Thursday, December 08, 2011

11th Circuit Decision Regarding Removal - Remand's Standard is "Lax"

Just came out this week, a decent decision that discusses the elements regarding remand.

The opinion actually discusses two cases. In the first, the insured sued Allstate and his agent in State Court. Allstate contended that the agent had been fraudulently joined and the district court agreed. The district court then granted summary judgment to Allstate in that case. The 11th Circuit reversed the district court's decision not to remand the case with good language about the applicable standard.

The Court first explained the doctrine of fraudulent joinder.To establish fraudulent joinder, “the removing party has the burden of proving [by clear and convincing evidence] that either: (1) there is no possibility
the plaintiff can establish a cause of action against the resident defendant; or (2) the plaintiff has fraudulently pled jurisdictional facts to bring the resident defendant into state court.” Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir. 1997). This burden is a “heavy one.” Id. (internal quotation marks omitted).

The Court went on to note that the standard to determine the issue of fraudulent joinder " is a lax one." “To determine whether the case should be remanded, the district court must evaluate the factual allegations in the light most favorable to the plaintiff and must resolve any uncertainties about state substantive law in favor of the plaintiff.” Crowe, 113 F.3d at 1538.

In fact, the Court wrote that the case need not even be a winnable one:"The plaintiff need not have a winning case against the allegedly fraudulent defendant; he need only have a possibility of stating a valid cause of action in order for the joinder to be legitimate."

The opinion helps explain the difference between the possibility and the plausibility standard, which as many who practice in the USDCT know is a much more difficult standard

Take a moment to read the opinion, here: