ERIN WILDER-DOOMES, Magistrate Judge.
Before the Court is a Motion for Leave to File Supplemental and Amended Complaint filed by Conrad P. Darr.
Also before the Court is Darr's Motion to Remand,
For the following reasons, the undersigned recommends that the Motion for Leave to File Supplemental and Amended Complaint be
On or about March 9, 2016, Darr filed a Petition for Damages ("Petition") in the 23
On April 12, 2016, Amerisure and Conner (collectively "Defendants") filed a Notice of Removal, seeking to remove the case to this Court on the basis of diversity jurisdiction, pursuant to 28 U.S.C. § 1332.
On May 9, 2016, Darr filed his first Motion for Leave to File Supplemental and Amended Complaint, seeking to name Henry D. Colvin and his insurer, State Farm Mutual Automobile Insurance Company ("State Farm") as additional defendants.
On June 9, 2016, Darr filed the instant Motion for Leave to File Supplemental and Amended Complaint, seeking to name Colvin and State Farm as additional defendants in this case.
On May 11, 2016, Defendants filed an Opposition
On June 10, 2016, Defendants filed a second Opposition in response to the Motion for Leave that is currently before the Court, which essentially adopts the arguments made in the Defendants' original Opposition.
On May 10, 2016, a day after Darr filed his first Motion for Leave to File Supplemental and Amended Complaint, Darr filed a Motion to Remand.
In opposition, Defendants assert that Darr filed a Motion to Remand to thwart this Court's legitimate removal jurisdiction and to deprive two non-Louisiana defendants from their statutory right to have this case decided in a federal forum.
Defendants maintain that Darr's Motion for Leave is a sham and should be denied, thereby making the Motion to Remand moot. However, Defendants concede that if Darr's Motion for Leave is granted then remand would be required.
Federal Rule of Civil Procedure 15(a) provides that leave to amend "shall be freely given when justice so requires." Fed. R. Civ. P. 15(a). The Fifth Circuit has strictly followed this rule, stating that "leave to amend should be granted liberally." Robertson v. Plano City of Texas, 70 F.3d 21, 22 (5th Cir. 1995). However, when an amendment after removal from state court would destroy subject matter jurisdiction, 28 U.S.C. § 1447(e) applies. Section 1447(e) provides, "If after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court." 28 U.S.C. § 1447(e). Thus, if diversity was the only basis for the court's subject matter jurisdiction and a district court permits joinder of a nondiverse defendant, it must remand the case to the state court. See Cobb v. Delta Exports, Inc., 186 F.3d 675, 677 (5th Cir. 1999) (citing 28 U.S.C. § 1447(e)).
"The district court, when faced with an amended pleading naming a new nondiverse defendant in a removed case, should scrutinize that amendment more closely than an ordinary amendment." Hensgens v. Deere & Co., 833 F.2d 1179, 1182 (5th Cir. 1987 whether to allow joinder of a non-diverse party under § 1447(e), "justice requires that the district court consider a number of factors to balance the defendant's interests in maintaining the federal forum with the competing interests of not having parallel lawsuits." Id. The Hensgens factors include: (1) the extent to which the purpose of the amendment is to defeat diversity; (2) whether the plaintiff has been diligent in requesting an amendment; (3) whether the plaintiff will be prejudiced if the amendment is denied; and (4) any other factors bearing on the equities. Id. Applying these factors, the court in Hensgens held the post-removal joinder of a non-diverse, non-indispensable party destroys diversity jurisdiction. Id.
Although the Fifth Circuit decided Hensgens before the enactment of § 1447(e), the court has subsequently approved the application of the Hensgens factors to a § 1447(e) case. See Cobb v. Delta Exports, Inc., 186 F.3d 675, 677 (5th Cir. 1999); Tillman v. CSX Transport., Inc., 929 F.2d 1023, 1029 (5th Cir. 1991); see also Smith v. Lucas Tire Co., Inc., 1995 WL 57295, at *2 (E.D. La. Feb. 10, 1995). In Cobb, as in Hensgens, the Fifth Circuit concluded that, "post-removal joinder of non-diverse defendants pursuant to Fed. R. Civ. P. 19 destroys diversity for jurisdictional purposes and requires remand, even when the newly joined defendants are not indispensable." 186 F.3d at 677. Thus, "it is technically immaterial" whether the non-diverse defendants sought to be added are indispensable or dispensable parties for the purposes of the analysis required under § 1447(e) Joseph v. Fluor Corp., 513 F.Supp.2d 664, 670 (E.D. La. 2007) (citing Cobb, 186 F.3d at 680-81).
