United States District Court, S.D. Alabama, Southern Division
THE SOLID WASTE DISPOSAL AUTHORITY OF THE CITY OF MOBILE, ALABAMA, Plaintiff,
WM MOBILE BAY ENVIRONMENTAL CENTER, INC., et al., Defendants.
REPORT AND RECOMMENDATION
F. BIVINS, UNITED STATES MAGISTRATE JUDGE
matter is before the Court on Defendant Waste Away Group,
Inc.'s motion to dismiss fraudulently-joined defendant
(Doc. 2) and Plaintiff the Solid Waste Disposal Authority of
the City of Mobile, Alabama's motion to remand. (Doc. 8).
The motions, which have been fully briefed and are ripe for
resolution, have been referred to the undersigned Magistrate
Judge for a report and recommendation pursuant to 28 U.S.C.
§ 636(b)(1)(B) and S.D. Ala. GenLR 72(a)(2)(S). Upon
consideration of all matters presented, the undersigned
RECOMMENDS, for the reasons stated herein, that Defendant
Waste Away Group, Inc.'s motion to dismiss
fraudulently-joined defendant (Doc. 2) be
DENIED, that Plaintiff's motion to
remand (Doc. 8) be GRANTED, and that this
action be remanded to the state court where it was originally
the Solid Waste Disposal Authority of the City of Mobile,
Alabama (the “Authority”) filed the instant
lawsuit in the Circuit Court of Mobile County, Alabama on
August 28, 2018. (Doc. 1-1 at 2-7). The Authority's
complaint names as Defendants WM Mobile Bay Environmental
Center, Inc. (“WM Mobile Bay”) and Waste Away
Group, Inc. (“Waste Away”). The Authority asserts
claims for trespass, conversion, and nuisance against WM
Mobile Bay, which operates the Chastang Landfill in Mobile
County, Alabama, and against Waste Away, the lessee of the
Chastang Landfill pursuant to a 2003 lease agreement with the
Authority. The Authority's claims stem from actions
allegedly taken by Defendants with respect to the “West
Tract, ” a tract of land that is owned by the Authority
and borders the Chastang Landfill, but, according to the
Authority, is not a part of the landfill. Specifically, the
Authority alleges that both Defendants trespassed upon the
West Tract by physical ingress and egress of persons and
equipment across the property line between the Chastang
Landfill and the West Tract, and by diverting water onto the
West Tract. The Authority further asserts that Defendants
have converted large volumes of cover dirt and timber from
the West Tract for their own use, and that Defendants'
activities have interfered with the Authority's use and
possession of the West Tract, amounting to a nuisance.
WM Mobile Bay and Waste Away removed the action to this Court
on October 11, 2018. (Doc. 1). In their notice of removal,
Defendants assert the existence of diversity jurisdiction
pursuant to 28 U.S.C. § 1332. (Id. at 1).
According to Defendants, the Authority and Waste Away are
both Alabama corporations and, as such, are residents of
Alabama, and WM Mobile Bay is a foreign corporation, which is
incorporated in the state of Delaware and has its principal
place of business in Mississippi. (Id. at 1-2).
Defendants assert that although both the Authority and Waste
Away are Alabama corporations, Waste Away has been
fraudulently joined in this action in an effort to defeat
diversity jurisdiction. (Id.). Defendants thus argue
that the Court should disregard Waste Away's Alabama
citizenship in determining whether complete diversity of
citizenship exists between the parties. (Id. at
5-6). Specifically, Defendants contend that “not one of
Plaintiff's factual allegations involves any conduct of
Waste Away” because Waste Away is not the operator of
the Chastang Landfill. (Id. at 6, 8-9). Defendants
further argue that although Plaintiff's complaint alleges
the existence of a lease agreement between the Authority and
Waste Away, the complaint does not “allege any act
which Waste Away has done to cause or contribute to the
tortious conduct alleged in the Complaint.”
(Id. at 6).
Away filed its motion to dismiss fraudulently-joined
defendant on October 18, 2018. (Doc. 2). In its motion, Waste
Away argues that it was fraudulently joined because the
Authority has failed to state a viable cause of action
against it. (Id. at 4). Waste Away also contends
that it has been fraudulently misjoined in this action
because there is no common question of law or fact that
connects the Authority's claims against WM Mobile Bay
with the Authority's claims against Waste Away.
(Id. at 6-7).
thereto, the Authority filed the instant motion to remand
this case to state court. (Doc. 8). In its motion, the
Authority notes that its complaint alleges that both Waste
Away and WM Mobile Bay have their principal places of
business in Alabama, and it contends that Defendants have not
offered any evidence refuting those allegations.
