spilled it in the parking lot of the Lawn Terrace Apartments, where Smith lived. Mercury, then, was tracked into some of the apartments and nearby residences occupied by the plaintiffs.

Smith and Carberry pled nolo contende-re in state court to charges of conspiracy and breaking and entering and they were placed on probation. It appears that Car-berry later was charged with violating the conditions of his probation and has been committed for failure to post bail.

NE Gas retained Clean Harbors to clean up the contamination but the complaint alleges that not all of the mercury has been removed 1 and it seeks injunctive relief and damages from NE Gas and Clean Harbors under theories of negligence, public and private nuisance, strict liability and violation of the Rhode Island Hazardous Waste Management Act (“HWMA”), R.I. Gen. Laws § 23-19.1-22 (1956). However, Smith and Carberry are named only in the nuisance and HWMA counts.

NE Gas claims that this Court has diversity jurisdiction because Smith and Carberry were fraudulently joined and, therefore, their citizenship should be disregarded. More specifically, NE Gas argues that (1) the complaint does not state any viable cause of action against Smith and Carberry, and (2) the plaintiffs do not intend to prosecute their claims against Smith and Carberry because both of them are indigent.

Analysis

One of the consequences of our federal system is that, in some cases, it requires a considerable expenditure of time, effort and resources simply to determine whether an action properly belongs in state or federal court. This case is an example because, in deciding whether the motion to remand should be granted, this Court must plumb the murky depths of the doctrine of fraudulent joinder.

I. The Doctrine of Fraudulent Joinder

The doctrine of fraudulent joinder is intended to preserve a defendant’s right to remove a case to federal court when there is complete diversity of citizenship between the parties. As the Supreme Court has said, a plaintiffs assertion of a claim against a defendant who is a citizen of the same state amounts to fraudulent joinder when it is done “without any purpose to prosecute the action in good faith as against him and with the purpose of fraudulently defeating the [defendant’s] right of removal.” Wilson v. Republic Iron & Steel, 257 U.S. 92, 98, 42 S.Ct. 35, 37-38, 66 L.Ed. 144 (1921). However, the term “fraudulent joinder” is something of a misnomer because it does not necessarily require a removing defendant to “prove that the plaintiff intended to mislead or deceive.” Lawrence Builders Inc. v. Kolodner, 414 F.Supp.2d 134, 137 (D.R.I.2006).

*182 The First Circuit has not yet prescribed the applicable standard for determining, in a particular case, whether joinder of a non-diverse defendant is fraudulent. Moreover, there is a lack of clarity and uniformity in the standards applied by other courts. In the words of the Fifth Circuit, “[njeither our circuit nor other circuits have been clear in describing the fraudulent joinder standard. The test has been stated by this court in various terms, even within the same opinion.” Travis v. Irby, 326 F.3d 644, 647 (5th Cir.2003) (discussing the variety of standards adopted by the various circuits).

Generally, courts agree that join-der is fraudulent where there has been outright fraud in alleging jurisdictional facts or where there is no basis for the plaintiffs claim. Smallwood v. Illinois Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir.2004)(en banc) cert. denied, 544 U.S. 992, 125 S.Ct. 1825, 161 L.Ed.2d 755 (2005)(recognizing “two ways to establish improper joinder ... ‘(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.’ ”); Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 207 (2d Cir.2001)(joinder is fraudulent if “there has been outright fraud committed in the plaintiffs pleadings, or there is no possibility, based on the pleadings, that the plaintiff can state a cause of action against the non-diverse defendant in state court.”); Lawrence Builders Inc. v. Kolodner, 414 F.Supp.2d at 137 (fraudulent joinder doctrine applies to “outright fraud in plaintiffs recitation of jurisdictional facts” and when there is “no possibility that plaintiff would be able to establish a cause of action against the non-diverse defendant in state court.”).

Also, it is well established that a removing defendant has the burden of proving fraudulent joinder “by clear and convincing evidence,” Whitaker v. Am. Telecasting, Inc., 261 F.3d at 207; Pampillonia v. RJR Nabisco, Inc., 138 F.3d 459, 461 (2d Cir.1998); In re Pharm. Indus. Average Wholesale Litig., 431 F.Supp.2d 109, 117 (D.Mass.2006); Gabrielle v. Allegro Resorts Hotels,

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483 F. Supp. 2d 177, 2007 U.S. Dist. LEXIS 27827, 2007 WL 1119888, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arriaga-v-new-england-gas-co-rid-2007.