Opinion
Case No. 4:02-CV-319.
February 5, 2003
Angela Marie Hahn of Cozen O'Connor, Dallas, TX, Attorneys for Plaintiffs.
D. Craig Brinker, Barry Andrew Moscowitz of Henslee, Fowler, Hepworth Schwartz, PLLC, Dallas, TX, Kevin Lamar Sewell of Walker Sewell, LLP, Dallas, TX, Timothy Ray Haney, Sherman, TX, Attorneys for Defendants, George Ulanet Co., MSC Industrial Direct, and AM Quartz Co.
ORDER
Before the Court is Plaintiff's Motion for Leave to File Amended Complaint and Memorandum in Support Thereof (Docket #4). Upon consideration of the parties' submissions and the applicable law, the Court concludes that Plaintiff's Motion for Leave to File Amended Complaint should be GRANTED. Furthermore, the Court concludes that joinder of a nondiverse defendant defeats diversity jurisdiction and this matter should be REMANDED to the 235th Judicial District Court of Cooke County, Texas.
On September 3, 2002, Plaintiff filed suit in the 235th Judicial District Court of Cooke County, Texas naming George Ulanet Company and MSC Industrial Direct Company as Defendants (collectively "Defendants"). Defendants then removed the action to this Court on the grounds that complete diversity of citizenship exists between the parties and the amount in controversy exceeds $75,000.00. See 28 U.S.C. § 1332 1441(a). Plaintiff then filed a Motion for Leave to File Amended Complaint. In its Motion for Leave, Plaintiff seeks to add AM Quartz Company ("AM Quartz"), a Texas corporation, as a Defendant. Since Plaintiff is a Texas corporation, the joinder of AM Quartz would destroy diversity under 28 U.S.C. § 1332. In their opposition to Plaintiff's Motion for Leave to File Amended Complaint, Defendants contend that Plaintiff has attempted to join AM Quartz with the sole purpose of destroying the basis of removal. As such, Defendants argue that the Court should deny Plaintiff's Motion for Leave to File Amended Complaint.
28 U.S.C. § 1447(e) provides that "[i]f 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." The Fifth Circuit has advised district courts to heavily scrutinize an amended pleading which names a new nondiverse defendant in a removed case more closely than an ordinary amended pleading. Hensgens v. Deere Co., 833 F.2d 1179, 1182 (5th Cir. 1987). This is so because a district court should never grant a request to join a party "against whom recovery is not really possible and whose joinder would destroy subject matter jurisdiction." Cobb v. Delta Exports, Inc., 186 F.3d 675, 678 (5th Cir. 1999). In making this determination, the district court is to balance the original defendants' interests in maintaining the federal forum against the plaintiff's interest in avoiding multiple or parallel litigation of the same claims. Hensgens, 833 F.2d at 1182. Specifically, the Court must consider the following factors: (1) the extent to which the purpose of the amended petition is to defeat federal subject matter jurisdiction; (2) whether Plaintiff has been dilatory in asking for the amended petition; (3) whether Plaintiff will be significantly injured if the amended petition is not allowed; and (4) any other factors which bear on the equities. Id.
In the instant case, the Court is persuaded that Plaintiff is not seeking to join AM Quartz to defeat this Court's jurisdiction. Here, Plaintiff knew of AM Quartz when it filed its Original Petition. However, once removed, Plaintiff discovered that there is no formal lease agreement between Plaintiff and AM Quartz and, therefore, there is no waiver of subrogation clause within a lease that would preclude Plaintiff from bringing such a suit against AM Quartz. Based on this information, Plaintiff can now bring a claim against AM Quartz. Also, it does not appear that the Plaintiff was dilatory in seeking the amendment. The subject motion was filed shortly after discovering that there was no formal lease agreement. Additionally, the Court finds that the Plaintiff will be significantly injured if it is not allowed to amend its Complaint to add AM Quartz. Were this Court to determine that Plaintiff should not be allowed to amend its Complaint, filing a parallel action in state court would be Plaintiff's only recourse against AM Quartz, assuming the statute of limitations would not preclude the claim. Placing the Plaintiff in such a situation and, in essence, requiring it to litigate the same action twice would be a waste of judicial resources. Accordingly, on balance, the Court finds it appropriate to allow Plaintiff to filed an amended complaint under the Hensgens analysis.
Plaintiff did not file a Motion to Remand along with its Motion for Leave to File Amended Complaint. Nevertheless, once the Court permits joinder of a nondiverse defendant, the Court is required to remand the case for lack of diversity jurisdiction. See 28 U.S.C. § 1447(e); Cobb, 186 F.3d at 677. Therefore, the Court concludes that this matter should be remanded to the 235th Judicial District Court of Cooke County, Texas. Accordingly,
IT IS ORDERED that Plaintiff's Motion for Leave to File Amended Complaint is GRANTED. IT IS FURTHER ORDERED that this matter is hereby REMANDED to the 235th Judicial District Court of Cooke County, Texas.
So ORDERED and SIGNED this 5TH day of February, 2003.