(Id. at 4-5). The Authority also contends that it
will be able to establish that its claims against Waste Away
are valid, and that it will be able to recover from Waste
Away for its tortious conduct. (Id. at 4). In
support of its assertions, the Authority cites to provisions
from its 2003 lease agreement with Waste Away, including
recitals that Waste Away is the operator of the Chastang
landfill as successor to the 1993 Transamerican contract, and
to other provisions charging Waste Away with making various
improvements to the landfill. (Id. at 6). The
Authority asserts that it “is also possible that Waste
Away is the real party in interest with respect to WM Mobile
Bay, and actually controls, manages and provides support for
WM Mobile Bay's activities at the Chastang
Landfill.” (Id.). The Authority further argues
that it is an arm of the state of Alabama and not subject to
the jurisdiction of this Court pursuant to the Eleventh
Amendment. (Id. at 10-15).
response in opposition to the Authority's motion to
remand, WM Mobile Bay contends that it has refuted the
Authority's assertion that WM Mobile Bay's principal
place of business is in Alabama. (Doc. 11 at 3-5). WM Mobile
Bay points out that the notice of removal states that WM
Mobile Bay's principal place of business is in
Mississippi, and WM Mobile Bay asserts that this allegation
is borne out by the affidavit of its vice president, David
Myhan, submitted in conjunction with its response to the
Authority's motion. (Id. at 3-4). WM Mobile Bay
also asserts that its Mississippi citizenship has been
conclusively established in prior litigation between the
parties. (Id. at 4). WM Mobile Bay further notes
that the Authority's own complaint asserts that WM Mobile
Bay, and not Waste Away, is the successor in interest to
Transamerican and currently operates the Chastang Landfill
under the 1993 contract between the Authority and
Transamerican. (Id. at 3). WM Mobile Bay claims that
this Court, in another case, previously determined that Waste
Away is not a party to that 1993 contract, “and thus
has no operational involvement in the landfill.”
(Id. at 6). Finally, WM Mobile Bay argues that the
Eleventh Amendment has no bearing on this case, since the
Authority is the plaintiff and not a defendant. (Id.
of these pleadings is now before the Court for review.
STANDARD OF REVIEW
removing defendant bears the burden of proving proper federal
jurisdiction.” Adventure Outdoors, Inc. v.
Bloomberg, 552 F.3d 1290, 1294 (11th Cir. 2008) (quoting
Leonard v. Enter. Rent a Car, 279 F.3d 967, 972
(11th Cir. 2002)). “Any doubts about the propriety of
federal jurisdiction should be resolved in favor of remand to
state court.” Adventure Outdoors, 552 F.3d at
1294. Because removal infringes upon state sovereignty and
implicates central concepts of federalism, removal statutes
must be construed narrowly, with all doubts resolved in favor
of remand. See Univ. of S. Ala. v. Am. Tobacco Co.,
168 F.3d 405, 411 (11th Cir. 1999); Burns v. Windsor Ins.
Co., 31 F.3d 1092, 1095 (11th Cir. 1994). Furthermore,
“once a federal court determines that is without
subject matter jurisdiction, the court is powerless to
continue.” Univ. of S. Ala., 168 F.3d at 410.
the alleged basis for federal jurisdiction is diversity of
citizenship under 28 U.S.C. § 1332, the removing
defendant has the burden of demonstrating that there is (1)
complete diversity of citizenship and (2) an amount in
controversy greater than $75, 000. See 28 U.S.C.
§ 1332(a); Triggs v. John Crump Toyota,
Inc., 154 F.3d 1284, 1287 (11th Cir. 1998);
Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353,
1357 (11th Cir. 1996), abrogated on other grounds by
Cohen v. Office Depot, Inc., 204 F.3d 1069 (11th Cir.
2000). For complete diversity of citizenship to be present,
“every plaintiff must be diverse from every
defendant.” Palmer v. Hosp. Auth. of Randolph
Cnty., 22 F.3d 1559, 1564 (11th Cir. 1994).
the requirement of complete diversity in cases removed under
28 U.S.C. § 1332, “[w]hen a plaintiff names a
non-diverse defendant solely in order to defeat federal
diversity jurisdiction, the district court must ignore the
presence of the non-diverse defendant and deny any motion to
remand the matter back to state court.” Henderson
v. Washington Nat'l Ins. Co., 454 F.3d 1278, 1281
(11th Cir. 2006). In such an instance, “[t]he plaintiff
is said to have effectuated a ‘fraudulent joinder,'
and a federal court may appropriately assert its removal
diversity jurisdiction over the case.” Id.
(internal citation omitted). “Fraudulent joinder is a
judicially created doctrine that provides an exception to the
requirement of complete diversity.” Triggs,
154 F.3d at 1287.
Eleventh Circuit precedent, a defendant seeking to
demonstrate fraudulent joinder has the burden to prove the
existence of at least one of the following three situations.
“The first is when there is no possibility that the
plaintiff can prove a cause of action against the resident
(non-diverse) defendant.” Id. (citing
Coker v. Amoco Oil Co., 709 F.2d 1433, 1440 (11th
Cir. 1983), superseded by statute on other grounds as
stated in Georgetown Manor, Inc. v. Ethan Allen, Inc.,
991 F.2d 1533 (11th Cir. 1993)). “The second is when
there is outright fraud in the plaintiff's pleading of
jurisdictional facts.” Triggs, 154 F.3d at
1287 (citing Coker, 709 F.2d at 1440). The third
situation, which was identified by the Eleventh Circuit in
Tapscott, is “where a diverse defendant is
joined with a nondiverse defendant as to whom there is no
joint, several or alternative liability and where the claim
against the diverse defendant has no real connection to the
claim against the nondiverse defendant.”
