Territa et al v. Oliver et al
Filing
225
ORDER & REASONS: ORDERED that Territas' 173 Motion to Dismiss is DENIED; Robert's 184 Motion to Reopen Case is GRANTED; Territas 187 Motion to Strike is DENIED; Robert's 198 Motion to Dismiss Original Defendants is GRANTED. The Court's case manager will contact the parties to arrange a scheduling conference. Signed by Judge Susie Morgan on 10/7/2013. (gbw, ) (NEF: Case Manager)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
TINA TERRITA, ET AL.,
Plaintiffs
CIVIL ACTION
VERSUS
No. 11-1830
KEVIN A. OLIVER, ET AL.,
Defendants
SECTION “E”
ORDER AND REASONS
Before the Court are several motions filed by plaintiffs, Tina and Michael Territa (the
"Territas") and by intervenor plaintiff Michelle Robert ("Robert").
BACKGROUND
This litigation began as a personal injury suit initiated in state court by the Territas,
who are both citizens of Louisiana. The Territas initially were represented by Robert, who
is also a citizen of Louisiana. On July 28, 2011, the Territas' suit was removed to this Court
by defendant Environmental Restoration, LLC.1 This Court had original jurisdiction over
the suit because complete diversity existed between the Territas and the defendants,
satisfying the requirements of 28 U.S.C. § 1332.2
After the case was removed, the Territas terminated Robert as their counsel and
retained new counsel. On August 2, 2012, Robert filed a complaint in intervention seeking
to recover compensation owed to her for representing Territas.3 Robert claimed she had a
1
R. Doc. 1
2
R. Doc. 1. The Territas are both citizens of Louisiana. Defendant Kevin Oliver is a Florida
domiciliary. Defendant Environmental Restoration LLC has ten members who are citizens of Missouri and
Illinois. Defendant Commerce and Industry Insurance Company is a New York corporation with its
principal place of business in New York. Defendant American International Insurance is a New York
corporation with its principal place of business in New York. Defendant Allstate Insurance is an Illinois
corporation with its principal place of business in Illinois. Therefore, the Territas do not share citizenship
with any of the defendants.
3
R. Doc. 44.
contingency fee agreement with the Territas, and she was owed a portion of the amount
recovered by the Territas in the principal lawsuit.4 In a pretrial conference held on March
21, 2013, this Court ordered Robert's claim in intervention be severed from the trial of the
principal lawsuit between the Territas and the defendants.5
On May 24, 2013, after having been advised that the Territas had settled the
principal lawsuit, this Court dismissed the action "as to all parties, without costs and
without prejudice to the right, upon good cause shown, within ninety days, to reopen the
action if settlement is not consummated. In addition, the Court specifically retains
jurisdiction to enforce the settlement agreement if the settlement is not consummated
within ninety days."6 Even after the settlement, Robert's intervention for attorneys' fees
remained. The Territas filed a motion to dismiss Robert's claims against them for lack of
subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1).7 Robert filed a
motion to reopen the action in order to litigate her claim in intervention against the
Territas.8 In response, the Territas filed a motion to strike Robert's motion to reopen the
case.9 Robert then filed an amended complaint in intervention, clarifying the jurisdictional
ground for her intervention and highlighting the citizenship of the original diverse
defendants.10 Robert also filed an ex parte motion to dismiss her claims against the original
4
R. Doc. 44.
5
R. Doc. 92.
6
R. Doc. 167.
7
R. Doc. 173.
8
9
R. Doc. 184.
R. Doc. 187.
10
R. Doc. 190.
defendants because Robert had reached a settlement with them.11 The Court will address
the pending motions in the order in which they were filed.
LAW AND ANALYSIS
A. The Territas Motion to Dismiss for Lack of Subject Matter Jurisdiction
The Court must first determine whether it has subject matter jurisdiction over
Robert's claim in intervention before deciding any of the other pending motions in the case.
See Danca v. Private Health Care Sys., 185 F.3d 1, 4 (1st Cir. 1999) (subject matter
jurisdiction is a "threshold" issue). In examining whether the Court has subject matter
jurisdiction over Robert's intervenor complaint, we must first determine whether Robert's
claim in intervention is a separate action, or if it remained part of the original suit filed by
the Territas against the defendants.
Robert's claim in intervention was severed from the trial of the principal suit
between the Territas and the defendants on March 21, 2013.12 Under the Federal Rules of
Civil Procedure, there are two varieties of severance - Rule 21 and Rule 42. Under Rule 21,
"the court may sever any claim against a party." FED R. CIV. P. 21. A Rule 21 severance
creates "entirely independent actions to be tried, and judgment entered thereon,
independently." 7 CHARLES A WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE
AND
PROCEDURE § 1689 (3d ed. 2013); see Louisiana v. Am. Nat'l Prop. & Cas. Co., 2013 LEXIS
129818 (E.D. La. Sept. 10, 2013). An action severed under Rule 21 "must have an
independent jurisdictional basis." Honeywell v. Phillips Co., 415 F.3d 429,431 (5th Cir.
