Rushing v. Beverly Ent MS Inc, et al

United States Court of Appeals
Fifth Circuit
F I L E D
November 9, 2004
Charles R. Fulbruge III
Clerk
In the
United States Court of Appeals
for the Fifth Circuit
_______________
m 03-60528
_______________
LETHA M. GRAY,
BY AND THROUGH ELLA RUDD,
AS NEXT FRIEND FOR THE USE AND BENEFIT OF
LETHA M. GRAY, ALSO KNOWN AS LETHA M. GARY,
Plaintiff-Appellant,
VERSUS
BEVERLY ENTERPRISES-MISSISSIPPI, INC., ET AL.
Defendants,
BEVERLY ENTERPRISES-MISSISSIPPI, INC.;
BEVERLY HEALTH AND REHABILITATION SERVICES, INC.; JAMES C. LANDERS; DAVID
DEVEREAUX; DAVID R. BANKS; LEWIS SEWELL; CHARLES R. SINCLAIR; BOBBIE
LUCILLE BLACKARD; ALICHA D. LINDSAY,
Defendants-Appellees.
* * * * * * * * * * * * * * *

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_______________
m 03-60712
_______________
MARY BODDIE,
INDIVIDUALLY AND ON BEHALF OF
THE ESTATE AND WRONGFUL DEATH BENEFICIARIES OF DAVID GREEN,
Plaintiff-Appellant,
VERSUS
BEVERLY ENTERPRISES-MISSISSIPPI, INC.;
BEVERLY HEALTH AND REHABILITATION SERVICES, INC.; JAMES C. LANDERS; DAVID
R. DEVEREAUX; DAVID R. BANKS; LEWIS G. SEWELL;
CHARLIE R. SINCLAIR, JR.,
ALSO KNOWN AS CHUCK SINCLAIR; JOHN DOES 1-10,
Defendants-Appellees,
UNIDENTIFIED ENTITIES 1-10,
Appellee.
* * * * * * * * * * * * * * *

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_______________
m 03-60768
____________
GENEVA G. RUSHING,
BY AND THROUGH DOROTHY SHERIFF, HER CONSERVATOR,
FOR THE USE AND BENEFIT OF GENEVA G. RUSHING,
Plaintiff-Appellant,
VERSUS
BEVERLY ENTERPRISES-MISSISSIPPI, INC.;
BEVERLY HEALTH AND REHABILITATION SERVICES, INC.; JAMES C. LANDERS; DAVID
R. DEVEREAUX; DAVID R. BANKS; LEWIS SEWELL;
CHARLIE R. SINCLAIR, JR.,
ALSO KNOWN AS CHUCK SINCLAIR;
ALICHA LINDSAY; JOHN DOES 1-10; UNIDENTIFIED ENTITIES 1-10,
Defendants-Appellees.
_________________________
Appeals from the United States District Court
for the Southern District of Mississippi
_________________________

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Before SMITH and GARZA, Circuit Judges,
and VANCE,* District Judge.
JERRY E. SMITH, Circuit Judge:
The plaintiffs bring this consolidated inter-
locutory appeal challenging orders denying
their motions for remand to state court after
the defendants removed these actions to fed-
eral district court. Because the relevant Mis-
sissippi law is, at a minimum, ambiguous, there
is “arguably a reasonable basis for predicting
that the state law might impose liability on the
facts involved . . . . ” Travis v. Irby, 326 F.3d
644, 648 (5th Cir. 2003). Under such
circumstances, there is no fraudulent joinder,
and removal is inappropriate, because the lack
of complete diversity divests the district court
of subject matter jurisdiction. We therefore
reverse and remand.
I.
The plaintiffs filed their respective suits in
Mississippi state court alleging that residents
of Beverly Healthcare-Northwest nursing
home were injured as a result of the conduct of
all the defendants. The named defendants
include t he corporate owners of the nursing
home, Beverly Enterprises-Mississippi, Inc.,
and Beverly Health and Rehabilitation Ser-
vices, Inc. These defendants are California
corporations with their principal place of busi-
ness in Arkansas and are therefore diverse
from the plaintiffs, all of whom are residents
and citizens of Mississippi. Also named as de-
fendants are numerous individual licensees and
administrators of the facility, some of whom
are diverse from the plaintiffs and others of
whom are non-diverse (i.e., also citizens of
Mississippi).
In each of the suits (consolidated for pur-
poses of appeal), defendants removed to fed-
eral district court, arguing that the in-state de-
fendants were fraudulently joined, and there-
fore t here is complete diversity. On each of
the plaintiffs’ motions to remand to state
court, the district court ruled the in-state de-
fendants were fraudulently joined, denied the
motions to remand, and dismissed the claims
against the in-state defendants.
The court held that the complaint did not
state a viable claim against the in-state defen-
dants under Mississippi law, specifically find-
ing that Mississippi law does not provide a
cause of action for any of the counts alleged
against the in-state defendants: (1) simple
negligence, (2) malice and/or gross negligence,
(3) medical malpractice, (4) fraud, and (5)
breach of fiduciary duty.
The court reasoned that the plaintiffs could
not state a claim under state law for simple
negligence against the in-state defendants be-
cause, “[u]nder Mississippi law, an agent of a
disclosed principal can incur ‘independent lia-
bility when his conduct constitutes gross negli-
gence, malice, or reckless disregard for the
rights’ of another. [But,] Mississippi does not
recognize a cause of action against an agent
for simple negligence” (quoting Bass v. Cal.
Life Ins. Co., 581 So. 2d 1087, 1090 (Miss.
1991) (emphasis added by district court)).
The court further held that the in-state admin-
istrator and licensee defendants did not owe
plaintiffs a duty under state law, so the claims
against those defendants for malice/gross neg-
ligence also fail to state a viable cause of
action. The court additionally dismissed the
medical malpractice, fraud, and breach of fi-
duciary duty claims.
Significantly, as we will explain, the plain- * District Judge of the Eastern District of Loui-
siana, sitting by designation.

