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FRAUDULENT JOINDER PREVENTION ACT OF 2015 

HEARING 

BEFORE THE

SUBCOMMITTEE ON THE CONSTITUTION 

AND CIVIL JUSTICE 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

ON

H.R. 3624 

SEPTEMBER 29, 2015 

Serial No. 114–44 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 
(II) 

COMMITTEE ON THE JUDICIARY 

BOB GOODLATTE, Virginia, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

LAMAR S. SMITH, Texas 

STEVE CHABOT, Ohio 

DARRELL E. ISSA, California 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

RAU ́ L LABRADOR, Idaho 

BLAKE FARENTHOLD, Texas 

DOUG COLLINS, Georgia 

RON DeSANTIS, Florida 

MIMI WALTERS, California 

KEN BUCK, Colorado 

JOHN RATCLIFFE, Texas 

DAVE TROTT, Michigan 

MIKE BISHOP, Michigan 

JOHN CONYERS, JR., Michigan 

JERROLD NADLER, New York 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO R. PIERLUISI, Puerto Rico 

JUDY CHU, California 

TED DEUTCH, Florida 

LUIS V. GUTIERREZ, Illinois 

KAREN BASS, California 

CEDRIC RICHMOND, Louisiana 

SUZAN DelBENE, Washington 

HAKEEM JEFFRIES, New York 

DAVID N. CICILLINE, Rhode Island 

SCOTT PETERS, California 

SHELLEY HUSBAND, Chief of Staff & General Counsel 

PERRY APELBAUM, Minority Staff Director & Chief Counsel 

SUBCOMMITTEE ON THE CONSTITUTION AND CIVIL JUSTICE

TRENT FRANKS, Arizona, Chairman 

RON DeSANTIS, Florida, Vice-Chairman 

STEVE KING, Iowa 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

STEVE COHEN, Tennessee 

JERROLD NADLER, New York 

TED DEUTCH, Florida 

PAUL B. TAYLOR, Chief Counsel 

JAMES J. PARK, Minority Counsel 
(III) 

C O N T E N T S 

SEPTEMBER 29, 2015 

Page 

THE BILL 

H.R. 3624, the ‘‘Fraudulent Joinder Prevention Act of 2015’’ .............................. 3 

OPENING STATEMENTS 

The Honorable Trent Franks, a Representative in Congress from the State 

of Arizona, and Chairman, Subcommittee on the Constitution and Civil 

Justice ................................................................................................................... 1 

The Honorable Steve Cohen, a Representative in Congress from the State 

of Tennessee, and Ranking Member, Subcommittee on the Constitution 

and Civil Justice ................................................................................................... 5 

The Honorable Bob Goodlatte, a Representative in Congress from the State 

of Virginia, and Chairman, Committee on the Judiciary ................................. 6 

The Honorable John Conyers, Jr., a Representative in Congress from the 

State of Michigan, and Ranking Member, Committee on the Judiciary ......... 8 

WITNESSES 

Elizabeth Milito, Senior Executive Counsel, NFIB Small Business Legal Center 

Oral Testimony ..................................................................................................... 10 

Prepared Statement ............................................................................................. 12 

Lonny Hoffman, Professor, University of Houston Law Center 

Oral Testimony ..................................................................................................... 19 

Prepared Statement ............................................................................................. 21 

Cary Silverman, Partner, Shook Hardy & Bacon L.L.P 

Oral Testimony ..................................................................................................... 34 

Prepared Statement ............................................................................................. 36 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Response to Questions for the Record from Cary Silverman, Partner, Shook 

Hardy & Bacon L.L.P .......................................................................................... 56 

Prepared Statement of Arthur D. Hellman, Professor, Sally Ann Semenko 

Endowed Chair, University of Pittsburgh School of Law ................................. 62 

(1) 

FRAUDULENT JOINDER PREVENTION ACT 

OF 2015 

TUESDAY, SEPTEMBER 29, 2015 

HOUSE OF REPRESENTATIVES

SUBCOMMITTEE ON THE CONSTITUTION

AND CIVIL JUSTICE

COMMITTEE ON THE JUDICIARY

Washington, DC. 

The Subcommittee met, pursuant to call, at 11:35 a.m., in room 

2237, Rayburn Office Building, the Honorable Trent Franks (Chairman of the Subcommittee) presiding. 

Present: Representatives Franks, Goodlatte, King, Cohen, and 

Conyers. 

Staff present: (Majority) Zachary Somers, Counsel; Tricia White, 

Clerk; (Minority) James Park, Minority Counsel; and Veronica 

Eligan, Professional Staff Member. 

Mr. FRANKS. The Subcommittee on the Constitution and Civil 

Justice will come to order. Without objection, the Chair is authorized to declare recesses of the Committee at any time. 

We call today’s hearing in order to consider the Fraudulent Joinder Prevention Act. This is legislation aimed at addressing an obstacle to the removal of civil litigation from state court to Federal 

court in diversity jurisdiction cases. 

I want to thank Representative Ken Buck, a Member of the Judiciary Committee, for introducing this legislation. 

Federal diversity jurisdiction exists when the plaintiff and the 

defendants to a lawsuit are from different states. According to the 

Supreme Court, ‘‘The Constitution has presumed, whether rightly 

or wrongly, that state attachments, state prejudices, state 

jealousies, and state interests might sometimes obstruct or control 

the regular administration of justice.’’ Thus, the Constitution’s 

framers created diversity jurisdiction to preserve national harmony 

and promote interstate commerce by ensuring that a lawsuit involving citizens of different states could be litigated in a presumably neutral Federal court rather than in a possibly biased state 

court. 

In general, under Federal diversity jurisdiction, if a plaintiff from 

one state files a lawsuit against a defendant from another state in 

state court, the defendant may have that litigation moved from 

state court to Federal court. However, for more than a century, 

plaintiffs have attempted to defeat removal in these cases by join-
2 

ing an in-state defendant with no real connection to the underlying 

claim. 

In response to these attempts to wrongfully deprive defendants 

of their right to have their cases heard in Federal court, the Supreme Court developed the fraudulent joinder doctrine. But the Supreme Court has not clarified or elaborated on the doctrine since 

the early 1900’s, nor has Congress stepped in to statutorily fill the 

void. This lack of guidance from the Supreme Court and Congress 

has led to poorly defined standards and inconsistent interpretations and application of the fraudulent joinder doctrine in the lower 

Federal courts. 

For instance, some Federal judges require a showing that there 

is no possibility of recovery against a local defendant in order to 

keep the case in a Federal court. Others require an even more difficult showing that the claim be wholly insubstantial or frivolous. 

Still other justices or judges insist that a defendant demonstrate 

that there is an obvious failure to a state claim against the defendant. 

