Favorable Ruling for Energy Companies in Oilfield Dispute

BPX, Zurich American, and others sued Cameron International Corporation in Oklahoma state court for more than $65 million in connection with work that Cameron performed on an oil and gas well in DeWitt County, Texas. Cameron removed the case to federal court, even though Cameron and BPX were both citizens of Texas, claiming that BPX had been fraudulently joined as a plaintiff in an improper attempt to destroy diversity jurisdiction. BPX and Zurich American filed a Motion to Remand arguing, among other things, that the doctrine of fraudulent joinder did not apply to plaintiffs like BPX and Zurich American.

The Honorable Charles B. Goodwin of the United States District Court for the Western District of Oklahoma agreed with BPX and Zurich American, noting the “pragmatic reasons to limit application of the fraudulent joinder doctrine to defendants and the absence of Tenth Circuit authority concluding that extension of the doctrine to plaintiffs is appropriate.” Therefore, Judge Goodwin concluded that federal jurisdiction did not exist and remanded the lawsuit back to Oklahoma state court.