United States District Court, W.D. Louisiana, Lafayette Division
REPORT AND RECOMMENDATION
PATRICK J. HANNA JUDGE.
the Court is the Motion for Leave of Court to File First
Supplemental and Amended Complaint and for Remand filed on
behalf of Plaintiffs in which they seek leave to amend their
Petition to add a non-diverse defendant. (Rec. Doc. 23).
Defendants, Great West Casualty Company, Indian River
Transport, Co., Clinton K. Hall, and Geico, oppose the Motion
(Rec. Doc. 25 and 26), and Plaintiffs have replied (Rec. Doc.
27). The Motion was referred to the undersigned magistrate
judge for review, report, and recommendation in accordance
with the provisions of 28 U.S.C. §636 and the standing
orders of this Court. Considering the evidence, the law, and
the arguments of the parties, and for the reasons fully
explained below, the Court recommends that the Motion be
granted and that the matter be remanded to state court.
filed this lawsuit following an automobile accident on
Interstate 10 East in Acadia Parish, Louisiana on March 20,
2017. According to the Petition, Bertha Wilson was driving in
the right lane of I-10 East behind a vehicle driven by Robert
Vinet in the left lane of I-10 East. Plaintiffs contend in
their Motion to Amend that an ice chest became dislodged from
Vinet's vehicle, and that he veered right in an attempt
to maneuver his vehicle to the shoulder of the roadway. (Rec.
Doc. 23-2, at 2). Thereafter, an eighteen-wheeler operated
by Clinton Hall, owned by Indian River, and insured by Great
West, struck the rear of the Wilson vehicle.
and Alton Thomas, on behalf of Wilson's minor children,
initially filed this suit in Acadia Parish against Hall,
Indian River, Great West, and Geico as Wilson's uninsured
motorist carrier. Defendants removed. (Rec. Doc. 1) Hall is a
Texas domiciliary; Indian River is a Florida corporation with
its principal place of business in Florida; and Great West is
an insurance company incorporated and with its principal
place of business in Nebraska. (Rec. Doc. 1, ¶VII-VIII).
Geico is a Maryland corporation with its principal place of
business in Washington, D.C. (Rec. Doc. 1, ¶IX).
parties submitted their joint Rule 26(f) report in December
2018. Contained in Defendants' submissions is the
statement, “in the alternative, it is Defendants'
position that the accident was caused by the fault of Robert
Vinet, who was operating a vehicle in front of
plaintiff's vehicle in a careless manner and in doing so,
created a sudden emergency situation that caused the subject
accident.” (Rec. Doc. 20, at 2). Thereafter, on March
13, 2018, Plaintiffs filed the Motion to Amend their Petition
at issue seeking to name Vinet and his insurer, GoAuto
Insurance Company, as defendants. Plaintiff alleges that
Vinet is a Louisiana domiciliary and that GoAuto is a
domestic insurance company in Louisiana. (Rec. Doc. 23-1).
Plaintiffs contend that they should be permitted to name
Vinet and GoAuto as potentially liable parties, which would
thus destroy diversity and mandate remand. Hall, Indian
River, and Great West oppose the Motion to Amend on the
grounds that Vinet has not yet been served. (Rec. Doc. 25).
Geico opposes the Motion on the grounds that the proposed
amendment is untimely, improperly intended to destroy
jurisdiction, and futile since the claims sought to be added
are time-barred. (Rec. Doc. 26).
a diversity case under 28 U.S.C. §1332. As set forth in
Defendants' Notice of Removal, Plaintiffs (Louisiana
citizens) are diverse from Defendants, and the amount in
controversy exceeds $75, 000. (See Rec. Doc. 1). If
Plaintiffs are permitted to amend their Petition to name
Vinet (a Louisiana domiciliary) and his insurer, GoAuto (a
Louisiana insurer), as defendants, the diversity requirement
of §1332 is no longer satisfied, and this Court loses
amendments to pleadings are governed by Federal Rule of Civil
Procedure 15(a), which states that leave to amend
“shall be freely given when justice so requires.”
