BROOKS et al v. HARLEY-DAVIDSON MOTOR COMPANY et al
MEMORANDUM. ( SIGNED BY HONORABLE EDUARDO C. ROBRENO ON 8/21/09. ) 8/24/09 ENTERED AND COPIES MAILED TO UNREPS, E-MAILED.(gn, ) Modified on 8/26/2009 (gn, ).
IN THE UNITED STATES DISTRICT COURT F O R THE EASTERN DISTRICT OF PENNSYLVANIA R O B E R T BROOKS, et al. v. H A R L E Y -D A V ID S O N MOTOR C O M P A N Y , et al. : : : : : : MEMORANDUM L u d w ig , J. August 21, 2009 C IV IL ACTION
N o . 08-4318
T h is is defendants' second attempt to effectuate removal on grounds of diversity ju ris d ic tio n .1 For the reasons set forth below, plaintiffs' motion to remand must again be g r a n te d . T h is is a personal injury action based on negligence and products liability arising from a motorcycle accident on August 10, 2006. Complaint, ¶ 30. On August 18, 2008, service
This action was commenced by summons in the Court of Common Pleas of Philadelphia County in November 2007 and first removed to this court in December 2007. Removal was premised on diversity jurisdiction, disregarding the citizenship of individual defendant Fred Gates, vice-president and general manager of Harley-Davidson's York, Pennsylvania plant, and plaintiff Kenneth Brooks, the adult son of injured plaintiff Robert Brooks. Defendants contend that these individuals were fraudulently joined as follows: as to Fred Gates, employees of manufacturers are not subject to individual liability in products cases absent active malfeasance; as to the adult son, state law does not recognize loss of consortium claims of adult children. On June 30, 2008, plaintiffs' first motion to remand was granted. The fact-record as to jurisdiction at that time consisted only of the notice of removal: "Absent a complaint, it cannot be said that plaintiffs' claims are `so defective that they should never have been brought at the outset.' . . . Therefore, it would be inappropriate to disregard the presence of non-diverse parties, and the presence of a Pennsylvania citizen." Brooks v. Harley-Davidson Motor Co., 2008 WL 2679189, at *2 (E.D. Pa., filed June 30, 2008), quoting Batoff v. State Farm Ins. Co., 977 F.2d 848, 852 (3d Cir. 1992).
o f plaintiffs' complaint was made on defendants, and on September 8, 2008, defendants H a rle y-D a v id so n and Fred Gates had the action removed on the ground of diversity ju ris d ic tio n . Plaintiffs move to remand based on their assertion of claims against a resident o f the forum state, and against non-diverse parties. Defendants contend that the forum re sid e n t and non-diverse parties were fraudulently joined, and therefore, their citizenship sh o u ld be disregarded.2 Because at this juncture, the joinders appear not to be fraudulent, th e re is no diversity jurisdiction, and the action will be remanded.3 A c c o rd in g to the complaint,4 plaintiffs Robert Brooks and Kathryn Brooks are citizens o f Maryland, and their adult son Kenneth, is a citizen of Delaware. Defendants are Harley"Joinder is fraudulent `where there is no reasonable basis in fact or colorable ground supporting the claim against the joined defendant, or no real intention in good faith to prosecute the action against the defendant or seek a joint judgment.'" Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 (3d Cir. 1992), quoting Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990), cert. denied, 498 U.S. 1085 (1991). However, "where there are colorable claims or defenses asserted against or by diverse and non-diverse defendants alike, the court may not find that the non-diverse parties were fraudulently joined based on its view of the merits of those claims or defenses." Boyer, 913 F.2d at 113 (citations omitted). It is the removing party's burden to show that parties are fraudulently joined. Id. "Removal statutes `are to be strictly construed against removal and all doubts should be resolved in favor of remand.'" Batoff, 977 F.2d at 851, quoting Steel Valley Authority v. Union Switch & Signal Div., 809 F.2d 1006, 1010 (3d Cir. 1987), cert. dismissed, 484 U.S. 1021 (1988). On October 8, 2008, plaintiffs filed an amended complaint, adding defendant HarleyDavidson York, Inc., which is alleged to be a Pennsylvania corporation with its principal place of business in Pennsylvania. Amended Complaint, ¶ 13. It also adds claims under the Maryland Consumer Protection Act against Harley-Davidson Annapolis and the Rommel defendants. Amended Complaint, ¶ 35(g). However, a defendant's right to remove is to be determined according to a plaintiff's pleading at the time the petition for removal was filed. Abels v. State Farm Fire & Cas., 770 F.2d 26, 29 (3d Cir. 1985), citing Pullman Company v. Jenkins, 305 U.S. 534, 537 (1939). Therefore, claims and parties added in plaintiffs' amended complaint cannot be considered vis-a-vis plaintiffs' motion to remand. 2
