Full opinion text
OPINION AND ORDER KARAS, District Judge. Third-Party Defendant Twin City Fire Insurance Company (“Twin City”) removed the present action, Federal Insurance Co. v. Tyco et al., Index No. 04/601416 (N.Y.Sup.Ct.2004) (“Interpleader Action”) from state court. Third-Party Plaintiffs Mark A. Belnick (“Belnick”), L. Dennis Kozlowski (“Kozlowski”), Mark H. Swartz (“Swartz”), and Frank E. Walsh, Jr. (‘Walsh”) move to remand this case back to state court. Specifically, Third-Party Plaintiffs maintain that: (1) Twin City’s removal of the Interpleader Action was improper because third-party defendants may not remove under 28 U.S.C. § 1441(a); and (2) the Court does not have original jurisdiction over the Interpleader Action pursuant to the interpleader statute, 28 U.S.C. § 1335, because Federal Insurance Company (“Federal”) has not deposited the amount in controversy into the registry of the court. Third-Party Plaintiffs also seek attorneys’ fees pursuant to 28 U.S.C. § 1447(c). Twin City opposes the motion, arguing that: (1) the remand motion is untimely; (2) Twin City, even as a third-party defendant, may remove this case under § 1441(a); and (3) because Twin City was fraudulently joined, a proper realignment supports both Twin City’s right to remove and federal jurisdiction over this case. For the reasons stated herein, the Motion to Remand is GRANTED, but the Motion for Attorneys’ Fees is DENIED. I. Background A. Facts The Insured and Their Legal Troubles This action arises from insurance coverage disputes between Interpleader Plaintiff Federal and Third-Party Defendant Twin City and their insured, Interpleader Defendants/Third-Party Plaintiffs Belnick, Kozlowski, Swartz, and Walsh. Belnick is the former Executive Vice President and Chief Corporate Counsel of Tyco International Ltd. (“Tyco”) and is alleged to be a New York resident. (Interpleader Compl. ¶ 5) Kozlowski is the former CEO and Chairman of Tyco, and also a resident of Florida. Swartz is the former Executive Vice President and CFO of Tyco and a resident of Florida, while Walsh is a former Tyco Director and a resident of New Jersey. Tyco is incorporated under the laws of Bermuda, and maintains executive offices in New York. Beginning in or around late 2000, allegations arose that Tyco engaged in questionable accounting practices. After these allegations arose, Tyco issued restatements of its earnings for fiscal year 1999 and the first half of fiscal year 2000. A criminal investigation resulted in indictments of Kozlowski, Walsh, Swartz, and Belnick, who were then prosecuted by the New York County District Attorney’s Office. This was soon followed by civil actions initiated by the Securities and Exchange Commission against these same four individuals, and an avalanche of ERISA and shareholder lawsuits in New York and around the country against Tyco and several of its directors and officers (“Underlying Actions”). See Federal Ins. Co. v. Tyco Int’l Ltd., 2 Misc.3d 1006(A), 2004 WL 583829, at *1 (N.Y.Sup.Ct. Mar. 5, 2004). The first criminal trial resulted in an acquittal for Belnick and a hung jury for Kozlowski and Swartz. The second criminal trial resulted in the conviction of Kozlowski and Swartz, who, in September 2005, were sentenced to eight and one-third to twenty-five years’ imprisonment, and were ordered to pay approximately $170 million in fines and restitution. (Letter from Nicholas J. Zoogman to the Court, Oct. 21, 2005) The Insurance Carriers and Their Policies Interpleader Plaintiff Federal is an insurance company organized under the laws of Indiana with its principal place of business in New Jersey. Third-Party Defendant Twin City is an insurance company also incorporated and existing under the laws of Indiana, with its principal place of business in Connecticut. Twin City also does business in New York. Before its legal troubles began, Tyco purchased certain primary and excess directors and officers (“D & O”) liability insurance policies that provided coverage to Tyco and its officers and directors. Pursuant to Executive Protection Policy, No. 8121-34-42 (“Federal Policy”), Federal is the primary carrier of a policy sold to Tyco for the period March 15, 2001 to March 15, 2003, which provides $25 million in coverage after the satisfaction by Tyco of a $10 million retention. (Zoogman Aff. ¶ 10, Oct. 12, 2004 (hereinafter “Zoogman Aff.”); Zoogman Aff. Ex. 4) The Federal Policy provides that it will pay on behalf of each insured all “Loss” for which an insured person “is not indemnified by the Insured Organization and which the Insured Person becomes legally obligated to pay on account of any Claim first made against him.” (Zoogman Aff. ¶ 16; Zoogman Aff. Ex. 4, Executive Liab. & Indem. 3) The Federal Policy defines “Loss” to include, inter alia, “Defense Costs,” which, in turn, is defined to include “reasonable costs, charges, fees (including but not limited to attorneys’ fees and expert fees) and expenses ... incurred in defending or investigating Claims and the premium for appeal, attachment or similar bonds.” (Zoogman Aff. ¶ 16; Zoogman Aff. Ex. 4, Executive Liab. & Indem. 10) In addition, Tyco purchased excess coverage through several other carriers that ultimately provided over $200 million in coverage in excess of the coverage provided by the Federal Policy. Twin City is the first excess carrier. The Twin City Excess Financial Products Insurance Policy No. NDA 0144927-01 (“Twin City Policy”), like the other excess policies, contains a “follow-form” provision stating: This policy is subject to the same warranties, terms, conditions, definitions, exclusions and endorsements (except as regards the premium, the amount and limits of liability, and duty to defend and except as otherwise provided herein) as. are contained in or as may be added to the policy of the Primary Insurer, together with all the warranties, terms, conditions, exclusions and limitations contained in or added by the endorsement to any Underlying Excess Policyfies). (Zoogman Aff. Ex. 3, Excess Fin. Prod. Ins. Policy III.A) (emphasis added) The Twin City Policy initially covered the period between March 15, 2001 and March 15, 2002. This period was extended by Endorsement Number Six to March 15, 2003, after which the policy apparently was amended again to account for the recent allegations of wrongdoing against Tyco’s directors and officers. (Zoogman Aff. Ex. 3, Endorsement Nos. 6, 7; Twin City Opp’n Mem. 3) For example, Endorsement Numbers Nine and Ten reduce Twin City’s liability to $12.5 million from $25 million, with the remaining $12.5 million to be self-insured by Tyco, except where Tyco is prohibited by Bermuda law to indemnify its own directors and officers. Most importantly, Endorsement Number Eleven amends the Twin City Policy to explicitly exclude coverage for Swartz, Kozlowski, Belniek, and Walsh. Not surprisingly, it is this provision that has drawn the bulk of the Third-Party Plaintiffs’ fire. B. Procedural History The Rescission Action The procedural history of this dispute is a long and winding road. The journey began in 2003 when Kozlowski notified Federal of the Underlying Actions pending against him and demanded that Federal provide him with legal representation or pay his defense costs. On February 13, 2003, Federal responded by rescinding its policy and returned the premiums on the ground that Kozlowski had made material