The Western District of New York courts analyzed the doctrine of fraudulent joinder where defendants claimed that one party was fraudulently joined for the purpose of defeating federal jurisdiction. The court in NXIVM Corporation v. Ross found that there was fraudulent joinder because there was no possibility of recovering against the non-diverse party. On an issue of first impression involving a timely topic, the court held that plaintiff’s residence was not an asset of his bankruptcy estate because a default judgment in an in rem tax foreclosure proceeding extinguished his ownership rights.
Fraudulent Joinder
In NXIVM Corporation v. Ross, 2009 WL 1765240 (W.D.N.Y. June 22, 2009), District Court Judge William M. Skretny addressed the issue of fraudulent joinder on plaintiff’s motion to remand to state court. Defendants claimed that plaintiff included a non-diverse defendant corporation with the aim of defeating diversity jurisdiction.
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