MEMORANDUM OPINION AND ORDER
I. Procedural Background
The complaint at bar was initially filed on February 10, 1999 in New York Supreme Court, alleging that plaintiff suffered personal injury as the result of exposure to asbestos. On September 1, 1999, Atlas Turner, Inc., one of the many defendants, filed a notice of removal to this Court asserting two independent grounds for removal: (1) diversity of citizenship and (2) Atlas Turner’s status as a “foreign state” within the meaning of the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1603(a). The first ground implicates 28 U.S.C. § 1441(a), which allows the removal of actions over which district courts have original jurisdiction. In asserting the latter ground, Atlas Turner, once owned by an arm of the Canadian government, implicitly invokes the provisions of 28 U.S.C. § 1441(d), which allows the removal of “[a]ny civil action brought in a State court against a foreign state as defined in § 1603(a)”.
On October 14, 1999, plaintiff moved to remand this case to New York Supreme Court chiefly on the basis of lack of subject matter jurisdiction. 1 Plaintiff argues that (1) diversity jurisdiction does not lie because plaintiff and one of the defendants, Georgia Pacific, are both citizens of Georgia; (2) removal on the basis of diversity was prohibited in any event by 28 U.S.C. § 1441(b) because at least one of the defendants, Rapid-American Corporation, is a New York corporation; and (3) jurisdiction is not furnished by the FSIA because Atlas Turner did not have the status of a foreign state either at the time this lawsuit was filed or at the time the underlying events occurred.
While the remand motion was
sub judi-ce,
the Judicial Panel on Multidistrict Litigation (the “MDL Panel”) transferred this
II. Removal Standards
Pursuant to the federal removal statute, a case originally filed in state court may be removed to federal court if it presents a claim over which the federal court has original jurisdiction or a claim against a “foreign state” as defined in the FSIA.
See
28 U.S.C. § 1441(a), (d). The statute permits a plaintiff, if so advised, to seek remand of the case to state court on the ground that subject matter jurisdiction does not exist or because of a defect in the removal procedure. 28 U.S.C. § 1447(c). In resolving a motion to remand, courts must be mindful of considerations of federalism and the limited jurisdiction conferred on subject matter jurisdiction courts and should “strictly construe[ ]” the federal removal statute, resolving all doubts “in favor of remand.”
Miller v. First Security Investments, Inc.,
As noted, defendant Atlas Turner identified two alternate bases for removal in its notice: its “foreign state” status as conferred by the FSIA and diversity of citizenship. If this Court has jurisdiction on either ground, removal was proper. Plaintiff argues that neither ground furnishes the requisite jurisdiction over this case. To determine whether remand is necessary, I will consider whether Atlas Turner has established original jurisdiction under the FSIA, and if not, whether complete diversity nonetheless rendered the removal valid.
III. “Foreign State”
Pursuant to the FSIA, this Court has original jurisdiction over civil actions filed against a “foreign state.” 28 U.S.C. § 1330(a). As defined by that statute, a “foreign state” includes an “agency or instrumentality” of a foreign state, which in turn includes an entity a majority of whose shares are owned by a foreign state or a political subdivision thereof. 28 U.S.C. § 1603(a), (b). It is common ground that from 1980 to 1989, Atlas Turner was owned by Societe Nationale de l’Amiante, an arm of the Canadian government. Thus there does not appear to be any dispute that between 1980 and 1989 Atlas Turner was a “foreign state” within the meaning of the FSIA. The instant debate instead centers upon whether Atlas Turner was a “foreign state” during a time that is relevant to the underlying claims at bar.
The controlling time period for purposes of assessing whether a defendant is entitled to invoke the FSIA has not yet been determined by the Second Circuit, and the issue is unsettled in other circuits as well. The few circuits' that have resolved the question have reached two different conclusions. The Ninth Circuit has suggested that the defendant’s status as an agency or instrumentality of a foreign government
at the time the lawsuit was filed
is determinative.