4 3 2
D a v id s o n Motor Company Group, Inc., a Wisconsin corporation with its principal place of b u s i n e s s in Wisconsin; Fred Gates is vice-president and general manager at HarleyD a v id s o n 's York, Pennsylvania plant, and a citizen of Pennsylvania; Kuser Enterprises, Inc. is a New Jersey corporation with its principal place of business in New Jersey; Mike's F a m o u s Harley-Davidson, Inc. is a Delaware corporation with its principal place of business in Maryland;5 Harley-Davidson of Annapolis is a Maryland corporation with its principal p lac e of business in Maryland; Rommel Cycles, LLC, is a Maryland corporation with its p rin c ip a l place of business in Maryland; and Dave Rommel is a Maryland citizen. C o m p la in t, ¶¶ 1-29. T h e complaint asserts the following claims, based on injuries resulting from the n e g lig e n t design, manufacture, sale, distribution, service and repair of Robert Brooks' m o to rc yc le, and the sale of a similarly defective motorcycle to Kathryn Brooks: (1) negligence (Counts I, V, X); (2) strict products liability (Count II); (3) breach of warranty (Count III);
Defendants have submitted the affidavit of Michael Schwartz, president of Mike's Famous, which states that Mike's Famous does not have a place of business in Maryland. Schwartz Affidavit, Exhibit "C" to defendants' memorandum in opposition to plaintiff's motion to remand. Consideration of affidavits is permissible in deciding a motion to remand. In re Diet Drugs, 2004 WL 1824357, at *2 (E.D. Pa., Aug. 12, 2004), citing Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 98 (1921) ("if a plaintiff contests a defendant' assertion that joinder of another defendant was a sham to defeat removal, the District Court must determine the facts from the evidence."). However, in light of the bases for the decision to remand, it is unnecessary to resolve this factual dispute. 3
(4) violation of Pennsylvania's UTPCPL (Counts IV, VI, IX); ( 5 ) joint enterprise and alter ego claims against Mike's Famous and the Rommel d e f en d a n ts (Counts VII and VIII); and (6) loss of consortium claims on behalf of both Kathryn and the Brooks' adult son K en n eth (Count XI). A cc o rd in g to plaintiffs, the presence of Fred Gates, a Pennsylvania citizen, renders re m o v a l improper under 28 U.S.C. § 1441(b). Remand motion, ¶ 47. Plaintiffs' negligence c la im against Gates asserts that as general manager of harley-Davidson's York plant, Gates w a s actively involved in the manufacture of the motorcycles in question. Gates' affidavit stated that he had no role in the design, manufacture, assembly, inspection, testing, packaging o r distribution of the motorcycle at issue. Affidavit of Fred Gates, ¶ 4, Exhibit "B" to d e f e n d a n ts ' memorandum in opposition. Under Pennsylvania law, "a corporate officer can be held liable for `misfeasance,' i.e., th e improper performance of an act, but not for `mere nonfeasance,' i.e., the omission of an a c t which a person ought to do." Brindley v. Woodland Village Restaurant, Inc., 652 A.2d 8 6 5 , 868 (Pa. Super. 1995). Defendants' position is that Gates' affidavit establishes that he c o u ld be charged, at most, with nonfeasance, which is not actionable conduct. Plaintiffs re sp o n d , however, that Gates' affidavit is not exhaustive as to his conduct - conduct that may h av e been active, and, therefore, considered misfeasance under Pennsylvania law .6 "If there For example, according to plaintiffs, the affidavit does not establish that "Gates did not receive reports of crashes due to wheel wobble or other stability problems exhibited by large 4
