Jeremy Skidmore sued his former employer's supervisors, Michael Schinke and Gail Saul, in Virginia state court, alleging they violated public policy by retaliating against him for discussing wage information. Skidmore claimed a cause of action under the Virginia Supreme Court's decision in Bowman v. State Bank of Keysville, which allows employees to sue for improper discharge in violation of a statutory right. The defendants removed the case to federal court, arguing that while Schinke was a Virginia citizen, Skidmore had fraudulently joined him to defeat diversity jurisdiction. The defendants contended that the statute Skidmore relied on provided its own exclusive remedies, leaving no room for a private Bowman claim. The district court agreed, finding there was no possibility Skidmore could succeed against Schinke, and dismissed the case. Skidmore appealed, arguing the district court overstepped by deciding a complex state law question at the removal stage.
Judge Quattlebaum, writing for the panel, explained that diversity jurisdiction requires complete diversity of citizenship. However, an exception exists for fraudulent joinder, where a court may disregard a non-diverse defendant if they were joined solely to defeat jurisdiction. The standard for fraudulent joinder is high: it is met only if 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 emphasized that at the removal stage, a district court should not 'delv[e] too far into the merits' or wrestle with thorny state-law questions. Instead, if the outcome is uncertain, doubts must be resolved in favor of remanding the case to state court. The district court erred by concluding that the Virginia statute in question precluded a Bowman claim. While the statute provides administrative remedies, no Virginia court has definitively ruled whether a private Bowman claim is possible under this specific statute. The court noted that while the plaintiff's argument is not 'airtight,' it is not 'impossible.' Because there is a possibility of success, the fraudulent joinder exception does not apply, and the district court lacked subject matter jurisdiction.
The Fourth Circuit vacated the dismissal and the denial of the motion to remand. The case is sent back to the district court to reconsider the jurisdictional issue. The lower court must now determine if the claim against the in-state defendant is viable without assuming it is hopeless. This decision reinforces the principle that federal courts should be cautious about removing cases involving non-diverse defendants when state law is ambiguous, preserving the plaintiff's right to have the case heard in state court unless the claim is clearly meritless.