All of these approaches and the others that are used are difficult 

to meet. In fact, current law is so heavily weighted against defendants that Federal Appeals Judge J. Harvie Wilkinson recently observed in support of congressional action to change the standards 

for joinder that, ‘‘There is a problem with fraudulent jurisdiction 

law as it exists today, and that is that you have to establish that 

the joinder of a non-diverse defendant is totally ridiculous, and that 

there is no possibility of ever recovering. That is a sham. That is 

corrupt. That is very hard to do. The problem is the bar is so terribly high.’’ 

To make the law more fair, the Fraudulent Joinder Prevention 

Act makes a modest change to existing law to ensure that defendants who are entitled to a Federal forum do not have their cases 

sent back to state court based on unreasonable or inconsistent 

standards. To accomplish this, the bill simply adds two additional 

sentences to the statute governing removal. Embodied in these sentences are two basic concepts: first, that Federal courts should 

evaluate fraudulent joinder under one uniform standard, namely 

whether the plaintiff states a ‘‘plausible claim for relief’’ against 

the non-diverse defendant; and second, that the Federal courts are 

permitted to look at evidence submitted by both the plaintiff and 

the defendants in making this determination. 

This legislation will improve the administration of justice in the 

Federal courts, and it will especially help small local businesses 

and their owners and employees who are currently unfairly pooled 

into costly lawsuits by trial lawyers simply to keep cases in state 

court. 

Small businesses are already over-burdened by litigation as it is. 

They should not be further weighed down by cases to which they 

have no real connection simply so that an enterprising attorney can 

game the system. 

I look forward to the witnesses’ testimony and any comments and 

suggestions they may have with regard to this legislation. 

Now I would recognize the Ranking Member for his statement. 

[The bill, H.R. 3624, follows:] 
3 
4 
5 

Mr. COHEN. Thank you, Mr. Chair. 

Well, you can’t claim that this Committee just deals with political issues. We don’t get into all those meaty things like Planned 

Parenthood. We take those straight to the floor. We deal with these 

issues that really can bore the viewing audience to death. 

Thank you. 

H.R. 3624, the Fraudulent Joinder Prevention Act of 2015, not 

even an acronym, could more properly be named the Corporate Defendant Forum Shopping Act, because it does that as well. It facilitates that in substance. 

If enacted, this bill could deny plaintiffs the right to pursue state 

law claims in state court and instead allow defendants to choose 

where the plaintiffs’ claims are heard. Plaintiff would not have the 

option of choosing their court. The bill upends a century—a century; that is a long time—of legal doctrine governing how Federal 

court decides whether to remand a case that was removed by an 

out-of-state defendant on diversity grounds and where there is at 

least one in-state defendant in the case. 

Specifically, this bill would require a court to deny a motion to 

remand where the plaintiff cannot show that the addition of an instate defendant to a case is based on a plausible state law claim 

against the in-state defendant or that the plaintiff has a good-faith 

intention to pursue such a claim against the in-state defendant or 

to seek a joint judgment. The bill also allows a court to consider 

affidavits or other evidence in making its determination. The bill 

raises a number of concerns. 

Firstly, there is no evidence that Federal courts have failed to 

properly address fraudulent joinders. For 100 years, the Federal 

courts have applied the doctrine of fraudulent joinder, which is an 

exception to the requirement to complete diversity. Under this doctrine, a Federal court may retain jurisdiction based on diversity of 

citizenship, even when a complaint names an in-state defendant if 

an out-of-state defendant shows that there is no possibility that the 

plaintiff would be able to establish a state law claim against the 

in-state defendant in state court. 

The party trying to remove the case to Federal court, the out-ofstate defendant, has the burden of proving that Federal diversity 

jurisdiction is proper. While the standard has been articulated differently by different courts, they all embody the same basic principle, that as long as there is any basis for pursuing a claim 

against an in-state defendant, the Federal court must remand the 

case to state court, kind of an interesting thing. Normally, some 

folks on this Committee think that the states should come first, 

that states’ rights—that things are ruled better at the local level 

and the state level. Not in this particular situation, because business is involved, and they prefer that the businesses have the option of getting it out of state court and into Federal court. 

This standard is in keeping with the longstanding judicial recognition that constitutionally, Federal courts are courts of limited 

jurisdiction and should therefore construe removal statutes strictly 

and narrowly, something you would think would be liked by this 

Committee. 

Tellingly, the Supreme Court has not appeared to consider it a 

problem that different courts articulate the doctrine of fraudulent 
6 

joinder differently, nor has it found it a problem with the way the 

courts have been applying the doctrine to address improper joinder. 

In short, after a century of application, the court has not deemed 

it necessary to alter the way the Federal courts deal with fraudulent joinder. 

Secondly, by requiring litigation on the merits at a nascent stage 

of litigation, the bill will increase the complexity and costs surrounding remand motions, dissuading plaintiffs from pursuing meritorious claims, and add cost to our Federal budget, something that 

our children and grandchildren will have to pay for. That is a 

quote. 

H.R. 3624 shifts the burden of proof from defendants to plaintiffs 

in removal cases based on diversity grounds. It also requires the 

application of vague and undefined standards, which invites further litigation over the meaning and scope of those standards. For 

instance, what constitutes a plausible claim is not simply self-evident. We know this because courts have been struggling to apply 

the plausibility standard with respect to pleadings in Federal 

courts after the Ashcroft v. Iqbal decision applied such a standard 

to pleadings under the Federal Rules of Procedure 8. That decision 

has produced a substantial amount of litigation and has led to increased uncertainty, complexity, and litigation costs. 

There is no reason to think the same thing will not happen once 

such a plausibility standard is imported into the remand context, 

as H.R. 3624 proposes to do. Similarly, the bill’s required inquiry 

into a plaintiff’s subjective good-faith intention will result in increased litigation as the bill does not define the phrase ‘‘good faith 

intention,’’ and is not used anywhere in Title 28. The increase in 

cost and complexity would not only drain limited resources of plaintiffs but would also burden already strained Federal judicial resources. 

Finally, this bill offends federalism by denying state courts the 

ability to shape state law. State courts are the final authority on 

state procedural and substance law, and state law claims ought to 

be left to state courts except in narrow circumstances. This bill 

would further deny state courts that authority by making it easier 

for Federal courts to retain jurisdiction where only state law claims 

are at issue. 

H.R. 3624 represents just the latest in a long line of attempts to 

deny plaintiffs access to state courts and to extend inappropriately 

the reach of Federal courts into state law matters. But it is good 

that we are not—what is it?—the hobgoblin of simple minds? Consistency. We are not in those terms. We get out of that, so that is 

a wonderful thing. For those reasons, I oppose the bill. 

Mr. FRANKS. And I thank the gentleman. 

And I now recognize the distinguished Chairman of the full Committee, Mr. Goodlatte, for 5 minutes. 

