Federal District Court Grants Motion to Remand Automotive Products Liability Case to West Virginia State Circuit Court

FordExpedition 198747000.JPGIn many instances, traffic accidents appear to make for fairly straightforward legal claims when a person suffers injuries in the wreck. A West Virginia traffic accident attorney need only assemble the evidence to determine which driver was at fault in the accident and assign liability, evaluate the damages suffered by his client, and proceed as necessary with the insurance companies involved to get his client compensated. However, there are times when such accidents may have been caused by mechanical failures or other problems with one of the vehicles themselves. In such cases, it is important to evaluate the case in light of possible products liabilities claims in addition to standard claims for driver negligence. When these claims become a part of a case, attorneys must carefully consider the procedural issues that can arise when national corporations are involved as defendants. The Wolfe Law Firm is familiar with the difficulties that develop in such cases, and our attorneys recently uncovered a decision from the US District Court’s Southern District of West Virginia regarding the complex jurisdictional issues that can arise in such cases.

Layton v. Ford Motor Company was an action brought by plaintiff, Amanda Kay Layton, after she was involved in a single car accident in Preston County, West Virginia. The accident occurred when the Plaintiff lost control of her 2003 Ford Expedtion and struck a tree. Upon impact, the car’s airbags and seatbelts failed to function properly, and she suffered severe physical injuries as a result. After the incident, Plaintiff filed a lawsuit in West Virginia state court against Ford Motor Company (the manufacturer of the vehicle in question), several other companies involved with the design and production of parts contained in the SUV, and J&J Ford Sales (the dealership that sold the Expedition). Plaintiff’s complaint included claims of negligence and strict products liability against each of the defendants.

In response to the lawsuit, Ford removed the case to federal court on the basis of diversity jurisdiction and claimed that J&J Ford Sales, which was located in West Virginia until it was dissolved in 2008, was joined in the lawsuit for the “sole purpose of defeating diversity jurisdiction.” Ford also claimed that because the dealership had been dissolved, it was not properly joined as a defendant. After removal, Plaintiff filed a motion to remand the case to state court, claiming that the claims against J&J Ford Sales were valid.

The court examined Defendant Ford’s claims that Plaintiff had fraudulently joined J&J Ford Sales under the fraudulent joinder doctrine that allows a federal court to ignore the citizenship status of a defendant — that would otherwise destroy diversity — to exercise jurisdiction over a case. The Court went on to state that under West Virginia Law, a claim may be brought against a dissolved corporation, and found Ford’s argument that such a claim can only be brought to the extent of its undistributed assets to be unpersuasive. Instead, the Court cited case law stating that jurisdiction cannot turn solely on the financial strength of a given defendant, and held that Ford had failed to satisfy the requirements of demonstrating fraudulent joinder. The Court then remanded the case back to the West Virginia Circuit Court from whence it came.