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Rose v. Giamatti

United States District Court for the Southern District of Ohio · 1989 · Civil Procedure

Civil ProcedureRemovalDiversity JurisdictionNominal PartiesFraudulent JoinderWaiver of Removal28 U.S.C. § 133228 U.S.C. § 1441

Facts

Rose, an Ohio citizen and field manager of the Cincinnati Reds, sued Giamatti, Major League Baseball, and the Cincinnati Reds in Ohio state court to enjoin a disciplinary hearing arising out of an investigation into allegations that he wagered on major league baseball games. Rose alleged no wrongful conduct by the Reds, but claimed all defendants owed him duties connected to a fair hearing and sought relief that would prevent Giamatti from ever conducting the hearing. The Reds were treated as Ohio citizens, and Major League Baseball, as an unincorporated association including the Reds, was also treated as an Ohio citizen for diversity purposes. After a state temporary restraining order issued, Giamatti removed, and Rose argued that the nondiverse defendants destroyed diversity and that Giamatti had waived removal by litigating in state court.

Issue

Whether complete diversity existed for removal purposes when the complaint named the Cincinnati Reds and Major League Baseball, both treated as Ohio citizens, along with Giamatti, a New York citizen. Also, whether Giamatti waived his right to remove by contesting temporary restraining order proceedings and seeking review in the Ohio courts before removing.

Rule

For diversity and removal purposes, the court must determine the real parties in interest from the principal purpose of the suit and the primary and controlling matter in dispute, disregarding nominal or formal parties and parties fraudulently joined. A nondiverse defendant may be ignored when there is no real cause of action or no real collision of interests with that defendant, and removal is not waived by defensive participation in state-court preliminary proceedings short of an adjudication on the merits unless there is clear and unequivocal action showing intent to submit the merits to state court.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Cleveland, Ohio, Dana Mercer sued Lionel Voss, a citizen of New Jersey, to stop him from presiding over an internal disciplinary hearing at a private sports federation. Dana also named Lakefront Rowing Club, an Ohio employer, even though the complaint expressly alleged no wrongdoing by the club and sought only an order preventing Voss from conducting the hearing; the club had no contractual power to cancel or control the hearing.

If Voss removes on diversity grounds, should the federal court count Lakefront Rowing Club's Ohio citizenship in deciding whether complete diversity exists?

Explanation. The majority opinion directs the court to look to the principal purpose of the suit and the primary and controlling matter in dispute to identify the real parties in interest. A party with no alleged wrongdoing, no legal duty sought to be enforced, and no power to prevent the challenged hearing is at most a nominal party, so its citizenship is disregarded for diversity purposes. A practical interest alone is insufficient.