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Removing a Case to Federal Court When Diversity Jurisdiction Exists

Jan 20, 2015

First published in the Hawai‘i Bar Journal (the official publication of the Hawai‘i State Bar Association), November 2014 Edition.

Removal is the process by which a party sued in state court can transfer that litigation to a federal court. In general, pursuant to 28 U.S.C. § 1441(a), any civil action brought in a state court for which federal courts also have original jurisdiction may be removed by the defendant to the appropriate federal district court. Federal courts, however, are courts of limited jurisdiction and are only empowered to hear actions involving issues subject to federal question jurisdiction or actions of “complete diversity” involving an amount in controversy exceeding $75,000.1 In other words, “[r]emoval statutes do not create jurisdiction [but] are instead a mechanism to enable federal courts to hear cases that are already within their original jurisdiction.”2

The First Congress established the process for removal through the Judiciary Act of 1789. Lawyers have therefore argued about removal jurisdic­tion for over two hundred years, making removal one of the most nuanced aspects of litigation in this country. This article does not pretend to provide an exhaustive analysis of removal jurisdiction, but rather provides background and analysis on some aspects of removal based on diversity jurisdiction beginning with the amount in controversy and complete diversity requirements and ending with a discussion of the fraudulent joinder exception to the requirement of complete diversity and its cousin, the doctrine of fraudulent misjoinder.

Diversity Jurisdiction: The Amount in Controversy

Determining the Amount in Controversy
One requirement for diversity jurisdiction is that the amount in controversy exceeds the sum or value of $75,000, exclusive of interest and costs.3 The determination of the amount in controversy for federal subject matter jurisdiction is generally the same whether an action is removed to federal court or if a case is brought originally in federal court, and it is an issue decided under federal law.4 Federal courts will, however, look to applicable state law to determine the nature of the plaintiff ’s substantive claim and related damages.5

Numerous courts, including the United States Supreme Court have held that the amount in controversy for jurisdictional purposes is measured by the direct pecuniary value of the right that the plaintiff seeks to enforce or the value of the object that is the subject matter of the suit.6 In general, this is simply an estimate of the total amount in dispute rather than an assessment of liability.7 The amount in controversy is determined without considering accrued or accruing interest or the costs associated with the lawsuit.8 Moreover, courts have held that collateral effects, such as the effect a judgment may have on other matters or controversies because of application of stare decisis or collateral estoppel principles will not be taken into account when calculating the amount in controversy.9 In addition, courts have also held that a defendant’s counterclaim is not considered or used to reduce the amount in controversy.10

The amount in controversy may include compensatory damages including general and special damages such as pain and suffering and out of pocket loss. The amount in controversy may also include punitive damages.11 The courts may, however, scrutinize punitive damages claims closely, especially if such claims make up the bulk of the amount in controversy.12 In addition, courts have also held that if there is direct legal authority, by statute or contract, for the recovery of attorneys’ fees, then the fee claim may be included in determining the amount in controversy regardless of whether the award of fees is mandatory or discretionary.13

Hawai‘i Cases and the Amount in Controversy.
Research reveals that there are a number of reported Hawai‘i federal district court decisions involving issues of measuring and calculating the amount in controversy. The cases are rather fact specific and involve a detailed analysis of the controversy at issue. Some decisions of interest are summarized as follows.

In Hideo Matusda v. Michiko Wada, the plaintiff sought declaratory relief to escape liability under an oral contract.14 At issue was the amount of compensation promised for services rendered. The court held that when the object of the suit is to escape liability under a contract, the value of relief is measured by the liability that will follow if the contract is valid and enforceable.

In White v. IndyMac Bank, FSB, plaintiff was challenging the foreclosure of his property.15 When determining the amount in controversy in foreclosure actions, the court noted that some courts have relied on the amount of indebtedness while others have looked to the fair market value of the real property. In an action to quiet title and to determine which entity is entitled to receive mortgage payments, however, there are a number of cases beginning with Pascua v. Option One Mortgage Corp. that determine the amount in controversy, not by the value of the property or debt, but rather by the subjective value to the mortgagor of eliminating the uncertainty of who to pay.16 So far the Hawai‘i federal district court has not held that the elimination of such uncertainty satisfies the amount in controversy requirement.

