Plaintiff Jeffrey Taylor filed a lawsuit against Target Corporation due to personal injuries that occurred at a Target store in Brick, New Jersey. Plaintiff filed his complaint in state court in Ocean County. Upon receipt of the complaint, defendant Target filed a Petition for Removal to remove the matter to federal court. The issue in Taylor v. Target Corp., 2024 U.S. Dist. LEXIS 201963 (D.N.J. Nov. 6, 2024) was whether Target had alleged complete diversity between all parties so as to make the lawsuit eligible to be removed to federal court.
When a lawsuit is filed in state court, a defendant may “remove” the lawsuit to federal court if it is able to establish either that there is complete diversity between all parties or that a federal question is involved. If the removal is on the basis of diversity of the parties, the defendant must be able to show that all plaintiffs are “diverse” in citizenship from all defendants and the matter in controversy exceeds $75,000. That means a defendant would need to be able to establish the state of residence of each plaintiff and each defendant and be able to show that the plaintiffs reside in different states than the defendants.
Here, in its Petition for Removal, Target alleged that it is a citizen of Minnesota and plaintiff is a citizen of New Jersey and that it believed the amount in controversy exceeded $75,000. Thus, it alleged that the lawsuit was removable to federal court under 28 U.S.C. § 1441.
However, there were other defendants in the lawsuit. In addition to Target Corporation, plaintiff had sued Dayton Hudson Corp. and Mervyn’s Inc. and Target’s store manager, Alexander Applegate. Plaintiff alleged that Applegate was a resident (“citizen”) of New Jersey and that because he was the director of the store on the date of the incident, he “had an affirmative executive duty to monitor and supervise” the store to prevent the alleged accident.
The District Court noted that removal of a lawsuit from state to federal court was proper only if the federal court to which the lawsuit was removed would have had original jurisdiction over the matter. Further, to maintain subject matter jurisdiction over a lawsuit either there must be diversity jurisdiction or federal court jurisdiction. Upon removal, if a district court finds that it lacked subject matter jurisdiction over a removed action, it must remand the action to state court.
In a lawsuit in which the defendants do not have complete diverse citizenship from the plaintiff, a diverse defendant may still remove the action “if it can establish that the non-diverse defendants were fraudulently named or joined solely to defeat diversity jurisdiction.” The District Court noted that joinder is considered fraudulent “where there is no reasonable basis in fact or a 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.” However, the moving party would carry a heavy burden of persuasion to show that the claim was not colorable.
The District Court found that Target had not met its burden of demonstrating that Applegate was fraudulently joined for the purpose of defeating diversity jurisdiction. The complaint had alleged that Applegate “did negligently, improperly, and carelessly design, construct, maintain, and supervise the aforementioned premises and. . . did fail to give warning to business invitees of the dangerous and hazardous condition that existed,” and that these actions caused plaintiff to fall and suffer serious and permanent injuries.
In prior cases, the District Court had held that similar claims for negligence against individual store managers like Applegate would be colorable and had “repeatedly rejected” fraudulent joinder arguments when considering similar claims for negligence against defendant store managers.
Target admitted that Applegate was the store director on the date of the alleged accident but claimed that he was not on the premises at any time on that date. Therefore, Target argued that Applegate was fraudulently joined because plaintiff could not allege that Applegate was actually in control of or negligently supervised the premises on the date of the accident.
The District Court rejected this argument because Target had failed to allege when Applegate was last on duty or when the hazardous condition was created. That left open the possibility that Applegate failed to remedy a hazardous condition that harmed plaintiff, even if he was not present on the date the harm occurred.
The District Court was also unpersuaded that plaintiff’s naming of “non-existent entities” (presumably New Jersey entities) demonstrated plaintiff’s intent to defeat diversity jurisdiction. Plaintiff did provide a basis for naming these entities as defendants, specifically, a letter from the Brick Township Tax Assessor which listed these entities as the owner of the real estate where the Target store was located.
Hence, the District Court found that diversity jurisdiction was lacking and because Target did not assert subject matter jurisdiction on any other basis, it remanded the matter back to state court.
