for such retroactive validation of an improper removal. Indeed,
the validity of removal under those circumstances is belied by
Caterpillar which nowhere suggested that the removal became any
less improper by post-removal achievement of diversity, but
instead dealt with the effect on the judgment of the error or
initial misjudgment in failing to remand. In my view, the Court
makes evident that the preferable, if not the required, course of
dealing with such a case before it has reached the stage of
judgment is to remand the case to the state court from which it
was improperly removed.
Petrop v. Lassen Art Publications, Inc., 939 F. Supp. 742,
745-46 (D.Hawai'i 1995) is also instructive. In Petrop, the
removal petition was filed at a time when complete diversity did
not exist. After removal, the non-diverse defendant was
transformed into a diverse defendant by merger into its sister
corporation, a citizen of a different state. Notwithstanding the
attainment of diversity jurisdiction, the court remanded the case
to state court since at the time of removal the parties were
clearly not diverse and removal was therefore improvident.
If one keeps in mind the fundamental precept that removal
jurisdiction must be ascertained as of the time of removal, one
may fairly derive from these cases the principle that removal on
the ground of diversity is not subject to post-hoc justification.
In other words, a court cannot test the propriety of removal by
ascertaining whether the statutory requirements are met
prospectively; "[d]evelopments in the lawsuit . . . subsequent to
removal can not serve to confer federal court jurisdiction if
none in fact existed as of the time of removal." Wamp v.
Chattanooga Housing Authority, 384 F. Supp. 251, 253 (E.D.Tenn.
1974) (case remanded after court determined that plaintiffs had
no standing to maintain lawsuit in state court and therefore no
justiciable controversy conferring federal jurisdiction existed),
aff'd on other grounds, 527 F.2d 595 (6th Cir. 1975).
Atlas Turner has not cited and my own independent research has
not discovered, any case that countenances such after the fact
validation of removal. Thus, consistent with the principal of
narrowly construing the removal statute and heeding the
presumption in favor of remand, I conclude that plaintiff's
post-removal dismissal of the only non-diverse defendant did not
render the removal valid. The case must accordingly be remanded.
Although this conclusion settles the matter, it is worth noting
that the removal petition suffered from an additional fatal
defect: at least one of the named and served defendants is a New
York corporation. As noted, even in the presence of complete
diversity among the parties, removal is prohibited if any of the
defendants is a citizen of the forum state. Allowing removal in
cases involving a local defendant would defeat the purpose of
diversity jurisdiction which is to protect out-of-state
defendants from local prejudice. See Moore's §
107[e][i], at 107-62. The presence of a single in-state
defendant serves to defeat removal on diversity grounds. Id.
It is undisputed that one of the defendants served in this
case, Rapid-American Corporation, is a New York corporation. For
this reason, removal was unavailable on the ground of diversity.
This would remain true even if, contrary to my conclusion in
text, removal on the basis of diversity jurisdiction were
regarded as valid because the parties are presently diverse. Cf.
Trask v. Kasenetz, 818 F. Supp. 39, 44-45 (E.D.N.Y. 1993)
(presence of New York defendants required remand after federal
claim was dismissed even though diversity jurisdiction existed;
as a citizen of the forum, "the defendant has no interest
recognized by a federal statute in a federal forum").
Atlas Turner nonetheless argues that plaintiff has no viable
case against Rapid-American and that plaintiff's failure to
dismiss it warrants the conclusion that it is included in the
lawsuit only for the purpose of defeating removal jurisdiction.
See Supplemental Letter Brief of Suzanne M. Halbardier, Esq.
dated February 7, 2000 ("Letter Brief") at 2. With this argument,
Atlas Turner appears to invoke the principle known as "fraudulent
joinder." Under that principle, a non-diverse defendant will be
disregarded in ascertaining the existence of diversity on a
remand motion if that defendant has no real connection to the
case and is named merely to defeat diversity jurisdiction. As the
Second Circuit has instructed:
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 joiner [sic], and all
factual and legal issues must be resolved in favor of
Pampillonia v. RJR Nabisco, Inc., 138 F.3d 459, 461 (2d Cir.
1998) (footnote omitted).