In Guzman v. Blockbuster, the court also addressed some significant issues related to the calculation of the amount in controversy.17 First, settlement letters are relevant evidence of the amount in controversy but only if they reflect a reasonable estimate of the plaintiff ’s claim. Second, in Hawai‘i, attorneys’ fees are considered in the amount of controversy when there is an underlying statute authorizing the award of such fees. Third, dismissed or nonviable claims are not considered when calculating the amount in controversy.

Finally, in Scher v. Premier Holdings, Inc., the court remarked that both compensatory and punitive damages must be considered to the extent they are recoverable and to the extent claimed.18 Where the plaintiff sought over $35,000 for time spent trying to resolve a claim arising out of the break-in of his car and theft of a $750 GPS unit, the court held that such damages were not recoverable consequential damages. In addition, the plaintiff asserted a $1 million punitive damages claim. Because the punitive damage claim made up the bulk of the claim, the court closely scrutinized the claim.

When is the Amount in Controversy Determined and the Burden of Proof
For removal actions, the amount in controversy is determined at the time the notice of removal is filed in federal court.19 The applicable law will be the law in effect at the time of the removal.20 Subsequent amendments to the removal petition or complaint reducing the amount to less than $75,000 do not divest the court of diversity jurisdiction.21 Likewise, the court is not divested of jurisdiction if the amount actually recovered by plaintiff fails to exceed $75,000.22 Moreover, where at least one plaintiff’s claims satisfy the amount in controversy requirement, 28 U.S.C. § 1367 authorizes supplemental jurisdiction over the claims of other plaintiffs not meeting the amount in controversy requirement.23

In 2011, Congress enacted a new section 1446(c)(2) within Title 28, which codified the rule that the sum demanded in good faith in the plaintiff ’s initial pleading is the amount in controversy.24 If the complaint alleges less than the jurisdictional amount or is ambiguous, however, the defendant may demonstrate in the notice of removal that the jurisdictional amount is actually satisfied. A defendant may remove an action not removable at the time of its initial filing due to an insufficient amount in controversy within thirty days after receipt of an amended pleading, motion, order or other paper indicating, for the first time, that the amount in controversy exceeds the jurisdictional amount. Removal is also allowed beyond the usual one year limitation for diversity actions if the court finds that the plaintiff deliberately failed to disclose the actual amount in controversy to prevent removal during the one-year window.

It is well established that the removing party has the burden of proving that the amount in controversy meets the jurisdictional requirement. In Miyasato v. Hyatt Corp., however, the Hawai‘i federal district court recognized that two different standards may apply in connection with this burden.25 First, in many cases filed in Hawai‘i state courts, the complaint may be silent or ambiguous as to the total amount of damages in controversy. If it is not evident from the complaint that more than $75,000 is in controversy, a defendant seeking removal must establish by a preponderance of the evidence that the amount in controversy exceeds $75,000. Second, however, if the complaint filed in state court affirmatively alleges that the amount in controversy is less than this jurisdictional threshold amount, then the removing party must prove with legal certainty that the amount in controversy exceeds the threshold. When assessing the amount in controversy, the court will assume that all the allegations of the complaint are true and that a jury will return a verdict for the plaintiff on all claims. The jurisdictional threshold amount is based on the amount in controversy and not what a defendant will ultimately owe.

The legal certainty standard may also apply when the amount in controversy is challenged by a party contesting jurisdiction. A party contesting the amount in controversy will prevail only if it is shown to a “legal certainty” that the amount in controversy does not meet the jurisdictional requirement. As noted by the Hawai‘i federal district court in Smallwood v. NCSOFT, there are only three situations under which the legal certainty standard is clearly met: (1) when the terms of the contract limit the plaintiff ’s possible recovery; (2) when a specific rule of law or measure of damages limits the amount of damages recoverable; and (3) when independent facts show that the amount of damages was claimed merely to obtain federal court jurisdiction.26 This standard is probably most often applied in situations where a defendant challenges a plaintiff ’s filing of an action in federal court. This standard may also apply, however, in some situations where a plaintiff challenges a defendant’s removal of an action to federal court (such as when the plaintiff changes its position on damages alleged in the complaint) such as was done in Chong v. Liberty Mut. Fire Ins. Co.27 In Chong, plaintiff had claimed damages in excess of the jurisdictional threshold amount but attempted to defeat the subsequent removal to federal court by arguing that her damages were actually limited under existing case law. Because the case law differed as to plaintiff ’s maximum recovery, the court held that it was not a legal certainty that the plaintiff would be unable to recover more than the jurisdictional amount.

