Removal Unanimity Extends to Diverse Defendants, and Improper-Joinder Review Must Not Become a Merits Trial

1. Introduction and Background

The dispute arose after a large oak tree fell on the Mississippi home of sisters Ashley and Catherine Guerdan in April 2020. Their insurer denied coverage because their dwelling fire policy excluded wind damage. The resulting litigation concerned not merely the policy’s coverage, but whether the professionals involved in the home purchase and insurance arrangements had misled the sisters or failed to secure appropriate protection.

The Guerdans purchased the property in May 2018 with assistance from real-estate agents Brad and Linda Burleson and their agency, Ulist LLC. According to the sisters, the Burlesons encouraged them to use other participants in the transaction, including Jason Sykes, a loan officer with Community Bank of Mississippi. Sykes allegedly arranged insurance through Michael Bishop, M.B.I. Holdings, LLC, State Automobile Mutual Insurance Company, and Meridian Security Insurance Company. Meridian issued the fire policy, which renewed in May 2019 without wind coverage. The mortgage allegedly passed from Community Bank to Caliber Home Loans, Inc., and then to Pennymac Loan Services, LLC.

The central appellate questions were procedural and jurisdictional: whether every defendant whose consent was required had agreed to removal, whether the Mississippi defendants were improperly joined, and whether the district court exceeded the permissible scope of a jurisdictional inquiry by resolving disputed evidence bearing on the merits.

Procedural History

• Guerdan I: In February 2022, the sisters sued eleven named defendants in state court. Seven defendants shared their Mississippi citizenship. Meridian and State Auto removed the action, asserting improper joinder of the other defendants.
• Initial remand proceedings: The sisters moved to remand in April 2022. The district court denied that motion in March 2023 and allowed limited discovery concerning improper joinder. The sisters sought reconsideration.
• Guerdan II: In August 2023, the sisters filed another state-court action against the same defendants other than Meridian and State Auto. Pennymac removed that action.
• Consolidation and dismissal: The district court consolidated the cases in March 2024. In March 2025, it granted Community Bank’s dismissal motion, rejected reconsideration of the first remand ruling, and denied remand in the second action.
• Appeal: A partial final judgment under Federal Rule of Civil Procedure 54(b) dismissed the seven Mississippi defendants with prejudice, permitting the appeal.

2. Summary of the Opinion

The Fifth Circuit required both cases to return to state court, but on different grounds.

1. Guerdan I was removed without the necessary consent. Caliber and Pennymac had been served before removal and were properly joined diverse defendants. Neither joined in nor consented to removal. Because the sisters timely objected, that procedural defect required remand.
2. Guerdan II lacked a sufficient basis for disregarding the Mississippi defendants. The complaint plausibly alleged negligence per se against Sykes and Community Bank. It was not time-barred on its face under the panel’s analysis. The district court also abused its discretion by conducting an extensive, disputed factual inquiry to establish an earlier accrual date and thereby defeat the claims.

The court did not decide that the sisters would ultimately recover, that the insurance policy covered the loss, or that the claims were necessarily timely. It decided that these merits questions did not justify retaining the actions in federal court.

3. Legal Reasoning

A. A Diverse Defendant’s Consent Cannot Be Disregarded Merely Because the Claim Against It Appears Weak

Under 28 U.S.C. § 1446(b)(2)(A), defendants who have been properly joined and served generally must join in or consent to removal. Caliber and Pennymac admittedly did neither.

The appellees first argued that those companies had received the original complaint but not the first amended complaint, which was operative when removal occurred. The panel rejected that distinction for purposes of the removal-consent requirement. Both companies had received service before removal; the absence of service of the amended pleading did not eliminate the need for their consent in these circumstances.

The appellees alternatively characterized Caliber and Pennymac as improperly joined. That argument failed because the ordinary claim-sufficiency branch of improper joinder concerns a plaintiff’s inability to recover against a nondiverse defendant. Caliber and Pennymac were diverse, and there was no disputed citizenship allegation supporting actual fraud in jurisdictional facts.

The distinction matters: improper joinder is not a general device for eliminating any defendant against whom the plaintiff may have a deficient claim. Its jurisdictional function does not permit a removing party to bypass a diverse defendant’s consent merely by challenging the merits of the claims against that defendant.

