Grennell v. Western Southern Life Insurance

298 F. Supp. 2d 390, 2004 U.S. Dist. LEXIS 498
CourtDistrict Court, S.D. West Virginia
DecidedJanuary 6, 2004
DocketCIV.A. 3:03-833 to CIV.A. 3:03-2019
StatusPublished
Cited by23 cases

This text of 298 F. Supp. 2d 390 (Grennell v. Western Southern Life Insurance) is published on Counsel Stack Legal Research, covering District Court, S.D. West Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grennell v. Western Southern Life Insurance, 298 F. Supp. 2d 390, 2004 U.S. Dist. LEXIS 498 (S.D.W. Va. 2004).

Opinion

ORDER

CHAMBERS, District Judge.

Pending is Plaintiffs’ Motion to Remand. For the reasons stated herein, the motion is DENIED.

I. Factual Background

On June 3, 2003, 2,286 plaintiffs filed suit in the Circuit Court of Mason County, West Virginia, against the Western and Southern Life Insurance Company (“Western-Southern”) and seven individuals who were allegedly agents of Western-Southern (the “individual defendants”). Western-Southern is an Ohio corporation with its principal place of business in Cincinnati, Ohio. The individual defendants are all residents of West Virginia. The plaintiffs are residents of several states, including West Virginia and Ohio. The single complaint filed by the plaintiffs alleged that both Western-Southern and the individual defendants committed various forms of fraud against them in the sales of certain “vanishing premium” life insurance policies. 1

Though only one complaint was filed, the Clerk of Court of the Mason County Circuit Court, acting pursuant to a recent administrative order of that court’s chief judge, required each “family unit plaintiff’ to pay a separate filing fee and assigned each a case number. 2 Although the Clerk was required to assign multiple case numbers and charge multiple “supplemental filing fees,” the plaintiffs were not required to file multiple complaints, and the entire action was apparently assigned to one judge of the Circuit Court. According to the Mason County Circuit Court Clerk, multiple case numbers were assigned “for purposes of assessing and tracking the filing fees ... and for tracking documents that may apply to individual Plaintiffs’ [sic].”

On July 29, 2003, Defendants filed four notices of removal purporting to remove 1,317 of the Circuit Court actions to the United States District Court for the Southern District of West Virginia. The Clerk of this Court assigned each plaintiffs case a case number and required Defendants to tender 1,317 filing fees. Relying on the representations contained in the removal notices and in consultation with the active judges of this district, 3 the Honorable Chief Judge David A. Faber directed the Clerk to divide the cases into four groups. The groups, based on classifications suggested by Defendants, separated Plaintiffs into four categories: plaintiffs who are West Virginia residents who had some contact with the individual defendants; plaintiffs who are West Virginia residents who had no contact with the individual defendants; plaintiffs who are currently in Chapter 11 bankruptcy proceedings or res *393 idents of Ohio; and plaintiffs who are residents of states other than West Virginia or Ohio. 4 Each of the first three groups was assigned to a single judge and a “lead plaintiff’ by whose name the group would be known was designated for each of the four groups. The final group (the “Gren-nell cases”), containing more than 1,100 cases, was divided among the four active, non-recused judges of this district. For purposes of signing proposed orders and deciding the instant motion, the Honorable Judge Robert C. Chambers was designated as the “lead judge” of the Grennell group.

Through the instant motion, Plaintiffs seek to have the Grennell cases remanded to Mason County Circuit Court. They argue that this Court improperly severed their claims, and that in fact all 1,317 plaintiffs now in federal court should be treated as properly joined in one action. Defendants, however, contend that both the Circuit Court and this Court have treated Plaintiffs’ claims as separate cases and that absent a successful motion for joinder or consolidation, a change in the Court’s attitude towards the cases would be improper. Plaintiffs and Defendants also disagree as to whether the individual defendants are properly joined as parties.

II. Analysis

Plaintiffs urge this Court to examine the status of this litigation as it existed in Mason County Circuit Court and to determine that despite certain administrative actions taken by that court, there existed only one case before Defendants filed their notices of removal and the cases were administratively severed in federal court. According to Plaintiffs, if the Mason County litigation was truly one case, then removal was improper; no one disputes that some plaintiffs and the individual defendants are residents of West Virginia, thus depriving the Court of diversity jurisdiction. That suggestion, however, does not end the Court’s inquiry. If as Defendants posit and as explained more fully below Plaintiffs were fraudulently joined in state court, then a finding that the litigation was only a single case will not defeat the diversity jurisdiction of this Court and thus cannot be the basis for remand. Plaintiffs also point out that even if their claims were wrongly joined, the presence of West Virginia resident defendants in the case forbids removal. Therefore, this Court’s decision will consist of three parts: an examination of the relevant standards for ruling on a motion to remand; an analysis of whether joinder of Plaintiffs’ claims would be proper; and an analysis of whether joinder of all Defendants would be proper.

A. Rules of Removal and Standard for Reviewing a Motion to Remand

When a civil case over which a federal district court would have original jurisdiction is filed in state court, the defendants may remove that action to the United States District Court in the district and division that embraces the place where the action is pending. 28 U.S.C. § 1441(a). In a case such as this one, where the district court’s original jurisdiction is premised on diversity of citizenship, an action is not removable where one or more of the defendants is a resident of the state in which the suit was filed. 28 U.S.C. § 1441(b). Further, the “complete diversity” rule gives federal courts diversi *394 ty jurisdiction only where no party shares common citizenship with any party on the other side. Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806). The “fraudulent joinder” doctrine, however, “permits a district court to disregard, for jurisdictional purposes, the citizenship of certain nondiverse defendants, assume jurisdiction over a case, dismiss the nondiverse defendants, and thereby retain jurisdiction.” Mayes v. Rapoport, 198 F.3d 457, 461 (4th Cir.1999).

While the typical fraudulent joinder 5 claim seeks the dismissal of nondiverse or resident defendants, Defendants in this action contend that in filing only one action, Plaintiffs were fraudulently joined in the Mason County Circuit Court action.

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Cite This Page — Counsel Stack

Bluebook (online)
298 F. Supp. 2d 390, 2004 U.S. Dist. LEXIS 498, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grennell-v-western-southern-life-insurance-wvsd-2004.