Diversity Jurisdiction: Diversity of Citizenship
Another jurisdictional requirement that must be met if a case is to be removed to federal court based on diversity jurisdiction is that of “complete diversity.” In particular, diversity jurisdiction typically occurs when none of the plaintiffs in an action share citizen­ship with any defendant.28 With certain exceptions—which are discussed, below—this rule applies regardless of the number of parties involved in a case.29 In general, diversity of citizenship most often relates to the parties’ states of residence, but can also occur when the action is between citizens of a state and a foreign state or citizens of a foreign state (unless the citizens of a foreign state are lawful permanent residents).30 Moreover, the “forum defendant rule” prohibits removal based on diversity jurisdiction if one of the properly joined and served defendants is a citizen of the state in which the action is filed.31

As a result, parties who seek or contest removal through diversity jurisdiction must first determine the citizenship of the parties. Pursuant to 28 U.S.C. § 1332, natural persons are citizens of their state of domicile, meaning that they are citizens of their primary place of residence.32 Corporations, on the other hand, are considered to be citizens of both the state or foreign state in which they are incorporated and also the state or foreign state in which their principal place of business is located.33 A trustee’s citizenship determines the citizenship of a trust, and partnerships and other unincorporated associations are citizens of every state in which each of their partners or members reside.34 The citizenship of nominal and John Doe defendants may be disregarded for the purposes of determining diversity jurisdiction.35

There are some exceptions to these rules, two of which are statutory and are worth mentioning here. The Multiparty, Multiforum Trial Jurisdiction Act of 2002 allows district courts to exert original jurisdiction over civil actions involving minimal diversity between adverse parties that arise from a single accident, where at least 75 natural persons have died in the accident at a discrete location, if (1) a defendant resides in a state and a substantial part of the accident took place in another state or other location, (2) any two defendants reside in different states, or (3) substantial parts of the accident took place in different states.36 Diversity jurisdiction was also expanded by the Class Action Fairness Act of 2005 (“CAFA”) which generally allows district courts to exercise original jurisdiction over multi-state class action litigations in which the total amount in controversy exceeds $5,000,000.37

In addition, it is important to keep in mind that certain types of actions cannot be removed through diversity jurisdiction. For example, diversity jurisdiction does not apply to divorce, child custody, or other domestic relations matters.38 As explained by the Ninth Circuit Court in Peterson v. Babbitt, “the strong state interest in domestic relations matters, the superior competence of state courts in settling family disputes because regulation and supervision of domestic relations within their borders is entrusted to the states, and the possibility of incompatible federal and state court decrees in cases of continuing judicial supervision by the state makes federal abstention in these cases appropriate.”39 Similarly, federal courts also lack jurisdiction over probate proceedings, regardless of the diversity of the parties.40

Fraudulent Joinder and Misjoinder

Fraudulent Joinder

What is fraudulent joinder?
Fraudulent joinder occurs when a plaintiff files a frivolous or illegitimate claim against a non-diverse defendant solely to defeat diversity jurisdiction and prevent removal to federal court.41 Fraudulent joinder is a term of art and does not require an ill motive.42 Instead, the joinder of a non-diverse defendant is considered fraudulent if the plaintiff fails to state a cause of action against that defendant and that failure is obvious under state law.43 Fraudulent joinder is considered an exception to the complete diversity rule.44 Under this exception, the citizenship of fraudulently joined defendants will be ignored and will not defeat removal on diversity grounds.45 Ordinarily, the issue of fraudulent joinder is contested in a motion to remand. The court may, however, also address this issue sua sponte as it impacts subject matter jurisdiction.

