REPORT AND RECOMMENDATION
KATHERINE P. NELSON, District Judge.
In this case, removed from the Circuit Court of Mobile County, Alabama on May 31, 2013 (see Doc. 1),1 Plaintiff Headwaters, LLC has filed a motion the Court interprets as one to remand (Doc. 17),2 which has been referred to the undersigned United States Magistrate Judge for entry of a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 72.2. Consistent with the submission order (Doc. 18), Removing Defendant Wal-Mart filed its opposition (Doc. 22; see also Docs. 23-29 (exhibits in support)) on July 2, 2013; but the deadline for reply, July 10, 2013, passed without the plaintiff making such a filing.
After consideration of the pleading, and for the reasons explained herein, it is RECOMMENDED that the motion to remand (Doc. 17) be GRANTED and that this case be REMANDED to the Circuit Court of Mobile County, Alabama.
I. Background
The applicable facts as they relate to this Court's jurisdiction are discussed in the undersigned's analysis. But for preliminary purposes, the plaintiff, Headwaters, LLC, an Alabama citizen (compare Doc. 1, ¶ 6 and Doc. 1-2, with Doc. 20),3 filed its lawsuit, asserting state law claims related to property damage (see generally Doc. 1-1) against two named defendants, Wal-Mart Stores, Inc., a citizen of Delaware and Arkansas (see Doc. 1, ¶ 7), and Dawes Lake, LLC, a citizen of Alabama (see id., ¶¶ 5, 9), and several fictitious defendants4 in Mobile County Circuit Court on April 24, 2013 (see Doc. 1-1 at 1). The action was timely removed to this Court on the basis of diversity jurisdiction.
II. Analysis
A. As the removing defendant, Wal-Mart must prove that this Court has subject-matter jurisdiction.
"Any civil case filed in state court may be removed by the defendant to federal court if the case could have been brought originally in federal court." Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1356 (11th Cir. 1996) (citing 28 U.S.C. § 1441(a)), abrogated on other grounds by Cohen v. Office Depot, Inc., 204 F.3d 1069 (11th Cir. 2000); accord City of Vestavia Hills v. General Fid. Ins. Co., 676 F.3d 1310, 1313 n.1 (11th Cir. 2012). And a federal court may exercise diversity jurisdiction over all civil actions where the amount in controversy exceeds $75,000, exclusive of interest and costs, and the action is between citizens of different states. 28 U.S.C. § 1332(a)(1). Nevertheless, "[b]ecause removal jurisdiction raises significant federalism concerns, federal courts are directed to construe removal statutes strictly. . . . Indeed, all doubts about jurisdiction should be resolved in favor of remand to state court." University of S. Ala., 168 F.3d at 411; cf. D.M.C. Enters. Inc. v. Best McAllister, LLC, Civil Action No. 10-00153-CB-N, 2010 WL 3039477, at *2 (S.D. Ala. Aug. 4, 2010) ("Because it is conferred by statute, the right of removal is strictly construed to limit federal jurisdiction." (citing Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir. 1996))); White v. Wells Fargo Home Mortgage, Civil Action No. 1:11-cv-408-MHT, 2011 WL 3666613, at *3 (M.D. Ala. Aug. 22, 2011) (a federal court is "obligat[ed] to narrowly construe removal statutes"; this obligation necessarily "requires that uncertainties be `resolved in favor of remand'" (quoting Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994))).
Therefore, Wal-Mart must establish the propriety of removal under section 1441 and, for that reason, "bears the burden of establishing the existence of federal jurisdiction[,]" Brown v. Kabco Builders, Inc., Civil Action 07-0099-WS-C, 2007 WL 841690, at *1 (S.D. Ala. Mar. 15, 2007) (citing Leonard v. Enterprise Rent a Car, 279 F.3d 967, 972 (11th Cir. 2002)), which requires that Wal-Mart both establish complete diversity—that all plaintiffs are diverse from all defendants, Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998) (citation omitted); accord Auto-Owners Ins. Co. v. Great Am. Ins. Co., 479 Fed. App'x 228, 232 n.3 (11th Cir. June 21, 2012) (per curiam)—and also show that the amount in controversy more likely than not exceeds the $75,000 jurisdictional requirement, see Fitzgerald v. Besam Automated Entrance Sys., 282 F.Supp.2d 1309, 1314 (S.D. Ala. 2003).
Wal-Mart has made a showing sufficient to establish—and the plaintiff does not contest—that the amount in controversy exceeds the jurisdictional minimum (see Doc. 1, notice of removal, ¶¶ 16-19). The sole task for the Court, then, is to determine whether the non-diverse (or resident) defendant, Dawes Lake, LLC, was fraudulently joined to defeat this Court's jurisdiction.
B. The Eleventh Circuit recognizes three ways to prove that a resident defendant has been joined to defeat federal diversity jurisdiction.
