United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 11-1724

___________

Angela Block, as Trustee for the Next *

of Kin of J.A., a minor, deceased, J.A. *

a minor, by her mother and natural *

guardian, Angela Block; Angela Block, *

individually, *

*

Plaintiffs - Appellants, *

* Appeal from the United States

v. * District Court for the

* District of Minnesota. 

Toyota Motor Corporation, a Japanese *

corporation; Toyota Motor North *

America, Inc., a California corporation; *

Calty Design Research, Inc., *

a California corporation; Toyota Motor *

Engineering and Manufacturing North *

America, Inc., a Kentucky corporation; *

Toyota Motor Manufacturing, *

Kentucky, Inc., a Kentucky corporation; *

Toyota Motor Sales, USA, Inc., a *

California corporation, *

*

Defendants, *

*

Brooklyn Park Motors, Inc., *

a Minnesota corporation doing business *

as Toyota City, *

*

Defendant - Appellee. *
___________

Submitted: November 16, 2011

Filed: December 19, 2011

___________

Before WOLLMAN, MURPHY, and BENTON, Circuit Judges.

___________

MURPHY, Circuit Judge.

Angela Block sued Brooklyn Park Motors and several Toyota affiliates in

Minnesota state court after her son was killed and her daughter seriously injured in

a crash with a 1996 Toyota Camry. In her capacity as trustee and guardian and also

individually, Block asserted claims of wrongful death and personal injury based on

strict products liability, negligence, and fraud. After defendants removed the case to

federal court, Block filed a motion to remand arguing that removal was improper

since Brooklyn Park Motors is a citizen of Minnesota, the forum state. The district

court concluded that Brooklyn Park Motors had been fraudulently joined because 1

Block had not asserted any reasonable basis for recovery against it, denied her motion

to remand, and dismissed with prejudice all claims against Brooklyn Park Motors. 

Block appeals the denial of her motion to remand and the dismissal of Brooklyn Park

Motors. We affirm.

I.

This case arises out of a tragic automobile accident in St. Paul, Minnesota in

June 2006, which involved two of Block's children. Javis Trice-Adams was driving

a car with four passengers: his son Javis Adams, his daughter Jassmine Adams,

The Honorable Ann D. Montgomery, United States District Judge for the

1

District of Minnesota. 

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Quincy Adams, and Devyn Bolton. Block is the mother of both Javis and Jassmine

Adams. While Trice-Adams was stopped at an intersection, a 1996 Toyota Camry

driven by Koua Fong Lee hit his car from behind, pushing it into oncoming traffic. 

Block's complaint alleges that the accident happened after the Toyota suddenly

accelerated to at least 70 miles per hour and did not decelerate even though Fong Lee

applied the brakes. Trice-Adams and Javis Adams died on the scene. Devyn Bolton

was rendered a quadriplegic and later died. Quincy and Jassmine Adams were 

severely injured but survived. 

After the 2006 accident Fong Lee was arrested and convicted of criminal

homicide. He had purchased the Toyota Camry that year from its first owner, who

had bought it new from Brooklyn Park Motors in 1996. The car had approximately

170,000 miles on the odometer when Fong Lee purchased it. Fong Lee's conviction

was eventually vacated after evidence ofsudden acceleration in other Toyota vehicles

was produced in post conviction proceedings.

In 2010 Block brought an action in Minnesota state court against Brooklyn

Park Motors and a number of Toyota affiliated companies (Toyota defendants)

asserting claims of strict products liability, negligence, res ipsa loquitur, and fraud. 

Block alleges that the Toyota Camry was defective because it suddenly accelerated

and that the National Highway Transportation Safety Administration (NHTSA) had

received "numerous complaints" about incidents of sudden acceleration in Toyota

Camrys. The Toyota defendants removed to federal court. Block then moved to

remand to state court arguing that removal was improper under 28 U.S.C. § 1441(b)

because Brooklyn Park Motors is a citizen of Minnesota. The Toyota defendants

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The parties do not dispute the district court's finding that complete diversity

2

exists under 28 U.S.C. § 1332 since Block is the only party who is a citizen of

Missouri.

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argued that Brooklyn Park Motors was fraudulently joined and therefore the motion

to remand should be denied.

The district court denied the motion to remand and dismissed all claims against

Brooklyn Park Motors with prejudice. It concluded that Minnesota's "seller's

exception statute," which allows for dismissal of strict products liability claims

against sellers, applied to Block'sstrict liability claims. See Minn Stat. § 544.41. The

court decided that the provisional nature of the dismissal under that statute did not

preclude a finding of fraudulent joinder in this case. It concluded that no reasonable

basis for strict liability existed against Brooklyn Park Motors since it did not have

actual knowledge of the alleged defect and that there was no reasonable basis for the

negligence claim which also required knowledge of the alleged defect. 