misrepresentations in his insurance application. Federal also responded by commencing an action in the New York Supreme Court, Federal Insurance Co. v. Tyco et al., Index. No. 6000507/03 (N.Y.Sup.Ct.) (“Rescission Action”), seeking a declaration that the Federal Policy was rescinded and void ab initio, or, in the alternative, that certain exclusions bar some of the insured from coverage. See Fed. Ins. Co. v. Tyco Int’l, 2 Misc.3d 1006(A), 2004 WL 583829 (N.Y.Sup.2004). Federal initially named Tyco and numerous other Tyco directors and officers as defendants, but Federal amended its complaint to name only Kozlowski, Swartz, Belniek, and Walsh as defendants. Belnick settled the action with Federal, with Federal ultimately agreeing to fund the cost of Ms defense. As a result, he was dismissed without prejudice. The remaining defendants (KozlowsM, Swartz, and Walsh) counterclaimed, and KozlowsM brought a motion for partial summary judgment seeMng a declaration that Federal was required to defend him, or pay his defense costs on an on-going basis, in certain of the Underlying Actions, including the criminal action in New York State Supreme Court. See Fed. Ins. Co., 2004 WL 583829, at *1-2. On March 5, 2004, Justice Helen Freeman of the New York Supreme Court granted KozlowsM’s partial motion for summary judgment. Id. at *5-6. The decision was largely upheld on appeal. See Fed. Ins. Co. v. Tyco Int’l Ltd., 18 A.D.3d 33, 792 N.Y.S.2d 397 (N.Y.App.Div.2005). Subsequent to the return of the case to New York Supreme Court, as noted, KozlowsM was convicted on twenty-two felony counts based on millions of dollars of fraud. He nonetheless filed a motion for summary judgment in the Rescission Action seeMng $17.8 million in defense costs as a result of the criminal action. (Letter from David Newmann to the Court, Nov. 10, 2005) Citing KozlowsM’s conviction, Federal has opposed KozlowsM’s motion and has filed its own summary judgment motion. (Letter from David Newmann to the Court, Nov. 10, 2005) Belnick and Tyco have moved to intervene in the Rescission Action for the sole purpose of opposing KozlowsM’s motion. (Letter from Nicholas J. Zoogman to the Court, Oct. 21, 2005) Apparently, KozlowsM has not responded to the motions made on behalf of Federal, Belnick, or Tyco. (Letter from Newmann to the Court, Nov. 10, 2005; Letter from Zoogman to the Court, Oct. 21, 2005). These motions are sub judice. The Interpleader Action Federal also commenced the second action in this story, which was the instant Interpleader Action before Justice Freedman, Federal Insurance Co. v. Tyco et al., Index No. 04/601416 (NY.Sup.Ct). This is a defensive interpleader action, brought pursuant to N.Y. C.P.L.R. § 1006(b), wherein Federal “contends that, for reasons set forth in the First Amended Complaint in the Rescission Action, the Rescission Action Defendants are not entitled to the payment of any Defense Expenses or other Loss as defined by” the Federal Policy. (Interpleader Compl. ¶ 19) However, based on Justice Freedman’s decision granting KozlowsM’s summary judgment motion and other litigation involving the insured, including Tyco and the Inter-pleader Defendants/Third-Party Plaintiffs, Federal expressed concern about being subject to multiple adverse claims that would exceed the limits of the Federal Policy. (Interpleader Compl. ¶ 21) To address this concern, Federal sought, among other things, permission to pay into court defense costs attributable to Tyco and the other Interpleader Defendants/Third-Party Plaintiffs, and an order requiring Tyco and the other Interpleader Defendants/Third-Party Plaintiffs to interplead their respective adverse claims to any amounts so deposited. (Interpleader Compl. ¶ 22(c)) At a September 9, 2004 status conference in the Interpleader Action, there was extensive discussion about impleading any excess carriers which might be part of the “tower” of coverage provided to Tyco and its officers and directors. (Zoogman Aff. Ex. 8; Zoogman Aff. Ex. 9, Status Conf. Tr. 10-14) Federal claimed it had no basis to implead the excess carriers, but several of the insured, including Kozlowski and Belnick, claimed they could. At the hearing, Justice Freedman concluded that the parties should “bring them [the excess carriers] in.” (Zoogman Aff. Ex. 8; Zoogman Aff. Ex. 9, Status Conf. Tr. 14) On September 28, 2004, ten days after the initiation of the Bermuda action, discussed below, Kozlowski filed motion papers seeking to join Twin City and all other potentially liable excess insurance companies as third-party defendants in the Interpleader Action. (Twin City Opp’n Mem. 7, Ex. E; Zoogman Aff. ¶ 42) Kozlowski explained that “it appears from discussions amongst counsel that the total amount of defense costs thus far incurred ... under the Federal policy ... exceeds the limits of the policy.” Kozlowski argued that he had a right to have the entire “tower of insurance” maintained, and thus all excess carriers (with one exception) should be a party to the action. (Twin City Opp’n Mem. Ex. E ¶ 8) On October 12, 2004, Kozlowski and Swartz filed a proposed Order to Show Cause, requesting Justice Freedman expedite consideration of the proposed joinder of Twin City to the Interpleader Action. On October 26, 2004, Justice Freedman granted Kozlowski and Swartz leave to add Twin City to the state court action. Justice Freedman’s Order reads: Defendants, Kozlowski and Swartz move to join Twin City Fire Insurance Co. (“Twin City”) as a defendant in this interpleader action brought by Federal Insurance Company to determine which of various defendants are entitled to its insurance coverage. Twin City is one of the excess insurers affording coverage to some or all of the defendants, and is thus potentially liable for some of or similar coverage to that plaintiff is obligated to afford. Pursuant to CPLR § 1007, “... a defendant may proceed against a person not a party who is or may be liable to that defendant for all or part of plaintiffs claim against that defendant by filing a third party summons.... ” The claim is denominated a third party complaint. Plaintiff, Federal Insurance Co. opposes the impleader on the ground that it owes nothing to Twin City or any other excess insurer. However, this “vouching in” type of provision of CPLR 1007 does not require plaintiff to have an obligation to any third party. Rather, it provides that where any part of the claim against the plaintiff may be satisfied by a third party (as here), third party impleader is permissible. See Vincent Alexander: Practice Commentaries, 7B McKinney’s Cons.L. § 1007, Page 12 et seq. This is consistent with the view of CPLR § 1007 that was adopted in the case of George Cohen Agency v. Donald S. Perl-man Agency, 51 N.Y.2d 358, 434 N.Y.S.2d 189, 414 N.E.2d 689 (1980) where the court denied dismissal of a third party claim on the ground that a party may bring before the court another who had shared responsibility. The fact that such action affects removal does not negate its validity. See George Cohen Agency, supra. Based on the foregoing, assuming that defendants Swartz and Kozlowski have served answers to plaintiffs complaint, they may serve a third party complaint against Twin City. This is the decision of the Court. Fed. Ins. Co. v. Tyco Int’l, Ltd., 5 Misc.3d 1022(A), 2004 WL 2805648, at *1 (N.Y.Sup. Ct. Oct. 26, 2004). On or about November 4, 2004, Kozlowski, Swartz, and