Mr. GOODLATTE. Thank you, Mr. Chairman. 

America’s small businesses are some of the leading victims of 

frivolous lawsuits and the extraordinary costs that our legal system 

imposes. Everyday local business owners have lawsuits filed 

against them based on claims for which they are ultimately not responsible. These lawsuits impose a tremendous burden on small 
7 

businesses and on our economy as a whole, as America’s small 

businesses are major drivers of the U.S. economy. 

Just 2 weeks ago the House passed the Lawsuit Abuse Reduction 

Act to help rein in frivolous lawsuits. Enactment of that legislation 

will help eliminate some of the abuses that exist in the Federal 

legal system that harm small businesses in particular. 

The bill we are examining today, the Fraudulent Joinder Prevention Act, will also help address a litigation abuse that regularly 

drags small businesses into court to answer for claims to which 

they have no real connection. 

In order to avoid the jurisdiction of the Federal courts, plaintiffs’ 

attorneys regularly join in-state defendants to the lawsuits they file 

in state court even if the in-state defendants’ connections to the 

controversy are minimal or non-existent. Typically, the fraudulently joined in-state defendant is a small business or the owner or 

employee of a small business. Ultimately, these in-state defendants 

may not face any liability as a result of being named as a defendant, but that does not prevent them from having to spend money 

to hire a lawyer and taking valuable time away from running their 

businesses to deal with matters related to a lawsuit. 

Plaintiffs’ attorneys join these basically unconnected in-state defendants to their lawsuits because the current rules for determining whether fraudulent joinder has occurred provide little disincentive to adding an in-state defendant, no matter how frivolous 

the claim is against that defendant. In fact, the system actually encourages plaintiffs to fight to get their cases sent back to state 

court once they are removed to Federal court by providing that 

plaintiffs may have their attorneys’ fees reimbursed if a case is remanded back to state court. 

The Fraudulent Joinder Prevention Act attempts to bring some 

balance to a Federal court’s determination over whether a case that 

has been removed from state to Federal court should remain in 

Federal court. It does this by making a modest change to the statute that governs the fraudulent joinder determination. The change 

is modest because it merely requires Federal judges to apply concepts to the fraudulent joinder determination that they already regularly use in other areas of the law. 

The bill provides that the standard judges are to use in determining whether a defendant has been fraudulently joined is whether the plaintiff states a plausible claim for relief against an in-state 

defendant. This plausible claim for relief standard is already used 

by Federal judges in determining whether to grant motions to dismiss. 

Additionally, the bill allows judges to determine whether the 

claims against an in-state defendant were made in good faith. 

Again, judges are already asked in other areas of the law to examine a party’s good or bad faith. 

Nothing in this bill forces a judge to decide issues in favor of a 

defendant or creates a new standard that Federal judges and litigants are not already familiar with. 

I look forward to the witnesses’ testimony on this commonsense 

legislative proposal and any suggestions they may have for ways 

this legislation can be improved. 
8 

Finally, I want to thank Representative Buck for introducing this 

bill to help level the playing field for defendants when questions regarding fraudulent joinder arise. 

And I yield back. 

Mr. FRANKS. And I thank the gentleman. 

I would now yield to the Ranking Member of the Committee, Mr. 

Conyers from Michigan. 

Mr. CONYERS. I want to thank the Chairman and welcome all the 

witnesses. 

As with the Class Action Fairness Act, once again we consider 

legislation really designed to deny access to justice for potentially 

millions of plaintiffs seeking relief under state law in state court. 

This so-called Fraudulent Joinder Prevention Act would flip on 

its head the century-old standard governing when a Federal court 

must remand cases alleging only state law claims back to state 

court where there is at least one in-state defendant in the case. 

Specifically, we amend in this bill Section 1447(c) of Title 28 to require a Federal court, when considering a motion for remand in a 

case that was removed from a state court to Federal court on diversity grounds, where there is also an in-state defendant, to deny 

such remand motion if the plaintiff has not demonstrated that 

there is a ‘‘plausible claim for relief against’’ an in-state defendant 

or that the plaintiff had a good-faith intention to prosecute the action against each in-state defendant, or to seek a joint judgment. 

There are three problems raised with the measure before us. 

The first, of course, is that the bill attempts to solve a non-existent problem. The doctrine of fraudulent joinder which Federal 

courts have been applying, as has been already remarked, for more 

than a century governs when a Federal court may ignore, for the 

purpose of retaining jurisdiction, an in-state defendant in a state 

law case that has been removed to Federal court solely on diversity 

grounds. 

The bill’s proponents claim that this legislation is necessary because the fraudulent joinder doctrine has been articulated differently by different courts, yet these are basically distinctions 

without a difference. All courts must consider whether there is 

some basis in law and fact for a plaintiff to pursue a claim against 

an in-state defendant. If there is, then the Federal court must remand the case back to state court. 

If uniformity were truly the concern of the bill’s proponents, the 

legislation would simply pick one of the existing articulations of the 

fraudulent joinder standard and codify it into law. Instead, it is 

clear from the bill’s radical changes to longstanding jurisdictional 

practice that the true purpose of this measure is simply to stifle 

the ability of plaintiffs to have their choice of forum, and possibly 

even their day in court. 

In addition, the bill would sharply increase the cost of litigation 

for plaintiffs and increase the resource burdens on Federal courts. 

The bill requires a court to engage in a substantial merits inquiry 

at a case’s initial procedural stage without the benefit of any substantial discovery. This requirement would undoubtedly generate 

more uncertainty, more costs, more unnecessary complexity at such 

an early stage of the litigation. 
9 

Moreover, the bill shifts the burden of proof on a motion to remand from the defendant to the plaintiff, even though it is the defendant that is seeking the remand. 

The bill also applies a vague, open-ended plausible claim standard. What constitutes a plausible claim is an open question in the 

remand context and would necessarily require substantial litigation 

and the corresponding development of a substantial body of case 

law. 

Similarly, the bill invites substantial litigation by requiring a 

showing of the plaintiff’s subjective good-faith intention to pursue 

a claim against an in-state defendant. Like ‘‘plausibility,’’ the bill 

does not define the term ‘‘good-faith intention,’’ and such a phrase 

is not used anywhere else in Title 28, where the bill’s amendments 

would be codified. 

All of this will have the cumulative effect of sharply increasing 

litigation costs for plaintiffs, possibly to the point where those with 

meritorious claims could be dissuaded from even filing suit, and it 

will strain the already limited resources of the Federal judiciary. 

And finally, the amendments made by this bill would raise fundamental federalism concerns. Removal of a state court case to 

Federal court always implicates federalism concerns. That is why 

the Federal courts generally disfavor Federal jurisdiction and read 

removal statutes narrowly. By applying a sweeping and vaguely 

worded new standard to the determination of when a state court 

may be removed to Federal court, the bill will deny state courts the 

ability to decide and ultimately to shape state law. 

