Appendix — Amerada Hess Corp. v. Green

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Oftice- Supreme Court,

83-493 FILED

IN THE

SUPREME COURT OF THE UNITED STATES

CLERK

us]

OCTOBER TERM, 1983

AMERADA HESS CORPORATION and

L. A. STRICKLIN,

Petitioners,

DAVID R. GREEN,

Respondent.

APPENDICES TO

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

POR THE FIFTH CIRCUIT

E. L. BRUNINI, JR.

(Counsel of Record)

JOHN E. MILNER

BRUNINI, GRANTHAM, GROWER & HEWES

1400 First National Bank Building

Post Office Drawer 119

Jackson, Mississippi 39205

(601) 948-3101

APPENDIX

je ee See i ok

APPENDIX

APPENDIX G .

CERTIFICATE OF

SERVICE

APPENDIX A

DAVID R. GREEN,

Plaintiff-Appellant,

Vv.

AMERADA HESS CORPORATION and

L. A. STRICKLIN, Defendants~-Appellees.

No. 82-4223

United States Court of Appeals,

Fifth Circuit

June 16, 1983.

Former employee brought action

against former employee and former

employer's vice-president, alleging

wrongful discharge. The suit was

originally brought in state court and

removed to federal district court. The

United States District Court for the

Southern District of Mississippi, Dan M.

Russell, J., denied employee's motion to

remand, dismissed the cause against

vice-president, and granted summary

judgment in favor of former employer,

and employee appealed. The Court of

Appeals, Clark, Chief Judge, held that

there was a possibility that Mississippi

court would conclude that former employee

had set forth a valid cause of action

for mental suffering against former

employer's vice-president, who was a

Mississippi resident, and there was a

possibility that Mississippi court would

conclude that employee's suit against

vice-president was not barred, under res

judicata and collateral estoppel prin-

ciples, as a result of district court's

judgment in favor of employer in

employee's prior wrongful discharge

suit; therefore, the vice-president was

not fraudulently joined, and, because

his presence destroyed diversity, cause

would be remanded to state court.

Reversed and remanded with

instructions.

~~ sS

1. Removal of Cases - 107(4)

In ruling on a motion for removal

based upon fraudulent joinder, district

court need not and should not conduct a

full-scale evidentiary hearing on

questions of fact affecting the ultimate

issue of substantive liability in order

to make the preliminary determination as

to the existence of subject-matter

jurisdiction. 28 U.S.C.A. § 1441.

2. Removal of Cases - 107(4)

In ruling on motion for removal

based on fraudulent joinder, trial court

erred in holding a full evidentiary

hearing. 28 U.S.C.A. § 1441.

3. Removal of Cases - 107(7)

Burden of proving fraudulent

joinder in support of a petition for

removal is a heavy one, and removing

party must prove that there is absolutely

no possibility that plaintiff will be

able to establish a cause of action

against the in-state defendant in state

court, or that there has been outright

fraud in plaintiff's pleadings of juris-

dGictional facts. 28 U.S.C.A. § 1441.

4. Federal Courts - 420

Removal of Cases - 107(7)

In making its determination on an

allegation of fraudulent joinder,

district court must ordinarily evaluate

all of the factual allegations in

plaintiff's state court pleadings in the

light most favorable to plaintiff,

resolving all contested issues of

substantive fact in favor of plaintiff;

however, that is not the case when

Plaintiff is collaterally estopped from

contesting a given issue or fact, and in

making that determination, federal court

should apply federal law. 28 U.S.C.A.

§ 1441.

5. Judgment - 634 ’

Under federal law, the three tradi-

tional requirements for the application

of the doctrine of collateral estoppel

are: the issue to be precluded must be

identical to that involved in the prior

action; in prior action, the issue must

have been actually litigated; and the

determination made of the issue in the

prior action must have been necessary to

the resulting judgment.

6. Removal of Cases - 102

If there is even a possibility that

a state court would find a cause of

action stated against any of the named

in-state defendants on the facts alleged

by plaintiff, then federal court must

find that the in-state defendants have

been properly joined, that there is

incomplete diversity, and that the case

must be remanded to state courts; there

must be no possibility of a valid state

cause of action being set forth against

in-state defendant before court may hold

that there has been a fraudulent

joinder. 28 U.S.C.A. § 1441.

7. Federal Courts - 420

In virtually all cases in which

federal court must decide the res

judicata effect of a prior judgment of

a federal court, it must apply federal

res judicata principles; but that is not

true where the court is evaluating the

merits of a fraudulent joinder claim.

28 U.S.C.A. § 1441.

8. Judgment - 634

In order for the doctrine of res

judicata to apply under Mississippi law,

four identities must exist: identity of

the thing sued for; identity of the

cause of action; identity of the persons

and parties to the action; and identity

of the quality in the persons for and

against whom the claim is made.

9. Judgment - 720

Collateral estoppel only applies

when the issues were actually litigated

in prior action.

10. Removal of Cases - 102

There was a possibility that

Mississippi court would conclude that

former employee, who alleged wrongful

discharge, had set forth a valid cause

of action for mental suffering against

former employer's vice-president, who

was a Mississippi resident, and there as

a possibility that Mississippi court

would conclude that employee's suit

against vice-president was not barred,

under res judicata and collateral estop-

pel principles, as a result of district

court's judgment in favor of employer in

employee's prior wrongful discharge

suit; therefore, the vice-president was

not fraudulently joined, and because his

presence destroyed diversity, cause

would be remanded to state court.

Dixon L. Pyles, Jackson, Miss.,

James M. Brown, Laurel, Miss., Clyde

Brown, Long Beach, Miss., for plaintiff-

appellant.

Edmund L. Brunini, Jr., John E.

Milner, Jackson, Miss., for defendants-

appellees.

Appeal from the United . :ates

District Court for the Southern District

of Mississippi.

Before CLARK, Chief Judge, THORNBERRY

and RANDALL, Circuit Judges.

CLARK, Chief Judge:

David R. Green claims he was wrong-

fully discharged by his employer,

Amerada Hess Corporation. Green also

Claims that L. A. Stricklin, a vice-

president of Amerada Hess, had a part in

his discharge. Green brought an action

against Amerada Hess and Stricklin ina

Mississippi court. Amerada Hess removed

the action to federal court. Green

moved the court to remand the action to

state court. The court denied the

motion, dismissed the cause against

Stricklin, and granted summary judgment

in favor of Amerada Hess. We hold that

Green's motion to remand should have

been granted, and reverse and remand

with instructions that the case be

returned to state court.

Green sustained a back injury in

the course of performing his employment

Guties for Amerada Hess. Green eventually

required surgery. He recuperated from

the operation and resumed his employment.

He was fired within one year.

Green brought an action against

Amerada Hess in federal court. The

basis of jurisdiction was diversity of

citizenship. Green alleged that he had

been discharged in retaliation for

10a

pursuing his rights under Mississippi's

workmen's compensation statute.1/

The district court granted summary

judgment in favor of Amerada Hess. On

appeal, Green v. Amerada Hess, 612 F.2d

212 (5th Cir.), cert. denied, 449 U.S.

952, 101 S.Ct. 356, 66 L.Ed. 2d 216

(1980) (Green I), this court affirmed.

We first noted that Green "did not have

a written contract of employment, but

was hired for an indefinite period of

time." Id. at 213. After examining the

conflicting caselaw of other jurisdic-

tions, and pointing out that neither the

Mississippi legislature nor the Mississippi

courts had addressed the matter, the

1/ Green's right to temporary total

disability compensation, temporary

partial disability compensation, and

permanent partial disability compen-

sation was established by an award

of the Mississippi Workmen's

Compensation Commission. Green v.

Amerada Hess Corp., M.W.C.C. No.

lla

court refused to create a new cause of

action for retaliatory discharge under

Mississippi law. The court went on to

hold that an employer under Mississippi

law has the legal right to discharge an

employee hired for an indefinite term

without any justification. Id. at 214.

The court affirmed the district court's

ruling that Green had failed to state a

cognizable claim.

Green remained undaunted. He filed

suit in Mississippi state court alleging

wrongful discharge and a variety of

other claims. Green named L. A. Stricklin,

and Amerada Hess as defendants. Both

Stricklin and Green are Mississippi

residents. Amerada Hess removed the

action to federal court. It contended

that Green fraudulently joined Stricklin

in the action in order to destroy diver-

sity jurisdiction. Green promptly moved

l2a

the court to remand the case back to

state court.

The court held a full evidentiary

hearing at which live testimony, deposi-

tion transcripts, and documentary evidence

were produced. The court denied Green's

motion to remand. On the basis of “the

strong evidence presented by Defendants

and the somewhat transparent support

mustered by Plaintiff," the court con-

cluded that Stricklin was fraudulently

joined. It also sua sponte dismissed

Strickling from the lawsuit pursuant to

Fed.R.Civ.P. 12(b) (6).

Amerada Hess moved for summary

judgment. The court held another

hearing, and then granted the motion.

It ruled that Green's action was barred,

under federal principles of res judicata

and collateral estoppel, by this court's

prior decision in Green v. Amerada Hess,

612 F.2d 212 (Sth Cir. 1980). The court

l3a

entered final judgment and Green

appeals.

In analyzing the issues presented

on this appeal, we are guided by B.,

Inc. v. Miller Brewing Company, 663 F.2d

545 (5th Cir. 1981). In that case, the

court was called upon to review the

standards and procedures which are to be

applied when a fraudu/ent joinder has

been alleged. B., Inc. brought suit

against Miller Brewing Company, a

Wisconsin company, in Texas state court.

He also named four Texas residents as

defendants. Miller of Wisconsin removed

to federal court. It alleged that B.,

Inc. fraudulently joined the Texas

defendants in order to defeat diversity

jurisdiction. B., Inc. moved to have

the case remanded. The district court

held an evidentiary hearing which lasted

several days. It concluded that the

Texas defendants had been fraudulently

l4a

joined, and dismissed all four of them

from the action.

This court reversed the judgment of

the district court. We repeatedly

emphasized that "district courts must

not ‘pretry' substantive factual issues

in order to answer the discrete threshold

question of whether the joinder of an

in-state defendant is fraudulent." Id.

at 546. The only issue that the court

should address is that of its own

jurisdiction.

C1] As a procedural matter, a

district court

need not and should not

conduct a full scale

evidentiary hearing on

questions of fact affecting

the ultimate issues of

substantive liability in a

case in order to make a

preliminary determination

as to the existence of

subject matter jurisdiction.

The question of whether the

plaintiff has set forth a

valid claim against the in-

state defendant(s) should

be capable of summary

determination.

oe.

Re.

15a

Id. at 551. Although this general

command is subject to limited exceptions, 2/

none of them are applicable here.

[2] Despite this clear mandate,

the district court in the instant case

held an extensive evidentiary hearing.

The factual issues it addressed related

to matters of substance, not jurisdiction,

in direct contravention of B., Inc. It

examined at length Stricklin's role in

the decision to terminate Green, and

found “a plethora of facts which could

have been ascertained by Plaintiff to

2/ For example, if Amerada Hess or

Stricklin contended that Green's

pleadings contained misrepresen-

tations of jurisdictional fact,

an evidentiary hearing would have

been appropriate. Id. at 551 n.

14. But here, they do not dispute

that Stricklin and Green are

Mississippi residents.

16a

verify Stricklin's lack of personal

involvement. "3/

The district court relied in part

on Smith v. City of Jackson, 358 F.2d

705 (Sth Cir. 1966), in its decision to

conduct a full evidentiary hearing on

the motion to remand. Smith, however,

was a criminal trespass case removed to

3/ Although Stricklin acknowledged

that he had been informed of the

decision to terminate Green prior

to its exception, the court found

that he exercised no authority to

approve or deny that decision. The

court rejected Green's evidence to

the effect that Stricklin was

instrumental in the mistreatment of

Green. For example, it discredited

the testimony of an Amerada Hess

employee that Stricklin had made

the termination decision.