1. Traditional fraudulent joinder analysis.
A removing defendant can establish complete diversity of citizenship by proving that the non-diverse defendant, purportedly a resident of the same state as the plaintiff, has been fraudulently joined in an effort by a plaintiff to defeat federal diversity jurisdiction. See Tapscott, 77 F.3d at 1359 ("An action may nevertheless be removable if the joinder of non-diverse parties is fraudulent."); Sellers v. Foremost Ins. Co., 924 F.Supp. 1116, 1117 (M.D. Ala. 1996) ("The citizenship of a resident defendant fraudulently joined should not be considered by a court for the purpose of determining diversity jurisdiction."). A removing defendant's burden in this regard is "a heavy one." See Pacheco de Perez v. AT & T Co., 139 F.3d 1368, 1380 (11th Cir. 1998). In Henderson v. Washington National Insurance Co., 454 F.3d 1278, (11th Cir. 2006), the Eleventh Circuit set forth the following standard of review:
When a plaintiff names a non-diverse defendant solely in order to defeat federal diversity jurisdiction, the district court must ignore the presence of the non-diverse defendant and deny any motion to remand the matter back to state court. The plaintiff is said to have effectuated a "fraudulent joinder," see Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir. 1997), and a federal court may appropriately assert its removal diversity jurisdiction over the case. A defendant seeking to prove that a co-defendant was fraudulently joined must demonstrate either that: "(1) there is no possibility the plaintiff can establish a cause of action against the [non-diverse or] resident defendant; or (2) the plaintiff has fraudulently pled jurisdictional facts to bring the resident defendant into state court." Id. The defendant must make such a showing by clear and convincing evidence. See Parks v. N.Y. Times Co., 308 F.2d 474, 478 (5th Cir. 1962)[.5]
Id. at 1281 (footnotes omitted); accord Taylor Newman Cabinetry, Inc. v. Classic Soft Trim, Inc., 436 Fed. App'x 888, 890 (11th Cir. May 31, 2011) (per curiam) (quoting Crowe and stating the same two alternative methods to show fraudulent joinder); Roberson v. BancorpSouth Bank, Inc., Civil Action No. 12-716-CG-N, 2013 WL 2896840, at *3 (S.D. Ala. June 13, 2013) (same).
2. Fraudulent misjoinder.
The Eleventh Circuit has recognized a third way to show fraudulent joinder. In Tapscott v. MS Dealer Service Corp., 77 F.3d 1353 (11th Cir. 1996), it held that "[m]isjoinder may be just as fraudulent as the joinder of a resident defendant against whom a plaintiff has no possibility of a cause of action"; this concept is commonly referred to as fraudulent misjoinder (and, sometimes, procedural misjoinder). Id. at 1360 (recognizing, "A defendant's `right of removal cannot be defeated by a fraudulent joinder of a resident defendant having no real connection with the controversy.'" (quoting Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921)); footnote omitted). Importantly, however, the court in Tapscott did "not hold that mere misjoinder is fraudulent joinder." Id. ("agree[ing] with the district court that Appellants' attempt to join these parties is so egregious as to constitute fraudulent joinder" (emphasis added))6; see also Ash v. Providence Hosp., Civil Action No. 08-0525-WS-M, 2009 WL 424586, at *8-9 (S.D. Ala. Feb. 17, 2009) ("[T]he law of this Circuit is clear that not every misjoinder amounts to fraudulent joinder; rather, only in egregious circumstances does misjoinder constitute fraudulent joinder."); Walton v. Tower Loan of Miss., 338 F.Supp.2d 691, 695 (N.D. Miss. 2004) ("It is thus apparent that, for Tapscott to be applicable, this court would be required to find a level of misjoinder that was not only improper, but grossly improper. . . . Clearly, this is a difficult burden for defendants to meet.").
And while the failure "to define egregious misjoinder as opposed to mere misjoinder has left courts in its wake either struggling to define the term, or[, as to courts outside this Circuit,] rejecting the theory of misjoinder as an improper jurisdictional inquiry," Yates v. Medtronic, Inc., No. CA 08-0337-KD-C, 2008 WL 4016599, at *7 n.4 (S.D. Ala. Aug. 26, 2008) (collecting cases), in Triggs v. John Crump Toyota, Inc., 154 F.3d 1284 (11th Cir. 1996), the Eleventh Circuit provided a framework under which to analyze Tapscott fraudulent misjoinder.7
As explained by the court in Bollea v. Clem, ___ F. Supp. 2d ___, 2013 WL 1296076 (M.D. Fla. Mar. 28, 2013),
[u]nder Triggs, if a plaintiff's joinder of defendants satisfies the permissive joinder requirements of Federal Rule of Civil Procedure 20(a)(2), then the parties are not fraudulently misjoined. 154 F.3d at 1289. Rule 20(a)(2) allows defendants to be joined if "any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences," and "any question of law or fact common to all defendants will arise in the action." FED. R. CIV. P. 20(a)(2)(A)-(B). To determine whether claims arise from the same "series of transactions or occurrences" under Rule 20(a)(2), courts in the Eleventh Circuit apply the "logical relationship" test. See Smith v. Trans-Siberian Orchestra, 728 F.Supp.2d 1315, 1319 (M.D. Fla. 2010) (citing Republic Health Corp. v. Lifemark Hosps. of Fla., 755 F.2d 1453, 1455 (11th Cir. 1985)). "Under this test, a logical relationship exists if the claims rest on the same set of facts or the facts, on which one claim rests, activate additional legal rights supporting the other claim." Id. (citing Republic Health, 755 F.2d at 1455). In other words, "there is a logical relationship when `the same operative facts serve as the basis of both claims.'" Republic Health, 755 F.2d at 1455 (quoting Plant v. Blazer Fin. Servs., Inc., 598 F.2d 1357, 1361 (5th Cir. 1979)). "[O]nly claims that do not arise from common operative facts are not logically related." Montgomery Ward Dev. Corp. v. Juster, 932 F.2d 1378, 1381 n.1 (11th Cir. 1991). The logical relationship standard is a "loose" one that "permits a broad realistic interpretation in the interest of avoiding a multiplicity of suits." Plant, 598 F.2d at 1361 (internal quotations omitted). Joinder rules, including Rule 20(a)(2), are construed generously towards "entertaining the broadest possible scope of action consistent with fairness of the parties." United Mine Workers v. Gibbs, 383 U.S. 715, 724 (1966).
