Unsettled State-Law Merits Defeat Fraudulent Joinder: “No Possibility” Requires Clear Foreclosure of the In-State Claim

Case: Jeremy Skidmore v. Michael Schinke
Court: United States Court of Appeals for the Fourth Circuit
Date: March 30, 2026
Disposition: Vacated and remanded (published)

1. Introduction

This appeal sits at the intersection of diversity jurisdiction, removal, and Virginia’s narrow public-policy wrongful-discharge doctrine under Bowman v. State Bank of Keysville. Jeremy James Skidmore, a Virginia employee, sued two individuals—his supervisor Michael Schinke (a Virginia citizen) and plant manager Gail Saul (a diverse citizen)—in Virginia state court, alleging that they participated in his termination after he raised compensation-related concerns.

The defendants removed the case to federal court, arguing that Schinke’s nondiverse citizenship should be ignored because he was fraudulently joined. The district court agreed, denied remand, and dismissed the complaint on the merits. The Fourth Circuit reversed, holding that the fraudulent-joinder standard was misapplied: the defendants failed to show there was no possibility of a viable Bowman claim against the in-state defendant, particularly where Virginia law had not squarely resolved the statutory question presented.

Key issues

• Removal & jurisdiction: Whether complete diversity existed, or whether Schinke’s citizenship could be disregarded via fraudulent joinder.
• Fraudulent joinder standard: Whether defendants met the “heavy burden” of showing no possibility of a state-law claim against Schinke.
• State-law merits (threshold only): Whether Virginia would allow a Bowman claim predicated on VA. CODE ANN. § 40.1-28.7:9.

2. Summary of the Opinion

The Fourth Circuit vacated the district court’s denial of remand and its dismissal. Applying Hartley v. CSX Transp., Inc., the court held that the defendants did not establish fraudulent joinder because they did not demonstrate that Skidmore had no possibility of stating a Bowman claim against Schinke in Virginia court. The statutory question—whether VA. CODE ANN. § 40.1-28.7:9’s enforcement provisions preclude a Bowman claim—was unsettled in Virginia, and analogous authorities did not “definitively foreclose” Skidmore’s theory. The case was remanded for further proceedings, leaving other defense arguments for the district court to address first.

3. Analysis

3.1 Precedents Cited

A. Diversity jurisdiction and complete diversity

• Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365 (1978): The opinion uses Kroger to restate the black-letter rule of complete diversity—“each defendant is a citizen of a different State from each plaintiff”—and frames the core jurisdictional defect created by an in-state defendant.
• 28 U.S.C. § 1332(a): Provides the statutory basis for diversity jurisdiction and its amount-in-controversy threshold.
• State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523 (1967): Cited to contrast Article III’s “minimal diversity” with § 1332(a)’s stricter “complete diversity,” underscoring that removal jurisdiction is a statutory limitation, not simply a constitutional one.
• Elliott v. Am. States Ins. Co., 883 F.3d 384 (4th Cir. 2018): Supplies the de novo standard of review for subject-matter jurisdiction and denial of remand.

B. Fraudulent joinder doctrine and its rigor

• Wilson v. Republic Iron & Steel Co., 257 U.S. 92 (1921): A foundational statement that removal cannot be defeated by “fraudulent joinder” of a resident defendant with no real connection to the dispute. The Fourth Circuit uses it to situate fraudulent joinder as an anti-manipulation doctrine.
• Mayes v. Rapoport, 198 F.3d 457 (4th Cir. 1999) (citing Cobb v. Delta Exports, Inc., 186 F.3d 675 (5th Cir. 1999)): Quoted for the functional effect of fraudulent joinder—allowing federal courts to disregard nondiverse parties, assume jurisdiction, dismiss them, and retain jurisdiction. This framing heightens why the standard must remain demanding.
• Hartley v. CSX Transp., Inc., 187 F.3d 422 (4th Cir. 1999) (quoting Marshall v. Manville Sales Corp., 6 F.3d 229 (4th Cir. 1993)): The controlling test: fraudulent joinder exists only with actual fraud in jurisdictional facts or when “there is no possibility that the plaintiff would be able to establish a cause of action against the in-state defendant in state court.” The court relies heavily on Hartley’s “heavy burden,” its direction to avoid “delv[ing] too far into the merits,” and its admonition to remand where the court “cannot predict with certainty” how state law will resolve the issue.
• Hain Celestial Grp., Inc. v. Palmquist, No. 24-724, 2026 WL 5017333 (U.S. Feb. 24, 2026) (Thomas, J., concurring): Cited to acknowledge contemporary skepticism about merits-based fraudulent-joinder determinations, but the panel reaffirms that Hartley “remains good law” and governs.

