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BROWN v. BROWN & WILLIAMSON TOBACCO CORP.

September 28, 1998

LOIS WALKER BROWN, et al., Plaintiffs,
v.
BROWN & WILLIAMSON TOBACCO CORPORATION, individually and as successor in interest to THE AMERICAN TOBACCO COMPANY, INC., et al., Defendants.



The opinion of the court was delivered by: URBINA

MEMORANDUM OPINION AND ORDER

 Granting Plaintiffs' Motion to Remand

 This matter is before the court on the plaintiffs' motion to remand this case to the Superior Court for the District of Columbia ("D.C. Superior Court"). For the reasons stated below, the plaintiffs' motion is granted.

 Background

 On September 19, 1997, the plaintiffs filed in D.C. Superior Court a complaint against two separate defendants, Brown & Williamson Tobacco Corporation, individually and as successor in interest to The American Tobacco Company, Inc. ("Brown & Williamson") and Philip Morris Incorporated ("Phillip Morris"). Subsequently, on October 10, 1997, the plaintiffs filed in D.C. Superior Court an amended complaint wherein they added a third defendant, H&Y Chun Corporation d/b/a Michigan Liquors ("H&Y Chun").

 In their amended complaint, the plaintiffs claim a right to relief based on the defendants' (1) failure to warn of the risks associated with cigarettes, (2) failure to manufacture cigarettes free from design defects, (3) liability for manufacturing and selling an unreasonably dangerous product, (4) false and misleading statements of material fact, (5) deceptive trade practices, and (6) liability for the plaintiffs' loss of consortium. Each of the plaintiffs' six claims for relief is premised on the law of the District of Columbia. The plaintiffs are seeking compensatory and punitive damages, plus costs and any other relief deemed just and proper.

 On October 17, 1997 -- after the plaintiffs had filed their amended complaint but before the defendants had learned of the filing -- the defendants removed this case to this court on the basis of diversity jurisdiction under 28 U.S.C. § 1332. Neither Brown & Williamson nor Phillip Morris, the original defendants, are incorporated in or have their principal places of business in the District of Columbia. The plaintiff, however, is a citizen of the District of Columbia, and the added defendant, H&Y Chun, operates a store located in Washington, D.C. On December 5, 1997, the plaintiffs filed a motion claiming that removal was improper and asking this court to remand this case back to D.C. Superior Court.

 Analysis

 The district courts of the United States have original jurisdiction over any civil action in which the amount in controversy exceeds $ 75,000 and the parties to the action are citizens of different states. See 28 U.S.C. § 1332(a). The diversity of citizenship requirement of 28 U.S.C. § 1332 is met only when the citizenship of every plaintiff in an action is different from the citizenship of every defendant. See Fortuin v. Milhorat, 683 F. Supp. 1, 2 (D.D.C. 1988) (citing Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 57 L. Ed. 2d 274, 98 S. Ct. 2396 (1978)) (emphasis added). If the requirements of 28 U.S.C. § 1332 are met, a defendant may remove a civil action from state court to federal court. See 28 U.S.C. § 1441(a). An action removed to federal district court "shall be remanded" back to state court, however, "if at any time before final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c).

 The proper addition of H&Y Chun, a Washington, D.C. corporation, as a defendant in this action would destroy the diversity of citizenship required under 28 U.S.C. § 1332 and mandate that this court remand this case back to D.C. Superior Court. The defendants contend, however, that H&Y Chun was fraudulently joined in this action and, therefore, the plaintiffs' motion to remand should be denied.

 To prove that a defendant has been joined fraudulently for the purpose of destroying diversity, a defendant "must show either that there is no possibility that the plaintiff would be able to establish a cause of action against the in-state defendant in state court; or that there has been outright fraud in the plaintiff's pleadings of jurisdictional facts." B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir. 1981); see Marshall v. Manville Sales Corp., 6 F.3d 229, 232 (4th Cir. 1993); Richardson v. Phillip Morris Inc., 950 F. Supp. 700, 702 (D. Md. 1997). The defendants here claim that they can demonstrate fraudulent joinder because the plaintiffs cannot establish a cause of action against H&Y Chun. The court disagrees.

 There is a heavy burden on a defendant claiming fraudulent joinder, and courts are required to resolve all disputed issues of fact and law in favor of the plaintiff. See Marshall, 6 F.3d at 232-33; Richardson, 950 F. Supp. at 702. It is not enough to show a likelihood of ultimate success in the action; the defendant must show that the plaintiff has " no possibility of a right to relief." Richardson, 950 F. Supp. at 702 (emphasis). "If there is even a possibility that a state court would find a cause of action stated against any one of the named in-state defendants on the facts alleged by the plaintiff, then the federal court must find that the in-state defendant(s) have been properly joined, and that there is incomplete diversity, and that the case must be remanded to the state courts." B. Inc., 663 F.2d at 550. Unless a state law claim is "wholly nonsensical," remand is the appropriate course of action. Pulse One Communications, Inc. v. Bell Atlantic Mobile Systems, Inc., 760 F. Supp. 82, 84 (D. Md. 1991) ("The state law argument might be meritless as well as novel, but . . . the state courts should make that determination, not the federal removal court . . . .").

 In this case, the plaintiffs assert that they can maintain a cause of action against defendant H&Y Chun on one or both of two theories. The first is that H&Y Chun either expressly or impliedly agreed to assume the liabilities of its predecessor company, which sold cigarettes to plaintiff Lois Brown. The second is that H&Y Chun is liable for the products sold by its predecessor company under the "product line ...


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