IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
September 1, 2011
XIA ZHAO AND DAVID EHRMANN, PLAINTIFFS,
SKINNER ENGINE COMPANY ET AL., DEFENDANTS.
The opinion of the court was delivered by: Yohn, J.
Xia Zhao and David Ehrmann, husband and wife, have filed a motion to remand this products-liability action to the Court of Common Pleas of Philadelphia County, where they originally filed the action. Because of a procedural defect in the removal of the action to this court-namely, the failure of all defendants to join in the removal notice or to otherwise provide timely written consent to removal-I will grant plaintiffs' motion to remand.
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
This action arises from injuries allegedly suffered by Xia Zhao when she was using a rubber extrusion machine referred to as the KO Intermix, KO Lab Intermix, KO MK3 Shaw Intermix, or KO Intermix MK3. Plaintiffs, residents of Pennsylvania, commenced this action in the Court of Common Pleas of Philadelphia County on March 9, 2011, against eight defendants, including Shar Systems, Inc. ("Shar"), a corporation with its principal place of business in Indiana; Polymer Machinery Company ("Polymer"), a corporation with its principal place of business in Ohio; Farrel Corporation ("Farrel"),*fn1 a corporation with its principal place of business in Connecticut; and HF Rubber Machinery, Inc. ("HF"), a corporation with its principal place of business in Kansas. Plaintiffs alleged that each defendant was involved in the design, manufacture, sale, or distribution of the machine.
Defendants HF and Polymer were served with the complaint on March 14, 2011, by certified mail; Farrel was served by certified mail on March 17, 2011; and Shar was allegedly served by certified mail on or before March 15, 2011.*fn2 None of the other four defendants was served, and as of April 12, 2011, the docket showed that only HF, Polymer, and Farrel had been served; there was no entry on the state-court docket reflecting service of the complaint upon Shar. (Pl.'s Mot. to Remand Ex. 13.)
On April 12, 2011, Farrel and HF (collectively, the "removing defendants") filed a notice of removal to this court, asserting that the court has original jurisdiction over the action, on the basis of diversity of citizenship, under 28 U.S.C. § 1332. The notice stated that "[t]he only other Defendant in the action to date, Polymer Machinery Corporation, has consented to this action being removed to federal court." (Notice of Removal ¶ 13.)
Plaintiffs timely filed, on May 5, 2011, a motion to remand this action to state court on the ground that the removal procedure was defective because defendants Shar and Polymer neither joined in the notice of removal nor provided timely written consent to removal.
A defendant in a state court action may remove the case to federal
court if the federal court could have originally exercised
jurisdiction over the matter. See 28 U.S.C. § 1441(a).*fn3
"Removal is a statutory right, and the procedures to effect
removal must be followed." Lewis v. Rego Co., 757 F.2d 66, 68 (3d Cir.
1985). "It is settled that the removal statutes are to be strictly
construed against removal and all doubts should be resolved in favor
of remand." Steel Valley Auth. v. Union Switch & Signal Div., 809 F.2d
1006, 1010 (3d Cir. 1987) (footnote omitted). Section 1446, which sets
forth the procedures for removing a case to federal court,*fn4
"has been construed to require that when there is more than one defendant, all
must join in the removal petition." Lewis, 757 F.2d at 68; see also
Balazik v. County of Dauphin, 44 F.3d 209, 213 (3d Cir. 1995) ("[I]t
is well established that removal generally requires unanimity among
Here, Polymer did not sign the notice of removal.*fn5 Nonetheless, Polymer argues that it "joined" the notice of removal. Polymer asserts that when contacted by counsel for the removing defendants, Polymer's counsel not only consented to removal but also stated that the removing defendants "had authority to speak for [Polymer] to the extent necessary to effectuate removal." (Resp. of Defs. Polymer Machinery Co. & Barwell Polymer Machinery Co. (A Non-Existent Entity) in Opp'n to Pls.' Mot. to Remand at 1--2.)