2005).
Rule 42(b) states "the court may order separate trials of one or more separate issues,
11
R. Doc. 198.
12
R. Doc. 92.
claims, crossclaims, or third-party claims" for "convenience, to avoid prejudice, or to
expedite and economize." FED R. CIV. P. 42(b). A Rule 42 order of separate trials does not
result in filing of separate cases, but simply leads to two or more separate factual inquiries
in the context of a single case. See United States v. O'Neil, 709 F.2d 361, 368 (5th Cir.
1983). Although Rule 42(b) technically provides for "separate trials," courts often
characterize the separation of trials as "severance" under Rule 42. See Spencer, White &
Prentis, Inc. v. Pfizer, Inc., 498 F.2d 358, 361 (2d Cir. 1974). More importantly, a claim
separated under Rule 42 does not require an independent jurisdictional ground. In this
Court's March 21, 2013 order, Robert's intervenor complaint was separated from the trial
of the principal lawsuit. The court ordered separate trials under Rule 42(b), rather than
creating an independent severed action under Rule 21. As a result, Robert need not prove
an independent jurisdictional ground for her intervenor complaint against the Territas.
Because Robert and the Territas are citizens of Louisiana, Robert's complaint in
intervention does not meet the jurisdictional requirements of § 1332. However,
supplemental jurisdiction extends to certain claims that are so related to a claim in an
action within the court's jurisdiction that they form part of the same case or controversy.
The critical question is whether supplemental jurisdiction exists under 28 U.S.C. § 1367
over Robert's claim in intervention against the Territas.
Section 1367(a) and (b) provide as follows:
(a) Except as provided in subsections (b) and (c) or as expressly provided
otherwise by Federal statute, in any civil action of which the district courts
have original jurisdiction, the district courts shall have supplemental
jurisdiction over all other claims that are so related to claims in the action
within such original jurisdiction that they form part of the same case or
controversy under Article III of the United States Constitution. Such
supplemental jurisdiction shall include claims that involve joinder or
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intervention of additional parties.
(b) In any civil action of which the district courts have original jurisdiction
founded solely on section 1332 of this title, the district courts shall not have
supplemental jurisdiction under subsection (a) over claims by plaintiffs
against persons made parties under Rule 14, 19, 20, or 24 of the Federal
Rules of Civil Procedure, or over claims by persons proposed to be joined as
plaintiffs under Rule 19 of such rules, or seeking to intervene as plaintiffs
under Rule 24 of such rules, when exercising supplemental jurisdiction over
such claims would be inconsistent with the jurisdictional requirements of
section 1332.
28 U.S.C. § 1367.
Because this Court had original jurisdiction over the principal action under section
1332, and Robert's intervention was brought under Rule 24, section 1367(b) instructs the
Court to examine whether Robert's claim in intervention would be inconsistent with the
jurisdictional requirements of section 1332. Robert, a Louisiana citizen, has a claim in
intervention to recover amounts out of the Territas' recovery in the principal lawsuit.
Robert is diverse from the original defendants, but she is not diverse from the Territas, who
are also Louisiana citizens. In determining whether Robert's claim in intervention defeats
the complete diversity requirement, an analysis of whether Robert is classified as a plaintiff
or defendant is of critical significance.
In Robert's opposition to the Territas' motion to dismiss, Robert aligns herself with
the plaintiffs in the principal suit, arguing her presence does not defeat complete diversity
because she is diverse from the defendants.13 In ascertaining the proper alignment of
parties, courts must "look beyond the pleadings, and arrange the parties according to their
sides in the dispute." City of Indianapolis v. Chase Nat'l Bank of City of N.Y., 314 U.S. 63,
13
R. Doc. 195.
5
69 (1941). In the Fifth Circuit, "[t]he generally accepted test of proper alignment is whether
the parties with the same 'ultimate interests' in the outcome of the action are on the same
side." Lowe v. Ingalls Shipbuilding, A Div. of Litton Sys., Inc., 723 F.2d 1173, 1178 (5th Cir.
1984).
The "ultimate interests" of Robert align her with the plaintiffs. When Robert
intervened, she sought a portion of the Territas' total recovery. Although Robert may
eventually recover this amount from the Territas, her recovery is based upon amounts
recovered from the defendants. Therefore, Robert and the Territas had the same "ultimate
interests" in recovering as much as possible from the defendants, and Robert is properly
characterized as a plaintiff-intervenor.