Standards for determining fraudulent joinder
To determine whether a party has been fraudulently joined, the court considers whether there is any reasonable basis in fact or law to support a claim against the non-diverse defendant.46 For example, the Ninth Circuit in California Dump Truck Owners Ass’n v. Cummins Engine Co. held that only if there is no possibility that the plaintiff can establish a cause of action against the defendant in state court can a fraudulent joinder claim succeed.47 This analysis generally involves the court looking at the allegations in the complaint and conducting a Federal Rules of Civil Procedure (“FRCP”) Rule 12(b)(6)-type of analysis to determine whether the complaint states a claim under state law against the non-diverse defendant.48 Unlike a true 12(b)(6) analysis where the court may only consider the allegations in the complaint and attachments, however, the court in ruling on the issue of fraudulent joinder may consider material outside the pleadings.49 Additionally, courts do not consider defendants’ defenses on the merits in the fraudulent joinder 12(b)(6) analysis.50

In particular, the Hawai‘i federal district court has consistently held that the possibility of a valid claim by a plaintiff defeats a fraudulent joinder argument. For example, in Balberdi v. Lewis, the court conducted a Rule 12(b)(6)-type analysis and, after analyzing the complaint, the court concluded that the settled law of Hawai‘i did not bar all of the claims against the in-state defendant and therefore the defendants had not proven by clear and convincing evidence that the plaintiffs had no valid cause of action.51 Accordingly, the court stated that fraudulent joinder did not apply. Moreover, even if a defendant has a legitimate defense to the plaintiff ’s claims, the case will be remanded to state court if the plaintiff ’s pleadings establish some possibility of recovery. For example, in Lovell v. Bad Ass Coffee Co. of Hawai‘i Inc., the court emphasized that there is a distinction between a complete lack of a cause of action against a “sham” defendant, and an inquiry as to whether the defendant has a viable defense to an otherwise valid cause of action, only the former resulting in a finding of fraudulent joinder.52 Using this reasoning, the court in Lovell found that the plaintiff had pled a valid claim and therefore the defendants had not met their burden to prove fraudulent joinder. Similarly, in County of Hawai‘i v. UniDev, LLC, the court noted that although the defendant presented valid defenses to liability, as long as the plaintiff pled a valid claim, the court could not say that there was no possibility of the plaintiff recovering.53

On the other hand, if the plaintiff has failed to state a valid theory of recovery or has failed to allege necessary facts to make out a valid claim, the Hawai‘i federal district court has not shied away from finding fraudulent joinder and denying motions to remand. For example in Gibo v. United States National Ass’n, the defendants alleged that the plaintiff fraudulently joined a non-diverse defendant to prevent removal.54 The court agreed and found that the defendants had demonstrated that there was no possibility the plaintiff could sustain a cause of action against that defendant in state court. For her first claim, the plaintiff failed to allege an essential element. For her second claim, the plaintiff failed to establish the necessary foundation to show that she had standing to raise the claim. Likewise, in Lovell v. United Airlines, the court held that the plaintiffs had failed to state an actionable claim of “aiding and abetting” by failing to allege an essential element of the claim: that the defendants’ involvement was “substantial.”55 Accordingly, the court found that the defendants had shown by clear and convincing evidence that the plaintiffs had failed to state a viable cause of action against the non-diverse defen­dants and that those defendants had been fraudulently joined. In addition, Casey v. Pioneer Hi-Bred Int’l, Inc. addressed fraudulent joinder in the context of Hawai’i’s landlord tenant law.56 The plaintiffs alleged that the non-diverse landlord defendants could be held liable for a nuisance. The plaintiffs, however, failed to allege facts that demonstrated that the landlords consented or even had knowledge of the nuisance. The court therefore held that the plaintiffs failed to allege a viable claim against the landlords and that the landlords had been fraudulently joined.

One situation in which the issue of fraudulent joinder often arises is when a plaintiff asserts claims against a diverse corporation and also against a non-diverse employee of that corporation. Whether the employee has been fraudulently joined then turns on whether the employee may be individually liable to the plaintiff. For example, in Tachera v. United Airlines,an employee asserted a claim against the diverse company and a non-diverse manager employee.57 The Hawai‘i federal district court held that the manager acted solely within the scope of employment and was thus not individually liable under Hawai‘i law. Accordingly, the manager was deemed to have been fraudulently joined. On the other hand, in Kalawe v. KFC Nat’l Mgmt. Co., an employee asserted a claim against the diverse company and non-diverse managers like in Tachera.58 In Kalawe, however, the plaintiff did not allege that the cause of action arose solely from acts performed within the scope of employment. Accordingly, the court found that the managers did not definitively lack liability under the Hawai‘i law and the assertion of fraudulent joinder was rejected. Next, in Roehrig v. Blossom Tong, the employer had assumed responsibility for the employee’s acts and it was uncontested that the employee was at all times acting within the scope of employment.59 The court therefore held that under these circumstances, the employee could not be held individually liable and was fraudulently joined. On these facts, the court found that Tachera was authoritative rather than Kalawe.