The Third Circuit has not addressed the question of what is required to evidence joinder in, or consent to, removal. Courts in this district, however, have held that each defendant must either sign the notice of removal or submit to the court a timely written notice of consent to removal. See, e.g., Knit With v. Aurora Yarns, No. 09-5981, 2010 U.S. Dist. LEXIS 22592, at *30--34 (E.D. Pa. Mar. 11, 2010); Green v. Target Stores, Inc., 305 F. Supp. 2d 448, 449--50 (E.D. Pa. 2004). It is not sufficient for the removing defendant to assert in its notice of removal that the other defendants consent to removal. See, e.g., Landman v. Borough of Bristol, 896 F. Supp. 406, 409 (E.D. Pa. 1995) ("[O]ne defendant's attempt to speak on behalf of another defendant will not suffice."); Ogletree v. Barnes, 851 F. Supp. 184, 187--90 (E.D. Pa. 1994).*fn6 Here, Polymer neither signed the notice of removal nor filed a separate written notice consenting to removal. Because the removing defendants' statement in their notice of removal that Polymer consented to removal of the action is insufficient to establish Polymer's consent, the removing defendants have failed to satisfy the unanimity requirement.
There are, however, several exceptions to the unanimity requirement, and the removing defendants argue that, under these exceptions, Polymer's consent to removal was not required here.
Analogizing to the doctrine of fraudulent joinder, the removing defendants argue that Polymer is not a proper party to the action and thus that its consent to removal is not necessary.*fn7 But they failed to allege in their notice of removal that Polymer was an improper party or had been fraudulently joined. The removing defendants stated only that Polymer was a defendant in the action and consented to removal. (See Notice of Removal ¶ 13.) In any event, there is no basis for concluding that Polymer is an improper party or was fraudulently joined.
It is well established that a defendant that has been improperly or fraudulently joined need not join in the notice of removal. See Balazik, 44 F.3d at 213 n.4 (asserting that the unanimity rule may be disregarded where a defendant has been fraudulently joined). The Third Circuit has explained that "joinder is fraudulent where there is no reasonable basis in fact or colorable ground supporting the claim against the joined defendants" (the objective test) or where the plaintiff has "no real intention in good faith to prosecute the action against the defendant or seek a joint judgment" (the subjective test). Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990) (internal quotation marks omitted). A removing party bears "a heavy burden of persuasion" in establishing fraudulent joinder. Id. (internal quotation marks omitted).
The removing defendants cite both the objective test and the subjective test in arguing that Polymer was fraudulently joined. They assert that before they filed their notice of removal, Polymer's counsel informed plaintiffs' counsel that Polymer was not in existence at the time of the manufacture and sale of the machine at issue in this case, and that plaintiffs' counsel agreed to stipulate to the dismissal of Polymer without prejudice. (See Mem. of Law in Supp. of Opp'n to Pl.'s Mot. for Remand by Defs. HF Rubber Machinery, Inc. & Farrel Corp. ("Removing Defs.' Br.") Ex. B.) The removing defendants thus contend that "there is no legal or factual basis through which Plaintiffs can pursue a claim against [Polymer]" and that plaintiffs "have no real intention in good faith to prosecute the action against [Polymer]." (Id. at 11.)
I turn first to the objective test-whether there is a reasonable basis in fact or colorable ground supporting the claim against the joined defendants. In applying this test to determine whether a defendant has been fraudulently joined, a court "must focus on the plaintiff's complaint at the time the petition for removal was filed . . . [and] must assume as true all factual allegations of the complaint." Batoff v. State Farm Ins. Co., 977 F.2d 848, 851--52 (3d Cir. 1992) (internal quotation marks omitted). The court's inquiry into the law must not be too "penetrating," and the fact that a court may ultimately conclude that the claims against a defendant must be dismissed for failure to state a claim upon which relief may be granted does not mean that the defendant was fraudulently joined. See id. at 852--53 (explaining that the standard for determining whether a defendant has been fraudulently joined is less searching than that triggered by a motion to dismiss for failure to state a claim). Rather, a defendant may be said to be fraudulently joined only where the claim against that defendant is "wholly insubstantial and frivolous." Id. at 852.
In this case, plaintiffs have asserted, among other claims, a strict-liability claim against Polymer for alleged defects in the machine that caused Ms. Zhao's injuries. Under Pennsylvania's products-liability law, "all suppliers of a defective product in the chain of distribution . . . are potentially liable to the ultimate user injured by the defect." Burch v. Sears, Roebuck & Co., 467 A.2d 615, 621 (Pa. Super Ct. 1983) (citing Francioni v. Gibsonia Truck Corp., 372 A.2d 736 (Pa. 1977)).*fn8 Because plaintiffs alleged in their complaint that Polymer was involved in the chain of distribution for the machine at issue in this case, they have stated a colorable claim against Polymer. The removing defendants, however, assert that at the time they filed their notice of removal, plaintiffs had been informed by Polymer's counsel that Polymer had no involvement in the sale of the machine. But, as plaintiffs point out, no discovery has been conducted yet, and except for an e-mail from Polymer's counsel to plaintiffs' counsel, the removing defendants have proffered no evidence that Polymer was not involved in the chain of distribution. The unsubstantiated and unverified representations of Polymer's counsel are simply insufficient to establish that Polymer was not involved in the sale of the machine, and I thus cannot conclude that plaintiffs' claims against Polymer are wholly insubstantial or frivolous.