Walsh filed a Third Party Complaint against Twin City (“Kozlowski/Swartz Third Party Action”). Likewise, on or about November 16, 2004, Belnick filed a Third-Party Complaint against Twin City (“Belnick Third-Party Action”). Bermuda Action The third action in this string of litigation was brought by Twin City when, on or about September 17, 2004, Twin City commenced an action in the Supreme Court of Bermuda (2004 No. 294), seeking certain declaratory relief absolving it from providing coverage to Swartz, Kozlowski, Belnick, and/or Walsh (“the Bermuda Action”). (Twin City Opp’n Mem. Ex. D) Specifically, Twin City contended that in March 2003, Twin City and Tyco agreed, through the issuance of Endorsement Number Eleven, to retroactively restructure portions of the insurance policy to exclude coverage for Swartz, Kozlowski, Belnick, and Walsh. As relief, Twin City sought a declaration that Endorsement Number Eleven is valid and binding upon Tyco, Kozlowski, Swartz, Belnick, and Walsh, and a declaration that Twin City has no obligation and is not liable under the policy to provide coverage to those listed individuals. Belnick Action The fourth and final coverage action was filed on or about October 8, 2004 by Belnick in the Supreme Court of New York (Index No. 04603293) (“Belnick Action”). Among other things, this action alleges that Twin City breached its obligations under the Twin City policy by refusing to defend the insured and that Twin City breached an implied covenant of good faith and fair dealing. Specifically, Belnick alleges breach of the covenant based on the negotiation of Endorsement Number Eleven. For relief, this action seeks a declaratory judgment that Twin City is obligated to pay defense costs of Belnick under the excess policies, and seeks to enjoin the Bermuda Action. As Twin City notes, the third-party complaints in both the Kozlowski and Belnick Third-Party Actions are substantively identical to the complaints filed by those same parties in the Kozlowski and Belnick Actions. In fact, apart from renaming Kozlowski/Swartz and Belnick as “Interpleader defendants and Third-Party Plaintiffs” rather than “Plaintiffs,” and changing Twin City from a “Defendant” to a “Third-Party Defendant,” the Third-Party Complaints are in many parts exactly the same as the prior Complaints. (Twin City Opp’n Mem. 8 (citing for comparison Ex. F. with Ex. K; Ex. G with Ex. J)) Following removal, Belnick brought a motion to remand pursuant to the abstention doctrine. Following oral argument, Belnick expressed an intention to seek dismissal of the claims without prejudice. Twin City, however, opposed such a dismissal, having already answered and filed a counterclaim for declaratory relief. Therefore, the Court issued an Order providing that Belnick submit the stipulation of dismissal, and setting a briefing schedule for Belnick’s motion to stay Twin City’s counterclaims. Belnick subsequently and timely submitted (but did not formally file) a notice of dismissal signed by counsel for Belnick, Walsh, and Swartz, but not Kozlowski and Twin City. Prior to the commencement of the briefing schedule, the Interpleader Action was removed. As a result, the Court issued an Order indicating that “[i]n light of the removal of the related action ... the scheduling order ... governing Belnick’s motion to stay Twin City’s counterclaim, is hereby vacated.” (Order, No. 04 Civ. 7998, Docket No. 23, Nov. 23, 2004) Thus, the issue of the Belnick Action is still pending and is addressed in a separate order, also signed today. Removal of the Interpleader Action and the Question of Remand On November 17, 2004, Twin City filed a Notice of Removal of the Interpleader Action. Twin City outlines a number of bases for removal. First, Twin City maintained that it “may remove to this Court pursuant to 28 U.S.C. § 1441 because it was fraudulently joined in the State Court Action, in that it was named as a defendant ... despite the fact that there is no allegation of third-party liability against Twin City in either pleading.” (Notice of Removal ¶ 5) Twin City contends there is diversity jurisdiction over the Kozlowski Third-Party Action and the Belnick Third-Party Action pursuant to 28 U.S.C. § 1332. (Notice of Removal ¶ 5) Twin City indicated that “it will not object to the remand of the State Court Action ... provided that the Court retain jurisdiction over the Kozlowski Third-Party Action and the Belnick Third-Party Action.” (Notice of Removal ¶ 5) Second, Twin City argued that “[ajlternatively, this action may be removed to this Court by Twin City because this Court has original jurisdiction over the State Court Action pursuant to 28 U.S.C. § 1335.” (Notice of Removal ¶ 6) Finally, Twin City maintained that “this action may be removed by this Court to Twin City because the true plaintiffs, to wit, Mssrs. Kozlowski, Swartz, Belnick and Walsh are of diverse citizenship in contrast to the true defendant, Twin City, and the amount in controversy exceeds the sum of Seventy-Five Thousand Dollars ($75,000.00), exclusive of interest and costs, such that jurisdiction is proper under 28 U.S.C. § 1332.” (Notice of Removal ¶ 7) On December 16, 2004, Third-Party Plaintiffs filed a motion to remand, which the Court denied without prejudice for failure to comply with the Court’s individual practices requiring pre-motion letters and a pre-motion conference. (Docket Nos. 8, 9) A letter requesting a pre-motion conference was sent by Kozlowski’s counsel on January 5, 2005, and following the premotion conference, a briefing schedule was set. Because of the obvious connection between the Interpleader and Belnick Actions, on August 9, 2005, the Court issued an Order providing, in relevant part: Based on the issues raised at the oral argument on July 25, 2005, as well as the issues raised in the related action, Belnick v. Twin City Fire Insurance Company, 04 Civ. 7998, the Court directs the parties to submit supplemental briefs on the question of whether abstention is appropriate in either this action, 04 Civ. 9086, or the Belnick action, 04 Civ. 7998. In addressing this issue, the parties should consider how retention of jurisdiction over one of the cases might affect or not affect the decision to abstain in the related action. (Order, Aug. 9, 2005) On November 10, 2005, Federal requested the Court to immediately remand the underlying Interpleader Action to Justice Freedman so that it could make payments to certain of the insured, including Tyco and Belnick, which had reached an agreement with Federal regarding approximately $12.3 million in defense costs and fees. The Court then inquired of all parties, including Twin City, all of whom consented to a remand of the underlying Interpleader Action. Accordingly, on November 14, 2005, the Court ordered that the Inter-pleader Complaint filed by Federal be remanded to the Supreme Court of New York, New York County, while retaining the two Third-Party Actions filed by Belnick and Kozlowski/Swartz. Based on the consensual remand of the underlying Interpleader Action, in an Order dated January 9, 2006, the Court then directed the parties to brief the question of what impact, if any, the remand of the Interpleader Action had on the remand motions filed by Belnick, Kozlowski, and Swartz. The parties timely submitted their memoranda of. law and the issue is now fully submitted. II. Discussion A. Removal and Remand 