Triggs, 154 F.3d at 1287 (citing Tapscott,
77 F.3d at 1360). “The defendant must make such a
showing by clear and convincing evidence.”
Henderson, 454 F.3d at 1281. The removing
party's burden “is a ‘heavy one.'”
Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir.
1997) (quoting B, Inc. v. Miller Brewing Co., 663
F.2d 545, 549 (5th Cir. Unit A Dec. 1981)).
Court must evaluate the parties' factual allegations and
submissions in the light most favorable to the plaintiff and
resolve any uncertainties about applicable state substantive
law in favor of the plaintiff. Crowe, 113 F.3d at
1538 (citing B, Inc., 663 F.2d at 549). The
Court's inquiry must be “based upon the
plaintiff's pleadings at the time of removal,
supplemented by any affidavits and deposition transcripts
submitted by the parties.” Pacheco de Perez v.
AT&T Co., 139 F.3d 1368, 1380 (11th Cir. 1998).
Although “‘the proceeding appropriate for
resolving a claim of fraudulent joinder is similar to that
used for ruling on a motion for summary judgment under
Fed.R.Civ.P. 56(b), '” the Eleventh Circuit has
stressed that “the jurisdictional inquiry ‘must
not subsume substantive determination' . . . [and that]
federal courts are not to weigh the merits of a
plaintiff's claim beyond determining whether it is an
arguable one under state law.” Crowe, 113 F.3d
at 1538 (quoting B, Inc., 663 F.2d at 549 n.9, 550).
“The plaintiff need not have a winning case against the
allegedly fraudulent defendant; he need only have a
possibility of stating a valid cause of action in
order for the joinder to be legitimate.”
Triggs, 154 F.3d at 1287 (emphasis in original).
WM Mobile Bay's Principal Place of Business is in
noted supra, the Authority contends that diversity
of citizenship does not exist because, regardless of whether
Waste Away was fraudulently joined, the complaint alleges
that WM Mobile Bay's principal place of business is in
Alabama, and “[t]his allegation has not been disputed
by Defendants.” (Doc. 8 at 3). For purposes of
diversity jurisdiction, “a corporation shall be deemed
to be a citizen of every State and foreign state by which it
has been incorporated and of the State or foreign state where
it has its principal place of business[.]” 28 U.S.C.
§ 1332(c)(1). A corporation's principal place of
business is the “nerve center” or “the
place where a corporation's officers direct, control, and
coordinate the corporation's activities.” Hertz
Corp. v. Friend, 559 U.S. 77, 92-93 (2010). That
“nerve center” will normally be “the place
where the corporation maintains its headquarters-provided
that the headquarters is the actual center of direction,
control, and coordination[.]” Id. at 93. The
party asserting diversity jurisdiction has the burden of
persuasion and, “[w]hen challenged on allegations of
jurisdictional facts, the parties must support their
allegations by competent proof.” Id. at 96-97.
Defendants' notice of removal states that “WM
Mobile Bay is a foreign corporation, incorporated in the
State of Delaware and having its principal place of business
in Madison, Mississippi, that is qualified to do business in
the State of Alabama.” (Doc. 1 at 2). In its response
in opposition to the Authority's motion to remand, WM
Mobile Bay attaches the March 20, 2017 affidavit of its vice
president, David Myhan. (See Doc. 11-1). In his
affidavit, Mr. Myhan avers that WM Mobile Bay's principal
place of business, and “the actual center of WM Mobile
Bay's direction, control, and coordination is 382
Galleria Parkway, Suite 107, Madison, Mississippi.”
(Id. at 2-3). Attached as an exhibit to Mr.
Myhan's affidavit is the business entity record from the
Alabama Secretary of State, which lists a Madison,
Mississippi principal address for WM Mobile Bay. (See
id. at 5). The unchallenged Myhan affidavit suffices to
demonstrate that WM Mobile Bay was incorporated in Delaware
and has its principal place of business in Madison,
Mississippi, not in Alabama, as alleged by the Authority.
Thus, WM Mobile Bay has met its burden of establishing that
it is a foreign corporation for the purposes of the diversity
Eleventh Amendment Immunity.
Authority further argues that it is an independent
instrumentality of the State of Alabama and, therefore,
entitled to Eleventh Amendment immunity. (Doc. 8 at 10-15).
WM Mobile Bay counters that the concept of Eleventh Amendment
immunity is not applicable to this case because the
Authority, the party claiming immunity, is the plaintiff.
(Doc. 11 at 8-9).
Eleventh Amendment states: “The Judicial power of the
United States shall not be construed to extend to any suit in
law or equity, commenced or prosecuted against one of the
United States by Citizens of another State, or by Citizens or
Subjects of any Foreign State.” U.S. Const. amend. XI.
The Supreme Court has construed the Eleventh Amendment
“to establish that an unconsenting State is immune from
suits brought in federal courts by her own citizens as well
as by citizens of ...