Fraudulent joinder and the timing of the notice of removal
28 U.S.C. § 1446(b) creates a thirty-day time limit to file a notice of removal once a case becomes removable. Often, when asserting fraudulent joinder, a notice of removal is promptly filed after defendant receives notice of the complaint. Under 28 U.S.C. § 1446(b), however, if the initial case is not removable, notice of removal may be filed within thirty days of an order from which it may first be ascertained that the case is or has become removable.

For example, in Ho v. State Farm Ins. Co., the Ninth Circuit Court of Appeals affirmed the Hawai‘i district court’s order denying the plaintiff ’s motion to remand.60 The plaintiff argued that the notice of removal, which was filed after non-diverse defendants were dismissed in state court, should have instead been filed within thirty days of service of the amended com­plaint. Although the normal rule is that the dismissal of non-diverse parties will not create diversity jurisdiction unless the dismissal was the result of voluntary action by the plaintiff, an exception to this rule exists where the resident defendants are determined by the court to have been fraudulently joined. Because 28 U.S.C. § 1446(b) provides that if the initial case is not removable, the notice of removal may be filed within thirty days of any order from which it may be first ascertained that the case is or has become removable, and because “diversity did not and could not have existed until after the fraudulently joined defendants had been dismissed,” the court held that State Farm’s notice of removal was timely. The plaintiff also argued that the notice of removal was defective because it did not specifically address fraudulent joinder as a ground for removal. In considering fraudulent joinder, however, the Ninth Circuit has held that the pleadings may be deemed amended by evidence introduced at the hearing, and because State Farm’s notice of removal incorporated, among other things, the state court’s dismissal of the resident employees, the notice was deemed to be sufficient.

A different result was reached under the facts of Coastal Construction Co. v. North American Specialty Ins. Co.61 North American Specialty Insurance Company (NASIC), stated in its notice of removal that the basis for removal had first been ascertained on February 8, 2011 and, therefore, NASIC timely filed its notice of removal on February 22, 2011. The fraudulent joinder contention was, however, only raised for the first time in opposition to the motion to remand on March 18, 2011, after the thirty-day window closed. Therefore, the Hawai‘i federal district court held that NASIC’s assertion of fraudulent joinder was untimely and remanded the case for lack of jurisdiction.

Fraudulent Misjoinder
Sometimes plaintiffs also attempt to prevent or defeat removal by joining other plaintiffs from the same state as a defendant. Fed. R. Civ .P. Rule 20(a) permits plaintiffs to join their claims into one action if: (1) “they assert any right to relief jointly, severally, or in the alternative with respect to or arising out of the same trans­action, occurrence, or series of transactions or occurrences;” and (2) “any question of law or fact common to all plaintiffs will arise in the action.”62 Attempts to join plaintiffs seeking recovery for independent claims are not permitted, however, and the fraudulent joinder of a plaintiff for the purposes of defeating removal jurisdiction is commonly known as “fraudulent misjoinder.” District courts may sever joined plaintiffs that fail to meet both requirements of Fed. R. Civ. P. Rule 20(a) so long as the severance does not prejudice any substantial right.63

As discussed above, the Ninth Circuit (including the district court of Hawai‘i) has adopted the position that “t is a commonplace that fraudulently joined defendants will not defeat removal on diversity grounds.”64 Numerous other courts have recognized that this same reasoning may apply to improperly-joined plaintiffs; “[m]isjoinder [of a plaintiff] may be just as fraudulent as the joinder of a resident defendant against whom a plaintiff has no possibility of a cause of action.”65

Circuits are split on how to address fraudulent misjoinder. Although the Ninth Circuit has not expressly adopted the misjoinder doctrine, the district courts of the Ninth Circuit appear to be among those courts that are at the forefront of exploring and accepting the applicability of the misjoinder doctrine to prevent litigants from joining plaintiffs for the purpose of defeating diversity jurisdiction.66 Fraudulent misjoinder may occur when the fraudulently-joined plaintiff does not have a cause of action according to the settled laws of the state, or when plaintiffs’ attorneys improperly attempt to consolidate plaintiffs seeking distinct and separate claims for relief.

