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Boyle v. Grizzly Industrial, Inc.

United States District Court, E.D. Pennsylvania

May 23, 2018

CARL BOYLE and ANDREA BOYLE, h/w
v.
GRIZZLY INDUSTRIAL, INC., a/k/a Grizzly Holdings Incorporated, d/b/a Grizzly Holdings Incorporated, t/a Grizzly Holdings Incorporated, GRIZZLY INDUSTRIAL PA, INC. and and TINIUS OLSEN INTERNATIONAL COMPANY

          MEMORANDUM OPINION

          SAVAGE, J.

         The issue in this products liability action, which was removed from the state court on the basis of diversity jurisdiction, is whether two of the three defendants were fraudulently joined to defeat diversity. If they were, there is no diversity jurisdiction and the case must be remanded.

         Plaintiff Carl Boyle suffered amputation injuries to his fingers when the table saw he was using kicked back.[1] He and his wife, Pennsylvania citizens, have named as defendants Grizzly Industrial PA, Inc. (Grizzly PA) and Grizzly Industrial, Inc. (Grizzly Industrial) as the designers and manufacturers of the table saw, and Tinius Olsen International Company (Tinius International) as the supplier of the table saw.[2] Grizzly PA and Tinius International are Pennsylvania citizens.

         In removing the action, Grizzly Industrial contends that Grizzly PA and Tinius International were fraudulently joined.[3] It asserts that Grizzly PA is a non-existent entity and Tinius International had no personal involvement with the accident.[4] The Boyles have moved to remand, maintaining that Grizzly PA and Tinius International, Pennsylvania citizens, are properly named defendants.

         Analysis

         For diversity jurisdiction to exist, the opposing parties must be citizens of different states and the amount in controversy must exceed $75, 000. No. plaintiff can be a citizen of the same state as any defendant. 28 U.S.C. § 1332(a); GB Forefront, L.P. v. Forefront Mgmt. Grp., LLC, 888 F.3d 29, 34 (3d Cir. 2018). When removal is based on diversity, complete diversity between the parties must have existed when the complaint was filed and at the time of removal. In re Lipitor Antitrust Litig., 855 F.3d 126, 150-51 (3d Cir. 2017).

         If the removing defendant establishes that a non-diverse defendant was fraudulently joined, the court disregards the citizenship of the non-diverse defendant for the purpose of determining diversity of citizenship and dismisses the non-diverse defendant. In re Briscoe, 448 F.3d 201, 216 (3d Cir. 2006). On the other hand, if the court determines that joinder was not fraudulent, it must remand. Id. (citing 28 U.S.C. § 1447(c)).

         Joinder is fraudulent only where there is no reasonable factual or “colorable” legal basis to support the claim against the non-diverse defendant or the plaintiff has no real intention of pursuing the action against that defendant. Brown v. JEVIC, 575 F.3d 322, 326 (3d Cir. 2009) (citing In re Briscoe, 448 F.3d at 216); see also Hogan v. Raymond Corp., 536 Fed.Appx. 207, 210 (3d Cir. 2013). Any uncertainty as to the controlling substantive law is resolved in favor of the plaintiff. The possibility that the state court might find that the complaint states a cause of action against the non-diverse defendant requires remand. JEVIC, 575 F.3d at 326 (quoting In re Briscoe, 448 F.3d at 217). Unless the claim is “wholly insubstantial and frivolous, ” joinder will not be deemed fraudulent. In re Briscoe, 448 F.3d at 218 (quoting Batoff v. State Farm Ins. Co., 977 F.2d 848, 852 (3d Cir. 1992)). Hence, only where it is clear that the plaintiff cannot possibly recover from the non-diverse defendant will the joinder be deemed fraudulent.

         The fraudulent joinder inquiry focuses on the complaint at the time of removal, accepting the factual allegations as true. JEVIC, 575 F.3d at 326 (quoting In re Briscoe, 448 F.3d at 217). Nevertheless, it may be necessary to look beyond the complaint, but only to the extent that it bears on the threshold jurisdictional inquiry. We do not conduct a merits inquiry. Nor can we consider the merits of a defense. In re Briscoe, 448 F.3d at 218 (citing Boyer v. Snap-on Tools Corp., 913 F.2d 108, 112-13 (3d Cir. 1990)).

         The removing party has a heavy burden of persuading a court that joinder is fraudulent. JEVIC, 575 F.3d at 326; Batoff, 977 F.2d at 851 (citation omitted). This heavy burden is imposed to effectuate the strong presumption against removal jurisdiction. Batoff, 977 F.2d at 851 (quoting Steel Valley Author. v. Union Switch & Signal Div., 809 F.2d 1006, 1010 (3d Cir. 1987)); JEVIC, 575 F.3d at 326.

         Grizzly Industrial PA, Inc.

         Grizzly Industrial maintains there is “no reasonable basis in fact” or “colorable ground” supporting claims against Grizzly PA because it has not existed for over twenty years. It relies on the affidavit of its Chief Financial Officer, Don Osterloh, and a screenshot of the Pennsylvania Department of State website for Grizzly PA.[5] The Department of State website lists Grizzly PA's status as “Withdrawn-CONSOLIDATED INACTIVE” and dates the Articles of Merger and Consolidation as December 31, 1998.[6]

         In conducting a fraudulent joinder analysis, we may consider records from prior proceedings and matters subject to judicial notice. In re Briscoe, 448 F.3d at 220. We may take judicial notice of information posted on the Pennsylvania Department of State website. See, e.g., Landair Transp., Inc. v. Del's Truck & Auto Repair, Civ. A. No. 17-CV-0723, 2018 WL 950208, at *2 n.1 (M.D. Pa. Feb. 20, 2018) (taking judicial notice of facts contained in the Pennsylvania Department of State website); Hall v. Kingston, Civ. A. No. 17-543, 2017 WL 1225054, at *2 (E.D. Pa. Mar. 31, 2017) (citing the Pennsylvania Department of State website in taking judicial notice of a charity's location); Corner Pocket, Inc. v. Travelers Ins., Civ. A. No. 12-288, 2013 WL 3993967, at *1 n.2 (W.D. Pa. Aug. 5, 2013) (judicially noticing records from the Pennsylvania Department of State online database). We may also consider supporting documents such as affidavits. See, e.g., Yellen v. Teledne Cont'l Motors, Inc., 832 F.Supp.2d 490, 503 (E.D. Pa. 2011); Susman v. Goodyear Tire & Rubber Co., Civ. A. No. 17-3521, 2018 WL 1243733, at *7 (E.D. Pa. Mar. 9, 2018); 16-107 James Wm. Moore, Moore's Federal Practice § 107.52 (2018). In doing so, we must keep in mind that we may not conduct a merits inquiry or consider the merits of a defense.

         The Pennsylvania Department of State records indicate Grizzly PA is an inactive Pennsylvania corporation, having merged with another entity. It does not indicate with whom Grizzly PA merged, nor does Grizzly Industrial provide a certification of the merger. Instead, it relies on Osterloh's declaration that Grizzly PA merged with Grizzly Industrial, a Washington corporation.[7] Because Osterloh's ...


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