Block then moved to reconsider or for entry of final judgment on the dismissal

of Brooklyn Park Motors. In her motion to reconsider Block alleged that there were

numerous complaints to NHTSA about sudden acceleration which showed that

Brooklyn Park Motors had actual knowledge of the alleged defect, but Block did not

produce any examples of such complaints. The district court denied the motion to

reconsider and entered final judgment in favor of Brooklyn Park Motors. Block now

appeals the denial of her motion to remand, arguing that Brooklyn Park Motors was

not fraudulently joined and should not have been dismissed. At argument Block

further contended that Brooklyn Park Motors should not have been dismissed with

prejudice.

II. 

We review de novo the district court's denial of the motion to remand. 

Knudson v. Systems Painters, Inc., 634 F.3d 968, 975 (8th Cir. 2011). A defendant

may remove a case to federal court in diversity cases "only if none of the parties in

interest properly joined and served as defendants is a citizen of the State in which

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such action is brought." 28 U.S.C. § 1441(b). Block argues thatsince Brooklyn Park

Motors is a citizen of Minnesota, the state in which the action was brought, removal

was inappropriate and remand is required. 

If there was "no reasonable basis in fact and law" for Block's claims against

Brooklyn Park Motors, Filla v. Norfolk S. Ry. Co., 336 F.3d 806, 810 (8th Cir. 2003)

(citation omitted), joinder of Brooklyn Park Motors was "fraudulent," meaning that

it was named as a party "solely to prevent removal" of the case from state court. Id.

at 809. If Brooklyn Park Motors was fraudulently joined, both the district court's

denial of the motion to remand and the dismissal of Brooklyn Park Motors were

proper. 

Fraudulent joinder does not exist where "there is arguably a reasonable basis

for predicting that the state law might impose liability based upon the facts involved." 

Junk v. Terminix Int'l Co., 628 F.3d 439, 446 (8th Cir. 2010) (citation omitted). In

order to establish fraudulent joinder, the defendant must "do more than merely prove

that the plaintiff's claim should be dismissed pursuant to a Rule 12(b)(6) motion"

since "we do not focus on the artfulness of the plaintiff's pleadings." Knudson, 634

F.3d at 980. In fraudulent joinder cases, some courts examine material beyond the

complaint's allegations to "determine if there is any factual support" for the claims

against the allegedly fraudulently joined defendant. See Masepohl v. Am. Tobacco

Co., Inc., 974 F. Supp. 1245, 1250 (D. Minn. 1997). "All doubts about federal

jurisdiction should be resolved in favor of remand to state court." In re Prempro

Prod. Liab. Litig., 591 F.3d 613, 620 (8th Cir. 2010). 

Block argues that the district court erred in finding fraudulent joinder,

dismissing Brooklyn Park Motors, and denying the motion to remand because there

is a reasonable basis in fact and law for her strict liability and negligence claims. We

address these claims separately.

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A. 

Block first argues that the district court erred in finding no "reasonable basis

in fact and law" for her strict liability claims against Brooklyn Park Motors. 

Minnesota has a "seller's exception" statute which mandates dismissal of strict

liability claims against nonmanufacturers where the nonmanufacturer provides the

identity ofthe manufacturer, unlessthe plaintiffshowsthat the nonmanufacturer falls

into one of three exceptions: 

(a) that the defendant has exercised some significant control over the

design or manufacture of the product, or has provided instructions or

warningsto the manufacturer relative to the alleged defect in the product

which caused the injury, death or damage;

(b) that the defendant had actual knowledge of the defect in the product

which caused the injury, death or damage; or

(c) that the defendant created the defect in the product which caused the

injury, death or damage.

Minn. Stat. § 544.41 subdiv. 3. If the plaintiff can show one of the three exceptions,

dismissal is prohibited. If no exception applies, dismissal is mandatory but "[t]he

plaintiff may at any time subsequent to dismissal move to vacate the order of

dismissal and reinstate the . . . defendant" where it can show an inability to recover

against the manufacturer. Id. subdiv. 2. The statute thus "tempers the harsh effect of

strict liability as it applies to passive sellers, while ensuring that a person injured by

a defective product can recover from a viable source." In re Shigellosis Litig., 647

N.W.2d 1, 6 (Minn. Ct. App. 2002).

