Greenspan v. Brothers Property Corp.
103 F. Supp. 3d 734
| D.S.C. | 2015Background
- Plaintiff (pro se) worked as Controller at Charleston Harbor Resort and Marina (subsidiary of Brothers Property Corp.), was terminated in June 2012, and sued his former employers in state court asserting multiple state-law claims including wrongful discharge in violation of public policy.
- Defendants removed the case to federal court based on diversity jurisdiction.
- While removal was pending but before defendants answered, Plaintiff filed a First Amended Complaint joining three individuals (Oliver Rooskens, Victor Fuller, Ana Reina); Rooskens is a South Carolina resident, which would defeat diversity.
- Defendants moved to strike the Amended Complaint as an improper attempt to defeat jurisdiction and argued Rooskens was fraudulently joined; Plaintiff moved to remand.
- The Magistrate Judge recommended denying the motion to strike and granting remand; the district court adopted the R&R, holding defendants failed to meet the heavy burden to show fraudulent joinder and that balancing the equities favored allowing joinder and remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the First Amended Complaint was timely under Rule 15(a) | Amended as of course before any responsive pleading; therefore timely | Untimely because filed more than 21 days after original complaint | Timely: amendment permitted under Rule 15(a)(1)(B) (allowed as matter of course) |
| Whether joinder of Rooskens is fraudulent (i.e., no possibility plaintiff can state a claim against him) | Rooskens was centrally involved in alleged misconduct and termination; possibility exists to state wrongful-discharge/public-policy claim | Rooskens is a co-worker/agent with no authority to fire; no SC authority supports individual liability, so joinder is fraudulent | Not fraudulent: defendants failed to show no possibility of state-law claim against Rooskens; issues of first impression must be resolved in plaintiff’s favor |
| Whether wrongful discharge in violation of public policy can be asserted against an individual co-employee under South Carolina law | Possible: SC has not decided the question; facts plausibly allege Rooskens participated in and effectuated the termination and alleged illegal pay practices | No SC authority permits suing individuals; Barron controls and plaintiff did not allege filing/threatening to file an external wage claim | Court finds a “glimmer of hope”: because SC law is unsettled and plaintiff’s allegations (liberally construed) could support such a claim, possibility exists |
| Whether equities favor permitting joinder and remanding under 28 U.S.C. §1447(e) | Amendment was timely, not dilatory, Rooskens is central to claims, state courts should resolve unsettled state-law issues; plaintiff would be harmed if barred from suing him | Amendment was likely a tactical attempt to defeat federal jurisdiction given timing | Balance favors plaintiff: amendment allowed and case remanded to state court (joinder permitted) |
Key Cases Cited
- Mathews v. Weber, 423 U.S. 261 (1976) (district court makes de novo review of magistrate report objections)
- Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (standard for district court review of magistrate judge R&R)
- Mayes v. Rapoport, 198 F.3d 457 (4th Cir. 1999) (equitable balancing test for joinder of non-diverse defendants after removal; fraudulent-joinder factor)
- Marshall v. Manville Sales Corp., 6 F.3d 229 (4th Cir. 1993) (standards for proving fraudulent joinder)
- Johnson v. Am. Towers, LLC, 781 F.3d 693 (4th Cir. 2015) (defendant must show no possibility plaintiff can state claim against non-diverse defendant)
- Triggs v. John Crump Toyota, Inc., 154 F.3d 1284 (11th Cir. 1998) (plaintiff need only show possibility of stating valid cause of action to defeat fraudulent-joinder claim)
- Hartley v. CSX Transp., Inc., 187 F.3d 422 (4th Cir. 1999) (fraudulent-joinder standard is more favorable to plaintiff than 12(b)(6))
- Barron v. Labor Finders of S. Carolina, 393 S.C. 609 (S.C. 2011) (public-policy wrongful-discharge doctrine; left open whether retaliation for filing Payment of Wages Act claim supports tort)
- VanBuren v. Grubb, 284 Va. 584 (Va. 2012) (state may allow wrongful-discharge claim against individual who participated in wrongful firing)