The underlying dispute involves allegations that Jonathan Steele, the Steele Law Firm, LLC, Steele Law Firm II, LLC, and Steele Chaffee, LLC maliciously prosecuted a nursing home negligence action against LTC Management Services, LLC and Health Systems, Inc. by utilizing false affidavits and fabricated trial exhibits to keep the plaintiffs in the case.
The Steele Defendants removed the case from the Circuit Court of Jackson County, Missouri, to federal court by invoking diversity jurisdiction. They argued that complete diversity existed because co-defendant Michelle White, a Missouri citizen, had not yet been served with process. However, the court noted that Plaintiffs actually served White two days before removal.
Judge Kays rejected this argument as foreclosed by binding Eighth Circuit precedent, specifically M & B Oil, Inc. v. Fed. Mut. Ins. Co. (2023). The court held that the citizenship of all named defendants counts for removal purposes regardless of service status, meaning complete diversity was never present.
The Steele Defendants attempted to raise fraudulent joinder for the first time in opposition, but the court declined to consider it because they had not identified it as a basis for removal in their original or amended notices.
Because binding Eighth Circuit authority directly foreclosed the Steele Defendants' removal theory, Judge Kays determined they lacked an objectively reasonable basis for removing the case.
The court granted the motion to remand and awarded Plaintiffs their attorney's fees and costs under 28 U.S.C. § 1447(c).
Plaintiffs were ordered to file a fee application within fourteen days, with the Steele Defendants given seven days to respond.