Legal Definitions - collusive joinder

Collusive joinder occurs when parties are improperly added to a lawsuit, or claims are improperly combined, as part of a secret agreement or understanding. The primary purpose of such a maneuver is often to manipulate legal procedures, such as a court's jurisdiction or the geographic location of the trial (venue), or to gain an unfair strategic advantage in litigation.

Here are some examples to illustrate collusive joinder:

• Example 1: Manipulating Federal Court Jurisdiction

  Imagine a large corporation based in Delaware wants to sue a competitor based in New York for a significant amount of money. This case would typically qualify for federal court jurisdiction because the parties are from different states (diversity jurisdiction). However, the Delaware corporation believes it would receive a more favorable outcome in New York state court. To prevent the case from being removed to federal court by the New York competitor, the Delaware corporation secretly arranges to add a small, local New York-based subsidiary of its own as a co-plaintiff, even though this subsidiary has no genuine claim against the competitor. The addition of the New York subsidiary is a collusive joinder because it's a pre-arranged, non-genuine addition of a party solely to destroy diversity jurisdiction and keep the case in state court.

• Example 2: Influencing Trial Venue

  Consider a plaintiff who suffered an injury in a car accident in County A, where the defendant also resides. Normally, the lawsuit would be filed in County A. However, the plaintiff believes juries in County B are more sympathetic to plaintiffs in personal injury cases. To establish venue in County B, the plaintiff secretly convinces a distant relative who lives in County B to join the lawsuit as a co-plaintiff, claiming a minor, fabricated emotional distress injury from witnessing the accident, even though the relative was not genuinely involved or impacted. This is a collusive joinder because the relative's inclusion is a pre-arranged, non-genuine addition of a party specifically to manipulate the rules for determining the proper trial location.

• Example 3: Preventing Removal to Federal Court

  A consumer in California sues a large national bank, headquartered in Delaware, in a California state court. The bank would prefer to litigate in federal court, believing it offers a more neutral forum for complex financial disputes, and plans to remove the case there. To prevent this, the consumer's attorney, aware of the bank's strategy, secretly adds a low-level, local California branch manager of the bank as a co-defendant, alleging a minor, questionable claim against them personally, even though the manager has no real liability for the main dispute. This constitutes a collusive joinder because the branch manager's inclusion is a strategic, non-genuine addition of a party whose presence (being from the same state as the plaintiff) destroys diversity jurisdiction, thereby blocking the bank's ability to remove the case to federal court.