17a

federal court under 28 U.S.C. § 1443.4/

The concerns in Smith were much like the

concerns in Georgia v. Rachel, 384 U.S.

780, 86 S.Ct. 1783, 16 L.Ed.2d 925

(1966). The defendants in Rachel also

petitioned for removal pursuant to sec-

tion 1443. The Supreme Court held that

the goals of the Civil Rights statutes,

4/ 28 U.S.C. § 1443 provides:

Any of the following civil actions

or criminal prosecutions, commenced

in a State court may be removed by

the defendant to the district court

of the United States for the

district and division embracing the

Place wherein it is pending:

(1) Against any person who is

denied or cannot enforce in

the courts of such State a

right under any law providing

for the equal civil rights of

citizens of the United States,

or of all persons within the

jurisdiction thereof;

(2) For any act under color of

authority derived from any law

providing for equal rights, or

for refusing to do any act on

the ground that it would be

inconsistent with such law.

18a

protecting the rights of the defendants

to peacefully attempt to be served upon

an equal basis in public restaurants,

precluded the State from prosecuting

these defendants in state courts, and

that under section 1443, remand to the

state court was improper. Rachel and

Smith did not involve fraudulent joinder,

but rather, claims of prejudicial

prosecution in the state courts. Such

considerations are not found in the

present case. Removal in this case is

sought under the general removal statute,

§ 1441, not the civil rights removal

statute, § 1443. Therefore, the rule

set forth in Smith does not apply.

We thus conclude that the district

court erred in holding a full evidentiary

hearing. We must now determine whether

that error was harmless. If, in viewing

the facts in their proper light and in

applying the proper standard, it can be

19a

said that Stricklin was indeed fraudu-

lently joined, the district court's

ruling may be affirmed consistent with

substantial justice, despite its proce-

dural error. See Fed.R.Civ.P.61.5/

[3] The burden of proving a

fraudulent joinder is a heavy one. The

removing party must prove that there is

absolutely no possibility that the

plaintiff will be able to establish a

cause of action against the in-state

5/ Rule 61 provides:

No error in either the admission

or the exclusion of evidence and

no error or defect in any ruling

or order or in anything done or

omitted by the court or by any of

the parties is ground for granting

a new trial or for setting aside a

verdict or for vacating, modifying

or otherwise disturbing a judgment

or order, unless refusal to take

such action appears to the court

inconsistent with substantial

justice. The court at every state

of the proceeding must disregard

any error or defect in the pro-

ceeding which does not affect the

substantial rights of the parties.

20a

defendant in state court, or that there

has been outright fraud in the plaintiff's

pleadings of jurisdictional facts. Bf

Inc. at 549; Bobby Jones Garden Apart-

ments v. Suleski, 391 F.2d 172, 177 (5th

Cir. 1968); Parks v. New York Times

Company, 308 F.2d 474, 478 (Sth Cir.

1962), cert. denied, 376 U.S. 949, 84

S.Ct. 964, 11 L.Ed.2d 969 (1964).

Because the parties have admitted that

Green and Stricklin are Mississippi

residents, Green's pleadings of juris-

dictional facts are obviously not

fraudulent. Our sole concern is whether

there is a possibility that Green has

set forth a valid cause of action.

[4,5] In making its determination,

the court must ordinarily evaluate all

of the factual allegations in the

plaintiff's state court pleadings in the

light most favorable to the plaintiff,

resolving all contested issues of

|. a

2la

substantive fact in favor of the

plaintiff. B., Inc. at 549. This case

presents unique circumstances that

justify a limited exception to this

requirement. Although the court must

normally assume all the facats as set

forth by the plaintiff to be true, this

is not the case when the plaintiff is

collaterally estopped from contesting a

given fact or issue. In making this

determination, the federal court should

apply federal law. Cf. Stovall v. Price

Waterhouse Co., 652 F.2d 537, 540 (5th

Cir. 1981); Cemer v. Marathon Oil Co.,

583 F.2d 830, 831 (6th Cir. 1978). Under

federal law, "the three traditional

requirements for the application of the

doctrine of collateral estoppel are:

(i) the issue to be precluded must be

identical to that involved in the prior

action, (ii) in the prior action the

issue must have been actually litigated,

22a

and (iii) the determination made of the

issue in the prior action must have been

necessary to the resulting judgment."

White v. World Finance of Meridian, Inc.,

653 F.2d 147, 151 (5th Cir. 1981).

An exarmle will clarify the matter.

In this case, Green alleges in his state

court complaint that he entered into a

written, fixed-term employment contract

with Amerada Hess. This, despite the

express finding of this court in Green I

at 213 that Green “did not have a written

contract of employment, but was hired

for an indefinite period of time." The

issue in both cases is identical. The

issue was actually litigated and decided

in Green I. The determination of the

issue in Green I was necessary to the

resulting judgment. , Had Green been

employed under a written fixed-term

contract., he might have had a cause of

action for wrongful discharge. But this

‘we

23a

court specifically based its refusal to

find a cause of action under Mississippi

law on the fact that Green was a

terminable at will employee. Id. at

214. Because all three necessary con-

ditions are preserit here, Green is

collaterally estopped from arguing

before the federal court that he was

employed under a fixed-term contract.

Therefore, the court need not assume the

allegation in Green's complaint to that

effect is true under B., Inc.

C6] Having assumed that all other

facts alleged by the plaintiff in his

complaint are true, the court must then

examine relevant state law and resolve

all uncertainties in favor of the non-

removing party. Id. at 550. Viewing

the state law in its proper perspective,

"if there is even a possibility that a

state court would find a cause of action

stated against any one of the named in-

24a

state defendants on the facts alleged by

the plaintiff, then the federal court

must find that the in-state defendants

have been properly joined, that there is

incomplete diversity, and that the case

must be remanded to the state courts."