Id. at *3 (some citations modified)8; see also Colson v. Joe East Heating & Air Conditioning, Inc., No. CV-12-J-3839-S, 2012 WL 6186176, at *3 (N.D. Ala. Dec. 10, 2012) (observing that "Tapscott's logic was drawn from the rules for permissive joinder as set forth in Rule 20(a)" and that, "[u]nder Alabama law, courts must consider each case individually to determine whether claims are logically related, therefore allowing `all reasonably related claims for relief by or against different parties to be tried in a single proceeding.'" (quoting Atchison v. Woodmen of the World Ins. Soc'y, 982 F.Supp. 835, 839 (S.D. Ala. 1997) (internal citations omitted))); Stone v. Zimmer, Inc., No. 09-80252-CIV, 2009 WL 1809990, at *2 (S.D. Fla. June 25, 2009) (defining procedural misjoinder as "a purposeful attempt to defeat removal by joining together claims against two or more defendants where the presence of one would defeat removal, and where in reality there is no sufficient factual nexus among the claims to satisfy the permissive joinder standard provided under Rule 20 of the Federal Rules of Civil Procedure").
3. A court's fraudulent joinder inquiry is "basic" and involves only a limited "piercing of the pleadings," to determine whether a claim against the resident defendant is possible.
In the context of fraudulent joinder, regardless which one of the three theories is being pursued, the Court is required to both evaluate the parties' factual allegations and submissions in the light most favorable to a plaintiff and resolve all uncertainties about state substantive law in favor of the plaintiff. See Crowe, 113 F.3d at 1538. And although the determination of whether a non-diverse defendant has been fraudulently joined "should be made based upon the plaintiff's pleadings at the time of removal," Cabalceta, 883 F.2d at 1561 (citing Pullman Co. v. Jenkins, 305 U.S. 534, 537 (1939)), a district court "can consider any submitted affidavits and/or deposition transcripts," id. (citing Coker v. Amoco Oil Co., 709 F.2d 1433, 1440 (11th Cir. 1983) ("Both parties may submit affidavits and deposition transcripts." (citing, in turn, B, Inc. v. Miller Brewing Co., 663 F.2d 545, 550 (5th Cir. Unit A Dec. 1981))), superseded by statute on other grounds as stated in Georgetown Manor, Inc. v. Ethan Allen, Inc., 991 F.2d 1533 (11th Cir. 1993)); see also Abrams v. Olin Corp., 248 F.R.D. 283, 291 (S.D. Ala. 2007) (The "fraudulent joinder analysis is not confined to the pleadings, but may also encompass `any affidavits and deposition transcripts submitted by the parties.'" (quoting Legg v. Wyeth, 428 F.3d 1317, 1322 (11th Cir. 2005)).
Given these parameters, some courts have analogized the fraudulent joinder inquiry to that applied to a motion for summary judgment under Rule 56. See Crowe, 113 F.3d at 1538.
However, while the analysis is similar, "the jurisdictional inquiry `must not subsume substantive determination' . . . [and w]hen considering a motion for remand, federal courts are not to weigh the merits of a plaintiff's claim beyond determining whether it is an arguable one under state law." Crowe, 113 F.3d at 1538. This court's authority to assess the "ultimate merit of the plaintiff's claims must be limited to checking for obviously fraudulent or frivolous claims" and it should not attempt to determine "the merits of cases that do not appear readily to be frivolous or fraudulent." Id. at 1541-42.