Common sense is also a factor. As stated by the Ninth Circuit, “[e]ven once these requirements [for permissive joinder] are met, a district court must examine whether permissive joinder would comport with the principles of fundamental fairness or would result in prejudice to either side.”67 One such factor for the Court to consider is the motive that the moving party has in joining a party to the litigation.68

Finally, in closing, practitioners are reminded that removal is a statutory privilege, rather than a right, and there must be strict compliance with the procedural requirements of applicable removal statutes. A defendant may also “waive the right to remove to federal court where, after it is apparent that the case is removable, the defendant takes actions in state court that manifest his or her intent to have the matter adjudicated there, and to abandon his or her right to a federal forum.”69 On the other hand, plaintiffs who wish to oppose diversity jurisdiction removal should do so within thirty days after the notice of removal is filed.70

Kelly Suzuka is a law student currently in her third year at the William S. Richardson School of Law.

1 28 U.S.C. §§ 1331 and 1332.

2 Lontz v. Tharp, 413 F.3d 435, 444 (4th Cir. 2005) (citation omitted).

3 28 U.S.C. § 1332(a) (2014).

4 14AA FEDERAL PRACTICE AND PROCEDURE § 3702 (4th ed. 2014) [hereinafter FEDERAL PRACTICE]. See Horton v. Liberty Mut. Ins. Co., 367U.S. 348, 352 (1961).

5 FEDERAL PRACTICE § 3702. See Horton, 367 U.S. at 352-353.

6 FEDERAL PRACTICE § 3702.5. See Hunt v. Washington State Apple Advertising Com’n, 432 U.S. 333, 97 S.Ct. 2434, 53 L. Ed. 1067 (1947).

7 Lewis v. Verizon Communications, Inc., 627 F.3d 395, 400 (9th Cir. 2010).


8 28 U.S.C. § 1332(b) (2014).

9 FEDERAL PRACTICE § 3702.5. See Healy v. Ratta, 292 U.S. 263, 267 (1934) (“the collateral effects of the decree, by virtue of stare decisis, upon other and distinct controversies, may not be considered in ascertaining whether the jurisdictional amount is involved, even though their decision turns on the same question of law.”). See also New England Mortg. Sec. Co. v. Gay, 145 U.S. 123, 130 (1892) (“It is well settled in this court that, when our jurisdiction depends upon the amount in controversy, it is determined by the amount involved in the particular case, and not by any contingent loss either one of the parties may sustain by the probative effect of the judgment, however certain it may be that such loss will occur.”).

10 See Snow v. Ford Motor Co., 561 F.2d 787, 789 (9th Cir. 1977); Ohoa v. Interbrew America, Inc., 999 F.2d 626, 629 (2d Cir. 1993).

11 See Anthony v. Security Pac. Fin. Servs., Inc., 75 F.3d 311, 315 (7th Cir. 1996); Watson v. Blankinship, 20 F.3d 383, 386-387 (10th Cir. 1994).

12 Anthony, 75 F.3d at 315; Packard v. Provident Nat’l Bank, 994 F.2d 1039, 1048 (3d Cir. 1993).

13 Galt G/S v. JSS Scandinavia, 142 F.3d 1150, 155-1156 (9th Cir. 1998).

14 128 F. Supp. 2d 659, 664 (D. Haw. 2000).

15 2012 U.S. Dist. LEXIS 5545 (D. Haw Jan. 18, 2012).

16 2014 U.S. Dist. LEXIS 25696 at *14 (D. Haw. Feb. 28, 2014). See also Toledo v. Bank of N.Y. Mellon, 2014 U.S. Dist. LEXIS 61300 at *9 (D. Haw. May 2, 2014) (“The object of the litigation is not the value of the property, but is instead the value in relieving the [Plaintiffs’] uncertainty.”); Broyles v. Bank of Am., N.A., 2014 U.S. Dist. LEXIS 60005 at *14 (D. Haw. April 30, 2014) (quantifying Plaintiff ’s “uncertainty” as the fear and cost of missing a single monthly mortgage payment); Dicion v. Mann Mortgage, LLC, 2014 U.S. Dist. LEXIS 47329 at *18 (D. Haw. April 4, 2014) (noting that the “object of the litigation…is to relieve Plaintiff of his uncertainty as to which Defendant he should remit his future mortgage payments”).