C. The Bowman doctrine and individual liability

• Bowman v. State Bank of Keysville, 331 S.E.2d 797 (Va. 1985): Provides the Virginia public-policy wrongful-discharge cause of action as a “narrow exception” to employment-at-will where termination violates a statutory right in furtherance of public policy.
• VanBuren v. Grubb, 733 S.E.2d 919 (Va. 2012): Critical to the pleadings posture: recognizes that a Bowman claim can run not only against the employer but also against the “actor” (e.g., supervisor/manager) who participated in the wrongful firing—supporting the plausibility of naming Schinke personally.

D. Virginia remedial-exclusivity principle and analogs

• Concerned Taxpayers of Brunswick Cnty. v. Cnty. of Brunswick, 455 S.E.2d 712 (Va. 1995) and Sch. Bd. of Norfolk v. Giannoutsos, 380 S.E.2d 647 (Va. 1989): Supply the general Virginia principle: “where a statute creates a right and provides a remedy ... that remedy is exclusive unless the statute says otherwise.” The district court relied on this line to conclude § 40.1-28.7:9 could not support a Bowman claim.
• Carmack v. Virginia, No. 18-cv-00031, 2019 WL 1510333 (W.D. Va. Apr. 5, 2019) and Hice v. Mazella Lifting Techs., Inc., 589 F. Supp. 3d 539 (E.D. Va. 2022): Federal decisions collecting/reflecting the view that statutes with their own remedial scheme generally cannot also support a Bowman claim. The Fourth Circuit treats these as informative but not dispositive of the specific, unanswered Virginia question under § 40.1-28.7:9.
• Lockhart v. Commonwealth Educ. Sys. Corp., 439 S.E.2d 328 (Va. 1994): Skidmore’s key pro-plaintiff analog: the Virginia Supreme Court allowed a Bowman claim based on an early VHRA version that “specifically disallowed private rights of action” and relied on agency enforcement—supporting the argument that the absence of a private statutory cause of action does not necessarily eliminate a Bowman claim.
• Cherrie v. Va. Health Servs., Inc., 787 S.E.2d 855 (Va. 2016): The defendants’ counterweight: the Virginia Supreme Court declined to imply a private cause of action where the statute created an administrative complaint path with agency prosecution and no individual remedies. The panel recognizes this trend as potentially unfavorable to Skidmore, but not conclusive as to Bowman and § 40.1-28.7:9.

E. Appellate restraint and standards versus Rule 12(b)(6)

• Bell. Atl. Corp. v. Twombly, 550 U.S. 544 (2007), Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Walters v. McMahen, 684 F.3d 435 (4th Cir. 2012): Used to emphasize that fraudulent joinder is even more plaintiff-friendly than Rule 12(b)(6), especially post-Twombly/Iqbal.
• Lovelace v. Lee, 472 F.3d 174 (4th Cir. 2006) (quoting Cutter v. Wilkinson, 544 U.S. 709 (2005)): Invoked to justify leaving other, unaddressed arguments to the district court on remand—appellate courts are “a court of review, not of first view.”

3.2 Legal Reasoning

The opinion proceeds in three essential steps:

Step 1: Identify the jurisdictional obstacle and the only available escape hatch

Because Skidmore and Schinke are both Virginia citizens, complete diversity fails on the face of the pleadings. The only way to sustain removal is to disregard Schinke via fraudulent joinder. The defendants did not allege “outright fraud” in jurisdictional facts, leaving only the merits-based prong: no possibility of a viable claim in state court.

Step 2: Apply a “possibility,” not “probability,” inquiry—and avoid resolving unsettled Virginia law

The district court treated Virginia remedial-exclusivity principles as decisively foreclosing a Bowman claim based on VA. CODE ANN. § 40.1-28.7:9. The Fourth Circuit agreed the defendants’ argument was substantial: Virginia often treats statutory remedies as exclusive (Sch. Bd. of Norfolk v. Giannoutsos), and federal courts have recognized that statutes with their own remedial schemes may not support Bowman (Hice v. Mazella Lifting Techs., Inc.; Carmack v. Virginia).

