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finding prejudice resulting from the possibility of contradictory conclusions by different courts
Summary of this case from In re Toyota Motor Corp.. Unintended Acceleration Mktg.Opinion
IP01-1456-C-T/K
October 31, 2003
REPORT AND RECOMMENDATION ON PENDING MOTIONS
I. Background.
This action arises out of personal injuries suffered by Plaintiff Olivia M. Bailey, a minor, when she became trapped in the rear power window of a Toyota 4 Runner on or about June 27, 2001. [Compl. ¶ 6]. On September 28, 2001, Olivia Bailey, by her mother, Michelle Bailey, filed her original action in this Court against Toyota Motor Corporation and Toyota Motor Sales, USA, Inc. (collectively `Toyota") claiming that the 4Runner was "unreasonably dangerous and defective at the time it was manufactured, assembled and distributed into the stream of commerce by Defendants" and that this condition was the proximate cause of her injuries. [Compl. ¶ 7]. Olivia Bailey's parents, Michelle and Rocky Bailey, also brought a claim for loss of services.
During the litigation of this matter, the parties agreed that any disassembly and inspection of the 4Runner would be accomplished jointly. [Docket No. 59, pp. 5-6]. To that end, on December 11, 2002, the parties met to inspect the interior of the 4Runner's tailgate that housed the allegedly defective power window. Based on the inspection, it appeared that "at some time subsequent to the manufacture of the subject vehicle, the rear window switch in the tailgate was installed upside down and without all of its components." [Docket No. 59, p. 6]. Plaintiffs purchased the vehicle used and, apparently, it was involved in a rear-end collision while in possession of its prior owner. [Docket No. 59, p. 7]. In his deposition, the previous owner testified that the repairs were performed by one of the Church Brothers located in Indianapolis. In addition, the "insurance repair estimate for damages from that collision involved several repairs and replacement of components on the rear of the vehicle including repair of the rear tailgate." [Docket No. 59, p. 7].
Thereafter, Plaintiffs filed their motion for leave to amend their complaint on June 26, 2003, seeking to join Church Brothers Collision Repair, LLC and Collision Technology Greenwood, Inc. (collectively the "body shop Defendants") as parties who may be liable for Plaintiffs' injuries as a result of certain repairs made on the 4Runner. Upon review of Plaintiffs' motion, the Court questioned whether, if granted, it could retain jurisdiction over this matter as the allegations in the proposed amended complaint "strongly suggest that these new Defendants are Indiana citizens" which may destroy diversity jurisdiction. [Docket No. 58]. Thereafter, the Court allowed the parties to file supplemental briefs addressing the proper citizenship of the proposed additional parties; what impact, if any, the citizenship has on the Court's subject matter jurisdiction; and whether this action should proceed in state or federal court. In response to the Court's order, Plaintiffs filed a motion to dismiss pursuant to Fed.R.Civ.P. 19(b) "so that a suit may be filed in an Indiana state court that can include all persons needed for a just adjudication of this case." [Docket No. 59, p. 1]. Toyota opposes Plaintiffs' motion to dismiss.
After reviewing the parties' submissions with respect to Plaintiffs' motion to dismiss under Rule 19(b), the Court questioned whether Rules 20 and 41(a)(2) might be more applicable to the circumstances before the Court. Accordingly, the Court set a status conference to allow the parties to address the applicability of these rules to this case. During this conference, Plaintiffs argued that, in addition to Rule 19, Rule 41(a)(2) provided sufficient grounds for dismissal, and orally moved to dismiss pursuant to Rule 41(a)(2). Toyota disagrees and argues that Rule 41(a)(2) is inapplicable due to significant prejudice that Toyota will suffer if the action is dismissed. In addition, Toyota requested an opportunity to brief this issue to further convey to the Court how Toyota will be prejudiced by any such dismissal. The Court, therefore, set a briefing schedule and the parties have now fully briefed the issue.
