Brooks v. Hyster-Yale Group, Inc. et al

Filing 48

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Plaintiff's Motion to Remand to State Court, Doc. 39 , is GRANTED in part. The Court will enter an Order of Remand herewith but will not award Plaintiff payment of costs and actual expenses. Signed by District Judge Matthew T. Schelp on 11/22/2024. (KCD)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
BRANDON BROOKS,
Plaintiff,
vs.
HYSTER-YALE GROUP, INC., et al.,
Defendant.

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Case No. 4:24-cv-01025-MTS

MEMORANDUM AND ORDER
In this action, Plaintiff asserts products liability and negligence claims arising
under Missouri law stemming from an incident where he alleges a lift severely injured his
leg. Plaintiff named as Defendants in the action Hyster-Yale Group, Inc. (“HysterYale”), the manufacturer of the lift; MH Equipment Company (“MH Equipment”), the
seller of the lift; and Kyle Churchill, the regional sales manager for MH Equipment.
Defendant Hyster-Yale removed this action from the Circuit Court of St. Charles County
asserting that this Court has diversity jurisdiction—provided the Court disregards
Defendant Churchill’s citizenship. See 28 U.S.C. § 1332(a)(1); id. at § 1441(a); see also
Waste Mgmt., Inc. v. AIG Specialty Ins. Co., 974 F.3d 528, 533 (5th Cir. 2020) (“The
fraudulent joinder doctrine provides that a district court must disregard, for diversity
jurisdiction purposes, the citizenship of an improperly joined defendant.”). Now before
the Court is Plaintiff’s Motion to Remand. Doc. [41]. Because the Court concludes that
Defendant Hyster-Yale failed to show that Plaintiff fraudulently joined Defendant
Churchill, the Court will grant the Motion and remand this action.

Section 1332(a)(1) of Title 28 vests district courts with “original jurisdiction” over
civil actions where the amount in controversy exceeds $75,000 and where all plaintiffs
are citizens of states different from those of defendants. For more than a century, though,
federal courts have recognized that “a plaintiff cannot defeat a defendant’s ‘right of
removal’ by fraudulently joining a defendant who has ‘no real connection with the
controversy.’” Knudson v. Sys. Painters, Inc., 634 F.3d 968, 976 (8th Cir. 2011) (quoting
Chesapeake & Ohio Ry. Co. v. Cockrell, 232 U.S. 146, 152 (1914)); see also Wecker v.
Nat’l Enameling & Stamping Co., 204 U.S. 176, 186 (1907) (affirming the refusal to
remand a case where “the real purpose in joining [a defendant] was to prevent the
exercise of the right of removal by the nonresident defendant”).
“When a party seeking removal alleges fraudulent joinder, the removing party
bears the burden of proving the alleged fraud.” Hutchen v. Wal-Mart Stores E. I, LP, 555
F. Supp. 2d 1013, 1017 (E.D. Mo. 2008). The U.S. Court of Appeals for the Eighth
Circuit requires the removing party “to do more than merely prove that the plaintiff’s
claim should be dismissed pursuant to a Rule 12(b)(6) motion.”

Knudson v. Sys.

Painters, Inc., 634 F.3d 968, 980 (8th Cir. 2011). The removing party must show that
“there is ‘no reasonable basis in fact and law’ for the claim brought against” the
diversity-destroying defendant. See Wivell v. Wells Fargo Bank, N.A., 773 F.3d 887, 893
(8th Cir. 2014) (quoting Murphy v. Aurora Loan Servs., LLC, 699 F.3d 1027, 1031 (8th
Cir. 2012)).
Defendant Hyster-Yale has failed to meet its burden in showing the claim against
Defendant Churchill has no reasonable basis in fact and law. See Menz v. New Holland

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N. Am., Inc., 440 F.3d 1002, 1004 (8th Cir. 2006) (quoting Filla v. Norfolk S. Ry., 336
F.3d 806, 810 (8th Cir. 2003) (“[A] proper review should give paramount consideration
to the reasonableness of the basis underlying the state claim.”)). Indeed, Plaintiff has put
forward multiple precedents that show, based on the factual allegations in the First
Amended Complaint, 1 that he “might have a ‘colorable’ claim” under Missouri law
against Defendant Churchill, a fellow citizen of Missouri. See Wilkinson v. Shackelford,
478 F.3d 957, 964 (8th Cir. 2007) (quoting Menz v. New Holland N. Am., Inc., 440 F.3d
1002, 1005 (8th Cir. 2006)); see also Hutchen, 555 F. Supp. 2d at 1019 (concluding
plaintiff alleged colorable negligence claim under Missouri law against store manager
who failed to remove contaminated spinach from store she managed or warn customers
of possible contamination though she allegedly should have known that contaminated and
recalled spinach had been found in other stores). In sum, Plaintiff did not fraudulently
join Defendant Churchill, and his presence in this action destroys diversity. 2

