59–006 

114TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 114–422 

FRAUDULENT JOINDER PREVENTION ACT OF 2016 

FEBRUARY 16, 2016.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. GOODLATTE, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 3624] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 3624) to amend title 28, United States Code, to prevent 

fraudulent joinder, having considered the same, reports favorably 

thereon with an amendment and recommends that the bill as 

amended do pass. 

CONTENTS 

Page 

The Amendment ...................................................................................................... 2 

Purpose and Summary ............................................................................................ 2 

Background and Need for the Legislation ............................................................. 2 

Hearings ................................................................................................................... 6 

Committee Consideration ........................................................................................ 6 

Committee Votes ...................................................................................................... 6 

Committee Oversight Findings ............................................................................... 7 

New Budget Authority and Tax Expenditures ...................................................... 7 

Congressional Budget Office Cost Estimate .......................................................... 7 

Duplication of Federal Programs ............................................................................ 8 

Disclosure of Directed Rule Makings ..................................................................... 9 

Performance Goals and Objectives ......................................................................... 9 

Advisory on Earmarks ............................................................................................. 9 

Section-by-Section Analysis .................................................................................... 9 

Changes in Existing Law Made by the Bill, as Reported ..................................... 17 

Dissenting Views ..................................................................................................... 18 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
2 

The Amendment 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Fraudulent Joinder Prevention Act of 2016’’. 

SEC. 2. PREVENTION OF FRAUDULENT JOINDER. 

Section 1447 of title 28, United States Code, is amended by adding at the end the 

following: 

‘‘(f) FRAUDULENT JOINDER.— 

‘‘(1) This subsection shall apply to any case in which— 

‘‘(A) a civil action is removed solely on the basis of the jurisdiction conferred by section 1332(a); 

‘‘(B) a motion to remand is made on the ground that— 

‘‘(i) one or more defendants are citizens of the same State as one or 

more plaintiffs; or 

‘‘(ii) one or more defendants properly joined and served are citizens 

of the State in which the action was brought; and 

‘‘(C) the motion is opposed on the ground that the joinder of the defendant or defendants described in subparagraph (B) is fraudulent. 

‘‘(2) The joinder of the defendant or defendants described in paragraph (1) (B) 

is fraudulent if the court finds that— 

‘‘(A) there is actual fraud in the pleading of jurisdictional facts; 

‘‘(B) based on the complaint and the materials submitted under paragraph (3), it is not plausible to conclude that applicable State law would 

impose liability on each defendant described in paragraph (1)(B); 

‘‘(C) State or Federal law clearly bars all claims in the complaint against 

all defendants described in paragraph (1)(B); or 

‘‘(D) objective evidence clearly demonstrates that there is no good faith 

intention to prosecute the action against all defendants described in paragraph (1)(B) or to seek a joint judgment. 

‘‘(3) In determining whether to grant or deny a motion under paragraph 

(1)(B), the court may permit the pleadings to be amended, and shall consider 

the pleadings, affidavits, and other evidence submitted by the parties. 

‘‘(4) If the court finds fraudulent joinder under paragraph (2), it shall dismiss 

without prejudice the claims against the defendant or defendants found to have 

been fraudulently joined and shall deny the motion described in paragraph 

(1)(B).’’. 

Purpose and Summary 

Congress has the authority to regulate the jurisdiction of the 

lower Federal courts. As an exercise of that authority, the Fraudulent Joinder Prevention Act establishes a uniform standard for determining whether a defendant has been fraudulently joined to a 

lawsuit in order to defeat Federal diversity jurisdiction. It also 

makes clear that Federal courts may consider evidence outside the 

pleadings when deciding a motion to remand a case that has been 

removed to Federal court, as well as whether the plaintiff has 

shown a good faith intent to pursue a judgment against a non-diverse defendant. 

Background and Need for the Legislation 

The current law of Federal jurisdiction allows trial lawyers to 

keep their cases in state court if they sue a defendant from another 

state, as long as they also sue a local defendant in the state in 

which they are filing the case. Not surprisingly, this body of law 

has been abused by trial lawyers who fraudulently sue local defendants, even though the plaintiff’s claims against those defendants have little or no support in fact or law, because suing them 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
3 

1 Chesapeake & Ohio Ry. Co. v. Cockrell, 232 U.S. 146, 152 (1914). 2 Alabama Great Southern Railway Co. v. Thompson, 200 U.S. 206, 218 (1906). 3 E. Farish Percy, Making a Federal Case of It: Removing Civil Cases to Federal Court Based 

on Fraudulent Joinder, 91 Iowa L. Rev. 189, 206–207 (2005). 4Paul Rosenthal, Improper Joinder: Confronting Plaintiffs’ Attempts to Destroy Federal Subject Matter Jurisdiction, 59 Am. U.L. Rev. 49, 64 (2009). 5Paul Rosenthal, Improper Joinder: Confronting Plaintiffs’ Attempts to Destroy Federal Subject Matter Jurisdiction, 59 Am. U. L. Rev. 49, 73 (2009). 6Peter G. Neiman, Root, Root, Root for the Home Team: Pete Rose, Nominal Parties, and Diversity Jurisdiction, 66 N.Y.U.L. Rev. 148, 156 (1991). 

allows the trial lawyers to keep their case in a preferred state court 

forum. 

If a local defendant has no proper connection to the controversy,1

joinder of that defendant is referred to as ‘‘fraudulent joinder.’’ The 

Supreme Court has recognized, since the early 1900’s, the fraudulent joinder doctrine as an exception to the complete diversity rule. 

The doctrine allows the district court to disregard, for jurisdictional 

purposes, the citizenship of certain nondiverse defendants under 

certain circumstances. The doctrine of fraudulent joinder prevents 

plaintiffs’ ‘‘attempts to wrongfully deprive parties entitled to sue in 

the Federal courts of the protection of their rights in those tribunals.’’ 2 However, despite its importance, the Supreme Court has 

not clarified or elaborated upon the fraudulent joinder doctrine 

since first recognizing it in several cases in the early 1900’s. 

Without guidance from the Supreme Court or Congress on the 

contours of fraudulent joinder, lower Federal courts, as described 

by one commentator, have been forced to grapple ‘‘with several 

issues raised by the doctrine, and in doing so, have created conflicts among the circuits with respect to the standard and procedure used to evaluate allegations of fraudulent joinder.’’ 3 Indeed, 

another commentator has observed that, ‘‘[p]resently, courts take 

divergent approaches when analyzing claims of fraudulent joinder. 

Predicting what test a court will apply to determine fraudulent 

joinder is difficult, as the standards can shift, even within the same 

opinion,’’ 4 and that ‘‘[r]ather than adopting one universal approach, 

courts attempt to discern fraudulent joinder by applying a collection of amorphous approaches.’’ 5 According to another commentator, the present standards are ‘‘poorly defined and thus subject 

to . . . inconsistent interpretation and application.’’ 6 However, one 

aspect is consistent across different applications of the doctrine, 

and that is that in every court, the burden of proving fraudulent 

joinder is one of the heaviest burdens known to civil law. 

Testimony at the hearing on H.R. 3624 made clear that this very 

demanding standard has substantial real-world consequences. 

Plaintiffs’ attorneys have a strong incentive in lawsuits targeting 

out-of-state businesses to name as an additional defendant a local 

individual or business that had only a tangential or peripheral role 

in the case. Doing so allows the plaintiff’s lawyer to litigate the 

case in a state court viewed as favorable to the plaintiff, whether 

due to a perception of bias against out-of-state defendants, procedures that favor plaintiffs, or other advantages. Current fraudulent 

joinder law allows this gamesmanship even when the plaintiff’s 

lawyer can muster only an extremely weak or highly attenuated 

claim against the local defendant. 

To avoid Federal court jurisdiction, plaintiffs’ lawyers have a 

number of go-to local defendants that they name depending on the 

type of lawsuit. In personal injury lawsuits, such as slip-and-fall 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
4 

7 Judge Learned Hand, The Deficiencies of Trials to Reach the Heart of the Matter (1926). 

8See Fraudulent Joinder Prevention Act: Hearing Before the Subcomm. on the Constitution 

& Civil Justice of the House Judiciary Committee, 114th Cong., 1st Sess. at 64 (2015) (statement of Arthur D. Hellman). Professor Hellman added: ‘‘Today the right extends to all cases 

in which all plaintiffs are diverse from all defendants, provided that the amount-in-controversy 

requirement is satisfied and no defendant properly joined and served is a citizen of the forum 

state.’’ Id. n. 6. 

claims, against retailers, hotels, and other national businesses, 

plaintiffs’ lawyers include a local store manager or employee as a 

defendant. In product liability actions, plaintiffs’ lawyers include in 

the lawsuit a local distributor, the neighborhood shop that sold the 

product, or a sales representative. In pharmaceutical litigation, 

plaintiff’s lawyers also name drug stores, pharmacists, or doctors 

as defendants in the complaint. When an automaker is sued, the 

local dealership or repair shop that serviced the vehicle may be 

dragged into court. In insurance coverage disputes, plaintiffs’ lawyers name local claims adjusters even when the adjuster’s only role 

was to assess the damage claimed by the insured. 

In many of these situations, the local defendant, which is often 

an individual or small business, is not subject to liability under applicable state law or has a complete defense under Federal law, or 

the plaintiff’s lawyer has no intention of actually pursuing a judgment against the local defendant. But the test for fraudulent joinder is so demanding that the district court will feel obliged to grant 

the plaintiff’s motion to remand. 

Once the case is remanded to state court, the local defendant will 

often be dropped from the case. By that time, the harm is done. 