This finding is consistent with Fifth Circuit jurisprudence. In Griffin v. Lee, the court
aligned an intervening attorney seeking to recover attorneys' fees from the plaintiff as a
plaintiff. 621 F.3d 380, 388 (5th Cir. 2010). The Court in Griffin found that it was
appropriate to align the intervening attorney as a plaintiff with a claim against the coplaintiff as to the amount of attorneys' fees owed. Id. The Fifth Circuit found the court did
not have subject matter jurisdiction over the intervenor's complaint in Griffin but only
because the intervenor was not diverse from the defendants, and therefore his presence as
a co-plaintiff was not consistent with the jurisdictional requirements of section 1332. Id.
Intervenor Robert is diverse from the defendants, and under Griffin the Court has
jurisdiction.
The Territas' motion to dismiss does not address whether or not Robert's claim in
intervention exceeds the amount in controversy requirement of section 1332. The Supreme
Court has interpreted section 1367 to permit the exercise of diversity jurisdiction over
6
claims forming a part of the same case or controversy, even if those claims are for less than
the jurisdictional minimum, provided that at least one claim satisfies the amount-incontroversy requirement and the citizenship elements of diversity are met. See Exxon Mobil
Corp. v. Allapattah Servs., 545 U.S. 546, 549 (2005). Because the Territas' original claim
against the defendants met the $75,000 jurisdictional threshold, Robert's claim in
intervention need not meet the amount in controversy requirement.
Accordingly, having found that this Court has subject matter jurisdiction over
Robert's intervenor complaint against the Territas, IT IS ORDERED that the Territas'
Motion to Dismiss is DENIED.
B. Robert's Motion to Reopen the Action
Robert filed a motion to reopen the action in order to litigate her claims against the
Territas after the principal lawsuit had settled.14 On March 24, 2013, having been advised
by counsel for all parties that the case had settled, this Court dismissed the action as to all
parties without prejudice.15 The Court also retained jurisdiction to reopen the action if
settlement was not consummated or to enforce the settlement agreement between the
Territas and the defendants.16 The settlement agreement has not been consummated as to
all parties. IT IS ORDERED that Robert's motion to reopen the action is GRANTED.17
C. Robert's Ex Parte Motion to Dismiss
On September 21, 2013, Robert filed an ex parte motion to dismiss the original
14
R. Doc. 184.
15
R. Doc. 167.
16
R. Doc. 167.
17
The Territas also filed a motion to strike Robert's motion to reopen the action (Doc. 187).
Because Robert's Motion to Reopen the Action is granted, the Territas Motion to Strike is DENIED.
7
defendants in the principal lawsuit, indicating that a settlement agreement had been
reached between her and them.18 IT IS ORDERED that Robert's ex parte motion to
dismiss the original defendants from her claim in intervention is GRANTED.
The dismissal of these defendants does not alter the Court's jurisdiction over
Robert's intervention. Although these defendants provided the grounds for original
diversity jurisdiction, the Court is not divested of jurisdiction merely because they have
been dismissed from the case. Generally, jurisdiction is determined at the time the suit is
filed. Mobil Oil Corp. v. Kelley, 493 F.2d 784, 486 (5th Cir. 1974). In a removed case,
diversity must exist both when the state suit is field and when the petition for removal is
filed. See Pullman v. Jenkins, 305 U.S. 534, 540-541 (1939).
In Griffin v. Lee, the defendants upon whose citizenship diversity jurisdiction was
based also had been dismissed from the case before the court analyzed whether it had
subject matter jurisdiction over the intervention. 621 F.3d at 383. The court in Griffin
examined the citizenship of the parties at the time the case was removed and did not find
the post-removal dismissal of the defendants to have any bearing on the question of
diversity jurisdiction. See id. Similarly, the settlement and dismissal between the Territas
and the original defendants does not divest this Court of supplemental jurisdiction because
diversity existed at the time the state suit was filed and when the case was removed.
CONCLUSION
Therefore, IT IS ORDERED that the Territas' motion to dismiss is DENIED,
Robert's motion to reopen the action is GRANTED, the Territas motion to strike is
18
The defendants are Kevin Oliver, Environmental Restoration LLC, Commerce and Industry
Insurance Company, American International Specialty Lines Insurance Company, and Allstate Property
and Casualty Insurance Company.
8
DENIED, and Robert's ex parte motion to dismiss the original defendants is GRANTED.
The Court's case manager will contact the parties to arrange a scheduling conference.
7th
New Orleans, Louisiana, this ____ day of October, 2013.
_____________________________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE
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