Tina Davidson v. Georgia Pacific, L. L. C.

Case: 14-30925 Document: 00513470939 Page: 1 Date Filed: 04/19/2016

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT United States Court of Appeals

Fifth Circuit

FILED

April 19, 2016

No. 14-30925

Lyle W. Cayce

Clerk

TINA DAVIDSON, Individually and on behalf of William Cleve Davidson;

KATHRYN D. DAVIDSON, Individually and on behalf of William Cleve

Davidson; KRISTEN M. DAVIDSON, Individually and on behalf of William

Cleve Davidson,

Plaintiffs - Appellants

v.

GEORGIA-PACIFIC, L.L.C.; UNION CARBIDE CORPORATION;

CERTAINTEED CORPORATION; BEAZER EAST, INCORPORATED; J

GRAVES INSULATION COMPANY, INCORPORATED, formerly known as

Graves-Aber Insulation Company, Incorporated; TAYLOR SEIDENBACH,

INCORPORATED, formerly known as Taylor-Seidenbach, Incorporated,

Defendants - Appellees

Appeals from the United States District Court

for the Western District of Louisiana

Before REAVLEY, PRADO, and COSTA, Circuit Judges.

COSTA, Circuit Judge:

This asbestos case requires us to once again wade into the thicket of

improper joinder law. 13F CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE

AND PROCEDURE § 3641.1 (3d ed. 2009) (noting that the Fifth Circuit “embraces

a number of district courts that in particular have seen a considerable amount

of removal activity that has raised issues of fraudulent joinder”). It also affords

us an opportunity to decide a question about removal procedure that district

Case: 14-30925 Document: 00513470939 Page: 2 Date Filed: 04/19/2016

No. 14-30925

courts often face, but that we have not yet confronted: when a district court

refers a motion to remand to a magistrate judge, is that matter a

nondispositive one in which the magistrate has the authority to enter an order

of remand? Or is it a dispositive matter in which the magistrate judge may

only make a recommendation subject to the district court’s de novo review?

I.

William Davidson was diagnosed with mesothelioma in March 2010.

Two months later, he filed a lawsuit in Louisiana state court against numerous

manufacturer, supplier, and contractor defendants that he contended were

responsible for his exposure to asbestos. Eventually, the case was removed to

federal court. The parties conducted eleven months of discovery, including

depositions of Davidson and his coworkers. Davidson died in October 2011.

Davidson’s estate and family did not substitute as proper plaintiffs. Instead,

a motion to dismiss was filed and granted without prejudice in October 2012.

Meanwhile, in April 2012, Plaintiffs filed the instant survival and

wrongful death action in Louisiana state court bringing similar claims to those

in the first suit. The new suit did, however, add an allegation that Davidson

was exposed to asbestos-containing insulation while working at Poulan

Chainsaw in Shreveport from 1972 to 1978. All of the defendants in Davidson

II were parties to Davidson I with the exception of the nondiverse Louisiana

Defendants whose joinder is contested in this appeal: J. Graves Insulation

Company, Inc. (Graves) and Taylor-Seidenbach, Inc. (Taylor). Graves and

Taylor, according to Plaintiffs, are contractors that frequently installed

asbestos insulation during the 1970s in northwest Louisiana.

Defendant Georgia-Pacific timely removed this case on the ground that

the Louisiana citizenship of Graves and Taylor should be ignored because these

Defendants had been improperly joined. It pointed out that “substantial

2

Case: 14-30925 Document: 00513470939 Page: 3 Date Filed: 04/19/2016

No. 14-30925

discovery was completed” in the first case and that there had been no mention

of either Graves or Taylor during that discovery.

Plaintiffs sought remand. In support of their motion, Plaintiffs attached

the affidavit of one of their attorneys, who stated, based on her experience that

“to the extent Mr. Davidson was exposed to asbestos insulation at Poulan

Chainsaw, this insulation was more likely than not supplied, installed[,] and

repaired by Graves and Taylor.” Georgia-Pacific and a second defendant,

CertainTeed, opposed the motion to remand, urging the court to pierce the

pleadings and to consider summary-judgment type evidence.