II. Discussion.
A. Rule 41(a)(2).
In relevant part, Rule 41(a)(2) provides that "an action shall not be dismissed at the plaintiff's instance save upon order of the court and upon such terms and conditions as the court deems proper." Furthermore, "[u]nless otherwise specified in the order, a dismissal under this paragraph is without prejudice." Id. It is in the sound discretion of the Court to permit a plaintiff to voluntarily dismiss an action without prejudice under Rule 41(a)(2). Shrader v. Palos Anesthesia Associates. S.C., 2003 WL 22225616, *1 (N.D. Ill. Sept. 24, 2003), citing Tolle v. Carroll Touch. Inc., 23 F.3d 174, 177 (7th Cir. 1994); FDIC v. Knostman. 966 F.2d 1133, 1142 (7th Cir. 1992). However, dismissal is inappropriate if Toyota will suffer "plain legal prejudice" as a result of the proposed dismissal.FDIC. 966 F.2d at 1142. The burden of persuasion is squarely on the Plaintiffs. In re Bridgestone/Firestone, Inc., ATX. ATX II. and Wilderness Tires Products Liability Litigation 199 F.R.D. 304, 305 (S.D. Ind. 2001), citing Tolle. 23 F.3d at 177. To determine whether Toyota would suffer plain legal prejudice if Plaintiffs' motion to dismiss is granted, the Seventh Circuit has enumerated four factors to consider:
the defendant's effort and expense of preparation for trial, excessive delay and lack of diligence on the part of the plaintiff in prosecuting the action, insufficient explanation for the need to take a dismissal, and the fact that a motion for summary judgment has been filed by the defendant.Pace v. Southern Express Co., 409 F.2d 331, 334 (7th Cir. 1969). See also FDIC. 966 F.2d at 1142. Plaintiffs argue that application of the Pace test calls for dismissal of this action without prejudice. The Court agrees.
The first Pace factor to be considered is Toyota's efforts and expense associated with the preparation for trial. Toyota claims this factor weighs in their favor because "Toyota has already expended a great deal of effort and resources defending this litigation." [Docket No. 70, p. 3]. Toyota argues that since it has "responded to multiple sets of written discovery from plaintiffs and served discovery of its own" dismissal would be improper. Id. In addition, "Toyota has also noticed and taken depositions of 18 fact witnesses." Id. Plaintiffs do not argue that significant discovery has not taken place, admitting that this issue is a "close question." [Docket No. 69, p. 4]. Instead, Plaintiffs submit that "it is possible that this discovery was not `wasted' in that the additional defendants in the state court action may not believe it is necessary to repeat these depositions." [Docket No. 69, p. 4]. The Court does not find Plaintiffs' argument convincing. Deciding this factor based on what future Defendants may or may not do with respect to discovery in a future state action is ill advised The body shop Defendants may determine that many or all of the fact witness depositions need not be repeated as Plaintiffs suggest. Alternatively, they may decide to repeat some of the depositions as would be their right. Accordingly, the Court finds that this factor weighs in favor of Toyota.
Although the body shop Defendants may deem it appropriate to repeat some of the depositions already taken in this federal action, the Court believes that any such depositions would be relatively short as much of the factual detail and background information would have already been covered.
In weighing this factor, Plaintiffs' argument that discovery will not necessarily be duplicative is unpersuasive. However, this same argument mitigates the impact of this factor on the Court's overall examination:
[B]ecause there is a related action pending in state court, much of the work product generated in relation to this federal court action will likely be useful in that case. This fact serves to mitigate the impact of this factor on the analysis.
Similarly, although the case has progressed to the point where a good deal of discovery has been conducted, much of this work would appear to be applicable in the state court action.Ornelas v. Safeway Ins. Co., 1989 WL 157794, *3 (N.D. Ill. 1989). See also Tyco Laboratories. 627 F.2d at 56 (while substantial discovery had taken place, discovery was not "so extensive . . . to be tantamount to the `plain legal prejudice' which will preclude dismissal. . . . This is particularly true here in view of the fact that [the plaintiff] agreed . . . not to object in any subsequent action to the utilization of evidence discovered in this case."); Davis v. USX Corp., 819 F.2d 1270, 1276 (4th Cir. 1987) (defendant is not prejudiced "when federal discovery will be useable in the state forum."); Anderberg v. Masonite Corp., 176 F.R.D. 682, 687 (N.D. Ga. 1997) ("if the evidence accumulated during discovery may be used in a subsequent lawsuit, then the fact that costs were incurred in conducting discovery will not in itself constitute plain prejudice."). Therefore, while this factor weighs in favor of Toyota, it does so ever so slightly.
