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finding that Plaintiff's motion to amend was not per se dilatory where the case was filed on July 24, 2001, removed on August 21, 2001, and Plaintiff's motion was filed on September 28, 2001
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Civil Action No. 3:01-CV-1715-M.
November 20, 2001.
MEMORANDUM OPINION AND ORDER
Before the Court are Plaintiff's Motion for Leave to File an Amended Complaint and Plaintiff's Motion to Remand. The Court GRANTS Plaintiff's Motion for Leave to File an Amended Complaint and, as a result, GRANTS Plaintiff's Motion to Remand for lack of subject matter jurisdiction.
The Motion to Remand and the initial Motion to Amend were both filed on September 28, 2001. Due to the presence of text, unrelated to the present case, in the "Jurisdiction and Venue" portion of the Plaintiff's proposed Amended Complaint, the Plaintiff, on November 6, 2001, withdrew her proposed Amended Complaint filed on September 28, 2001. In its place, the Plaintiff filed an Amended Motion for Leave to file an Amended Complaint, attaching a virtually identical, but corrected, proposed Amended Complaint. The November 6 Motion is consequently what is now before the Court.
ISSUE
Plaintiff seeks leave to join Erick Baumberger ("Baumberger") and Jim Watkins ("Watkins"), Texas residents and the Plaintiff's supervisors at Defendant Brience, Inc. ("Brience") when the Plaintiff's alleged intentional infliction of emotional distress ("IIED") claims arose. Plaintiff argues: "Two necessary parties who reside in Texas have not yet been sued in the lawsuit. Because these individuals were primary actors, their presence in the lawsuit defeats diversity jurisdiction." Pl's Mot. for Leave at 2. Brience argues Baumberger and Watkins are being added solely to defeat diversity jurisdiction, and that, in any event, the Plaintiff has pled, on the face of her Complaint, subject matter jurisdiction.
ANALYSIS
A. Subject Matter Jurisdiction
In Brience's Response to Plaintiff's Motion to Remand, it argues that regardless of the Court's determination of the Plaintiff's attempted joinder of Baumberger and Watkins, which would defeat diversity jurisdiction, the basis for the removal, jurisdiction is proper under 28 US.C. § 1331:
Although the Plaintiff has not specifically included Title VII as a `cause of action' the plaintiff's factual allegations clearly indicate an intent to bring a sexual harassment or pregnancy discrimination claim.
Pl's Resp. at 2.
IIED is the only claim the Plaintiff seeks to assert against Baumberger and Watkins. Though the Plaintiff alleges facts that could support a pregnancy or sexual harassment claim, she did not expressly bring either. Even if she did plan to assert such a claim, the Court cannot assume the claim would be asserted on federal grounds. The Plaintiff, as "master" of her complaint, can bring a gender or pregnancy discrimination claim under either the Texas Commission on Human Rights Act or Title VII of the Civil Rights Act, including the Pregnancy Discrimination Act.
See Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987).
Tex. Labor Code Ann. § 21.051 (Vemon's 1996).
42 U.S.C. § 2000(e) et seq. (West 1994).
See, e.g., Wallace v. The Methodist Hosp. Sys., 85 F. Supp.2d 699, 705 (S.D. Tex. 2000); Ornelas v. Erapmus, Inc., No. 98-966, 1999 WL 222353, *1 (N.D. Tex. April 12, 1999) (Sanders, J.).
B. Diversity Jurisdiction
The case was properly removed based on diversity jurisdiction. However, the proposed Amended Complaint would, if granted, defeat diversity. "[M]ost post-removal developments — amendment of pleadings to below jurisdictional amount or change in citizenship of a party — will not divest the court of jurisdiction. . . ." This is because "federal courts base decisions about subject matter jurisdiction after removal on the plaintiff's complaint as it existed at the time the defendant filed the removal petition." However, in contrast to most post-removal developments, the addition of Baumberger and Watkins would destroy diversity and eliminate subject matter jurisdiction in this Court. Their joinder thus implicates important federalism principles and must be carefully scrutinized.
Hensgens v. Deere Co., 833 F.2d 1179, 1181 (5th Cir. 1987), cert. denied, 493 U.S. 851 (1989).
Kidd v. Southwest Airlines Co., 891 F.2d 540, 545 (5th Cir. 1990).
Hensgens, 833 F.2d at 1182.
In order for the Court to grant the Plaintiff leave in this instance, she must show that: (1) the joinder of Baumberger and Watkins is proper under the Federal Rules of Civil Procedure; and (2) the factors gleaned from 28 U.S.C. § 1447(e) do not weigh against removal.