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tiffs’ briefs challenge only the ruling with re-
spect to negligence and gross negligence.
Specifically, the plaintiffs’ reply brief notes
that the remaining claims “are not before this
court,” nor were they discussed in their open-
ing brief.
The district court recognized that “[n]o
Mississippi case law directly relates” to the
issues at hand and that the “cases leave a great
deal to interpretation.” The court, therefore,
attempted to certify the cases for appeal pursu-
ant to rule 54(b) of the Federal Rules of Civil
Procedure. Because of the peculiar language
used in the district court’s orders, however,
we requested supplemental briefing on wheth-
er the order in one of these consolidated
appealsSSNo. 03-60712 (“Boddie”), was
properly certified so as to confer appellate
jurisdiction.
Plaintiffs have moved this court to take
judicial notice of unreported decisions from
federal district courts in Mississippi and un-
reported state court judicial decisions and rec-
ords. That motion was carried with the case.
II.
On the jurisdictional question, there is no
discernible difference between the wording of
the order purporting to render Boddie fit for
appeal (under either rule 54(b) or 28 U.S.C.
§ 1292(b)) and the corresponding orders in the
other two cases. Nevertheless, even the defen-
dants concede that we have jurisdiction over
the other two cases under § 1292(b), despite
the fact that there is no indication that the
plaintiffs received the requisite permission
from this court as required by the statute.
The relevant order in Boddie (as well as the
orders in the other two cases) reads in perti-
nent part:
. . . Plaintiff seeks to certify the findings in
the August 11 Opinion for interlocutory
appeal. Plaintiff invokes the provisions of
Rule 54(b) of the Federal Rules of Civil
Procedure. . . . In the subject case, the
Court finds that there exists a danger of
hardship or injustice through delay which
would be alleviated by immediate appeal
. . . . As such, the Court finds that justice
will be served by the immediate appeal of
this issue . . . .
Plaintiff also invokes the provisions of 28
U.S.C. § 1292(b) . . . . Under § 1292(b),
an issue is appropriate for interlocutory
appeal if it “present[s] a controlling
question of law as to which there is
substantial ground for difference of opin-
ion.” As analyzed above, the fraudulent
joinder of a business manager does present
such a question, and interlocutory appeal is
appropriate for that issue. . . .
. . . For these final reasons, the Court
finds that the subject issue should be de-
cided on interlocutory appeal . . . .
(Brackets in original, citations omitted.)
The defendants urge that the above-quoted
order renders neither an appealable final order
nor a case certified for interlocutory appeal.
They rely on the proposition that an order that
dismisses fewer than all defendants is not ap-
pealable unless the court makes an “express
determination that there is no just reason for
delay.” FED. R. CIV. P. 54(b). Because the
order in Boddie does not contain this particu-
lar phrasing, the defendants conclude rule
54(b) cannot provide the basis for our jurisdic-
tion. Further, defendants contend that the or-
der cannot be appealable under § 1292(b), be-
cause this court has not granted leave to take

