JOSEPH H.L. PEREZ-MONTES, Magistrate Judge.
Before the Court is a product liability suit filed pursuant to 28 U.S.C. § 1332 by Plaintiffs Cory P. Roy and Angie Roy, residents of Louisiana. The named Defendants are Dixie RV Superstore of Acadiana, LLC; Rev Recreation Group, Inc. ("Rev"); Airxcel, Inc. ("Airxcel"); and Dixie Motors, LLC (Docs. 1, 5). Plaintiffs seek rescission of the sale of an allegedly defective RV, as well as damages and costs.
This suit was originally filed in the Louisiana Twelfth Judicial District Court in Avoyelles Parish on June 24, 2016, and Rev was served on July 14, 2016 (Doc. 1). Rev removed the suit to this Court on August 15, 2016 (Doc. 1). Dixie and Airxcel consented to the removal (Docs. 2, 3). Plaintiffs filed an amended complaint on August 16, 2016 (Doc. 5).
Rev alleges there is diversity jurisdiction because Plaintiffs are residents of Louisiana; Rev is a Delaware corporation with its principal place of business in Indiana; and Airxcel is a Delaware corporation with its principal place of business in Kansas. Rev contends there is diversity jurisdiction because Dixie RV Superstores of Acadiana, LLC, a Louisiana business, was not properly joined as a defendant. Rev alleges that Dixie RV Superstores of Acadiana, LLC did not sell an RV to Plaintiffs, and was not involved with Plaintiffs so as to subject it to this litigation.
Plaintiffs filed a motion to remand (Doc. 17). Defendants filed a brief in opposition (Doc. 21), and Plaintiffs replied (Doc. 24).
Federal courts have limited subject matter jurisdiction and cannot entertain cases unless authorized by the Constitution and legislation.
Subject matter jurisdiction must exist at the time of removal to federal court, based on the facts and allegations contained in the complaint.
Federal courts have subject matter jurisdiction and are authorized to entertain causes of action only where a question of federal law is involved, or where there is diversity of citizenship between the parties and the amount in controversy exceeds $75,000.00, exclusive of interest and costs.
The citizenship of a limited liability company is determined by the citizenship of all of its members.
When a non-diverse party is properly joined as a defendant, a federal court lacks subject matter jurisdiction over the case pursuant to 28 U.S.C. § 1332, and the case may not be removed from state court. However, a defendant may remove the case by showing the non-diverse party was improperly joined.
"To establish improper joinder, the removing party must demonstrate either: `(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.'"
A court may determine whether a plaintiff has a reasonable basis for recovery under state law in one of two ways: (1) the court may conduct a Rule 12(b)(6)-type analysis, looking initially at the allegations of the complaint to determine whether the complaint states a claim under state law against the in-state defendant; or (2) where a plaintiff has stated a claim but has misstated or omitted discrete facts that would determine the propriety of joinder, the district court may, in its discretion pierce the pleadings and conduct a summary inquiry.
Defendants allege in the Notice of Removal (Doc. 1) that Plaintiffs named Dixie RV Superstores of Acadiana as a defendant in this lawsuit based on a contract of sale allegedly between Dixie RV Superstores of Acadiana and Plaintiffs for a 2012 American Revolution recreational vehicle, executed on November 8, 2012. Defendants further allege that Plaintiffs contend Dixie RV Superstores of Acadiana is liable to them for damages related to defects in the RV, but have not set forth facts to establish that Dixie RV Superstores of Acadiana executed a contract of sale with the Plaintiffs for the 2012 American Revolution. Defendants contend that Dixie RV Superstores of Acadiana did not sell the RV in question to the Plaintiffs on November 8, 2012, as shown by the Purchase Agreement (Doc. 1, Ex. E).
In their opposition to the Motion to Remand (Doc. 21), Defendants contend the members/owners of Dixie RV Superstores of Acadiana, LLC, are Gregory Lala, Brandi Lala Picone, and Stephen L. Guidry, Jr., all Louisiana residents. Defendants further contend that Dixie RV Superstores of Acadiana, LLC operates the Dixie RV store in Breaux Bridge, Louisiana, but not the store in Hammond.