See Wyant v. Nat'l R.R. Passenger Corp., 881 F. Supp. 919, 922 (S.D.N.Y. 1995). The Court is aware that this two step process is not uniformly applied. Though courts consistently consider factors balancing the competing interests of efficient adjudication and the need to protect diversity jurisdiction from manipulation, the degree to which the Federal Rules of Civil Procedure governing joinder affect the analysis varies. Some jurisdictions find 28 U.S.C. § 1447(e) and the Federal Rules of Civil Procedure governing joinder mutually exclusive on this point. See Buttons v. Nat'l Broadcasting Co., Inc., 858 F. Supp. 1025, 1027 (C.D. Cal. 1994) ("[a]lthough under the F.R.Civ.P. 20(a), joinder should be liberally permitted, this Motion is governed by 28 U.S.C. § 1447(e) and not by Rule 20"). Others read the procedure rules governing joinder in conjunction with § 1447(e). El Chico Rest., Inc. v. Aetna Cas. Surety Co., 980 F. Supp. 1474, 1484 (S.D. Ga. 1997). A third approach, which this Court considers most logical, first considers whether joinder is appropriate under the Federal Rules of Civil Procedure, then proceeds to weigh § 1447(e) equities. See Briarpatch Ltd. v. Pate, 81 F. Supp.2d 509, 515 (S.D.N.Y. 2000) ("courts first consider whether joinder would be appropriate under Rule 20 [of the Fed.R.Civ.P.] and then proceed to weigh competing interests [under § 1447(e)]"). It makes sense to first ensure that a proposed party falls within the ambit of the procedural rules governing joinder, before proceeding to the more laborious task of "scrutiniz[ing] that amendment more closely than an ordinary amendment." Hensgens, 833 F.2d at 1182. The approach accords with the Fifth Circuit recognition that "Congress adopted the narrow language of section 1447(e) to avoid expanding federal diversity jurisdiction." Templeton v. Nedlloyd Lines, 901 F.2d 1273, 1275 (5th Cir. 1990).
The Plaintiff claims Baumberger and Watkins are "necessary" parties to this action and, therefore, must be joined. Baumberger and Watkins are not "necessary" under Fed.R.Civ.P. 19. However, the relief the Plaintiff seeks from Baumberger and Watkins arises out of the same series of occurrences and involves questions of law and fact common to the IIED claims asserted against Brience. The Court thus finds Baumberger and Watkins "permissive" parties under Fed.R.Civ.P. 20.
Compulsory joinder of "necessary" parties is governed by Fed.R.Civ.P. 19. "Necessary" parties under Rule 19(a)(1) and (2) comprise those parties in whose absence "complete relief cannot be accorded among those already parties," or those persons who "claim an interest relating to the subject of the action and [who are] so situated that the disposition of the action may (i) as a practical matter impair or impede [their] ability to protect that interest or (11) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest."
Compulsory joinder of "necessary" parties under Fed.R.Civ.P. 19 is a more stringent test than permissive joinder of parties under Fed.R.Civ.P. 20. Instead of needing to show that complete relief cannot be afforded without the presence of certain parties, which is the standard under Rule 19, the parties must simply show, under Rule 20, that the relief sought against the parties arises out of the same series of occurrences and involves common questions of law and fact. Before § 1447(e) was enacted, the circuits were split on the issue of whether a non-diverse party must be "necessary" and "indispensable" within the meaning of Fed.R.Civ.P. 19(b) before the party could be joined and diversity destroyed. However, the Fifth Circuit, even before § 1447(e) was enacted, rejected the rigid distinction between the post-removal joinder of indispensable parties under Fed.R.Civ.P. 19 and post-removal joinder of permissive parties under Fed.R.Civ.P. 20. See Hensgens, 833 F.2d at 1181 ("[w]e conclude that the balancing of these competing interests is not served by a rigid distinction of whether the proposed added party is an indispensable or permissive party.").
In addition to the joinder rules found in the Federal Rules of Civil Procedure, as stated above, 28 U.S.C. § 1447(e) governs joinder in removed actions:
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) (1994).
Section 1447(e) does not explicitly provide standards to aid the Court in its joinder analysis, but Hensgens v. Deere Co., which was decided before § 1447(e) was adopted in 1988, has guided courts, both in and outside of this Circuit, through the equitable balancing of four post-removal factors:
(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; and
(4) any other factors bearing on the equities.
Hensgens v. Deere Co., 833 F.2d 1179, 1182 (5th Cir. 1987), cert. denied, 493 U.S. 851 (1989).
See Doleac v. Michalson, 264 F.3d 470, 473 (5th Cir. 2001) (discussing the district court's use of these § 1447(e) Hensgens factors).
