Mere Allegation Of 'Joint Liability' Does Not Satisfy 'Significant Basis' Test For Local Defendant

Opelousas General Hosp. Authority v. Fairpay Solutions, Inc., No. 11–30610,2011 WL 3902996 (5th Cir. La. Sept. 6, 2011).

While reversing a district court's remand order under the local controversy exception, the Fifth Circuit held that the mere fact that relief might be sought against the local defendant for the conduct of others (via joint liability) does not convert the conduct of others into the conduct of the local defendant so as to satisfy the 'significant basis' requirement.

The plaintiff, Opelousas General Hospital, sued three defendants -- FairPay Solutions, Inc., LEMIC Insurance Company and Zurich American Insurance Company -- in Louisiana state court for violations of the Louisiana Racketeering Act.