In Pepitone v. Target Corp., No. CV 24-236 (MAS) (RLS), 2024 WL 4238701 (D.N.J. Sept. 18, 2024), the District Court of New Jersey reaffirmed that including a corporation’s employee as a direct defendant can destroy diversity. In Pepitone, the plaintiff was struck by a chain of shopping carts pushed by the defendant’s employee during the course of his employment. The plaintiff sued the defendant in Superior Court, and the defendant timely removed the matter to Federal Court on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332, as the plaintiff and defendant were from different states and the amount in controversy exceeded $75,000. After removal, the plaintiff learned the name of the defendant’s employee that struck her with the train of carts. The plaintiff sought to file an amended complaint in order to add that employee as a direct defendant, and also sought to remand the matter to Superior Court pursuant to 28 U.S.C. § 1447(c) since the inclusion of the employee destroyed diversity jurisdiction.
The defendant opposed the motion to remand, arguing that the fraudulent joinder doctrine is applicable. Fraudulent joinder is applicable “when there is no reasonable basis in fact or colorable ground supporting the claim against the joined defendant, or no real intention in good faith to prosecute the action against the defendant or seek a joint judgment.” A claim is not colorable when it is “wholly insubstantial and frivolous.” If the employee was fraudulently joined, it would allow the Court to ignore the employee for jurisdictional purposes, or dismiss that employee and retain jurisdiction.
The Court found that the employee was not fraudulently joined because the plaintiff had a colorable claim for negligence against the employee, separate from the plaintiff’s claims against the defendant. Respondeat superior is not a bar to individual recovery against an employee. The Court noted that the plaintiff continuously asserted an intention to seek judgment from the employee by naming a John Doe in the complaint, seeking to acquire the employee’s name, and joining the employee to the action. The Court found that the addition of the employee eliminated complete diversity, and subsequently remanded the matter due to lack of subject matter jurisdiction.