United States District Court, D. Montana, Great Falls Division
FINDINGS AND RECOMMENDATIONS ON MOTION TO
JOHNSTON UNITED STATES MAGISTRATE JUDGE
William Calhoun (Mr. Calhoun) filed this action in Montana
state district court alleging various asbestos-related tort
claims. On August 16, 2017, Defendant BNSF Railway Co.
(“BNSF”) timely removed to this Court on
diversity of citizenship grounds. (See Doc.
1). Defendant BNSF acknowledged that John Swing (Mr.
Swing) is a citizen of Montana, but claims he has been
fraudulently joined. On September 12, 2017, Mr. Calhoun filed
a Motion to Remand the action back to State court, arguing
Mr. Swing is a proper defendant and that his presence in the
action prevents removal under the forum defendant rule. (Doc.
12). The motion has been fully briefed, and the Court held a
hearing on the matter on November 1, 2017. The motion is ripe
courts have jurisdiction over state law claims in which the
matter in controversy exceeds $75, 000, and is between
citizens of different states. 28 U.S.C. § 1332(a).
Removal under section 1332(a) requires “complete
diversity” of citizenship, meaning each plaintiff, with
few exceptions, must be diverse from each defendant.
Morris v. Princess Cruises, Inc., 236 F.3d 1061,
1067 (9th Cir. 2001) (citation omitted). If any defendant who
is “properly joined and served” is “a
citizen of the State in which the action is brought[,
]” then the action is not removable. 28 U.S.C.
1441(b)(2). Therefore, unless Mr. Swing has been fraudulently
joined, this action must be remanded.
removal statutes are to be strictly construed against removal
jurisdiction. Lovell v. Bad Ass Coffee Co. of Hawaii,
Inc., 103 F.Supp.2d 1233, 1236 (D. Haw. 2000). All
doubts are to be resolved “against removal, . . .
employ[ing] a presumption against fraudulent joinder.”
Macey v. Allstate Property & Casualty Ins.
Co., 220 F.Supp.2d 1116, 1117 (N.D. Cal. 2002) (citation
omitted). Federal jurisdiction must be rejected if there is
any doubt as to the right of removal in the first instance.
Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.
1992). The party alleging fraudulent joinder bears the burden
of persuasion. Lovell, 103 F.Supp.2d at 1237
“will be considered fraudulently joined - and removal
will be permitted - when the plaintiff has not or cannot
state a claim for relief” against the non-diverse
individual under the applicable state substantive law. 14B
Charles Alan Wright, Arthur R. Miller & Edward H. Cooper,
Federal Practice and Procedure §3723 at 631 (3d ed.
1998); see also Lovell, 103 F.Supp.2d at 1237
(citing McCabe v. General Foods Corp., 811 F.2d
1336, 1339 (9th Cir. 1987)). Any disputed issues of fact are
to be resolved in favor of the plaintiff. Charlin v.
Allstate Ins. Co., 19 F.Supp.2d 1137, 1140 (C.D. Cal.
has established diversity of citizenship in this action. In
its Notice of Removal, BNSF alleges that BNSF Railway is
incorporated in Delaware, and has its principal place of
business in Texas, and is therefore a citizen of Delaware and
Texas. (Doc. 1 at ¶ 5). It further alleges that Mr.
Calhoun is a citizen of Arizona. (Id. at ¶ 4,
see Doc. 7 at ¶ 1). Finally, BNSF alleges that
Mr. Swing is a citizen of Montana and that none of the other
defendants are citizens of Arizona. (Id. at ¶
6, see Doc. 7 at ¶ 3). Therefore, there is
complete diversity between the plaintiff and all defendants.
However, the presence of Mr. Swing as a defendant in this
case and his Montana citizenship requires remand to State
court under the forum defendant rule, 28 U.S.C.
premises its opposition to Mr. Calhoun's Motion to Remand
on the argument that Mr. Swing is fraudulently joined and his
presence in the action should therefore be ignored under
application of the forum defendant rule. Therefore, the issue
is whether Mr. Swing can be held personally liable under
Montana law given the allegations in Mr. Calhoun's
Complaint and is therefore properly joined as a defendant in
corporate agent under Montana law may be held personally
liable if “the agent was personally negligent or that
the agent's actions were tortious in nature.”
Crystal Springs Trout Co. v. First State Bank of
Froid, 732 P.2d 819, 823 (Mont. 1987); Mont. Code Ann.
§ 28-10-702 (2001); see also Bottrell v. Am.
Bank, 773 P.2d 694, 708-09 (Mont. 1989) (“officer
or director [personally liable if he] acts against the best
interests of the corporation, acts for his own pecuniary
benefit, or with the intent to harm the plaintiff”)
(citing Phillips v. Montana Education Ass'n, 610
P.2d 154, 158 (Mont. 1980)); Little v. Grizzly Mfg.,
636 P.2d 839, 841 (Mont. 1981). Where, as here, there are
allegations against an employee personally, the Montana
Supreme Court has allowed the employee to be named as a
defendant. Dagel v. City of Great Falls, 819 P.2d
186, 195 (Mont. 1991).
argues that any negligence on the part of Mr. Swing was in
the course and scope of his employment, and therefore he
cannot personally be held liable. (Doc. 40 at 13-14). It
argues that the exception holding corporate agents personally
liable for acts that are “wrongful in nature” is
narrow and against the general policy of shielding officers
and agents “from personal liability for acts taken on
behalf of a corporation.” (Id. at 14 (quoting
Crystal Springs, 732 P.2d at 823)).
courts in the District of Montana have held that it is enough
to allege that the corporate agent either ignored warnings or
participated in the principal's tortious conduct to hold
the agent personally liable. For instance, in Castro v.
ExxonMobil Oil Corp., 2012 WL 523635 (D. Mont. 2012),
the Court reasoned as follows in granting a motion to remand:
As recently as 2009, the Montana Supreme Court affirmed the
longstanding rule that corporate agents can be personally
liable if they were personally negligent or their actions
were tortious in nature. Ammondson v. Northwestern
Corp., 353 Mont. 28, 220 P.3d 1, 21 (Mont. 2009)
[citation omitted]. Here, for example, Plaintiffs allege
Montgomery is the Terminal Superintendent for EMPC [and] was
aware that the Silvertip Pipeline was not buried deep enough
below the Yellowstone River and that high water could damage
the pipeline, that he was actively involved in