Atlas Turner has failed to meet this exacting standard. The
complaint broadly alleges that all of the defendants, including
Rapid-American, "produced, manufactured, specified, supplied,
installed or distributed asbestos and/or asbestos products . . .
to which the plaintiff was exposed, or was a contractor at a
location where the plaintiff was exposed to asbestos, or
manufactured, sold and/or installed equipment which had asbestos
components or specified such components for operation. . . ."
See Complaint at ¶¶ 2-3. Atlas Turner argues that because
plaintiff did not identify Rapid-American in her videotaped
deposition testimony and because Rapid-American "was a
manufacturer of pipe covering, block and cement . . . we do not
believe that [Rapid-American] is really a party whose products
are at issue in this case." Letter Brief at 2.
Based on the complaint, which is ordinarily what the Court
reviews to determine whether fraudulent joinder is at issue, see
Pampillonia, 138 F.3d at 461 (defendant must show that there is
no possibility that plaintiff can state a cause of action "based
on the pleadings"); Wheeler v. Frito-Lay, Inc., 743 F. Supp. 483,
485 (S.D.Miss. 1990) (whether a nondiverse defendant was
fraudulently joined is determined "by reference to the
allegations made in the original pleadings"), plaintiff has
broadly stated a claim against Rapid-American, and Atlas Turner
does not argue otherwise.
Assuming arguendo that I am permitted to review the
extra-pleading submission by Atlas Turner, I conclude that it
does not show clearly and convincingly that plaintiff cannot
possibly recover against Rapid-American in state court. Although
Atlas Turner correctly notes that Rapid-American was not
identified in plaintiff's deposition testimony, that omission
does not necessarily defeat the possibility of a claim against
it. None of the other defendants, with the exception of Armstrong
World Industries, Inc., was mentioned by plaintiff in her
testimony concerning her exposure to asbestos during the
renovations at Café Geiger. If this omission alone were
sufficient to preclude a finding of liability undoubtedly Atlas
Turner, who also was not mentioned, would press for dismissal of
the claim against it as well. Since Atlas Turner does not, its
argument that no viable claim exists against Rapid-American must
turn on counsel's assertion that Rapid-American did not
manufacture asbestos. This argument suffers from two principle
defects. First, Atlas Turner has submitted no evidence in the
form of an affidavit or otherwise to show what Rapid-American
did or did not produce. Second, Atlas Turner has not established
that even if Rapid-American were simply a manufacturer of pipe
covering, block and cement, that would rule out any role in
causing plaintiff's injury under the complaint's broad assertion
of liability. After all, even the products counsel claims
Rapid-American did manufacture could conceivably have been
involved in the renovations and in the plaintiff's exposure to
asbestos, and I do not regard plaintiff's testimony as precluding
Resolving all factual and legal issues against Atlas Turner, I
conclude that Atlas Turner has not established that there is no
possibility of recovery against Rapid-American. Thus even if,
contrary to my conclusion supra, the case was properly removed
on the basis of diversity, the presence of Rapid-American made
removal improvident since Atlas Turner has not shown that it was
fraudulently joined as a defendant.
For the reasons stated above, I grant plaintiff's request to
amend the complaint as proposed, and conclude that the complaint,
once amended in accordance with the representation of plaintiff's
counsel, does not state a claim against defendant as a "foreign
state" and that therefore no grounds exist for removal pursuant
to 28 U.S.C. § 1441(d). In addition, because diversity
jurisdiction was lacking at the time of removal, I conclude that
this case was improvidently removed under 28 U.S.C. § 1441(a).
Finally, removal was precluded by 28 U.S.C. § 1441(b).
Accordingly, plaintiff's motion is granted and the case will be
remanded to New York Supreme Court pursuant to
28 U.S.C. § 1447(c).
Consistent with the discussion in Part II, supra, plaintiff
is directed to file an amended complaint clarifying that
plaintiff's alleged exposure occurred at her place of work in
1969, within ten (10) days after the date of issuance of this
Immediately following plaintiff's filing of the amended
complaint, the Clerk of the Court is directed to transmit the
file and a copy of this Order to the Clerk of the New York
Supreme Court, New York County.
The foregoing is SO ORDERED.