Small business owners and other individuals who are named as a 

defendant for an improper reason are forced to incur substantial financial costs in defending their business. They must dedicate their 

time and energy to the case. They must deal with the heavy emotional toll that a wrongful suit may cause. As the great Judge 

Learned Hand wrote, ‘‘I must say that, as a litigant, I should dread 

a lawsuit beyond almost anything short of sickness and death.’’ 7

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 improvident positions. 

H.R. 3624 fosters such a policy, and it does so in way that is consistent with principles of federalism as they have been understood 

since the Founding. The Judiciary Act of 1789 was enacted by a 

Congress whose members included individuals who served in the 

Constitutional Convention. That Act included a provision (§ 12) authorizing removal of cases commenced in state court if the plaintiff 

was a citizen of the forum state and the defendant was a citizen 

of another state. Similar provisions have been included in the Judicial Code ever since. ‘‘Thus, from the beginning of the Nation’s history, a non-citizen [of the forum state] sued in state court by a citizen of the forum state has had the right to remove the case to Federal court, provided that the case satisfied an amount-in-controversy requirement.’’ 8

Today, under section 1441(a) of the Judicial Code, a civil action 

can be removed to Federal court based on diversity of citizenship 

jurisdiction if the suit could have been filed in Federal court by the 

plaintiff. Original jurisdiction, however, is limited by the rule of 

‘‘complete diversity,’’ that is, Federal jurisdiction is unavailable if 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
5 

9See Charles J. Cooper & Howard C. Nielson, Jr., Complete Diversity and the Closing of the 

Federal Courts, 37 Harv. J. L. & Pub. Pol’y 295, 324–325 (2014). The Committee notes there 

are additional policy solutions that could promote access to Federal courts when plaintiff attorneys seek to evade Federal court jurisdiction for cases that are fundamentally interstate in nature. There has been recent commentary from legal scholars and practitioners that the diversity 

statute should be amended to effectuate the original understanding of the Framers of the Constitution. For instance, the aforementioned article in the Harvard Journal of Law and Public 

Policy entitled ‘‘Complete Diversity and the Closing of the Federal Courts’’ argues that ‘‘the statutory requirement of complete diversity of citizenship is not one that the First Congress truly 

intended to impose on Federal jurisdiction in the first place, and it very well may be a requirement that Congress lacked constitutional authority to impose in any event. Yet, the requirement 

has governed diversity jurisdiction throughout our nation’s history, and in recent times it has 

been used by plaintiffs as an instrument to close the Federal courts to the very types of interstate disputes for which the Founders intended to provide a neutral Federal forum.’’ See id. at 

326, available at http://www.harvard-jlpp.com/wp-content/uploads/2014/01/37_1_295_ Cooper_Nielson.pdf. 10For example, in Simpkins v. Southern Wine & Spirits of America, 2010 WL 3155844 (N.D. 

Cal. Aug. 9, 2010), the district court acknowledged that ‘‘the result it [was] compelled to reach 

in light of the very high standard for establishing fraudulent joinder may not further the interests of judicial economy and deterrence of forum shopping.’’ 11See Hearing, supra note 9, at 47 (statement of Cary Silverman) (quoting remarks by Judge 

Wilkinson). 12Martin v. Hunter’s Lessee, 14 U.S. (1 Wheat.) 304, 347 (1816). 

any defendant is a citizen of the same state as any plaintiff. This 

is a court-made rule tracing back to a decision of Chief Justice 

John Marshall—a decision that he is said to have later regretted.9

The fraudulent joinder doctrine was developed by courts as a way 

of limiting the gamesmanship that would otherwise be permitted 

by an unyielding and mechanical application of the rule of complete 

diversity. But current decisional law in all circuits makes it very 

difficult for defendants to counter any but the most blatant manipulation.10

H.R. 3624 addresses the problem by codifying a somewhat more 

robust version of the fraudulent joinder doctrine than the one now 

applied by the lower Federal courts. In particular, the bill expands 

the class of situations in which the citizenship of a local defendant 

can be disregarded in determining whether the case can be removed on the basis of diversity. The bill adopts a uniform approach 

for evaluating fraudulent joinder that will result in a more realistic 

examination of whether a plaintiff has stated a viable claim 

against a local defendant and intends to pursue a judgment against 

that individual or entity. 

The bill will give out-of-state defendants a better opportunity to 

secure the neutral Federal forum that they would be entitled to if 

sued alone. And it will help to protect individuals and small businesses from being dragged into court when their involvement in the 

controversy is peripheral at best. But removal law is otherwise unchanged. 

H.R. 3624 is precisely the kind of remedy urged by one of the 

most respected Federal judges in the country, Judge J. Harvie 

Wilkinson of the Fourth Circuit Court of Appeals.11 It is a narrowly 

targeted legislative response to a very real problem created by current law. 

The Framers included Federal diversity jurisdiction in the Constitution to provide a neutral Federal forum in which interstate 

controversies could be adjudicated. Accordingly, as the Supreme 

Court has held, the Constitution ‘‘presume[s] . . . that state attachments, state prejudices, state jealousies, and state interests, 

might sometimes obstruct, or control, or be supposed to obstruct or 

control, the regular administration of justice.’’ 12 This legislation 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
6 

will help ensure that Congress’s extension of Federal diversity jurisdiction is living up to the Framers’ intentions in a manner fair 

to everyone. 

Hearings 

The Committee’s Subcommittee on Constitution and Civil Justice 

held 1 day of hearings on H.R. 3624, the Fraudulent Joinder Prevention Act, on September 29, 2015. Testimony was received from 

Elizabeth Milito, Senior Executive Counsel, NFIB Small Business 

Legal Center; Cary Silverman, Partner, Shook, Hardy & Bacon 

LLP; and Lonny Hoffman, Professor, University of Houston Law 

Center. 

Committee Consideration 

On February 3, 2016, the Committee met in open session and ordered the bill H.R. 3624 favorably reported with an amendment, by 

a rollcall vote of 13 to 10, a quorum being present. 

Committee Votes 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the following 

rollcall votes occurred during the Committee’s consideration of H.R. 

3624. 

1. H.R. 3624, with an amendment in the nature of a substitute 

that was adopted by voice vote, was reported out. Approved 13 to 

10. 

ROLLCALL NO. 1 

Ayes Nays Present 

Mr. Goodlatte (VA), Chairman ................................. X 

Mr. Sensenbrenner, Jr. (WI) .....................................

Mr. Smith (TX) ..........................................................

Mr. Chabot (OH) ........................................................ X 

Mr. Issa (CA) .............................................................. X 

Mr. Forbes (VA) ......................................................... X 

Mr. King (IA) ............................................................. X 

Mr. Franks (AZ) ......................................................... X 

Mr. Gohmert (TX) ...................................................... X 

Mr. Jordan (OH) ........................................................

Mr. Poe (TX) ...............................................................

Mr. Chaffetz (UT) ...................................................... X 

Mr. Marino (PA) ........................................................ X 

Mr. Gowdy (SC) .........................................................

Mr. Labrador (ID) ......................................................

Mr. Farenthold (TX) ..................................................

Mr. Collins (GA) ........................................................

Mr. DeSantis (FL) .....................................................

Ms. Walters (CA) ....................................................... X 

Mr. Buck (CO) ............................................................ X 

Mr. Ratcliffe (TX) .......................................................

Mr. Trott (MI) ............................................................ X 

Mr. Bishop (MI) ......................................................... X 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
7 

ROLLCALL NO. 1—Continued 

Ayes Nays Present 

Mr. Conyers, Jr. (MI), Ranking Member ................. X 

Mr. Nadler (NY) ......................................................... X 

Ms. Lofgren (CA) .......................................................

Ms. Jackson Lee (TX) ................................................

Mr. Cohen (TN) .......................................................... X 

Mr. Johnson (GA) ...................................................... X 

Mr. Pierluisi (PR) ...................................................... X 

Ms. Chu (CA) ............................................................. X 

Mr. Deutch (FL) .........................................................

Mr. Gutierrez (IL) ......................................................

Ms. Bass (CA) ............................................................

Mr. Richmond (LA) ....................................................

Ms. DelBene (WA) ..................................................... X 

Mr. Jeffries (NY) ........................................................ X 

Mr. Cicilline (RI) ........................................................ X 

Mr. Peters (CA) .......................................................... X 

Total ............................................................. 13 10 

Committee Oversight Findings 

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

New Budget Authority and Tax Expenditures 

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

Congressional Budget Office Cost Estimate 

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, February 16, 2016. 

Hon. BOB GOODLATTE, CHAIRMAN, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3624, the ‘‘Fraudulent 

Joinder Prevention Act of 2016.’’ 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Marin Burnett, who can 

be reached at 226–2860. 

Sincerely, 

KEITH HALL, DIRECTOR. 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
8 

Enclosure 

cc: Honorable John Conyers, Jr. 

Ranking Member 

H.R. 3624—Fraudulent Joinder Prevention Act of 2016. 

As ordered reported by the House Committee on the Judiciary 

on February 3, 2016. 

H.R. 3624 would require Federal courts to deny a motion to 

transfer a case to State court under certain circumstances. The bill 

also would amend the procedures under which Federal courts consider a motion to remove a case to State court by permitting parties to amend their pleadings. 

Under current law, plaintiffs can choose to bring certain claims 

in Federal or State court. In some cases, plaintiffs may view State 

courts as more favorable because of litigation strategy or timing, 

whereas, defendants may view Federal courts as more desirable. In 

such cases, courts must determine which jurisdiction is proper. 

Under H.R. 3624, Federal courts would have to deny a motion to 

transfer if they find that the plaintiff has misrepresented a defendant’s State of citizenship, or made a claim against a specific defendant that is not possible or plausible under State law, or is not made 

in good faith. 

Based on information from the Administrative Office of the U.S. 

