Civil Practice – Federal Jurisdiction – Diversity – Remand – Fraudulent Joinder Argument – Contract – Third-Party Beneficiary

Listen to this article

Sonic Automotive, Inc. v. Blanchard (Lawyers Weekly No. 13-04-1003, 11 pp.) (David S. Cayer, USMJ) 3:13-cv-00356; W.D.N.C.

Holding: Although defendant argues that the N.C. plaintiff fraudulently joined a Texas car dealership as a plaintiff in order to defeat diversity, the complaint alleges that the Texas dealership was a third-party beneficiary of the (allegedly breached) contract between the N.C. company and the Texas-resident defendant. In fact, the Texas dealership was defendant’s employer when the contract was executed. Defendant has failed to show that the Texas dealership was fraudulently joined.

Plaintiffs’ motion to remand to state court should be granted.