Deciding this factor in Toyota's favor does not stop the inquiry. "The enumeration of the factors to be considered in Pace is not equivalent to a mandate that each and every factor be resolved in favor of the moving party before dismissal is appropriate. It is rather simply a guide for the trial judge, in whom the discretion ultimately rests."Kovalic v. DEC Intern., Inc., 855 F.2d 471, 474 (7th Cir. 1988), citing Tyco Laboratories, Inc. v. Koppers. Inc., 627 F.2d 54, 56 (7th Cir. 1980). See also Stidam v. Ryder Truck Rental, Inc., 2001 WL 699873, *1 (S.D. Ind. 2001). Keeping this in mind, the Court moves to the secondPace factor: excessive delay and lack of diligence on the part of the plaintiff in prosecuting this action.
Toyota maintains that this factor also weighs in its favor, arguing that the case has been pending for two years and the Plaintiffs "have yet to disclose any expert opinion to substantiate their claim." [Docket No. 70, p. 4]. Toyota further claims that "[i]f the Court allows plaintiffs to dismiss their case, there will likely be many more months of delay before plaintiffs are required to disclose their experts' opinion."Id. Toyota claims prejudice because the Court "will likely defer ruling on any summary judgment motion" until after Plaintiffs have disclosed their experts' opinions. Id. Additionally, Toyota argues that Plaintiffs failed to exercise "due diligence in their efforts to add the Church Brothers' automotive repair shop defendant to this case." Id. According to Toyota, on January 6, 2003 the parties learned that the vehicle in question had been involved in a rear-end collision sometime in late 1994. Toyota argues that because Plaintiffs did not file their motion to add Church Brothers until June 26, 2003, "well after both sides had received documentation that Church Brothers had, in fact, done the repair work," Plaintiffs lack due diligence in the prosecution to their case. [Docket No. 70, p. 5].
On the other hand, Plaintiffs argue that there has not been an excessive delay or a lack of diligence on their part stating that the motion to add the body shop Defendants "was filed within seven (7) months of the vehicle inspection that suggested there were likely alterations to the subject vehicle" and before the deadline set by this Court for joining additional parties. [Docket No. 69, p. 3]. In addition, Plaintiffs allege that "[d]uring that seven-month period, plaintiffs' efforts were hampered by the death of their primary liability expert." Id. Under these facts, the Court does not believe Plaintiffs have engaged in excessive delay or shown a lack of diligence in the prosecution of their case. To be sure, by the time Plaintiffs sought to add the body shop Defendants, the case had already been pending for twenty-one months. However, Plaintiffs did not learn of the body shop Defendants' potential involvement in the events leading to Olivia Bailey's injuries until December 2002 and did not confirm their specific identity until sometime after January 17, 2003. The Court, therefore, does not conclude that Plaintiffs' "delay" until June 26, 2003 to request these parties be joined was excessive.
As best the Court can determine, the relevant time line is as follows: On December 11, 2002, the parties jointly inspected the vehicle and determined that possible post-manufacture alterations had been made to the vehicle. [Docket No. 59, p. 6]. On January 6, 2003, the parties deposed Robert Gee, the vehicle's previous owner. Mr. Gee testified that the car had been involved in a rear-end collision and had been repaired sometime in late 1994 by Church Brothers. [Docket No. 70, p. 5]. After Gee's deposition and at least by January 17, 2003, to confirm this fact, the parties requested documents from Church Brothers regarding the repair. [Docket No. 52, p. 2]. Plaintiffs filed for leave to amend their complaint and add the body shop Defendants on June 26, 2003. Although neither party states the precise date, presumably sometime between January 17, 2003 and June 26, 2003, the parties received confirmation that Church Brothers did perform the repair work. [Docket No. 70, p. 5].
Plaintiffs' expert died in February 2003.