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an interlocutory appeal.
Plaintiffs, for their part, remind us that our
existing jurisprudence explains that a rule
54(b) interlocutory appeal is appropriate
where the language of the order appealed, in-
dependently or read together with other por-
tions of the record, reflects the court’s unmis-
takable intent to render the issue appealable
under rule 54(b), and “nothing else is required
to make the order appealable . . . .” Ford v.
Elsbury, 32 F.3d 931, 934-35 (5th Cir. 1994).
According to plaintiffs, the order reflects just
this sort of unmistakable intent. The defen-
dants completely fail to address the “unmis-
takable intent” argument and rely solely on the
lack of the phrase “no just reason for delay.”
To hold that this order is not appropriate
for review under rule 54(b) because it lacks
the talismanic words for which the defendants
search would be directly contrary to this cir-
cuit’s precedent. In Kelly v. Lee’s Old Fash-
ioned Hamburgers, Inc., 908 F.2d 1218, 1220
(5th Cir. 1990) (en banc), we held that a dis-
trict court may make the requisite “express de-
termination” without mechanically reciting the
words “no just reason for delay.”1
Such an “unmistakable intent” is readily
apparent from the face of the district court’s
order. The court found “that there exists a
danger of hardship or injustice through delay
which would be alleviated by immediate appeal
. . . . As such, the Court finds that justice will
be served by the immediate appeal of this
issue. . . .” This explanation is a mere para-
phrase of the seven words “[t]here is not just
reason for delay”2SSa paraphrase (stating that
a delay would yield injustice, and an immediate
appeal would serve justice) that presents an
even stronger justification for appeal than
existed in Kelly, where the district court did
not expressly consider the justice of a delay,
but rather impliedly did so by ordering a final
judgment “pursuant to [rule] 54(b).”
The district court expressed its finding
merely using a phraseology different from the
seven words of the rule. Therefore, we have
jurisdiction to hear the appeal of all three
cases, including Boddie, under rule 54(b).
III.
The plaintiffs’ main contention on appeal is
that the district court erred in holding that
Mississippi law does not recognize a cause of
action for negligence or gross negligence
against the in-state defendants. From that,
plaintiffs reason that removal was improper.
A.
Plaintiffs first suggest that the court applied
an incorrect standard in considering their mo-
tions to remand. Such a motion will be denied
on grounds of fraudulent joinder only if based
on “(1) actual fraud in the pleading of jurisdic-
tional 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, 647 (5th Cir. 2003). Because
neither the parties nor the district court con-
tends there was actual fraud, we look only to
the second test.
1 See also Askanase v. Livingwell, Inc., 981
F.2d 807, 810 (5th Cir. 1993) (“[I]t is not neces-
sary for the Trial Court to recite the magic words
of ‘no just reason for delay.’”).
2 See Kelly, 908 F.2d at 1222 (Smith, J., dis-
senting) (“[S]ince the rule does not specifically
require incantation of the seven very words, they
could be paraphrased, provided that the court ac-
tually states that it had made the required de-
termination.”).

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Though our earlier fraudulent joinder cases
had been uncertain as to whether a removing
defendant must demonstrate an absence of any
possibility of recovery in state court, we clari-
fied in Travis that the defendant must demon-
strate only that there is no reasonable basis for
predicting that the plaintiff will recover in state
court. Id. Thus, the Travis court noted the
similarity of the standard to that used with
respect to a Federal Rule of Civil Procedure
12(b)(6) motion, in that the crucial question is
whether the plaintiff has set out a valid claim
under applicable state law. Id.
Critically, all disputed questions of fact and
all ambiguities in state law must be resolved in
favor of the plaintiff. Id. (citing Great Plains
Trust Co. v. Morgan Stanley Dean Witter &
Co., 313 F.3d 305, 312 (5th Cir. 2002)).
Further, the plaintiff may not rely solely on the
allegations in his complaint; the court may
“pierce the pleadings” and consider summary
judgment-type evidence to determine whether
the plaintiff truly has a reasonable possibility of
recovery in state court. Id. at 648-49.
The district court correctly recited this stan-
dard from Travis. Nevertheless, plaintiffs con-
tend that the court “improperly expanded its
review” beyond whether there is a reasonable
possibility that a Mississippi court might im-
pose liability. . . .” In making that argument,
the plaintiffs repeatedly emphasize the
“possibility of recovery” language while giving
only lip service to the “reasonable” modifier.
To that extent, the district court correctly
evaluated the fraudulent joinder claim. Al-
though recognizing that Mississippi law on the
subject is cloudy, the court disregarded the
theoretical possibility of recovery and consid-
ered whether there was a reasonable possibility
under state law.
For example, plaintiffs devote considerable
energy to the contention that the very fact that
Mississippi state courts have entered judg-
ments against administrators and licensees of
nursing homes in similar cases is conclusive
evidence of the district court’s error. But, af-
ter analyzing the relevant Mississippi caselaw,
the district court concluded that plaintiffs
lacked a reasonable possibility of recovery.
This analysis, notwithstanding the fact that we
may find it flawed under de novo review, nev-
ertheless reflected the proper approach under
applicable precedent. See, e.g., id. at 647.
B.
We review the district court’s analysis of
state law (i.e., its determination that the plain-
tiffs lack a reasonable possibility of recovery)
de novo. See McKee v. Kansas City S. Ry.,
358 F.3d 329, 333 (5th Cir. 2004). The dis-
trict court initially concluded, in a cursory an-
alysis, that Mississippi state law precludes re-
covery for simple negligence against an agent
of a disclosed principal. For this the court re-
lied solely on Bass v. Cal. Life Ins. Co., 581
So. 2d 1087, 1090 (Miss. 1991), holding that
a health insurance plan administrator could not
be held liable in a bad faith denial of coverage
suit based on mere negligent conduct. The
Bass court noted that such agents owe no duty
of good faith or other fiduciary duties to
insured parties. Id. From this proposition, the
district court extrapolated that no negligence
claims can be brought successfully against
agents of disclosed principals.
This conclusion was likely erroneous, and
certainly inaccurate enough to warrant remand
under the above-described standard, which re-
solves all ambiguities in favor of the party
seeking remand. As plaintiffs point out, the
cases relying on Bass are almost all in the
context of insurance agents and adjusters.