Id. Stated conversely, there must be no

possibility of a valid state cause of

action being set forth against the in-

state defendant before the court may

hold that there has been a fraudulent

joinder. Id., Keating v. Shell Oil

Company, 610 F.2d 328, 331 (Sth Cir.

1980); Tedder v. F.M.C. Corp., 590 F.2d

115, 117 (5th Cir. 1979); Suleski at

176-77; Parks at 478.

Stricklin argues that the standards

enunciated in B., Inc. are “fundamentally

wrong," and that the case establishes

"bad law." This panel is not empowered

to overrule the judgment of another panel

of this court. 8., Inc. is precisely on

25a

point. It unequivocally directs the

proper analysis in a fraudulent joinder

case. In any event, as a policy matter,

principles of limited federal jurisdic-

tion, comity with the state courts, and

freedom of the plaintiff "to prosecute

his own suit in his own way to a final

determination," Parks at 478, suggest a

strict application of the judicially

created doctrine of fraudulent joinder.

Stricklin argues that the standards

adapted in B., Inc. allow too much room

for abuse by plaintiffs' attorneys. But

in Mississippi, Miss. Code Ann. § 11-7-91,

and in most jurisdictions, an attorney

must sign the pleadings he files in an

action. By his signature, the attorney

vouches that there is good ground to

support the pleading, and that it is not

26a

interposed for delay or any other improper

purpose. See Fed.R.Civ.P. 11 .8/

With these general principles in

mind, we now turn to the case at hand.

Stricklin argues that Green could not

possibly win in state court because his

action is barred by res judicata. He

points to our prior decision, Green I,

as the operative judgment barring this

litigation. It must be emphasized that

we do not decide the merits of this

Claim. Our sole function is to determine

6/ Rule 11 provides in part that “the

signature of an attorney or party

constitutes a certificate by him

that he has read the pleading,

motion, or other paper; that to the

best of his knowledge, information,

and belief formed after reasonable

inquiry it is well grounded in fact

and is warranted by existing law or

a good faith argument for the exten-

sion, modification, or reversal of

existing law, and that it is not

interposed for any improper purpose,

such as to harass or to cause un-

necessary delay or needless increase

in the cost of litigation."

27a

whether there is a possibility that a

Mississippi court would find that Green's

cause of action against Stricklin is not

barred by this court's prior judgment.

[7] In virtually all cases in

which a federal court must decide the

res judicata effect of a prior judgment

of a federal court, it must apply

federal res judicata principles.

Stovall v. Price Waterhouse Co., 652

F.2d 537, 540 (Sth Cir. 1981). But that

is not true where, as here, the court is

evaluating the merits of a fraudulent

joinder claim. In that situation, B.,

Inc. dictates that the court look to

state law.

{8} In order for the doctrine of

res judicata to apply under Mississippi

law, four identities must exist. They

are:

(1) identity of the thing sued

for,

28a

(2) identity of the cause of

action,

(3) identity of the persons

and parties to the action, and

(4) identity of the quality

in the persons for and against whom the

claim is made.

Pray v. Hewitt, 254 Miss. 20, 179 So.2d

842, 844 (Miss. 1965). See also Dunaway

v. W. H. Hopper & Associates, Inc., 422

So.2d 749, 751 (Miss. 1982); Mississippi

Employment Security Commission v.

Georgia-Pacific Corporation, 394 So.2d

299, 301 (Miss. 1981); Cowan v. Gulf

City Fisheries, Inc., 381 So.2d 158, 162

(Miss. 1980); Standard Oil Company v.

Howell, 360 So.2d 1200, 1202 (Miss.

1978). Mississippi courts have strictly

construed the requirement that there be

an identity of parties. Stovall v.

Price Waterhouse Co., 652 F.2d 537, 540

(Sth Cir. 1981) ("Mississippi law in

29a

this area has been characterized as

being rigid as any now extant.").

The case of Magee v. Griffin, 345

So.2d 1027 (Miss. 1977) is very similar

to the case at bar. GMAC sued Magee

because he had missed monthly payments

on his automobile. A valid judgment was

entered against Magee and his car was

repossessed. Magee then brought an

action against GMAC and one of its

employees, John Griffin. He claimed

that GMAC and Griffin had embarrassed

and humiliated him, and caused him to

lose possession of his car. The trial

court dismissed his action as barred by

the prior judgment.

Although six of the nine justices

on the Mississippi court voted to affirm

as to GMAC, a different majority of six

voted to reverse as to Griffin. In the

opinion of those six justices, res judi-

cata had no application against Griffin.

Despite the fact that Griffin was acting

30a

as an employee and agent of GMAC at all

relevant times, the court held that

there was no identity of the parties.

Id. at 1033 (Patterson, J.).

The events giving rise to Ditta v.

City of Clinton, 391 So.2d 627 (Miss.

1981) began when Ditta brought an action

in Louisiana against Hammerhead

Construction Company for breach of

contract and defective construction of a

retaining wall. The plans for the pro-

ject had been modified and then approved

by the City of Clinton. Hammerhead did

its work under the direct and close

supervision of Clinton personnel.

Judgment was entered in favor of

Hammerhead.

In a second suit, Ditta sued

Hammerhead and Clinton. His claims

against Clinton were based on Clinton's

alleged wrongful acts and omissions as

supervisor of the project. Despite the

3la

close business relationship of Clinton

and Hammerhead, and the fact that their

duties vis-a-vis the project was sub-

stantially intertwined, the Mississippi

Supreme Court held that there was no

identity of the parties. As a result,

res judicata was held not to apply. Id.

at 629. Despite the close relationship

of the defendant in the first action and

the defendant in the second action in

both Magee and Ditta, the Mississippi

court held that res judicata did not

apply.