Block contends that dismissal under § 544.41 is always provisional and thus

the Minnesota seller's exception statute is never a proper basis for finding fraudulent

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joinder. She states that the statute allows reinstatement of the seller "at any time

subsequent to dismissal" under certain conditions, see id. subdiv. 2, and thus

Brooklyn Park Motors would remain "functionally a party," precluding removal. She

cites Illinois and Missouri district court cases suggesting that under similar statutes

in those states the seller "remains functionally a party, susceptible of reinstatement

at any time before judgment." LaRoe v. Cassens & Sons, Inc., 472 F. Supp. 2d 1041,

1053 (S.D. Ill. 2006); see Dorsey v. Sekisui Am. Corp., 79 F. Supp. 2d 1089, 1092

(E.D. Mo. 1999). She argues that there is an "obvious risk" that the Toyota

defendants could go bankrupt or otherwise become unable to pay a judgment in which

case Brooklyn Park Motors could be reinstated. See § 544.41 subdiv. 2(d), (e).

The district court concluded that "[w]hile a remote chance exists that a

catastrophic global economic event will bankrupt all the Toyota [d]efendants, that

extremely unlikely possibility does not rise above the level of the hypothetical" and

thusthere was no reasonable basis for a claim ofstrict liability against Brooklyn Park

Motors merely because of the statute's reinstatement provision. Brooklyn Park

Motors notes that even in the unlikely event of bankruptcy Toyota defendants carry

"substantial insurance coverage," which would preclude Brooklyn Park Motors'future

reinstatement under the statute. 

We agree with the district court that the Minnesota statutory seller's exception

does not preclude a finding of fraudulent joinder for joining Brooklyn Park Motors

as a defendant in this case. The Missouri statute Block refers to is dissimilar, for it

providesthat a defendant dismissed under it remains a party for jurisdiction purposes. 

Mo. Rev. Stat. § 537.762(6). The Illinois cases rely on cases interpreting the

Missouri statute. In contrast, the dismissed seller defendant does not remain a party

under the Minnesota statute. That statute has also been interpreted to allow a finding

of fraudulent joinder. See Masepohl, 974 F. Supp. at 1256 (denying motion to

remand based on finding of fraudulent joinder). Here, Block has failed to show any

reasonable basis for finding that Brooklyn Park Motors might be reinstated. See

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Henderson v. Ford Motor Co., 340 F. Supp. 2d 722, 727 (N.D. Miss. 2004)

(dismissing car dealership where plaintiff offered no "realistic scenario" in which

Ford Motor Company would be unable to satisfy a judgment and thus the dealership

would be reinstated under a similar Mississippi statute). 

Block also argues that the district court erred in dismissing with prejudice. She

asserts that if a court dismisses a defendant with prejudice under the Minnesota

seller's exception statute, that defendant cannot be reinstated under subdivision 2. 

The statute does not however specify that dismissal be without prejudice. Block has

not explained why a defendant dismissed with prejudice under the statute could not

be reinstated under subdivision 2, which expressly providesfor an order of dismissal

to be vacated and a defendant reinstated in certain circumstances. Cf. Murrell, 2010

WL 1050309, at *3 (implying that dismissal under statute would be with prejudice). 

The district court did not err in dismissing Brooklyn Park Motors with prejudice.

Block further argues that the district court erred in finding fraudulent joinder

because she has established that Brooklyn Park Motors had actual knowledge of the

defect, meeting one of the Minnesota statute's exceptions to mandatory dismissal of

a strict liability claimagainst a seller. § 544.41 subdiv. 3(b). The district court noted

3

that "Block has not made any specific allegations concerning how Brooklyn Park

Motors had knowledge regarding a defect in a product that it did not design or

manufacture and which did not manifest itself for more than ten years after the

vehicle left Brooklyn Park Motors' control." It concluded that "no reasonable basis

in fact and law exists for the strict liability claims against Brooklyn Park Motors."

Block also suggests that Brooklyn Park Motors created the defect under

3

subdivision 3(c) because it "failed to warn of the dangerous condition . . . both before

and after its initial sale." Block did not argue this before the district court, and we

decline to reach it. See Wright v. Newman, 735 F.2d 1073, 1076 (8th Cir. 1984).

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Block argues that the district court erred in concluding that actual knowledge

was not demonstrated. She pointsto numerous generalized allegations of knowledge

in her complaint asto all defendants jointly, such as"Defendants knew orshould have

known of numerous prior deaths, injuries, accidents, complaints, and claims made to

Defendants involving unintended acceleration of Toyota Camrys and other

substantially similar vehicles" or that they had "actual knowledge of other injuries

and deaths caused by the defective and dangerous condition of the vehicle." She also

alleged that "numerous complaints have been reported to the National Highway

Transportation Safety Administration documenting incidents of unintended

acceleration of Toyota Camry vehicles." 

