Unreported / Non-Citable
Background
Ashley and Catherine Guerdan bought a Mississippi home in 2018 and obtained a dwelling fire policy from Meridian Security Insurance Company. The policy did not cover wind damage. After a large oak tree fell on the house in April 2020, Meridian denied coverage, prompting the sisters to sue the insurers, mortgage companies, bank, loan officer, insurance intermediaries, real-estate agents, and related entities.
The Guerdans filed two state-court actions containing both diverse and Mississippi defendants. The defendants removed both cases to federal court. The district court denied remand, concluded that the seven nondiverse defendants had been improperly joined, and dismissed those defendants with prejudice. The Guerdans appealed the resulting partial final judgment.
The Court’s Holding
The Fifth Circuit held that removal of the first action was procedurally defective because Caliber Home Loans and Pennymac Loan Services were properly joined and had been served before removal, yet neither joined in nor consented to removal as required by 28 U.S.C. § 1446(b)(2)(A). The Guerdans timely raised that defect within 30 days, so the district court should have remanded the case.
As to the second action, the court held that the defendants failed to establish improper joinder. The complaint plausibly alleged negligence per se against Mississippi defendants Community Bank and Jason Sykes under the Mississippi S.A.F.E. Mortgage Act, and the claims were not time-barred on the face of the pleadings because the Guerdans alleged that they first received the policy after the April 2020 loss.
The district court also abused its discretion by piercing the pleadings after denying remand and by using extensive discovery to resolve the disputed question whether Catherine Guerdan electronically consented to policy delivery. That issue went to the potential merits of claims against diverse and nondiverse defendants alike, not to a discrete fact specific to joinder. The Fifth Circuit reversed and directed the district court to remand both actions to state court.
Key Takeaways
- Every properly joined and served defendant must join in or consent to removal, and a timely objection to missing consent requires remand.
- A limitations defense supports improper joinder only when the claim is time-barred on the face of the complaint; disputed accrual facts cannot be resolved against the plaintiff at the pleading stage.
- Piercing the pleadings in an improper-joinder inquiry must be limited and summary, not a merits proceeding involving extensive discovery into disputed facts.
Why It Matters
The decision reinforces the narrow scope of improper-joinder review. A federal court may not preserve diversity jurisdiction by resolving a defense that would defeat the claims against all defendants equally or by conducting substantial merits discovery before establishing jurisdiction.
For removal practitioners, the opinion also underscores that consent requirements are assessed based on whether a defendant was properly joined and served when removal occurred. Service of the original complaint was sufficient here even though the defendants had not separately received the amended complaint.