As with many similar measures, this bill violates our fundamental constitutional structure by intruding deeply into state sovereignty. So I accordingly look forward to hearing the views of our 

witnesses today with respect to my concerns, and I thank the 

Chair. 

Mr. FRANKS. And I thank the gentleman. 

Without further objection, other Members’ opening statements 

will be made part of the record. 

I will now introduce our witnesses. 

Our first witness is Elizabeth Milito. Ms. Milito served as Senior 

Executive Counsel with the National Federation of Independent 

Business Small Business Legal Center, a position that she has held 

since March of 2004. She is responsible for managing cases and 

legal work for the Small Business Legal Center and has testified 

before Congress on numerous occasions on the impact regulations 

in the civil justice system have on small business. Ms. Milito previously worked as a trial attorney and has an extensive background 

in tort, medical malpractice, employment, and labor law. 

Welcome. 

Our second witness is Lonny Hoffman. Professor Hoffman is the 

Associate Dean and Law Foundation Professor at the University of 

Houston Law Center. He is a specialist on procedural law in Federal courts and state courts and has authored numerous Law Review articles. Professor Hoffman has testified before Congress and 

lectured around the world on civil litigation subjects. He is a member of the Supreme Court of Texas’ Rules Advisory Committee and 

Editor-in-Chief of The Advocate, a quarterly journal published by 

the Litigation Section of the State Bar of Texas. 
10 

Welcome, sir. 

Our final witness is Cary Silverman, a partner at the law firm 

Shook, Hardy & Bacon in Washington, D.C. Mr. Silverman’s public 

policy work focuses on civil justice reform, and he has published 

over 25 articles in prominent law journals. He regularly authors 

amicus briefs on behalf of national business, trade, and other advocacy groups in cases before the U.S. Supreme Court and state high 

courts. Mr. Silverman has testified before Congress and most state 

legislatures, and is an adjunct professor at the George Washington 

University Law School. 

Now, each of the witnesses’ written statements will be entered 

into the record in its entirety, and I would ask that each of you 

summarize your testimony in 5 minutes or less. To help you stay 

within that time, there is a timing light in front of you. The light 

will switch from green to yellow, indicating that you have 1 minute 

to conclude your testimony. When the light turns red, it indicates 

that the witness’ 5 minutes has expired. 

So before I recognize the witnesses, it is the tradition of the Subcommittee that they be sworn. So, if you would please stand and 

be sworn? 

Do you solemnly swear that the testimony that you are about to 

give will be the truth, the whole truth, and nothing but the truth, 

so help you God? 

Please be seated. 

Let the record reflect that the witnesses answered in the affirmative. 

I now recognize our first witness, Ms. Milito, and if you would 

make sure that microphone is turned on. Thank you, ma’am. 

TESTIMONY OF ELIZABETH MILITO, SENIOR EXECUTIVE 

COUNSEL, NFIB SMALL BUSINESS LEGAL CENTER 

Ms. MILITO. Thank you, Chairman Franks, Ranking Member 

Cohen, and distinguished Committee Members. I am happy to appear here today on behalf of the National Federation of Independent Business, which represents more small businesses than 

any other organization. Because litigation entails angst and great 

expense for small businesses, NFIB is pleased to see this Committee’s attention focused on the issue of fraudulent joinder. 

Fraudulent joinder remains a source of confusion and unnecessary litigation in our courts, and impacts far too many innocent 

small businesses. The situation unfolds as follows. Plaintiff’s attorneys will name a small business such as a local pharmacy or insurance agent with little connection to the complaint in order to deny 

the Federal courts of jurisdiction. In many instances, the plaintiff 

has no intention of imposing liability on the fraudulently joined 

party. 

With courts divided over the standard for finding that a defendant is fraudulently joined, the small business is forced to engage 

in protracted litigation when all they want is to be dismissed from 

the case entirely. Public policy should encourage plaintiffs’ attorneys to prudently assess the viability of their clients’ potential 

claims before initiating a lawsuit and discourage plaintiffs from 

taking unfounded or improvidently cavalier positions. Along these 

lines, we should aim to create strong disincentives against naming 
11 

a small business as a defendant in a case where the claim against 

the business is particularly weak. 

This is especially so where the plaintiff’s apparent motive in 

naming the defendant is to use the defendant as a body shield 

against invocation of Federal jurisdiction, or what is also referred 

to as fraudulent joinder. 

But unfortunately, as the law currently stands, plaintiffs actually 

have a perverse incentive to bring weak or attenuated claims 

against small business defendants for the sake of defeating Federal 

jurisdiction. Given the tremendous costs of litigation and the inevitable risk that a plaintiff might prevail if the case goes before a 

sympathetic jury or an errant judge, we must also address the reality that small business defendants are rationally discouraged 

from vindicating their rights, and so long as this remains true, 

plaintiffs’ attorneys will inevitably waive the benefit of pursuing a 

questionable defendant as outweighing the risks. 

Accordingly, NFIB supports the Fraudulent Joinder Prevention 

Act, which would provide greater clarity in the law on removal, and 

reduce litigation. It would accomplish these things by requiring 

that a Federal court considering a motion for remand determine 

whether the complaint states a plausible claim for relief against 

the non-diverse defendant. This language would eliminate the current legal standards that strongly favor plaintiffs’ motions for remand. The court would also consider whether the plaintiff has a 

good-faith intention to prosecute the action against the non-diverse 

defendant or to seek judgment against the non-diverse defendant. 

This bill is straightforward and offers a simple and commonsense 

fix for a problem that has generated much confusion and unnecessary litigation in Federal courts at the expense of small businesses. 

On behalf of America’s small business owners, I thank this Subcommittee for holding this hearing and inviting me to testify. I am 

happy to answer your questions. 

[The prepared statement of Ms. Milito follows:] 
12 
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16 
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Mr. FRANKS. Thank you, Ms. Milito. 

And I would now recognize our second witness, Mr. Hoffman. 

If you would make sure that microphone is on. 

TESTIMONY OF LONNY HOFFMAN, PROFESSOR, 

UNIVERSITY OF HOUSTON LAW CENTER 

Mr. HOFFMAN. Chairman Franks and Ranking Member Cohen, 

thank you for inviting me to testify today. I have three brief but 

important points I want to make that I hope everyone on the Committee will consider as they are considering this legislation. I hope 

in particular proponents of the bill will consider them seriously. 

First, as Representatives Cohen and Conyers have already pointed out, there is no need for this bill. Fraudulent joinder law is well 

settled. But I want to expand on that point a bit further. 

