Perry v. Catepillar Inc.Perry v. Catepillar Inc.
After Justin Perry perished in a construction-site accident, his estate (represented by his wife Elsa Perry) sued both the general contractor of the site and the manufacturer of the machine involved in the accident. See generally R. 1-1, Compl.1 Elsa Perry filed the lawsuit in state court, but the general contractor—Caterpillar, Inc.—removed the case to federal court based on diversity jurisdiction. R. 1, Notice of Removal ¶¶ 1, 3. Perry moves to remand the case, arguing that the co-defendant manufacturer—S&C Electric Company—is a citizen of Illinois, and thus the forum-defendant rule bars the removal.2 R. 19, Pl.‘s Mot. to Remand at 1 (citing
I. Background
Justin Perry worked as an engineer for Asplundh Construction Company. Compl. at 2, Count 1 ¶ 10. Caterpillar served as the general contractor for a construction project and subcontracted with Asplundh for electrical work, which Justin was assigned to perform. Id. ¶¶ 8–11. Justin needed to work on a low-voltage enclosure, which is a large (three feet by five feet by 14 inches) and heavy (at least 400 pounds) piece of electrical equipment. Id. at 2–3, Count 1 ¶¶ 11, 14–15. The enclosure was manufactured by S&C Electric and stood atop a three-legged stanchion. Id. at 3, Count 1 ¶ 16; id. at 9, Count 3 ¶¶ 4–8. To facilitate the assigned electrical work, Caterpillar employees unbolted the enclosure and transferred it to another location, where they allegedly failed to re-secure the device to the floor. Id. at 2–3, Count 1
His wife, Elsa Perry, filed this suit in Illinois state court. Compl. at 1. She asserted theories of liability against both Caterpillar and S&C Electric. Id. at 1–16, Counts 1–4. As to S&C Electric, Perry alleged that the enclosure should have been equipped with adequately supportive legs and that S&C Electric should have provided sufficient instructions to install, relocate, and transport the enclosure safely. Id. at 9–16, Counts 3–4. Ordinarily, an in-state defendant cannot remove a state case to federal court on the basis of diversity jurisdiction.
II. Legal Standard
A defendant generally may remove an action filed in state court to federal court in any case in which the plaintiff could have filed the case in federal court in the first place.
Given the forum-defendant rule, then, Caterpillar ordinarily would not be able to remove the case to federal court because of S&C Electric‘s presence as an in-state defendant. To Caterpillar‘s way of thinking, however, S&C Electric is fraudulently joined in the case, and its citizenship should be disregarded for purposes of the forum-defendant rule. Under the doctrine of fraudulent joinder, federal courts “disregard, for jurisdictional purposes, the citizenship of certain nondiverse defendants, assume jurisdiction over a case, dismiss the nondiverse defendants, and thereby retain jurisdiction.” Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 763 (7th Cir. 2009) (cleaned up).3 Although the doctrine usually is concerned with the fraudulent joinder of a non-diverse defendant, some courts also have applied the doctrine where the parties are completely diverse but a fraudulently joined, at-home defendant would prevent removal under the forum-defendant rule. See, e.g., In re Abbott Lab‘ys, 2022 WL 3586150, at *5–6 (N.D. Ill. Aug. 22, 2022). It is worth noting that despite the doctrine‘s name, actual “fraud” is not needed to successfully invoke fraudulent joinder.
A removing defendant bears “a ‘heavy burden‘” to establish fraudulent joinder. Schur, 577 F.3d at 764 (quoting Poulos, 959 F.2d at 73). The Seventh Circuit has suggested that this “burden is even more favorable to the plaintiff than the standard that applies to a motion to dismiss under
III. Analysis
As a threshold matter, the parties dispute whether the fraudulent-joinder doctrine applies in the context of applying the forum-defendant rule. See Caterpillar‘s Resp. to Mot. to Remand at 1–7; Pl.‘s Mot. to Remand at 4–5. Perry contends that the fraudulent-joinder doctrine does not apply in this context at all, and she argues that the Seventh Circuit has expressed reluctance to extend the doctrine. Pl.‘s Mot. to Remand at 4–5 (citing Morris, 718 F.3d at 666–71). The Court does not need to decide
As noted earlier, in the complaint Perry asserts liability theories against S&C Electric, as the manufacturer of the low-voltage enclosure, premised on (1) defective design and (2) failure to warn. Compl. at 9–16, Counts 3–4. In the motion to remand, she focuses her attention on the failure-to-warn theory.4 Mot. to Remand at 8–11. Whether the failure-to-warn claims are based on a theory of strict liability or negligence, the claims would require proof that the manufacturer did not disclose a known and unreasonably dangerous condition or otherwise failed to instruct on the proper use of a product. Norabuena v. Medtronic, Inc., 86 N.E.3d 1198, 1207 (Ill. App. Ct. 2017). Evaluating whether a manufacturer was negligent in failing to warn of a danger also asks whether the manufacturer‘s conduct was reasonable. Woodill v. Parke Davis & Co., 402 N.E.2d 194, 197 (Ill. 1980).
It is true that “[n]o duty to warn exists where the danger is apparent or open and obvious.” Sollami v. Eaton, 772 N.E.2d 215, 219 (Ill. 2002). Whether the danger was open or obvious can be a question of law in a case in which the factual record is undisputed or, instead, a question of fact if there are factual disagreements. See Klen
The Defendants highlight that S&C Electric had no hand in designing or fabricating the three-legged stanchion that contributed to the accident. Caterpillar‘s Resp. to Mot. to Remand at 11–12. Instead, the Defendants emphasize that S&C Electric‘s instruction manual detailed four different installation methods, none of which involved a three-legged stanchion. Id. at 11. The Defendants also contend that “putting a heavy cabinet on the precarious three-legged stanchion” was an open and obvious danger for which S&C Electric had no duty to warn. Id. at 13. And even if S&C Electric did owe a duty to warn, the Defendants argue that warnings were provided that (1) only a qualified person should install or maintain the enclosure; and (2) the enclosure should be secured to a wall or post. Id. at 13–14; R. 1-1, Exh. A, State Court Record at 56, 62, 85.
But Perry persuasively points to other characteristics about the enclosure that might not make the danger obvious or the warnings adequate, so she has some reasonable possibility of winning. For example, Perry highlights that the voltage enclosure had threaded holes that were conducive to being attached to a stanchion, and she emphasizes that the instructions did not warn that the four suggested installation methods represented an exhaustive list of the only safe possibilities. R. 35, Pl.‘s
Based on these plausible theories, Perry‘s complaint likely would survive a motion to dismiss. But the Court need not decide that (the state court should be the one to do so), because when evaluating fraudulent joinder, the plaintiff is held to a lower threshold of plausibility than for a motion to dismiss. See Schur, 577 F.3d at 764. Here, there are factual ambiguities about the design of the enclosure and what was apparent to the accident victim. Those facts require more development of the record. And there are no clear question-of-law answers on whether, based on the enclosure‘s design and instructions, a duty to warn was owed by S&C Electric. Resolving those ambiguities in Perry‘s favor, as required at this stage, the claims against S&C Electric are not “utterly groundless,” Walton, 643 F.3d at 999. So the Defendants have failed to meet their “heavy burden,” Morris, 718 F.3d at 666 (cleaned up), to show fraudulent joinder.
IV. Conclusion
S&C Electric was not fraudulently joined as a defendant. Thus, because S&C Electric is at home in Illinois, the forum-defendant rule bars the Defendants from removing this case to federal court.
ENTERED:
s/Edmond E. Chang
Honorable Edmond E. Chang
United States District Judge
DATE: August 5, 2026