1. Applicable Principles Twin City seeks to remove to this Court a ease that was initially filed in New York State Supreme Court. In determining the validity of Twin City’s removal, the Court must answer two questions: Does Twin City have a right to remove this action under the federal removal statute, and, if so, does this Court have jurisdiction over the removed case? In answering these questions, the Court starts with the baseline proposition that federal courts are courts of limited jurisdiction. See Keene Corp. v. United States, 508 U.S. 200, 207, 113 S.Ct. 2035, 124 L.Ed.2d 118 (1993). In this context, this means that the “right of a party to remove a case from state to federal court is a purely statutory right and, as such, is dependent upon the will of Congress for its continued existence.” Chase v. N. Am. Sys., Inc., 523 F.Supp. 378, 380 (W.D.Pa. 1981). Accordingly, “removal jurisdiction exists in a given case only when that jurisdiction is expressly conferred on the courts by Congress.” Id. Among other things, “[a]dherence to these principles is particularly demanded in the context of removal, where considerations of comity play an important role.” Johnston v. St. Paul Fire & Marine Ins. Co., 134 F.Supp.2d 879, 880 (E.D.Mich.2001). Indeed, “[o]ut of respect for the independence of state courts, and in order to control the federal docket, ‘federal courts construe the removal statute narrowly, resolving any doubts against removability.’ ” Stan Winston Creatures, Inc. v. Toys “R” Us, Inc., 314 F.Supp.2d 177, 179 (S.D.N.Y.2003) (quoting Somlyo v. J. Lu-Rob Enter., Inc., 932 F.2d 1043, 1045-46 (2d Cir.1991)); see also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941) (federalism concerns call for “the strict construction” of the removal statute); Lupo v. Human Affairs Int’l, Inc., 28 F.3d 269, 274 (2d Cir.1994) (“In light of the congressional intent to restrict federal court jurisdiction, as well as the importance of preserving the independence of state governments, federal courts construe the removal statute narrowly, resolving any doubts against removability.”); Zerafa v. Montefiore Hosp. Hous. Co., Inc., 403 F.Supp.2d 320, 324 (S.D.N.Y. 2005) (“Removal jurisdiction is strictly construed inasmuch as it implicates significant federalism concerns and abridges the deference courts generally give to a plaintiffs choice of forum.”); Vasura v. Acands, 84 F.Supp.2d 531, 533 (S.D.N.Y.2000) (“In resolving a motion to remand, courts must be mindful of considerations of federalism and the limited jurisdiction conferred on subject matter jurisdiction courts and should ‘strictly construe! ]’ the federal removal statute, resolving all doubts ‘in favor of remand.’ ”) (quoting Miller v. First Security Invs., Inc., 30 F.Supp.2d 347, 350 (E.D.N.Y.1998)). Aside from federalism principles, one practical consideration for the heavy presumption against suspect removal is that it conserves judicial resources. As one court has explained: “The question of subject-matter jurisdiction can, after all, be raised by the parties or even by the court at any stage of the proceedings. It would therefore ill behoove us to retain the action if there is the slightest doubt as to our power to entertain it, and then face the possibility of jurisdictional dismissal by a higher court after the litigation had been fully concluded.” Am. Mut. Liab. Ins. Co. v. The Flintkote Co., 565 F.Supp. 843, 850 (S.D.N.Y.1983) (citations omitted). Therefore, “[wjhen the removal of an action to federal court is contested, ‘the burden falls squarely upon the removing party to establish its right to a federal forum by “competent proof.” ’ ” Stan Winston Creatures, 314 F.Supp.2d at 179 (quoting R.G. Barry Corp. v. Mushroom Makers, Inc., 612 F.2d 651, 655 (2d Cir.1979)). “This is particularly so where the removing party seeks to oppose a motion to remand on a claim of fraudulent joinder.” Am. Mut. Liab. Ins. Co., 565 F.Supp. at 845. Another guiding principle is that the propriety of removal is to be determined by the pleadings at the time of removal. See Pullman Co. v. Jenkins, 305 U.S. 534, 537, 59 S.Ct. 347, 83 L.Ed. 334 (1939) (“The second amended complaint should not have been considered in determining the right to remove, which in a case like the present one was to be determined according to the plaintiffs’ pleading at the time of the petition for removal.”); In re Methyl Tertiary Butyl Ether Prod. Liab. Litig., 399 F.Supp.2d 356, 363 (S.D.N.Y. 2005) (“A court must thus consider the complaint at the time of removal to determine if removal was appropriate in the first place.... There is a ‘judicial reluctance to make jurisdiction hinge on fortuities or ex parte tactical moves.’ ”) (quoting Murphy v. Kodz, 351 F.2d 163, 167 (9th Cir.1965)); In re Bridgestone/Firestone, Inc. Tires Prod. Liab. Litig., 256 F.Supp.2d 884, 889 n. 5 (S.D.Ind.2003) (“[Rjemoval must be determined on the basis of the plaintiffs’ pleadings at the time of removal, without regard to subsequent development.”). Thus, for example, a post-removal settlement with a non-diverse party does not cure a removal that was defective at the time it was filed. See Vasura, 84 F.Supp.2d at 536 (“It is not relevant in determining the propriety of removal — which is measured as of the date of removal — that diversity was later created by dismissal of the non-diverse defendant. If the removal was not proper in the first instance, the state court was never divested of jurisdiction and the federal court consequently has no jurisdiction to exercise.”). With these principles in mind, the Court now turns to the merits of the remand motion. 2. Timing of Motion to Remand Twin City initially argues that Third-Party Plaintiffs waived their right to chailenge Twin City’s right of removal because their motion was untimely. (Twin City Opp’n Mem. 25) Title 28, United States Code, Section 1447(c) provides, in pertinent part: A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a). If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded. 28 U.S.C. § 1447(c). Thus, “all motions for remand — except those based on lack of subject matter jurisdiction — must be made within 30 days after removal or they are waived.” Hamilton v. Aetna Life and Cas. Co., 5 F.3d 642, 643 (2d Cir.1993). “Congress placed a strict time limit on motions to remand in order to prevent the delay, inefficiency, and unfairness resulting from late-stage, forum-shopping remand motions.” Pierpoint v. Barnes, 94 F.3d 813, 817 (2d Cir.1996). While “[t]his deadline is plainly mandatory,” the Second Circuit has “never held it to be jurisdictional, nor is there any statutory language that purports to limit the court’s power to consider an overdue motion.” Phoenix Global Ventures, LLC v. Phoenix Hotel Assocs., Ltd., 422 F.3d 72, 75 (2d Cir.2005). In this case, Third-Party Plaintiffs timely filed their original motion to remand, even if “one day prior to the expiration of the 30-day statutory deadline of 28 U.S.C. § 1447(c).” (Twin City Opp’n Mem. 8) The motion, however, was denied without prejudice merely for failure to comply with the Court’s individual practices, which require a moving party to submit a pre-motion letter outlining the basis for the motion and requesting a premotion conference. (Individual Practices of Kenneth M. Karas ¶ 2A) Approximately two weeks thereafter, Third-Party Plaintiffs submitted a letter request for a premotion