The facts in the instant case are

very similar. In Green I, Green only

sued Amerada Hess. But in this case,

Green named Stricklin as an additional

defendant. We do not suggest that it

would be impossible to distinguish Magee

and Ditta from this case. However, B.,

Inc. teaches that we must resolve all

uncertainties in the law in favor of

Ra.

32a

Green. Given these Mississippi prece-

dents, there is a distinct possibility

that a Mississippi court would hold that

res judicata principles would not prevent

Green from pursuing this action against

Stricklin.

Stricklin next argues that Green

could not possibly prevail in state

court because Green is collaterally

estopped from pursuing his claims as a

result of our judgment in Green I. This

argument could only succeed if Green is

estopped from raising every issue pre-

sented in the complaint filed in this

action. Collateral estoppel only bars

relitigation of specific issues. Even

if Green were collaterally estopped from

pursuing all his claims save one in

state court, a remand would be necessary.

[9] Collateral estoppel only applies

when the issues were actually litigated

in the prior action. Dunaway at 751;

33a

State v. Smith, 278 So.2d 411, 415

(Miss. 1973); C.I.T. Corp. v. Turner,

248 Miss. 517, 157 So.2d 648, 660 (Miss.

1963). Several of the claims raised by

Green in this case were not actually

litigated in Green I. The issue actually

litigated in Green I was whether Green

was illegally discharged in retaliation

for pursuing his workmen's compensation

rights.7. But in the present case,

Green alleges that he was wrongfully

subjected to "great anxiety, stress and

mental anguish" by the defendants. He

alleges that Stricklin maliciously refused

to report Green's medical expenses to

the insurance carrier. He alleges that

Amerada Hess and Stricklin were dilatory

in the payment of medical expenses. He

alleges that several false accusations

7/ As previously noted, the court also

found that Green was not employed

under a written contract.

34a

were made against him. These allegations

were not actually litigated in Green I.

There is a possibility that a Mississippi

Court would hold that Green is not

collaterally estopped from arguing these

claims in a state court action.

[10] In any event, as with the law

of res judicata, Mississippi appears to

require a strict identity of parties

before collateral estoppel applies.

~ Stovall at 540; McCarty v. Johns-

Mansville Sales Corp., 502 F.Supp. 335,

338 (S.D.Miss. 1980) sush Construction

Company v. Walters, 254 Miss. 266, 179

So.2d 188, 190 (Miss. 1965); Johnson v.

Bagby, 252 Miss. 125, 171 So.2d 327, 330

(Miss. 1965). There is a possibility

that a Mississippi court would conclude

that the relationship between Amerada

Hess and Stricklin is insufficient to

estop Green.

35a

It has been shown that Green might

not be barred from bringing his state

court action. We must now determine

whether there is a possibility that

Green has stated a valid cause of action

under the substantive law involved. It

bears repeating: we do not decide whether

Green will actually, or even probably

prevail on the merits of these claims.

We look only for a mere possibility that

he will do so. If even one of Green's

many claims might be successful, a

remand to state court is necessary. Cf.

B., Inc. at 650 (if valid cause of

action is stated against even one of the

four named in-state defendants, remand

is called for).

Green alleges that the “unpriviledged,

wilful, wanton, malicious and gross" acts

of Stricklin were intended to, and did

cause Green severe mental pain and stress.

In numerous cases, the Mississippi Supreme

36a

Court has recognized that damages for

mental suffering are recoverable when

they are the "proximate result of an act

committed maliciously, intentionally, or

with such gross carelessness or reckless-

ness as to show an utter indifference to

the consequences when they may have been

in the actor's mind," Lyons v. Zale

Jewelry Company, 246 Miss. 139, 150

So.2d 154, 158 (1963), or "({wJhere there

is something about the defendant's con-

duct which evokes outrage or revulsion,"

Sears, Roebuck & Co. v. Devers, 405

So.2d 898, 901 (Miss. 1981), or when

they result from a “wanton or shamefully

gross wrong,” Saenger Theaters Corp. v.

Herndon, 180 Miss. 791, 178 So. 86, 87

(1938) .8/

8/ See McCulloch v. Glasgow, 620 F.2d 47, 51

(5th Cir. 1980) (applying Mississippi

law) (no physical impact required);

Burris v. South Central Bell Telephone

(footnote continued on next page)

37a

The wrongful acts that Green alleges

Stricklin intentionally committed, and

that we must assume, for the purposes of

this motion, Stricklin did commit, are

that he: (1) “maliciously refused to

report to the [insurance] carrier the

medical expenses incurred in the treat-

ment of Green's work-related injury";

(2) was dilatory in the payment of

Green's medical expenses; (3) “harassed,

humilitated and embarrassed Green";

(footnote 8 continued)

Co., 540 F.Supp. 905, 909 (S.D.Miss.

T1982) (applying Mississippi law);

Johnson v. Ford Motor Co., 354 F.Supp.

N.D.Miss. (applying

Mississippi: law) (willful, wanton, inten-

tional or malicious wrong); Sears,

Roebuck & Co. v. Young, 384 So.2d 69, 71

(Miss. 1980) (same); First National Bank

v. Langley, 314 So.2d 324, 338 (Miss.

1975) taititul or wanton acts); T. G.

Blackwell Chevrolet Co. v. Eshee,

So.24 481, 485 (Miss. 1972) (intentional

or willful wrong); Daniels v. Adkins

Protective Service, Inc., 247 So.2d 710,

711 (Miss. 1971).

38a

(4) “employed the use of injurious

falsehood",9/ (5) "deprived Green of his

lawful employment, denied him the right

to pursue his trade, and destroyed

Green's economic advantage", and (6)

discharged Green in an abusive and

outrageous manner. Whether these acts

are sufficiently "wrongful", “wanton",

"shamefully gross", or sufficient to

evoke “outrage and revulsion” under

Mississippi law is unclear. For

example, although Green I established

that Amerada Hess was entitled to

discharge Green, it did not hold that

Stricklin was entitled to carry out the

dismissal in an “abusive and outrageous

9/ the alleged falsehoods were that “Green

was unable to get along with his fellow

employees; that he did not perform his

job in a workmanlike manner, that he left

oil tanks run over, and that he had let

dirty oil run through the lines, costing

the company great and needless expense."