Furthermore, the Court does not believe that Plaintiffs have shown a lack of diligence in prosecuting their case. Toyota's main argument with respect to this element is that Plaintiffs have not yet served their expert disclosures and have not conducted "further non-destructive inspection of the subject 4Runner" with a new expert "simply by providing notice to Toyota and to Church Brothers." [Docket No. 70, p. 5]. However, the deadline for Plaintiffs' expert disclosures was October 28, 2003, and only recently passed. [Docket No. 56, ¶ 2]. In addition, at the parties joint inspection of the vehicle in December 2002, Toyota's counsel, after learning that the vehicle appeared to be altered, objected to the continued disassembly and inspection of the tailgate, in part, because the body shop Defendants were not present. [Docket No. 64, p. 4]. Plaintiffs' motions to dismiss under both Rule 19 and Rule 41(a)(2) resulted from Plaintiffs' attempt to add the body shop Defendants to this action. Toyota's argument suggests that Plaintiffs lacked diligence in prosecuting their case because they did not proceed with an inspection of the vehicle before the body shop Defendants were actual parties. Toyota's argument is not convincing and the Court, therefore, finds this factor favors the Plaintiffs.
The Court notes that Plaintiffs' expert disclosure deadline has twice been enlarged, along with various other deadlines, past the original date outlined in the Case Management Plan. The first enlargement stemmed from the revelation that the vehicle in question had been altered post-manufacture as a result of a rear-end collision. The Court granted the second extension as a result of the unfortunate death of Plaintiffs' expert witness in February 2003. On both occasions, the Court found good cause existed to allow an enlargement of Plaintiffs' disclosure deadline. A finding that Plaintiffs have somehow lacked diligence in prosecuting their case by not disclosing their expert reports before the current deadline seems contrary to the Court's earlier findings that good cause existed. Toyota's argument is, therefore, not compelling.
At the September 29, 2003 telephonic conference, Toyota's counsel stated that, in addition to the body shop Defendants' participation in the inspection, Toyota objected to any further disassembly of the tailgate whatsoever. Whether to allow further destructive testing and inspection is a different issue and not germane to resolution of Plaintiffs' motion to dismiss.
The third factor to consider is whether Plaintiffs have sufficiently explained the need for dismissal. This factor plainly favors Plaintiffs. Plaintiffs seek dismissal so that they can "commence litigation in an Indiana state court against all the parties plaintiffs believe are responsible" for Plaintiffs' injuries. [Docket No. 69, p. 2]. Toyota, however, maintains otherwise arguing that, as explained in their opposition to Plaintiffs' Rule 19(b) motion to dismiss, "plaintiffs can attempt to get full relief in federal court against Toyota without having to add Church Brothers." [Docket No. 70, p. 6]. Toyota's argument misses the mark Unlike Rule 19, Rule 41(a)(2) does not require a finding that a non-party is "necessary" or "indispensable." Nor does the rule require a determination of whether "complete relief can be afforded to those already parties. Compare Fed.R.Civ.P. 19 with Fed.R.Civ.P. 41(a)(2). Instead, the Court is required to determine whether Toyota will suffer "plain legal prejudice" as a result of the dismissal. Part of that inquiry requires the Court to assess whether Plaintiffs' reasons for dismissal are sufficient. Given that the body shop Defendants would destroy jurisdiction if joined in this action, the Court finds that dismissal of this action so that a state action could be commenced against all the parties potentially responsible for Olivia Baily's injuries is a legitimate and sufficient reason. This is especially true because of spoliation issues and other logistical problems that would arise from sharing key evidence — the vehicle — between two separate actions. Toyota suggests that "[d]iscovery can proceed in a federal court action and in a separate state court action, provided that all interested parties to both lawsuits are notified." [Docket No. 70, p. 6]. While this may be true, the Court does not believe that this best serves judicial economy. Nor is this argument consistent with Toyota's claim that they would be prejudiced by delay. Under this plan, Toyota would still have to wait for the state action to "catch up" for discovery purposes. The body shop Defendants would require time to hire an expert and otherwise prepare for and conduct the inspection of the vehicle and, therefore, delay would still occur regardless of whether this action remains in federal court.
