Cyrus v. Wallace Hardware Co., Inc. et al
Filing
45
MEMORANDUM OPINION & ORDER: (1) 16 Order of 10/8/2014 is SET ASIDE AND HELD FOR NAUGHT. (2) 13 Motion to Intervene is DENIED. (3) Matter is REMANDED to the Clerk County Circuit Court. Signed by Judge Joseph M. Hood on 5/22/2015.(SCD)cc: COR, Clark CC(via US Mail)
UNITED STATES DISTRICT COURT
EASTERN DIVISION OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
JASON CYRUS,
Plaintiff,
v.
LUMBERMAN’S UNDERWRITING
ALLIANCE,
Intervenor Plaintiff,
v.
WALLACE HARDWARE CO., INC.,
et al.,
Defendants.
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Action No.
5:14-cv-339-JMH
MEMORANDUM OPINION & ORDER
***
This matter is before the Court on its own motion,
Magistrate Judge Robert E. Wier having ordered the parties
to state their positions regarding diversity jurisdiction
and whether complete diversity exists in this matter given
the intervention of Lumbermen’s Underwriting Alliance. All
of the parties have now briefed the issue. [DE 39; 42; 44].
Defendant removed this case to federal court on July
30, 2014, 1 under the court’s diversity jurisdiction. At the
time of removal, the parties were diverse, Plaintiff being
1
The case was actually removed to the U.S. District Court for the
Western District, and transferred to this district in August of 2014
when the. [DE 7].
a citizen of Kentucky and Defendant a citizen of Tennessee,
[DE
1],
and
Defendant
established
that
the
amount-in-
controversy requirement was met. [DE 11; 12]. Subsequently,
Lumberman’s Underwriting Alliance sought to intervene as a
plaintiff pursuant to Fed. R. Civ. P. 24, although it did
not
specify
under
Rule
whether
24(a)
it
or
moved
for
permissive
intervention
intervention
of
right
under
Rule
24(b). The Court construed Lumberman’s motion as one to
intervene
permissively
and,
with
no
objection
from
any
party, granted it. [DE 16].
However, Lumberman’s citizenship remained unclear and,
following the Order of the Magistrate Judge, Lumberman’s
filed a brief to confirm that it is a reciprocal interinsurance exchange and not a corporation. As such, like
other unincorporated associations, its citizenship is that
of every state of which any of its members reside. See
Delay v. Rosenthal Collins Grp., LLC, 585 F.3d 1003, 1005
(6th
Cir.
unincorporated
2009)
(stating
associations
the
and
general
citing
Carden
rule
v.
for
Arkoma
Assocs., 494 U.S. 185, 187–92 (1990)); United Servs. Auto.
Ass'n v. Franke Consumer Products, Inc., No. 11-05430-PSG,
2012 WL 368378, at *2 (N.D. Cal. Feb. 3, 2012) (collecting
cases
regarding
reciprocal
inter-insurance
2
exchanges).
Lumberman’s has members in Tennessee and is, therefore, a
citizen of Tennessee.
Because Defendants are citizens of Tennessee as well,
there is no longer complete diversity. See Owen Equip. &
Erection Co. v. Kroger, 437 U.S. 365, 373 (1978). Thus, the
question
before
jurisdiction
this
this
over
Court
is
matter.
whether
Defendants
it
point
retains
to
the
general rule that jurisdiction is determined at the time of
removal. Ahearn v. Charter Twp. of Bloomfield, 100 F.3d
451, 453 (6th Cir. 1996); Dean v. Holiday Inns, Inc., 860
F.2d 670, 672 (6th Cir. 1988). Accordingly, when a nondiverse party intervenes in a case as of right, pursuant to
Rule
24(a),
the
court
is
not
divested
of
jurisdiction
unless that party is indispensable. Dean, 860 F.2d at 672.
But this rule is used in cases of intervention under Rule
24(a) because when a party seeks to intervene permissively
pursuant
to
Rule
24(b),
a
court
will
simply
deny
intervention, as courts may not permit intervention when it
would destroy the diversity between the existing parties.
See E.E.O.C. v. Nat'l Children's Ctr., Inc., 146 F.3d 1042,
1046
(D.C.
Cir.
1998)
(“Permissive
intervention...has
always required an independent basis for jurisdiction.”);
7C
Charles
Alan
Wright
and
Arthur
R.
Miller,
Practice and Procedure § 19717 (3d ed. 2010).
3
Federal
Regardless, 28 U.S.C. § 1367(b), adopted after Dean in
1990,
precludes
under
Rule
parties
24
from
....
intervening
when
“as
exercising
plaintiffs
supplemental
jurisdiction over such claims would be inconsistent with
the
jurisdictional
requirements
of
section
1332.”
Thus,
under the plain language of § 1367(b), this Court may not
exercise
jurisdiction
plaintiff-intervenor,
over
Lumberman’s,
whether
it
attempted
a
nondiverse
to
intervene
under Rule 24(a) or (b). 28 U.S.C. § 1367(b); see also
Baker v. Minnesota Min. & Mfg. Co., 99 F. App'x 718, 722-23
(6th Cir. 2004) overruled on other grounds by Blackburn v.
Oaktree Capital Mgmt., LLC, 511 F.3d 633 (6th Cir. 2008).
Therefore,
in
light
of
Lumberman’s
citizenship,
the
Court will reconsider its decision on Lumberman’s motion to
intervene. Based on the analysis above, the Court will deny
Lumberman’s motion to intervene in this case. See Baker, 99
F. App'x at 723.
Plaintiff argues that Lumberman’s is an indispensable
party and, therefore, this case should be remanded. See
Fed. R. Civ. P. 19(b). Lumberman’s intervention is premised
on
its
having
paid
workmen’s
compensation
benefits
to
Plaintiff as a result of the accident that serves as a
basis for his claims against Defendants, and Lumberman’s
asserts its right to recover that amount from Defendants
4
under
a
subrogation
theory.
Courts
have
found
that
workmen’s compensation carriers, as partial subrogees, are
not “indispensable parties.” See Baker, 99 F. App'x at 723
(citing United States v. Aetna Cas. & Sur. Co., 338 U.S.
366, 382 & n. 19 (1949)).
Although, on the record before
the Court, it is not clear to what extent Lumberman’s has
compensated
Plaintiff,
whether
he
has
been
or
will
be
partially or totally compensated. Furthermore, at least one
of
the
factors
appropriate.
potentially
If
be
in
Rule
19(b)
Lumberman’s
liable
is
twice,
suggests
absent,
to
both
dismissal
Defendant
is
could
Plaintiff
and
Lumberman’s. See KRS 342.700. Because “[a]ll doubts as to
the propriety of removal are resolved in favor of remand,”
Smith v. Nationwide Prop. & Cas. Ins. Co., 505 F.3d 401,
405 (6th Cir. 2007) (quotation and citation omitted), the
Court finds that remand here is appropriate.
Accordingly, IT IS HEREBY ORDERED:
(1)
that
the
Court’s
previous
order
of
October
8,
2014, [DE 16], is SET ASIDE AND HELD FOR NAUGHT;
(2) that Lumberman’s Underwriting Alliance’s Motion to
Intervene [DE 13] is DENIED;
(3) that this matter is REMANDED to the Clark County
Circuit Court.
This the 22nd day of May, 2015.
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