House Judiciary Committee Debates Fraudulent Joinder Legislation

The House Judiciary Committee heard testimony September 29 regarding the Fraudulent Joinder Prevention Act (H.R. 3624), which would amend 28 U.S.C. § 1447(c) to make it explicit that a “district court shall deny a motion to remand if it finds that the complaint does not state a plausible claim for relief against a nondiverse defendant under applicable State law or there is no good faith intention to prosecute the action against a nondiverse defendant or to seek a joint judgment.” Proponents of the bill say that the amendment would replace multiple standards currently employed by the courts to determine the viability of a nondiverse plaintiff’s claim with a single, uniform standard. Opponents say that the bill say that the phrase “plausible claim” will not yield greater uniformity and that the legislation is intended only to shield businesses from liability. [9/30/15]