Plaintiff was aware of the facts underlying her proposed IIED claims against Baumberger and Watkins when she filed suit in state court. In fact, virtually identical facts give rise to the Plaintiff's IIED claim against Brience and her IIED claims against Baumberger and Watkins. Plaintiff nevertheless chose to bring her action solely against Brience. She did not seek to add Baumberger or Watkins until after Brience had removed the case to federal court. The Court views this time frame and the lack of intervening discovery with "much suspicion." The Plaintiff offers no explanation for her failure to name Baumberger or Watkins initially. Bare assertions of "indispensability" do not justify the Plaintiff's apparent purpose to defeat jurisdiction under the first factor. However, referring to the second factor, the Court cannot say the Plaintiff has necessarily been dilatory. The Litigation is still in its infant stages. The case was filed on July 24, 2001 and removed on August 21, 2001. On September 28, 2001, when the Plaintiff initially sought to add Baumberger and Watkins, the case had only been active for a few months. The facts do not justify labeling the Plaintiff's amendment as per se dilatory.
See O'Connor v. Automobile Ins. Co. of Hartford, 846 F. Supp. 39, 41 (E.D. Tex. 1994); see also Mayes v. Rapoport, 198 F.3d 457, 462 (4th Cir. 1999) (when a "plaintiff seeks to add a nondiverse defendant immediately after removal but before any additional discovery has taken place, district courts should be wary that the amendment sought is for the specific purpose of avoiding federal jurisdiction.").
Compare Sanders v. General Motors Corp., No. 01-1579, 2001 WL 1297443, *3 (N.D. Tex. Oct. 10, 2001) (Lynn, J.) (motion for amendment nine months after filing suit and one day after the plaintiff was served with the Defendant's Notice of Removal, and after substantial discovery, was dilatory); Briarpatch Ltd., 148 F. Supp.2d at 330 (joinder denied where, for eighteen months, plaintiffs had been on notice of facts sufficient to support claims against non-diverse defendants, but did not assert them until after removal).
The main concern expressed in Hensgens was the possibility of parallel federal and state proceedings. That possibility is a factor in this case. Aptly stated by Heninger v. Wecare Distributors, Inc.: "there is the danger of parallel lawsuits in federal and state court, which may spawn inconsistent results and inefficient use of judicial resources." The Court must take the Plaintiff at her word at this stage in the case. If, as she is representing to the Court, she has an intention to pursue recovery from Baumberger and Watkins, the Court should not deny her the opportunity to bring all of her related claims in one suit. Although the Court is skeptical that Plaintiff may make out an IIED claim, against either Watkins or Baumberger, that issue is most properly determined by the state court.
706 F. Supp. 860, 862 (S.D. Fla. 1989).
The only support Plaintiff offers for her IIED claim against Watkins rests on alleged comments made by Watkins, from late February to April 2001, concerning the Plaintiff's ability to return to work during and after her pregnancy. To support her IIED claim against Baumberger, the Plaintiff alleges that, from August 2000 until his termination in late November 2000, he made several sexual comments to her, including:
• stating, "Wow, they look. . . . I don't know what to say," when the Plaintiff returned from a scheduled breast augmentation surgery;
• stating, "I know. I did that on purpose," when the Plaintiff commented that his office was cold;
• asking the Plaintiff if she were really a "blonde," even though she has brown hair;
• pointing to a woman and saying to the Plaintiff, "You need to dress like her, I go for that `prison guard' look;"
• telling the Plaintiff that his son had the "hots" for her;
• stating that "Every guy here is hot for you;"
• remarking, in a conversation with a Brience manager from the San Francisco office about a sales force promotional trip to Hawaii, "Is Julie included in the trip? Because all the men will be jumpier to win that trip. Too bad for the women."
Extreme and outrageous conduct, which is an essential element of any IIED claim, is that which is so extreme in degree, so outrageous in character, as to go beyond all bounds of decency, to be regarded as atrocious, and utterly intolerable in a civilized community. Wornick Co. v. Casas, 856 S.W.2d 732, 734 (Tex. 1993); see also Prunty v. Arkansas Freightways, Inc., 16 F.3d 649, 654 (5th Cir. 1994). It must be so "vile or reprehensible to be regarded as going beyond all possible bounds of decency or utterly intolerable in a civilized community." Gearhart v. Eye Care Ctrs. of Am., Inc., 888 F. Supp. 814, 823 (S.D. Tex. 1995).
The Court concludes that the Plaintiff will be prejudiced, and judicial economy disserved, if the amendment is not allowed. Having all of the parties as defendants in one action will promote the efficient use of judicial and party resources, especially given that the IIED claim against Brience will very likely result in depositions and testimony of Baumberger and Watkins. While "[j]urisdiction is not so malleable that [p]laintiffs can creatively forum shop through manipulation of the Rules," in this case, the Court concludes that application of the factors counsels in favor of allowing joinder. Leave to Amend is therefore GRANTED. Since the amendment destroys complete diversity, Plaintiff's Motion to Remand is GRANTED, and the case is remanded to the 192nd Judicial District Court, Dallas County, for further proceedings. The Court is without jurisdiction to determine the Defendant's Motion for Partial Dismissal and Plaintiff's late-filed Response.
Sanders, 2001 WL *3.