Both sides supported their positions by quoting Davidson’s testimony,

from two depositions in the first lawsuit, about potential asbestos exposure

while working at Poulan Chainsaw. In the first deposition he testified as

follows:

Q: Okay. Do you have any reason to believe that you were exposed

to any asbestos or asbestos-contain[ing] products when you worked

for Poulan between that 19, you know, 72 or so to 1978 or ’79?

A: It’s a possibility because being out in the plant a lot and there

were repairs being done to equipment all the time, some big

machinery, and, you know, it’s very possible.

In the second deposition, Davidson responded again to questions about

asbestos exposure at Poulan Chainsaw:

Q: One of the things that you said was that you saw repairs being

done to machinery out at [Poulan]. Can you describe what

machinery that was?

A: Drills. You know, industrial-type drills, presses. I really can’t

remember beyond that.

Q: And do you remember any of this machinery being insulated out

at [Poulan]?

A: I don’t recall.

3

Case: 14-30925 Document: 00513470939 Page: 4 Date Filed: 04/19/2016

No. 14-30925

Q: Do you remember insulated pipe being out at [Poulan]?

A: I don’t recall.

Q: Do you ever remember seeing anybody doing any type of

insulation work out at [Poulan]?

A: No.

The district court referred the remand motion to a magistrate judge. The

magistrate judge issued an order granting the motion to remand, concluding

that the allegations in the petition were sufficient to survive a Rule 12(b)(6)-

type analysis and that there was not a basis for piercing the pleadings.

Georgia-Pacific and CertainTeed filed “appeals” of the order. The district

court disagreed with the magistrate’s analysis. After piercing the pleadings,

it concluded that Graves and Taylor had been improperly joined. Based on its

improper joinder finding, the court dismissed Graves and Taylor with

prejudice. After a period of discovery, the remaining Defendants filed a series

of motions that resulted in the dismissal of all claims.

II.

On appeal, Plaintiffs challenge only the denial of their motion to

remand. 1 Before we reach the merits of that question, we address a procedural

question that a number of other circuits have decided but we have not: does a

1 Graves and Taylor argue that this court lacks appellate jurisdiction over them

because the Plaintiffs did not appeal the district court’s order dismissing them with prejudice.

In their amended notice of appeal, Plaintiffs specified that they were appealing the order

denying their motion for remand, but failed to specifically mention the dismissals that were

derivative of that ruling. Because Plaintiffs’ success on the remand issue that they have

clearly preserved would mean the district court lacked jurisdiction to enter any dismissals,

we reject this challenge to our appellate jurisdiction.

4

Case: 14-30925 Document: 00513470939 Page: 5 Date Filed: 04/19/2016

No. 14-30925

magistrate judge have authority to enter an order remanding a case to state

court? 2

In the trial court proceedings, the parties and both judges operated on

the belief that the magistrate judge has that authority. The magistrate judge

did not just recommend that the case be remanded, he entered an Order of

Remand; Georgia-Pacific and CertainTeed filed “appeals” of that ruling; and

the district court treated the magistrate judge’s ruling as one involving a

nondispositive matter that could be set aside only if “clearly erroneous or

contrary to law.” 28 U.S.C. § 636(b)(1)(A); FED. R. CIV. P. 72(a). In contrast,

rulings by a magistrate judge on dispositive matters—motions to dismiss and

for entry of summary judgment being the common examples—are mere

recommendations subject to de novo review when properly challenged by the

losing party. See 28 U.S.C. § 636(b)(1); FED. R. CIV. P. 72(b)(3).

This dichotomy of a magistrate judge’s authority in civil cases referred

by the district court is outlined in the Federal Magistrates Act, 28 U.S.C. § 636,

and seeks to enforce the constitutional limits on non-Article III judges. See 12

CHARLES ALAN WRIGHT ET. AL., FEDERAL PRACTICE AND PROCEDURE § 3068.2

(3d ed. 2014) (“Constitutional concerns explain the statutory distinction

between types of pretrial matters. Motions thought ‘dispositive’ of the action

warrant particularized objection procedures and a higher standard of review

because of the possible constitutional objections that only an article III judge

2 At least once, this circuit has reviewed a remand ruling from a magistrate judge that

a district court treated as nondispositive. See In re 1994 Exxon Chem. Fire, 558 F.3d 378,

383 (5th Cir. 2009) (noting that the district court affirmed the magistrate judge’s denial of

remand motions in fifteen cases under the “clear error” standard of 28 U.S.C. § 636(b)(1)(A)

that governs rulings by magistrate judges on nondispositive matters). But in that case

neither the parties nor the court raised an issue about the magistrate judge’s authority. See

id. at 381 (listing the sole issue on appeal as whether the district court lacked subject matter

jurisdiction).