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Further, there have been several cases in which
agents of disclosed principals were in fact held
liable for negligence.3
The defendants counter that the complaints
in the instant cases allege a similar sort of tort-
contract hybrid cause of action, and thus, Bass
is controlling. Nevertheless, defendants point
to no additional cases in which the Bass limi-
tation has been applied outside the context of
bad-faith denial of claims. Consequently, the
court incorrectly held that there is no reason-
able basis for predicting that a cause of action
for simple negligence will lie under the cir-
cumstances alleged.
That error, however, is not dispositive.
The district court went on to find that the
plaintiffs additionally cannot state a cause of
action for malice or gross negligence; the court
based its conclusion on the in-state defendants’
lack of duty to the plaintiffs. These same
arguments apply with equal force to claims for
simple negligence. Thus, if the court was cor-
rect in its reason for finding that the plaintiffs
cannot state a claim for gross negligence, then
its erroneous refusal to recognize a simple
negligence cause of action would be irrelevant,
for that claim would be barred on the other
grounds.4
C.
In addition to asserting that the in-state de-
fendants were guilty of simple negligence, the
complaints allege several breaches of supposed
duties under the rubric of “inadequate
management” constituting gross negligence.
The district court stated,
The particular issue in this case is wheth-
er the duty to adequately manage Beverly
Healthcare was owed by the non-diverse
Defendants to Plaintiff, or whether the duty
was owed to the two corporate Defendants
that owned Beverly Healthcare. If the duty
was owed to Plaintiff, then Plaintiff has
asserted a viable state law cause of action
and the case must be remanded.
Conversely, if the duty was owed to the
corporate Defendants, then Plaintiff has no
valid cause of action against the
non-diverse Defendants, requiring dismissal
of the non-diverse Defendants and denial of
Plaintiff's Motion to Remand.
(Footnote omitted.) The court went on to
conclude that as a general matter, any duty
that the licensees and administrators had to
manage the nursing home adequately was
owed not to the plaintiffs, but to the business
itself. The plaintiffs contend this finding is in
error in that both Mississippi common law and
statutory regulations establish a duty to
plaintiffs.
The complaints allege that the administrator
and licensee defendants committed gross
negligence in that they failed to comply with
the regulations promulgated by the Mississippi
Department of Health governing nursing
homes.5 The district court gave cursory atten
3 See, e.g., Wood v. Allstate Ins. Co., 1997 WL
570848, at *2 (N.D. Miss. 1997) (“The Bass deci-
sion is limited to the tort-contract hybrid cause of
action for bad faith denial of insurance claims.”).
4 Cf. LLEH, Inc. v. Wichita County, Tex., 289
F.3d 358, 364 (5th Cir. 2002) (“We may affirm for
any reason supported by the record, even if not
relied upon by the district court.”).
5 See Mississippi Rules, Regulations, and Mini-
(continued...)