However, in removed cases, a district court has discretion to
either grant or deny the amendment of a complaint when
subject-matter jurisdiction is based on diversity, and the
plaintiff seeks to amend the complaint to add a nondiverse
party. 28 U.S.C. § 1447(e); Schindler v. Charles
Schwab & Co., Inc., 2005 WL 1155862, *2 (E.D. La.
2005) (citing Ascension Enterprises, Inc. v. Allied
Signal, Inc., 969 F.Supp. 359, 360 (M.D. La. 1997)). See
also Doleac ex rel. Doleac v. Michalson, 264 F.3d
470, 476 (5th Cir. 2001). Thus, when faced with a
motion to amend a complaint to add a nondiverse defendant in
a removed case, federal courts are required to scrutinize the
proposed amendment more closely than they would other
proposed amendments. Hensgens v. Deere & Co.,
833 F.2d 1179, 1182 (5thCir. 1987). Deciding
whether to permit an amendment that would destroy the
court's subject-matter jurisdiction requires a balancing
of the diverse defendant's interest in retaining the
federal forum with the plaintiff's competing interests.
Id. In such a situation, “the court may deny
joinder, or permit joinder and remand the action to the State
court.” 28 U.S.C. § 1447(e). The decision of
whether to deny joinder or permit joinder and remand is
within the discretion of the district court.
Hengrens, 833 at 1182.
Hensgens v. Deere & Co., the Fifth Circuit
identified four factors that should be considered in deciding
whether to permit an diversity-destroying amendment: (1)
whether the purpose of the amendment is to defeat federal
jurisdiction, (2) whether the plaintiff was dilatory in
requesting the amendment, (3) whether the plaintiff will be
significantly injured if the amendment is not allowed, and
(4) whether any other factors bear on the equities.
Id. The Court will address each factor in turn.
Whether the purpose of the amendment is to defeat federal
analyzing the first Hensgens factor, courts consider
whether the plaintiff knew the identity of the non-diverse
defendant when the state court complaint was filed and
whether the plaintiff has stated a valid claim against the
nondiverse defendant. See, e.g., Fontenot v. Johnson
& Johnson, No. 10-CV-162, 2012 WL 2064722, at *4
(W.D. La. Apr. 13, 2012), report and recommendations
adopted, 2012 WL 2064848 (W.D. La. June 5, 2012);
Richardson v. Wal-Mart Stores Texas, LLC, 192
F.Supp.3d 719, 726 (S.D. Tex. 2016). A plaintiff's
possession of a valid claim suggests that the purpose of a
proposed amendment is not to defeat diversity. See
Tillman v. CSX Transp., Inc., 929 F.2d 1023, 1029
(5th Cir. 1991); Allen v. Walmart Stores,
L.L.C., 907 F.3d 170, 186 (5th Cir. 2018). However, the
plaintiff's knowledge of the nondiverse defendant's
identity upon initially filing suit in state court, yet
failure to name him as a defendant at that time, suggests
that the motion to amend was intended to frustrate diversity
jurisdiction. See Martinez v. Holzknecht, 701
F.Supp.2d 886, 889 (S.D.TX. March 15, 2010) (collecting
Court does not find that Plaintiffs' principal purpose in
seeking to amend the suit was to defeat diversity
jurisdiction. As Plaintiffs submit, they did not file their
Motion to Amend until after Defendants submitted their Rule
26(f) report inserts affirmatively indicating for the first
time that they intended to rely upon (at least alternatively)
the fault of Vinet. Notably, Defendants did not raise
Vinet's fault as an affirmative defense in their Answers.
(See Rec. Doc. 6 and 10). Thus, although Plaintiffs knew
about Vinet at the time of filing suit, they did not
anticipate his purported liability to be an issue until
Defendants raised it as a defense for the first time in their
Rule 26(f) report inserts. Further, the Court is ...