See Straub v. A.P. Green, Inc.,
One court in this district has reconciled the two views and concluded that “the correct approach under the FSIA is to ask whether the underlying conduct took place on the foreign state’s watch, even if that state is no longer in control of the party by the time of the lawsuit, or, alternatively, whether the defendant [is] currently a foreign state, regardless of its status at the time of the underlying conduct.”
Belgrade v. Sidex Int'l Furniture Corp.,
Without question Atlas Turner was not a foreign state in 1999 when this lawsuit was filed, having been sold a decade earlier by Societe Nationale de l’Amiante. Thus, if the litmus test is the date of filing, the FSIA would clearly not apply in this case.
Assuming the analysis turns instead on the defendant’s status at the time the underlying events occurred, the question becomes whether the conduct giving rise to Atlas Turner’s alleged liability took place during the time it was owned by the Canadian government — between 1980 and 1989. That particular inquiry is implicated by the provisions in 28 U.S.C. § 1605(a)(2) that § 1604’s general immunity of a foreign state from American jurisdiction (federal or state) does not apply to an action which “is based upon a commercial activity carried on in the United States by the foreign state.” (Emphasis added). The complaint in this case alleges that plaintiff developed the severe malady of mesotheli-oma as a result of her exposure to asbestos both at her home and at her place of work, Café Geiger in New York City. But the complaint is silent as to the dates of her alleged exposure. Pointing to her deposition testimony, however, plaintiff Vasura more precisely identifies the relevant time frame. She avers, consistent with her testimony, that the “installation and exposure to the asbestos-containing products occurred in 1969” during the renovation of Café Geiger. 2 Plaintiffs Reply Brief at ¶ 2. Therefore, contending that the “injurious tort that occurred to [Vasura] transpired in 1969,” plaintiff seeks “leave to amend ¶ 5 of the Complaint to state that Ms. Vasura was exposed to asbestos-containing materials in 1969.” Id. at ¶ 3.
Atlas Turner does not offer any evidence to demonstrate that plaintiffs alleged exposure occurred at any time other than in 1969. Instead, the defendant contends that its liability cannot be circumscribed to 1969, the year of exposure, because the complaint’s broad allegations include charges that beginning in the 1920s and continuing to the present Atlas Turner knew of the dangerousness of asbestos and violated its duty to warn of its dangers. Atlas Turner thus argues that the complaint alleges a continuing violation that encompassed the period it was owned by Societe Nationale de 1’Armante. This argument is unpersuasive. While the knowledge of asbestos’ dangerousness and the duty to warn the plaintiff of that danger
In the case at bar, the deposition testimony, unrefuted by Atlas Turner, narrows the window of plaintiffs exposure to the summer of 1969, when Café Geiger underwent renovations during which plaintiff was present. In order to establish the time frame, plaintiffs counsel has offered to amend the complaint to limit the window of exposure to 1969, thereby precluding plaintiff from arguing that the liability arose in any year thereafter. With the liability so temporally confined, there can be no serious contention that the FSIA applies here. Atlas Turner was not owned by Societe Nationale de l’Amiante during either of the potentially controlling time periods for FSIA purposes. It was not acquired by that entity until eleven years after the exposure allegedly occurred, and was sold ten years before this lawsuit commenced. Given the narrow construction I am admonished to afford the removal statute and resolving all uncertainties in favor of remand, I conclude that Atlas Turner' cannot be regarded as a “foreign state” for purposes of this lawsuit and that there is no basis for the exercise of removal jurisdiction on that ground. 3 As such, the case must be remanded unless I conclude that it was properly removed on the alternative ground of diversity jurisdiction.
IV. Diversity Jurisdiction
A case originally filed in state court may be removed to federal court if the traditional requirements of diversity jurisdiction, complete diversity of citizenship between all the parties and an amount in controversy exceeding $75,000, are satisfied. However, even if the jurisdictional requirements are met, an action is not removable on the basis of diversity unless the defendants overcome an additional hurdle not applicable when a complaint is filed in the first instance in federal court: none of the defendants may be a citizen of the forum state. 28 U.S.C. § 1441(b).
