M & B Oil, Inc. v. Federated Mutual Insurance Co, No. 21-3817 (8th Cir. 2023)
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This case involves a rare procedural maneuver called snap removal. Federated Mutual Insurance Company removed an insurance dispute to federal court before Plaintiff, M & B Oil, Inc., “properly joined and served” one of the Defendants, the City of St. Louis. The question is whether this maneuver eliminates the requirement of complete diversity.
The Eighth Circuit answered no, and vacated the order denying remand and sent the case back for a second look. The court explained that from the beginning, M & B sued two Defendants: St. Louis and Federated. One of them is a fellow Missourian, so there has never been complete diversity. And without complete diversity, there is no “original jurisdiction. Further, the court wrote that snap removal cannot cure a lack of complete diversity. Moreover, the court explained that there is reason to doubt that any fraudulent-joinder argument will succeed now that M & B has amended its complaint to include an inverse condemnation claim against St. Louis.
Court Description: [Stras, Author, with Smith, Chief Judge, and Arnold, Circuit Judge] Civil case - Civil procedure. Federated removed this insurance dispute to federal court before plaintiff M & B had properly joined and served the second defendant in the action, the City of St. Louis, which was the only non-diverse defendant; service does not matter in evaluating the diversity of the parties, and this procedure, known as snap removal, does not eliminate the requirement of complete diversity under 28 U.S.C. Sec. 1332(a); the order denying remand to state court is vacated, and the matter is remanded for further proceedings to evaluate whether the City was fraudulently joined.
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