Opinion
Cause No. IP02-0444-C-K/T
January 8, 2003
Mark W McNeely, McNeely Law Office, Shelbyville, IN.
Thomas L Davis, Locke Reynolds LLP, Indianapolis, IN.
ENTRY ON PLAINTIFFS' MOTION TO REMAND
I. Background
Plaintiffs Kimberly and Floyd Smith allege that on September 22, 2000 K. Smith was stopped by two of Defendant Wal-Mart's security guards who questioned, interrogated, and photographed her.
After inspecting her merchandise and accusing her of shoplifting, the security guards contacted the Marion County Sheriff's Department. Criminal charges were filed against K. Smith for criminal conversion. [Sec. Am. Comp. ¶¶ 7-13, 16; Def.'s Ex. C]. Plaintiffs further allege that Wal-Mart caused K. Smith to incur medical expenses, loss of income, intentionally and recklessly inflicted emotional distress, and that Wal-Mart has a pattern and history of negligent, careless, intentional and reckless conduct similar to that involved in this case. As a result, Plaintiffs seek both compensatory and punitive damages. [Sec. Am. Compl. ¶¶ 32-36].
On January 28, 2002, Plaintiffs filed a complaint in the Marion Superior Court. Wal-Mart subsequently removed the case to federal court based on diversity jurisdiction. Plaintiffs then filed a motion for leave to amend their complaint to add as defendants Indiana residents Patty Waidlich and Ronald Fickle, the security guards involved in the alleged acts forming the basis of Plaintiffs' claim.
Wal-Mart objected to this proposed amendment on the grounds that Plaintiff had known about the involvement of Waidlich and Fickle but failed to name them in this litigation until after the statute of limitations had expired. [Docket # 26]. By order dated September 23, 2002, the Court granted Plaintiffs leave to file their amended complaint naming Waidlich and Fickle as Defendants in this action, but declined to address any statute of limitations issue at that time. [Docket # 27].
On October 4, 2002, in light of the newly-added Defendants, Plaintiffs moved to remand the case back to state court. Pursuant to 28 U.S.C. § 1447(e), "[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." Holmes v. Boehringer Ingelheim Pharmaceuticals, Inc., _ F. Supp.2d _, 2002 WL 31445018, *1 (N.D.Ill. Oct. 31, 2002), citing 28 U.S.C. § 1447(e). Defendants oppose this motion.
II. Discussion
"Normally, when a plaintiff seeks to join a nondiverse party, the court may either deny joinder or permit joinder and remand the entire action to state court." Hinshaw v. ATT Corp., 1997 WL 33384369, *1 (S.D.Ind. 1997), citing Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1486 (7th Cir. 1996); 28 U.S.C. § 1447(e). Despite Plaintiffs' contentions, courts in this district have held that the presumption set forth in section 1447 can be overcome by conducting a "balanc[ing] of the equities." See In re Bridgestone/Firestone, Inc., 129 F. Supp. d 1202, 1204 (S.D.Ind. 2001), citing Hensgens v. Deere Company, 833 F.2d 1179, 1182 (5th Cir. 1987) (acknowledging that the Seventh Circuit "has not enumerated factors to be considered in balancing the equities."). See also Hinshaw, 1997 WL 33384369, at *1 (noting that "the court may lack discretion in permitting diversity-destroying joinder after removal if joinder of the party would be fraudulent."). The balancing factors include:
(1) the extent to which the joinder of the nondiverse party is sought merely to defeat federal jurisdiction;
(2) whether plaintiff has been dilatory in asking for amendment;
(3) the balance between the risk that the plaintiff will experience significant injury by pursuing multiple lawsuits if the amendment is not allowed and the risk that the defendant will be prejudiced if the amendment is allowed; and (4) any other equitable considerations, including the defendant's interest in maintaining a federal forum.
See In re Bridgestone/Firestone, 129 F. Supp.2d at 1204. See also Hinshaw, 1997 WL 33384369, at *2 (adopting a similar test, which includes that remand will "advance judicial economy and efficiency").
In balancing the equities, the Court finds that remand of this action to the state court is inappropriate. The Court questions the Plaintiffs' motives in seeking remand of this action at such a late date in the litigation. It is reasonable to conclude that Plaintiffs were aware of the existence of Waidlich and Fickle for a considerable amount of time. For instance, on May 2, 2002, in responding to Plaintiffs' first set of interrogatories, Wal-Mart named Waidlich and Fickle as the only individuals who had personal knowledge of Plaintiffs' claims. [Def.'s Ex. A, Resp. to Inter. No. 2]. In addition, in their preliminary witness list filed on August 22, 2002, Plaintiffs named Waidlich and Fickle as individuals they may call as witnesses at a trial. [Docket #23]. Further, in their original complaint filed in state court, Plaintiffs allege their damages resulted from the acts, omissions, or conduct of "Wal-Mart, through its employees and representatives." [Sec. Am. Compl. ¶¶ 29-37]. Last but certainly not least, in the information filed by the Marion County Prosecutor's Office in K. Smith's criminal case shortly after the September 22, 2000 incident, Fickle signed as the affiant, and Waidlich signed the information as a state's witness. [Def.'s Ex. C]. The information was filed almost sixteen months before the original complaint was filed in this case.
Plaintiffs have not provided a credible reason for the delay in naming Waidlich and Fickle as defendants. This delay is troubling, and supports the conclusion that Plaintiffs only sought to add these individuals to defeat federal jurisdiction. See In re Bridgestone/Firestone, 129 F. Supp.2d at 1205 ("When a plaintiff was aware at the time of the filing of her original complaint of the identity of the defendant she now seeks to add, there arises some suspicion of plaintiff's motives to amend.").
The Court's ruling does not prejudice Plaintiffs. They may obtain full recovery through its present lawsuit against Wal-Mart, including for any alleged acts of Waidlich or Fickle. The interests of judicial economy also support the Court's ruling. The case has been on the Court's docket since March 21, 2002, and is set for trial on April 30, 2003. Presumably, if the case is remanded to state court, the litigation will be further delayed.
Denying Plaintiffs' motion to remand requires this Court to simultaneously reconsider the September 23, 2002 order granting Plaintiffs leave to file an amended complaint naming Waidlich and Fickle as Defendants. The Court now does so and finds that the better approach is to deny leave to add these Defendants. As noted above, Wal-Mart objected to Plaintiffs' proposed amendment. With the benefit of hindsight, this amendment appears to be merely a belated attempt to destroy federal jurisdiction. The balancing of the equities weighs against permitting such a result. Therefore, the Court reconsiders its September 23, 2002 order and denies Plaintiffs' September 3, 2002 motion for leave to file an amended complaint. This does not, however, end the matter as to amendments. The Court finds that, in light of the rulings herein, Plaintiffs should file another amended complaint within 20 days that deletes Waidlich and Fickle as Defendants but that makes no attempt to plead any new allegations.
III. Conclusion
For the reasons set forth above, Plaintiffs' motion to remand is DENIED. The Court also reconsiders its September 23, 2002 order and DENIES Plaintiffs' September 3, 2002 motion for leave to amend. Within 20 days of this entry, Plaintiffs are ordered to file an amended complaint that deletes Waidlich and Fickle as Defendants and makes no attempt to add any new allegations.