ON ie hada RI a

39a

manner." With respect to the falsehoods

allegedly uttered, and the harassment

and humiliation, the Mississippi courts

have held that, in some circumstances,

abuse that is purely verbal may constitute

a sufficiently wanton act to justify the

imposition of liability for the mental

anguish caused. Lyons, 150 So.2d at

155, 162 (abusive remarks over the

telephone); Saenger Theatres Corporation,

178 So. at 87 (accusations hurled on

public street); Continental Casualty Co.

v. Garrett, 173 Miss. 676, 161 So. 753

(1935) (defendant went to sick man's

home and called hima liar). Thus,

there is a possibility that a Mississippi

court would conclude that Green has set

forth a valid cause of action for mental

suffering resulting from Stricklin’‘s

wrongful acts.

Having assumed all the facts set

forth by Green to be true, and having

40a

resolved all uncertainties as to state

substantive law against Stricklin, we

conclude that there is a possibility cof

a valid cause of action being set forth

against Stricklin in state court. There-

fore, Stricklin was not fraudulently

joined. There was incomplete diversity,

and the district court was required to

remand to the Mississippi court. Its

failure to do so constituted reversible

error. We reverse and remand with

instructions to remand the cause to

state court.

REVERSED AND REMANDED.

4la

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF MISSISSIPPI

EASTERN DIVISION

DAVID R. GREEN

vs. CIVIL ACTION NO. E80-0121(R)

AMERADA HESS CORPORATION

and L. A. STRICKLIN

OPINION

Plaintiff, David R. Green,

originally instituted this action against

Defendants, Amerada Hess Corporation and

L. A. Stricklin, in the Circuit Court of

Clarke County, Mississippi alleging a

breach of an employment contract and

intentional infliction of emotional

distress.1/ Amerada Hess removed the

1/ this action is one of four lawsuits

filed against Amerada Hess since

1975 by David R. Green concerning

his discharge from employment at

Amerada Hess.

42a

action to Federal Court contending

diversity of citizenship existed since

L. A. Stricklin, previously Hess' vice-

president of U.S. Production in Tulsa,

Oklahoma and now a resident of Mississippi,

was fraudulently joined in order to

defeat federal jurisdiction.2/ Subse-

quently, Plaintiff moved this Court to

2/ Plaintiff assets that the removal

petition should be denied and the

case remanded because the removal

petition was filed by only one

Defendant, Amerada Hess. Plaintiff

stated the general rule that all

Defendants must join in the removal

petition. 1A Moore's Federal

Practice §0.168 (3.-2), at 447

However, he overlooked the

well-recognized exception to this

rule that "formal", “normal” or

"improper" Defendants need not join

the petition. See e.g., Tri-Cities

Newspapers, Inc. v. Tr [cities

Printin Ss “st al, 427 F.2d

325, 33¢ (5th Cir. 1570); McCurtain

County Production Corp. v. Cowett,

482 F. Supp. 509, S13 (E.D. Okla.

1978); McKinney v. Rodney C. Hunt

Co., 464 F. Supp. 59, SSW DS D.N.C.

T578); Williams v. Atlantic Coast

Line Railroad C , 294 FP. Supp.

815, Sle (S.D. Sar 1568) ; 1A Moore's

Federal Practice §0.168 (3.-2) at

; right, Muller &

Cooper, Federal Practice and

43a

remand the action to the Clarke County

Circuit Court. After a full evidentiary

hearing on March 30, 1981 and on May 22,

1981 and considerable briefing of the

issue, this Court concludes that the

Plaintiff's motion to remand should be

denied on the basis of fraudulent

joinder of the resident Defendant, L. A.

Stricklin. Accordingly, this Court will

retain jurisdiction of this cause and

promptly dismiss Defendant, L.A. Stricklin,

from further proceedings pursuant to

Rule 12(b)(6) of the Federal Rules of

Civil Procedure.

In order to assess the propriety of

the joinder of Defendant, L. A. Stricklin,

this Court properly “pierced the pleadings"

to determine “whether under any set of

facts alleged in the petition, a claim

against the Defendant(s) could be

asserted" which controls the substantive

issues and which will ultimately determine

44a

whether a cause of action exists.

Keating v. Shell Chemical Co., 610 F.2d

328, 331 (5th Cir. 1980) per curiam;

Tedder v. F. M. C. Corp., 590 F.2d 115,

116 (5th Cir. 1979) per curiam; Tri-

Cities Newspapers, Inc. v. Tri-Cities

Printing Pressmen, et al, 427 F.2d 325,

327 (5th Cir. 1970); Parks v. New York

Times, Co., 308 F.2d 474, 478 (Sth Cir.

1962); Williams v. Tri-County Community

Center, 323 F. Supp. 286, 288 (S.D.

Miss.) aff'd, 452 F. 2d 221 (5th Cir.

1971); Howard v. General Motors Corp.,

287 F. Supp. 646, 647-48 (N.D. Miss.

1968). Indeed, the Fifth Circuit has

succinctly stated that, upon a motion to

remand, the district court has a "duty

to hear and determine the factual issues

once affidavits have been submitted

contradicting the removal petition."

Smith v. City of Jackson, 358 F. 2d 705,

705 (5th Circuit 1966) (per curiam).

——

45a

Then, the trial court must determine

"“(i)f there is any possibility that the

facts Plaintiff alleges could support a

Claim, making dismissal under Rule

12(b)(6) improper." However, "when lack

of a state law claim is apparent,

dismissal at this point in the pro-

ceedings does not constitute a premature

trial on the merits." Keating, supra at

332. See also, Tedder, supra at 117;

Bobby Jones Garden Apartments, Inc. v.

