Walter E. Campbell Company v. Hartford Financial Services Group, Inc.
959 F. Supp. 2d 166
D.D.C.2013Background
- Plaintiff Walter E. Campbell Company (WECCO), a Maryland corporation formerly headquartered in D.C., sued several insurers and the Property and Casualty Insurance Guaranty Corporation (PCIGC) in D.C. Superior Court seeking declaratory relief about asbestos-liability coverage.
- PCIGC is a Maryland-created guaranty corporation that covers claims of insolvent Maryland insurers (here, American Mutual and Centennial), and both plaintiff and PCIGC are Maryland citizens.
- Defendants removed to federal court alleging fraudulent joinder of PCIGC to defeat diversity jurisdiction; removal was consented to by PCIGC. WECCO moved to remand.
- Defendants argued fraudulent joinder because the federal court lacks personal jurisdiction over PCIGC; plaintiff contended jurisdiction over PCIGC is plausible under D.C. long-arm and due process principles.
- The district court evaluated whether a D.C. court could possibly exercise specific personal jurisdiction over PCIGC (directly or by PCIGC "standing in the shoes" of the insolvent insurer) and resolved uncertainties in favor of the plaintiff.
- Because defendants failed to show there was no possibility of a valid claim against PCIGC, the court found fraudulent-joinder not established and remanded the case to D.C. Superior Court for lack of subject-matter jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether removal was proper given lack of complete diversity | WECCO: PCIGC is properly joined; D.C. courts could exercise personal jurisdiction over PCIGC | Defs: PCIGC is non‑diverse and fraudulently joined because D.C. courts lack personal jurisdiction over it | Court: Remand — defendants did not meet heavy burden to show fraudulent joinder |
| Whether D.C. long‑arm § 13‑423(a)(6) ("contracting to insure") can reach PCIGC | WECCO: statute could reach guarantors; PCIGC may "stand in the shoes" of the insolvent insurer | Defs: PCIGC is a statutory guarantor, not a contracting insurer; clause doesn’t apply | Court: Unclear under D.C. law; courts have recognized guarantors in similar contexts, so possibility exists — resolve in plaintiff's favor |
| Whether due process permits jurisdiction over PCIGC (specific jurisdiction) | WECCO: if insurer (American Mutual) had sufficient D.C. contacts, PCIGC, standing in its shoes, could be haled into D.C. courts | Defs: PCIGC lacks purposeful contacts with D.C.; cannot reasonably anticipate suit here | Court: Insufficient facts to rule out that American Mutual had contacts; given statute deeming PCIGC to assume insurer's rights/duties, due process possibility exists |
| Standard for fraudulent joinder on personal jurisdiction grounds | WECCO: all uncertainties resolved for plaintiff; removal fails if any possibility of valid claim exists | Defs: must show no possibility plaintiff can state claim against nondiverse defendant | Held: Removing parties failed to carry heavy burden; any doubt requires remand |
Key Cases Cited
- Mayes v. Rapoport, 198 F.3d 457 (4th Cir. 1999) (fraudulent joinder doctrine permits disregarding nondiverse defendant only in narrow circumstances)
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (U.S. 1945) (minimum contacts due process standard for personal jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (purposeful availment and relation of claim to defendant’s forum contacts)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (U.S. 1980) (foreseeability and reasonable anticipation of being haled into forum’s courts)
- Oliver v. Merritt Dredging Co., Inc., 979 F.2d 827 (11th Cir. 1992) (guarantor may "stand in the shoes" of insolvent insurer for jurisdictional purposes)
- B., Inc. v. Miller Brewing Co., 663 F.2d 545 (5th Cir. 1981) (in removal context, courts must resolve jurisdictional doubts in favor of the plaintiff)
- GTE New Media Servs., Inc. v. BellSouth Corp., 199 F.3d 1343 (D.C. Cir. 2000) (two-part personal jurisdiction inquiry: long‑arm statute then due process)