But fraudulent joinder requires more than a persuasive defense. The panel emphasized two features that keep removal improper under Hartley:

• No Virginia decision on point: “No Virginia court has addressed whether a plaintiff can bring a Bowman claim based on a violation of § 40.1-28.7:9.” That absence matters because Hartley instructs remand when the federal court “cannot predict with certainty” how state law resolves a question.
• Analogous Virginia authority is mixed: Lockhart v. Commonwealth Educ. Sys. Corp. provides a plausible route for Skidmore’s theory (Bowman claim despite no private right of action), while Cherrie v. Va. Health Servs., Inc. suggests a more restrictive modern approach. The presence of competing signals defeats the notion that success is “impossible.”

Step 3: Conclude the defendants failed the “heavy burden,” vacate merits dismissal, and remand

Because the district court lacked diversity jurisdiction if Schinke was properly joined, its subsequent Rule 12(b)(6) dismissal could not stand. The Fourth Circuit vacated both the denial of remand and the merits dismissal.

Notably, the panel did not hold that a § 40.1-28.7:9-based Bowman claim is valid under Virginia law; it held only that the claim is not so clearly foreclosed that it can be used to strip the state court of its role at the removal stage. The panel also declined to address alternative “no possibility” arguments not considered below, leaving them for remand.

3.3 Impact

A. A clarified practical rule for removal practice in the Fourth Circuit

The decision reinforces a concrete removal principle with real litigation consequences: where a plaintiff asserts a state-law claim against a nondiverse defendant and state law is unsettled, defendants will struggle to prove fraudulent joinder. The court’s “half-court shot” analogy is not mere rhetoric; it captures the operative threshold: the plaintiff’s claim may be weak, but weakness is not “no possibility.”

B. Institutional deference to state courts on unresolved state-law questions

The opinion strengthens federalism-sensitive restraint embedded in Hartley: federal courts should not decide novel or close state-law questions under the guise of jurisdictional policing. This will likely:

• increase remands where defendants’ fraudulent-joinder arguments depend on predicting new limitations in state law;
• encourage defendants to pursue dismissal in state court rather than using removal as a merits-testing device;
• shift attention from “who has the better argument” to “is the claim clearly impossible.”

C. Bowman-related consequences in Virginia employment litigation (without deciding the merits)

Although the panel does not resolve whether VA. CODE ANN. § 40.1-28.7:9 can support a Bowman claim, it signals that litigants can plausibly argue the point by analogizing to Lockhart—and that defense reliance on remedial-exclusivity cases may not be enough at the removal stage. Practically, plaintiffs may be more willing to plead individual defendants (consistent with VanBuren v. Grubb) in compensation-retaliation narratives to ensure state-court adjudication of unsettled Virginia public-policy questions.

4. Complex Concepts Simplified

• Diversity jurisdiction: A federal court can hear certain state-law disputes if the parties are citizens of different states and the stakes exceed $75,000. “Complete diversity” means no plaintiff shares a state of citizenship with any defendant.
• Removal: A defendant’s procedural mechanism to move a case filed in state court into federal court when federal jurisdiction exists.
• Fraudulent joinder: An exception allowing a federal court to ignore an in-state defendant’s citizenship if the plaintiff added that defendant solely to block federal jurisdiction. Under Hartley v. CSX Transp., Inc., it applies only if there is actual fraud in jurisdictional facts or “no possibility” of a claim.
• “No possibility” vs. “unlikely”: The key distinction in this opinion. A claim can be improbable and still defeat fraudulent joinder. The question is not whether the defendant is likely to win, but whether the plaintiff is categorically unable to win under state law.
• Bowman claim: A Virginia common-law wrongful-discharge claim recognized in Bowman v. State Bank of Keysville, permitting suit when an at-will termination violates public policy expressed in a statute. Under VanBuren v. Grubb, supervisors/managers who participate can be sued personally.
• Exclusive remedial scheme: A state-law principle that when a statute creates a right and supplies a remedy, that remedy is typically exclusive (Sch. Bd. of Norfolk v. Giannoutsos). Whether that principle bars a Bowman claim can be statute-specific and, here, unsettled.

5. Conclusion

The Fourth Circuit’s published decision re-centers fraudulent joinder on its demanding threshold: defendants must show the in-state claim is not merely weak, but impossible. Where Virginia law has not spoken directly—here, on whether VA. CODE ANN. § 40.1-28.7:9’s enforcement framework forecloses a Bowman claim—federal courts should not convert removal into a merits referendum. The result is a strong remand directive in cases presenting close, novel, or evolving questions of state employment policy, leaving state courts to supply the authoritative answer.