Crockett, et al v. R J Reynolds Tobacco, et al

United States Court of Appeals
Fifth Circuit
F I L E D
January 13, 2006
Charles R. Fulbruge III
Clerk
In the
United States Court of Appeals
for the Fifth Circuit
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m 04-41584
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JOHNNY CROCKETT, ET AL.,
Appellants,
JOHNNY CROCKETT,
INDIVIDUALLY, AND AS HEIRS TO THE ESTATE OF VERONICA FAYE CROCKETT;
ANDRA KITCHEN,
INDIVIDUALLY, AND AS HEIRS TO THE ESTATE OF VERONICA FAYE CROCKETT;
ROBERT KITCHEN,
INDIVIDUALLY, ANS AS HEIRS TO THE ESTATE OF VERONICA FAYE CROCKETT,
Plaintiffs-Appellants,
VERSUS
R.J. REYNOLDS TOBACCO COMPANY, ET AL.,
Defendants,
R.J. REYNOLDS TOBACCO COMPANY; R.J.R. NABISCO, INC.;
PHILIP MORRIS USA INC.; PHILIP MORRIS COMPANIES, INC.;
BROWN AND WILLIAMSON TOBACCO CORPORATION;
BATUS TOBACCO SERVICES, INC.; B&W JAPAN, INC.;
H.E.B. BUTT GROCERY COMPANY,
Defendants-Appellees.

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_________________________
Appeal from the United States District Court
for the Southern District of Texas
______________________________
Before GARWOOD, SMITH, and DEMOSS,
Circuit Judges.
JERRY E. SMITH, Circuit Judge:
Johnny Crockett and other heirs of the es-
tate of Veronica Faye Crockett (collectively
“Crockett”) challenge the removal to federal
court of their wrongful death and survival suit
against R.J. Reynolds Tobacco Company and
other tobacco companies (collectively the “to-
bacco defendants”). Concluding that there is
jurisdiction, we affirm the judgment on the
merits.
I.
Crockett filed a wrongful death and survival
suit against the tobacco defendants and Dr.
William Peterek and the Gulf Coast Medical
Group (collectively the “health care defen-
dants”) in state court seeking damages for the
cancer-related death of Veronica Faye Crock-
ett, a long-time smoker. Crockett alleges that
the tobacco defendants’ defective cigarettes
and the health care defendants’ negligence in
failing to diagnose the decedent’s cancer com-
bined to cause her death.
Because Crockett and the health care de-
fendants are citizens of Texas, there is not
complete diversity of citizenship. Federal jur-
isdiction also is barred by the fact that the
health care defendants are citizens of the state
in which the action is brought. The tobacco
defendants nevertheless removed, claiming that
the non-diverse health care defendants had
been fraudulently joined to defeat removal
jurisdiction. The district court determined that
there had been no fraudulent joinder and re-
manded to state court.
On remand, the tobacco defendants, over
Crockett’s objection, successfully moved to
sever Crockett’s claims against the health care
defendants. Upon issuance of the severance
order, the tobacco defendants again removed,
arguing that the severance of the non-diverse
parties cured the lack of complete diversity.
Immediately after filing their notice of remov-
al, the tobacco defendants also filed a motion
for judgment on the pleadings.
Once back in federal court, Crockett moved
to remand, arguing that the tobacco defen-
dants’ second attempt to remove was improper
because diversity had not been created through
a voluntary act of the plaintiffs. Instead of
first ruling on Crockett’s motion, the district
court held against him on the merits by grant-
ing the tobacco defendant’s motion for judg-
ment on the pleadings, then denied as moot the
motion to remand.1 Crockett appeals, claiming
1 Although it reached the correct result, the dis-
trict court should not have decided to bypass the
jurisdictional question presented in the motion to
remand and proceed directly to the merits. See
Steel Co. v. Citizens for a Better Env’t, 523 U.S.
83, 94-95 (1998) (rejecting the notion that a court
(continued...)

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the district court lacked subject matter juris-
diction.
II.
“We review questions of subject matter jur-
isdiction de novo.” Bissonnet Invs., LLC v.
Quinlan, 320 F.3d 520, 522 (5th Cir. 2003).
Because Crockett does not contest the district
court’s decision on the merits, so the only is-
sue on appeal is whether the district court had
removal jurisdiction, leading us to apply the de
novo standard.
As a general matter,
any civil action brought in a State court of
which the district courts of the United
States have original jurisdiction, may be re-
moved by the defendant or the defendants,
to the district court of the United States for
the district and division embracing the place
where such action is pending.
28 U.S.C. § 1441(a). If jurisdiction is based
on diversity of citizenship, however, the action
is removable only if there is complete diversity
and “none of the parties in interest properly
joined and served as defendants is a citizen of
the State in which such action is brought.” Id.
§ 1441(b). If an action is not initially remov-
able, but later becomes removable,
a notice of removal may be filed within
thirty days after receipt by the defendant
. . . of a copy of an amended pleading, mo-
tion, order or other paper from which it
may first be ascertained that the case is one
which is or has become removable, except
that a case may not be removed on the ba-
sis of [diversity of citizenship] more than
one year after commencement of the action.
Id.
This suit was initially nonremovable be-
cause the health care defendants were non-di-
verse and were citizens of Texas, in which the
action was brought. The tobacco defendants
argue, however, that the state court’s order
severing Crockett’s claims against the health
care defendants produced complete diversity
and obviated the “in-state defendant” barrier
posed by § 1446(b). The tobacco defendants
assert that a severance order qualifies as an
“order or other paper from which it may first
be ascertained that the case is one which . . .
has become removable.” § 1446(b).
Crockett contends, to the contrary, that
§ 1446(b) was enacted against the backdrop
of, and without the intent to abrogate, the ju-
dicially-created “voluntary-involuntary” rule
whereby “an action nonremovable when com-
menced may become removable thereafter only
by the voluntary act of the plaintiff.” Weems
v. Louis Dreyfus Corp., 380 F.2d 545, 547
(5th Cir. 1967). Because this suit became
arguably removable only after the issuance of
a severance order that was entered over
Crockett’s objection, Crockett claims removal
was improper under the voluntary-involuntary
rule.
The tobacco defendants counter that the
voluntary-involuntary rule is inapplicable be-
cause the health care defendants were not
properly-joined parties. We agree.
Courts have long recognized an exception
to the voluntary-involuntary rule where a claim
against a nondiverse or in-state defendant is
1(...continued)
can “assume” jurisdiction for the purpose of de-
ciding the merits, because such an approach “car-
ries the courts beyond the bounds of authorized
judicial action and thus offends fundamental princi-
ples of separation of powers”).