Courts, CBO expects that the increase in claims would not have a 

substantial effect on the workload of the Federal courts. Therefore, 

CBO estimates that the additional discretionary costs to implement 

H.R. 3624 would not be significant. 

Because enacting H.R. 3624 would not affect direct spending or 

revenues, pay-as-you-go procedures do not apply. CBO estimates 

that enacting H.R. 3624 would not increase net direct spending or 

on-budget deficits in any of the four consecutive 10-year periods beginning in 2027. 

H.R. 3624 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act. 

The CBO staff contact for this estimate is Marin Burnett. The estimate was approved by H. Samuel Papenfuss, Deputy Assistant 

Director for Budget Analysis. 

Duplication of Federal Programs 

No provision of H.R. 3624 establishes or reauthorizes a program 

of the Federal Government known to be duplicative of another Federal program, a program that was included in any report from the 

Government Accountability Office to Congress pursuant to section 

21 of Public Law 111–139, or a program related to a program identified in the most recent Catalog of Federal Domestic Assistance. 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
9 

Disclosure of Directed Rule Makings 

The Committee estimates that H.R. 3624 specifically directs to be 

completed no specific rule makings within the meaning of 5 U.S.C. 

551. 

Performance Goals and Objectives 

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 3624 is designed 

to prevent the fraudulent joinder of parties to lawsuits. 

Advisory on Earmarks 

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 3624 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(e), 9(f), or 9(g) of Rule XXI. 

Section–by–Section Analysis 

The following discussion describes the bill as reported by the 

Committee. Following the text of the various provisions of the bill 

as reported is some commentary on those provisions. 

Sec. 1. Short title. Section 1 sets forth the short title of the bill 

as the ‘‘Fraudulent Joinder Prevention Act of 2016.’’ 

Sec. 2. Prevention of Fraudulent Joinder. Section 2 contains the 

following provisions: 

‘‘(f) Fraudulent joinder. (1) This subsection shall apply to 

any case in which—(A) a civil action is removed solely on 

the basis of the jurisdiction conferred by section 1332(a); 

and’’ 

Since fraudulent joinder is only a problem in a subclass of cases 

involving diversity of citizenship jurisdiction, this provision makes 

clear that the bill applies only in cases that are removed under the 

general diversity statute, 28 U.S.C. 1332(a), which states as follows: 

(a) The district courts shall have original jurisdiction of all 

civil actions where the matter in controversy exceeds the 

sum or value of $75,000, exclusive of interest and costs, 

and is between—(1) citizens of different States; (2) citizens 

of a State and citizens or subjects of a foreign state, except 

that the district courts shall not have original jurisdiction 

under this subsection of an action between citizens of a 

State and citizens or subjects of a foreign state who are 

lawfully admitted for permanent residence in the United 

States and are domiciled in the same State; (3) citizens of 

different States and in which citizens or subjects of a foreign state are additional parties; and (4) a foreign state, 

defined in section 1603(a) of this title, as plaintiff and citizens of a State or of different States. 

‘‘(B) a motion to remand is made on the ground that—(i) one 

or more defendants are citizens of the same state as one or 

more plaintiffs, or –(ii) one or more defendants properly 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
10 

13 Byrd v. TVI, Inc., 2015 WL 5568454, at *2 (E.D. Mo. Sept. 21, 2015) (emphasis added). Accord, In re Ethicon, Inc., Pelvic Repair Sys. Prods. Liab. Litig., 2013 WL 6710345, at *3 n.2 (S.D. 

W. Va. Dec. 19, 2013) (‘‘In Musewicz, the issue is diversity of citizenship, while in Hammons 

and Delacruz, the issue is the home state defendant rule. However, the fraudulent joinder analysis remains the same in both instances.’’). There are some district court cases on the other side, 

primarily in the Southern District of Illinois. 14See, e.g., Breitweiser v. Chesapeake Energy Corp., 2015 WL 6322625, at *2 (N.D. Tex. Oct. 

20, 2015) (collecting cases and referring to the practice as ‘‘snap removal’’). 

joined and served are citizens of the state in which the action was brought; and’’ 

When a case is removed under 28 U.S.C. § 1332(a), there can be 

many grounds for a motion to remand other than those that implicate the fraudulent joinder doctrine. Some are jurisdictional like 

the amount-in-controversy requirement; others are procedural. If 

even one of those other grounds is well-taken, the case should be 

remanded whether or not the joinder is fraudulent. Paragraph 

(1)(B) specifies that the new provision applies when there is a motion to remand on the ground that the joinder of a co-defendant either destroys complete diversity or violates the forum defendant 

rule of 28 U.S.C. § 1441(b)(2). 

Subparagraph (B)(ii) deals with situations where the objection to 

removal is based on violation of the forum defendant rule. This provision is necessary because courts apply the fraudulent joinder doctrine when a plaintiff who is not a citizen of the forum state names 

a citizen of the forum state as a defendant, implicating 28 U.S.C. 

1441(b)(2), which prohibits removal of a diversity case ‘‘if any of the 

parties in interest properly joined and served as defendants is a citizen of the State in which [the] action is brought.’’ 

District courts apply the fraudulent joinder doctrine to forum defendants in the same way that they do to defendants who share 

citizenship with the plaintiff. As a district court in Missouri observed last year, ‘‘The standards for determining whether a resident defendant is fraudulently joined are the same as the standards for determining whether a diversity-destroying defendant is 

fraudulently joined.’’ 13

Paragraph (1)(B)(ii) codifies this line of cases because it represents sound policy. It would be very confusing to create a situation in which courts apply two different standards to two kinds of 

alleged fraudulent joinder, with a less rigorous standard for determining whether an in-state defendant has been fraudulently joined. 

This would be particularly anomalous in view of the fact that in 

most cases the defendant whose joinder is challenged is both a cocitizen of the plaintiff and a citizen of the forum state. In most instances the plaintiff would raise both objections; it would make no 

sense to apply different standards to each of the two. Nor would 

it make sense to apply different standards depending on which objection the plaintiff chose to raise. 

Paragraph (1)(B)(ii) uses the exact language of § 1441(b)(2), including the limitation to defendants ‘‘properly joined and served.’’ 

This avoids any implication that the provision resolves the ongoing 

dispute in the lower Federal courts over the propriety of removal 

before service of process on resident defendants.14 However, the 

limitation is not included in paragraph (1)(B)(i), because ‘‘a defendant who is a citizen of plaintiff’s state destroys complete diversity, 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
11 

15Jennings-Frye v. NYK Logistics Americas Inc., 2011 WL 642653, at *3 (C.D. Cal. Feb. 1, 

2011) (citing cases). 16The distinction between the two doctrines was helpfully summarized by the court in In re 

Plavix Prod. Liab. & Marketing Litig., 2014 WL 4544089, at *5 (D. N.J. Sept. 12, 2014): 

Fraudulent misjoinder, otherwise known as ‘‘procedural misjoinder’’, occurs when a 

plaintiff attempts to defeat removal by misjoining the unrelated claims of non-diverse 

party plaintiffs against a defendant. Geffen v. Gen. Elec. Co., 575 F.Supp.2d 865, 869 

(N.D. Ohio 2008). While fraudulent joinder tests the viability of the claims against the 

defendant, fraudulent misjoinder tests the procedural basis of a party’s joinder. 17 No inference is intended with respect to the use of a presumption in removal cases not involving fraudulent joinder. See Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547, 

554 (2014) (‘‘We need not here decide whether [a purported ‘‘presumption’’ against removal] is 

proper in mine-run diversity cases.’’). 

regardless of whether that defendant was properly served prior to 

removal.’’ 15

‘‘(C) the motion is opposed on the ground that the joinder 

of the defendants described in paragraph (B) is fraudulent.’’ 

Since fraudulent joinder is only a problem in a subclass of cases 

involving diversity of citizenship jurisdiction, this provision makes 

clear that the bill applies only in cases that are removed under the 

general diversity statute, 28 U.S.C. 1332(a) and where the motion 

to remand is opposed solely on the ground that the joinder of the 

defendants described by paragraph (B) is fraudulent. This provision 

is necessary because it confines the application of the bill to opposition to remand on grounds of fraudulent joinder, which is the subject of the bill. The bill does not apply, for example, to the related 

but distinct doctrine of fraudulent misjoinder.16

‘‘(2) The joinder of the defendant or defendants described in 

paragraph (1)(B) is fraudulent if the court finds that—’’ 

Paragraph (2) sets forth four situations in which a court should 

find joinder to be fraudulent and should, under paragraph (4), deny 

the motion to remand. With the exception of the adoption of a uniform ‘‘plausibility’’ standard in subparagraph (B), paragraph (2) is 

largely a codification of current fraudulent joinder practice. Subparagraph (C) resolves a conflict in the lower courts and makes 

clear that a plainly meritorious affirmative defense, whether under 

state or Federal law, can be the basis for finding fraudulent joinder. 

H.R. 3624 does not alter the burden of proving fraudulent joinder. As uniformly recognized by courts, the removing party must 

show Federal jurisdiction, and in cases covered by H.R. 3624 this 

means showing that the in-state defendant has been fraudulently 

joined. The removing party does this by persuading the court that 

one or more of the criteria set forth in paragraph (2) are satisfied. 

If the removing party establishes this, then the district court must 

deny the motion to remand described in paragraph (1)(B). If the removing party does not carry its burden, then the motion to remand 

must be granted. 

