Opinion ID: 48281
Heading Depth: 1
Heading Rank: 3

Heading: standard for improper joinder

Text: 11 To establish that a non-diverse defendant has been improperly joined to defeat diversity jurisdiction, the removing party must prove (1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court. Smallwood, 385 F.3d at 573 (quotation omitted). Here, there has been no claim that Plaintiffs fraudulently pleaded jurisdictional facts, so our concern is with the second prong. The test established by our circuit 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. Id. In making this determination, the district court is obliged to resolve any contested issues of material fact, and any ambiguity or uncertainty in the controlling state law, in [the plaintiff's] favor. Griggs v. State Farm Lloyds, 181 F.3d 694, 699 (5th Cir. 1999). Plaintiffs argue that throughout its Order, the district court erred by resolving ambiguities in the controlling state law in favor of Union Pacific. As discussed below, this contention has merit.