5

Case: 14-30925 Document: 00513470939 Page: 6 Date Filed: 04/19/2016

No. 14-30925

may ultimately determine the litigation.” (quotation marks omitted)). The Act

lists the following as dispositive pretrial matters in civil cases in which the

magistrate judge may only issue a recommendation: motions for injunctive

relief, for judgment on the pleadings, for summary judgment, to certify or

decertify a class action, to dismiss for failure to state a claim, and to

involuntarily dismiss a case. 28 U.S.C. § 636(b)(1)(A). Although motions to

remand are not included in this list, every court of appeals to consider the

question has held that they should be treated as dispositive matters in which

only the district court may enter an order. See Flam v. Flam, 788 F.3d 1043,

1046–47 (9th Cir. 2015); Williams v. Beemiller, Inc., 527 F.3d 259, 266 (2d Cir.

2008); Vogel v. U.S. Office Prods. Co., 258 F.3d 509, 517 (6th Cir. 2001); First

Union Mortg. Corp. v. Smith, 229 F.3d 992, 995–96 (10th Cir. 2000); In re U.S.

Healthcare, 159 F.3d 142, 145–46 (3d Cir. 1998). 3

We agree with the conclusion of our five sister circuits. The duty to avoid

constitutional difficulties when interpreting a statute warrants a narrow

reading of the matters in which a magistrate judge may enter orders without

de novo Article III review. Williams, 527 F.3d at 264–65 (citing Gomez v.

United States, 490 U.S. 858, 863–64 (1989) 4). Allowing magistrate judges to

3 A number of district courts have held that a motion to remand is a nondispositive

matter. Indeed, “district courts in this circuit have generally adhered to the view that

motions to remand are non[]dispositive pretrial matters and have applied the clearly

erroneous standard of review.” Credeur v. York Claim Serv., 2013 WL 5935477 at *3 (W.D.

La. 2013) (citing cases).

4 Gomez is useful for its general point that courts interpreting the Federal Magistrates

Act should do so in a manner that avoids constitutional concerns about the exercise of power

by non-Article III judges. 490 U.S. at 864 (noting, in interpreting the Act, the “settled policy

to avoid an interpretation of a federal statute that engenders constitutional issues if a

reasonable alternative interpretation poses no constitutional question”). We do not, however,

read it as two courts of appeals have as a holding that the list of dispositive matters in 28

U.S.C. § 636(b)(1)(A) is not exhaustive. See, e.g., Flam, 788 F.3d at 1046 (citing Gomez for

the proposition that the “Supreme Court has identified some judicial functions as dispositive

notwithstanding the fact that they do not appear in the list”); Williams, 527 F.3d at 265 (also

characterizing Gomez as holding that jury selection in felony trials is dispositive despite not

6

Case: 14-30925 Document: 00513470939 Page: 7 Date Filed: 04/19/2016

No. 14-30925

enter remand orders at a minimum approaches the constitutional line because

“a remand order is dispositive insofar as proceedings in the federal court are

concerned” and thus is “the functional equivalent of an order of dismissal.” See

U.S. Healthcare, 159 F.3d at 145 (noting that the question of subject matter

jurisdiction is “at the core of the exercise of federal judicial power”). Treating

motions to remand as nondispositive would create a situation in which an

Article III judge might never exercise de novo review of a case during its entire

federal lifespan. And although a remand order is a final disposition only of the

jurisdictional question, a merits determination is not a necessary feature of a

“dispositive” matter as the statute labels requests for preliminary injunctions

and class certification as dispositive. 28 U.S.C. § 636(b)(1)(A).