It is well-established that the removability of an action is determined as of the time the notice of removal is filed.
See, e.g.,
14B Charles A. Wright, Arthur R. Miller
&
Edward H. Cooper,
Federal Practice and Procedure: Jurisdiction
§ 3723, at 568-69 (3d ed.1998). Where removal is predicated upon diversity, a case is not removable unless the parties were diverse not only at the time removal is sought but at the time 'the state court complaint was filed.
See, e.g., United Food & Commercial Workers Union,
It is undisputed that the plaintiff in the case at bar is a citizen of the state of Georgia and' that one of the defendants, Georgia Pacific Corporation, is a corporation headquartered in Georgia. The status of both parties as Georgia citizens existed both when the state court complaint was filed and when Atlas Turner filed its notice of removal. Accordingly, it is axiomatic under the governing test that removal on the basis of diversity was improper in this case.
In objecting to remand, however, Atlas Turner notes that complete diversity presently exists in this case because in December 1999, several months after the case was removed, Georgia Pacific was dismissed pursuant to a settlement agreement with plaintiff. 5 Atlas Turner argues that as a result complete diversity among the parties has been achieved and jurisdiction properly exists.
This argument must be rejected. The applicable test is whether diversity jurisdiction existed when the removal petition was filed, not, as Atlas Turner suggests, whether it exists at the time the federal court is considering the motion to remand. It is not relevant in determining the propriety of removal — which is measured as of the date of removal — that diversity was later created by dismissal of the non-diverse defendant. If the removal was not proper in the first instance, the state court was never divested of jurisdiction and the federal court consequently has no jurisdiction to exercise.
See Jackson v. Allen,
This Court knows of no decision addressing the precise question at issue here: whether post-removal dismissal of the only non-diverse defendant renders valid a notice of removal filed on the basis of diversity. However, the Court has found several cases that offer guidance.
Recently, the Supreme Court suggested in
dicta
that remand should be granted on the basis of improper removal in analogous circumstances. In
Caterpillar Inc. v. Lewis,
On appeal, the question the Supreme Court confronted was whether, although removal was improper because diversity did not exist at the time the case was removed, the final judgment could none
The question presented is whether the absence of complete diversity at the time of removal is fatal to federal court adjudication. We hold that a district court’s error in failing to remand a case improperly removed is not fatal to the ensuing adjudication if federal jurisdictional requirements are met at the time judgment is entered.
Id. (emphasis added).
The Court’s precise holding in
Caterpillar
is not relevant to the motion at hand as this case has not reached the stage of
adjudication
and the only consideration is whether remand is required at this preliminary stage. The decision is instructive, however, because of the Supreme Court’s implicit recognition that the district court’s failure to remand a case in which diversity was absent at the time of removal constituted “error”, notwithstanding that the non-diverse defendant was dismissed after removal. While the decision’s particular focus was on the effect of the improvident removal on the resulting judgment, one cannot ignore the Supreme Court’s baseline assumption that in the absence of complete diversity
at the time of removal
the failure to remand was error — even though diversity was later attained. A variation on that unmistakable theme appears later in the
Caterpillar
opinion at
This reading of the case is reinforced by the Court’s discussion of the plaintiffs argument that allowing the judgment to stand would encourage defendants to remove cases prematurely with the knowledge that if diversity were later created the case could validly reach federal resolution. In rejecting that argument, the Court emphasized the existence of the remand rules and expressed the clear expectation that district courts would apply those rules properly so as to avoid repetition of the undesirable circumstances
Caterpillar
involved.
See
The well-advised defendant, we are satisfied, will foresee the likely outcome of an unwarranted removal — a swift, and nonreviewable remand order attended by the displeasure of a district court whose authority has been improperly invoked.
Id. (citation omitted).