If, however, the removing party carries its burden, no more is required. In particular, the removing party need not overcome any 

‘‘presumption’’ in order to carry its burden.17

‘‘(A) there is actual fraud in the pleading of jurisdictional 

facts;’’ 

Fraudulent joinder requiring denial of a motion to remand is defined by prong (A) as including a situation in which actual fraud— 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
12 

18See, e.g., Boyer Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990); Green v. Amerada 

Hess Corp., 707 F.2d 201, 205 (5th Cir.1983); B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 

(5th Cir.1981)). 19 927 F.Supp.2d 427, 434–35 (E.D. Tex. 2013). 20 385 F.3d 568, 573 (5th Cir. 2004) (en banc). 21Dutcher v. Matheson, 733 F.3d 980, 988 (10th Cir. 2013). 22See, e.g., Paul Rosenthal, Improper Joinder: Confronting Plaintiffs’ Attempts to Destroy Federal Subject Matter Jurisdiction, 59 Am. U. L. Rev. 49, 64 (2009) (‘‘Presently, courts take divergent approaches when analyzing claims of fraudulent joinder. Predicting what test a court will 

apply to determine fraudulent joinder is difficult, as the standards can shift, even within the 

same opinion.’’). 23Florence v. Crescent Resources, LLC, 484 F.3d 1293, 1299 (11th Cir. 2007) (emphasis added). 24See, e.g., Hartley v. CSX Transp., Inc., 187 F.3d 422, 426 (4th Cir. 1999) (finding that the 

‘‘any possibility’’ or ‘‘no possibility’’ standard requires remand if there a ‘‘glimmer of hope’’ for 

the plaintiff). 25 550 U.S. 544 (2007). 

that is, the making of false allegations—exists in the pleading of 

jurisdictional facts. Courts have long recognized actual fraud in the 

pleading of jurisdictional facts as a basis for fraudulent joinder, although it is seldom asserted.18 In Coffman v. Dole Fresh Fruit 

Co.,19 for example, the court defined ‘‘actual fraud’’ as involving 

‘‘false allegations,’’ such as misrepresenting or concealing the citizenship of a party. The bill preserves this basis for finding fraudulent joinder. The bill’s language is taken directly from a two-part 

test articulated by the Fifth Circuit in the leading case of 

Smallwood v. Illinois Central R.R. Co.20 Since then, the same twopart test has been used by many courts to define fraudulent joinder. For example, the Tenth Circuit said in 2013: ‘‘To establish 

[fraudulent] joinder, the removing party must demonstrate either: 

(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the nondiverse party in state court.’’ 21

‘‘(B) based on the complaint and the materials submitted 

under paragraph (3), it is not plausible to conclude that applicable state law would impose liability on each defendant 

described in paragraph (1)(B); or’’ 

Fraudulent joinder requiring denial of a motion to remand is defined in prong (B) as including a situation in which, based on the 

complaint and materials submitted under paragraph (3), it is not 

plausible to conclude, as a legal matter, that applicable state law 

would impose liability on each co-citizen or in-state defendant. 

Prong (B) adopts a single uniform standard in place of the many 

different verbal formulations used by the courts today.22 In particular, prong (B) repudiates the ‘‘any possibility’’ standard adopted 

by some courts. Under that standard, ‘‘if there is any possibility 

that the state law might impose liability on a resident defendant 

under the circumstances alleged in the complaint, the Federal 

court cannot find that joinder of the resident defendant was fraudulent.’’ 23 Some courts have phrased this standard as requiring remand unless there is ‘‘no possibility’’ that the plaintiff can establish 

a claim against an in-state defendant under applicable state law in 

state court or no possibility of recovery by the plaintiff against an 

in-state defendant.24

The term ‘‘plausible’’ is taken from the Supreme Court’s jurisprudence interpreting Rule 8 of the Federal Rules of Civil Procedure, 

and the Court’s decisions provide substantial guidance as to the 

meaning of the term. Initially, in Bell Atlantic Corp. v. Twombly,25

the Court distinguished between plausible claims and claims that 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
13 

26 Id. at 555. 27 556 U.S. 662, 678 (2009). 28Twombly, 550 U.S. at 558 (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 

1106 (7th Cir. 1984)) (emphasis added). 29For cases using the ‘‘reasonable likelihood’’ test in the Rule 8 context, see, e.g., 16630 Southfield Limited Partnership v. Flagstar Bank, F.S.B., 727 F.3d 502, 504 (6th Cir. 2013) (quoting 

Twombly); Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007). 30 Iqbal, 556 U.S. at 778. 31For example, some courts have used ‘‘no reasonable basis’’ interchangeably with ‘‘no possibility of recovery.’’ See, e.g., In re 1994 Exxon Chem. Fire, 558 F.3d 378, 385 (5th Cir. 2009) 

(stating that in the Fifth Circuit the test for fraudulent joinder is ‘‘whether the defendant has 

demonstrated that there is no possibility of recovery by the plaintiff against an in-state defendant, which stated differently means that there is no reasonable basis for the district court to 

predict that the plaintiff might be able to recover against an in-state defendant’’) (quoting 

Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004)). 32Martin H. Redish, ‘‘Pleading, Discovery, and the Federal Rules: Exploring the Foundations 

of Modern Procedure,’’ 64 Fla. L. Rev. 845, 850 (2012). 

are speculative: ‘‘Factual allegations must be enough to raise a 

right to relief above the speculative level.’’ 26 Later, in Ashcroft v. 

Iqbal,27 the Court distinguished between a probability requirement, which is not part of the law, and the plausibility standard: 

‘‘The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.’’ Plausibility thus stands between possibility and probability. 

The Twombly opinion provided further guidance in the course of 

explaining why the Court was adopting the plausibility standard. 

Quoting from an opinion of the Seventh Circuit, the Court said: 

[T]he costs of modern Federal antitrust litigation and the 

increasing caseload of the Federal courts counsel against 

sending the parties into discovery when there is no reasonable likelihood that the plaintiffs can construct a claim 

from the events related in the complaint.28

The ‘‘reasonable likelihood’’ test, which is synonymous with the 

plausibility standard, can readily be adapted to the fraudulent joinder context.29 For challenges to the factual basis of the plaintiff’s 

claim against the co-citizen or in-state defendant, the court would 

look at ‘‘the complaint and [other] materials’’ and determine whether there is a reasonable likelihood that the plaintiff can muster factual support for each element of the state-law claim. This ‘‘demands more than an unadorned, the-defendant-unlawfully-harmedme accusation’’ or ‘‘[t]hreadbare recitals of the elements of a cause 

of action, supported by mere conclusory statements.’’ 30 For legal 

challenges, the court would examine the ‘‘applicable state law’’ and 

determine whether there is a reasonable likelihood that the state 

courts would impose liability under the pleaded facts. 

The ‘‘reasonable likelihood’’ standard is quite different from the 

‘‘reasonable basis’’ and ‘‘reasonable possibility’’ standards used in 

some fraudulent joinder cases.31 ‘‘Reasonable likelihood’’ is another 

way of expressing the concept of plausibility, and that concept is 

drawn from Twombly-Iqbal jurisprudence, not fraudulent joinder 

cases. 

Professor Martin H. Redish, one of the nation’s foremost scholars 

of Federal court jurisdiction, has written that ‘‘the Twombly-Iqbal 

plausibility standard represents the fairest and most efficient resolution of the conflicting interests’’ in the context of pleading.32 It 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
14 

33 Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487 (1941). 34See, e.g., Hornbuckle v. State Farm Lloyds, 385 F.3d 538, 542 (5th Cir. 2004). 35 781 F.3d 693, 705–06 (4th Cir. 2015). 36 In re Briscoe, 448 F.3d 201, 219 (3d Cir. 2006). 37See, e.g., City of Columbus, Ohio v. Sunstar Columbus, Inc., 2015 WL 5775532, at *5 (S.D. 

Ohio Oct. 2, 2015) (‘‘Res judicata and collateral estoppel are affirmative defenses’’ that a court 

may not address when considering fraudulent joinder); Huitron v. U.S. Foods, Inc., 2014 WL 

4215656, at *5 (C.D. Cal. Aug. 25, 2014) (‘‘Consent [is] is an affirmative defense to defamation’’ 

that is ‘‘not considered’’ in the fraudulent joinder inquiry). Some courts have mistakenly applied 

the ‘‘well-pleaded complaint’’ rule—a rule developed for federal-question jurisdiction—in the context of fraudulent joinder. These decisions too should no longer be followed. 38 385 F.3d 568 (5th Cir. 2004) (en banc) (9–7 decision). 39Other flaws are discussed in Case Note, 118 Harv. L. Rev. 1086 (2005). 

will similarly provide a fair and efficient approach in the context 

of fraudulent joinder. 

In most cases, there will be no dispute as to which state’s law 

is the ‘‘applicable state law.’’ If there is a disagreement, the court 

must perform a choice of law analysis. Under the Klaxon rule, a 

Federal court sitting in diversity applies the choice-of-law rules of 

the state in which it sits.33 The ‘‘reasonable likelihood’’ standard 

can be helpful here also. If there is a reasonable likelihood that the 

state court in which the Federal court sits would apply law that 

would impose liability on the co-citizen or in-state defendant, joinder is not fraudulent. 

Applying the plausibility standard to fraudulent joinder does not 

require the court to decide any claims on their merits. Prong (B) 

uses the term ‘‘impose liability on,’’ drawn from fraudulent joinder 

jurisprudence.34 And paragraph (4) makes clear that claims against 

defendants found to have been fraudulently joined must be dismissed without prejudice. 

‘‘(C) State or Federal law clearly bars all claims in the complaint against all defendants described in paragraph (1)(B), 

or’’ 

Fraudulent joinder requiring denial of a motion to remand is defined by prong (C) as including a situation in which state or Federal law clearly bars all claims in the complaint against the nondiverse or in-state defendants. This would occur, for example, 

through the affirmative defenses of statute of limitations expiration, Federal preemption, or state or Federal laws that provide immunity from suit. For example, the Fourth Circuit in Johnson v. 

