United States Court of Appeals

Fifth Circuit

FILED

January 13, 2006

Charles R. Fulbruge III

Clerk

In the

United States Court of Appeals

for the Fifth Circuit

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m 04-41584

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JOHNNY CROCKETT, ET AL.,

Appellants,

JOHNNY CROCKETT,

INDIVIDUALLY, AND AS HEIRS TO THE ESTATE OF VERONICA FAYE CROCKETT;

ANDRA KITCHEN,

INDIVIDUALLY, AND AS HEIRS TO THE ESTATE OF VERONICA FAYE CROCKETT;

ROBERT KITCHEN,

INDIVIDUALLY, ANS AS HEIRS TO THE ESTATE OF VERONICA FAYE CROCKETT,

Plaintiffs-Appellants,

VERSUS

R.J. REYNOLDS TOBACCO COMPANY, ET AL.,

Defendants,

R.J. REYNOLDS TOBACCO COMPANY; R.J.R. NABISCO, INC.;

PHILIP MORRIS USA INC.; PHILIP MORRIS COMPANIES, INC.;

BROWN AND WILLIAMSON TOBACCO CORPORATION;

BATUS TOBACCO SERVICES, INC.; B&W JAPAN, INC.;

H.E.B. BUTT GROCERY COMPANY,

Defendants-Appellees.
2

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Appeal from the United States District Court

for the Southern District of Texas

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Before GARWOOD, SMITH, and DEMOSS,

Circuit Judges.

JERRY E. SMITH, Circuit Judge:

Johnny Crockett and other heirs of the estate of Veronica Faye Crockett (collectively

“Crockett”) challenge the removal to federal

court of their wrongful death and survival suit

against R.J. Reynolds Tobacco Company and

other tobacco companies(collectively the “tobacco defendants”). Concluding that there is

jurisdiction, we affirm the judgment on the

merits.

I.

Crockettfiled a wrongfuldeathand survival

suit against the tobacco defendants and Dr.

William Peterek and the Gulf Coast Medical

Group (collectively the “health care defendants”) in state court seeking damages for the

cancer-related death of Veronica Faye Crockett, a long-time smoker. Crockett alleges that

the tobacco defendants’ defective cigarettes

and the health care defendants’ negligence in

failing to diagnose the decedent’s cancer combined to cause her death.

Because Crockett and the health care defendants are citizens of Texas, there is not

complete diversity of citizenship. Federal jurisdiction also is barred by the fact that the

health care defendants are citizens of the state

in which the action is brought. The tobacco

defendants nevertheless removed, claiming that

the non-diverse health care defendants had

been fraudulently joined to defeat removal

jurisdiction. The district court determined that

there had been no fraudulent joinder and remanded to state court.

On remand, the tobacco defendants, over

Crockett’s objection, successfully moved to

sever Crockett’s claims against the health care

defendants. Upon issuance of the severance

order, the tobacco defendants again removed,

arguing that the severance of the non-diverse

parties cured the lack of complete diversity.

Immediately after filing their notice of removal, the tobacco defendants also filed a motion

for judgment on the pleadings.

Once back infederalcourt,Crockett moved

to remand, arguing that the tobacco defendants’second attempt to removewasimproper

because diversityhad not been created through

a voluntary act of the plaintiffs. Instead of

first ruling on Crockett’s motion, the district

court held against him on the merits by granting the tobacco defendant’s motion for judgment on the pleadings, then denied as moot the

motionto remand.1 Crockett appeals, claiming

1 Although it reached the correct result, the district court should not have decided to bypass the

jurisdictional question presented in the motion to

remand and proceed directly to the merits. See

Steel Co. v. Citizens for a Better Env’t, 523 U.S.

83, 94-95 (1998) (rejecting the notion that a court

(continued...)
3

the district court lacked subject matter jurisdiction.

II.

“We review questions ofsubject matter jurisdiction de novo.” Bissonnet Invs., LLC v.

Quinlan, 320 F.3d 520, 522 (5th Cir. 2003).

Because Crockett does not contest the district

court’s decision on the merits, so the only issue on appeal is whether the district court had

removal jurisdiction, leading usto apply the de

novo standard.

As a general matter, 

any civil action brought in a State court of

which the district courts of the United

States have original jurisdiction, may be removed by the defendant or the defendants,

to the district court of the United Statesfor

the district and division embracing the place

where such action is pending. 

28 U.S.C. § 1441(a). If jurisdiction is based

on diversity of citizenship, however, the action

isremovable only if there is complete diversity

and “none of the parties in interest properly

joined and served as defendants is a citizen of

the State in which such action is brought.” Id.

§ 1441(b). If an action is not initially removable, but later becomes removable,

a notice of removal may be filed within

thirty days after receipt by the defendant

. . . of a copy of an amended pleading, motion, order or other paper from which it

may first be ascertained that the case is one

which is or has become removable, except

that a case may not be removed on the basis of [diversity of citizenship] more than

one year after commencement ofthe action.

Id.

This suit was initially nonremovable because the health care defendants were non-diverse and were citizens of Texas, in which the

action was brought. The tobacco defendants

argue, however, that the state court’s order

severing Crockett’s claims against the health

care defendants produced complete diversity

and obviated the “in-state defendant” barrier

posed by § 1446(b). The tobacco defendants

assert that a severance order qualifies as an

“order or other paper from which it may first

be ascertained that the case is one which . . .

has become removable.” § 1446(b). 