The case at bar places me within the universe of displeased judges to which the Court refers in the language just quoted. I am presented with a case in which although diversity was not present at the time of removal, the apparent dismissal of the non-diverse defendant has subsequently rendered the parties diverse. Under the circumstances, despite the present existence of diversity, I am compelled to remand. To allow the case to stay in this Court would validate the plaintiffs expressed concern in
Caterpillar
and in effect require me to create a new, unwarranted and potentially far-reaching exception to the rule that diversity must exist at the time of removal, applying to cases in which diversity is achieved after removal.
6
There is no au
Petrop v. Lassen Art Publications, Inc.,
If one keeps in mind the fundamental precept that removal jurisdiction must be ascertained as of the time of removal, one may fairly derive from these cases the principle that removal on the ground of diversity is not subject to post-hoc justification. In other words, a court cannot test the propriety of removal by ascertaining whether the statutory requirements are met prospectively; “[djevelopments in the lawsuit ... subsequent to removal can not serve to confer federal court jurisdiction if none in fact existed as of the time of removal.”
Wamp v. Chattanooga Housing Authority, 384
F.Supp. 251, 253 (E.D.Tenn.1974) (case remanded after court determined that plaintiffs had no standing to maintain lawsuit in state court and therefore no justiciable controversy conferring federal jurisdiction existed),
aff'd on other grounds,
Atlas Turner has not cited and my own independent research has not discovered, any case that countenances such after the fact validation of removal. Thus, consistent with the principal of narrowly construing the removal statute and heeding the presumption in favor of remand, I conclude that plaintiffs post-removal dismissal of the only non-diverse defendant did not render the removal valid. The case must accordingly be remanded.
Although this conclusion settles the matter, it is worth noting that the removal petition suffered from an additional fatal defect: at least one of the named and served defendants is a New York corporation. As noted, even in the presence of complete diversity among the parties, removal is prohibited if any of the defendants is a citizen of the forum state. Allowing removal in cases involving a local defendant would defeat the purpose of diversity jurisdiction which is to protect out-of-state defendants from local prejudice. See Moore’s § 107[l'4][2][e][i], at 107-62. The presence of a single in-state defendant serves to defeat removal on diversity grounds. Id.
It is undisputed that one of the defendants served in this case, Rapid-American Corporation, is a New York corporation. For this reason, removal was unavailable on the ground of diversity. This would remain true even if, contrary to my conclusion in text, removal on the basis of diversity jurisdiction were regarded as valid because the parties are presently diverse.
Cf. Trask v. Kasenetz,
In order to show that naming a non-diverse defendant is a “fraudulent join-der” effected to defeat diversity, the defendant must demonstrate, by clear and convincing evidence, either that there has been outright fraud committed in the plaintiffs pleadings, or that there is no possibility, based on the pleadings, that a plaintiff can state a cause of action against the non-diverse defendant in state court. The defendant seeking removal bears a heavy burden of proving fraudulent joiner [sic], and all factual and legal issues must be resolved in favor of the plaintiff.
Pampillonia v. RJR Nabisco, Inc.,
Atlas Turner has failed to meet this exacting standard. The complaint broadly alleges that all of the defendants, including Rapid-American, “produced, manufactured, specified, supplied, installed or distributed asbestos and/or asbestos products ... to which the plaintiff was exposed, or was a contractor at a location where the plaintiff was exposed to asbestos, or manufactured, sold and/or installed equipment which had asbestos components or specified such components for operation.... ” See Complaint at ¶¶2-3. Atlas Turner argues that because plaintiff did not identify Rapid-American in her videotaped deposition testimony and because Rapid-American “was a manufacturer of pipe covering, block and cement ... we do not believe that [Rapid-American] is really a party whose products are at issue in this case.” Letter Brief at 2.
