Opinion
NO. 1:00CV64-S-A
June 7, 2000
OPINION
In this case, which was originally filed in the Circuit Court of Monroe County, Mississippi, plaintiff, a Mississippi citizen, alleges that defendants Beneficial National Bank USA, a Delaware corporation with its principal place of business in Illinois, and numerous fictitious defendants committed certain fraudulent acts in soliciting the sale of a home satellite system. Specifically, plaintiff charges that a salesperson made certain material misrepresentations and omissions regarding the financing of the system. In the original complaint, plaintiff sought compensatory and punitive damages in an amount not to exceed $74,999.00 and "specifically repudiate[d] any and all federal causes of action." After Beneficial received plaintiff's responses to its requests for admissions in which plaintiff refused to admit that he would not later claim that his damages exceed $74,9990.00, Beneficial removed, invoking this court's jurisdiction under both diversity and federal question. At the time of removal, plaintiff had moved to amend the complaint to add a Mississippi citizen, Ken Cook, as a defendant (substantively, the claims did not change in the slightest) and to delete both the specific damage request and the repudiation. The state court took no action on the motion, and it remains pending in this court.
Presently before the court is plaintiff's motion to remand. In support of remand, plaintiff first maintains that he has not sought relief under the Truth in Lending Act (TILA), as Beneficial argues, but instead has brought this action strictly under state law. He then points to his pending motion to amend to include Cook as a defendant in this action which would destroy diversity of citizenship. Beneficial counters that only TILA, not Mississippi state law, imposes an affirmative duty to disclose the information about which plaintiff complains, and therefore, plaintiff's claim arises under federal law. Furthermore, diversity jurisdiction remains intact because the in-state defendant has never been added as a party and because the amount in controversy exceeds the jurisdictional requirement.
Having carefully considered the matter, the court finds that plaintiff's motion to remand is not well taken. The court reaches this conclusion for several reasons. First, although Beneficial may be correct in its defense that only TILA, not state law, provides a cause of action for material omissions of fact regarding financing arrangements, plaintiff has stated a viable claim for material misrepresentation under Mississippi law. If plaintiff's claim for omission fails because a defendant, such as Beneficial, has no affirmative duty to disclose under state law, then he, as the master of his complaint, must live with the tactical decision to disavow any reliance on federal law. In this court's view, reference to TILA will not be necessary to determine Beneficial's duties, if any, under state law, and therefore, because plaintiff has alleged other state law causes of action, no federal question jurisdiction exists in this case.
Nevertheless, the court believes that diversity jurisdiction does exist. Without dispute, plaintiff and Beneficial have diverse citizenship. The citizenship of Cook is ignored as he has never been added as a defendant in this case. Furthermore, under 28 U.S.C. § 1447(e), the court may deny his joinder if "joinder would destroy subject matter jurisdiction. . . ." After review of plaintiff's proposed amended complaint, the court finds that Cook is not an indispensable party under Fed.R.Civ.P. 19(a) and (b), and therefore, the motion to amend the complaint is denied. The question of diversity jurisdiction thus turns on the amount in controversy. Though the court would be inclined to remand if plaintiff had agreed not to seek damages in excess of $75,000.00, he has affirmatively stated that he cannot make that representation. Indeed, he does not dispute any of the arguments advanced by Beneficial regarding the amount in controversy, including findings by Judge Pepper that substantial punitive damages awards have been returned by juries in similar cases. Plaintiff has therefore failed in his burden to show to a legal certainty that his recovery will not exceed the amount requested in the state court complaint.
Therefore, because diversity jurisdiction exists in this case, it was properly removed by defendant Beneficial, and the motion to remand is denied. Furthermore, because the addition of the in-state defendant Cook would destroy subject matter jurisdiction, and he is not an indispensable party, the motion to amend is denied as well.
An appropriate order shall issue