1

The Court looks to the facts within Plaintiff’s First Amended Complaint, filed after removal, to
determine whether jurisdiction is proper here. See Wullschleger v. Royal Canin U.S.A., Inc., 75 F.4th
918, 922 (8th Cir. 2023) (explaining that an amended complaint supersedes an original complaint,
rendering the original complaint without legal effect, even when the case “ends up in federal court
through removal”), cert. granted, 144 S. Ct. 1455 (2024); see also, e.g., Johnson v. The Hertz Corp.,
4:24-cv-00827-SRC, 2024 WL 4751310 (E.D. Mo. Nov. 12, 2024) (citing Wullschleger, 75 F.4th at
922–24) (examining the amended complaint to resolve fraudulent joinder question). But see, e.g.,
Berber v. Wells Fargo Bank, N.A., 760 F. App’x 684, 688 n.2 (11th Cir. 2019) (per curiam) (noting
amended complaints “do not matter for the purposes of the fraudulent joinder analysis, which only
examines the pleadings at the time of removal”).
2

The Court notes that Defendant Churchill answered the Petition and the First Amended Complaint;
he did not seek dismissal of either under Federal Rule of Civil Procedure 12(b)(6). Nor did he seek
to file any papers taking a position on the merits of the motion to remand or on the Court’s
jurisdiction. Of course, his litigation strategies do not resolve the jurisdictional question here, cf.
Great River Ent., LLC v. Zurich Am. Ins. Co., 81 F.4th 1261, 1263 (8th Cir. 2023) (no action of the
parties can confer subject matter jurisdiction), but if there were no reasonable basis in fact and law
for the claim brought against him, surely Defendant Churchill, represented by able counsel, would
have sought dismissal or sought to inform the Court of his position.

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This action’s jurisdictional troubles do not end there, though, because Defendant
Hyster-Yale has failed to establish the Court’s jurisdiction even if the Court could
disregard Defendant Churchill’s citizenship.

First, Defendant Hyster-Yale failed to

establish Plaintiff’s citizenship. Instead, the Notice of Removal alleged only that Plaintiff
is “a resident” of Missouri. But a “notice of removal resting on residency” does “not
establish citizenship for diversity jurisdiction.” Hargett v. RevClaims, LLC, 854 F.3d
962, 965 (8th Cir. 2017). Ambiguity in the word “resident” prevents the Court from
concluding “that diversity jurisdiction is proper based solely on an allegation a party is
(or was) a ‘resident’ of a particular state.” Reece v. Bank of New York Mellon, 760 F.3d
771, 778 (8th Cir. 2014). “This rule is not new.” Hargett, 854 F.3d at 965; see also, e.g.,
Wolfe v. Hartford Life & Annuity Ins. Co., 148 U.S. 389, 389 (1893) (reversing lower
court’s judgment for want of jurisdiction because, while plaintiff averred that he was “a
resident” of New York, “his citizenship [wa]s nowhere disclosed”).
Second, Defendant Hyster-Yale failed to establish that the parties were diverse
both when Plaintiff initiated the action in state court and when Hyster-Yale removed the
action to this Court. Compare Doc. [1] ¶ 9 (stating parties are diverse), and id. ¶ 11
(claiming Plaintiff is a resident), with Chavez-Lavagnino v. Motivation Educ. Training,
Inc., 714 F.3d 1055, 1056 (8th Cir. 2013) (“For a party to remove a case to federal court
based on diversity jurisdiction, the parties must be diverse both when the plaintiff
initiates the action in state court and when the defendant files the notice of removal in
federal court.”); see also Reece, 760 F.3d at 777 (finding removal defective because
defendant’s notice failed to specify party’s citizenship “when the suit was commenced”).

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This rule, too, is not new. See, e.g., Burnham v. First Nat. Bank, 53 F. 163, 165 (8th Cir.
1892) (calling the rule “well settled”).
***
A federal district court must “presume[ ] that a cause lies outside [its] limited
jurisdiction,” and “the burden of establishing the contrary rests upon the party asserting
jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).
Here, Defendant Hyster-Yale has failed to carry that burden for the reasons explained
herein. It appearing that this Court lacks subject matter jurisdiction, the case shall be
remanded. 28 U.S.C. § 1447(c). Though § 1447(c) mandates remand of this action, the
Court will not award attorney’s fees under that subsection as Plaintiff requests. 3
Accordingly,
IT IS HEREBY ORDERED that Plaintiff’s Motion to Remand to State Court,
Doc. [39], is GRANTED in part. The Court will enter an Order of Remand herewith but
will not award Plaintiff payment of costs and actual expenses.
Dated this 22nd day of November 2024.

MATTHEW T. SCHELP
UNITED STATES DISTRICT JUDGE

3

After removal, Plaintiff filed a First Amended Complaint, which shored up his claim against
Defendant Churchill. While the Court concludes that the First Amended Complaint governs the
jurisdictional analysis here, see supra note 1, Hyster-Yale had an objectively reasonable basis for
seeking removal of this action based upon Plaintiff’s original Petition in state court. See Martin v.
Franklin Cap. Corp., 546 U.S. 132, 141 (2005) (holding that “courts may award attorney’s fees
under § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking
removal”).

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