We note an additional reason, one our sister circuits have not discussed,

for treating rulings on motions to remand as dispositive matters. 5 An order of

remand like the one the magistrate judge issued “is not reviewable on appeal

or otherwise.” 28 U.S.C. § 1447(d). Yet the statute and rule governing

being in the statute’s list of dispositive matters). The question in Gomez was not dispositive

versus nondispositive, but whether magistrates had any authority to conduct jury selection

in felony cases. 490 U.S. at 860. The relevant statutory language provided that a “magistrate

may be assigned such additional duties as are not inconsistent with the Constitution and

laws of the United States.” Id. at 863 (quoting 28 U.S.C. § 636(b)(3)). In finding that jury

selection in felony cases did not fall within this catch-all provision, the Court noted that if it

were within the scope of a magistrate’s duties, one would expect jury selection to be a

dispositive one enumerated in the statute given that duty’s importance. The absence of the

jury-selection duty from the enumerated list of dispositive matters thus counseled against

including it within the catch-all provision. Id. at 873–74. If anything then, Gomez attaches

significance to the statutory list of dispositive matters. We nonetheless come to the same

conclusion in regard to a magistrate judge’s authority over motions to remand, for the reasons

discussed above, as the courts of appeals that have read Gomez differently than we do.

5 U.S. Healthcare discussed some of these concerns after holding that the magistrate

judge should not have entered an order of remand. 159 F.3d at 145–47. It did so in

determining whether that order was appealable or the basis for a petition for mandamus on

the ground that the magistrate judge exceeded his authority. See id. (concluding that the

latter avenue offered relief). We conclude that these difficult issues surrounding appellate

review of an order of remand issued by a magistrate judge also inform the initial classification

decision.

7

Case: 14-30925 Document: 00513470939 Page: 8 Date Filed: 04/19/2016

No. 14-30925

magistrate judge rulings on nondispositive matters provides for an appeal to

the district court under the “clearly erroneous or contrary to law” standard.

28 U.S.C. § 636(b)(1)(A); FED. R. CIV. P. 72(a). Classifying motions to remand

as dispositive matters on which magistrate judges may enter recommendations

but not orders of remand avoids a potential collision between these review

provisions. It also avoids a timing problem that would result even if the

magistrate-specific review provisions govern a magistrate judge’s entry of a

remand order: absent a stay, a remand order sends the case back to state court

and deprives the federal court of jurisdiction that would allow for district court

review. 28 U.S.C. § 1447(c) (noting that the clerk of court should mail order of

remand to state court which “may thereupon proceed with such case”); Dahiya

v. Talmidge Int’l, Ltd., 371 F.3d 207, 208 (5th Cir. 2004) (concluding that

district court’s remand order deprived the court of appeals of further federal

jurisdiction). 6

We therefore join the uniform view of the courts of appeals that have

considered this question and hold that a motion to remand is a dispositive

matter on which a magistrate judge should enter a recommendation to the

district court subject to de novo review.

6 Escuadra v. Geovera Specialty Ins. Co., 739 F. Supp. 2d 967 (E.D. Tex. 2010), appears

to recognize both of these problems. It qualified its holding that a motion to remand is

nondispositive by saying that is the case “at least when district-judge review is not

foreclosed.” Id. at 972. It then addressed the practical difficulties of that review by noting

that the local rules in that district require a 20-day waiting period after entry of a remand

order before the clerk of court transmits a case back to state court. Id. at 972 n.3. Of course,

not every district has that local rule. And even operating under such a rule, that 20 days

would only allow the objecting party to file its appeal with the district judge. In most cases,

the district judge would need more time to rule and thus would have to enter a stay. See also

U.S. Healthcare, 159 F.3d at 144 (noting that even with a Local Rule’s 15-day grace period,

the district court “treated the remand as effective immediately” because the case was closed

the day the order of remand was entered, thus precluding district court review). Working

around this problem is not impossible, but its existence informs how we classify a remand

matter.

8

Case: 14-30925 Document: 00513470939 Page: 9 Date Filed: 04/19/2016

No. 14-30925

III.

That means we review the district court’s ruling as opposed to acting as

the second layer of review for the magistrate judge’s decision. We review de

novo the district court’s “determination that a party is improperly joined and

[its] denial of a motion for remand.” Kling Realty Co. v. Chevron USA, Inc.,

575 F.3d 510, 513 (5th Cir. 2009). The decision to pierce the pleadings and

consider summary judgment-type evidence is reviewed only for abuse of

discretion. La. ex rel. Caldwell v. Allstate Ins. Co., 536 F.3d 418, 425 (5th Cir.

2008).