The final factor also favors Plaintiffs as Toyota has not filed a motion for summary judgment. Toyota attempts to downplay this obvious fact by arguing that, but for Plaintiffs' failure to disclose their experts' reports, Toyota would have already filed a summary judgment motion. As noted above, the Court does not find that Plaintiffs have engaged in excessive delay or otherwise lacked diligence in prosecuting this matter or disclosing their experts' opinions. In any event, the fact remains that Toyota has not filed for summary judgement and, therefore, this factor favors Plaintiffs.
Under the Pace factors, Toyota would not suffer plain legal prejudice by the dismissal of this action. While Toyota is concerned about the delay associated with a separate action filed in state court, this does not equate to legal prejudice. "[T]he prospect of a second lawsuit on the same facts in state court does not constitute plain legal prejudice." In re Bridgestone/Firestone. Inc., 199 F.R.D. 304, 306, citing Quad/Graphics. Inc. v. Fass, 724 F.2d 1230, 1233 (7th Cir. 1983).
In addition, outside the Pace factors, Toyota argues that they will be prejudiced by the dismissal because, in an Indiana court, Plaintiffs' experts will not be subject to the requirements of Fed.R.Evid. 702 and Daubert v. Merrell Dow Pharmaceuticals. Inc., 509 U.S. 579 (1993). This does not evidence plain legal prejudice. "[T]he prospect of a second lawsuit or the creation of a tactical advantage, is insufficient to justify denying the plaintiffs motion to dismiss."Quad/Graphics, Inc., 724 F.2d at 1233. Accordingly, the Magistrate Judge recommends that Plaintiffs' motion to dismiss pursuant to 41(a)(2) be GRANTED.
Given the Magistrate Judge's recommendation with respect to Plaintiffs' Rule 41(a)(2) motion, analysis of Plaintiffs' motion to dismiss under Rule 19 is not required However, as explained below, even under the more stringent requirements of Rule 19, joinder and, therefore, dismissal is proper.
"The purpose of Rule 19 under the Federal Rules of Civil Procedure is `to permit joinder of all materially interested parties to a single lawsuit so as to protect interested parties and avoid waste of judicial resources.'" Davis Companies v. Emerald Casino, Inc., 268 F.3d 477, 481 (7th Cir. 2001), quoting Moore v. Ashland Oil, Inc., 901 F.2d 1445, 1447 (7th Cir. 1990). To determine whether joinder is required under Rule 19, the Court conducts a two-prong test:
First, the court must determine whether a party is one that should be joined if feasible — called, in the old days, a "necessary" party. To answer that question, the court must consider (1) whether complete relief can be accorded among the parties to the lawsuit without joinder, (2) whether the absent person's ability to protect its interest in the subject-matter of the suit will be impaired, and (3) whether any existing parties might be subjected to a substantial risk of multiple or inconsistent obligations unless the absent person joins the suit. Only if the court concludes, based on those factors, that the party should be included in the action but it cannot be, must it go on to decide whether the litigation can proceed at all in the party's absence. If there is no way to structure a judgment in the absence of the party that will protect both the party's own rights and the rights of the existing litigants, the unavailable party is regarded as "indispensable" and the action is subject to dismissal. . . .Thomas v. U.S., 189 F.3d 662, 666-67 (7th Cir. 1999) (citations omitted). Stated differently, "the district court must answer three questions: Should the absentee be joined? If the absentee should be joined, can the absentee be joined? If the absentee cannot be joined, should the lawsuit proceed without her nonetheless?" Western Maryland Ry. Co. v. Harbor Ins. Co., 910 F.2d 960, 961 (D.C. Cir. 1990) (footnotes omitted).
The Court must first decide whether the proposed body shop Defendants should be joined, i.e. are they necessary parties? Pursuant to Rule 19(a), a person shall be joined, if feasible, if (1) "complete relief cannot be accorded among those already parties" or (2) the absent person "claims an interest relating to the subject matter of the action and is so situated to the disposition of the action" that his absence may "impede or impair the person's ability to protect that interest or "leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations.