Atwood v. Weyerhaeuser USA, Inc., Civil Action No. 09-0379-CG-N, 2010 WL 749337, at *5 (S.D. Ala. Feb. 26, 2010) (emphasis added); see id. at *6 (describing the inquiry into the plaintiffs' claims for purposes of fraudulent joinder as "basic": The court must merely decide whether the defendants have shown by clear and convincing evidence that no Alabama court could find plaintiffs' complaint[, as supplemented by their] affidavit[,] sufficient to invoke claims for nuisance, negligence, wantonness and trespass."); Triggs, 154 F.3d at 1287 ("The plaintiff need not have a winning case against the allegedly fraudulent defendant; he need only have a possibility of stating a valid cause of action in order for the joinder to be legitimate." (emphasis in original)); Burden v. General Dynamics Corp., 60 F.3d 213, 217 (5th Cir. 1995) ("[I]n testing for fraudulent joinder the district court in its discretion may `pierce the pleadings,' albeit in so doing the court should not conduct an evidentiary hearing but, based on appropriate documentation in addition to the pleadings, should instead resolve all disputed questions of fact in favor of the plaintiff.").
As Burden and Atwood make clear, in "piercing the pleadings" to determine whether a claim exists against a resident defendant, a court may not step beyond the threshold jurisdictional inquiry and wade into the merits. See also In re Briscoe, 448 F.3d 201, 218 (3d Cir. 2006) ("Assuming a district court can `pierce the pleadings' to determine whether a plaintiff has asserted a colorable claim against the non-diverse defendant, `that inquiry is far different from the summary judgment type inquiry made by the district court here.' The district court, `in the guise of deciding whether the joinder was fraudulent, stepped from the threshold jurisdictional issue into a decision on the merits' . . . ." (discussing and quoting Boyer v. Snap-on Tools Corp., 913 F.2d 108, 112-13 (3d Cir. 1990) (internal citations omitted))); cf. Eckhart v. DePuy Orthopaedics, Inc., Case No. 2:03-cv-1063, 2004 WL 524916, at *2-4 (S.D. Ohio Mar. 3, 2004) ("Because a factual attack on the well-pleaded allegations of the plaintiff's complaint resembles an effort to obtain summary judgment on the merits, courts have struggled with the appropriate legal standard to be applied in such a situation.").
C. Wal-Mart has failed to show that the plaintiff's claims against Dawes Lake are not possible, which means that the Court must consider Dawes Lake's citizenship for purposes of determining jurisdiction.
Wal-Mart appears to give three reasons why the joinder of Dawes Lake is fraudulent. First, in its notice of removal (see Doc. 1, ¶ 12), Wal-Mart alleges "fraudulent misjoinder." Next, as provided in the notice (see id.,¶ 15), and reurged in its response to the remand motion (see Doc. 23 at 9-10), it argues that any claims against Dawes Lake are barred by a statute of repose. Finally, in response to the remand motion (see id. at 2-9), Wal-Mart recasts its "fraudulent misjoinder" argument as one under Rule 11 (see, e.g., id. at 3, 5 ("[I]f the fraudulent joinder inquiry revolves around facts unknown to the plaintiff (such as the origin of the stormwater that damaged plaintiff's property), the plaintiff's allegations must satisfy Rule 11. . . . Because plaintiff has made no effort to distinguish the Wal-Mart and Dawes Lake properties from the other property `uphill' from plaintiff's property, it has not complied with Rule 11. Plaintiff's legal justification also lacks merit, and Dawes Lake is therefore fraudulently joined.").)
While the undersigned will address each theory in turn, not one satisfies the heavy burden Wal-Mart must shoulder to demonstrate fraudulent joinder.
1. Wal-Mart has not shown that Dawes Lake has been fraudulently misjoined.
Wal-Mart's theory of fraudulent misjoinder, as stated in the notice of removal, is that it
has no relation to Dawes Lake. Although plaintiff alleges "joint conduct[,]" that "conduct" is limited to the geographic location of defendants' property: plaintiff alleges that both defendants developed property `uphill from the property' of plaintiff. There is no other link between Wal-Mart and Dawes Lake, and the properties are not adjacent, contiguous, or related in any way. [Further, t]he potential class of defendants in this suit is each and every property developer "uphill" from plaintiff's property. This is a haphazard and improper basis by which to join these defendants in a lawsuit, because there is no joint, several or alternative liability and the claim has no real connection to the claim against Dawes Lake. As such, Dawes Lake is fraudulently joined[,] and this lawsuit is properly removable on diversity grounds.
(Doc. 1, ¶ 12 (citation and some quotation marks omitted).)
