Removal After an Unserved Forum Defendant and an Admission of Vicarious Liability
Plaintiff Dana, a Nebraska citizen, was injured when a delivery truck driven by Carl, a Nebraska citizen, struck her in an Omaha crosswalk. Dana sued Carl and his employer, Beta Logistics Corp., a Colorado corporation, in Nebraska state court, alleging Carl was texting and that Beta was vicariously liable and negligent in hiring. Dana seeks $150,000. Beta was served on March 3; Carl has not yet been served. On March 21, Beta removed to federal court, asserting diversity jurisdiction and arguing that Carl was fraudulently joined because Beta has admitted respondeat superior liability and will pay any judgment. Dana moves to remand. The federal court must decide whether it has subject-matter jurisdiction, whether the forum-defendant rule applies when Carl has not been served, and whether Beta's admission defeats the possibility of recovery against Carl.
1. Does the federal court have diversity jurisdiction over Dana's action? Explain the complete-diversity and fraudulent-joinder analysis.
Read the worked answer
Diversity jurisdiction requires complete diversity: no plaintiff may share citizenship with any defendant. Dana is a Nebraska citizen, and Carl is a Nebraska citizen. On the face of the complaint, complete diversity is therefore absent, even though Beta is a Colorado corporation and the amount in controversy exceeds $75,000. Beta's only route to federal court is to show that Carl was fraudulently joined, which requires evidence that there is no possibility of recovery against Carl under state law-not merely that the claim is weak. Beta's admission of vicarious liability does not eliminate Dana's separate theory that Carl himself was negligent by texting while driving. A defendant cannot unilaterally make a joined tortfeasor a sham by promising to satisfy any judgment; Dana may still seek a judgment against Carl for his own conduct. Because Beta has not carried its heavy burden to show that Dana has no colorable claim against Carl, the joinder is not fraudulent. The case must be remanded for lack of subject-matter jurisdiction.
2. If Carl remains unserved, does 28 U.S.C. § 1441(b)(2) independently bar removal? Does it matter to the outcome?
Read the worked answer
The forum-defendant rule bars removal of a diversity case if any properly joined and served defendant is a citizen of the forum state. Carl is a Nebraska citizen, and Nebraska is the forum, but Carl has not been served. By its terms, § 1441(b)(2) applies only to a defendant who has been properly joined and served, so the rule does not independently bar Beta's removal while Carl remains unserved. That does not save the removal, however. The forum-defendant rule is a procedural removal restriction; it is not the source of diversity jurisdiction. Complete diversity is measured by the citizenship of all parties, served or not. Because Carl and Dana share Nebraska citizenship, the absence of complete diversity is fatal regardless of whether § 1441(b)(2) applies. The unserved forum defendant therefore matters only to the alternative statutory argument, not to the Article III/§ 1332 analysis.