Under fraudulent joinder law today, while it is certainly true 

that the defendant has a heavy burden to meet to show that fraudulent joinder exists, which is as it should be, that burden is hardly 

insurmountable. For every story of a non-diverse defendant found 

to have been properly joined, I can cite an equal number where the 

court found the plaintiff’s claim had no reasonable basis under the 

substantive law. This makes a couple of things clear, and the first 

I think is that we should be wary against legislating by anecdote. 

It also suggests that for those who support the bill, their real 

beef isn’t with fraudulent joinder law or with the way that judges 

apply it. Instead, it is with the substantive law itself that this Congress and state legislatures have enacted to protect citizens. Courts 

find fraudulent joinder when the substantive law allows recovery, 

they find joinder proper, and they find fraudulent joinder when it 

does not. There is no need to change fraudulent joinder law. If opponents are unhappy with the substantive law, then that is what 

they need to be talking about. 

Of course, they are not because they know there is not a lot of 

political support for taking away substantive rights. So it turns out 

to be much easier to talk about technical procedural reform. 

Which brings me to the second point I want to make. Whatever 

one thinks about current law, this bill would not achieve the uniformity that is supposedly desired. One problem is, as noted earlier, the bill would force courts to determine what the word ‘‘plausible’’ means. This is very hard to do, and we already know this. 

We don’t have to guess because of the Supreme Court’s plausibility 

cases, the Bell Atlantic v. Twombly case in 2007, and the Ashcroft 

v. Iqbal case in 2009. These cases have spawned decisions from the 

lower courts almost too numerous to count. Do you know that last 

week the count on Iqbal was that there were 85,000 cases that it 

cited? It had become the number-one most cited case in the history 

of all cases being cited, and that is in less than 6 years. The recordholder that it replaced had held that position, but it took it 25 

years to get there, the Anderson v. Liberty Lobby case. And this 

deluge of cases applying the Court’s ambiguous plausibility test 

hasn’t brought uniformity to pleading law. Instead, what counts as 

plausible varies, often greatly, from circuit to circuit. 

In addition to having to figure out what ‘‘plausible’’ means, 

courts would also have to determine what the plaintiff’s good faith 

was. But how in the world is a district judge to figure out the 
20 

plaintiff’s good or bad faith only 30 days after a lawsuit has been 

filed, which is when the remand hearing typically takes place? 

Like plausibility, this good-faith requirement is certain to lead to 

years of litigation, which is only going to make litigation more expensive, as Representative Cohen has already pointed out, for everyone, though I would highlight in particular for plaintiffs. 

Which brings me to the third and final point I want to make. 

Though the bill is only a page-and-a-half long, there should be no 

misunderstanding that the proposed amendments would dramatically alter existing law. All other subject-matter jurisdiction doctrines that exist today, all others, recognize that any merits inquiry 

at the jurisdictional stage should be limited. 

For example, to show that a plaintiff hasn’t met the minimum 

amount in controversy, the defendant bears a heavy burden of 

showing ‘‘to a legal certainty’’ that the claim is really for less than 

$75,000. This same approach is taken with regard to Federal question jurisdiction. Only a showing by the defendant that the plaintiff’s claim is ‘‘wholly insubstantial and frivolous’’ will dismissal be 

warranted. Thus, jurisdictional law consistently recognizes that 

judges are ill-equipped to conduct the kind of exhaustive merits inquiries at the very outset of a case that this bill would urge before 

there has been an opportunity for the facts to come out through 

discovery. 

So, in sum, this legislative body should recognize, I hope, the collective judicial wisdom that fraudulent joinder law reflects and resist legislating technical procedural reforms. Instead, I want to 

submit, it should recall the advice given by a former Solicitor General who, when testifying against a bill a few years ago that would 

have reversed the courts’ plausibility decisions, the Twombly and 

the Iqbal decisions I mentioned earlier, advised that legislators 

should ‘‘leave procedure to the rulemakers.’’ That is what General 

Garre told the Senate Judiciary Committee, and I submit that that 

advice is worth remembering today. 

Thank you, Chairman. 

[The prepared statement of Mr. Hoffman follows:] 
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Mr. FRANKS. And I thank the gentleman. 

And we will now recognize our third witness, Mr. Silverman. 

TESTIMONY OF CARY SILVERMAN, PARTNER, 

SHOOK HARDY & BACON L.L.P 

Mr. SILVERMAN. Thank you, Mr. Chairman, Ranking Member 

Cohen, and distinguished Members of the Subcommittee. I appreciate the opportunity to testify today on behalf of the U.S. Chamber 

and the Institute for Legal Reform. 

The current process by which courts decide fraudulent joinder is 

in need for reform. The doctrine is intended to secure the Constitution’s promise of a neutral Federal forum in lawsuits involving citizens of different states. Instead, it routinely allows for manipulation and gamesmanship. Such lawsuits have a toll on people who 

are sued solely to keep a case in state court. It also deprives litigants of an impartial forum, sending cases to local courts where 

the deck may be stacked against them. And, for the Judiciary, it 

has resulted in confusion and unnecessary litigation. 

Let me briefly explain how this works. Plaintiffs’ lawyers typically want to litigate their cases in state court. That is understandable. They have an advantage there. They are likely familiar with 

the judges and the trial court’s local procedures. And as the Founders recognized, there is a danger that local courts may inherently 

favor local plaintiffs, and that remains as true today as it did then. 

As you explained, Mr. Chairman, when each of the defendants is 

from a state different from each of the plaintiffs, there is complete 

diversity. A defendant can then remove the case from state to Federal court. It is easy, however, for a plaintiff’s lawyer to destroy 

complete diversity. All he needs to do is name a local person or a 

business as a defendant, one from the same state as the plaintiff. 

The plaintiff typically has no intention of actually litigating that 

claim or seeking a judgment against that person when its remand 

of that person will likely be dismissed. The only reason that the 

person is included is to block the Federal court from hearing the 

case. 

As my prepared testimony shows, this tactic often involves naming people such as local managers, salespeople, insurance claims 

adjusters, or others who are not typically personally liable as a defendant when the real target is their employer. It involves naming 

local retailers, often family businesses that have nothing to do with 

how a product was designed, when the real product was the manufacturer. It involves naming local pharmacies that may have sold 

a drug but had no involvement in developing its labeling or warnings, when the real target is the pharmaceutical maker. 

Fraudulent joinder provides Federal courts with the ability to ignore the presence of a local defendant when it is named in a lawsuit only to defeat Federal jurisdiction. There are two problems, 

however, with how courts evaluate fraudulent joinder which brings 

us to this bill today. 

The first is that Federal courts are all over the map as to how 

they decide it. My prepared testimony outlines five different approaches courts have taken. There is the ‘‘no possibility of a claim 

or recovery’’ approach, which is what one Federal circuit refers to 

as the ‘‘no glimmer of hope’’ standard. There is the ‘‘wholly and 
35 

substantial and frivolous’’ approach, which seems akin to Federal 

Rule 11, also an extremely high standard. There are some courts 

that consider whether there is an obvious failure to state a claim. 