“Improper joinder can be established in two ways: (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.” Mumfrey v. CVS

Pharmacy, Inc., 719 F.3d 392, 401 (5th Cir. 2013) (internal quotations and

alteration omitted). 7 Only the second situation is before us. The test “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.” Smallwood

v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004) (en banc).

Our en banc opinion in Smallwood sets out the procedure for

determining whether, in the absence of actual fraud, a nondiverse defendant

was improperly joined. See Mumfrey, 719 F.3d at 401. First, a court looks at

the allegations contained in the complaint. See id. If a plaintiff can survive a

Rule 12(b)(6) challenge for failure to state a claim, there is ordinarily no

7 “The Fifth Circuit adopted the terminology ‘improper joinder,’ . . . instead of the

terminology ‘fraudulent joinder,’ which is ‘a term of art’ used in other circuits to describe the

doctrine that ignores a lack of complete diversity where the plaintiff joins a nondiverse

defendant to avoid federal jurisdiction.” Mumfrey, 719 F.3d at 401 n.14 (internal citation

omitted).

9

Case: 14-30925 Document: 00513470939 Page: 10 Date Filed: 04/19/2016

No. 14-30925

improper joinder. Id. (citing Smallwood, 385 F.3d at 573). When “a complaint

states a claim that satisfies 12(b)(6), but has ‘misstated or omitted discrete

facts that would determine the propriety of joinder . . . the district court may,

in its discretion, pierce the pleadings and conduct a summary inquiry.’” Id.

(quoting Smallwood, 385 F.3d at 573). “[T]he decision regarding the procedure

necessary in a given case must lie within the discretion of the trial court.”

Smallwood, 385 F.3d at 573.

“The burden of persuasion on those who claim [improper] joinder is a

heavy one.” Travis v. Irby, 326 F.3d 644, 649 (5th Cir. 2003). Accordingly, we

view “all unchallenged factual allegations, including those alleged in the

complaint, in the light most favorable to the plaintiff” and resolve “[a]ny

contested issues of fact and any ambiguities of state law” in the plaintiff’s favor.

Id. Moreover, we must “take into account the ‘status of discovery’ and consider

what opportunity the plaintiff has had to develop its claims against the

non[]diverse defendant.” McKee v. Kan. City S. Ry. Co., 358 F.3d 329, 334 (5th

Cir. 2004) (quoting Travis, 326 F.3d at 649).

We do not agree with Plaintiffs that the district court abused its

discretion in piercing the pleadings and looking to see if evidence had

developed in the first case “that would preclude [P]laintiff[s’] recovery against

the in-state defendant.” See Smallwood, 385 F.3d at 573–74. In light of the

district court’s discretion in deciding whether to pierce the pleadings, it was

not error to do so here given the unusual procedural posture of this case that

meant there was already a lengthy record at the outset of this second lawsuit.

See Guillory v. PPG Indus., Inc., 434 F.3d 303, 309–11 (5th Cir. 2005) (rejecting

plaintiff’s challenge to court’s decision to pierce the pleadings when neither the

scope and amount of remand-related discovery nor the length of time court took

to consider the evidence was excessive).

10

Case: 14-30925 Document: 00513470939 Page: 11 Date Filed: 04/19/2016

No. 14-30925

We agree with Plaintiffs, however, that the district court erred in

applying the improper joinder standard to that record. Although a court may

pierce the pleadings and consider summary-judgment type evidence, the

standard for finding improper joinder is not the summary judgment standard

in which an absence in the plaintiff’s proof alone can be fatal. Travis, 326 F.3d

at 650 n.3 (noting that “[o]n a motion for summary judgment, the plaintiff’s

lack of evidence in support of her claims, after a sufficient period of discovery,

could have a different effect” than at the motion to remand stage, where such

lack of evidence is not dispositive). It would make little sense to apply the no-

evidence summary judgment standard at the early stages of a case when

improper joinder usually arises as the plaintiff typically will have had little

opportunity to conduct discovery, hire experts, etc. Rather than a standard in

which no evidence on the plaintiff’s part may be dispositive, “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 . . . .” 8

Smallwood, 385 F.3d at 573. The examples of improper joinder based on

“discrete and undisputed facts” outside the pleadings that Smallwood provides

are consistent with this language requiring a defendant to “preclude” the

possibility of recovery: 9 evidence showing that “the in-state doctor defendant

8 In supplemental briefing, Defendants recognize that they must make an initial

showing. They characterize the improper joinder standard as requiring that “once a

defendant offers evidence of the in-state defendant’s non-liability, the plaintiff must respond

with contrary evidence.”

