Tommy Gene Sessions, Administrator of the Estate of Kenneth E. Sessions v. Chrysler Corporation, a Delaware Corporation

Appellant sued Chrysler in state court in California, alleging breach of contract. Six individual defendants were joined. Chrysler successfully petitioned for removal. After a year had passed, the district court, upon Chrysler’s motion, dismissed for failure to prosecute.

We see the major issue to be whether the district court had jurisdiction. Appellant asserts that there was no diversity because the individual defendants were, by all appearances, citizens of California as was he. Chrysler responds that the individual defendants were fraudulently joined for the purpose of defeating the diversity existing between it and appellant.

The basis for the action was a contract between Sessions and Chrysler, whereby Sessions was to sell Chrysler products on a non-exclusive basis in a specified area. Read broadly, the complaint alleges that Chrysler and the six individual defendants established a competing business and allowed it to undersell Sessions, in violation of an implied contractual covenant of fair dealing.

Chrysler argues that, since it was the only signatory other than appellant to the contract in question, it alone, and not the individual defendants joined in this…