In Hertel v. Mortgage Electronic Registration Systems, Inc., Case. No. 1:12-cv-174,  Judge Bell found that diversity jurisdiction exists even though the plaintiffs sued several non-diverse defendants – that is, defendants who were from the same state as the plaintiffs.  The complaint alleges that several entities, including Fannie Mae, Freddie Mac, JPMorgan Chase, and Bank of America, did not pay Michigan's State Real Estate Transfer tax arising from the sale of foreclosed upon homes.  Judge Bell agreed with JPMorgan Chase and Bank of America that the non-diverse entities had been fraudulently joined – i.e., the plaintiffs did not raise colorable claims against them.

The plaintiffs alleged several claims against multiple non-diverse defendants, but Judge Bell found that each claim was baseless.  Therefore, Judge Bell did not let the joinder of non-diverse defendants defeat diversity jurisdiction.  Furthermore, even though the plaintiffs argued that the amount-in-controversy requirement had not been met because a claim against one defendant might not amount to $75,000, Judge Bell pointed out that the amount-in-controversy requirement must be satisfied by only one defendant.

Interestingly, Fannie Mae originally removed the case on grounds other than diversity jurisdiction.  Subsequently, the banks joined in the notice of removal asserting diversity of citizenship as grounds for removal.  Until deciding this motion, it went unnoticed that Fannie Mae should have been deemed dismissed from the case because the summons expired before being served on Fannie Mae.  Thus, because Fannie Mae had been deemed dismissed, Fannie Mae improperly removed the case.  Luckily for Fannie Mae, however, the banks joined in the motion for removal and properly asserted diversity jurisdiction as a ground for removal.