Defendants removed this matter to federal court based upon diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)(1).
As discussed above, Defendants removed this case based on the Court's diversity jurisdiction, pursuant to 28 U.S.C. § 1332. Allowing Darr to file the proposed Amended Complaint naming Colvin and State Farm as defendants would destroy complete diversity between the parties because Darr is a citizen of Louisiana and has alleged that Colvin is also a citizen of Louisiana. Thus, the Court must apply the four-factor analysis set forth in Hensgens to determine whether Darr's post-removal Motion for Leave, seeking to amend his Petition to add a non-diverse defendant, should be granted.
Darr's Motion for Leave makes no mention of the fact that adding Colvin and State Farm as defendants would destroy the Court's diversity jurisdiction. The Motion for Leave also does not address the Hensgens factors that the Court must consider to determine whether to allow joinder and remand the case or deny joinder under § 1447(e). Although Defendants cite Hensgens and the four-factor analysis in their Memorandum in Opposition to the Motion for Leave, Defendants only addresses the first factor-whether the purpose of the amendment is to defeat federal jurisdiction.
When analyzing the first Hensgens factor, courts within the Fifth Circuit frequently look at whether the plaintiff knew or should have known the identity of the party to be joined and the facts underlying the claim against that party when the state court complaint was filed. See Tomlinson v. Allstate Indem. Co., 2006 WL 1331541, at *3 (E.D. La. May 12, 2006); Irigoyen v. State Farm Lloyds, 2004 WL 398553, at *3 (S.D. Tex. Jan. 5, 2004). "Courts have held that a plaintiff's failure to join a non-diverse defendant to an action prior to removal when such plaintiff knew of a non-diverse defendant's identity and activities suggests that the purpose of the amendment is to destroy diversity jurisdiction." Schindler v. Charles Schwab & Co., Inc., 2005 WL 1155862, at3 (E.D. La. May 12, 2005). However, courts have also recognized that when a plaintiff states a valid claim against a defendant, it is unlikely that the primary purpose of bringing those defendants into a litigation is to destroy diversity jurisdiction." Id. (emphasis in original) (citing cases).
Here, the timing of the attempted amendment (less than a month after the Notice of Removal was filed) suggests that, at the very least, part of Darr's purpose in amending his Petition is to defeat federal jurisdiction. It is clear that Darr knew of Henry Colvin's existence and role in the underlying accident when Darr filed his state court Petition because the Petition specifically mentions Colvin. In the Petition, Darr alleges the following:
The only reason Darr provides for amending his Petition to add Colvin and State Farm is that they "also may be responsible for the accident in question."
Although some courts have also considered whether the plaintiff states a valid claim against the proposed additional defendant when analyzing the first Hensgens factor,
To the extent that Darr may have alleged a valid negligence claim against Colvin, the Court finds that the claim was prescribed when Darr filed his first Motion for Leave. Louisiana has a one-year prescriptive period for negligence claims, which begins to run from the day the injury or damage is sustained. La. Civ. Code art. 3492. Here, the underlying accident occurred on March 17, 2015
Although the parties have not addressed the issue, the Federal Rules of Civil Procedure provide that an amendment to a pleading relates back to the date of the original pleading when:
Fed. R. Civ. P. 15(c)(1). The Fifth Circuit has held that, "the inquiry regarding whether an amended complaint relates back to the date of the original complaint turns on `what the prospective defendant reasonably should have understood about the plaintiff's intent in filing the original complaint.'" Al-Dahir v. F.B.I., 454 F. App'x 238, 242 (5th Cir. 2011) (quoting Krupski v. Costa Crociere S. p. A., 560 U.S. 538, 553-54, 130 S.Ct. 2485, 2496, 177 L.Ed.2d 48 (2010)).