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tion to this argument, noting that there was no
legislative intent to create a private cause of
action.
1.
Both sides devote considerable energy to
negligence per se and whether these regula-
tions allow recovery under that theory. That
debate is beside the point. The district court
held that the plaintiffs did not have a reason-
able expectation of recovery against the in-
state defendants under Mississippi law be-
cause, inter alia, those defendants did not owe
a duty to plaintiffs. Negligence per se, on the
other hand, is a theory by which statutes are
used to establish the appropriate standard of
care. In absence of a duty to the plaintiff, the
relevant standard of care is moot. As even the
plaintiffs note,
The statute’s provisions are deemed con-
clusive expressions of the applicable stan-
dard of care and reasonable conduct. In-
deed, the Mississippi Supreme Court has
stated that a violation of an internal regula-
tion “may serve as evidence of negli-
gence,” even if it does not give rise to a
private right of action.
(Quoting Moore v. Mem’l Hosp., 825 So. 2d
658, 665 (Miss. 2002); other citations omit-
ted.) Thus, the theory of negligence per se
does not speak to the relevant question of
whether the in-state defendants owed any duty
of care to the plaintiffs.
2.
Plaintiffs further argue, citing Minimum
Standards § 408.2(e),6 that the regulations
provide an “explicit right of action” that estab-
lishes a duty. Indeed, the applicable regulation
does appear to grant such a right. Unfor-
tunately, it does not appear t hat any Missis-
sippi court has determined whether those par-
ticular regulations confer a cause of action.
Plaintiffs point to several recent unreported
federal district court opinions concluding that
such a cause of action is afforded.7 On the
5(...continued)
mum Standards for Institutions for the Aged and
Infirm (“Minimum Standards”), as promulgated by
MISS. CODE ANN. § 43-11-13(1).
6 Minimum Standards § 408.2(e) provides:
[The resident] has a right of action for dam-
ages or other relief for deprivations or in-
fringements of his right to adequate and
proper treatment and care established by an
applicable statute, rule, regulation or
contract . . . .
7 See, e.g., Hill v. Beverly Enters.-Mississippi,
Inc., No. 3:03CV301LN (S.D. Miss. Oct. 31,
2003), slip op. at 14 (holding, in case involving
these defendants, that although “no Mississippi
state court has passed on the question,” it was rea-
sonable to conclude that a possibility of recovery in
state court existed). As we have said, plaintiffs
have moved for us to take judicial notice of num-
erous unreported Mississippi state court records
and decisions and unpublished authority from fed-
eral district courts in Mississippi.
We may take judicial notice of another court’s
judicial action. See Karaha Bodas Co. v. Perusa-
haan Perambangan Minyak Dan Gas Bumi Nega-
ra, No.02-20042, 2003 WL 21027134, at *4 (5th
Cir. 2003). Although we cannot take judicial no-
tice of findings of fact of other courts, the fact that
a judicial action was taken is indisputable and is
therefore amenable to judicial notice. See Taylor
v. Charter Med. Corp., 162 F.3d 827, 831 (5th
Cir. 1998).
(continued...)

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other hand, defendants counter that in an an-
alogous situation, in Moore v. Mem. Hosp.,
825 So. 2d 658 (Miss. 2002), involving state
pharmacy board regulations, the court found
no cause of action. But, as noted in Hill, slip
op. at 13, Moore did not hold that regulations
can never establish a legal duty or cause of ac-
tion, but rather that the particular regulations
considered did not do so.
In summary, Mississippi caselaw on this
point is non-existent. The Minimum Standards
may or may not provide a private cause of
action that would be applicable here.
Defendants further counter by arguing that,
even assuming the regulations are meant to
grant such a cause of action, such a grant
would “greatly overstep [the Department of
Health’s] legislative grant of authority.” The
relevant statutory grant authorizes the depart-
ment to
adopt, amend, promulgate and enforce such
rules, regulations and standards, including
classifications, with respect to all institu-
tions for the aged or infirm to be licensed
under this chapter as may be designed to
further the accomplishment of the purpose
of this chapter in promoting adequate care
of individuals in those institutions in the
interest of public health, safety and welfare.
MISS. CODE ANN. § 43-11-13(1). This statu-
tory grant of authority may be susceptible to
interpretation both for and against the ability
to grant a private right of action. But, as the
plaintiffs correctly note, that is more appropri-
ately an argument for the Mississippi courts.
The dearth of applicable caselaw interpret-
ing the Minimum Standards, coupled with the
unreported district court decisions concluding
that a cause of action was intended, weighs
heavily in plaintiffs’ favor. As we said above,
when considering a fraudulent joinder argu-
ment, the court must resolve all ambiguities in
state law in favor of remand. Thus, defendants
are not able to meet their heavy burden of
showing that there is no reasonable possibility
that plaintiffs can recover in state court.8
3.
The district court also concluded that the
licensee and administrator defendants did not
owe a duty of care to the nursing home resi-
dents under Mississippi common law, and
therefore plaintiffs have no reasonable pos-
sibility of recovering under Mississippi law.
The district court analytically divided the al-
legations of gross negligence into two cate-
goriesSSthose relating to “either (1) the daily
hands-on care of Plaintiff[s]; or (2) the typical
functions of a manager.”
With respect to the latter category, the
court found that “absent extenuating circum-
stances well beyond those pled in the Com-
plaint,” the in-state defendants owed to the
corporate owners, rather than the residents,
the duty to manage the nursing home
adequately. Although the court purportedly
7(...continued)
The defendants point out that the motion ef-
fectively seeks to avoid this circuit’s rule against
giving precedential value to unpublished opinions.
That would be true if the purpose for which plain-
tiffs seek to have the cases noticed were to es-
tablish them as precedent. It is perfectly permis-
sible, however, for us to take judicial notice of the
very fact of the judicial act that these decisions
represent. We therefore grant the motion.
8 See Jernigan v. Ashland Oil, Inc., 989 F.2d
812, 815 (5th Cir.1993) (stating that the burden in
such cases is on defendant).

