United States District Court, Southern District of New York
May 13, 1999
SUSAN ROSSBACH, PLAINTIFF,
LORILLARD, INC. AND HOLLINGSWORTH & VOSE CO., DEFENDANTS.
The opinion of the court was delivered by: Berman, District Judge.
On March 31, 1999, plaintiff filed this action in Supreme
Court, New York County, against defendants Lorillard, Inc.
("Lorillard") and Hollingsworth & Vose Co. ("H & V"). On April 7,
1999, plaintiff filed an Amended Complaint adding two defendants:
Loews Corporation ("Loews") and Lorillard Tobacco Company
("LTC").*fn1 Also on April 7, 1999, apparently a few hours after
plaintiff filed her Amended Complaint, defendants Lorillard and H
& V filed a Notice of Removal with the Clerk's office of this
Court on the basis of diversity of citizenship.*fn2
By letter application, dated April 13, 1999, plaintiff seeks a
remand to the Supreme Court, New York County. Plaintiff, a
citizen of New York, asserts that since defendant Loews is also a
citizen of New York*fn3, this Court does not have subject matter
jurisdiction based on diversity of citizenship.*fn4 Defendants
oppose plaintiff's application for remand, arguing that the
inclusion of Loews in the Amended Complaint constitutes
"fraudulent joinder" which cannot support an application to
For the reasons set forth herein, the application for remand
It is well settled that removal statutes are strictly construed
and defendants bear the burden of proving that diversity exists.
See Negrin v. Alza Corp., 1999 WL 144507 at *1 (S.D.N.Y. March
17, 1999). The Court of Appeals for the Second Circuit has
recognized that "a plaintiff may not defeat a federal court's
diversity jurisdiction and a defendant's right of removal by
merely joining as defendants parties with no real connection with
the controversy." Pampillonia v. RJR Nabisco,
Inc., 138 F.3d 459, 460-61 (2d. Cir. 1998). The
Pampillonia Court went on to state that:
In order to show that naming a non-diverse defendant
is a `fraudulent joinder' effected to defeat
diversity, the defendant must demonstrate, by clear
and convincing evidence, either that there has been
outright fraud committed in the plaintiff's
pleadings, or that there is no possibility, based on
the pleadings, that a plaintiff can state a cause of
action against the non-diverse defendant in state
court. The defendant seeking removal bears a heavy
burden of proving fraudulent joinder, and all factual
and legal issues must be resolved in favor of the
Id. at 461. Here, defendants have not argued that plaintiff
committed outright fraud in the pleadings. Thus, the Court must
examine whether, based on the pleadings, plaintiff can sustain a
claim against Loews in state court. See Negrin, 1999 WL 144507
Plaintiff argues that Loews is an appropriate defendant because
"a strong case can be made to `pierce the corporate veil' and
Loews could be held liable for the acts of Lorillard." (Pl.Reply,
p. 3). However, plaintiff's only allegation against Loews in the
Amended Complaint is that "[u]pon information and belief,
defendant LOEWS CORPORATION is a Delaware Corporation with its
principal place of business in New York State." (Amended Compl.,
¶ 7). This allegation is insufficient to support a cause of
action against Loews in state court. See Pampillonia, 138 F.3d
In Pampillonia, a case in point with the one at bar, the
Second Circuit rejected plaintiff's claims against defendant RJR
Nabisco, Inc. and denied plaintiff's motion to remand holding
There is no basis upon which to determine whether
RJRN [RJR Nabisco, Inc.] exercised control over
plaintiff's working conditions or Planters'
employment policies and practices. . . . In fact, the
only mention of RJRN in the complaint is the
allegation that RJRN was incorporated in Delaware and
has an office in New York. Likewise, the complaint
fails to allege facts that could establish a basis
for piercing the corporate veil between RJRN and
Planters for the purpose of holding RJRN liable for
Planters' misrepresentations or breaches of contract.
Pampillonia, 138 F.3d at 461. Here, plaintiff's counsel
conceded the flaw in his case at oral argument on April 22, 1999,
stating that plaintiff's "amended complaint is deficient in that
it doesn't sufficiently plead the cause of action against Loews."
(Transcript, pp. 19-20).
Conclusion and Order
Accordingly, the action against defendant Loews is hereby
dismissed and plaintiff's application to remand is denied. See
Sonnenblick-Goldman Co. v. ITT Corp., 912 F. Supp. 85, 88
(S.D.N.Y. 1996) (where "fraudulent joinder is found, and the
requirements of jurisdiction are otherwise met, then the case was
properly removed and the Court has subject matter jurisdiction").
The parties are directed to appear at a scheduling conference
on May 21, 1999, at 3:30 p.m., in Courtroom 706 of the U.S.
Courthouse, 40 Centre Street, New York, New York.