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Update: Popcorn flavoring suits



On June 30, we reported a verdict in favor of the flavoring manufacturer in the series of lawsuits over it allegedly causing lung disease to workers at a popcorn factory. The plaintiffs complained that a juror failed to disclose "her daughter's seven years of intermittent breathing treatments", and in November, the judge granted their motion for a new trial. Not surprisingly, International Flavors states they'll appeal this decision. (AP/SF Chronicle, Nov. 5).

Meanwhile, yet another jury has issued a decision, this one for $15 million. (Jeff Lehr, "Jury grants injured worker, wife $15 million", Joplin Globe, Mar. 26). Four other cases from the same factory have settled; another trial last March resulted in a $20 million verdict. Workers at an Iowa factory have also been bringing suits in the wake of the publicity from the Joplin County verdicts.

The more experienced among you may be wondering: Missouri plaintiff, New York and Virginia corporate defendants--what are these cases doing in Joplin County state courts? Simple: in each case, the plaintiffs also sued a Missouri doctor, an unfortunate innocent bystander, Rick Scacewater. The presence of a Missouri citizen on each side of the "v." meant that the federal courts did not have federal diversity jurisdiction. Not that the plaintiffs had any intention of really going after Dr. Scacewater; each time, after waiting more than a year in an effort to avoid the limitation in 28 U.S.C. � 1446(b), they dismissed the doctor from the case. (Benavides v. Int'l Flavors & Fragrances, Inc., No. 01-CV-683025, Circuit Ct. Jasper Cty., Mo.; dismissal filed Dec. 2, 2002, fifteen months after complaint filed). Unfortunately, if federal courts faced with a removal motion permit plaintiffs to engage in fraudulent joinder, plaintiffs have every incentive to harass local businesses and individuals to get the benefits of forum-shopping. Some courts are more tolerant of the gamesmanship than others; under 28 U.S.C. � 1447(d), defendants have no recourse if a federal district court incorrectly remands a complaint suffering from fraudulent joinder.

Courts differ over whether to apply the one-year limitation on removal of diversity cases in � 1446(b) when the plaintiffs act fraudulently. See Tedford v. Warner-Lambert Co., 327 F.3d 423 (5th Cir. 2003) (recognizing "equitable exception" to 28 U.S.C. � 1446(b)'s one-year time limit for removing cases). It will be years of litigation before this can be resolved definitively, but Congress can solve the ambiguity by removing the last clause of � 1446(b). The one-year loophole has become an exception that is swallowing the rule. Congress helped to kill the loophole for class actions when it passed the Class Action Fairness Act, and now is the time to end it for other cases.

Similarly, the Class Action Fairness Act created appellate jurisdiction to review remand decisions of removed class actions. Similar appeals should be permitted when the removal is on grounds of fraudulent joinder, if only to ensure consistency among federal district courts in the same state applying the same law.

 

 


Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.