Since Darr filed his first proposed Amended Complaint after removal, the Federal Rules of Civil Procedure, rather than the Louisiana Code of Civil Procedure, apply to determine whether the proposed Amended Complaint relates back to the filing of the original Petition. See Norton v. Livingston Parish Detention Center, 2014 WL 1057218, at*3 (M.D. La. Mar. 19, 2014). Plaintiffs have the burden to demonstrate that an amended complaint relates back under Rule 15(c). See Dodson v. Hillcrest Sec. Corp., 1995 WL 459770, at *10 (5th Cir. July 24, 1996). The Court finds that Darr has not met his burden of proving that the proposed Amended Complaint relates back to the filing of the original Petition under Rule 15(c). By adding Colvin and State Farm as defendants, Darr did not simply correct a mistakenly-identified defendant. Instead, Darr added two new defendants to this matter, one of whom (Colvin) was mentioned in the original Petition. See Norton, 2014 WL 1057218 at *3. When an amended complaint adds an additional defendant, not a misnamed defendant, "the amendment is essentially the filing of a new cause of action, and the relation back rule does not apply." Id. (quoting Smith v. Auto Club Family Ins. Co., 2008 WL 5110590, at *3 (E.D. La. Nov. 25, 2008)); See Braud v. Transp. Serv. Co., 445 F.3d 801, 808 (5th Cir. 2006). Because Darr attempted to add two entirely new defendants after the expiration of the prescriptive period, the proposed Amended Complaint does not relate back to the original state court Petition under Rule 15(c). As such, Darr has not alleged a valid negligence claim against Colvin.
Based on the foregoing, the Court finds that the first Hensgens factor-whether Darr's primary purpose in seeking to amend is to defeat diversity jurisdiction-weighs in favor of denying Darr's Motion for Leave.
The second Hensgens factor—whether the plaintiff was dilatory in seeking leave to amend—is is a closer issue, but also weighs in favor of denying the Motion for Leave. In determining whether the plaintiff has been dilatory in seeking amendment, "district courts often look to the amount of time that has passed between the filing of the original complaint and the amendment and the amount of time between the removal and the amendment." Schindler v. Charles Schwab & Co., 2005 WL 1155862, at *4 (E.D. La. May 12, 2005) (citation omitted). "Generally a plaintiff is not dilatory in seeking to amend a complaint when no trial or pre-trial dates [have been] scheduled and no significant activity beyond the pleading stage has occurred." Boyce v. CitiMortgage, Inc., 992 F.Supp.2d 709, 720 (W.D. Tex. 2014) (quotation and citation omitted). However, "the analysis is different when the proposed amendment is to add nondiverse defendants shortly after removal based on federal diversity jurisdiction." Gallegos v. Safeco Ins. Co. of Indiana, 2009 WL 4720570, at *4 (S.D. Tex. Dec. 7, 2009). In that situation, "[a] delay of two months after the filing of the original complaint or almost thirty days after the notice of removal has been found dilatory." Id.; See Irigoyen v. State Farm Lloyds, 2004 WL 398553, at4 (S.D. Tex. Jan. 5, 2004).
Other courts, however, have concluded that a plaintiff was not dilatory in seeking leave to amend within the same time frame. See Schindler v. Charles Schwab & Co., 2005 WL 1155862, at *4 (E.D. La. May 12, 2005) (holding that the plaintiff was not dilatory when she filed the motion to amend a month and a half after she filed her state court petition and less than thirty days after removal to federal court); Johnson v. Sepulveda Props., Inc., 1999 WL 728746, at *3 (E.D. La. Sept. 16, 1999) (amendment sought two months after state court petition filed held not dilatory); Holcomb v. Brience, Inc., 2001 WL 1480756, at *2 (N.D. Tex. Nov. 20, 2001) (amendment two months and one week after state court filing and one month and one week after removal held not dilatory See also McNeel v. Kemper Cas. Ins. Co., 2004 WL 1635757, at3 (N.D. Tex. Jul. 21, 2004) (amendment five months after filing of state court petition and six weeks after removal held not dilatory); Vincent v. East Haven Ltd. P'ship, 2002 WL 31654955, at3 (E.D. La. Nov. 20, 2002) (amendment five months after state court filing and six weeks after removal held not dilatory).
In the instant case, the Court has not yet issued a Scheduling Order, so no pretrial or trial dates have been scheduled and no significant activity beyond the pleading stage has occurred. However, Darr filed his first Motion for Leave to File Supplemental and Amended Complaint on May 9, 2016,
In determining the third Hensgens factor—whether the plaintiff would be prejudiced by denying leave to amend—courts consider whether the already named diverse defendant would be unable to satisfy a future judgment and whether the plaintiff could recover against the proposed nondiverse defendant. See Gallegos, 2009 WL 4730570 at *5 (citing Irigoyen v. State Farm Lloyds, 2004 WL 398553, at *5 (S.D. Tex. Jan. 5, 2004)). In addition, "considerations of cost, judicial efficiency and possible inconsistency of results militate in favor of not requiring plaintiff[s] to prosecute two separate claims in two forums when both arise from the same set of facts and circumstances." Joseph v. Fluor Corp., 513 F.Supp.2d 664, 670 (E.D. La. 2007) (quotation omitted). Since the Court finds that Darr does not have a viable claim against Colvin because the claim is prescribed and the amendment does not relate back to the filing of the Petition, Darr will not be prejudiced if he is not allowed to amend his Petition to name Colvin and State Farm as defendants. The Court, therefore, finds that the third Hensgens factor weighs in favor of denying Darr's Motion for Leave.
The final Hensgens factor requires the Court to consider "other equitable factors" in determining whether to allow plaintiff leave to amend. "Although equitable factors include whether granting leave to amend would deprive a defendant of a properly invoked federal forum and . . . would result in parallel state court proceedings, these factors are likely to be present whenever a plaintiff in a removed case seeks to add a nondiverse defendant." Gallegos, 2009 WL 4730570 at *5 (citing Smith v. Robin Am., Inc., 2009 WL 2485589, at *6 (S.D. Tex. Aug. 7, 2009); Tomlinson v. Allstate Indem. Co., 2006 WL 1331541, at *6 (E.D. La. May 12, 2006). In addition, these factors have already been analyzed in the Court's consideration of the first three Hensgens factors. Because the Court has not yet ruled upon Darr's Motion to Remand, there has not been a determination that removal was proper such that granting leave to amend would deprive the Defendants of a properly invoked federal forum. Since the parties have not pointed to any additional equitable factors beyond these considerations, the Court finds the fourth Hensgens factor is neutral.
After conducting the four-factor analysis set forth in Hensgens, this Court concludes that Darr should not be allowed to file an amended complaint naming a non-diverse defendant. The Court finds that the proposed amendment is primarily for the purpose of defeating federal jurisdiction, Darr was dilatory in naming Colvin and State Farm as defendants, Darr will not be prejudiced if the Court denies the amendment, and neither party has presented additional equitable considerations. The Court finds that the balance of the competing interests and equities in this particular case weigh against granting Darr's Motion for Leave to amend his Petition.
The sole basis for Darr's Motion to Remand is his assertion that the Court no longer has subject matter jurisdiction over this case because he filed a Motion for Leave to File a Supplemental and Amended Complaint naming a non-diverse defendant.
According to § 1447(c), "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). Section 1447 also specifically provides that, "If after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court." 28 U.S.C. § 1447(e). Here, the denial of Darr's Motion for Leave, which seeks to add a non-diverse defendant, eliminates the basis for Darr's Motion to Remand. See Hebert v. Wal-Mart La., LLC, 2010 WL 2813623, at *1 (M.D. La. June 14, 2010). As a result, the parties to this action—Darr, Conner, and Amerisure—are diverse and this Court continues to have subject matter jurisdiction over this matter based on diversity jurisdiction, pursuant to 28 U.S.C. § 1332(a). Darr's Motion to Remand should, therefore, be denied as moot.
Based on the foregoing, Darr's Motion for Leave to File Supplemental and Amended Complaint, which seeks to add a non-diverse defendant, should be denied. Under the four factor analysis set forth in Hensgens, the undersigned finds that Darr seeks to amend his state court Petition for the primary purpose of defeating diversity jurisdiction in this case, Darr was dilatory in seeking to amend, denying the Motion for Leave will not prejudice Darr; and while neither party has presented additional equitable considerations, Defendants could be deprived of a properly invoked federal forum.
Since the Motion to Remand is premised upon the Court granting Darr's Motion for Leave and allowing Darr to amend his Petition to name a non-diverse defendant in this case, the Motion to Remand should be denied as moot if the Court denies Darr's Motion for Leave.
It is the recommendation of the magistrate judge that Darr's Motion for Leave to File Supplemental and Amended Complaint