Removal, Fraudulent Joinder, and a Late Motion to Amend
Priya, a citizen of State A, is injured at a hotel in State B owned by HotelCo, a State B corporation. On March 1 she sues HotelCo and Marcus in State B state court. Marcus is a State A citizen who handles HotelCo's bookings from his home in State A and has never set foot in State B. The complaint pleads negligence against HotelCo and negligent misrepresentation against Marcus, seeking $95,000. HotelCo was served on March 1; Marcus was served on March 20. On April 5, HotelCo files a notice of removal, asserting that Marcus was fraudulently joined because the claim against him is barred by State B's one-year limitations period and because State B cannot exercise personal jurisdiction over him. On April 20, Priya moves to remand and, in the alternative, moves to amend to add Nadia, a State A resident who serviced HotelCo's booking software.
1. Should the federal court remand for lack of subject-matter jurisdiction? Analyze the fraudulent-joinder argument.
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Complete diversity is measured at the time of filing, and Priya and Marcus are both State A citizens; if Marcus is a real defendant, § 1332 fails and remand is required. HotelCo, as the removing party, bears the burden of proving fraudulent joinder - the standard is whether there is no possibility of recovery against Marcus, which is more demanding than Rule 12(b)(6).
Limitations. A limitations defense supports fraudulent joinder only where the bar is apparent and undisputed on the face of the pleadings. Priya filed 14 months after the booking under a one-year statute. Unless Priya can point to a discovery rule, tolling, or a different accrual date, the claim is time-barred as pleaded and there is no possibility of recovery.
Personal jurisdiction. Marcus's lack of contacts with State B is a weaker but reinforcing argument: if no State B court could enter judgment against him, there is no possibility of recovery there. Courts are split on whether a personal-jurisdiction defect alone establishes fraudulent joinder; it need not carry the day.
If either ground holds, the court disregards Marcus, diversity is complete, and remand is denied.
2. Assume the court finds Marcus was not fraudulently joined. Is the removal timely, and has Priya preserved the objection?
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Section 1446(b)(1) gives a defendant 30 days from service of the initial pleading. HotelCo was served March 1 and removed April 5 - 35 days later, outside its window.
Section 1446(b)(2)(B), as amended, gives each defendant 30 days from service on that defendant, and the last-served-defendant rule permits a later-served defendant to remove despite an earlier defendant's expired window, with the consent of the earlier-served defendants. That rule does not help HotelCo: it is the earlier-served defendant and the removing party, and its own deadline expired March 31. Service on Marcus cannot restart HotelCo's clock.
A blown removal deadline is not jurisdictional; it is waived unless the plaintiff moves to remand within 30 days after the notice of removal is filed (§ 1447(c)). Priya moved on April 20, fifteen days after April 5, so she preserved the objection. Untimeliness is an independent ground for remand even if the fraudulent-joinder argument fails.
3. How should the court rule on Priya's motion to add Nadia as a defendant?
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Section 1447(e) governs. When a plaintiff seeks to join, after removal, a party whose presence would destroy diversity, the court may deny joinder or permit it and remand. Courts weigh the plaintiff's purpose (delay or forum shopping versus a genuine claim), the timeliness of the motion, prejudice to the parties, and whether the claim is colorable.
Adding Nadia creates a State A plaintiff suing a State A defendant, so complete diversity is destroyed and § 1367 cannot cure it: § 1367(b) withholds supplemental jurisdiction over claims by a plaintiff against a party joined under Rule 20 when doing so would be inconsistent with the diversity requirement. The court therefore has only two lawful options.
On these facts the motion comes five weeks after removal and only after the remand motion, which suggests forum shopping, particularly if the court has already concluded that Marcus was joined to defeat diversity. The court should scrutinize the proposed claim against Nadia for substance. If the court instead grants remand on the earlier grounds, the amendment question is moot and the state court decides it.