9 The improper joinder standard is thus similar to the summary judgment standard

that many courts applied before the Supreme Court’s 1986 summary judgment trilogy. One

of the 1986 cases was, like this one, an asbestos case. The D.C. Circuit denied summary

judgment based on its understanding that the summary judgment standard required “that

the party moving for summary judgment must prove the absence of any genuine issue of

material fact, and that only after the movant has done so must the nonmovant respond with

‘specific facts showing that there is a genuine issue for trial.’” See Patricia M. Wald,

Summary Judgment at Sixty, 76 TEXAS L. REV. 1897, 1911 (1998) (explaining Catrett v.

Johns-Manville Sales Corp., 756 F.2d 181, 184–85 (D.C. Cir. 1985), and summary judgment

practice generally prior to the 1986 trilogy). The Supreme Court reversed the D.C. Circuit,

11

Case: 14-30925 Document: 00513470939 Page: 12 Date Filed: 04/19/2016

No. 14-30925

did not treat the plaintiff,” that “the in-state pharmacist defendant did not fill

a prescription for the plaintiff patient,” that “a party’s residence was not as

alleged, or any other fact that easily can be disproved if not true.” See 385 F.3d

at 573–74 & n.12 (emphasis added) (citing Travis, 326 F.3d at 648–49).

Travis v. Irby, cited favorably by the en banc Smallwood court, see 385

F.3d at 573, illustrates the difference between the summary judgment and

improper joinder standards. The railroad defendant in Travis asked the

district court to pierce the pleadings and consider interrogatory responses

submitted by the plaintiff. 326 F.3d at 646, 648–50. The plaintiff’s responses

acknowledged that she did not, at the time, possess facts supporting the

petition’s allegations that the train engineer failed to keep a proper and

reasonable lookout, to take proper precautions under the circumstances, and

to brake in time. Id. at 649. Characterizing these statements “as admissions

that she had no factual basis or evidence in support of her claims against [the

engineer],” the district court found improper joinder. Id. at 649–50. We

reversed, explaining that the “lack of substantive evidence as to the

non[]diverse defendant does not support a conclusion that he was [improperly]

joined” even though that may support summary judgment. Id. at 650 & n3.

Instead, “the defendant must put forward evidence that would negate a

possibility of liability on the part of [the nondiverse defendant].” Id. at 650.

Much of the argument of the removing parties in this case amounts to

what Travis rejected: “simply pointing to the plaintiff’s lack of evidence at this

stage of the case.” Id. at 650 (finding such an argument insufficient). Aside

from their arguments regarding Davidson’s deposition testimony which we will

address shortly, Defendants cite the district court’s finding that “there was no

holding that summary judgment is warranted when the movant identifies an absence of

evidence supporting a claim and the nonmovant fails to identify facts in response. See id. at

1911–12 (citing Celotex Corp. v. Catrett, 477 U.S. 317 (1986)).

12

Case: 14-30925 Document: 00513470939 Page: 13 Date Filed: 04/19/2016

No. 14-30925

mention of either Graves or Taylor” in the Davidson I record. They have not,

however, identified any evidence from that earlier lawsuit negating a

possibility of liability on the part of Graves and Taylor, such as receipts or

other business records showing that those businesses did not supply asbestos

to Poulan Chainsaw from 1972–1978. Contrast, e.g., Vaillancourt v. PNC

Bank, Nat’l Ass’n, 771 F.3d 843, 847–48 (5th Cir. 2014) (per curiam) (finding

improper joinder established, in case in which plaintiff alleged that defendant

had not complied with statutory notice requirements before foreclosing, when

defendant produced uncontroverted evidence including certified mail receipt

and affidavit indicating notices were sent to plaintiff); Cuevas v. BAC Home

Loans Servicing, LP, 648 F.3d 242, 250 (5th Cir. 2011) (finding improper

joinder established, in case in which plaintiff alleged that defendant

wrongfully refused to accept tendered payment for loan in default, when

defendant produced uncontroverted evidence that it did not service or originate

the loan). With the pleadings pierced, it also would not have been difficult for

Defendants to submit affidavits from Graves and Taylor stating that they did

not supply Poulan (if that was the case). Contrast Guillory, 434 F.3d at 313

(finding improper joinder established, in case where plaintiff alleged

defendants breached duty to protect, based on “the self-serving [deposition]

testimony of the nondiverse defendant[s] that [they] had no responsibility for

safety measures relating to the particular plant explosion” because the

plaintiffs did not identify evidence contradicting the defendants’ testimony).