There are others that consider whether there is a reasonable basis 

for the claim, or a reasonable possibility of success. Other courts 

simply consider whether the plaintiff does indeed state a claim, 

taking an approach similar to an ordinary motion to dismiss, and 

that which is provided in the bill. 

The courts also significantly vary on the evidence they will consider, and if they will consider at all whether the plaintiff has a 

good-faith intent to seek a judgment against a local defendant. 

So the first problem is confusion in the law. The second is that 

these standards range from nearly impossible to very difficult to 

meet. This is the case even when the claim against a local defendant is extraordinarily weak. 

The Fraudulent Joinder Prevention Act will help bring clarity to 

the law, reduce gamesmanship and litigation, and preserve access 

to a neutral Federal forum. The bill does so by adopting a uniform 

approach, requiring a plaintiff to state a plausible claim against 

the local defendant. This is a standard regularly applied by Federal 

courts when deciding a motion to dismiss. It is a modest tweak to 

the standard for fraudulent joinder. It does not expand diversity jurisdiction. It is balanced. A plaintiff still gets the benefit of the 

doubt. Nor does it dictate any results or tilt a judge’s discretion on 

removal one way or the other. Rather, the bill will clarify that 

judges have broad discretion to consider evidence when deciding 

fraudulent joinder such as affidavits submitted by either party, or 

whether there is a good-faith intent to seek recovery from the local 

defendant. 

The result will be a more realistic assessment of whether a plaintiff has stated a viable claim against a local defendant and intends 

to pursue a judgment against that person. Plaintiffs with legitimate claims against a local defendant will be able to litigate in 

state court, and out-of-state defendants that show there is no viable claim against the local defendant will be able to have the lawsuit decided in a neutral Federal forum. 

Thank you again for holding this hearing and inviting me to testify today. I welcome your questions. 

[The prepared statement of Mr. Silverman follows:] 
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Mr. FRANKS. Thank you, Mr. Silverman. 

Thank you all for your testimony. 

We will now proceed under the 5-minute rule. I will begin by recognizing myself for my 5 minutes. 

My first question is to you, Ms. Milito. In his written testimony, 

Professor Hoffman discusses the cost he argues this bill may impose upon plaintiffs and the courts. Could you please elaborate further on the very real costs that the current fraudulent joinder 

standard imposes on American small businesses? 

Ms. MILITO. Yes. Thank you very much for that question. In my 

remarks I noted that litigation brings great angst and expense to 

small business owners. In my time at NFIB, which is now well over 

10 years, I talk with business owners too often who are named as 

a defendant in a lawsuit, and my discussions with them mirror the 

findings that the Small Business Administration found in the study 

they conducted a few years ago to determine what is the real impact of litigation on small businesses, and they found there are 

really four things. There is financial expense. There is an emotional expense. There are changes to how a business operates, including a wariness, unfortunately, that develops with their customers, and I find this when I talk with business owners too. It is 

who do we trust anymore? Are they going to target us? Who are 

the customers that I can trust there, too? And then the final thing, 

and this is a very real concern with small businesses in this day 

and age of social media, is damage to the business’ reputation, and 

that goes back too to the financial cost, but it is kind of a separate 

thing too. There is real damage to a business’ reputation when they 

are named as a defendant in litigation alongside of, say, a big pharmaceutical company, and then you have the local drugstore named 

too. It makes the papers, and that is a real concern for small business owners. 

Thank you. 

Mr. FRANKS. Thank you. 

Mr. Silverman, in his testimony Professor Hoffman asserts that 

fraudulent joinder law is applied uniformly, with some minor 

variances based on semantics. Do you agree with that, that the 

standard Federal judges apply to decide the fraudulent joinder 

question is uniform across the Federal courts, and that any difference between the standard applied is merely semantics? 

Mr. SILVERMAN. Mr. Chairman, I would respectfully disagree. 

What I have seen in my research is that even within a Federal circuit, the standard varies significantly from case to case. Even as 

many courts seem to follow the ‘‘no possibility of a claim’’ approach, 

those same courts go on to define that possibility very differently, 

whether it is a reasonable possibility, absolutely no possibility, or 

no glimmer of hope, and some are looking at it in the plain way 

of whether there is actually a claim at all. 

I don’t think it is just semantics. I think there is a great amount 

of variation that leads, I think the evidence shows, to different results. My prepared testimony cites at least three Law Review articles that recognize these significant variations and that they are a 

problem. 
49 

I also believe that Professor Arthur Hellman of the University of 

Pittsburgh School of Law submitted prepared testimony that 

agrees with that assessment. 

Mr. FRANKS. Well, let me follow up. The Fraudulent Joinder Prevention Act essentially makes three changes regarding the Federal 

courts’ fraudulent joinder determination. Number one, it permits 

judges to look at affidavits and other evidence. It creates a uniform 

plausible claims standard. And it requires that plaintiffs act in 

good faith when joining defendants to their lawsuits. Do these 

three changes create new legal concepts, or are they all based on 

concepts that Federal judges are familiar with? 

Mr. SILVERMAN. All of these concepts are firmly rooted in U.S. 

Supreme Court jurisprudence, some of which goes back 100 years. 

These are concepts from existing law. 

First, as to the plausibility standard, as we have discussed today, 

this is the same standard that Federal courts now routinely apply 

to determine whether the complaint states a viable claim when 

there is a motion to dismiss. It is a standard set by the U.S. Supreme Court that is now well understood and every day is being 

applied in cases. It doesn’t surprise me, as the Professor has stated, 

that there are 85,000 cases citing this case because it comes up 

every single time there is a motion to dismiss, and courts know 

what to do with it. 

As to the affidavits and other evidence, this is more a clarification or codification of existing law than a change. Most courts are 

already considering these materials when deciding fraudulent joinder. 

With respect to good faith, the Supreme Court has said, in cases 

dating back to 1921 and 1931, that courts, when deciding fraudulent joinder, can look at the good faith in bringing a claim against 

that local defendant and seeking a judgment. This would just codify that and clarify that it applies, because not all courts are looking at it. 

Mr. FRANKS. Well, thank you, Mr. Silverman. 

I am now going to recognize the Ranking Member for 5 minutes 

for his questions. 

Mr. COHEN. Thank you, Mr. Chairman. 

Professor Hoffman, you teach at the University of Houston Law 

School? 

Mr. HOFFMAN. I do. I have recently stepped down as the Associate Dean, so I should clarify the Chairman’s remarks, a happy 

change. I am no longer the Associate Dean, and now I get to return 

to my regular life and not take care of everybody else’s. 