conference consistent with the Court’s individual practices. The Court then held the pre-motion conference and set a briefing schedule. Third-Party Plaintiffs timely filed their motion papers, including their Memorandum of Law, which is identical to the Memorandum of Law originally submitted in support of their timely-made remand motion. According to Twin City, this sequence of events makes the motion untimely. Specifically, Twin City argues that after the Court denied the motion without prejudice, “[Third-Party Plaintiffs] had one additional day to file their request for a pre-motion conference, thereby preventing the balance of their deadline from expiring. However, [Third-Party Plaintiffs] waited two weeks before finally sending their request....” (Twin City Opp’n Mem. 26) This argument is unpersuasive for several reasons. First, Twin City’s objection is based on an overly technical reading of the Court’s individual practices and the applicable statute. The Court’s denial of the timelyfíled motion was obviously not on the merits, but solely on the procedural default of Third-Party Plaintiffs to submit a premotion letter requesting a pre-motion conference. Because the Memorandum of Law provided the type of analysis typically required in a pre-motion letter, the only thing lacking from Third-Party Plaintiffs’ submission was a formal request for a conference. Had such a conference been requested contemporaneously with the Memorandum of Law, the Court could have scheduled the conference and formally tolled the time by which Third-Party Plaintiffs would have to file their motion. Indeed, the Court has since uniformly employed this practice when either a premotion letter is filed or a motion is filed in contravention of the Court’s individual practices precisely to avoid any confusion among the parties about the status of any applicable deadlines, the timing of any response to the pre-motion letter, and the scheduling of the pre-motion conference. That the Court did not do so explicitly here is no basis to deem the timely motion (timely, that is, under § 1447(c)) to be untimely simply by virtue of the Court’s individual practices. Cf. Mitskovski v. Buffalo & Fort Erie Pub. Bridge Auth., 435 F.3d 127, 133 (2d Cir.2006) (“We think the District Court’s decision to remand for lack of an index of State Court documents was an unduly rigid application of the local requirement.... The Authority’s filing of all the State Court documents afforded the District Court ample opportunity to assess whether the case should remain in a federal court. If an index was thought to be needed, the District Court could have ordered the Authority to furnish one promptly. A remand, with the consequent deprivation of a federal forum, for lack of an index was too drastic a remedy for such a minor noncompliance.”). Put another way, the Court could have waived its own individual practices and allowed the motion to be filed. Deeming the motion to be timely now, in the context of Twin City’s objection, would accomplish the same thing and, in the Court’s view, be a just application of its own practices and Section 1447(c). See Somlyo, 932 F.2d at 1049 (“The district court should ask whether the application of the letter of Local Rules to a particular case would cause an unjust result. If faced with potential unfairness, the district court should tailor the Local Rules to best achieve a just outcome.”). While there appears to be no authority specifically addressing the unique facts of this case, the available case law supports the view that the timely filing of the motion to remand does not become untimely because of “quirks” in the local rules. For example, in Phoenix Global Ventures, the movant’s remand motion was twice rejected as a result of the district court’s electronic case file system, thus making the perfected motion technically untimely. 422 F.3d at 74. Nevertheless, in affirming the district court’s acceptance of the remand motion, the Second Circuit held that district courts may “excuse failures to comply with rules enforced by its local electronic case filing system for purposes of determining when a motion was made.” Id. at 76. In another case, Blanco v. Snyder’s of Hanover, Inc., No. 03 Civ. 385, 2003 WL 21939707 (S.D.N.Y. Aug. 12, 2003), movants filed an “Affirmation in Opposition” to the removal of a case initially and improperly sent to the Eastern District of New York. Id. at *1. The “Affirmation” pointed out the alleged untimeliness of the removal, but it was never filed as a motion to remand and was never addressed in the Eastern District of New York. Id. Instead, the case was transferred to the Southern District of New York, which after limited discovery and the filing of motions to dismiss, learned of the earlier objection to removal. Id. at *3. The court remanded the case in spite of the claim by defendant that the “formal” motion was untimely. Id. Noting that the timeliness objection was “overly technical on the unusual facts of this case,” the court further noted that plaintiffs had “made known their opposition to removal, and their coneededly meritorious grounds for remand, within the time limit set by § 1447(c), in the ‘Affirmation of Opposition.’ ” Id. This application of the law is consistent with the rationale behind the thirty-day requirement for remand motions, which is intended to “prevent the delay, inefficiency, and unfairness resulting from late-stage, forum-shopping remand motions.” Pierpoint v. Barnes, 94 F.3d 813, 817 (2d Cir.1996). Moreover, this is not a case where a party is seeking to amend the motion to remand, in which case, as Twin City notes, courts have found that “the amended motion cannot relate back to the original motion to remand for purpose of complying with the time requirement.” Locke v. Purdon, No. 294CV70-BO, 1995 WL 1945502, at *2 (N.D.Miss. Apr. 20, 1995). A second reason to reject Twin City’s claim is that even if the motion is not fairly deemed to have been timely made, there is authority for deeming it to have been equitably tolled. See Chamberlain v. AM-REP, Inc., No. 3:04-CV-1776-B, 2004 WL 2624676, at *2 (N.D.Tex. Nov. 18, 2004) (holding removal deadlines subject to equitable exceptions); Phoenix Global Ventures v. Phoenix Hotel Assocs., Ltd., No. 04 Civ. 4991, 2004 WL 2360033, at *5 (S.D.N.Y. Oct. 19, 2004) (concluding that equitable tolling is appropriate where motion to remand was arguably untimely because of difficulties encountered in using ECF system), aff'd, 422 F.3d 72 (2d Cir, 2005); Byfield v. Niaz, No. 00 Civ. 6572, 2001 WL 25705, at *2 (S.D.N.Y. Jan. 10, 2001) (“In these circumstances, it is appropriate that the statutory time period for filing a remand motion be equitably tolled for a minimum of three weeks.”); Doyle v. Staples, No. 99-CV-6062, 2000 WL 194685, at *2 (E.D.N.Y. Feb. 18, 2000) (“I conclude that the thirty-day deadline in § 1447(c) was equitably tolled in this case and that I therefore have the authority to entertain an otherwise untimely motion to remand.”). In this case, the Third-Party Plaintiffs provided unambiguous and timely notice to Twin City of their intention to send this case back to state court, and the rationale in support of this intended course of action. The subsequent delay in scheduling the pre-motion conference was neither lengthy nor done for tactical gain. Indeed, it may very well be the case that Third-Party Plaintiffs believed