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11
relied on several cases for this proposition,
those decisions are not necessarily on point,
because they more accurately reflect the law as
it relates to allegations of negligence with
respect to direct care rather than to inadequate
management. The district court points to no
cases specifically addressing whether a duty of
an agent adequately to manage a facility is
owed to the principal, to third parties, or to
both.
Plaintiffs aver that such duties need not be
mutually exclusive. Despite the accuracy of
this contention, plaintiffs can point to no au-
thority establishing that such duality of alle-
giances exists with respect to a duty to manage
adequately. The defendants, for their part, can
do no better. They cite to no case establishing
that a duty to manage a facility adequately
cannot be owed to a third party in addition to
the entity itself. Although ambiguous
questions of law must be resolved in favor of
the plaintiffs, they, in the absence of any
authority, cannot reasonably expect to recover
under state law. These allegations alone,
therefore, are insufficient to defeat complete
diversity.
Notwithstanding the absence of authority
with respect to the in-state defendants’ alleged
failure adequately to manage t he facility, the
plaintiffs additionally allege direct participation
on behalf of the licensees and administrators in
the supposed grossly negligent care of
residents. The district court found that the
plaintiffs cannot adequately show that the in-
state defendants were sufficiently directly in-
volved in the “hands-on care of the plaintiff”
to saddle independent tort liability on an agent
of a disclosed principal. Both sides concede
that such an agent may be liable under Missis-
sippi law where he was directly involved in the
commission of a tortSSin this case, if the in-
state defendants were directly involved in
resident care.
The issue, therefore, is what constitutes
“direct.” The defendants and the district court
apparently equated the term with hands-on
care. Plaintiffs, on the other hand, argue for a
more expansive definition.
As we have said, in the context of fraudu-
lent joinder analysis a party may not rely on
the allegations in his pleadings on their face,
but must show that there is, at minimum, some
reasonable dispute of a fact that, if established,
would demonstrate a reasonable possibility of
recovery. The district court considered
affidavits from the in-state defendants claiming
that “they were not involved in the hands-on
care of Plaintiff[s],” determined that this
evidence was unrebutted, and therefore found
that plaintiffs’ claims must fail.
The defendants echo this argument on ap-
peal, contending that there is no evidence of-
fered that demonstrates hands-on care or parti-
cipation in the medical injuries alleged. Plain-
tiffs claim, however, that liability will lie even
in the absence of such evidence, and they con-
tend that their complaints allege sufficiently di-
rect participationSSand that such participation
need not be “hands-on,” as defendants
maintain.
Defendants point to Mozingo v. Correct
Mfg. Corp., 752 F.2d 168, 173 (5th Cir.
1985), for the proposition that to face tort lia-
bility, an agent such as the in-state defendants
must be the “guiding spirit” or “central figure.”
Defendants further reason that the affidavits of
the in-state defendants, which deny any direct
participation in the care of the plaintiffs, stand
un-rebutted and therefore demonstrate the ex-
istence of fraudulent joinder.

