Should the Eighth Circuit recognize procedural misjoinder?

South Dakota Law Review, Spring, 2008 by Ronald A. Parsons, Jr.

B. CULHANE COMMUNICATIONS V. FULLER

Another recently published decision relates a similar tale from the District of South Dakota. In Culhane Communications v. Fuller, (77) a South Dakota corporation and its owner, both South Dakota residents, filed an action alleging seven state law claims arising out of a disputed transaction involving a radio station in Yankton, South Dakota. (78) Three of the claims were brought against two Iowa defendants collectively referred to as Fuller) with whom the plaintiffs had been negotiating. (79) Four additional claims were brought against a resident of South Dakota (Solberg) who had a financial interest in the negotiation of the disputed transaction. (80) After the Iowa defendants removed the action to federal court, the plaintiffs filed a motion for remand. (81) As Judge Piersol summarized the defendants' asserted basis for opposing the remand,

Fuller is not making the usual fraudulent joinder argument in this case.

   He does not contest that Plaintiffs state valid claims against
   Solberg under the facts alleged in the Complaint, but instead he
   argues that Solberg was fraudulently "misjoined" under the Federal
   Rules of Civil Procedure because the claims against him do not
   arise out of the same transaction or agreement as the claims
   against Fuller. The crux of Fuller's argument is that Plaintiffs'
   claims against Fuller are entirely distinct, factually and legally,
   from Plaintiffs' claims against Solberg and, therefore, they cannot
   be joined together in one lawsuit. (82)

After discussing the Tapscott decision and observing that its ambiguity has "left courts struggling with application of this theory," the district court, like the court in Bowling, readily concluded that there was no need to explore the substance or validity of a doctrine that, even if valid, was plainly not applicable to the action under consideration. (83) As the court explained: "The Eighth Circuit has not addressed procedural misjoinder, but the questions surrounding the doctrine need not be resolved in this case because the Court finds that Solberg was not misjoined, either merely or egregiously." (84) The action accordingly was remanded to state court. (85) As was true in Bowling, because the motion to remand was granted, the defendants were procedurally barred from appealing the order. (86)

VI. THE EIGHTH CIRCUIT SHOULD CONSIDER REJECTING THE

DOCTRINE OF PROCEDURAL MISJOINDER

If it is ever directly presented with the question, the author respectfully suggests that the Eighth Circuit should consider declining what will presumably be a tempting invitation to endorse the procedural misjoinder doctrine. Although there are persuasive arguments on both sides of the equation, (87) the judicial decisions declining to recognize procedural misjoinder as a new variant of fraudulent joinder appear to be better reasoned and in greater accord with the expressed intention of Congress.

A. CONGRESSIONAL INTENT

Nothing in the current federal removal statutes explicitly permits a court to disregard the citizenship of a state court party when assessing whether the suit qualifies for diversity jurisdiction. (88) Prior to 1990, the federal removal statute, 28 U.S.C. [section] 1441(c), provided that an action containing both removable and non-removable state law claims could be removed and the claims severed if they were deemed to be "separate and independent." (89) Claims were separate and independent within the meaning of that statute if they did not arise out of the same common nucleus of facts and if they sought completely separate redress for unrelated legal injuries. (90) Under the pre-1990 version of section 1441(c), where claims did not share their genesis in a common factual nucleus and sought separate redress for unrelated injuries, a diverse defendant was authorized to remove an entire case, and district courts were authorized to accept jurisdiction over the removable claims and remand the non-removable claims involving nondiverse defendants to state court. (91)