We agree with the district court that Block has offered no reasonable basis in

fact and law to support a strict liability claim against Brooklyn Park Motors in light

of the Minnesota statute. The conclusory allegations in the complaint that "the

Defendants" knew of the alleged defect are insufficient to show that Brooklyn Park

Motors had actual knowledge as required by § 544.41 subdiv. 3(b). Minnesota law

does not impose a general postsale duty to warn. Hodder v. Goodyear Tire & Rubber

Co., 426 N.W.2d 826, 833 (Minn. 1988). Thus, the relevant inquiry is whether

Brooklyn Park Motors had knowledge of the alleged defect prior to the sale. Block's

complaint does not allege that Brooklyn Park Motors had knowledge of the alleged

defect before it sold the car in 1996, nor does she allege that Brooklyn Park Motors

had any knowledge at all of a defect in the 1996 model year vehicles.

Block asks that we consider her conclusory allegations about three specific

NHTSA complaints involving 1996 Toyota Camrys. Only one of them was made

4

before Brooklyn Park Motorssold the Camry. Block does not explain how Brooklyn

Park Motors would have gained knowledge of a defect in the 1996 Camry merely

It should be noted that Block has not produced the NHTSA complaints to 4

which she refers and asks the court to rely on the assertions in her brief as to their

substance. 

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because one isolated incident had been reported to a federal agency. Nor does Block

show that the feature which allegedly caused unintended acceleration in the 1996

complaint to NHTSA existed in Fong Lee's car. As to the other two alleged

complaints, both occurred after Brooklyn Park Motors' sale of Fong Lee'sCamry, and

it is not clear that they involved 1996 Camrys. 

We conclude that there is no "reasonable basis for predicting that [Minnesota]

law might impose liability based upon the facts involved." Filla, 336 F.3d at 811;see

Masepohl, 974 F. Supp. at 1254 (finding fraudulent joinder in part because in light

of § 544.41 plaintiff "failed to establish the possibility of a colorable strict products

liability claim" against distributor despite assertion that distributor "had knowledge

of the alleged defects").

Block further argues that even if she has not established a reasonable basis in

fact and law for her strict liability claims in light of the Minnesota statute, the court

erred by dismissing Brooklyn Park Motors before discovery. Block relies on Murrell

v. Zimmer, Inc., where a seller defendant's motion to dismiss was denied on the basis

of § 544.41 due to the district court's concern that dismissal before discovery might

"allow a non-passive seller to escape liability" under the Minnesota statute. No.

09–757, 2010 WL 1050309, at *3 (D. Minn. Mar. 18, 2010). Murrell did not involve

a motion to remand or allegations of fraudulent joinder, however; the parties there

disagreed about whether the correct manufacturer had been identified so it was

unclear whether a dismissal of the manufacturer under § 544.41 was available. The

fraudulent joinder doctrine anticipates resolution of jurisdictional issues at an early

stage after removal so that the case can be properly remanded to state court if there

is no jurisdiction. We conclude that the district court did not abuse its discretion by

denying the motion to remand and dismissing Brooklyn Park Motors before

discovery.

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B.

Finally, Block argues that the district court erred in finding no reasonable basis

for her negligence claims against Brooklyn Park Motors. Block's negligence theory

appears to be that Brooklyn Park Motors failed to warn consumers despite knowing

of the alleged defect in the 1996 Camry. Brooklyn Park Motors would have had to

have known or had reason to know of the alleged defect before it would incur any

duty to warn about the alleged defect. See Frey v. Montgomery Ward & Co., Inc.,

258 N.W.2d 782, 786 (Minn. 1977); Erickson v. Am. Honda Motor Co., Inc., 455

N.W.2d 74, 77 (Minn. Ct. App. 1990); Restatement (Second) of Torts § 401 (1965). 

Nor is there a duty to warn if the connection between the injury and the allegedly

negligent act is too remote. Gorath v. Rockwell Int'l, Inc., 441 N.W.2d 128, 133

(Minn. Ct. App. 1989) (no duty to warn where the connection between the product's

sale "and the accident some 9 years later was too remote to impose liability").

Block has offered no factual basis that Brooklyn Park Motors had any

knowledge of, or reason to know of, the alleged defect so as to subject it to

negligence liability. There was no evidence of the Camry's alleged problem with

sudden acceleration until ten years had passed, and the car had been driven 170,000

miles. We conclude there is no reasonable basis for Block's negligence claim against

Brooklyn Park Motors based on the facts asserted in this case and that the district

court's finding of fraudulent joinder was not improper.

III.

Accordingly, we affirm the denial of the motion to remand and the dismissal

of Brooklyn Park Motors with prejudice.

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