Legal Definitions - fraudulent joinder

Fraudulent joinder occurs when a plaintiff improperly includes a party in a lawsuit, typically a defendant, for the deceptive purpose of preventing the case from being moved from state court to federal court. This usually happens when the plaintiff and the primary defendant are from different states, which would normally allow the case to be heard in federal court under what's called "diversity jurisdiction." To avoid federal court, the plaintiff adds a defendant from their own state against whom there is no legitimate legal claim. If the court determines that the joinder was fraudulent, it will disregard the improperly joined party and allow the case to proceed in the appropriate court, often federal court.

• Imagine a person from California sues a large, out-of-state trucking company for injuries sustained in an accident. The trucking company is based in Nevada. Normally, this case could be "removed" to federal court because the plaintiff and the main defendant are from different states. However, the plaintiff also names the local California-based truck driver as a defendant, even though the driver was acting within the scope of their employment and there's no independent basis for a claim against them personally under state law. The plaintiff's true intention is to keep the case in California state court by including a California defendant. The trucking company could argue fraudulent joinder, asserting there's no real claim against the driver, and seek to remove the case to federal court.

• A consumer in Florida purchases a defective appliance from a local Florida electronics store. The appliance was manufactured by a large corporation based in Ohio. The consumer sues both the Ohio manufacturer and the local Florida store, alleging the product was defective. However, the defect is clearly a manufacturing flaw, and the local store merely sold the product without any involvement in its design or production, and without knowledge of the defect. Under Florida law, the retailer might not be liable for a manufacturing defect if they were not negligent themselves. The manufacturer could argue that the local store was fraudulently joined to prevent the case from being removed to federal court, as the manufacturer and consumer are from different states.

• A small business in Texas enters into a complex contract with a major technology firm headquartered in New York. A dispute arises, and the Texas business wants to sue the New York firm. To ensure the lawsuit stays in Texas state court, the Texas business also names a local Texas-based consultant who provided minor, non-binding advice during the contract negotiation, even though the consultant has no direct liability for the breach of contract. The New York technology firm could claim fraudulent joinder, arguing that the consultant was added solely to defeat diversity jurisdiction and keep the case out of federal court, as there's no valid claim against the consultant.