Suleski, 391 F. 2d 172, 176 (Sth Cir.

1968); Parks, supra at 478; Dees, supra

at 618; Howard, supra at 648. The

district court's power to retain juris-

diction over the action is limited to

cases where it finds that there has

been bad faith in the joinder, regardless

of Plaintiff's motive. Howard, supra.

Bad faith in joining a Defendant may be

shown “by proving that the Plaintiff

stated the facts knowing them to be

46a

false, or with enough information within

reach so that he should have known them

to be false." Id. This Court concludes

that Plaintiff, David R. Green, and his

attorneys had sufficient facts within

their reach to know or ascertain that no

cause of action in fact existed under

Mississippi law against Defendant, L. A.

Stricklin, so that he would be liable

for the termination of Plaintiff and the

alleged intentional infliction of

emotional distress.

Plaintiff has sought to convince

this Court that L. A. Stricklin, as

Hess' vice-president of United States

Production in Tulsa, Oklahoma, personally

participated in or was responsible for

alleged wrongful termination of

Plaintiff from employment at Amerada

Hess. As clearly stated in Childers v.

Beaver Dam Plantation, Inc., 350

47a

F. Supp. 331, 335 (N.D. Miss. 1973), the

law of Mississippi is that

(i)t is universally held in

Mississippi and elsewhere,

that the officers, directors,

stockholders or employees of

a corporation cannot be held

responsible for the torts of

the corporation unless such

officer, director, stockholder,

Or employee personally partici-

pated in the commission of the

tort, or aided and abetted the

commission thereof. (emphasis

added).

See also, Grapico Bottling Co. v. Ennis,

140 Miss. 502, 106 So. 97 (1925). The

evidence submitted to this Court con-

vincingly proves that L. A. Stricklin

did not personally participate in the

decision to terminate Plaintiff or in

his actual termination. The proof shows

that Stricklin was only informed of the

decision to terminete Plaintiff for cause,

which decision was made by management

personnel authorized to take such

action.

48a

Stricklin's testimony revealed that

as vice-president of Production for

Amerada Hess, his major responsibilities

included handling administrative matters,

budgeting, production planning and

drilling services (TR. Vol. I at 48).

He had no involvement with the daily

Operations of his department, including

the hiring and discharging of approxi-

mately 750 hourly employees such as

Plaintiff. (TR. Vol. I at 48; Vol. II

at 56). The manager of Production,

George Dewhurst, and his management

subordinates handled employment-related

matters. (TR. Vol. I at 46-8; Vol. IT

at 56). Stricklin did admit that he

had been informed of the decision to

terminate Green as a matter of protocol.

(TR. Vol. I at 38, 43). However, he

emphatically denied exercising any

authority to inititate or to approve

Green's termination. Stricklin's

49a

testimony regarding his lack of any

involvement with Green's termination is

substantially corroborated by numerous

employees of Amerada Hess who claim

responsibility for the decision to

terminate Green and for the actual

termination thereof. Specifically, the

sworn affidavit of David M. Pritchard,

previously an employee of Hess', stated

that he initiated the decision to

terminate Green because of poor work

performance and actually carried out

that decision. (Ex. D-4). Pritchard

further states that he didn't seek

Stricklin's approval for his decision

nor was it even discussed with Stricklin.

The affidavit of Donald L. Miller,

Plaintiff's immediate supervisor,

substantiates Pritchard's statements.

(Ex. D-l1). Miller confirmed the fact

that Pritchard made the decision to

discharge Plaintiff without the approval

50a

or participation of L. A. Stricklin.

Moreover, the affidavit of James C.

Hefley, Regional Manager of the Southeast

Region of Amerada Hess, states that the

decision to discharge Plaintiff had

already been made and was being pro-

cessed before Stricklin was informed of

the decision. (Ex. D-3). According to

the affidavit of W. C. Henderson,

Southeast Region Operations Manager in

1975, he, as Pritchard's supervisor,

approved Pritchard's decision to ter-

minate Plaintiff.

Plaintiff unconvincingly attempts

to combat the veracity of these sworn

affidavits by summarily disposinc of

them as “unworthy of consideration" and

sheer “doubletalk." (Plaintiff's brief

at 6). In support of his contention

that Stricklin was personally involved

in the termination, Plaintiff introduced

the unsigned transcript of a telephone

5la

conversation between Plaintiff's attorneys

and Donald Miller wherein Miller very

equivocally stated that Stricklin had

made the decision to terminate Green.

In view of the strong evidence

presented by Defendants and the somewhat

transparent support mustered by

Plaintiff, this Court concludes that

“there is no arguably reasonable basis

for predicating that the alleged

Mississippi law might impose liability

on the resident Defendant under the

facts alleged." Keating, supra at 331;

Tedder, supra at 117; Bobby Jones Garden

Apartments, Inc., supra at 176; Parks,

supra at 478; Dees, supra at 618;

Howard, supra at 648.

IT IS THEREFORE the opinion of this

Court that Defendant, L. A. Stricklin,

was fraudulently joined by Plaintiff to

defeat diversity jurisdiction and since

this Court finds a plethora of facts

52a

which could have been ascertained by

Plaintiff to verify Stricklin's lack of

personal involvement, this Court retains

jurisdiction of this cause and finds

that Defendant, L. A. Stricklin, should

be dismissed from further proceedings in

this matter.

An Order will be submitted in

accordance with the foregoing opinion

within the time prescribed by the local

rules.