Plaintiffs claim that "[c]omplete relief could not be accorded in this case to the extent the Toyota defendants assert the body shop defendants are nonparties at fault and a jury actually allocates fault to the body shop." [Docket No. 59, p. 10]. Toyota claims that the body shop Defendants do not meet the requirements of Rule 19(a)(1) because complete relief can accomplished as between the Plaintiffs and Toyota without the presence of the body shop Defendants. To be sure, "the term `complete relief refers only to `relief between the persons already parties, and not as between a party and the absent person whose joinder is sought.'"Davis. 268 F.3d at 484, quoting Perrian v. O'Grady. 958 F.2d 192, 196 (7th Cir. 1992). However, this determination also requires consideration of the "effectiveness that a judgement for either party will have in terminating the controversy."Showtime Game Brokers, Inc. v. Blockbuster Video, Inc., 151 F.R.D. 641, 646 (S.D. Ind. 1993), citing Evergreen Park Nursing and Convalescent Home, Inc. v. American Equitable Assurance Co., 417 F.2d 1113, 1115 (7th Cir. 1969). Evergreen a case decided shortly after the 1966 amendment which substantially overhauled Rule 19, involved the interpretation of insurance policies issued by six different companies which overlapped in coverage. The plaintiff filed a diversity action against four of the insurance companies in federal court. Because the district court found the remaining two companies to be indispensable parties, and because they were non-diverse, the court subsequently dismissed the action and the plaintiff appealed. In affirming the district court, the Seventh Circuit stated:
The first step is to determine whether the absent companies are persons described in subdivision (a)(1)-(2) of the rule. Each of these insurance contracts creates a separate obligation, except to the extent that the amount recoverable is dependent upon the provision of coverage by the other five. It would be conceivable that plaintiff might sue separtely [sic] on each. Although in each action the court would have to decide whether the other five companies provide coverage, its decision on that issue would not bind the companies not before the court, any more than its decision on the amount of loss would be binding on the others. In a closely analytical view it could be said with some logic that the absent companies do not fit either (1) or (2)(i). The proper view, we think, is broader. The Notes of the Advisory Committee, referring to Rule 19 as amended July 1, 1966, state that (1) furthers the interests not only `of the parties, but also that of the public in avoiding repeated lawsuits on the same essential subject matter.'Evergreen 417 F.2d at 1115 (finding that the absent insurance companies must be joined if feasible under both 19(a)(1) and 19(a)(2)).
The same could be said for the case at hand Like Evergreen it is conceivable that Plaintiffs sue Toyota in one action and the body shop Defendants in a separate action. Neither is binding on the other, yet both courts would have to decide what role the non-party played to determine liability. In other words, under the status quo, this Court would have to decide the merits of Toyota's substantial modification defense and to do so, would have to consider the actions of the body shop Defendants. If Toyota succeeds on this defense, it is likely that the controversy will not terminate and multiple litigations will occur involving the same issues.
Toyota relies on Atlantic Aero. Inc. v. Cessna Aircraft Company. 93 F.R.D. 333 (M.D.N.C. 1981), to bolster its argument that complete relief can be accorded between the current parties. That case involved, among other things, allegations of negligent design and manufacture of an aircraft which had been involved in a crash. In finding joinder of the pilot unnecessary, the court held:
Cessna and Atlantic Aero, Inc., are the parties to this action for damage to Atlantic Aero, Inc.'s, plane based on a theory that Cessna is at fault. If Cessna is not at fault (perhaps because the crash was caused by pilot error), then Cessna will not be required to pay a judgment. If Cessna is at fault, then Cessna will have to pay damages. Either way, complete relief will have been afforded between Atlantic Aero, Inc., and Cessna, the present parties.Id. at 334. The Court does not believe this approach furthers the public interest in avoiding multiple lawsuits regarding essentially the same issues, nor does it comport with the reasoning of Evergreen.See Evergreen. 417 F.2d at 1115; Showtime. 151 F.R.D. at 646.
