Klein v. Menard, Inc.

Background

Meghan Klein sued as trustee for the heirs and next-of-kin of her deceased son, James Lee Stanback. The complaint alleges that Stanback was killed in a work-related incident at Menard’s Golden Valley, Minnesota store. According to the complaint, Stanback was directed to reorganize lumber that had been stacked unsafely. When he attempted to move the lumber with a forklift, the stack fell onto the forklift and crushed him inside its cage.

The complaint asserts six claims under Minnesota’s wrongful-death statute, including gross negligence, grossly negligent training, grossly negligent supervision, grossly negligent stacking and storage of lumber, failure to provide a safe workplace, and a survivorship claim. The claims name Menard and various individual coemployees, including Joseph Bowser, Jacob Ratliff, Janani Thayalan, Ben Willson, and Preston Tuma.

Menard removed the case to federal court based on diversity jurisdiction. Menard is a Wisconsin citizen, while Klein and all five named individual defendants are Minnesota citizens. Because parties on both sides were Minnesota citizens, complete diversity was absent. Menard argued that the individual defendants had been fraudulently joined, meaning there was no reasonable factual or legal basis for claims against them and their citizenship should therefore be disregarded.

Legal standard

The court explained that a federal court must remand a removed case when it lacks subject-matter jurisdiction. The removing party bears the burden of establishing federal jurisdiction. Under the fraudulent-joinder rule, joinder is fraudulent only when there is no reasonable basis in fact and law supporting a claim against a nondiverse defendant. If Minnesota law might impose liability under the alleged facts, the defendant is not fraudulently joined. Doubts and factual ambiguities are resolved in favor of remand.

The court applied Minnesota’s workers’ compensation law. Generally, workers’ compensation is the exclusive remedy for a work-related injury or death. But Minnesota law creates an exception for a coemployee whose grossly negligent or intentional act caused the injury. Minnesota precedent further requires a plaintiff to show that the coemployee owed a personal duty—meaning the coemployee took direct action toward the injured employee, or directed someone else to do so, and acted outside the course and scope of employment.

Because Menard relied on the complaint’s allegations, the court accepted those allegations as true and viewed supporting materials and reasonable inferences in Klein’s favor. The court emphasized that applying the coemployee exception is usually fact-intensive and often requires discovery.

Analysis

The court found an arguably reasonable basis for predicting that Bowser, Willson, and Ratliff might not be protected by coemployee immunity. Bowser and Willson were alleged to have been Stanback’s direct supervisors. The complaint alleged that Stanback’s forklift training did not comply with federal workplace-safety regulations, that he lacked prior forklift experience, that Willson reported he had received twenty hours of training, and that Bowser certified his completion of forklift training three days after he was hired. The complaint also alleged that the forklift’s load limit was well below the weight of the lumber Stanback was directed to move.

The court reasoned that these allegations could support an inference that Bowser and Willson violated Menard’s instructions, rules, or policies and therefore acted outside the course and scope of their employment. The allegations could also support a finding that inadequate training presented a reasonably foreseeable risk of injury and lacked even slight diligence or scant care, which can satisfy Minnesota’s gross-negligence standard at this stage.

Ratliff was alleged to be an assistant manager who either stacked the lumber or directed that it be stacked in an unsafe and unstable manner. The complaint alleged that an employee had previously reported the unsafe condition and that the task list described the lumber as “Unsafe stacking.” The court found it arguably reasonable to infer that Menard had rules or policies concerning lumber stacking, that Ratliff may have violated them, that the unsafe stacking posed a reasonably foreseeable risk to an employee assigned to move the lumber, and that the conduct might qualify as gross negligence.

The court rejected Menard’s arguments that coemployees cannot be liable for safety-related claims or that the complaint had to allege direct physical contact between each coemployee and Stanback. The court explained that Minnesota law may allow coemployee liability when the alleged conduct involves a personal duty, direct negligence, or directing another person to act toward the injured employee. It also concluded that performing a job in an unauthorized manner may arguably place an employee outside the course and scope of employment.

Disposition

The court concluded that Bowser, Willson, and Ratliff were not fraudulently joined. Their Minnesota citizenship therefore defeated complete diversity, leaving the federal court without subject-matter jurisdiction. The court did not decide whether any defendant was ultimately liable for Stanback’s death.

Judge Eric C. Tostrud granted Plaintiff’s Motion to Remand and ordered the case remanded to Minnesota District Court, Fourth Judicial District (Hennepin County), under 28 U.S.C. § 1447(c).