Lack of unanimous consent is a procedural removal defect. Under 28 U.S.C. § 1447(c), it must ordinarily be raised within thirty days after the notice of removal. The notice was filed on March 15, 2022, and the sisters objected on April 5, preserving the issue.

B. Improper Joinder Requires More Than Doubt About Ultimate Success

For Guerdan II, the controlling inquiry was whether there was a reasonable basis to predict that the sisters might recover against an in-state defendant. The removing party bore a heavy burden.

The court began with a Rule 12(b)(6)-type examination of the complaint, applying federal pleading standards to the state-law claims. Unchallenged factual allegations were viewed favorably to the plaintiffs, while contested facts and ambiguities in state law were resolved in their favor.

This inquiry asks whether a claim is plausibly alleged, not whether liability has been proved. A plausible claim against even one relevant nondiverse defendant defeats the effort to establish complete diversity by disregarding that defendant.

C. The Pleadings Did Not Establish a Conclusive Limitations Defense

The district court relied on the proposition that the insurance-procurement claims were time-barred. The panel accepted that limitations can support dismissal at the pleading stage, but only when the bar is evident from the complaint and the pleadings supply no basis for avoiding it.

The sisters alleged that they did not receive the policy until after reporting the April 2020 loss. Accepting that allegation as true, the panel treated their procurement claims as accruing when they received the policy in April 2020. It therefore rejected the conclusion that the claims were facially time-barred.

This was a pleading-stage conclusion, not a final determination of accrual or timeliness. The opinion expressly acknowledged that the litigation might ultimately prove time-barred and meritless. It did not provide a comprehensive limitations calculation or finally resolve any limitations defense.

D. Negligence Per Se Supplied a Plausible Claim Against Mississippi Defendants

The panel identified a sufficient claim against Sykes and Community Bank under Mississippi negligence-per-se principles, relying on the Mississippi S.A.F.E. Mortgage Act, Miss. Code § 81-18-27.

The required elements were plausibly alleged:

1. Protected class: The sisters were mortgage applicants, within the class the statute sought to protect.
2. Protected injury: They alleged deception and material misrepresentations during the mortgage process, harms of the kind the statute sought to prevent.
3. Causation: They alleged that, without the deception, they would either have declined to purchase the home or purchased it knowing that the insurance did not cover all perils.

The ruling does not establish that the Act requires every mortgage transaction to include all-perils insurance. Nor does it finally establish a statutory violation or causation. It holds that the allegations were sufficient to defeat improper joinder at this stage.

E. Piercing the Pleadings Must Remain a Narrow Jurisdictional Inquiry

A district court may sometimes look beyond the complaint to identify discrete, undisputed facts that determine whether a defendant was improperly joined. The Fifth Circuit found three independent problems with the inquiry conducted here.

1. The sequence put merits investigation ahead of jurisdictional certainty

The panel held that the necessary decision to pierce the pleadings must precede the remand ruling. Denying remand and then investigating the factual foundation needed to establish jurisdiction reversed the proper sequence. A federal court must establish its authority before proceeding toward a merits judgment.

2. The disputed issue was not a proper, defendant-specific joinder fact

The district court focused on whether Catherine Guerdan electronically signed a form consenting to electronic delivery of the insurance policy. That issue was contested. It differed from a simple fact showing that a named defendant had no involvement—for example, that a doctor never treated the plaintiff.

Moreover, the proposed limitations defense would defeat the corresponding insurance-procurement claims against diverse and nondiverse defendants alike. Under the common-defense principle, a showing that the case fails generally does not establish that the local defendants were improperly included. It may demonstrate a weak lawsuit, but not improper joinder.

3. The extensive discovery exceeded the purpose of the inquiry

Resolving the electronic-signature dispute required extensive forensic evidence and deposition testimony. That was incompatible with the summary inquiry contemplated by improper-joinder doctrine. If a removing defendant cannot establish the jurisdictional point without substantial factual litigation, that difficulty itself weighs against finding that the defendant has carried its burden.

4. Precedents Cited and Their Influence

A. Review Standards and the Burden of Establishing Removal

Int'l Energy Ventures Mgmt., L.L.C. v. United Energy Grp., Ltd., 818 F.3d 193 (5th Cir. 2016)

This decision supplied several central rules: remand denials receive de novo review; improper joinder asks whether a plaintiff has stated a claim against a nondiverse defendant; and federal pleading standards govern that assessment. It helped distinguish the preliminary jurisdictional inquiry from proof of the underlying state-law claim. The panel used it both to review the district court independently and to assess the sufficiency of the sisters’ allegations.

Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720 (5th Cir. 2002)

This case places the burden of establishing federal jurisdiction and proper removal on the removing party. Its influence was structural: the sisters did not have to prove federal jurisdiction was absent; the removing defendants had to establish the grounds for retaining the actions.

B. Consent to Removal

Getty Oil. Corp. v. Ins. Co. of N. Am., 841 F.2d 1254 (5th Cir. 1988)

The panel cited this authority by analogy when identifying service at the time of removal as the relevant inquiry. Because Caliber and Pennymac had already been served, the appellees could not avoid their consent requirement simply by pointing to the unserved amended complaint.

Jernigan v. Ashland Oil Inc., 989 F.2d 812 (5th Cir. 1993)

This decision recognizes that the consent of allegedly improperly joined defendants is unnecessary for removal. The panel accepted that exception but found no applicable improper-joinder ground for Caliber and Pennymac. The exception therefore did not excuse their missing consent.

C. The Scope of Improper-Joinder Review

Smallwood v. Illinois Cent. R. Co., 385 F.3d 568 (5th Cir. 2004)

This was the opinion’s principal doctrinal foundation. It identifies the two routes to improper joinder: actual fraud in jurisdictional facts, or inability to establish a state-law claim against a nondiverse defendant. It also supplies the ordinary Rule 12(b)(6)-type inquiry and the limited exception permitting examination of discrete, undisputed facts.

Equally important, it distinguishes improper joinder from a defense that necessarily defeats the claims against resident and nonresident defendants alike. Its warning against substantial hearings supported the conclusion that the electronic-signature investigation had become an impermissible merits inquiry.

Travis v. Irby, 326 F.3d 644 (5th Cir. 2003)

This case supplied the heavy burden of persuasion and the requirement to resolve contested facts and state-law ambiguities favorably to the plaintiff. Those principles prevented the district court from treating disputed evidence about electronic delivery as a conclusive basis for federal jurisdiction.

Davidson v. Georgia-Pacific, LLC, 819 F.3d 758 (5th Cir. 2016)

This authority directed attention to the allegations in the complaint when assessing a reasonable possibility of recovery. It supported beginning with the sisters’ pleaded account, rather than replacing that account with conclusions drawn from contested discovery.

Acuna v. Brown & Root Inc., 200 F.3d 335 (5th Cir. 2000)

This decision requires doubts about removal jurisdiction to be resolved against federal jurisdiction. It reinforced the restrictive approach to removal where retaining the case depended on resolving contested factual matters.

Hart v. Bayer, 199 F.3d 239 (5th Cir. 2000)

The panel relied on this case for the consequence of pleading a viable claim against an in-state defendant. Once the sisters plausibly alleged negligence per se against Sykes and Community Bank, the removing parties could not establish improper joinder merely by attacking other claims or defendants.

D. Limitations and the Underlying State-Law Claim

Jones v. Alcoa, 339 F.3d 359 (5th Cir. 2003)

This case permits a limitations dismissal under Rule 12(b)(6) when the bar is apparent from the pleadings and no pleaded basis avoids it. It also constrained the district court: because the complaint alleged receipt of the policy only after the loss, the court could not establish a facial bar by rejecting that allegation through contested evidence.

Snapp v. Harrison, 699 So. 2d 567 (Miss. 1997)

This Mississippi decision supplied the negligence-per-se elements: protected-class membership, an injury of the kind the statute seeks to prevent, and proximate causation. Applying those elements, the panel found the mortgage-related deception allegations sufficiently plausible to preserve the claims against Sykes and Community Bank for state-court adjudication.

E. The Boundary Between Jurisdiction and Merits

B., Inc. v. Miller Brewing Co., 663 F.2d 545 (5th Cir. 1981)

The court invoked this decision’s warning that a district court must be certain of its jurisdiction before pursuing a judgment on the merits. It supported the objection to denying remand before completing the factual inquiry thought necessary to establish jurisdiction.

Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392 (5th Cir. 2013)

This case confines examination beyond the pleadings to discrete and undisputed facts relevant to remand. It directly undermined the investigation of a contested electronic signature requiring forensic analysis and depositions.

Chesapeake & O.R. Co. v. Cockrell, 232 U.S. 146 (1914)

This Supreme Court authority supplies the longstanding distinction between a potentially meritless action and fraudulent joinder. A showing that the plaintiff should lose against everyone does not, without more, show that the resident defendants were wrongfully included to defeat federal jurisdiction. The panel used that distinction to explain why the possible limitations defense belonged in state court.

5. Potential Impact and Limits

Removal Practice

Removing defendants should identify every properly joined and served defendant whose consent is required, including diverse defendants against whom they consider the claims weak. Plaintiffs, conversely, must raise missing-consent objections within the statutory thirty-day period. A successful objection need not depend on proving an absence of subject-matter jurisdiction.

Jurisdictional Discovery

The opinion discourages using improper-joinder discovery as an early substitute for summary judgment. Simple, undisputed facts may justify looking beyond the complaint; contested authenticity questions requiring substantial expert or testimonial evidence ordinarily do not fit that narrow function.

Common Defenses

Defendants relying on limitations or another broadly applicable defense must distinguish between showing that an in-state defendant was improperly joined and showing that the entire case lacks merit. When the asserted ground necessarily defeats the corresponding claims against diverse defendants too, it does not establish improper joinder.

Mortgage and Insurance Litigation

The negligence-per-se analysis illustrates how allegations of deception during mortgage origination can supply a plausible claim under Mississippi law. Its reach remains limited: the panel did not conclusively interpret every application of the S.A.F.E. Mortgage Act or impose a general obligation to obtain comprehensive insurance.

What Remains Open

• Whether the policy was delivered electronically and when the sisters legally received notice of its terms.
• Whether any claims are ultimately barred by limitations.
• Whether the alleged statutory violations, causation, and damages can be proved.
• Whether claims against defendants other than Sykes and Community Bank independently survive merits review.

The reversal displaced the with-prejudice dismissals, but did not validate every claim against every Mississippi defendant. The unpublished opinion’s broader persuasive force rests on the established authorities it applies.

6. Complex Concepts Simplified

Removal and remand

Removal transfers a case from state to federal court. Remand sends it back because federal jurisdiction is absent or a preserved removal defect requires return.

Complete diversity and the forum-defendant rule

Complete diversity generally requires that no plaintiff share state citizenship with a properly joined defendant. Separately, the forum-defendant rule generally bars diversity removal when a properly joined and served defendant is a citizen of the forum state.

Unanimous consent

Generally, all properly joined and served defendants must agree to removal. Diversity alone does not eliminate a defendant’s right to withhold consent.

Improper joinder

A narrow doctrine allowing a court to disregard certain defendants when deciding jurisdiction. A claim’s possible failure is not automatically proof of improper joinder.

Rule 12(b)(6) analysis

A test of whether the complaint plausibly states a legal claim, assuming its well-pleaded factual allegations are true. It is not a trial of disputed facts.

Piercing the pleadings

Looking beyond the complaint at limited evidence. In improper-joinder proceedings, this ordinarily concerns discrete, undisputed facts—not extensive merits discovery.

Negligence per se

Using a statutory violation as the basis for negligence when the plaintiff and injury fall within the statute’s protective purpose and causation is established. A violation does not automatically prove entitlement to damages.

Accrual and limitations

Accrual identifies when a claim arises and the filing clock begins. A limitations defense argues that the applicable filing deadline expired.

Standards of appellate review

De novo review means independent appellate assessment. Abuse-of-discretion review asks whether a procedural choice exceeded permissible bounds. The panel applied the former to the remand determination and the latter to piercing the pleadings.

Rule 54(b) judgment

An authorized final judgment resolving fewer than all claims or parties, allowing an immediate appeal while the remaining litigation continues.

7. Conclusion

Guerdan v. State Automobile reinforces two boundaries: properly joined and served diverse defendants cannot be bypassed when their consent to removal is required, and improper-joinder proceedings cannot become trials of disputed merits defenses.

The decisive distinction is between authority to hear a case and whether the case should succeed. The sisters may ultimately lose on limitations or other grounds. This opinion holds that those unresolved merits questions did not justify keeping either action in federal court.