Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_07-cv-00199/USCOURTS-alsd-1_07-cv-00199-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

WILLIAM UTSEY, et al., )

 )

Plaintiffs, )

 )

v. ) CIVIL ACTION 07-0199-WS-M

 )

NEW ENGLAND MUTUAL LIFE )

INSURANCE COMPANY, et al., )

 )

Defendants. )

ORDER

This matter is before the Court on defendants’ Motion to Defer Ruling on Plaintiffs’

Remand Motion Pending Discovery on Jurisdictional Issues (doc. 10).

On March 15, 2007, defendants removed this action to this District Court from the

Circuit Court of Choctaw County, Alabama. In so doing, defendants predicated federal subject

matter jurisdiction on 28 U.S.C. § 1332, arguing that there was complete diversity of citizenship

and the amount in controversy exceeded $75,000. Defendants’ Notice of Removal (doc. 1)

recognized that defendants Harry C. Thompson, Jr. and Brent Thompson are not of diverse

citizenship to the plaintiffs, inasmuch as both the Thompson defendants and plaintiffs are

citizens of the State of Alabama; nonetheless, defendants maintained that the Thompsons’ nondiverse status did not negate diversity jurisdiction because the Thompsons were fraudulently

joined. Defendants outlined their fraudulent joinder argument in considerable detail over the

course of their 20-page Notice of Removal and 11 supporting exhibits numbering well in excess

of 100 pages.

Three weeks later, on April 4, 2007, plaintiffs filed a Motion to Remand (doc. 9)

contesting defendants’ fraudulent joinder ground for invoking federal jurisdiction. That same

day, defendants countered with a Motion to Defer Ruling on Plaintiffs’ Remand Motion Pending

Discovery on Jurisdictional Issues (doc. 10). Defendants request leave to undertake

jurisdictional discovery, including taking plaintiffs’ depositions and propounding requests for

production of documents; however, they fail to identify any specific topics on which such

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discovery might be appropriate or warranted, make no proffer of the evidence they believe such

discovery may disclose, provide no explanation of how such discovery efforts might disclose

evidence relevant to the fraudulent joinder inquiry, and offer no showing whatsoever of any need

for jurisdictional discovery prior to resolution of the Motion to Remand.

In lieu of making a specific showing that jurisdictional discovery is needed in the specific

circumstances of this litigation, defendants rely exclusively on the well-worn general principle

that parties may submit materials outside the pleadings (such as deposition transcripts, affidavits

and the like) in litigating a fraudulent joinder issue. See, e.g., Legg v. Wyeth, 428 F.3d 1317,

1322-23 (11th Cir. 2005) (recognizing that fraudulent joinder determination is based on pleadings

at time of removal “supplemented by any affidavits and deposition transcripts submitted by the

parties” and that procedure for resolving such a claim “is similar to that used for ruling on a

motion for summary judgment”). Defendants would apparently extrapolate from this

uncontroversial, basic principle an unqualified right to conduct extensive, virtually unfettered

discovery in federal court upon request on matters pertaining to the merits of the dispute

antecedent to any ruling on plaintiffs’ Motion to Remand. But none of the authorities on which

defendants rely can support such a broad, open-ended application of jurisdictional discovery. It

is one thing to say, as defendants’ cases do, that materials outside the pleadings should be

considered in ruling on a fraudulent joinder argument. It is quite another to suggest, as

defendants do, that jurisdictional discovery is automatically available whenever fraudulent

joinder questions are in play.

There is no absolute right to conduct jurisdictional discovery; indeed, courts have

routinely denied such requests in the absence of any specific showing by the movant establishing

the need for same. See Kelly v. Syria Shell Petroleum Development B.V., 213 F.3d 841, 855 (5th

Cir. 2000) (district court did not abuse discretion in denying jurisdictional discovery where

movant did not describe the discovery it contended should have been allowed, what facts it

hoped to gain from such discovery, or how it would produce information that would support

jurisdictional allegations); Instabook Corp. v. Instantpublisher.com, 469 F. Supp.2d 1120, 1127

(M.D. Fla. 2006) (denying request for jurisdictional discovery where requesting party “has only

generally requested such discovery, without explaining how such discovery would bolster its

contentions”); Rich v. KIS Cal., Inc., 121 F.R.D. 254, 259 (M.D.N.C. 1988) (district court need

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not permit jurisdictional discovery if such discovery will be a mere “fishing expedition”); Gear,

Inc. v. L.A. Gear California, Inc., 637 F. Supp. 1323, 1328 (S.D.N.Y. 1986) (“Discovery need

not be granted to allow [movant] to engage in an unfounded fishing expedition for jurisdictional

facts”); see generally Posner v. Essex Ins. Co., 178 F.3d 1209, 1214 n.7 (11th Cir. 1999) (no error

by district court in not ordering jurisdictional discovery where party failed to specify what it

thought could or should be discovered).

This Court’s inquiry in determining whether defendants have been fraudulently joined for

jurisdictional purposes is confined to the narrow question of ascertaining whether “there is no

possibility the plaintiff can establish a cause of action against the resident defendant. ... The

defendant must make such a showing by clear and convincing evidence.” Henderson v.

Washington National Ins. Co., 454 F.3d 1278, 1281 (11th Cir. 2006). Defendants have made no

showing that jurisdictional discovery might be beneficial to that endeavor, and have already

submitted 20 pages of legal argument and dozens of pages of exhibits in support of their position

that the Thompsons have been fraudulently joined. Accordingly, they are not entitled to such

preliminary discovery here.

For all of these reasons, the Motion to Defer Ruling on Plaintiffs’ Remand Motion

Pending Discovery on Jurisdictional Issues (doc. 10) is denied. Any party opposing the pending

Motion to Remand must file a response, supported by legal authority as appropriate, on or before

April 20, 2007. Movants will be allowed until April 27, 2007 to file a reply. If the Court

determines that oral argument is necessary, the parties will be notified and a hearing will be

scheduled. Otherwise, the Motion will be taken under submission after April 27, 2007.

DONE and ORDERED this 9th day of April, 2007.

s/ WILLIAM H. STEELE 

UNITED STATES DISTRICT JUDGE

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