Mr. COHEN. You are the John Boehner of Houston, yes. 

When you go back to your class, what will you tell them about 

this hearing and the law that we discussed and the reasons why 

you even think this came to a hearing in the United States Congress? 

Mr. HOFFMAN. So, the issues that we talk about are exactly the 

issues that we talk about every day in my course, subject matter 

removal, pleading standards. I mean, every one of these we either 

have talked about or are on the syllabus to talk about. This is very 

familiar law. 
50 

As I tried to indicate in my remarks specifically on fraudulent 

joinder in terms of how old it is, courts have been applying it for 

a long time, and with thousands of cases it should come as no surprise that there are variances in language. I quote a Fifth Circuit 

case, for instance, that even goes out of its way to point out that 

just within that one circuit some of the courts say ‘‘no possibility,’’ 

as Mr. Silverman pointed out, and others say things like ‘‘no reasonable basis’’ or ‘‘no reasonable possibility.’’ And then the Fifth 

Circuit goes on to say those standards are interchangeable. 

So maybe the thing to really drive home here is the same thing 

I drive home with my students, which is that procedure drives 

many outcomes in cases, sometimes positively, sometimes negatively. The concern that we should always have whenever we reform procedure or try to think about making reforms is whether in 

doing so we are changing the balance of power in some way that 

makes it harder. What I fear is that in a circumstance like this 

where the real issue is the substantive law, as I indicated earlier, 

that we are really focused in the wrong place. 

And again, just to make one other point about that to make sure 

that point is clear, regardless of what the semantic standard is, 

Representative Cohen, with fraudulent joinder, what really happens is that when courts find that the substantive law provides a 

right for relief, they find there is no fraudulent joinder and they 

send it back. And conversely, when they find that there is no reasonable chance of recovery because the law doesn’t provide a right 

to recover, they find appropriately that fraudulent joinder has occurred. So the action is in the substantive law. If you were to read 

100 cases, I would submit that—I don’t want to say 100 out of 100, 

but almost all of them are going to break exactly as I say. 

So it raises a nice lesson for students that procedure, unfortunately or fortunately, can be important because of the power that 

goes in and goes behind a lot of these procedural rules. 

Mr. COHEN. Thank you. 

Ms. Milito, if you were a student in Professor Hoffman’s class, 

what would you ask him about this? And when he explains that 

there is really no need for change in the law, that this is all based 

on the substantive law, then why would there even be a need to 

have this law to help small business? 

Ms. MILITO. I would ask him about, if you will, vindicating the 

rights of these small business owners, the defendants in the case, 

who are, as I have been told by a member, wrongly accused in an 

action, and how can we more efficiently get to that ‘‘no reasonable 

chance of recovery’’ finding? Is there a way that we can get to the 

finding that Professor Hoffman just referred to quicker and in a 

more efficient manner in our courts without getting to discovery? 

Because there is one thing you learn in civil procedure: discovery 

can go on for a long time, and it can be very expensive. And the 

small business owners who I hear from who believe they are 

wrongly accused don’t want to get to that stage of litigation. They 

want to get out. So that would be my question to the professor. 

Mr. COHEN. And, Professor, would you respond to her now? 

Mr. HOFFMAN. So, obviously, I don’t agree with the substance, 

but I thought she said it very well, and if you were in my class I 

would have given you an A. 
51 

Mr. COHEN. Mr. Silverman said that there are a whole lot of differences in the different districts on this issue. Aren’t there are a 

lot of differences in districts on other issues as well? 

Mr. HOFFMAN. Certainly, and again—— 

Mr. COHEN. How do those normally get resolved? 

Mr. HOFFMAN. The cases percolate through the system. Eventually, enough of them make it to the circuit courts, to the intermediate courts of appeals. Sometimes there is agreement within 

those courts, sometimes there isn’t. When there isn’t, once in a blue 

moon the Supreme Court uses one of its very, very few—it only 

hears about 70 cases a year nowadays, so it can’t resolve all these 

issues, but occasionally it does. 

I mean, plausibility is a good example of that. I mean, this notion 

that we are doing it a lot, and therefore we know what we are 

doing, really I think, respectfully, misses the mark. If you think 

about it, even if we don’t engage in an empirical debate about what 

is or isn’t going on in the lower courts, just look at the word ‘‘plausible.’’ I mean, what does it mean for something to be plausible? 

Again, going back to my class, I can tell you that if my students 

were here to testify, they would tell you that they are utterly baffled by what this standard is that the Court has announced, and 

it really got announced out of whole cloth. I mean, the test that 

Twombly announced in 2007 was essentially a brand-new test, and 

certainly as a matter of pleading standards was new, and the 

courts are struggling to figure this out. There isn’t any reason to 

think that for plausibility, as well as for this business about good 

faith, that it would come out any differently if we were to incorporate it into remand law. 

And, by the way, just one other point about good faith. You 

know, there is a nice lesson here. In 2011, Congress passed the 

JVCA, the Jurisdiction and Venue Clarification Act, and one of the 

changes that it made, an interesting point of comparison here, is 

they amended 1446. It used to be that a defendant could only remove a diversity case if it was within 1 year of when it had been 

commenced. But then there were some plaintiffs who once in a 

while played games and maybe would dismiss the non-diverse defendant 366 days later. 

So the law got amended to say you could look at the plaintiff’s 

bad faith after the case had been on file for a year, bad faith in 

keeping the case from being removed, and the Congress amended 

the law to put bad faith in there, but it is after a year has gone 

by. In other words, it gives the district judge a chance to sit back 

and say has the plaintiff been pursuing discovery equally against 

the non-diverse and diverse defendant? If they haven’t, if they have 

basically been ignoring the non-diverse defendant, it is some pretty 

good evidence that maybe they aren’t really targeting them. 

But what this bill does is it says, literally in the first inning of 

the game, but even before the inning has ended, 30 days into the 

case, the district judge is supposed to figure out what good faith 

the plaintiff had, and that isn’t a standard that we know, and it 

is one that I submit is going to cause a great deal of confusion. 

Mr. COHEN. Well, thank you for your testimony, and in spite of 

that fact I am still going to hope that Greg Ward has a bad game 

when he plays Memphis. [Laughter.] 
52 

Mr. HOFFMAN. So noted. 

Mr. FRANKS. I thank the gentleman, and I now yield to the gentleman from Iowa for his questions. 

Mr. KING. Thank you, Mr. Chairman. I appreciate being recognized. I appreciate the testimony of the witnesses and the trouble 

you take to help inform this Congress. 

As I listened to the testimony here this morning, I have a couple 

of questions along the way I would direct first to Mr. Hoffman. As 

I listened to your testimony, one of the points you made is that we 

need to be aware of legislating by anecdote. It is one of my concerns, too. When I was first elected to state office, I fell prey to that 

myself. And when it was pointed out to me that you can’t fix every 

problem by legislation, it was one of the few times that I heard 

someone say something that immediately changed my mind on the 

spot. So, that matters. 