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dismissed on account of fraudulent joinder.2
Fraudulent joinder can be established by dem-
onstrating either “(1) actual fraud in the plead-
ing of jurisdictional facts, or (2) inability of the
plaintiff to establish a cause of action against
the non-diverse party in state court.” Travis v.
Irby, 326 F.3d 644, 646-47 (5th Cir. 2003).3
On the tobacco defendants’ first attempt to
remove, the district court, after deciding that
the health care defendants had not been fraud-
ulently joined, remanded on that basis. Crock-
ett notes correctly that that decision is made
unreviewable by 28 U.S.C. § 1447(d).4 In
addition, the severance order issued by the
state court cannot be considered equivalent to
a finding of actual fraud in the pleadings or an
inability of the plaintiffs to establish a cause of
action against the health care defendants.
Rather, that order merely established that
Crockett’s claims against the health care de-
fendants should be tried in separate suits.
Crockett elected not to appeal that ruling.
Fraudulent joinder is therefore no longer an
issue in this case.
A party, however, can be improperly joined
without being fraudulently joined. Under fed-
eral law, defendants are properly joined if
(1) “there is asserted against them jointly, sev-
erally, or in the alternative, any right to relief
in respect of or arising out of the same trans-
action, occurrence, or series of transactions or
occurrences” and (2) “any question of law or
fact common to all defendants will arise in the
action.” FED. R. CIV. P. 20(a). Texas has
adopted the same requirements for proper
joinder. See TEX. R. CIV. P. 40(a). If these
requirements are not met, joinder is improper
even if there is no fraud in the pleadings and
the plaintiff does have the ability to recover
against each of the defendants.5
The state court severed Crockett’s claims
against the health care defendants from his
claims against the tobacco defendants because
“the medical negligence and malpractice claim
and the burden of proof to sustain [that] claim
is totally different [from] the burden of proof
. . . necessary to secure judgment for product
liability.”6 To the extent the severance deci-
sion was tantamount to a finding of improper
joinder, we agree with that finding.
The fraudulent joinder exception to the vol-
untary-involuntary rule is designed to prevent
plaintiffs from blocking removal by joining
nondiverse and/or in-state defendants who
should not be parties. That salutary purpose is
also served by recognizing an exception to the
voluntary-involuntary rule where defendants
are improperly, though not fraudulently,
joined. We therefore conclude that removal
on the basis of an unappealed severance, by a
2 See, e.g., Insigna v. LaBella, 845 F.2d 249,
254 (11th Cir. 1988) (“Fraudulent joinder is a
well-established exception to the voluntary-invol-
untary rule.”).
3 Accord Smallwood v. Ill. Cent. R.R., 385 F.3d
568, 573 (5th Cir. 2004) (en banc) (describing “the
test for fraudulent joinder” and quoting Travis, 326
F.3d at 646-47), cert. denied, 125 S. Ct. 1825
(2005).
4 Section 1447(d) states that “[a]n order re-
manding a case to the State court from which it
was removed is not reviewable on appeal or other-
wise” (adding an exception not relevant here).
5 Cf. Tapscott v. MS Dealer Serv. Corp., 77
F.3d 1353, 1360 (11th Cir. 1996).
6 Crockett v. R.J. Reynolds Tobacco Co., No.
03CV1391 (10th Dist. Ct., Galveston County,
Tex., Aug. 18, 2004) (transcript of hearing on de-
fendants’ motion to sever).

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state court, of claims against improperly joined
defendants is not subject to the voluntary-
involuntary rule.7 Accordingly, removal
jurisdiction existed in this case upon the sev-
erance of Crockett’s claims against the nondi-
verse in-state health care defendants.
III.
Crockett has not challenged the district
court’s disposition on the merits. Accordingly,
because we conclude that the district court had
subject matter jurisdiction, its judgment grant-
ing the motion for judgment on the pleadings,
denying (as moot) the motion to remand, and
dismissing all claims with prejudice, is AF-
FIRMED.
7 This conclusion finds support the text of
§ 1441(b), which does not refer to “nonfraudulent-
ly joined” parties. Rather, it blocks removal only
where “properly joined” defendants are citizens of
the state in which the action is brought.

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