Next, citing the subjective test for fraudulent joinder, the removing defendants contend that, because plaintiffs apparently told Polymer's counsel that they would agree to dismiss the claims against Polymer, plaintiffs had no good-faith intention to prosecute their claims against Polymer at the time the removing defendants filed their notice of removal. But plaintiffs assert that they "intend to pursue any viable claims against [Polymer]." (Pls.' Reply to Defs Farrell Corp. & HF Rubber Machinery's Resp. to Pls' Mot. to Remand at 6.) They explain that, notwithstanding their discussions with Polymer's counsel regarding the potential dismissal of Polymer, they ultimately decided that, because they had not yet had the opportunity to conduct discovery and because the representations of Polymer's counsel were unsubstantiated, dismissal would be premature. The removing defendants have offered no reason to doubt plaintiffs' explanation, and accordingly, I conclude that the removing defendants have failed to demonstrate that plaintiffs lacked a good-faith intention to prosecute the action against Polymer.
The removing defendants further suggest that even if Polymer was not fraudulently joined, plaintiffs "are refusing to dismiss [Polymer], as they previously agreed to do, in order to defeat removal" (Removing Defs.' Br. at 3), and they argue that plaintiffs are "barred by the principles of equitable estoppel from using [Polymer] as a party to defeat removal" (id. at 7). Their argument is unavailing.
The dismissal of Polymer now would not cure the procedural defect at the time of removal. Because the removing defendants have failed to show that Polymer was fraudulently joined, under the unanimity rule Polymer was required to join the notice of removal. Just as submitting to the court written notice of Polymer's consent to removal now, after the thirty-day removal period has expired, is insufficient to cure its failure to join the notice of removal, see, e.g., Carter v. Ingersoll-Rand Co., No. 00-6438, 2001 U.S. Dist. LEXIS 2466 (E.D. Pa. Mar. 12, 2001), dismissing Polymer now would similarly be insufficient to cure the procedural defect at the time of removal.
Moreover, there is no basis for applying the doctrine of equitable estoppel here. "Equitable estoppel applies to prevent a party from assuming a position or asserting a right to another's disadvantage inconsistent with a position previously taken." Blofsen v. Cutaiar, 333 A.2d 841, 843 (Pa. 1975). Under Pennsylvania law, "[i]t arises when a party 'intentionally or through culpable negligence induces another to believe certain facts to exist' and the other party 'rightfully relies and acts on such belief' to its detriment." Kirleis v. Dickie, McCamey & Chilcote, P.C., 560 F.3d 156, 165 (3d Cir. 2009) (quoting Zitelli v. Dermatology Educ. & Research Found., 633 A.2d 134, 139 (Pa. 1993)). The essential elements of equitable estoppel are inducement and detrimental reliance, see id., and "[t]here can be no equitable estoppel where the complainant's act appears to be rather the result of his own will or judgment than the product of what defendant did or represented." In re Estate of Tallarico, 228 A.2d 736, 741 (Pa. 1967) (internal quotation marks omitted). Here, there is no evidence that Polymer's failure to sign the removing defendants' notice of removal or submit a separate written notice consenting to removal (or the removing defendants' failure to obtain such written consent) was the result of plaintiffs' statements that they would agree to stipulate to the dismissal of Polymer, rather than the result of Polymer's (and the removing defendants') own judgment. Indeed, notwithstanding any statements by plaintiffs regarding the dismissal of Polymer, the removing defendants sought Polymer's consent to remove the case, and Polymer's counsel orally consented to removal. Given that Polymer orally consented to removal, there is no reason to believe that Polymer was somehow induced not to give (or the removing defendants were induced not to seek) written consent.
Because Polymer failed to provide timely written consent to removal, and because there is no basis for excusing this lack of written consent, I will grant plaintiffs' motion to remand this action to state court. An appropriate order accompanies this memorandum.