the Court would schedule the pre-motion conference without any formal request. Thus, under these circumstances it is proper to view the thirty-day deadline to be equitably tolled simply as a means to permit Third-Party Plaintiffs to perfect their motion. Moreover, it cannot credibly be claimed that the Court’s application of its individual practices harmed Twin City. Indeed, it merely gave Twin City more time to respond to the motion. As such, Twin City has not identified any prejudice from the timing of the motion and, therefore, the Court is not persuaded that the motion should be denied as untimely. See Phoenix Global Ventures, 422 F.3d at 76 (“Associates have never identified any prejudice arising from the one-day delay in their receipt of the remand motion. The district court was well within its discretion to determine that holding Ventures to the technical ECF system requirements would have worked ' an injustice.”); Wilson v. Lowe’s Home Ctr., Inc., 401 F.Supp.2d 186, 189 (D.Conn.2005) (“[P]laintiffs motion to remand may be treated as though it had been filed within the 30-day period. Treating the motion this way causes no unfair prejudice to the defendant.”) (citations omitted). S. Third-Party Defendant Removal Under Section 1111(a) Section 1441(a) provides in pertinent part that “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a) (emphasis added) The initial question that jumps out from this provision is whether Twin City, as a named Third-Party Defendant, is a “defendant” that may remove under § 1441(a). Third-Party Plaintiffs say no; Twin City says yes. There is little doubt that measured by the quantum of decisions, the weight of authority decidedly tips in favor of Third-Party Plaintiffs. See, e.g., ConocoPhillips Co. v. Turner Indus. Group, LLC, No. Civ. G-05-516, 2006 WL 213956, at *1 (S.D.Tex. Jan. 24, 2006) (“[T]he majority of courts have held that third-party defendants are not ‘defendants’ as the term is used in § 1441(a) and cannot remove an action from state court.”); Casul v. Mo-dell’s N.Y. II, Inc., No. 04 Civ. 7204, 2004 WL 2202581, at *2 (S.D.N.Y. Sept. 30, 2004) (“[Cjourts have routinely held that a third-party defendant may not remove under section 1441(a).”); Sterling Homes v. Swope, 816 F.Supp. 319, 321 (M.D.Pa.1993) (“The majority view among courts is that third party defendants may not remove a case. This view is shared by the leading commentators.”) (collecting cases); Knight v. Hellenic Lines, Ltd., 543 F.Supp. 915, 917 (E.D.N.Y.1982) (“[Judicial authority and the commentators have squarely rejected the view that a defendant in a third-party action is a ‘defendant’ under § 1441(a).”). Of course, where there is a majority view, there is a minority view as well. “The courts in the minority, permitting third-party removal, have done so in varying degrees.... However, most courts permitting third party removal have done so only of the severed part” of a case, typically under Section 1441(c). See Sterling Homes, 816 F.Supp. at 321. Section 1441(c) permits removal for a “separate and independent claim” to which there is a federal question under Section 1331 that is joined with a claim for which there is no basis for removal. Since Twin City did not remove this case pursuant to § 1441(c), the case law interpreting this provision has little significance. The judicial debate over the question of third-party removal has raged for years, so there is little left to be added to the discussion. After a comprehensive review of the case law (which does not yet include a decision from the Second Circuit), the Court is persuaded that the majority view is the superior one. To begin, the majority view is more faithful to the Supreme Court’s instruction in Shamrock Oil to strictly construe the removal statute, see 313 U.S. at 108-09, 61 S.Ct. 868, as well as the plain language of the statute. “Although Shamrock Oil is not dispositive of the precise issue ..., it does dictate that the phrase ‘the defendant or the defendants,’ as used in § 1441(a), be interpreted narrowly, to refer to defendants in the traditional sense of parties against whom the plaintiff asserts claims.” First Nat’l Bank of Pulaski v. Curry, 301 F.3d 456, 462-63 (6th Cir.2002). “This interpretation of ‘the defendant or the defendants’ is bolstered by the use of more expansive terms in other removal statutes. Title 28 grants removal power in bankruptcy cases to any ‘party,’ see 28 U.S.C. § 1452(a), a broader grant of power that courts have interpreted to extend to third-party defendants.” Id. at 463. “By contrast, § 1441(a).’s grant of removal power is much more limited, instilling a right of removal only in the defendant or the defendants.” Id.; see also Casul, 2004 WL 2202581, at *2 (“The plain text of the statute does not permit removal by a person other than a defendant....”); Johnston, 134 F.Supp.2d at 880 (noting that the terms “defendant” and “third-party defendant” “typically are understood as referring to distinct parties”); Crawford, 647 F.Supp. at 846 (“This court is not inclined to contravene every decided case of the district courts of this circuit and allow a fourth-party defendant to remove under § 1441(c). To do so would require an expansion of the statutory language beyond that expressed by Congress. This brand of statutory interpretation is misplaced, especially in the context of the removal statute.”); Knight, 543 F.Supp. at 917 (concluding that a third-party defendant is not a “defendant” as that term is used in § 1441(a)). The statute’s plain language limiting the removal right to a defendant also reflects a conscious decision by Congress to restrict, over time, the removal options of parties in state cases. In the first Judiciary Act of 1789, Congress initially granted the removal right to “the defendant.” See Shamrock Oil, 313 U.S. at 105, 61 S.Ct. 868. The Supreme Court interpreted this provision to bar a non-citizen plaintiff who had been subject to a counterclaim from removing the case to federal court. See West v. Aurora City, 6 Wall. 139, 73 U.S. 139, 141, 18 L.Ed. 819 (1867). In the Judiciary Act of 1875, however, “the practice of removal was greatly liberalized,” by permitting removal by “either party, or any one or more of the plaintiffs or defendants” to remove. Shamrock Oil, 313 U.S. at 106, 61 S.Ct. 868. This provision remained in effect until 1887, when Congress adopted the language currently in place. See Id.; Greater N.Y. Mut. Ins. Co. v. Anchor Constr. Co., 326 F.Supp. 245, 247 (E.D.Pa.1971) (“In 1875 the right to removal, at least in Federal question cases, was granted to either party. However, the Judiciary Act of 1887-1888, restricted this broad rule to allow removal only by a defendant or defendants.”) (quotations omitted). The full-circle evolution of the removal statute, then, particularly when combined with the Supreme Court’s interpretation of this statutory evolution, strongly supports the notion that Congress intended to limit removal only to defendants and not to any other party, including third-party defendants. See Shamrock Oil, 313 U.S. at 108, 61 S.Ct. 868 (“Not only does the language of the Act of 1887 evidence the Congressional purpose to restrict the jurisdiction of the federal courts on removal, but the policy of the successive acts of Congress regulating the jurisdiction of federal courts is one calling for the strict construction of such legislation.”); Sterling