United States District Court, E.D. Louisiana
TRAVIS THOMAS ET AL.
EXXON MOBIL CORPORATION ET AL.
ORDER AND REASONS ON MOTION
C. WILKINSON, JR. UNITED STATES MAGISTRATE JUDGE.
a personal injury action alleging liability for damages
caused to plaintiffs Travis Thomas, his wife and minor
children by his long-term exposure to benzene in gasoline.
The lawsuit was filed in state court and removed to this
court based on diversity jurisdiction by all defendants
except Jafri's Faith, Inc. (“Jafri's”),
which has not appeared in the action. Notice of Removal,
Record Doc. No. 1. The removing defendants, Exxon Mobil
Corporation, Shell Oil Company, Ingram Barge Company,
Frontier Merger Sub LLC, Cash America, Inc. of
Louisiana and Gentilly, LLC (collectively
“defendants”), contend in their notice of removal
that plaintiffs fraudulently joined Jafri's, a Louisiana
citizen, to defeat diversity jurisdiction. Id. at p.
2 ¶ 2, p. 5 ¶ 11 et seq.
promptly moved to remand the action to state court. The
presiding district judge denied the motion. Order and
Reasons, Record Doc. No. 26. In assessing whether plaintiffs
had alleged a cause of action against the non-diverse
defendant to avoid a finding of fraudulent joinder, the
district judge “conduct[ed] an analysis similar to that
employed in the context of [Fed. R. Civ. P.] 12(b)(6), asking
whether there is a legal basis for recovery assuming the
facts in the complaint as true.” Id. at p. 2.
The court applied the Rule 12(b)(6) standard to
plaintiffs' petition, which “must contain
sufficient factual matter, accepted as true, to state a claim
to relief that is plausible on its face. A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
district court held that the petition's
sole factual allegation specific to Jafri's is that it
sold gasoline to [Travis Thomas]. The Petition contains no
specific factual allegations relative to Jafri's
knowledge of defects in the product at issue. Plaintiff's
boilerplate statement that all “defendants knew or
should have known of the health hazards inherent in the
products” at issue is a legal conclusion and lacks
sufficient specificity. Accordingly, the Court finds that
Jafri's is fraudulently joined, as the Petition does not
provide a legal basis for recovery against it. The Motion to
Remand is therefore denied.
Doc. No. 26 at p. 4. The order did not expressly
dismiss plaintiffs' claims against Jafri's.
Plaintiffs were not given an opportunity to amend to
cure any pleading deficiencies before the ruling.
return of service on Jafri's had been filed in the state
court record when this action was removed to federal court.
After plaintiffs' motion to remand was denied, the Clerk
of Court directed plaintiffs to file a return of service on
Jafri's. Record Doc. No. 27. Plaintiffs did so on March
14, 2017. Record Doc. No. 28. The return of service shows
that the petition was served on Jafri's before the
lawsuit was removed, but the return was not filed in the
state court record until five days after the removal.
Id. On March 21, 2017, the court ordered plaintiffs
to prosecute their claims against Jafri's or risk
dismissal for failure to prosecute. Record Doc. No. 29.
days later, plaintiffs filed a Motion for Leave to File First
Amended Complaint, Record Doc. No. 31, which is pending
before me. They seek to add allegations against Jafri's
in new paragraphs 37 through 40 of their proposed amended
complaint to “cure the defects of the original Petition
for Damages and permit remand to the state court.”
Id. at p. 2. The amended complaint also adds
allegations against Shell in its new paragraphs 37 through 39
and 41 through 44, although plaintiffs do not mention these
new allegations in their motion. Record Doc. No. 31-1.
Defendants filed timely opposition memoranda, arguing against
allowing the amendment regarding Jafri's because it would
destroy diversity of citizenship, the sole basis for this
court's subject matter jurisdiction. Like plaintiffs,
defendants do not mention the new allegations against Shell.
Record Doc. Nos. 32-35, 38. Plaintiffs received leave to file
a reply memorandum. Record Doc. Nos. 39, 40, 41. No
scheduling order has yet been entered.
considered the written submissions of the parties, the record
and the applicable law, IT IS ORDERED that the motion is
GRANTED for the following reasons.
Rule of Civil Procedure 15(a) provides that leave to amend
pleadings “shall be freely given when justice so
requires.” Because the policy of Rule 15 is to permit
liberal amendment of pleadings in the absence of substantial
prejudice to defendants that cannot be cured by other means,
Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 597
(5th Cir. 1981), Rule 15(a) evinces a bias in favor of
granting leave to amend. Unless there is a substantial reason
to deny leave to amend, the discretion of the district court
is not broad enough to permit denial. Stripling v. Jordan
Prod. Co., 234 F.3d 863, 872 (5th Cir. 2000) (citing
Foman v. Davis, 371 U.S. 178, 182 (1962);
Leffall v. Dallas Indep. Sch. Dist., 28 F.3d 521,
524 (5th Cir. 1994); Martin's Herend Imports, Inc. v.
Diamond & Gem Trading U.S. Am. Co., 195 F.3d 765,
770 (5th Cir. 1999); Dussouy, 660 F.2d at 597-98).
Thus, “[t]he court should freely give leave when
justice so requires, ” Fed.R.Civ.P. 15(a)(2), but such
leave “is by no means automatic.” Wimm v.
Jack Eckerd Corp., 3 F.3d 137, 139 (5th Cir. 1993)
(quotation omitted). Relevant factors to consider include
“undue delay, bad faith or dilatory motive on the part
of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the
opposing party, and futility of amendment.”
Id. Futility in this context means “that the
amended complaint would fail to state a claim upon which
relief could be granted. . . . [Thus, ] to determine
futility, we will apply the same standard of legal
sufficiency as applies under Rule 12(b)(6).”
Stripling, 234 F.3d at 873 (quotations and citations
omitted); accord Fenghui Fan v. Brewer, 377
F.App'x 366, 367 (5th Cir. 2010).
addition, a court generally should not dismiss an
action under Rule 12(b)(6) because it fails to state a claim
upon which relief may be granted, which, as the court stated
in the prior ruling in the instant case, requires essentially
the same analysis as the fraudulent joinder standard, without
giving plaintiffs “at least one chance to amend”
the complaint. Hernandez v. Ikon Office Solutions,
Inc., 306 F.App'x 180, 182 (5th Cir. 2009);
accord Great Plains Trust Co. v. Morgan Stanley Dean
Witter & Co., 313 F.3d 305, 329 (5th Cir. 2002).
Plaintiffs have not previously been provided an opportunity
to amend to cure pleading deficiencies.
contend that the court's prior ruling that plaintiffs
failed to state a claim against Jafri's upon which relief
may be granted and that Jafri's was improperly joined as
a defendant “is tantamount to a dismissal.”
Record Doc. No. 33 at p. 2 (Shell and Exxon Mobil's
memorandum in opposition). Defendants argue that the failure
to dismiss Jafri's explicitly is “‘a mere
technicality'” because “the denial of
plaintiffs' motion to remand ‘effectively dismissed
the [. . . non-diverse] defendants by finding that the
plaintiffs failed to state a claim against them.'”
Id. at p. 3 (quoting Holmes v. Entergy
Corp., No. 98-3119, 1999 WL 288774, at *2 (E.D. La. May