Instead, the Court believes the reasoning in Whyham v. Piper Aircraft Corporation 96 F.R.D. 557 (M.D. Pa. 1982), to be most applicable to the case at hand. Like Atlantic Aero.Whyham also involved a plane crash and allegations of negligent design and construction. In addition, similar to the facts of the instant matter, Whyham also involved allegations of after-sale service. In that case, the defendant sought to dismiss the action because of the plaintiff's failure to join the company responsible for maintenance of the plane. Specifically, the defendant argued that the non-parties were "negligent in the maintenance and inspection of the Piper airplane and therefore are responsible for the accident." Id. at 560. Given the goals of complete adjudication of the dispute and judicial economy, the court found that the non-parties satisfied the criteria of Fed.R.Civ.P. 19(a)(1). Id. See also Kerny. Jeppeson Sanderson. Inc., 867 F. Supp. 525, 537 (S.D. Tex. 1994).
However, Rule 19(a) is an either/or proposition. Persons can be "necessary" parties under Rule 19(a) if they meet either the criteria of Rule 19(a)(1) or 19(a)(2). See Fed.R.Civ.P. 19(a). Therefore, even if the body shop Defendants do not qualify under Rule 19(a)(1), they may still be found "necessary" if they meet the description of 19(a)(2). The Whyham court explained that:
First, there can be no dispute that Air Navigation and Aero are necessary parties under Rule 19(a)(2)(i). Their presence is crucial to determining the important issue of liability. They are more than key witnesses; rather, they are active participants. If the jury accepts Defendant's argument that the Scottish companies were negligent in the maintenance and inspection of the Piper aircraft, the companies will be at least partly liable for damages.
Admittedly, a determination of liability of the Scottish concerns in this case will not be binding on any subsequent action for indemnity or contribution against Air Navigation or Aero. It is not necessary, however, that a party be legally bound by principles of res judicata or collateral estoppel to demonstrate prejudice under Rule 19(a)(2)(i). To require a decision to be legally binding before it is considered to impede the absent party's ability to protect himself is too analytical and is expressly rejected. Thus, we find that the disposition of Plaintiff's current action without Air Navigation's and Aero's presence may, as a practical matter, impair or impede their ability to protect their interest.Whyham. 96 F.R.D. at 561 (internal citations omitted). Similarly, the body shop Defendants are more than key witnesses. In concluding that Toyota is not at fault, a jury could find that the body shop Defendants are liable because of the repair work performed on the 4Runner. While this conclusion would not be binding on a subsequent state court jury, the Court believes that, it may, as a practical matter, impair or impede the body shop Defendants' ability to protect their interest. Accordingly, the Court finds that the body shop Defendants should be joined under 19(a)(1) or (a)(2) if feasible.
Toyota also argues that the body shop Defendants are merely potential joint tortfeasors, and therefore mandatory joinder is inappropriate. Toyota is correct that, generally, Rule 19 does not require joinder of joint tortfeasors. Temple v. Syntfaes Corporation, Ltd., 498 U.S. 5, 7 (1990). However, "a joint tortfeasor will be considered a necessary party when the absent party `emerges as an active participant' in the allegations made in the complaint that are `critical to the disposition of the important issues in the litigation.'" Laker Airways, Inc. v. British Airways, PLC. 182 F.3d 843, 848 (11th Cir. 19991 quoting Haas v. Jefferson National Bank. 442 F.2d 394, 398 (5th Cir. 1971). Such is the case here and the body shop Defendants are necessary parties.
Having found that the body shop Defendants should be joined, the Court must determine whether they can be joined. Although Toyota argues weakly to the contrary, the addition of the body shop Defendants would destroy diversity and, therefore, they cannot be joined. Relying onFreeport-McMoran. Inc. v. K N Energy, Inc., 498 U.S. 426 (1991), Toyota argues that "diversity jurisdiction, once established, is not defeated by the addition of a non-diverse party." [Docket No. 62, p. 2]. However, in Estate of Alvarez v. Donaldson Co., Inc., 213 F.3d 993, 994-95 (7th Cir. 2000), the 7th Circuit interpretedFreeport-McMoran to be limited only to Rule 25 substitutions. The more general rule is probably best set forth in Owen Equipment Erection Co. v. Kroger. 437 U.S. 365, 374-75 (1978), "which held that a plaintiff may not bypass the jurisdiction requirements by suing only the diverse defendants and waiting for them to implead the nondiverse defendants." Estate of Alvarez. 213 F.3d at 995. In the present case, all conduct that is subject to the lawsuit occurred prior to the suit being filed, and there is no issue of substitution, just the subsequent discovery that two additional Defendants may have played a role in the Plaintiffs' injuries. Under these circumstances,Freeport-McMoran is inapplicable and the body shop Defendants cannot be joined.