Crockett contends, to the contrary, that

§ 1446(b) was enacted against the backdrop

of, and without the intent to abrogate, the judicially-created “voluntary-involuntary” rule

whereby “an action nonremovable when commencedmaybecome removable thereafter only

by the voluntary act of the plaintiff.” Weems

v. Louis Dreyfus Corp., 380 F.2d 545, 547

(5th Cir. 1967). Because this suit became

arguably removable only after the issuance of

a severance order that was entered over

Crockett’s objection, Crockett claimsremoval

wasimproper under the voluntary-involuntary

rule.

The tobacco defendants counter that the

voluntary-involuntary rule is inapplicable because the health care defendants were not

properly-joined parties. We agree.

Courts have long recognized an exception

to the voluntary-involuntaryrule where a claim

against a nondiverse or in-state defendant is

1

(...continued)

can “assume” jurisdiction for the purpose of deciding the merits, because such an approach “carries the courts beyond the bounds of authorized

judicial action and thus offends fundamental principles of separation of powers”).
4

dismissed on account of fraudulent joinder.2

Fraudulent joinder can be established by demonstrating either “(1) actualfraud in the pleading of jurisdictionalfacts, or (2) inability ofthe

plaintiff to establish a cause of action against

the non-diverse party in state court.” Travis v.

Irby, 326 F.3d 644, 646-47 (5th Cir. 2003).3

On the tobacco defendants’ first attempt to

remove, the district court, after deciding that

the health care defendants had not been fraudulently joined, remanded on that basis. Crockett notes correctly that that decision is made

unreviewable by 28 U.S.C. § 1447(d).4 In

addition, the severance order issued by the

state court cannot be considered equivalent to

a finding of actual fraud in the pleadings or an

inability of the plaintiffsto establish a cause of

action against the health care defendants.

Rather, that order merely established that

Crockett’s claims against the health care defendants should be tried in separate suits.

Crockett elected not to appeal that ruling.

Fraudulent joinder is therefore no longer an

issue in this case.

A party, however, can be improperly joined

without being fraudulently joined. Under federal law, defendants are properly joined if

(1) “there is asserted against them jointly,severally, or in the alternative, any right to relief

in respect of or arising out of the same transaction, occurrence, or series of transactions or

occurrences” and (2) “any question of law or

fact common to all defendants will arise in the

action.” FED. R. CIV. P. 20(a). Texas has

adopted the same requirements for proper

joinder. See TEX. R. CIV. P. 40(a). If these

requirements are not met, joinder is improper

even if there is no fraud in the pleadings and

the plaintiff does have the ability to recover

against each of the defendants.5

The state court severed Crockett’s claims

against the health care defendants from his

claims against the tobacco defendants because

“the medical negligence and malpractice claim

and the burden of proof to sustain [that] claim

is totally different [from] the burden of proof

. . . necessary to secure judgment for product

liability.”6 To the extent the severance decision was tantamount to a finding of improper

joinder, we agree with that finding.

The fraudulent joinder exception to the voluntary-involuntary rule is designed to prevent

plaintiffs from blocking removal by joining

nondiverse and/or in-state defendants who

should not be parties. That salutary purpose is

also served by recognizing an exception to the

voluntary-involuntary rule where defendants

are improperly, though not fraudulently,

joined. We therefore conclude that removal

on the basis of an unappealed severance, by a

2

See, e.g., Insigna v. LaBella, 845 F.2d 249,

254 (11th Cir. 1988) (“Fraudulent joinder is a

well-established exception to the voluntary-involuntary rule.”).

3 Accord Smallwood v. Ill. Cent. R.R., 385 F.3d

568, 573 (5thCir. 2004) (en banc) (describing “the

test for fraudulent joinder” and quotingTravis, 326

F.3d at 646-47), cert. denied, 125 S. Ct. 1825

(2005).

4 Section 1447(d) states that “[a]n order remanding a case to the State court from which it

was removed is not reviewable on appeal or otherwise” (adding an exception not relevant here).

5 Cf. Tapscott v. MS Dealer Serv. Corp., 77

F.3d 1353, 1360 (11th Cir. 1996).

6 Crockett v. R.J. Reynolds Tobacco Co., No.

03CV1391 (10th Dist. Ct., Galveston County,

Tex., Aug. 18, 2004) (transcript of hearing on defendants’ motion to sever).
5

state court, of claims against improperlyjoined

defendants is not subject to the voluntaryinvoluntary rule.7

 Accordingly, removal

jurisdiction existed in this case upon the severance of Crockett’s claims against the nondiverse in-state health care defendants.

III.

Crockett has not challenged the district

court’s dispositiononthemerits. Accordingly,

because we conclude that the district court had

subject matter jurisdiction, itsjudgment granting the motion for judgment on the pleadings,

denying (as moot) the motion to remand, and

dismissing all claims with prejudice, is AFFIRMED.

7

 This conclusion finds support the text of

§ 1441(b), which does not refer to “nonfraudulently joined” parties. Rather, it blocks removal only

where “properly joined” defendants are citizens of

the state in which the action is brought.