As the proponent of fraudulent misjoinder, Wal-Mart must prove, however, that the joinder of Dawes Lake is not only improper under Rule 20, but also egregious, in the same vein as Tapscott. First, because there is a logical relationship between the claims against them, it has not been shown that Wal-Mart and Dawes Lake are misjoined under Rule 20(a)(2). As stated above, courts in this Circuit apply the "broad" and "loose" "logical relationship" test "[t]o determine whether claims arise from the same `series of transactions or occurrences' under Rule 20(a)(2)." Bollea, 2013 WL 1296076, at *3 (citations omitted). Here, the plaintiff has alleged that its property has been damaged by both Wal-Mart's construction of a facility and Dawes Lake's development of a subdivision, both uphill from its property. (See Doc 1-1, ¶¶ 4-7.) Thus, it appears that the plaintiff's claims against both "rest on the same set of facts[,]" Smith, 728 F. Supp. 2d at 1319, or, said differently, "the same operative facts serves as the basis [for] both[,]" Republic Health, 755 F.2d at 1455 (quoting Plant, 598 F.2d at 1361)—uphill developments, which have included the construction of impervious surfaces (e.g., streets and parking lots) caused water from a June 2012 rain event to damage the plaintiff's property (see Doc. 17-1, Mason Head Aff., at 2).9 Because the claims against both defendants arise from common operative facts, those claims are logically related. Cf. Montgomery Ward Dev. Corp., 932 F.2d at 1381 n.1.
Further, for purposes of fraudulent misjoinder, because there is a logical relationship between the claims asserted against Wal-Mart and Dawes Lake, it neither matters that more uphill property developers could have been named nor that Wal-Mart's and Dawes Lake's property is neither adjacent nor contiguous.10 Finally and most significantly, even if the joinder of Wal-Mart and Dawes Lake somehow violates the permissive joinder rules, Wal-Mart has not shown that any such misjoinder is egregious. Such a showing is required to prove fraudulent misjoinder under Tapscott.11
2. Wal-Mart has not shown there is no possibility that an Alabama court would find that the plaintiff's claims against Dawes Lake are not barred, either by a statute of limitation or one of repose.
While a statute of repose and a statue of limitation are not the same,12 both are affirmative defenses. See, e.g., Abrams, 248 F.R.D. at 291 n.11 ("Of course, the statute of limitations is an affirmative defense which plaintiffs are not required to negate in their Complaint." (collecting cases)). And, certainly, "[i]f the only claims against a resident defendant are barred by [either], then there is no possibility the plaintiff can establish a cause of action against the resident defendant. In such a situation, the resident defendant is deemed to be fraudulently joined." Bullock v. United Benefit Ins. Co., 165 F.Supp.2d 1255, 1258 (M.D. Ala. 2001) (quoting Whitlock v. Jackson Nat'l Life Ins. Co., 32 F.Supp.2d 1286, 1290 (M.D. Ala. 1998) (internal quotation marks omitted)); accord Fowler v. Provident Life & Accident Ins. Co., 256 F.Supp.2d 1243, 1247-48 (N.D. Ala. 2003); see also Riverdale Baptist Church v. Certainteed Corp., 349 F.Supp.2d 943, 949 (D. Md. 2004) ("[C]ourts in several other circuits have held, with varying requirements of certainty, that if the statute of limitations has run on a cause of action against a non-diverse defendant, the court may—and in some jurisdictions, must—find joinder of that defendant to be fraudulent." (collecting cases)).
If a defendant invokes the running of a statute of limitation or a statute of repose to show that there is no possibility a plaintiff can establish a cause of action against the resident defendant, that defendant must prove to this Court "that no Alabama court could conclude otherwise." Abrams, 248 F.R.D. at 291 n.12 ("[D]efendants' unsupported contention that any `alleged release and intrusion of mercury onto Plaintiffs' properties, undeniably occurred more than six years ago' perhaps reflects defendants' ardent hope and firm conviction as to what the evidence will show; however, they have made no evidentiary showing to meet their burden of proving that no Alabama court could conclude otherwise." (record citation omitted)); see Wright v. American Gen. Life & Accident Ins. Co., 136 F.Supp.2d 1207, 1212-13 (M.D. Ala. 2001) (relied upon heavily by Wal-Mart) ("The question before this court is not whether the rule of repose bars the Plaintiffs' claims, but whether there is any possibility that a state court would find that the Plaintiffs have stated a claim which is not barred by the rule of repose." (citing Crowe, 113 F.3d at 1539)); see also Thomas v. Jim Walter Homes, Inc., 918 F.Supp. 1498, 1502 (M.D. Ala. 1996) ("Jim Walter does not provide the court with the dates that defendant Henry received the tax notices, and thus Jim Walter offers no proof that a claim premised on the receipt of these tax notices is untimely. The court therefore proceeds to examine whether the Plaintiffs could possibly establish their negligence claim against defendant Henry in state court.").
