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COOK v. PEP BOYS

May 17, 1985

ROBERT COOK and IDESSA COOK, h/w, Plaintiffs
v.
PEP BOYS-MANNIE, MOE & JACK, INC. and GILBARCO, INC. EXXON CORPORATION and SAMUEL ROSS, Individually, t/a SAMUEL ROSS CONSTRUCTION AND S.A.R.



The opinion of the court was delivered by: POLLAK

POLLAK, J.

 MEMORANDUM

 Plaintiffs, Robert and Idessa Cook, initiated this lawsuit in the Court of Common Pleas of Philadelphia County in July 1984. The named defendants were Pep Boys -- Mannie, Moe & Jack, Inc. ("Pep Boys"); Gilbarco, Inc.; Exxon Corporation; and Samuel Ross individually and trading as Samuel Ross Construction and S.A.R. The suit alleges a number of different tort claims against the defendants based upon injuries allegedly sustained by plaintiff Robert Cook while working for defendant Pep Boys. The injury was allegedly caused by a hydraulic lift manufactured by Gilbarco, Inc. and distributed by Exxon Corporation which had been serviced by defendant Samuel Ross and his related corporations Samuel Ross Construction and S.A.R.

 On October 4, 1984, the Court of Common Pleas granted the unopposed motion of defendant Pep Boys for judgment on the pleadings. Pep Boys was the only Pennsylvania defendant. Plaintiffs are also citizens of Pennsylvania.

 The motion to remand contends that removal was improper because diversity of citizenship did not exist at the time the complaint was filed in the state court. Gilbarco responds that full diversity came about only after the Court of Common Pleas dismissed Pep Boys as defendants on October 4, 1984, and that removal was accomplished promptly thereafter.

 The state court's dismissal of the nondiverse defendant would not be sufficient to justify removal to a federal forum if, as plaintiffs contend, the governing principle is that diversity must exist both at the time of removal and at the time of the filing of the complaint in the state court. Substantial authority points in that direction. E.g., Unanue v. Caribbean Canneries, Inc., 323 F. Supp. 63 (D. Del. 1971); Carlton Properties, Inc. v. Crescent City Leasing Corporation, 212 F. Supp. 370 (E.D. Pa. 1962); 14A C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3723 at 312 (1985). Furthermore, this rule is undergirded by common sense:

 
The purpose of requiring diversity to exist at both times apparently is to prevent a nondiverse defendant from acquiring a new domicile after commencement of the state suit and then removing on the basis of the newly created diversity of citizenship.

 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3723 at 312 (1985).

 However, an exception to this rule has been created to preclude a plaintiff from anticipatorily defeating removal of a diversity case by joining, at the inception of the case, an unnecessary nondiverse defendant. Therefore, when the nondiverse party is dropped from the suit while it is pending before the state court, removal is proper thereafter. See 14A C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3723 at 314 (1985). However, it is established that removal subsequent to state court dismissal of the nondiverse defendant is available only when the nondiverse party is dropped pursuant to a voluntary action on the part of plaintiff. E.g., Self v. General Motors Corp., 588 F.2d 655 (9th Cir. 1978); Atlanta Shipping Corp. v. International Modular Housing, Inc., 547 F. Supp. 1356 (S.D.N.Y. 1982). This voluntary/involuntary distinction has been justified on the ground that an involuntary dismissal of a nondiverse party might be reversed by the state courts on appeal but this would be precluded by the removal of the litigation prior to consideration of that issue by the appellate courts of the state. *fn1"

 Gilbarco contends that the dismissal of Pep Boys from the state court action should be deemed a voluntary dismissal because the plaintiffs did not oppose the motion for judgment on the pleadings filed by the nondiverse defendant and granted by the state court. In addition, defendants note that plaintiffs did not appeal the dismissal of Pep Boys, thereby obviating the argument that removal would bar the state appellate courts from considering the propriety of the dismissal of the nondiverse party. Defendants assert that these failures to act on the part of the plaintiffs amount to consent to the dismissal of Pep Boys and are the functional equivalent of a voluntary dismissal. Quinn v. Aetna Life & Casualty Co., 616 F.2d 38, 40 n.2 (2d Cir. 1980).

 However, it is the party seeking to establish that removal was proper which shoulders the burden of proof. In the present case, Gilbarco has not presented any authority for the proposition that plaintiffs could have appealed the dismissal of a single defendant prior to the resolution of the entire state suit. See Samuels v. Hendricks, 300 Pa. Super. 11, 445 A.2d 1273, 1277 (1982) ("to be appealable, an adjudication must be final as to all parties and as to the whole of the subject matter.") Although it is possible that the order granting the unopposed motion for judgment on the pleadings was appealable, I have no basis on which I can so conclude on the present record nor do I have a basis for concluding that the failure to appeal that order soon after it was issued waived any right that the plaintiffs would have had to appellate review of that issue at some future time. Therefore, I cannot justify the removal of this litigation to a federal forum by treating the plaintiffs' failure to oppose the motion for judgment on the pleadings as equivalent to consent to the dismissal of Pep Boys.

 Gilbarco also relies on the so-called "fraudulent joinder" doctrine as an alternative basis for removal despite the lack of complete diversity at the time the complaint was filed. If the nondiverse party is found to have been "fraudulently" joined, it may be dismissed and ignored for purposes of determining whether the case was properly removed to federal court. The application of this principle does not require a showing of "fraud" in the conventional understanding of the term. Newman v. Forward Lands, Inc., 418 F. Supp. 134, 136 n. 1 (E.D. Pa. 1976); 14A C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3723 at 354 (1985). Subsumed under the label "fraud" is the question whether plaintiffs had any colorable basis for including the nondiverse party among the defendants. E.g., Buchanan v. Delaware Valley News, 571 F. Supp. 868 (E.D. Pa. 1983); Castner v. Exxon Co., U.S.A., 563 F. Supp. 684 (E.D. Pa. 1983); Newman v. Forward Lands, Inc., 418 F. Supp. 134 (E.D. Pa. 1976).

 The complaint in this case alleges that plaintiff Robert Cook was injured while working for Pep Boys. The complaint goes on to allege that Robert Cook's employer should be liable to him for those injuries under theories of strict liability, negligence and intentional misconduct. Pep Boys is said to have breached its duty to warn Cook of the potential dangers posed by the hydraulic ...


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