United States District Court, N.D. Mississippi, Greenville Division
M. BROWN, UNITED STATES DISTRICT JUDGE
the Court is State Farm Mutual Automobile Insurance
Company's motion to sever, Doc. #5; Sarah Kelly Raymond
Wilson's motion for extension of time, Doc. #9, and
motion to remand, Doc. #13; and State Farm and Wilson's
“Joint Motion of Dismissal, ” Doc. #20.
28, 2017, Sarah Kelly Raymond Wilson filed a complaint in the
Circuit Court of Bolivar County, First Judicial District,
naming as defendants State Farm Mutual Automobile Insurance
Company, John Doe Corporation, and Vickie V. Reynolds. Doc.
#2. On August 17, 2017, State Farm, invoking diversity
jurisdiction, removed the action to this Court. Doc. #1. In
its notice of removal, State Farm maintains that complete
diversity exists because Reynolds, a citizen of Mississippi
like Wilson, was fraudulently or egregiously misjoined in the
action; and that the amount in controversy exceeds $75, 000
based on Wilson's claim for “bad faith” and
demand for an unspecified amount of punitive damages.
Id. at 2-3.
August 18, 2017, State Farm moved to sever the claims against
it from those against Reynolds. Doc. #5. Arguing that this
case involves “two distinct litigable events”-a
claim against Reynolds for negligence and a claim against
State Farm for its handling of Wilson's claim-State Farm
asks that the claims against it remain in this Court and the
claims against Reynolds be remanded to the Circuit Court of
Bolivar County. Doc. #5 at 2. On September 15, 2017, Wilson
moved to remand this action for lack of subject matter
jurisdiction, arguing the amount-in-controversy requirement
has not been met. Doc. #13. Both motions have been fully
November 3, 2017, State Farm filed a “Joint Motion of
Dismissal” signed by its counsel and Wilson's
counsel. Doc. #20. In the joint motion, Wilson and
State Farm represent that “the parties have reached a
settlement of all claims” and “request the Court
enter an Order dismissing all portions of the Complaint and
all claims with prejudice.” Id.
dismissing a case with prejudice is a final judgment on the
merits, the question of jurisdiction must be addressed before
a district court takes such an action. Burleigh v.
James, 684 F. App'x 412, 415 (5th Cir. 2017).
Farm contends in its notice of removal that Reynolds was
fraudulently misjoined to destroy diversity jurisdiction.
Doc. #1 at 4-6. The Eleventh Circuit, in Tapscott v. MS
Dealer Service Corp., held that “[m]isjoinder may
be just as fraudulent as the joinder of a resident defendant
against whom a plaintiff has no possibility of a cause of
action.” 77 F.3d 1353, 1360 (11th Cir. 1996),
overruled in part on other grounds by Cohen v. Office
Depot, Inc., 204 F.3d 1069, 1076-77 (11th Cir. 2000).
The Tapscott court reasoned that “[a]
defendant's ‘right of removal cannot be defeated by
a fraudulent joinder of a resident having no real connection
with the controversy.'” Id. (quoting
Wilson v. Republic Iron & Steel Co., 257 U.S.
92, 97 (1921)). In this regard, State Farm argues that
Reynolds was fraudulently misjoined because Wilson's
negligence claims against Reynolds have no connection with
the breach of contract claims Wilson brought against State
Farm. Tapscott's doctrine of fraudulent
misjoinder, however, remains an open question in the Fifth
Fifth Circuit has expressed support for the concept of
misjoinder on two previous occasions but has stopped short of
expressly adopting the doctrine. See In re Benjamin Moore
& Co., 309 F.3d 296, 298 (5th Cir. 2002)
(“Benjamin Moore I”) (citing
Tapscott and observing that “it might be
concluded that misjoinder of plaintiffs should not be allowed
to defeat diversity jurisdiction”); In re Benjamin
Moore & Co., 318 F.3d 626, 630-31 (5th Cir. 2002)
(“Benjamin Moore II”) (“[W]ithout
detracting from the force of the Tapscott principle
that fraudulent misjoinder of plaintiffs is no more
permissible than fraudulent misjoinder of defendants to
circumvent diversity jurisdiction, we do no reach its
application in this case.”). More recently, in
Crockett v. R.J. Reynolds Tobacco Co., the Fifth
Circuit, in applying the voluntary-involuntary
for removal to “an unappealed severance, by a state
court, of claims against improperly joined defendants,
” cited Tapscott in a
“Cf.” footnote. See 436 F.3d
529, 533 & n.5 (5th Cir. 2006) (“[I]f …
[Rule 20] requirements are not met, joinder is improper even
if there is no fraud in the pleadings and the plaintiff does
have the ability to recover against each of the defendants.
Cf. Tapscott ….”).
majority of district courts in the Fifth Circuit,
“based on Benjamin Moore I & II and/or
Crockett … have taken the position that the
Fifth Circuit has adopted, or at least appears to have
adopted, Tapscott.” Palermo v. Letourneau
Techs., Inc., 542 F.Supp.2d 499, 515 (S.D.Miss. 2008)
(collecting cases). Other district courts in this circuit
have declined to adopt a rule of fraudulent misjoinder as a
basis for removal. Moore v. SmithKline Beecham
Corp., 219 F.Supp.2d 742, 745 (N.D. Miss. 2002)
(“District courts within the Fifth Circuit, …
including this court have repeatedly distinguished and
declined to follow Tapscott.”) (collecting
cases); Johnson v. Glaxo Smith Kline, 214 F.R.D.
416, 420 (S.D.Miss. 2002) (“Even if the Court were to
adopt the holding of Tapscott, which it does not,
the instant case does not present an example of fraudulent
resolving this conflict, this Court begins with the general
rule that, “because the effect of removal is to deprive
the state court of an action properly before it, removal
raises significant federalism concerns … which mandate
strict construction of the removal statute.”
Carpenter v. Wichita Falls Indep. Sch. Dist., 44
F.3d 362, 365-66 (5th Cir. 1995) (citations omitted).
“This principle … is particularly applicable in
cases involving diversity of citizenship.” Gober v.
Allstate Ins. Co., 855 F.Supp. 158, 160 (S.D.Miss. 1994)
(collecting cases); see Fawvor v. Texaco, Inc., 546
F.2d 636, 639 (5th Cir. 1977) (“[T]he rationale behind
the diversity jurisdiction statute … require[s] its
strict construction.”). Consistent with the strict
interpretation approach, district courts outside the Fifth
Circuit have declined to adopt the fraudulent misjoinder rule
without express guidance from the United States Supreme Court
or the controlling Court of Appeals. See, e.g., Cambridge