Thus, for purposes of Wal-Mart's statute of repose-fraudulent joinder theory, all the Court needs to determine is whether there is a possibility that the claims against Dawes Lake are not barred, such that there is "a possibility [the plaintiff has] stat[ed] a valid cause of action" against Dawes Lake. Triggs, 154 F.3d at 1287 ("The plaintiff need not have a winning case against the allegedly fraudulent defendant; he need only have a possibility of stating a valid cause of action in order for the joinder to be legitimate." (emphasis in original)). In this regard, Riverdale Baptist Church is helpful. There, the court observed that, "[f]or the most part, [ ] successful fraudulent joinder/statute of limitations arguments occur in cases where the issue is fairly easy to determine, either from the face of the complaint or with resort to limited additional evidence, while courts facing more ambiguous factual situations reject such arguments." Id.; see, e.g., Edwards v. Pipewelders Marine, Inc., Civil Action No. 96-3630, 1997 WL 40622, at *1 (E.D. La. Jan. 31, 1997) ("In any event, as the complained of conduct took place in 1989, it is clear from the face of the pleading that any redhibitory claim is barred by the statute of limitations. Under the circumstances, there is no possibility that plaintiff would be able to establish a cause of action against Billy's in state court. As such, it is the finding of the Court that there is complete diversity between the parties." (emphasis added)); see also Riverdale Baptist Church, 349 F. Supp. 2d at 950 (recommending "a limited `piercing of the pleadings' for fraudulent joinder in statute of limitation cases"); accord McGinty v. Player, 396 F.Supp.2d 593, 598 (D. Md. 2005).13
The statute of repose Wal-Mart relies on concerns actions against architects, contractors, and engineers, see generally ALA. CODE § 6-5-220, et seq., and was upheld as constitutional by the Alabama Supreme Court in Baugher v. Beaver Construction Co., 791 So.2d 932 (Ala. 2000), in which the Supreme Court noted,
Buildings are unique in that typically they are intended to endure indefinitely if not permanently. Without this statute, architects, builders, and engineers would remain subject to liability until they die or, indeed, for some months after they have died. The construction statute of repose bears a substantial relationship to the eradication or amelioration of this potentially perpetual liability as well as the evils specifically found by the Legislature. Therefore, [it is] a valid exercise of police power. . . .
Id. at 937 (citations omitted).
Among other actions, § 6-5-221(a) applies to
[a]ll civil actions in tort, contract, or otherwise . . . against builders who constructed, or performed or managed the construction of, an improvement on or to real property designed by and constructed under the supervision, administration, or observation of an architect or engineer, or designed by and constructed in accordance with the plans and specifications prepared by an architect or engineer, for the recovery of . . . [d]amage to real or personal property caused by any such defect or deficiency.
Id. Under that section, such actions
shall be commenced within two years next after [it] accrues or arises, and not thereafter. [And] no relief can be granted on any cause of action which accrues or would have accrued more than seven years after the substantial completion of construction of the improvement on or to the real property, and any right of action which accrues or would have accrued more than seven years thereafter is barred, except where prior to the expiration of such seven-year period, the architect, engineer, or builder had actual knowledge that such defect or deficiency exists and failed to disclose such defect or deficiency to the person with whom the architect, engineer, or builder contracted to perform such service.
Id.
The statute does not apply (or apply without exception) in two instances: (1) where an "action against any architect, engineer, or builder who, at the time the cause of action accrues or arises, is the owner or is in actual possession or control as owner, tenant, or otherwise of the improvement[,]" id., § 6-5-221(d); and (2) "[w]hen the architect, engineer, or builder has been the owner or the person in actual possession or control, in whatever capacity, of the improvement during the seven-year period after the substantial completion of construction of the improvement on or to real property, but not at the time the cause of action accrues or arises," id., § 6-5-221(e) (providing that in such an instance, "the time of the ownership, possession, or control shall not be computed as a portion of the time necessary to create a bar for the action or of relief by virtue of the passage of time after the substantial completion of the improvement").
As to the application of the statute of repose to any claims against Dawes Lake, Wal-Mart relies on the Affidavit of Ben Tom Roberts (Doc. 3-1), provided in support of Dawes Lake's motion to dismiss (Doc. 3), filed May 31, 2013, the day this case was removed to federal court. Mr. Roberts, the "manager for Dawes Lake, LLC from its formation until its dissolution on October 31, 2011" (Doc. 3-1, ¶ 2), offers the following testimony:
• "Dawes Lake, LLC developed two subdivisions in west Mobile County, Alabama between 1998 and 2005 — Dawes Lake Estates and Dawes Lake Trace. These two subdivisions are the only projects Dawes Lake, LLC developed during its existence.
• "Dawes Lake, LLC began development of Dawes Lake Estates in or around June of 1998. There were a total of four additions constructed at Dawes Lake Estates. The fourth and final addition to Dawes Lake Estates was substantially completed and recorded by January 23, 2003. All of Dawes Lake, LLC's development work at Dawes Lake Estates was substantially completed on or before January 23, 2003.
• "Development at Dawes Lake Trace was substantially completed and recorded on or before December 12, 2005. All of Dawes Lake, LLC's development work at Dawes Lake Trace was substantially completed on or before December 12, 2005.
• "All development work performed by Dawes Lake, LLC[] was performed while acting in conformance with the instructions and under the supervision of an engineer or engineers."
(Id., ¶¶ 3-6.)