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12
In contrast, plaintiffs rely on cases purport-
ing to establish liability for a wider spectrum of
acts and omissions. For example, in Turner v.
Wilson, 620 So. 2d 545, 548-49 (Miss. 1983),
the court stated that directors, officers, and
agents may be liable for torts where they either
participated in the act, authorized it or directed
it, gave consent to an act, or even acquiesced
in a tortious act that they knew of or “should
have known of” in the exercise of reasonable
care.
Plaintiffs also point to numerous unreported
district court decisions in Mississippi in which,
under very similar circumstances (some
involving the same defendants as in this case),
the courts, in plaintiffs’ words, “rejected the
defendants’ ‘myopic view of direct partici-
pation’ as requiring personal contact . . .”
(quoting Hill). In those unreported cases, the
district court held that a nursing home admin-
istrator, like the in-state defendants, may be
held liable for their personal tortious conduct
without personal, hands-on contact with the
plaintiff. See, e.g., Hill. Rather, allegations of
failure to perform managerial duties, such as
maintaining adequate records and supervising
those members of the staff who handled the
residents’ day-to-day care, were held sufficient
to “afford a reasonable basis for imposing
personal liability under Mississippi law.”
Bradley v. Grancare, Inc., No.4:03CV93-P-B,
at *5-6 (N.D. Miss. Aug. 18, 2003).
Lastly, plaintiffs rely on Rein v. Benchmark
Constr. Co., 2003 WL 21356013 (Miss. June
12, 2003), for the proposition that the question
whether these defendants owe a duty to plain-
tiffs is one of fact. In Rein, a nursing home
resident sued a pest control company for in-
juries inflicted by ants. The court found that it
was possible that the pest control company
was an independent contractor with no inde-
pendent duty to the plaintiff. Nevertheless, it
held that the question was one for the trier of
fact. Id. at *12. Thus, plaintiffs assume that
there is at least a reasonable possibility that the
non-diverse defendants in this case owe a duty
to them.
On balance, plaintiffs have the better of the
argumentSSat least strong enough to demon-
strate a reasonable possibility of recovery un-
der Mississippi law. Plaintiffs cannot demon-
strate hands-on contact by the defendants, but
such activity does not seem required to impose
personal liability under Mississippi law. One
may easily be a direct participant in tortious
conduct by merely authorizing or negligently
failing to remedy misconduct by one’s subor-
dinates.
It is uncertain, at this stage of the litigation,
whether plaintiffs will be able to prove their al-
legations of direct participation to the satis-
faction of the trier of fact. Nevertheless, it is
at least reasonable to expect that a Mississippi
court might find that the allegations of the in-
state defendants’ misfeasance and nonfeasance
are sufficient to state a claim under state law.
The district court therefore erred in not rec-
ognizing the reasonable possibility of plaintiffs’
recovery against the in-state defendants under
Mississippi lawSSespecially in light of the
recognized ambiguity in the caselaw that must
be resolved in favor of remand.
IV.
At oral argument, we raised, and the parties
have subsequently addressed in supplemental
briefs, the specter of a jurisdictional defect in
these cases arising from the plaintiffs’ election
to appeal only the district court’s decisions on
the negligence and gross negligence causes of
action. The plaintiffs, at argument and in their
supplemental brief, attempt to sidestep this po-

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13
tential pitfall by arguing that, although their
brief discusses the negligence and gross negli-
gence causes of action, they did not necessarily
fail to appeal the decisions regarding the other
causes of action.
We disagree. As we have noted, plaintiffs’
reply brief specifically contends that the de-
fendants err in focusing on the other causes of
action in that those causes of action “are not
before this Court.”
A.
The failure to appeal those decisions, de-
fendants contend, forecloses any possibility of
success on plaintiffs’ appeal. Defendants rea-
son as follows: By failing to appeal the dis-
missal of the medical malpractice, breach of
fiduciary duty, and fraud claims, plaintiffs con-
cede that they have no reasonable possibility of
success on the merits of those claims. Further,
by not appealing those decisions, plaintiffs
allow the dismissals to stand and therefore
tacitly agree that the court had jurisdiction
over those claims in order to dismiss them.
Therefore, if we rule that the district court
erred in finding the in-state defendants
fraudulently joined in the negligence and gross
negligence claims (and we have so ruled), the
district court will be caught between a verita-
ble Scylla and Charybdis.
That is, although we will have commanded
the court to remand, because the two claims
we addressed here have a reasonable possibil-
ity of success on the merits, the district court
will not be able concomitantly to remand the
dismissed claims, the result being that the en-
tire action will not be remanded, but only some
claims, a course of action that is contrary to 28
U.S.C. § 1441. Under the removal statute, in
a diversity action where all claims relate to the
same constitutional case, individual claims
cannot be removed, but only entire actions.9
Consequently, goes defendants’ argument,
plaintiffs, by failing to challenge the district
court’s jurisdiction over the other claims, have
forgone the ability to have their negligence and
gross negligence claims remanded to state
court.
This argument is interesting and might be
persuasive, but for one fatal flaw. Underlying
the entire argument is the notion that by not
appealing the decisions on some counts, the
plaintiffs have “waived” the issue of subject
matter jurisdiction over those counts. Subject
matter jurisdiction, however, cannot be
waived.10
That being so, plaintiffs’ failure to appeal
the other causes of action is not dispositive.
We have said, above, that the district court’s
refusal to recognize a reasonable possibility of
recovery under state law on the negligence and
gross negligence claims was error. Conse-
quently, on remand from this court, the district
court must remand the entire case to state
court.
The fact that the plaintiffs did not appeal
9 See Arango v. Guzman Travel Advisors
Corp., 621 F.2d 1371, 1376 (5th Cir. 1980) (stat-
ing that on removal, cases are considered in their
entirety); cf. United Mine Workers v. Gibbs, 383
U.S. 715, 725 (1966) (defining an entire Article III
“case” as claims deriving from a “common nucleus
of operative fact”).
10 See, e.g., Clinton v. New York, 524 U.S. 417,
428 (1998) (stating that jurisdictional questions,
even of statutory, not constitutional, magnitude,
may not be waived); Bridgmon v. Array Sys.
Corp., 325 F.3d 572, 575 (5th Cir. 2003) (explain-
ing that courts have duty to raise question of sub-
ject matter jurisdiction sua sponte).