American Towers, LLC,35 held that the non-diverse defendant was 

fraudulently joined because ‘‘the Communications Act clearly preempts the [plaintiffs’] state-law tort claim against [that defendant] 

as a matter of law.’’ And in the leading case of In re Briscoe, the 

Third Circuit stated: ‘‘Courts have . . . recognized that a statute 

of limitations defense is properly considered in connection with a 

fraudulent joinder inquiry.’’ 36 However, some courts have held that 

affirmative defenses cannot be considered as a basis for finding 

fraudulent joinder; those decisions should no longer be followed.37

Subparagraphs (B) and (C), taken together, abrogate the ‘‘common defense’’ doctrine associated with the Fifth Circuit decision in 

Smallwood v. Illinois Central R. Co.38 Under that doctrine, no matter how clear it is that the plaintiff’s claim against the in-state defendant is barred, the case must be remanded to the state court if 

the same defense also bars the claim against the out-of-state defendant. For reasons given by the dissenting opinions in 

Smallwood, the doctrine is seriously flawed.39 Mandatory language 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
15 

40See Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 98 (1921) (‘‘[T]he joinder was a sham 

and fraudulent—that is, . . . without any purpose to prosecute the cause in good faith against 

the [defendant]’’ and ‘‘with the purpose of fraudulently defeating the [other defendant’s] right 

of removal.’’). 41 849 F.Supp.2d 1327, 1331 (M.D. Ala. 2012). 42 220 F.Supp.2d 414, 420–22 (E.D. Pa. 2002). 43 448 F.3d 201, 216 (3rd Cir. 2006). 44See, e.g., Herkenhoff v. Supervalu Stores, Inc., 2014 WL 3894642, at *3 (E.D. Mo. Aug. 18, 

2014) (citing authorities). 

in subparagraphs (B) and (C) make clear that in determining 

whether joinder is fraudulent, the court should consider only the 

claims against the defendants described in paragraph (B); the court 

should not examine the case against the diverse, out-of-state defendants. 

‘‘(D) objective evidence clearly demonstrates that there is no 

good faith intention to prosecute the action against all defendants described in paragraph (1)(B) or to seek a joint 

judgment.’’ 

Prong (C) codifies a proposition that the Supreme Court has long 

recognized: that in deciding whether joinder is fraudulent, courts 

may consider whether the plaintiff has a good-faith intention of 

seeking a judgment against the non-diverse defendant.40 Consistent with Supreme Court precedent, courts continue to find 

fraudulent joinder requiring denial of a motion to remand when objective evidence clearly demonstrates there is no good faith intention to prosecute the action against all defendants or seek a joint 

judgment against them. As the Federal court in Faulk v. 

Husqvarna Consumer Outdoor Products N.A., Inc. 41 said, ‘‘Where 

the plaintiff’s collective litigation actions, viewed objectively, clearly 

demonstrate a lack of good faith intention to pursue a claim to 

judgment against a non-diverse defendant, the court should dismiss 

the non-diverse defendant and retain jurisdiction over the case.’’ 

That is what Federal courts mean when they describe ‘‘objective 

evidence’’ in the context of fraudulent joinder, namely ‘‘collective 

litigation actions.’’ The Federal court decision in In re Diet Drugs 

Prods. Liab. Litig.,42 also illustrates how a court can find a lack of 

good faith intention based on a careful analysis of objective evidence. 

The language of this provision is taken almost verbatim from an 

often-cited decision of the Third Circuit. In In re Briscoe,43 the 

court said that joinder is fraudulent if ‘‘there is . . . no real intention in good faith to prosecute the action against the defendant or 

seek a joint judgment.’’ This language has been quoted in decisions 

throughout the country, and prong (C) codifies it, with added language to make clear that the court should not inquire into the subjective intent of the plaintiff or his or her lawyer, but rather look 

to objective evidence. 

‘‘(3) In determining whether to grant or deny a motion 

under paragraph (1)(B), the court may permit the pleadings 

to be amended, and shall consider the pleadings, affidavits, 

and other evidence submitted by the parties.’’ 

Paragraph (3) codifies the widely followed judicial practice of considering affidavits and other materials outside the pleadings when 

determining whether joinder is fraudulent.44 As one court aptly put 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
16 

45Mills v. Allegiance Healthcare Corp., 178 F.Supp.2d 1, 5–6 (D. Mass. 2001) (citing cases). 46 428 F.3d 1317, 1320–23 (11th Cir. 2005). 47 Id. at 1322–23 (internal quotations, citations, and emphasis deleted). 48See Wivell v. Wells Fargo Bank, N.A., 773 F.3d 887, 896 (8th Cir. 2014) (citing cases from 

Third and Tenth Circuits). 49Walton v. Bayer Corp., 643 F.3d 994, 1000–01 (7th Cir. 2011). 

it, ‘‘In analyzing a claim of fraudulent joinder, a court is not held 

captive by the allegations in the complaint.’’ 45 For example, in 

Legg v. Wyeth,46 the Eleventh Circuit ruled that a district court 

erred in refusing to consider affidavits submitted by local sales representatives supporting the assertion that the representatives were 

fraudulently joined as defendants. 

Paragraph (3) also makes it clear that the district court may 

allow the plaintiff to amend the complaint to meet objections to remand. This provision addresses any concern that the plaintiff, having filed a complaint in state court under state procedural rules, 

may not have anticipated application of a ‘‘plausibility’’ or other 

Federal standard. 

The two provisions of paragraph (3) work in tandem. Thus, in 

Legg v. Wyeth, supra, the court said: 

The determination of whether a resident defendant has 

been fraudulently joined must be based upon the plaintiff’s 

pleadings at the time of removal, supplemented by any affidavits and deposition transcripts submitted by the parties.’’ The proceeding appropriate ‘‘for resolving a claim of 

fraudulent joinder is similar to that used for ruling on a 

motion for summary judgment under Fed.R.Civ.P. 56(b).47

H.R. 3624 codifies this approach, with one important modification: the determination need not be based on the plaintiff’s pleadings at the time of removal; the plaintiff may amend the pleadings 

to meet objections to remand. However, the bill does not authorize 

any discovery beyond that which is permitted by existing rules and 

court decisions. 

‘‘(4) If the courts finds fraudulent joinder under paragraph 

(2), it shall dismiss without prejudice the claims against the 

defendant or defendants found to have been fraudulently 

joined and shall deny the motion described in paragraph 

(1)(B).’’ 

Paragraph (4) makes clear that when a district court determines 

that a defendant has been fraudulently joined, the court should dismiss the claims against that defendant without prejudice, thereby 

allowing for a refiling of those claims in state court, to be decided 

on the merits. In providing that the claims against the in-state or 

non-diverse defendants should be dismissed without prejudice, 

paragraph (4) adopts the position of all but one of the courts of appeals that have addressed the issue.48 Only one court of appeals 

has ruled otherwise, in a single sentence without explanation.49

That decision should no longer be regarded as authoritative. 

With the dismissal of the fraudulently joined defendants, the district court can and should deny the motion to remand described in 

paragraph (1)(B). 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
17 

Changes in Existing Law Made by the Bill, as Reported 

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italics 

and existing law in which no change is proposed is shown in 

roman): 

TITLE 28, UNITED STATES CODE 

* * * * * * * 

PART IV—JURISDICTION AND VENUE 

* * * * * * * 

CHAPTER 89—DISTRICT COURTS; REMOVAL OF CASES 

FROM STATE COURTS 

* * * * * * * 

§ 1447. Procedure after removal generally 

(a) In any case removed from a State court, the district court 

may issue all necessary orders and process to bring before it all 

proper parties whether served by process issued by the State court 

or otherwise. 

(b) It may require the removing party to file with its clerk copies of all records and proceedings in such State court or may cause 

the same to be brought before it by writ of certiorari issued to such 

State court. 

(c) A motion to remand the case on the basis of any defect 

other than lack of subject matter jurisdiction must be made within 

30 days after the filing of the notice of removal under section 

1446(a). If at any time before final judgment it appears that the 

district court lacks subject matter jurisdiction, the case shall be remanded. An order remanding the case may require payment of just 

costs and any actual expenses, including attorney fees, incurred as 

a result of the removal. A certified copy of the order of remand 

shall be mailed by the clerk to the clerk of the State court. The 

State court may thereupon proceed with such case. 

(d) An order remanding a case to the State court from which 

it was removed is not reviewable on appeal or otherwise, except 

that an order remanding a case to the State court from which it 

was removed pursuant to section 1442 or 1443 of this title shall be 

reviewable by appeal or otherwise. 

(e) If after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the 

court may deny joinder, or permit joinder and remand the action 

to the State court. 

(f) FRAUDULENT JOINDER.— (1) This subsection shall apply to any case in which— 

(A) a civil action is removed solely on the basis of the 

jurisdiction conferred by section 1332(a); 

(B) a motion to remand is made on the ground that— 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
18 

1The Committee on the Judiciary considered and passed an amendment in the nature of a 

substitute to H.R. 3624 during the February 3, 2016 markup. The description and analysis contained herein reflect the reported version of H.R. 3624 as amended by the amendment in the 

nature of a substitute. 

(i) one or more defendants are citizens of the same 

State as one or more plaintiffs; or 

(ii) one or more defendants properly joined and 

served are citizens of the State in which the action was 

brought; and 

(C) the motion is opposed on the ground that the joinder of the defendant or defendants described in subparagraph (B) is fraudulent. 

(2) The joinder of the defendant or defendants described in 

paragraph (1) (B) is fraudulent if the court finds that— 

(A) there is actual fraud in the pleading of jurisdictional facts; 

(B) based on the complaint and the materials submitted under paragraph (3), it is not plausible to conclude 

that applicable State law would impose liability on each 

defendant described in paragraph (1)(B); 

(C) State or Federal law clearly bars all claims in the 

complaint against all defendants described in paragraph 

(1)(B); or 

(D) objective evidence clearly demonstrates that there is 

no good faith intention to prosecute the action against all 

defendants described in paragraph (1)(B) or to seek a joint 

judgment. 

