Creating Diversity Jurisdiction in Removal Actions through the Improper Use of Federal Rule of Civil Procedure 21: Procedural Blackjack or Judicial Bust
Recently, federal district courts have held that Federal Civil Rule of Procedure 21 bestows upon them the power to sever nondiverse parties or claims to create diversity jurisdiction without first finding that a party or claim is improperly joined. Severance may mean that a plaintiff who brings a state court action against multiple parties, one or more of which is not diverse, runs the risk of a federal court severing the action in a removal analysis, even where the plaintiff has committed no improper joinder of parties. Severance may leave a plaintiff with the need to conduct simultaneous suits--one in state court and one in federal court. Other federal district courts, however, have correctly declined to sever properly joined nondiverse parties. Through an analysis of the purposes and limitations of removal and the proper role of the Federal Rules of Civil Procedure, this Note concludes that the use of Federal Rule 21 to create diversity jurisdiction where all parties are properly joined is improper. Part II traces the evolution of Federal Rule 21. Parts III and IV review the qualifiers necessary for diversity jurisdiction, the history and parameters of removal, and the judicial doctrines of fraudulent joinder and procedural misjoinder. Parts V and VI demonstrate that the misuse of Federal Rule 21 to create diversity jurisdiction in removal actions where parties are properly joined has been supported by either a misreading of or an unwarranted extension of the Supreme Court's holding in Newman-Green, Inc. v. Alfonzo-Larrain a disregard for the proper role of the Federal Rules in relation to the interplay of judicial exercise and Congressional oversight, and by ignoring the unfair consequences that misuse of the Rule places on the parties to the action. Arguably, such a misuse of Federal Rule 21 not only flouts the separation of powers by treading into territory that Congress controls, but it also conflicts with the self-limitations imposed by the Federal Rules themselves and can result in undue hardship on plaintiffs. Part VII examines the possible solutions to the problem and ultimately concludes that the best solution is for the judiciary to exercise self restraint in its application of Federal Rule 21. Alternatively,Congress could either amend the removal or diversity statutes, or it could exercise its oversight powers with regard to the Federal Rules themselves to remedy this misuse of Federal Rule 21.
Note, Creating Diversity Jurisdiction in Removal Actions through the Improper Use of Federal Rule of Civil Procedure 21: Procedural Blackjack or Judicial Bust, 60 Clev. St. L. Rev. 249 (2012)