17 2010 U.S. Dist. LEXIS 21988 (D. Haw. Mar. 9, 2010).

18 2010 U.S. Dist. LEXIS 28038 (D. Haw. Mar. 24, 2010).



20 See, Hunt v. Transport Indem. Ins. Co., 1990 U.S. Dist. LEXIS 16555 (D. Haw. July 30, 1990).

21 St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 295-296 (1938).

22 Id.

23  Id. See Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 549 (2005).

24 28 U.S.C. § 1446, FEDERAL PRACTICE § 3702.1, see The Federal Courts Jurisdiction and Venue Clarification Act of 2011, Act of December 7, 2011, § 103(a), Pub. L. No. 112-63, 125 Stat. 758 (2011).


25  2012 U.S. Dist. LEXIS 33345 (D. Haw. Feb. 16, 2012).

26 2010 U.S. Dist. LEXIS 17481(D. Haw. Feb. 26, 2010).

27 1979 U.S. Dist. LEXIS 13466 (D. Haw. Mar. 27, 1979).

28 Strawbridge v. Curtis, 7 U.S. 267, 267-68 (1806).


29 Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 829 (1989).

30 28 U.S.C. § 1332; compare Hideo Matsuda v. Michiko Wada, 128 F. Supp. 2d 659 (D. Haw. 2000) (no diversity of citizenship between permanent resident aliens and non-resident aliens). In addition, a foreign state includes both the country itself and political subdivisions, agencies, or instrumentalities of that foreign state. 28 U.S.C. § 1603(a).

31 28 U.S.C. § 1441(b); Winged Foot Invs. v. Lum, 2010 U.S. Dist. LEXIS 78778, at *3 (D. Haw. July 16, 2010).

32 Newman-Green, Inc. at 828; Kantor v. Wellesley Galleries, Ltd., 704 F.2d 1088, 1090 (9th Cir. 1983).

33  28 U.S.C. § 1332(c). In addition, certain other rules apply to insurers who are sued independent from their insured and legal representatives of estates. 28 U.S.C. § 1332(c).

34  Navarro Sav. Ass’n v. Lee, 446 U.S. 458, 465-66 (1980) (re citizenship of a trust); Carden v. Arkoma Assocs., 494 U.S. 185, 190-95 (1990) (citizenship of partnerships determined by residence of general and limited partners); United Steelworkers v. R.H. Bouligny, Inc., 382 U.S. 145, 151 (1965) (citizenship of an unincorporated entity includes citizenship of all members).

35 28 U.S.C. § 1441(a); Bates v. Mortgage Elec. Registration Sys., 694 F.3d 1076, 1080 (9th Cir. 2012) (nominal parties that would not benefit from a suit may be disregarded for determination of diversity jurisdiction); Fat T, Inc. v. Aloha Tower Assocs. Piers 7, 8 & 9, 172 F.R.D. 411, 41415 (D. Haw. 1996) (presence of Doe defendants does not destroy diversity nor preclude removal).

36 28 U.S.C. § 1369(a); c.f. 28 U.S.C. § 1369(b).


37 28 U.S.C. § 1332(d); see also Hum v. Dericks, 162 F.R.D. 628, 634 (D. Haw. 1995) (non-diverse class members who are not class representatives do not destroy diversity) (citation omitted).

38 Ankenbrandt. v. Richards, 504 U.S. 689, 693-701 (1992).

39 708 F.2d 465, 466 (9th Cir. 1983) (citations omitted).

40 See Markham v. Allen, 326 U.S. 490, 494 (1946).

41 In re Prempro Prods. Liab. Litig., 591 F.3d 613, 620 (8th Cir. 2010).

42 McCabe v. General Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987).


43 Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001).

44 In re Prempro, 591 F.3d at 620.

45 Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998).

46 In re Prempro, 591 F.3d at 620.

47 24 Fed. Appx. 727 (9th Cir. 2001).

48 Balberdi v. Lewis, 2013 U.S. Dist. LEXIS 46048 at *2 (D. Haw. Mar. 8, 2013).

49 16 Georgene Vairo, MOORE’S FEDERAL PRACTICE § 107.14 (3d ed. 2014).