Homes, 816 F.Supp. at 323 (alterations to removal statute “served to limit removal and bolster the restrictive interpretation given to § 1441(c), an interpretation disfavoring third party removal”); Share v. Sears, Roebuck & Co., 550 F.Supp. 1107, 1108 (E.D.Pa.1982) (“The proposition that ‘defendant’ in section 1441(a) excludes third-party defendants is not compelled by syntax. Congress certainly could have conferred, and intended to confer, the privilege of remand on any litigant who at some stage of a state court law suit becomes the target of a claim cognizable by a federal district court. But Congress has not followed this course.”). A strict construction of the removal statute also serves the practical purpose of limiting a third-party from undermining the forum choices of both the plaintiff and defendant in a state action. See Johnston, 134 F.Supp.2d at 880 (“[Rjemoval by the principal defendant displaces the chosen forum of only one party, the principal plaintiff, while removal by a third-party defendant threatens to overcome the state-court preferences of both the principal plaintiff and the principal defendant.”); Chase, 523 F.Supp. at 382 (“[Ajllowing removal by the third-party defendant in this case denies both the plaintiff and the defendant the right to proceed in a forum of their own choosing.”). Of course, this applies perforce here, as removal would frustrate the forum choices of several parties. Cf. Crawford, 647 F.Supp. at 846 (“These arguments apply with equal if not greater force to fourth-party defendants, since they too are introduced to the litigation after its commencement, are not named in the plaintiffs complaint, and are only one small corner of a larger universe of dispute.”). Finally, strictly interpreting the removal statute to limit removal rights to defendants optimally harmonizes federalism interests. As the Seventh Circuit observed: “To allow removal of an entire suit on the basis of a third-party claim is to bring into federal court an action the main part of which is not within that court’s original jurisdiction, and is thus to enlarge federal at the expense of state jurisdiction in rather a dramatic way.” Thomas v. Shelton, 740 F.2d 478, 486 (7th Cir.1984). In this case, the normal federalism concerns are magnified by virtue of the relationship between the Interpleader Action and the Rescission Action, both of which are assigned to the same New York State Supreme Court Justice. In the Rescission Action, Federal has sought, and continues to seek, declaratory judgment that it may rescind the Federal Policy, thus relieving Federal of providing insurance coverage to several of the Third-Party Plaintiffs. Only when Federal partially lost the first round of summary judgment litigation did it bring the Interpleader Action, as an obvious effort to hedge its position as to the other insured parties under the Federal Policy. However, in bringing the Interpleader Action, Federal in no way conceded that, for example, Kozlowski is entitled to insurance benefits. Indeed, subsequent to Kozlowski’s conviction, Federal is currently engaging Kozlowski in a second round of litigation over this question, the result of which may have a profound impact on the Interpleader Action. Thus, the usual instruction to narrowly construe the statutory right to remove applies with special emphasis here. Cf. Casul, 2004 WL 2202581, at *2 (limiting right of removal to defendants only avoids “judicial gloss” that can “serve as an unwarranted encroachment on state sovereignty”). In the midst of this vast sea of authority strongly suggesting that third-party defendants have no statutory right to remove cases, Twin City hitches its life raft to Mignogna v. Sair Aviation, Inc., 679 F.Supp. 184 (N.D.N.Y.1988), claiming that the reasoning in that case “is more persuasive and ought to be followed by this Court.” (Twin City Opp’n Mem. 28). Before turning to the court’s reasoning, however, it bears noting that the remand motion in Mignogna was granted, on the ground that removal of the case did not involve a “separate and independent claim” under § 1441(c). Id. at 190-91. Thus, the court’s discussion of the right of a third-party defendant to remove an action is dicta. Moreover, the discussion of a third-party defendant’s right to remove in that case is in the context of § 1441(c), which as noted above, has since been amended and no longer allows for removal where the sole basis of federal jurisdiction (as here) is diversity. In any event, the Court is not persuaded by the rationale offered in favor of third-party defendant removal of cases. In support of its expansive reading of the removal statute, the Mignogna court suggests that the definition of “defendant,” which unquestionably is determined by federal law, should be construed to mean “someone who ‘has been haled into court involuntarily and must defend an action for relief against it.’ ” Id. at 189 (quoting Ford Motor Credit Co. v. Aaron-Lincoln Mercury, Inc., 563 F.Supp. 1108, 1113 (N.D.Ill. 1983)). Ignoring the statute’s historical evolution, and the obvious difference between a defendant and third-party defendant, as well as the Supreme Court’s admonition to strictly construe the removal statute, the Mignogna court found “nothing in the legislative history of the general removal statute requiring an interpretation of statutory language that is inconsistent with ordinary usage.” Id. Respectfully, this Court believes the more limited definition of “defendant,” absent a congressional directive to the contrary, is more persuasive and prudent. See Capitalsource Finance, LLC v. THI of Columbus, Inc., No. 2:05-CV-0561, 2005 WL 3216570, at *3 (S.D.Ohio Nov. 29, 2005) (“Although the Court recognizes that the removing parties, unlike the typical plaintiff/counterclaim defendant, did not choose in the first instance to litigate their claims in the state court, the presumption against removal jurisdiction and the need to construe the removal statute narrowly and not liberally precludes a finding that they are ‘defendants’ with a right to remove.”); Kaye Assocs. v. Bd. of Chosen Freeholders, 757 F.Supp. 486, 489 (D.N.J.1991) (“Our position that third-party defendants cannot remove cases to federal court is consistent with the Supreme Court’s assertion in Shamrock Oil that the removal statute should be uniform in its application, because our position uniformly limits removal to claims joined by plaintiffs.”). From a policy perspective, the Mignogna court also suggests that to “adopt an inflexible rule barring removal by third-party defendants ... would have the curious effect of making a litigant’s right to have a claim heard in a federal forum turn on the fortuity of being sued in a third-party complaint rather than in a separate action.” Mignogna, 679 F.Supp. at 188. Relatedly, the court notes, “the right to remove would be directly affected by the procedural rules governing third-party practice, which may vary from state to state.” Id. This objection to strictly interpreting the removal statute to bar third-party removal stands the uniformity argument on its head. Indeed, “[a] uniformly applied federal rule barring removal by third-party defendants does not allow state procedure to control access to federal courts.” Chase, 523 F.Supp. at 381 n. 1. For example, where a state’s joinder rules are unusually permissive, or more to the point, more permissive