(3) In determining whether to grant or deny a motion under 

paragraph (1)(B), the court may permit the pleadings to be 

amended, and shall consider the pleadings, affidavits, and 

other evidence submitted by the parties. 

(4) If the court finds fraudulent joinder under paragraph 

(2), it shall dismiss without prejudice the claims against the defendant or defendants found to have been fraudulently joined 

and shall deny the motion described in paragraph (1)(B). 

* * * * * * * 

Dissenting Views 

H.R. 3624, the ‘‘Fraudulent Joinder Prevention Act of 2016,’’ is 

the latest attempt to tilt the civil justice playing field in favor of 

corporate defendants by making it more difficult for plaintiffs to 

pursue state law claims in state courts.1 H.R. 3624 would dramatically alter existing law by overriding the century-old doctrine of 

fraudulent joinder, under which Federal courts must remand a diversity case to state court if one defendant that is a citizen of the 

same state as the plaintiff (hereinafter ‘‘in-state defendant’’) was 

joined and where there is a reasonable basis under state law for 

a claim against that defendant. The bill also effectively repeals a 

statutory exception to diversity jurisdiction where a properly-joined 

out-of-state defendant is a citizen of the state in which the suit is 

originally brought, known as the ‘‘local defendant’’ exception. The 

bill would impose new requirements on a Federal court when considering a motion to remand in a case that was removed to Federal 

court solely on the basis of diversity of citizenship and where there 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
19 

is both an in-state and an out-of-state defendant present or where 

there is a local defendant. Specifically, before a Federal court can 

grant a motion to remand, the bill would require the court to find, 

among other things, that there is no actual fraud in the pleading 

of jurisdictional facts, that the addition of the in-state or local defendant to a case is based on a ‘‘plausible’’ state law claim against 

that in-state or local defendant, and that the plaintiff has a good 

faith intention to pursue the action against the in-state or local defendant or to seek a joint judgment. 

H.R. 3624 threatens to delay and possibly deny justice for plaintiffs with meritorious state law claims. First, as with many civil 

justice measures that the Committee has considered, the bill is a 

solution in search of a problem. Current law already establishes a 

standard for courts to determine when a party has been improperly 

joined, a standard that has been in place for a century. Tellingly, 

the Supreme Court has not seen fit to change this standard, and 

H.R. 3624’s proponents offer no objective evidence that Federal 

courts have routinely failed to properly address fraudulent or otherwise improper joinder. Moreover, a defendant may be able to 

move to dismiss a claim in state court against an in-state defendant before removing the remaining claims to Federal court. 

Second, H.R. 3624 will generate tremendous uncertainty, complexity, and additional cost to the consideration of motions to remand, which are ordinarily common procedural matters considered 

at a nascent stage of a diversity case. The bill applies a vague and 

undefined ‘‘plausibility’’ standard to state law claims. Similarly, the 

bill requires a court to inquire into the ‘‘good faith’’ of the plaintiff’s 

subjective intentions, providing no guidance as to what constitutes 

‘‘good faith intention.’’ These various requirements would effectively mandate a trial on the merits of a state law claim against 

a state defendant at an early procedural stage of the case when a 

court is ill-equipped to make such determinations and could even 

involve a defendant over which a Federal court may not have jurisdiction. In addition to adding burdens on litigants, these new requirements will strain already-limited Federal judicial resources. 

Finally, H.R. 3624 deeply intrudes on state sovereignty by denying state courts the ability to decide, and thereby shape, state procedural and substantive law and by shifting that power to Federal 

courts. Indeed, it is out of respect for federalism and recognition 

that Federal courts are supposed to be courts of limited jurisdiction 

that the Supreme Court added the requirement of complete diversity and Congress added a minimum amount in controversy requirement in order for a state case to be removed to Federal court. 

Respect for federalism is also why Federal courts developed the 

practice of construing removal statutes narrowly, as reflected in the 

current fraudulent joinder doctrine, which favors remand to state 

courts except in very limited circumstances. H.R. 3624 runs 

counter to this fundamental constitutional value, while also denying plaintiffs the prerogative to choose a state forum for the adjudication of state law claims. 

Given the bill’s serious flaws, a broad coalition consisting of 21 

groups, including the Alliance for Justice, the Asbestos Disease 

Awareness Organization, the Center for Justice & Democracy, the 

Consumer Federation of America, the National Association of Consumer Advocates, the National Consumer Law Center, the NaVerDate Sep 11 2014 21:16 Feb 16, 2016 Jkt 059006 PO 00000 Frm 00019 Fmt 6659 Sfmt 6601 E:\HR\OC\HR422.XXX HR422

asabaliauskas on DSK5VPTVN1PROD with REPORTS
20 

2Letter from 21 consumer groups to Rep. Bob Goodlatte (R-VA), Chairman, and Rep. John 

Conyers, Jr.(D-MI), Ranking Member, H. Comm. on the Judiciary (Feb. 2, 2016), on file with 

the Democratic Staff of the H. Comm. on the Judiciary. 3 Id. 

4 U.S. CONST. art. III, § 2, cl. 1. 5 28 U.S.C. § 1332(a) (2016). 

6Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806). 

7 28 U.S.C. § 1332(a)(1) (2016). 

8 28 U.S.C. § 1332(c)(1) (2016). 

9 28 U.S.C. § 1332(d)(2) (2016). 

tional Disability Rights Network, the National Employment Lawyers Association, oppose H.R. 3624.2 They warn that the bill ‘‘would 

upend long established law in the area of Federal court jurisdiction, place unreasonable burdens on the Federal judiciary, and 

make it more difficult for Americans to enforce their rights in state 

courts.’’ 3

For the foregoing reasons, and those discussed below, we strongly 

oppose H.R. 3624. 

BACKGROUND AND DESCRIPTION

BACKGROUND

Diversity jurisdiction refers to the jurisdiction of Federal courts 

over cases where the underlying claims arise solely under state 

law, but the parties are citizens of different states. A plaintiff may 

file a case in Federal court on diversity grounds or a defendant 

may remove a case filed in state court to Federal court on such 

basis. 

The diversity jurisdiction of Federal courts is rooted in Article 

III, section 2 of the Constitution, which provides, in pertinent part, 

that the ‘‘judicial Power [of the United States] shall extend to . . . 

Controversies . . . between Citizens of different States. . . .’’ 4

Congress’s statutory grant of diversity jurisdiction is narrower than 

the scope of this constitutional provision, requiring, for example, a 

minimum amount in controversy.5 The Supreme Court has further 

limited the scope of diversity jurisdiction by requiring ‘‘complete’’ 

diversity—i.e., that no defendant can be a citizen of the same state 

as any plaintiff.6

The Federal diversity statute is codified at 28 U.S.C. § 1332 and 

provides, among other things, that Federal district courts shall 

have jurisdiction over all civil actions where the amount in controversy exceeds $75,000 and is between citizens of different 

states.7 Section 1332(c)(1) provides that for purposes of the diversity statute and the Federal removal statute, a corporation is 

deemed to be a citizen of every state and foreign state where it is 

incorporated and where it has its principal place of business.8 For 

class actions, section 1332(d)(2) requires at least $5 million amount 

in controversy and recognizes diversity where any class member is 

a citizen of a different state than any defendant, among other 

things, making it relatively easier to remove class actions from 

state to Federal court.9

Under 28 U.S.C. § 1441(b), a defendant may seek to remove any 

civil action filed in a state court to a Federal court in the district 

where the state action is pending based solely on diversity jurisdiction, but the court must disregard the citizenship of defendants 

sued under fictitious names, and a case may not be removed if any 

of the parties properly joined and served as defendants is a citizen 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
21 

10 28 U.S.C. § 1441(b) (2016). 11 28 U.S.C. § 1447 (2016). 12 H.R. 3624, the Fraudulent Joinder Prevention Act of 2015: Hearing Before the Subcomm. 

on the Constitution and Civil Justice of the H. Comm. on the Judiciary, 114th Cong. 3 (2015) 

(written statement of Lonny Hoffman, Law Foundation Professor of Law, University of Houston 

Law Center) [hereinafter ‘‘Hoffman Statement’’]. 13 Id.at 3–4. 14Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108–09 (1941). 15 Hoffman Statement at 5. 

of the state in which the action is brought (the ‘‘local defendant’’ 

exception).10 Section 1447 of title 28, United States Code, outlines 

procedures for the Federal courts to follow after removal.11

The judicially-created doctrine of fraudulent joinder is an exception to the requirement for complete diversity. Under the doctrine, 

a case may be removed to Federal court even if there is an in-state 

defendant in the case because the plaintiff failed to state a case 

against the in-state defendant. 12 In seeking to remove a state case 

to Federal court, defendants often assert that a plaintiff has fraudulently joined an in-state defendant solely to defeat diversity jurisdiction. 

The test for determining whether joinder is improper under this 

doctrine is whether the defendant has demonstrated that there is 

no possibility of recovery by the plaintiff against the in-state defendant or no reasonable basis for a claim against such defendant, 

an extremely difficult and often impossible standard for a defendant to meet.13 If the Federal court finds, upon removal, that the 

fraudulently joined party was not properly joined to the case, it 

must dismiss that party from the case. 

The Supreme Court has recognized that federalism issues are always implicated in the removal context and, therefore, has made 

clear that removal statutes should be strictly and narrowly interpreted to resolve all doubts and ambiguities against removal.14 The 

doctrine of fraudulent joinder reflects this general policy.15

DESCRIPTION

H.R. 3624, as amended, would impose a number of new requirements on courts considering motions to remand in certain types of 

diversity cases. As a general matter, all of these requirements will 

make it harder for plaintiffs to successfully have cases solely raising state law claims remanded back to state court. 