Defendants show that Plaintiffs purchased their RV from the Dixie RV Superstores (in Hammond, Louisiana), not from Dixie RV Superstores of Acadiana in Breaux Bridge (Docs. 1-5, 21-1). Defendants allege that Dixie Motors, LLC is the entity that operates the Hammond store, which sold and serviced Plaintiffs' RV (Doc. 21, p. 6). Defendants allege the sole member of Dixie Motors, LLC is Gregory Lala, a citizen of Louisiana.
In their Motion to Remand (Doc. 17), Plaintiffs point out that they added Dixie Motors, LLC, another Louisiana company, as a defendant in their amended complaint, which was filed on August 16, 2016 (Doc. 5).
Jurisdiction for removal is established at the time of removal, not subsequently. Although the notice of removal did not affirmatively allege the citizenship of Dixie RV Superstores of Acadiana, LLC and Dixie Motors, LLC, Defendants alleged their citizenship in their brief opposing the Motion to Remand (Doc. 21).
Plaintiffs initially named the wrong limited liability company, Dixie RV Superstores of Acadiana, LLC, as the RV seller-defendant. Therefore, at the time of removal on August 15, 2016, Plaintiffs did not have a viable claim against Dixie RV Superstores of Acadiana, LLC. However, on August 16, 2016, Plaintiffs amended their complaint to add Dixie Motors, LLC (which operates the Hammond store), as a defendant.
In
Further, Plaintiffs may timely correct a defendant or its company name pursuant to Fed.R.Civ.P. 15(c)
Plaintiffs were diligent and timely amended their complaint to name the correct Defendant. There was no surprise or prejudice to Defendants arising from the amendment. Therefore, Plaintiffs' amended complaint relates back to their original complaint pursuant to Fed.R.Civ.P. 15(c)(1)(C).
Since Plaintiffs' amended complaint relates back to the original complaint, the addition of Dixie Motors, LLC defeats diversity at the time of removal. This Court does not have subject matter jurisdiction over this case. See Cobb v. Delta Exports, Inc., 186 F.3d 675, 677 (5th Cir. 1999) (post-removal joinder of non-diverse defendants pursuant to Fed.R.Civ.P. 19 destroys diversity for jurisdictional purposes and requires remand).
Defendants further argue that Plaintiffs did not properly serve Dixie Motors, LLC because they attempted to effect service by certified mail. However, there is a waiver of service for Dixie Motors, LLC in the record (Doc. 32).
Since this Court does not have diversity jurisdiction, Plaintiffs' motion to remand should be granted.
Based on the foregoing, IT IS RECOMMENDED that Plaintiffs' Motion to Remand (Doc. 17) be GRANTED and the case be remanded to the Louisiana Twelfth Judicial District Court in Avoyelles Parish.
Under the provisions of 28 U.S.C. § 636(b)(1)(c) and Fed.R.Civ.P. 72(b), parties aggrieved by this Report and Recommendation have fourteen (14) calendar days from service of this Report and Recommendation to file specific, written objections with the Clerk of Court. A party may respond to another party's objections within fourteen (14) days after being served with a copy thereof. No other briefs (such as supplemental objections, reply briefs, etc.) may be filed. Providing a courtesy copy of the objection to the undersigned is neither required nor encouraged. Timely objections will be considered by the District Judge before a final ruling.
Failure to file written objections to the proposed findings, conclusions, and recommendations contained in this Report and Recommendation within fourteen (14) days from the date of its service, or within the time frame authorized by Fed.R.Civ.P. 6(b), shall bar an aggrieved party from attacking either the factual findings or the legal conclusions accepted by the District Judge, except upon grounds of plain error.
Defendants admit in their brief (Doc. 17, p. 9, n.3) that Dixie RV Superstores is a trade name, doing business as all of the Dixie dealerships located in Hammond, Breaux Bridge, and Defuniak Springs, Florida. The Dixie RV Superstores is a registered trade name of Dixie Motors, LLC (see below).
Moreover, the Court takes judicial notice that the Louisiana Secretary of State shows on its business listing website: