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finding that plaintiffs stated "facially valid" claims against the two defendants that they sought to add to the suit
Summary of this case from Agyei v. Endurance Power Prods., Inc.Opinion
CIVIL ACTION NUMBER 02-1110, SECTION "L" (5)
November 14, 2002
ORDER REASONS
Before the Court is the Defendant Johns Manville's motion to review the Magistrate Judge's order. For the following reasons, the motion is DENIED and the Magistrate Judge's ruling is AFFIRMED.
I. BACKGROUND
This case arises out a claim by the Plaintiffs, Haskal and Carol Herzog, against Defendant Johns Manville for damages/injuries sustained as a result of toxic mold allegedly discovered in insulation in the Plaintiffs' home. Plaintiffs filed suit in January of 2002 in the 22nd Judicial District for the Parish of St. Tammany, State of Louisiana, seeking recovery under the Louisiana Products Liability Act, La. R.S. 9:28100.55. The Defendant, Johns Manville, the manufacturer of the allegedly contaminated insulation in the Plaintiffs' home, was served in April of 2002. Soon after being served, Defendant Johns Manville removed the case to federal court based on diversity jurisdiction.
Plaintiff previously filed a separate suit against State Farm Fire Casualty Company in the 22nd Judicial District for the Parish of St. Tammany, State of Louisiana on December 3, 2001, seeking coverage under their insurance policy for damage to the contents of their home. State Farm removed this case to federal court based on diversity jurisdiction. To date the two cases have not been consolidated.
On June 28, 2002, the Plaintiffs hired an expert to inspect the home and determine all potential sources of the toxic mold. Based on this expert report, the Plaintiffs sought leave to amend their complaint on September 10, 2002, to name additional defendants, specifically, Campbell Roofing Materials, Inc. and Coastal Insulation of Louisiana, Inc. for alleged negligence in installation of the roof and the visquene vapor barrier. According to the Plaintiffs, the expert determined that the roofing and visquene vapor barrier were also potential causes of the toxic mold. However, the Defendant, Johns Manville, contends that a copy of this expert's report was never provided to it and no such expert report, expert affidavit, or evidence to show that the inspection was done is contained in the record, despite Defendant's repeated discovery requests asking for identification of experts.
On October 2, 2002, Magistrate Judge Alma Chasez held a hearing on the motion to amend, and granted the Plaintiffs' motion. Defendant Johns Manville now files the present motion to review the Magistrate Judge's order, arguing that the addition of two non-diverse defendants will destroy diversity jurisdiction, resulting in remand of this action to state court, and, is not proper after application of the factors set forth by the Fifth Circuit in Hensgens v. Deere Co., 833 F.2d 1179 (5th Cir. 1987). Alternatively, the Defendant requests that this Court order the Plaintiffs to produce their expert report and/or that Plaintiffs' expert be deposed before Plaintiffs are allowed to add Coastal and Campbell as additional defendants and the matter remanded back to state court.
II. LAW AND ANALYSIS
Pursuant to 28 U.S.C. § 636(b)(1)(A), a district court may modify or set aside any portion of the Magistrate Judge's order relating to a nondispositive motion only if the order is clearly erroneous and contrary to law. 28 U.S.C. § 636(b)(1)(A); See also Fed.R.Civ.P. 72(a) (requiring a district court to apply the clearly erroneous standard to Magistrate Judge's order concerning a nondispositive pretrial matter). Thus, the Court applies a clearly erroneous standard in reviewing a magistrate judge's decision on motion for leave to file an amended complaint. A decision is clearly erroneous or contrary to law when the reviewing court is left with the definite and firm conviction that a mistake has been committed. Palacios Seafood, Inc. v. Piling, Inc., 888 F.2d 1509, 1513 (5th Cir. 1989).
Rule 15(a) of the Federal Rules of Civil Procedure provides that leave to amend "shall be freely given when justice so requires." The Fifth Circuit has strictly followed this rule, stating that "leave to amend complaint should be granted liberally . . . ." Robertson v. Piano City of Texas, 70 F.3d 21, 22 (5th Cir. 1995). However, when faced with an amended pleading naming a new nondiverse defendant in a removed case, the district court should scrutinize the amendment more closely than an ordinary amendment. Hensgens, 833 F.2d at 1181. The court is required to consider the following factors to balance the defendant's interests in maintaining the federal forum with the competing interests of not having parallel lawsuits: (1) the extent to which the purpose of the amendment is to defeat federal jurisdiction; (2) whether the plaintiff has been dilatory in asking for the amendment; (3) whether the plaintiff will be significantly injured if the amendment is not allowed; (4) and any other factors bearing on the equities. Id.; Bethay v. Ford Motor Co., No. 99-0367, 1999 WL 496488 (E.D. La. July 13, 1999) (applying Hensgen factors to review Magistrate Judge's ruling on amendment adding nondiverse defendant).
In the present matter, Magistrate Judge Chasez issued a Minute Entry declaring her ruling on the motion to amend the complaint. The Minute Entry indicated that the motion to amend the complaint was granted and provided the following: "consideration of the Hensgens factors militates in favor of allowing Plaintiffs to assert their facially valid causes of action against the two non-diverse parties." Minute Entry, October 4, 2002, Doc. No. 28. After reviewing the motion by the Defendant, the facts of this case, and the applicable law, this Court finds that Magistrate Chasez's ruling which granted the motion to amend was not clearly erroneous or contrary to law.
With regard to the first Hensgens factor, the case law indicates that as long as the plaintiff states a valid claim against the new defendants, the principal purpose of the amendment is not to destroy diversity jurisdiction. Bienaime v. Kitzman, No. 00-473, 2000 WL 381932, at *2 (E.D. La. April 12, 2000); Burton v. Mentor Corp., No. 96-2-78, 1996 WL 751063, at *1 (E.D. La. Oct. 29, 1996). Additionally, the same cases, when applying the second Hensgens factor, found that when no trial or pre-trial dates were scheduled and no significant activity beyond the pleading stage has occurred, the Plaintiff was not dilatory in seeking to amend the complaint. Id., See also Achord v. Monsanto Co., No. 92-3039, 1993 WL 218259 (E.D.La. June 16, 1993) (finding that motion to amend not dilatory when filed six months after complaint filed and little action occurred since case was removed to federal court). Finally, these cases support the proposition that the third Hensgens factor favors the Plaintiff because forcing the Plaintiff to file a separate suit on the same facts is inefficient and a waste of judicial resources. Id.; See also Brown v. Foti, No. 94-1659, 1996 WL 271639 (E.D. La. May 21, 1996) (finding that third Hensgens factor favors Plaintiff because forcing Plaintiff to try the same case twice in two separate courts is waste of judicial resources and risks inconsistent results).
In this matter, the Plaintiffs state facially valid negligence claims against the two defendants that they seek to add to the suit. Second, the motion to amend was filed only five months after the case was removed, no preliminary conference has been held, and the pre-trial and trial dates have not been fixed. It is irrelevant that the preliminary conference was continued two times, because even if a trial date had previously been set, it would still be several months away at this point and no significant activity has occurred in this case since it was removed. In addition, filing a separate suit would be inefficient and a waste of judicial resources, regardless of whether the Plaintiffs previously filed a separate suit for their insurance claim. Therefore, because the case law supports a finding that the Hensgens factors weigh in Plaintiffs' favor to allow amending the complaint, this Court cannot find that the Magistrate Judge's ruling was clearly erroneous or contrary to law.
II. CONCLUSION
For the foregoing reasons, the motion by Defendant Johns Manville to review the Magistrate Judge's order is DENIED. Magistrate Judge Chasez's order granting Plaintiffs' motion to amend the complaint is AFFIRMED. Before a motion to remand will be entertained, the Defendant Johns Manville SHALL be given an opportunity to review Plaintiffs' expert reports and/or to depose the Plaintiffs' expert.