Section 2 would add a new subsection (f) to 28 U.S.C. § 1447, the 

Federal statute governing remands of cases that have been removed to Federal court from state court. New section 1447(f)(1) 

specifies that the bill’s requirements apply in cases where: (1) a 

civil action has been removed only on the basis of diversity jurisdiction (i.e., all plaintiffs are citizens of different states from all defendants); (2) a motion to remand the case back to state court is 

made on the ground that at least one of the defendants is a citizen 

of the same state as at least one of the plaintiffs (i.e., that there 

is no complete diversity of citizenship between the parties, as required by the diversity statute) or that one of the defendants is a 

citizen of the state in which the state court action was brought 

(such cases are currently an exception to diversity jurisdiction, provided for in 28 U.S.C. § 1441(b)(2)); and (3) the motion to remand 

is opposed on the ground that the joinder of an in-state or local defendant is fraudulent. 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
22 

16 556 U.S. 662 (2009). 17 28 U.S.C. § 1441(b)(2) (2016). 18See 28 U.S.C. § 1446(b)(3) (providing that a case is removable within 30 days after initial 

pleadings if case has become removable within that time period). 

New section 1447(f)(2) specifies the circumstances pursuant to 

which a court can find that joinder was fraudulent. These circumstances include a case where the court finds that there is actual fraud in the pleading of jurisdictional facts or where state or 

Federal law clearly bars all claims against in-state or local defendants. A court can also find that joinder of a party was fraudulent, 

based on evidence, if ‘‘it is not plausible’’ to conclude that state law 

would impose liability on an in-state or local defendant or where 

objective evidence ‘‘clearly demonstrates’’ that the plaintiff lacked 

the ‘‘good faith intention’’ to pursue the civil action against such a 

defendant or to seek a joint judgment. 

The plausibility standard for determining whether remand would 

be appropriate appears to import the heightened pleading standard 

articulated in Ashcroft v. Iqbal 16 into the remand context. Additionally, the bill fails to define ‘‘good faith intention,’’ a term that 

is not used in any other provision in title 28 of the U.S. Code. Such 

a determination would inherently require a subjective inquiry into 

the plaintiff’s intention in adding the in-state or local defendant, 

rather than the objective inquiry under current law, which asks 

whether the plaintiff had a reasonable basis for pursuing such a 

claim. 

New section 1447(f)(3), among other things, requires a court to 

consider pleadings, affidavits, and other evidence submitted by the 

parties in assessing whether joinder was fraudulent when considering a motion to remand. 

CONCERNS WITH H.R. 3624

I. H.R. 3624 IS A SOLUTION IN SEARCH OF A PROBLEM

While seeking to further stack the deck against plaintiffs by 

making it harder to pursue state law claims in state court, the bill 

does not address any actual existing problem. H.R. 3624’s proponents offer no credible evidence that Federal courts are systematically ignoring improper joinder of in-state defendants in diversity cases or that the fraudulent joinder doctrine is ineffective. Ostensibly, the bill’s proponents seek a uniform fraudulent joinder 

standard. Nevertheless, all articulations of the current century-old 

standard embody the same principle that unless there is no reasonable basis or possibility of recovery against an in-state defendant, 

the court should allow the party to be added and remand the case 

to state court. The fraudulent joinder doctrine is well-settled and 

is the same standard in substance in every circuit, whatever the 

semantic variances among different courts. Moreover, proponents 

offer no evidence that there is any problem with the way that Federal courts have applied the ‘‘local defendant’’ exception to diversity 

jurisdiction,17 which H.R. 3624 effectively repeals. Additionally, a 

defendant might have the option of seeking to dismiss a non-meritorious claim against an in-state defendant in state court prior to 

removal to Federal court.18 In short, H.R. 3624 does not address 

an actual problem, but would instead create problems by upending 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
23 

19 Hoffman Statement at 6. 20 Id. at 7. 21 556 U.S. 662 (2009). 22 Rule 8 requires, among other things, that a complaint must contain ‘‘a short and plain 

statement of the claim showing that the pleader is entitled to relief. . . .’’ Fed. R Civ. P. 8(a)(2). 23 Conley v. Gibson, 355 U.S. 41, 46 (1957) 24 Herman Schwartz, The Supreme Court Slams the Door, THE NATION, Sept. 30, 2009. 25 Adam Liptak, 9/11 Case Could Bring Broad Shift on Civil Suits, N.Y. TIMES, July 21, 2009. 

longstanding rules and potentially wreak havoc on the Federal 

courts. 

II. H.R. 3624 WILL DRAMATICALLY INCREASE UNCERTAINTY, COM- PLEXITY, AND COSTS RELATED TO THE CONSIDERATION OF REMAND

MOTIONS

A. The application of a vague and undefined ‘‘plausibility’’ standard will require a determination on the merits of a state law 

claim at a point in the case when a court is ill-equipped to do 

so. 

H.R. 3624 requires that, prior to granting a motion to remand, 

a court must find that it is ‘‘plausible to conclude that applicable 

State law would impose liability’’ on an in-state or local defendant. 

This plausibility standard is inherently vague and the bill fails to 

define ‘‘plausible’’ or provide any guidance as to how a court should 

apply the term. As Professor Lonny Hoffman, the Minority witness 

who testified at the Constitution Subcommittee hearing on this bill 

warned, this vague term ‘‘would force courts to struggle with determining what ‘plausible’ means for purposes of deciding whether to 

grant remand.’’ 19 Professor Hoffman further noted that in addition 

to being ambiguous, the ‘‘plausibility’’ requirement is a new one, 

making it even more problematic by making it hard for courts to 

apply the standard in a consistent and coherent way.20

The drafters of H.R. 3624 appear to import the Federal plausibility pleading standard into the bill’s new standards for granting 

remand motions. In 2009, the U.S. Supreme Court issued its decision in Ashcroft v. Iqbal 21 whereby the Court established a new 

standard for judging the sufficiency of facts alleged in a civil complaint. Prior to Iqbal, the Court had made clear that, in interpreting Federal Rule of Civil Procedure 8,22 which governs pleadings in civil cases, a civil action should not be dismissed ‘‘unless it 

appears beyond doubt that the plaintiff can prove no set of facts 

in support of his claim which would entitle him to relief.’’ 23 According to commentators, the pre-Iqbal view was that Rule 8 should be 

‘‘interpreted liberally’’ because ‘‘until the plaintiff can remain in 

court long enough to have an opportunity to examine those files 

and to question defendants and others, the merits of a case cannot 

be determined.’’ 24

The Court’s holding in Iqbal reflected a decision to abandon more 

than half a century of established civil litigation practice. Justice 

Ruth Bader Ginsberg, who dissented from the Iqbal decision, said, 

‘‘the court’s majority messed up the federal rules.’’ 25 In Iqbal, the 

Court put forward a new test under which Federal judges are to 

determine which civil complaints will withstand a motion to dismiss. First, a complaint must contain factual allegations, rather 

than legal conclusions, and second, the factual allegations must be 

plausible, with plausibility ‘‘a context-specific task that requires 

the reviewing court to draw on its judicial experience and common 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
24 

26 556 U.S. at 679. 27The Supreme Court first established the notion of a ‘‘plausibility’’ pleading requirement in 

2007 in the antitrust case of Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). But it was 

in Iqbal that the Court expanded the ‘‘plausibility’’ pleading requirement to all civil suits. This 

new pleading requirement has been described as ‘‘an open door to judicial bias’’ and a ‘‘padlock 

on the courthouse door.’’ Tony Mauro, Plaintiffs Groups Mount Effort to Undo Supreme Court’s 

‘Iqbal’ Ruling, THE NAT’L L. J., Sept. 21, 2009. It is a significant departure from the ‘‘bare-bones 

complaint’’ and ‘‘mechanical’’ approach that had been established in the previous 50 years. Adam 

Liptak, 9/11 Case Could Bring Broad Shift on Civil Suits, N.Y. TIMES, July 21, 2009. 28 Id. 

sense.’’ 26 Not surprisingly, Iqbal has spawned much litigation over 

what constitutes a ‘‘plausible’’ claim for purposes of pleading under 

Rule 8.27

The experience of Federal courts in attempting to apply a vague 

‘‘plausibility’’ standard to pleadings foreshadows the difficulties 

that would arise in applying a similar standard to remand motions. 

Iqbal has spawned numerous inconsistent and incoherent decisions 

attempting to define what constitutes a ‘‘plausible’’ pleading. As 

Professor Hoffman noted, the ‘‘attempt to incorporate plausibility 

into jurisdictional law would raise identical difficulties to those 

that now plague the cacophony of Rule 12(b)(6) decisional law [addressing whether pleadings raise ‘‘plausible’’ claims]. Yet, the proposed amendments [in H.R. 3624] are oblivious to this danger and 

silent on how district courts are to determine whether the claims 

asserted against a non-diverse defendant are plausible.’’ 28 Seven 

years after the Supreme Court required that a ‘‘plausibility’’ standard be applied to Federal pleadings, Federal courts still struggle 

with its application, and there is little reason to think that the 

same difficulties would not arise with respect to the application of 

such a standard in the context of remand motions, with tremendous time and money spent litigating the question of plausibility. 

In addition to being vague and difficult to apply, H.R. 3624’s 

plausibility standard would force courts to conduct a mini-trial on 

the merits of a plaintiff’s state law claims at a jurisdictional stage 

of the case, in the absence of discovery or the opportunity to fully 

develop the factual record and before the court’s jurisdiction (i.e., 

the court’s power to decide the case in the first place) is even established. These factors will spawn a tremendous amount of litigation 

over the application of what currently is a simple procedural motion, potentially making many state law cases cost-prohibitive for 

many plaintiffs to pursue. 

For these reasons, current fraudulent joinder law does not impose such a requirement for merits review and instructs courts to 

avoid merits determinations. The fraudulent joinder doctrine requires a court only to take a limited look outside the pleadings and 

to avoid crossing the line from jurisdictional inquiry to a decision 

on the merits. Thus, in yet another way, H.R. 3624 would dramatically change current law and practice. 

B. H.R. 3624’s subjective ‘‘good faith intention’’ and ‘‘actual fraud’’ 

standards are ambiguous, difficult to apply, and represent a significant departure from current law. 

As with its plausibility requirement, H.R. 3624’s mandate that a 

court find that a plaintiff had a ‘‘good faith intention to prosecute 

the action against’’ an in-state or local defendant or to seek a joint 

judgment is vague and undefined. The bill provides absolutely no 

guidance as to the meaning of ‘‘good faith intention’’ or how such 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
25 

29 Hoffman Statement at 7. 

a standard is to be applied. The term ‘‘good faith intention’’ is not 

used anywhere in Title 28 of the United States Code. Moreover, 

like the plausibility requirement, the requirement that a court inquire into a plaintiff’s subjective intentions is one that a court is 

ill-equipped to apply at a jurisdictional stage of the case. 

In addition, the ‘‘good faith intention’’ requirement is a significant departure from current law. Under the fraudulent joinder doctrine, the term ‘‘fraudulent’’ is a term of art that does not require 

the presence of fraudulent intent on the plaintiff’s part.29 ‘‘Fraudulent’’ joinder typically refers to any improper joinder, regardless of 

the plaintiff’s intent, and the court’s inquiry is limited to whether 

there was some basis in law for the plaintiff’s claim against the instate defendant. Yet, H.R. 3624 mandates that a court determine 

that a plaintiff joined an in-state or local defendant with the ‘‘good 

faith intention’’ of pursuing a claim against such a defendant, 

changing longstanding law and introducing additional uncertainty 

into the consideration of remand motions. 

Similarly, H.R. 3624’s requirement that a court find no ‘‘actual 

fraud in the pleading of jurisdictional facts’’ misdirects the court’s 

attention toward a plaintiff’s subjective intent when determining 

whether to grant a remand motion. As noted, current law requires 

a court only to look at whether there was a reasonable basis for 

the plaintiff’s claim, regardless of the plaintiff’s intent in naming 

a particular defendant. The ‘‘actual fraud’’ standard, like the ‘‘good 

faith intention’’ standard, is a major change to current fraudulent 

joinder law, one that would be very cumbersome to implement. 

As with the plausibility requirement, the ambiguity and novelty 

of the ‘‘good faith intention’’ and ‘‘actual fraud’’ standards will 

spawn increased litigation over their meaning and application, 

leading to increased uncertainty and costs for litigants and unnecessary and harmful delay in resolving threshold jurisdictional questions. 

C. The bill’s requirements open the door to dilatory tactics by defendants to further delay resolution of a case, deny plaintiffs the 

prerogative to choose the forum for their claims, and strain Federal judicial resources. 

Justice delayed is justice denied, and H.R. 3624’s various requirements, taken individually and collectively, will have the effect 

of significantly delaying the ultimate resolution of many plaintiffs’ 

state law claims against in-state or local defendants. This factor 

may further incentivize out-of-state defendants to remove cases to 

Federal court and to prolong proceedings on motions to remand, 

knowing that the burden of sharply increased costs and length of 

litigation will fall disproportionately on plaintiffs, who typically 

have fewer litigation resources than the average out-of-state corporate defendant. This potential outcome may even have the effect 

of dissuading plaintiffs from filing suit in state court in the first 

place. 

H.R. 3624 also denies plaintiffs the prerogative to select the 

forum in which their claims will be heard by making it much easier 

for an out-of-state defendant to remove a case to Federal court, 

leaving the choice of forum in the defendant’s hands in many more 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
26 

30 Unofficial Tr. of Markup of H.R. 3624, the ‘‘Fraudulent Joinder Prevention Act of 2015,’’ by 

the H. Comm. on the Judiciary, 114th Cong., at 65 (Feb. 3, 2016). 31P.L. 109–2, 119 Stat. 4 (Feb. 18, 2005). 32See H. Rep. 108–144 at 157–76, 108th Cong. (dissenting views to Committee report accompanying H.R. 1115, Class Action Fairness Act of 2003, which the House passed by a vote of 253– 

170). 33 Id. at 166–70. 

cases than under current law. Additionally, the bill could result in 

a significant increase in the workload of Federal courts, straining 

already limited judicial resources. As Representative Hank Johnson 

(D-GA) noted during the Committee markup, there are currently 72 

Federal judicial vacancies, so ‘‘our [federal] trial courts, where the 

makers of this bill would like to see cases go is backlogged, so you 

do not get justice.’’ 30

H.R. 3624 must be seen as part of a longstanding effort to make 

it easier for defendants to remove purely state law matters to Federal court. For instance, more than a decade ago, Congress passed 

the Class Action Fairness Act of 2005 (CAFA).31 Among other 

things, CAFA expanded Federal diversity jurisdiction for class actions, including eliminating the requirement for complete diversity 

in class actions, making it easier for defendants to remove class 

and ‘‘mass actions’’ from state to Federal courts. CAFA opponents— 

including Ranking Member John Conyers, Jr. (D-MI) and Representative Jerrold Nadler (D-NY)—argued that it was a blatant 

attempt to tilt the playing field in favor of defendants. They opposed expansion of Federal diversity jurisdiction as an unwarranted effort to make it ‘‘far more burdensome, expensive, and 

time-consuming for groups of injured persons’’ to use the class action mechanism to vindicate their rights under state law.32 They 

expressed concern that CAFA would undermine state law by divesting state courts of the ability to interpret and develop state 

procedural and substantive law and that it would increase the 

workload of already over-burdened Federal courts.33 H.R. 3624 simply continues to exacerbate this problem. 

III. H.R. 3624 OFFENDS FEDERALISM AND REPRESENTS A SERIOUS

INTRUSION INTO STATE SOVEREIGNTY

H.R. 3624 raises serious federalism concerns by denying state 

courts the ability to shape state substantive and procedural law 

and instead transfers that power to Federal courts. Removal of a 

state court case to Federal court always implicates federalism concerns, which is why the Federal courts generally disfavor Federal 

jurisdiction and read removal statutes narrowly. As noted earlier, 

this is why the fraudulent joinder doctrine places a very high burden on a defendant opposing a remand motion to show that there 

was no reasonable basis for the addition of an in-state defendant, 

thus favoring remand to state courts except under very limited circumstances. By replacing this well-settled doctrine with sweeping 

and vaguely-worded new standards for the determination of when 

a state case may be remanded to state court, H.R. 3624 will deny 

state courts the ability to decide and, ultimately, to shape state law 

in many cases. 

H.R. 3624 infringes state sovereignty by giving Federal courts 

the power to shape state pleading law. This is particularly true 

with respect to the application of the bill’s ‘‘plausibility’’ standard. 

When a suit is maintained in state court, the applicable pleading 


asabaliauskas on DSK5VPTVN1PROD with REPORTS
27 

standard may not be the plausibility pleading standard articulated 

in Iqbal. Yet when a Federal court is required to review a state law 

claim in the context of a remand motion, it will effectively be applying the heightened Iqbal pleading standard to the plaintiff’s claims 

against an in-state or local defendant, progressively undermining 

the authority of state courts to set their own pleading standards for 

state court cases. 

Finally, by effectively repealing the local defendant exception to 

diversity jurisdiction provided for in 28 U.S.C. § 1441(b)(2), H.R. 

3624 further chips away at state sovereignty, expanding the power 

of Federal courts to decide state law matters. This is particularly 

egregious in the case of repealing the local defendant exception because the principal concern justifying diversity jurisdiction—the 

risk of prejudice against an out-of-state defendant by a state 

court—is not present in the case of a defendant that is a citizen 

of the state where the suit was filed, as Congress clearly recognized 

by putting the local defendant exception into statute. 

CONCLUSION

As with so many civil justice measures that the Committee has 

considered in the last three Congresses, H.R. 3624 is an attempt 

to tilt the playing field in favor of corporate wrongdoers by making 

it far more burdensome, expensive, and time-consuming for injured 

people to obtain justice from such wrongdoers. The bill’s proponents 

have failed to offer any credible evidence that there is a need to 

replace the well-settled fraudulent joinder doctrine. Moreover, the 

bill will impose novel, highly ambiguous, and difficult-to-apply requirements on Federal courts considering remand motions in certain circumstances. These new requirements will create tremendous uncertainty and introduce unnecessary complexity into the remand process. They will also increase the length and cost of litigation, delaying adjudication of potentially meritorious claims and 

burdening plaintiffs to the point where future plaintiffs may even 

be dissuaded from filing suit. Finally, the bill represents a serious 

intrusion into state sovereignty by denying state courts the ability 

to shape state law and inappropriately shifting that power to Federal courts. For the foregoing reasons, we strongly oppose H.R. 

3624 and urge our colleagues to do the same. 

MR. CONYERS, JR. 

MR. NADLER. 

MS. JACKSON LEE. 

MR. COHEN. 

MR. JOHNSON, JR. 

MS. CHU. 

MR. DEUTCH. 

MR. GUTIERREZ. 

MR. RICHMOND. 

MS. DELBENE. 

MR. JEFFRIES. 

MR. CICILLINE. 

Æ 


asabaliauskas on DSK5VPTVN1PROD with REPORTS