is even a possibility that a state court would find that the complaint states a cause of action a g a in s t any one of the resident defendants, the federal court must find that joinder was proper a n d remand the case to state court." Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d C ir. 1990), cert. denied, 498 U.S. 1085 (1991). Because the complaint asserts a claim against Gates cognizable under Pennsylvania law , which may be supported by evidence obtained in the course of discovery, the claim is co lorab le. Gates, therefore, renders removal improper. A further fraudulent joinder issue is the loss of consortium claim asserted by Robert a n d Kathryn Brooks' adult son Kenneth, a Delaware citizen, against defendants, including M ik e 's Famous Harley-Davidson, which is also a citizen of Delaware. Defendants cite cases h o l d i n g that a loss of consortium claim by an adult child has not been recognized by P e n n s ylv a n ia , Delaware or Wisconsin: Schroeder v. Ear, Nose and Throat Assoc. of Lehigh V a lle y, Inc., 557 A.2d 21 (Pa. Super. 1998) (loss of consortium claim is derivative of s p o u s e 's substantive claim); Dep't. of Public Welfare v. Schultz, 855 A.2d 753, 755 (Pa. 2 0 0 4 ) (parent cannot bring loss of consortium claim for death of adult child); Lacy v. G.D. S ea rle & Co., 484 A.2d 527, 532 (Del. Super. 1984) (stating that non-spouse family members m u s t satisfy `zone of danger' test to recover in negligence cases); Wells v. Mount Sinai M e d i c a l Center, 515 N.W.2d 705, 709 (Wisc. 1994) (declining to recognize parent's right
numbers of the FL family of Harley-Davidson motorcycles, did not participate in decisions to produce a defective and potentially deadly motorcycle despite such reports, and place that motorcycle into the stream of commerce anyway." Motion to remand, ¶ 49. 5
t o loss of consortium claim arising from injury to adult child). Unless Kenneth has an a c tio n a b le claim, his citizenship for diversity purposes should be disregarded. O n the other hand, according to plaintiffs, six states have recognized an adult child's ca u se of action: Rolf v. Tri-State Motor Transit Co., 745 N.E.2d 424, 427 (Ohio 2001); N e ls o n v. Cour Seasons Nursing Center, 934 P.2d 1104, 1105 (Okla. App. 1996); Reagan v. V a u g h n , 368 N.W.2d 141 (Iowa 1985); Cleland v. Reynolds Metals Co., 691 P.2d 190, 195 (W a sh . 1984); Villareal v. State Dept. of Transp., 774 P.2d 213 (Ariz 1989). Plaintiffs h yp o th e s iz e that Pennsylvania, Wisconsin and Delaware may revisit this issue. See, e.g., T h e a m a by Bichler v. City of Kenosha, 344 N.W.2d 513, 520-21 (Wis. 1984) (recognizing " th a t the rule denying recovery for the loss of society and companionship was created by the c o u rts and not the legislature, and it is, therefore, as much our duty as the legislature's to c h a n g e that law if it no longer meets society's needs. . . . We hold that a minor child may re c o v er for the loss of care, society, companionship, protection, training and guidance of a p a re n t due to the negligent acts of a third party.") " T h e inquiry into the validity of a complaint triggered by a motion to dismiss under R u le 12(b)(6) is more searching than that permissible when a party makes a claim of f ra u d u len t joinder. . . . [Moreover,] [a] claim which can be dismissed only after an intricate a n a lys is of state law is not so wholly insubstantial and frivolous that it may be disregarded f o r purposes of diversity jurisdiction." Batoff, 977 F.2d at 853. While it appears unlikely that P e n n s ylv a n ia , Delaware or Wisconsin courts will recognize an adult child's claim for loss
o f consortium, it cannot be said, given other states' recognition of the claim, that plaintiffs' a r g u m e n t is "wholly insubstantial and frivolous." Accordingly, the presence of non-diverse p a rtie s cannot be disregarded for purposes of establishing diversity jurisdiction, and the a c tio n must be remanded.7
B Y THE COURT:
/s/ Edmund V. Ludwig E d m u n d V. Ludwig, J.
Other claims by non-diverse parties: Kathryn Brooks asserts a claim under Pennsylvania's UTPCPL against the Rommel defendants, who, like Brooks, are alleged to be Maryland citizens. Defendants' position is that she has no standing under Pennsylvania's consumer protection law, because she is not a Pennsylvania resident. Therefore, the claim is not colorable and lack of diversity may be disregarded. Plaintiffs appear to concede the validity of this argument. The amended complaint includes a claim under Maryland's consumer protection statute on behalf of Kathryn Brooks. See Amended Complaint. However, the original complaint is controlling in this context. Deciding whether the sale in Maryland of a motorcycle manufactured in Pennsylvania to a Maryland resident implicates Pennsylvania's consumer protection law requires an "intricate analysis of state law." Our Court of Appeals has held such a claim "not so wholly insubstantial and frivolous" that it can be disregarded in determining the existence of diversity jurisdiction. Batoff, 977 F.2d at 853. 7
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