Civil Procedure – diversity — fraudulent joinder — forum defendant rule

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United States Court of Appeals For the Seventh Circuit

Civil

Civil Procedure – diversity — fraudulent joinder — forum defendant rule

The fraudulent joinder doctrine does not create an exception to the forum defendant rule.

“We are unwilling to rely on Wilson and Poulos to extend the doctrine to the forum defendant rule. As mentioned, both cases involved an alleged fraudulent joinder of a nondiverse resident defendant and therefore shed little light upon the question before us. While it is true that the Supreme Court’s use of the term ‘resident defendant’ in Wilson could arguably encompass diverse resident defendants, we do not believe that was the Court’s intended meaning given its unqualified reference to the forum defendant rule in the same passage. Further, it does not appear that any federal court in the country had considered whether the doctrine could apply to a diverse resident defendant at the time Wilson was decided—we doubt the Court had this rather uncommon scenario on its radar. Whatever ambiguity Wilson might raise, we do not agree that our explanation in Poulos of the doctrine’s rationale applies with equal force to diverse resident defendants.”

Vacated and Remanded.

12-3220 Morris v. Nuzzo

Appeal from the United States District Court for the Southern District of Indiana, Barker, J., Zagel, J.