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United States District Court, Southern District of New York

May 13, 1999


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 remand.

For the reasons set forth herein, the application for remand is denied.


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 at *3.

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 at 461.

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 that:

  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.

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