50 Hunter v. Philip Morris USA, 582 F.3d 1039, 1044 (9th Cir. 2009).

51 Balberdi, 2013 U.S. Dist. LEXIS 46048 at *16.

52 103 F. Supp. 2d 1233 (D. Haw. 2000).

53 2010 U.S. Dist. LEXIS 12150 (D. Haw. Feb. 11, 2010).


54 2013 U.S. Dist. LEXIS 25749 (D. Haw. Jan. 29, 2013) (remanded on other grounds).

55 2009 U.S. Dist. LEXIS 92 380 at *15 (D. Haw. Oct. 2, 2009). In addition, the plaintiff ’s second claim (public policy) was not valid as a matter of law because under Hawai‘i law, “a party may not bring a public policy claim where the policy sought to be vindicated is already embodied in a statute providing its own remedy for its violation” and such a statute existed. Id. at *20.

56 2013 U.S. Dist. LEXIS 54948 (D. Haw. April 17, 2013).

57 1989 U.S. Dist. LEXIS 15320 (D. Haw. Sept. 25, 1989).

58 1991 U.S. Dist. LEXIS 20073 (D. Haw. July 16, 1991).

59 2006 U.S. Dist. LEXIS 15683 (D. Haw. April 3, 2006).

60 1997 U.S. App. LEXIS 16395 (D. Haw. June 9, 1997).

61 2011 U.S. Dist. LEXIS 46394 (D. Haw. April 29, 2011).

62 Amen v. AOAO Century Ctr., 2006 U.S. Dist. LEXIS 75726, *4 (D. Haw. Oct. 16, 2006).

63 Coughlin v. Rogers, 130 F.3d 1348, 1351 (9th Cir. 1997).

64 Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998); County of Hawai‘i v. UniDev, LLC, 2010 U.S. Dist. LEXIS 12150, *11 (D. Haw. Feb. 11, 2010).

65 Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1360 (11th Cir. 1996), abrogated on other grounds; Cohen v. Office Depot, Inc., 204 F.3d 1069 (11th Cir. 2000) (emphasis added); In re Rezulin Prods. Liab. Litig., 168 F. Supp. 2d 136, 144 (S.D.N.Y. 2001); c.f. Visendi v. Bank of America, N.A., 733 F.3d 863, 870 (9th Cir. 2013).

66 See, e.g.,  Rubio v. Arndal, 2013 U.S. Dist. LEXIS 29149 (E.D. Cal. Mar. 1, 2013); Caouette v. Bristol-Myers Squibb Co., 2012 U.S. Dist. LEXIS 113980 (N.D. Cal. Aug. 10, 2012) at *31 (“The Ninth Circuit [] has acknowledged the [fraudulent misjoinder] doctrine in an unpublished decision predating January 1, 2007, but has not expressly adopted it”); Sutton v. Davol, Inc., 251 F.R.D. 500 (E.D. Cal. 2008) at *504-06 (adopting the fraudulent misjoinder doctrine and severing claims); Greene v. Wyeth, 344 F. Supp. 2d 674, 683-85 (D. Nev. 2004) (“the [fraudulent misjoinder] rule is a logical extension of the established precedent that a plaintiff may not fraudulently join a defendant in order to defeat diversity jurisdiction in federal court”).

67 Visendi, 733 F.3d at 870 (internal citations and quotations omitted).

68 SBO Pictures, Inco. v. Does 1-3036, Civ. No. 114420 SC, 2011 WL 6002620, at *3 (N.D. Cal. Nov. 30, 2011).

69 Paoa v. Marati, 2007 U.S. Dist. LEXIS 67596, at *19 (D. Haw. Sept. 11, 2007) (emphasis omitted) (citing EIE Guam Corp. v. Long Term Credit Bank of Japan, Ltd., 322 F.3d 635, 649 (9th Cir. 2003)); see also Hamakua Sugar Co. v. Fiji Sugar Corp., 778 F. Supp. 503, 505 (D. Haw. 1991).

70  28 U.S.C. § 1447(c). Failure to seek remand within thirty days constitutes a waiver of any procedural challenge to removal, although the plaintiffs can always seek remand if the federal court lacks subject matter jurisdiction.

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