Wal-Mart's (and Dawes Lake's) theory is, then, that the latest of the dates for substantial completion of Dawes Lake's two developments, December 12, 2005, is the operative date for determining whether the plaintiff's claims against Dawes Lake are barred by § 6-5-221(a). (See, e.g., Doc. 1, ¶ 15 ("Plaintiff's claims against Dawes Lake were forever barred by Alabama's statute of repose as of December 12, 2012, seven years following the substantial completion of its last development project in that area, and[, accordingly,] plaintiff's complaint fails to state a claim under state law against Dawes Lake for that reason.").) This may be true, and the defendants may ultimately prevail on this affirmative defense. But, for purposes of fraudulent joinder, Wal-Mart has the "burden of proving that no Alabama court could conclude otherwise[,]" Abrams, 248 F.R.D. at 291 n.12, and there are several reasons why the undersigned cannot say that Wal-Mart's showing in this Court meets its burden.
First, there is no evidence to show that Dawes Lake was, during the applicable time period, a "builder" as defined in the statute, which defines a "builder" to be "[a]ny individual, partnership, firm, or corporation that constructed, or performed or managed the construction of, an improvement, or any portion thereof, on or to real estate, and at the time of the construction was licensed as a general contractor in the State of Alabama." ALA. CODE § 6-5-220(a) (emphasis added). The only evidence as to Dawes Lake's status (Mr. Roberts's affidavit) is set out in full above. Nowhere therein is there proof that Dawes Lake, LLC, "at the time of the construction [of Dawes Lake Estates and Dawes Lake Trace,] was a licensed general contractor in the State of Alabama." And unfortunately for the defendants, one of the few Alabama Supreme Court cases to discuss § 6-5-220(a) directly supports such an outcome.
In Burkes Mechanical, Inc. v. Ft. James-Pennington, Inc., 908 So.2d 905 (Ala. 2004), Burkes sought to invoke § 6-5-221(a)'s two-year limitations period, but Ft. James argued that there was "no proof that Burkes satisfies the statutory definition of a `builder,' and, consequently, Burkes cannot rely on the limitations period of § 6-5-221(a)." Id. at 910-11. The court agreed with Ft. James:
"A party claiming the benefits of a statute has the burden of establishing a sufficient factual basis to support invocation of the statute." Wood v. Krenz, 392 N.W.2d 395, 397 (N.D. 1986); see also Geiger & Co. v. Hussey, 63 Ala. 338, 342 (1879) ("whoever claims the benefits of [a] statute[ ] must bring himself within its provisions-must show affirmatively that he is of the class of persons, and has a [right] of the kind the statute intends to secure").
In reply to Ft. James's contention that Burkes has presented no proof that it satisfies the definition of a "builder" at § 6-5-220(a), Burkes states: "Of course, Burkes Mechanical is a licensed Alabama general contractor, so this argument is incorrect." However, the "briefs of counsel, with the statements of their contentions, [are] not evidence in the case." Fleming v. Copeland, 210 Ala. 389, 391, 98 So. 128, 129 (1923). . . . The record contains no evidence of Burkes's status. Because Burkes has failed to satisfy its burden of showing it is entitled to the benefit of § 6-5-221(a), we hold that the claims of Ft. James are not barred by that statute of limitations.
Id. at 911 (emphasis added).
As such, Wal-Mart has not carried its burden to show that there is no possibility "that [an Alabama] court would find that the Plaintiff[ has] stated a claim [against Dawes Lake that] is not barred by [§ 6-5-221(a)]." Wright, 136 F. Supp. 2d at 1212-1314; see also Abrams, 248 F.R.D. at 291 n.12; cf. Legg v. Armstrong Int'l Inc., MDL No. 875, 2012 WL 7761497, at *1 (E.D. Pa. Nov. 29, 2012) (choosing not to "predict what the Supreme Court of Alabama would do" where the applicability of § 6-5-221 to claims of latent illness was not established).
Second, assuming Dawes Lake was a licensed general contractor during the appropriate time and its work was supervised by a statutorily-defined engineer— which, as Burkes instructs, a court cannot assume—the Court is without evidence to determine whether Dawes Lake was "the owner or the person in actual possession or control, in whatever capacity, of the improvement[, i.e., Dawes Lake Trace, ]during the seven-year period after the substantial completion of construction of the improvement on or to real property[, that is, after December 12, 2005], but not at the time the cause of action accrues or arises[.]" ALA. CODE § 6-5-221(e). If it was, any such time is "not be computed as a portion of the time necessary to create a bar for the action or of relief by virtue of the passage of time after the substantial completion of the improvement." Id. For example, if after the claimed substantial completion date of Dawes Lake Trace, Dawes Lake was "the owner or person in actual possession or control, in whatever capacity, of" the development for only five months, the plaintiff's lawsuit would not be barred by the statute of repose.