UNITED STATES DISTRICT JUDGE

DATED: July 21, 1981

53a

APPENDIX C

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF MISSISSIPPI

EASTERN DIVISION

DAVID R. GREEN PLAINTIFF

vs. CIVIL ACTION NO. E80-0121(R)

AMERADA HESS CORPORATION

AND L. A. STRICKLIN DEFENDANTS

ORDER

THIS CAUSE having come on for

hearing on the Plaintiff's Motion to

Remand, and a full evidentiary hearing

having been had on said Motion on March

30, 1981, and on May 22, 1981, and this

Court having carefully considered all

the evidence finds that resident

Defendant, L. A. Stricklin, has been

fraudulently joined in this action and

54a

that Plaintiff's Motion to Remand should

be denied.

THEREFORE, IT IS ORDERED that

Plaintiff's Motion to Remand is denied

on the basis of fraudulent joinder of

the resident Defendant, L. A. Stricklin.

It is further ordered that this Court

hereby retains jurisdiction of this

cause and that Defendant, L. A. Stricklin,

is dismissed from all further proceedings

in this cause pursuant to Rule 12(b) (6)

of the Federal Rules of Civil Procedure.

SO ORDERED this the 13th day of

October, 1981.

U. S. DISTRICT JUDGE

55a

APPENDIX D

IN THE UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF MISSISSIPPI

EASTERN DIVISION

DAVID R. GREEN PLAINTIFF

vs. CIVIL ACTION NO. E80-0121(R)

AMERADA HESS CORPORATION DEFENDANT

MEMORANDUM OPINION

Defendant, Amerada Hess Corporation,

has moved this Court to enter, pursuant

to F.R.Civ.P. Rule 56, summary judgment

in its favor and against Plaintiff,

David R. Green, on the basis that this

action is barred under the doctrine of

res judicata and/or collateral estoppel

by the Judgment and Findings of Fact and

Conclusions of Law entered in David R.

Green v. Amerada Hess Corp., Civil

Action No. E78-0065(C) (July 19, 1979),

56a

aff'd, 612 F.2d 212 (Sth Cir.), reh. en

banc denied, 614 F.2d 1298 (Sth Cir.),

cert. denied, 449 U.S. 952 (1980).

FINDINGS OF FACT

Plaintiff, David R. Green, filed

the instant action against Amerada Hess

Corporation and L. A. Stricklin in

November 19801/ in the Circuit Court of

Clarke County, Mississippi seeking

damages for an alleged breach of

contract by these defendants; for an

alleged tortious conspiracy by these

defendants to deprive plaintiff of his

statutory and constitutional rights; for

an alleged interference with his economic

advantage; and for alleged intentional

infliction of emotional distress. The

action was subsequently removed to this

Court by Defendant on the basis of

diversity jurisdiction and the fraudulent

joinder of L. A. Stricklin. Stricklin

57a

was dismissed from this lawsuit

following an Order by £his Court on

October 13, 1981 that Defendant

S:ricklin was fraudulently joined by

Plaintiff to defeat Federal diversity

jurisdiction.

The facts upon which Plaintiff

relies in support of his allegations are

as follows: Plaintiff began his

employment with Amerada Hess Corporation

in January 1972 as a lease operator. In

April 1973, Plaintiff sustained a work-

related injury. He immediately filed an

accident report although he continued

working until April 1974 when he was

hospitalized for a week of diagnostic

tests. Thereafter, he returned to work

until October 1974 when he was again

hospitalized for back surgery. After

recuperating, he resumed his employment

in December 1974. In July 1975, Green

was dismissed. He alleges that his

58a

discharge was the result of a conspiracy

on the part of Hess' employees to coerce

him to abandon his employment because of

his stated intention to invoke his sta-

tutory rights under the Mississippi

Workmen's Compensation Act, MISS. CODE

ANN. § 71-3-1, et seq.2/ These

conspirators allegedly utilized

injurious falsehood to carry out their

deed. As a result of their conspiracy,

Plaintiff was wrongfully discharged and,

thus deprived of his lawful employment,

his right to pursue a trade and his

economic advantage.

According to Green, Hess breached

its “written, fixed term contract of

employment” with him by wrongfully

discharging him for pursuing his

worker's compensation rights. He states

that the parties agreed and contracted

to continue his employment until normal

retirement, or, thirty-four (34) years.

59a

Green contends that his acceptance of

Hess' “Benefit Program for Employees",

which includes the Employees Pension

Plan; Savings and Stock Bonus Plan;

Medical Expense Benefits; Personnel

Policies; and Survivor Benefits, upon

commencement of his employment, consti-

tutes a written, fixed term contract

with Hess.

Defendant-Hess retorts Plaintiff's

contentions by referring to the Judgment

and Findings of Fact and Conclusions of

Law in Green v. Amerada Hess Corp.,

E78-0065(C) and the affirmance by the

Fifth Circuit, 612 F.2d 212 (5th Cir.

1980), wherein the terms and conditions

of Plaintiff's employment with Hess were

adjudicated. Defendant contends that

the instant action is barred by the

final adjudication in the prior suit

under the doctrine of res judicata

and/or collateral estoppel.

60a

CONCLUSIONS OF LAW

The doctrine of res judicata

provides that

"a prior valid judgment operates

as an absolute bar to a second

suit between the same parties or

their privies based on the same

cause of action not only in

respect of every matter actually

litigated, but also as to every

ground of recovery or defendant

which might have been raised."

Key v. Wise, 629 F.2d 1049, 1063 (Sth

Cir. 1980); Valerio v. Boise Cascade

Corp., 80 F.R.D. 626, 648 (N.D. Cal.

1978) (quoting Mirin v. Nevada ex rel.,

Public Service Commission, 547 F.2d 91,

94 (9th Cir. 1976), cert. denied, 432

U.S. 906 (1977)).

The Fifth Circuit in Stevenson v.

International Paper Co., 516 F.2d 103,

109 (Sth Cir. 1975), delineated the

requirements which must be met before

res judicata applie.:

6la

(1) the prior judgment must be

rendered by a court of competent

jurisdiction;

(2) the parties, or those with

privity, must be identical in both

suits;

(3) the same cause of action must

be involved in oth suits; and,

(4) there must have been a final

judgment on the merits.