However, you also mentioned that you could show as many cases 

on the opposite side of this argument. So anecdote matched up 

against anecdote, where is the preponderance of the anecdotes, in 

your opinion? 

Mr. HOFFMAN. So, I think it is right, and I am glad you asked 

me that question. The standard is a high standard, so it is certainly more often the case, and depending on the circuit sometimes 

much more often the case, that a defendant, a non-diverse defendant who has been named is found not to have been fraudulently 

joined, and so the motion to remand is granted. 

My point is to say it is a big litigation system. It is a big country. 

We have lots of cases, and I have no doubt that there are cases 

where judges have made a mistake on one side. My point is only 

that there are just as many, and I am happy to give examples. But 

again to your point, there is a danger if we focus only on the examples. 

Mr. KING. I think instead I would go this way with it, that we 

are talking about justice here on the Judiciary Committee, and 

when we talk about justice, it is not something we do away with 

as far as the preponderance of the anecdotes that we have. It 

should be what is the best thing we can do to bring out the maximum amount of justice and equity, and I am one of those people 

who forbids my staff to use the word ‘‘fair,’’ which I didn’t notice 

anybody using this morning, because you can’t define that. It has 

multiple utilizations and code, but there is no consistent definition 

of ‘‘fair.’’ So we should be providing justice and equity. 

What provides justice and equity? The other two witnesses would 

argue this bill does. You argue that it is too complex and we should 

trust the collective judicial wisdom. That is a little bit harder to 

swallow here in the aftermath of some of the Supreme Court decisions that have come down lately, the collective judicial wisdom. 

But I would just make the point that I don’t hear anyone testifying that there is any reservation about Congress’ constitutional 

authority to write these regulations. There is no one among the 

panel that would make that case, is there? 

Mr. HOFFMAN. No. The only point, to the extent that I have made 

one, Representative King, in my written testimony—I didn’t say 

anything today—is I think there are concerns about the Federalism 

issues because of the nature of what happens. But I want to be 
53 

clear in that I don’t think there is, for example, an Article 3 issue 

involved here as kind of the scope of—— 

Mr. KING. Okay, and that was my point. I just wanted to establish that. We don’t have a disagreement on Article 3 authority. 

Mr. HOFFMAN. We do not. 

Mr. KING. And I certainly agree. But you made another point 

about the definition of the word ‘‘plausible,’’ that it is not defined. 

So isn’t it true that under current practice, then, ‘‘plausible’’ is defined by each judge? That would be some of the essence of your testimony, as I understand. 

Mr. HOFFMAN. It is. The only thing I will add is, in reference to 

your last remarks, despite perhaps your fear of the collective judicial wisdom, the Supreme Court in both Twombly and Iqbal advised us that plausibility is determined by a judge’s judicial wisdom and common sense. 

Mr. KING. Which means they know it when they see it. 

Mr. HOFFMAN. So perhaps proponents of the bill should 

pause—— 

Mr. KING. I think you get my point on that, Mr. Hoffman. 

[Laughter.] 

Let me make another point, then, while we have an opportunity 

here. I have with me a quote from Fourth Circuit Judge J. Harvie 

Wilkinson, which you are apparently familiar with. He recently observed this with regard to the joinder issue: ‘‘There is a problem 

with fraudulent jurisdiction law as it exists today, and that is that 

you have to establish that the joinder of a non-diverse defendant 

is totally ridiculous and that there is no possibility of ever recovering, that it is a sham, that it is corrupt. That is very hard to do. 

The problem is the bar is so terribly high.’’ 

Don’t we have the presumption in favor of the fraudulent defendants that would join this, and isn’t the burden too high? You said 

it is complex, and there are anecdotes on either side of this. But 

in the end, if we are after justice and equity and it gets to be a 

burden to litigate through that, the argument to simplify our system doesn’t argue necessarily in favor of justice. Would you agree 

with that? 

Mr. HOFFMAN. Thank you for your question. Let me see if I can 

try to answer it this way. 

First of all, in terms of Judge Wilkinson’s remarks, I don’t know 

when they were made, whether he was speaking to a Federalist Society group or whether he was—I suspect it is not from a judicial 

opinion. Obviously, we know there are many, many judicial opinions. I just don’t know, so I can’t speak to it. 

In terms of the substantive part of your question, Representative 

King, my answer to you I think, and I will try to be very brief on 

this, is really to track what I said before. To the extent that there 

is an issue, and I submit there isn’t, but to the extent the Committee or proponents think there is an issue, the issue doesn’t lie 

with fraudulent joinder law or with how judges are applying it in 

their particular places, but rather it is with the substantive law. 

And again, what I meant by that, to expound that point, regardless 

of how the standard is, whether it is no possibility or reasonable 

possibility, whatever it is for figuring out whether a defendant has 
54 

been improperly joined, the cases turn almost exclusively on this 

question of whether or not the law allows recovery. 

This is not to legislate by anecdote, but I will just give you one 

example to try to put some meat on the bones of what I am trying 

to say. So, there was a case out of Mississippi just a couple of years 

ago where there was a woman who was in a nursing home and terrible things happened to her. She was deprived of water, she had 

multiple falls and bruises. 

So anyway, she ends up suing the nursing home, and she also 

sues the administrators, the folks who are running the home. They 

are, of course, the non-diverse defendants. So the administrators 

bring a motion saying—you know, they remove it, and in response 

to the motion to remand, they say we were fraudulently joined. 

Their argument is they say we can’t be held liable unless we actually were the ones who physically touched, physically injured the 

plaintiff. 

What the court ends up ruling is that under Mississippi law, 

physical injury is not the only requirement for holding a supervisor 

liable. So the point is, to the extent there is an issue, they may 

have a beef with Mississippi law—maybe it goes too far, maybe it 

doesn’t—but it is not a fraudulent joinder issue. 

Mr. KING. Well, I am not disagreeing with the point that is in 

the heart of that. I am recognizing that the clock has wound down. 

I have other curiosities about this I will seek to examine, but I 

want to thank all the witnesses and the Chairman and yield back 

the balance of my time. 

Mr. FRANKS. I thank the gentleman. 

I suppose when it comes to plausibility, we can explain it to the 

judges, but perhaps we can’t understand it for them as well. 

This concludes today’s hearing. Thanks to all of our witnesses for 

attending. 

Without objection, all Members will have 5 legislative days to 

submit additional written questions for the witnesses or additional 

materials for the record. 

And again, I thank the witnesses, I thank the Members, and I 

thank the audience. 

This hearing is adjourned. 

[Whereupon, at 12:35 p.m., the Subcommittee was adjourned.] 
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