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14
the dismissal of the other claims does not make
it impossible for the district court to remand
those claims as well. Because we hold that the
plaintiffs have a reasonable possibility of
recovering in state court on at least two causes
of action, removal was improper, complete
diversity does not exist, and the district court
never properly had jurisdiction over this
action.
The consequence of the district court’s lack
of jurisdiction is that the dismissal of those
claims must be also be reversed. Although our
fraudulent joinder decisions have never made
the issue entirely pellucid, § 1441’s holistic
approach to removal mandates that the ex-
istence of even a single valid cause of action
against in-state defendants (despite the
pleading of several unavailing claims) requires
remand of the entire case to state court.11
B.
Defendants suggest that if plaintiffs had ef-
fectively waived the jurisdictional question
with respect to the fraud, breach of fiduciary
duty, and medical malpractice claims, the dis-
trict court could retain jurisdiction over the
dismissed claims and assume jurisdiction over
the appealed claims through the supplemental
jurisdiction statute, despite the lack of com-
plete diversity. This approach is a non-starter.
As both part ies agree in their supplemental
briefs, 28 U.S.C. § 1367, which authorizes
district courts to exercise supplemental juris-
diction, cannot apply in this instance.
Specifically, § 1367(b) “has limits . . . on
the use of supplemental jurisdiction in diversity
cases so that it will not defeat the established
rule of complete diversity.”12 As we noted in
McLaughlin v. Miss. Power Co., 376 F.3d
344, 354 (5th Cir. 2004), Ҥ 1367(b) provides
that there must be complete diversity where
parties are joined in a diversity suit under
[Federal Rule of Civil Procedure 19 or] 20 . .
. .”13 Because multiple defendants, like those
in this case, are allowed under Federal Rule of
Civil Procedure 20, complete diversity must
exist, and § 1367(b) does not authorize the ex-
ercise of supplemental jurisdiction.
11 See Green v. Amerada Hess Corp., 707 F.2d
201, 208 (5th Cir. 1983) (“If even one of [the
plaintiff’s] many claims might be successful, a re-
mand to state court is necessary.”); Moody Nat’l
Bank v. St. Paul Mercury Ins. Co., 193 F. Supp.
2d 995, 1000 (S.D. Tex. 2002) (remanding be-
cause plaintiff could recover under one of his many
theories); Blanchard v. State Farm Lloyds, 206 F.
Supp. 2d 840, 845 (S.D. Tex. 2001) (requiring
only one valid cause of action for remand); accord
Cabalceta v. Standard Fruit Co., 883 F.2d 1553,
1561 (11th Cir. 1989) (explaining that a court
looks “to see whether there is no possibility the
plaintiff can establish any cause of action against
the resident defendant . . .”). This line of reasoning
is consistent with our continued instruction that
“diversity removal, powerful as it is, [must] remain
within its congressionally marked traces [as]
demanded by principles of comity and federalism .
. . .” Smallwood v. Ill. Cent. R.R., 385 F.3d 568,
576 (5th Cir. 2004) (en banc).
12 13B CHARLES ALAN WRIGHT ET AL., FED-
ERAL PRACTICE AND PROCEDURE 2D § 3567.3,
2004 Supp. at 96. See also id. at § 3567.2 (stating
that because of rule 20, “if a . . . diversity of cit-
izenship case is brought against multiple defen-
dants, § 1367(b) precludes supplemental jurisdic-
tion.” Id. § 3567.2, 2004 Supp. at 83.
13 See also, e.g., Taylor v. Am. Tobacco Co.,
983 F. Supp. 686, 691 (E.D. Mich. 1997) (stating
that court cannot exercise original jurisdiction over
claims against diverse parties and supplemental
jurisdiction over claims against in-state de-
fendants).

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15
The dismissal of the negligence and gross
negligence claims, and the dismissal of the ad-
ditional claims, are REVERSED, and this mat-
ter is remanded to the district court with
instruction to remand to state court.

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