than, for example, Fed. R.Civ.P. 14 or 20, permitting removal in those circumstances “would allow [the third-party defendant] to remove into federal court an action that could not have been brought there originally.” Id. In other words, permitting removal by a third-party defendant properly joined under state law “allows peculiarities of state practice to define the jurisdiction of a federal court.” Id. “Admittedly, the national disuniformity resulting from permitting removal only by defendants joined in the plaintiffs complaint provides some tension.” Crawford, 647 F.Supp. at 846. However, “[t]his court is inclined not to increase federal jurisdiction despite the tension caused by nonuniform state pleading practiees[,][as] Congress is best suited to balance the interests and establish the parameters of federal court jurisdiction which serve those interests.” Elkhart Coop. Equity Exch., 716 F.Supp. at 1388; see also Kaye Assocs., 757 F.Supp. at 489 (“While we think it better if third-party defendants were allowed to remove cases to federal court, we are not the ones to make that choice; we are bound to enforce the will of Congress. In this case, in the absence of a clearer expression of an intention to do so, we do not think that Congress intended to give rights of removal to third-party defendants.”); Crawford, 647 F.Supp. at 846 (noting that tolerating the tension created by varying state third-party practice “is preferable to shattering the coherence of cases and expanding the jurisdiction of this court beyond that expressed by Congress.”). For these and other reasons, therefore, the Court believes that the better view is that the right to removal has not been given to third-party defendants in § 1441. L Fraudulent Joinder/Misjoinder Twin City argues that even if third-party defendants have no statutory removal rights, it is “entitled to remove the Third-Party Actions under the fraudulent joinder doctrine because it was improperly joined as a party by [the Third-Party Plaintiffs] to defeat jurisdiction.” (Twin City Opp’n Mem. 26-27) Pivoting from there, Twin City claims that once the fraudulent joinder is recognized, the parties may be realigned, thus converting Twin City into a “simple defendant” whose citizenship is diverse from the true plaintiffs. (Twin City Opp’n Mem. 27) According to Twin City, the end result of this jurisdictional re-construction is a removable action over which this Court has jurisdiction. While not irrational, Twin City’s argument suffers from several fatal flaws, some at the removal stage and others at the jurisdictional stage. Either way, the result is the same: granting Third-Party Plaintiffs’ remand. Beginning with the removal component, Twin City argues that under the so-called “fraudulent joinder” doctrine, “‘courts overlook the presence of a non-diverse defendant if from the pleadings there is no possibility that the claims against that defendant could be asserted in state court.’ ” (Twin City Opp’n Mem. 27) (quoting Briarpatch Ltd., L.P. v. Phoenix Pictures, Inc., 373 F.3d 296, 302 (2d Cir.2004), cert. denied, — U.S.-, 125 S.Ct. 1704, 161 L.Ed.2d 525 (2005)). Thus, the argument continues, “if this Court agrees that no third-party claim lies under Fed.R.Civ.P. 14, it follows that the Court must ‘overlook the presence’ of Twin City when conducting its removal analysis.” (Twin City Opp’n Mem. 27) This argument, however, is misdirected, as the essence of Twin City’s objection is more akin to fraudulent “misjoinder,” than fraudulent joinder. “Fraudulent joinder occurs either when there is no possibility that a plaintiff can state a cause of action against nondiverse defendants in state court, or there has been outright fraud in plaintiffs pleading of jurisdictional facts.” Hoosier Energy Rural Elec. Coop., Inc. v. Amoco Tax Leasing TV Corp., 34 F.3d 1310, 1315 (7th Cir.1994) (omitting quotations). As Twin City correctly notes, the Second Circuit has held: In order to show that naming a non-diverse defendant is a ‘fraudulent joinder’ effected to defeat diversity, the defendant must demonstrate, by clear and convincing evidence, either that there has been outright fraud committed in the plaintiffs pleadings, or that there is no possibility, based on the pleadings, that a plaintiff can state a cause of action against the non-diverse defendant in state court. Pampillonia v. RJR Nabisco, Inc., 138 F.3d 459, 461 (2d Cir.1998); see also Briarpatch Ltd., 373 F.3d at 302; Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 207 (2d Cir.2001). Since Twin City acknowledges that it does not believe that Third-Party Plaintiffs committed “outright fraud,” by joining Twin City as a third-party defendant, the question is whether Third-Party Plaintiffs can state a cause of action against Twin City, a test, Twin City notes, that is “akin to the review of a Rule 12 motion to dismiss.” (Twin City Opp’n Mem. at 11) While Twin City asserts that federal law controls the question of whether there has been fraudulent joinder, “ ‘[j]oinder will be considered fraudulent when it is established that there can be no recovery [against the defendant] under the law of the state on the cause alleged.’ ” Whitaker, 261 F.3d at 207 (quoting Allied Programs Corp. v. Puritan Ins. Co., 592 F.Supp. 1274, 1276 (S.D.N.Y.1984)) (citations omitted). In fact, in In re Rezulin Products, a decision cited by Twin City, Judge Kaplan explained that “the Court must consider the state law upon which the claim rests and then determine only whether there is a reasonable possibility that the relevant state’s highest court would rule in favor of the plaintiff were the issue presented to it.” In re Rezulin Prods., 133 F.Supp.2d at 280. Thus, as Third-Party Plaintiffs point out, “[t]he test of whether or not here has been fraudulent joinder is uniformly whether the plaintiff can establish a claim under state, not federal law.” (Third-Party Plaintiffs Reply Mem. 6) (citing Stan Winston Creatures, 314 F.Supp.2d at 182) That is, “[e]ven though federal law applies to the question of fraudulent joinder, the ultimate question is whether there is arguably a reasonable basis for predicting that state law might impose liability on the facts involved.” 16 James Wm. Moore, et al., Moore’s Federal Practice § 107.14[2][c][iv][C] (3d ed.2003). The wrong turn in Twin City’s argument, however, is not a failure to accurately state the law regarding fraudulent joinder. Rather, it is their belief that fraudulent joinder is the doctrine that applies here. Indeed, nothing in Twin City’s extensive briefing suggests that the relief that Third-Party Plaintiffs seek against Twin City — a declaratory judgment that Twin City is obligated to pay defense costs of Third-Party Plaintiffs — is impossible to obtain under New York state law. Instead, Twin City argues that the defect in the Third-Party Complaint is that the claims against Twin City were improperly (i.e., fraudulently) joined with claims made in the Interpleader Complaint, under both Fed.R.Civ.P. 14(a) and its New York state equivalent, N.Y. C.P.L.R. § 1007. As alleged, therefore, the claim is closer to one of “fraudulent misjoinder.” “Fraudulent misjoinder” occurs when a plaintiff purposefully attempts “to defeat removal by joining together claims against two or more defendants where the presence of one would defeat removal and where in reality there is no sufficient factual nexus among th