Based on the complaint, which is ordinarily what the Court reviews to determine whether fraudulent joinder is at issue,
see Pampillonia,
Assuming
arguendo
that I am permitted to review the extra-pleading submission by Atlas Turner, I conclude that it does not show clearly and convincingly that plaintiff cannot possibly recover against Rapid-American in state court. Although Atlas Turner correctly notes that Rapid-American was not identified in plaintiffs deposition testimony, that omission does not necessarily defeat the possibility of a claim against it. None of the other defendants, with the exception of Armstrong World Industries, Inc., was mentioned by plaintiff in her testimony concerning her exposure to asbestos during the renovations at Café Geiger. If this omission alone were sufficient to preclude a finding of liability undoubtedly Atlas Turner, who also was not mentioned, would press for dismissal of the claim against it as well. Since Atlas Turner does not, its argument that no viable claim exists against Rapid-American must turn on counsel’s assertion that Rapid-American did not manufacture asbestos. This argument suffers from two principle defects. First, Atlas Turner has submitted no evidence in the form of an affidavit or otherwise to show what Rapid-
Resolving all factual and legal issues against Atlas Turner, I conclude that Atlas Turner has not established that there is no possibility of recovery against Rapid-American. Thus even if, contrary to my conclusion supra, the case was properly removed on the basis of diversity, the presence of Rapid-American made removal improvident since Atlas Turner has not shown that it was fraudulently joined as a defendant.
V. Conclusion
For the reasons stated above, I grant plaintiffs request to amend the complaint as proposed, and conclude that the complaint, once amended in accordance with the representation of plaintiffs counsel, does not state a claim against defendant as a “foreign state” and that therefore no grounds exist for removal pursuant to 28 U.S.C. § 1441(d). In addition, because diversity jurisdiction was lacking at the time of removal, I conclude that this case was improvidently removed under 28 U.S.C. § 1441(a). Finally, removal was precluded by 28 U.S.C. § 1441(b).
Accordingly, plaintiffs motion is granted and the case will be remanded to New York Supreme Court pursuant to 28 U.S.C. § 1447(c).
Consistent with the discussion in Part II, supra, plaintiff is directed to file an amended complaint clarifying that plaintiffs alleged exposure occurred at her place of work in 1969, within ten (10) days after the date of issuance of this opinion.
Immediately following plaintiffs filing of the amended complaint, the Clerk of the Court is directed to transmit the file and a copy of this Order to the Clerk of the New York Supreme Court, New York County.
The foregoing is SO ORDERED.
Notes
. Plaintiff also contended that the removal was untimely, a proposition Atlas Turner disputes. In the view I take of the case, I need not reach this issue.
. At the December 14, 1999 motion conference, counsel for plaintiff advised the Court that the complaint’s reference to exposure at plaintiff’s “home” in paragraph 12 was a mistake, apparently resulting from wording left over from a previous unrelated complaint.
. In this regard, it should be noted that plaintiff is considered the master of her complaint, even when it comes to considerations of whether a case must be remanded for lack of jurisdiction.
See
16 Moore’s Federal Practice § 107.14[3][b][ii], at 107.86-86.1 (3d ed. 1999) ("The plaintiff may dismiss the federal claims on removal and then move to remand."); Bur
ns v. Windsor Ins. Co.,
. One exception to this rule applies in circumstances where a plaintiff creates diversity by its voluntarily dismissal of a non-diverse defendant after the initial state court complaint
. While counsel for plaintiff agrees that Georgia Pacific was "let out” of the case in December 1999, see Affidavit of Mark Bibro, Esq. dated February 7, 2000 at ¶ 6, the court docket does not reflect any formal dismissal.
. I note that there is no suggestion here that the "fraudulent joinder” exception to the requirement of complete diversity applies to Georgia Pacific. As discussed in text below, the doctrine of fraudulent joinder allows a federal court to disregard a non-diverse defendant in determining the propriety of removal if it is shown that the plaintiff has joined that non-diverse defendant purely to defeat diversity jurisdiction. Atlas Turner does not argue that Georgia Pacific was an invalid defendant, and in any event the fact
