Fraudulent Joinder Prevention Act of 2016 2016-02-25 Passed House amended Fraudulent Joinder Prevention Act of 2016

(Sec. 2) This bill amends procedures under which federal courts determine whether a case that was removed from a state court to a federal court on the basis of a diversity of citizenship among the parties may be remanded back to state court upon a motion opposed on fraudulent joinder grounds that: (1) one or more defendants are citizens of the same state as one or more plaintiffs, or (2) one or more defendants properly joined and served are citizens of the state in which the action was brought.

Joinder of such a defendant is fraudulent if the court finds:

  • actual fraud in the pleading of jurisdictional facts with respect to that defendant,
  • state law would not plausibly impose liability on that defendant,
  • state or federal law bars all claims in the complaint against that defendant, or
  • no good faith intention to prosecute the action against that defendant or to seek a joint judgment including that defendant.

In determining whether to grant or deny such a motion for remand, the court: (1) may permit pleadings to be amended; and (2) must consider the pleadings, affidavits, and other evidence submitted by the parties.

A federal court finding that all such defendants have been fraudulently joined must: (1) dismiss without prejudice the claims against those defendants, and (2) deny the motion for remand.

]]> 2016-02-16 Reported to House amended Fraudulent Joinder Prevention Act of 2016

(Sec. 2) This bill amends procedures under which federal courts determine whether a case that was removed from a state court to a federal court on the basis of a diversity of citizenship among the parties may be remanded back to state court upon a motion opposed on fraudulent joinder grounds that: (1) one or more defendants are citizens of the same state as one or more plaintiffs, or (2) one or more defendants properly joined and served are citizens of the state in which the action was brought.

Joinder of such defendants is fraudulent if the court finds:

  • actual fraud in the pleading of jurisdictional facts,
  • state law would not plausibly impose liability on each defendant,
  • state or federal law bars all claims in the complaint against all such defendants, or
  • no good faith intention to prosecute the action against all such defendants or to seek a joint judgment.

In determining whether to grant or deny such a motion for remand, the court: (1) may permit pleadings to be amended; and (2) must consider the pleadings, affidavits, and other evidence submitted by the parties.

A federal court that finds joinder to be fraudulent must: (1) dismiss without prejudice the claims against defendants found to be fraudulently joined, and (2) deny the motion for remand.

]]> 2015-09-28 Introduced in House Fraudulent Joinder Prevention Act of 2015

This bill amends procedures under which federal courts consider a motion to remand back to a state court a case that was removed from a state court to federal court.

The bill allows a motion for remand, and any opposition to such a motion, to include affidavits or other evidence: (1) showing a plausible claim for relief against each nondiverse defendant, or the lack thereof; or (2) indicating a good faith intention to prosecute the action against each nondiverse defendant or to seek a joint judgment, or the lack of such a good faith intent.

Federal courts must deny a motion to remand if they find that the complaint does not state such a plausible claim for relief against a nondiverse defendant under applicable state law or that there is no good faith intention to prosecute the action against a nondiverse defendant or to seek a joint judgment.

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