Because complete diversity will not exist if the body shop Defendants are joined, the Court must turn to Rule 19(b) and determine whether the case should proceed or be dismissed According to the rule:
The factors to be considered by the court include: first, to what extent a judgment rendered in the person's absence might be prejudicial to the person or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person's absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder.
Fed R. Civ. P. 19(b). Applied to the present case, each of these factors favors dismissal. First, the possibility of contradictory conclusions by federal and state juries would be prejudicial to Plaintiffs. For example, the federal jury could determine that Toyota is not liable based on Toyota's "substantial modification" defense, implying that the body shop Defendants may be responsible for Plaintiffs' injuries. In contrast, the state jury may reject that argument and find Toyota liable. Second, this prejudice cannot be lessened through protective measures. Third, a judgment without the body shop Defendants would be inadequate for these same reasons. Fourth, Plaintiff Olivia Bailey will have an adequate remedy if the action is dismissed because she can file suit in state court. The Court, therefore, finds the body shop Defendants to be indispensable. See Estate of Alvarez. 213 F.3d at 995; Moore. 901 F.2d 1445, 1448.
Toyota maintains that Plaintiffs Rocky and Michelle Bailey would not have an adequate remedy if this action is dismissed due to the expiration of the statute of limitations. Plaintiffs seemingly concede this point, but maintain that Olivia Bailey's claims, as a minor, would remain viable. On this the parties agree. See Ind. Code § 34-11-6-1.
The Court also believes joinder, and therefore dismissal, would be appropriate under Fed.R.Civ.P. 20. See Wyant v. National Railroad Passenger Corp., 881 F. Supp. 919 (S.D.N.Y. 1995).Wyant involved a factually similar case where a passenger had been injured by tripping in the waiting area of a train station.Id. at 921. After discovery commenced, the plaintiff learned that another company performed maintenance work on the floor where she tripped and may have been responsible for her injuries. Id. The court found that fundamental fairness permitted joinder, despite the fact that joinder destroyed diversity jurisdiction, requiring remand.Id. at 923. See also Gursky v. Northwestern Mutual Life Insurance Company. 139 F.R.D. 279, 283 (E.D.N.Y. 1991). The same result is required here.
The Magistrate Judge finds that, under Rule 19, the body shop Defendants are both necessary and indispensable, therefore making joinder and dismissal appropriate. Given the above discussion on Rule 41(a)(2), the Magistrate Judge recommends that, in the alternative, Plaintiffs' motion to amend complaint be GRANTED and that Plaintiffs' motion to dismiss under Rule 19(b) also be GRANTED.
Finally, the Court notes that, in addition to the dictates of Rules 19 and 41, principles of common sense and fundamental fairness support this result. Plaintiff Olivia Bailey wishes to proceed with one lawsuit against all parties who might be liable for her injuries. This Court's limited diversity jurisdiction prevents all parties from participating in this forum, but state court presents no such limitation. This action should proceed in state court where all issues can be resolved in one case, by one jury.
III. Conclusion
For the reasons stated above, the Magistrate Judge recommends that Plaintiffs' motion to dismiss pursuant to Fed.R.Civ.P. 41(a)(2) be GRANTED. In the alternative, the Magistrate Judge recommends that Plaintiffs' motion to amend complaint be GRANTED and Plaintiffs' motion to dismiss pursuant to Fed.R.Civ.P. 19(b) also be GRANTED.
Any objections to the Magistrate Judge's Report and Recommendation shall be filed with the Clerk in accordance with 28 U.S.C. § 636 (b)(1), and failure to file timely objections within the ten days after service shall constitute a waiver of subsequent review absent a showing of good cause for such failure.
SO ORDERED.