We do not believe that the existence of a developed record in the first

lawsuit warrants expanding the improper joinder standard to allow the

absence of evidence alone to satisfy it. The improper joinder ruling was made

before discovery in this case, which had first named Graves and Taylor. See

McKee, 358 F.3d at 334 (“The district court must also take into account the

‘status of discovery’ and consider what opportunity the plaintiff has had to

13

Case: 14-30925 Document: 00513470939 Page: 14 Date Filed: 04/19/2016

No. 14-30925

develop its claims against the non[]diverse defendant.” (quoting Travis, 326

F.3d at 649)). The district court did not err in considering the record from the

first trial, and that record might have revealed evidence of the sort we just

mentioned that would disprove Plaintiffs’ claims. But finding an absence of

evidence to be controlling when Plaintiffs never had an interest in the first case

to develop evidence against Graves and Taylor would be at odds with the

limited scope of improper joinder and the defendant’s “heavy burden” to

establish it. Travis, 326 F.3d at 649. The record in the first lawsuit did not

include, nor would one expect it to, business records relating to Graves, Taylor,

or Poulan or testimony from people employed at those companies during the

1970s. Defendants point out that the defendants in Davidson I might have

had an incentive to develop such evidence against Graves and Taylor to

support contribution claims. But we have always focused on the plaintiff’s

opportunity to develop its claims, not other parties’ incentives. And if evidence

developed by other parties is relevant, would that extend to earlier cases not

even involving the plaintiff? We refuse the invitation to expand our improper

joinder inquiry.

That leaves Davidson’s deposition testimony. The district court found,

without explanation, that this testimony supported its finding that Plaintiffs

have no reasonable possibility of recovery against Graves or Taylor. But his

June 2010 statement that it was “very possible” that he had been exposed to

asbestos at Poulan Chainsaw on its face more than satisfies a “some

possibility” standard. Defendants counter that his testimony a year later,

when Davidson said that he never saw anybody doing insulation work at

Poulan Chainsaw, and did not recall specific machinery or industrial Poulan

equipment being insulated with asbestos, shows that the possibility of any

recovery from Graves or Taylor is “merely a theoretical” speculation. See Ross

v. Citifinancial, Inc., 344 F.3d 458, 462 (5th Cir. 2003) (holding that

14

Case: 14-30925 Document: 00513470939 Page: 15 Date Filed: 04/19/2016

No. 14-30925

speculation is insufficient). But accepting as inconsistent his “very possible”

versus “I do not recall” answers, we have to resolve the tension in favor of the

earlier, stronger statement. See African Methodist Episcopal Church v.

Lucien, 756 F.3d 788, 793 (5th Cir. 2014) (“We repeat for emphasis that any

contested issues of facts and any ambiguities of state law must be resolved in

favor of remand.” (internal quotation marks omitted)). Even if we could credit

only Davidson’s later testimony—and, thus, limit his personal knowledge with

respect to his exposure at Poulan Chainsaw to the “I don’t recall” answer—that

only demonstrates an absence of evidence to support Plaintiffs’ claims. It does

not “preclude [P]laintiffs’ recovery against the in-state [D]efendant[s].” 10

Guillory, 434 F.3d at 310 (quoting Smallwood, 385 F.3d at 573–74).

Finally, although Defendants make much of Plaintiffs’ apparent forum

manipulation, we have noted that the “motive or purpose of the joinder of in-

state defendants is not relevant” when the basis for removal is not “actual

fraud” in the pleadings but rather the inability of the plaintiff to recover

against the in-state defendant. Smallwood, 385 F.3d at 574.

***

We VACATE the judgment and REMAND to the district court for entry

of an order remanding the case to state court.

10 We thus need not consider the admissibility of the affidavit submitted by Plaintiffs’

counsel.

15