Finally, although it appears that Wal-Mart's § 6-5-221(a) argument is premised on the seven-year statute-of-repose, it has also not been shown there is no possibility that an Alabama court would find that the plaintiff has stated a claim against Dawes Lake that is not barred by the two-year statute of limitations. Mr. Head's affidavit in support of the remand motion provides that the defendants' developments uphill from the plaintiff's property caused a "rain event" on June 9-10, 2012 to inundate a 14-acre manmade, spring-fed lake on the plaintiff's property, destroying that lake and its headwall and spillway. (See, e.g., Doc. 17-1 at 2.15) For purposes of fraudulent joinder, this affidavit satisfies the Court that the plaintiffs' claims against Dawes Lake are not foreclosed by § 6-5-221(a)'s two-year limitations period. See, e.g., Atwood, 2010 WL 749337, at *5-6.
3. A Rule 11-no evidence fraudulent joinder does not apply to this case.
In its response to the remand motion, Wal-Mart appears to convert its fraudulent misjoinder argument into one under Rule 11:
Under the third prong in Wright, [fraudulent misjoinder,] plaintiff must make plausible allegations that the water that damaged its property originated from the properties owned or constructed by defendants Wal-Mart and Dawes Lake. The mere allegation that both are "uphill" from plaintiff, even if sworn, only makes plaintiff's claims theoretically possible. This is insufficient; as this Court has noted, "a mere theoretical possibility [of liability] will not prevent a conclusion of fraudulent joinder." Nelson v. Whirlpool Corp., 668 F.Supp.2d 1368, 1376 (S.D. Ala. 2009) (emphasis in original) (quoting Legg, 428 F.3d at 1325 n.5).
While it is conceivable that water from Wal-Mart's store could eventually reach plaintiff's property, nothing in the complaint (as filed at the time of removal) explains how this occurs between non-contiguous properties. Pacheco de Perez, 139 F.3d at 1380. Water travels downhill, but there are numerous other properties uphill from plaintiff's property. Accordingly, plaintiff cannot know that the stormwater that damaged its property originated from properties owned or constructed by Wal-Mart and Dawes Lake. It is just as likely, if not more so, that the stormwater came from other adjacent properties.
Given that plaintiff is alleging facts that do not lie within the plaintiff's possession, the Nelson case is a proper analogue to this case. . . .
(Doc. 23 at 2-3 (citations modified).)
In Nelson, the plaintiffs admitted that they sued a resident defendant, Clarke,
knowing nothing more than that Clarke supplied electricity to the residence. After suit was filed against Clarke, Lowe's and Home Depot, representatives of the plaintiff and these entities, plus Whirlpool, conducted a joint visual inspection of the site, which confirmed Whirlpool as the manufacturer and Lowe's as the seller but which—as the plaintiffs' expert acknowledges—contributed no evidence that Clarke was in any way responsible for the fire.
668 F. Supp. 2d at 1377 (footnote omitted and emphasis added).
And there, this Court, applying Sellers v. Foremost Insurance Co., 924 F.Supp. 1116 (M.D. Ala. 1996),16 ultimately found fraudulent joinder because (1) the plaintiffs' "position simply reveal[ed] that the possibility of linking Clarke to the fire is merely theoretical, not practical, and thus insufficient under Legg" and (2) "the plaintiffs did not perform an investigation reasonable under the circumstances before naming Clarke as a defendant." Id.
Here, however, the plaintiff has made no admission that he has "no evidence whatsoever that supports, or is likely to lead to evidence that supports, a viable claim against [Dawes Lake]." Contra compare Sellers, 924 F. Supp. at 1119, with Nelson, 668 F. Supp. 2d at 1377. And further, for purposes of the "basic" fraudulent joinder inquiry—which "must not subsume substantive determination[,]" Crowe, 113 F.3d at 1538, but rather, "is limited to checking for obviously fraudulent or frivolous claims[,]" id. at 1541-42—the undersigned cannot consider Wal-Mart's extensive argument (with citation to public records) regarding the effect of Halls Mill Creek as to flooding on the plaintiff's property in June 2012 and earlier problems with flooding on property adjacent to the plaintiff's property (Doc. 23 at 5-9). These arguments and evidence are better presented to the Circuit Court upon remand.
III. Conclusion
Because Wal-Mart has not shown that the resident defendant, Dawes Lake, has been fraudulently joined, the Court cannot disregard its citizenship for purposes of determining jurisdiction. Therefore, because complete diversity is lacking, this Court does not have subject matter jurisdiction under § 1332.
It is therefore RECOMMENDED that the motion to remand (Doc. 17) be GRANTED and that this matter be REMANDED to the Circuit Court of Mobile County, Alabama.
IV. Notice of Right to File Objections
A copy of this report and recommendation shall be served on all parties in the manner provided by law. Any party who objects to this recommendation or anything in it must, within fourteen (14) days of the date of service of this document, file specific written objections with the Clerk of this Court. See 28 U.S.C. § 636(b)(1); FED. R. CIV. P. 72(b); S.D. ALA. L.R. 72.4. In order to be specific, an objection must identify the specific finding or recommendation to which objection is made, state the basis for the objection, and specify the place in the Magistrate Judge's report and recommendation where the disputed determination is found. An objection that merely incorporates by reference or refers to the briefing before the Magistrate Judge is not specific.
