From Proxy to Principle: Fraudulent Joinder Reconsidered

TLDR: In this paper, the authors pointed out that the identity of the court hearing their case is at least as important as the facts of their case and pointed out the importance of the forum of a case.

Abstract: I. INTRODUCTION A. Background To most seasoned trial lawyers, the identity of the court hearing their case is at least as important as the facts of their case. (1) As one legal scholar has commented, "'[e]very trial lawyer ... would agree that [where] the case is to be tried, is without question one of the most significant factors, perhaps the most significant factor, in the outcome of the case.'" (2) Even if one would like to believe that the locale of the lawsuit is not outcome determinative, the fact is that lawyers who try cases believe that it makes a big difference. (3) In a world where most cases are disposed of by settlement, (4) perception becomes reality. Nobody would dispute the importance of a lawsuit's venue. As two researchers concluded, "forum matters." (5) This preoccupation with the identity of the decision-maker is no more profound than in the context of the choice between a state and federal court for resolution of a civil lawsuit, particularly when the plaintiff is deprived of her original selection of a state court as the preferred forum due to a defendant's removal to federal court. (6) As one researcher noted, "a plaintiffs ability to avoid removal [from state to federal court] could mean the difference between winning and losing." (7) Empirical research that is available suggests that such assertions are not hyperbole, with removed cases sharing a statistically significant low win-rate. (8) Issues affecting the forum that will adjudicate claims, therefore, have a profound impact on the adjudication of such claims. In terms of federal-state jurisdiction, the last decade might fairly be characterized as one wherein the legal profession has witnessed a three-fold significant expansion of federal court jurisdiction over state law claims. First, in 1990, Congress passed the supplemental jurisdiction statute--28 U.S.C. [section] 1367--which not only provided sustenance to the threatened doctrines of pendent and ancillary jurisdiction, (9) but when read literally, undermines some doctrinal creatures of the federal courts designed to limit the scope of the courts' diversity jurisdiction. (10) At the end of its 2004-05 term, the United States Supreme Court finally resolved a longstanding circuit split (11) by giving the statute a literal interpretation such that no longer must each claimant in a diversity case joined pursuant to Federal Rule of Civil Procedure 20 independently satisfy [section] 1332's amount in controversy requirement (12) despite the Supreme Court's contrary pre-statutory (13) requirements enunciated in Clark v. Paul Gray, Inc. (14) and Zahn v. International Paper Co. (15) Indeed, in certain contexts, (16) this statute arguably permits results inconsistent with the complete diversity requirement of Strawbridge v. Curtiss. (17) Most interestingly, in a very recent case the Supreme Court displayed a tolerance for a broad reading of the supplemental jurisdiction statute even in the face of increasing the reach of diversity jurisdiction in a way that the Court found illogical: It is not immediately obvious why Congress would withhold supplemental jurisdiction over plaintiffs joined as parties "needed for just adjudication" under Rule 19 but would allow supplemental jurisdiction over plaintiffs permissively joined under Rule 20. The omission of Rule 20 plaintiffs from the list of exceptions in [section] 1367(b) may have been an "unintentional drafting gap." If that is the case, it is up to Congress rather than the courts to fix it. (18) Second, in 2002, Congress passed the Multi-Party Jurisdiction Statute--28 U.S.C. [section] 1369--which provides for federal court jurisdiction over certain mass tort state law claims (e.g., suits arising out of single occurrences resulting in the deaths of at least seventy-five people) with only minimal diversity--cases that would have traditionally only been heard in state courts. …