F.H. Paschen, S.N. Nielsen & Associates, LLC v. Veolia Water North America Operating Services, LLC et al
ORDER AND REASONS - ORDERED that within 10 days pla seek leave to file an amended complaint as set forth in document. Signed by Judge Helen G. Berrigan on 12/2/2014.(kac)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
F. H. PASCHEN, S.N. NIELSEN
& ASSOCIATES, LLC
VEOLIA WATER NORTH AMERICA
OPERATING SERVICES, LLC AND VEOLIA
WATER NORTH AMERICA-SOUTH, LLC
SECTION: “C” (5)
ORDER AND REASONS
Before this Court is plaintiff's brief regarding whether Kohler Rental Power, Inc.
("Kohler") is an indispensable party whose presence would deprive the Court of subject matter
jurisdiction over this case, defendants having filed no brief. Rec. Doc. 38. Having considered the
record, the memoranda of counsel, and the law, this Court has determined that the joinder of
Kohler as an additional defendant is appropriate for the reasons discussed herein.
This action arises out of damage to scaffolding owned by F. H. Paschen ("FHP") that
occurred when Hurricane Isaac made landfall in August 2012. Rec. Doc. 1-1 at 4-6. According to
FHP, it had contracted to perform work at the East Bank Wastewater Treatment Plant
("Treatment Plant") in New Orleans, Louisiana at the time, and had placed equipment including
scaffolding at the work site. Id. at ¶9-10. Defendants do not dispute that the Treatment Plant was
operated by Veolia Water North America-South, LLC pursuant to a contract with the New
Orleans Sewerage and Water Board ("SWB"). Id. at ¶12. According to FHP, when Hurricane
Isaac hit, the Treatment Plant overflowed, and FHP's scaffolding was commandeered and used
without authorization by Veolia, becoming damaged beyond repair. Id. at ¶18-22.
This action was originally initiated in a Louisiana state court on August 13, 2013. Rec.
Doc. 1-1. Veolia Water North America Operating Services, LLC and Veolia Water North
America-South, LLC ("Veolia") subsequently removed the action to this Court, claiming
jurisdiction under 28 U.S.C. §1332. Rec. Doc. 1. According to FHP, after commencing
discovery, Veolia identified Kohler Rental Power, Inc. ("Kohler") as a potentially liable party.
Rec. Doc. 38 at 3.
On May 8, 2014, the Court granted leave for plaintiff to file an amended complaint. Rec.
Doc. 19. The amended complaint added inter alia, Kohler, as a defendant to the action. Id. FHP
alleged in the amended complaint that Kohler leased a backup generator to Veolia and/or the
Sewerage and Water Board for use at the Treatment Plan, and that the failure of that generator
allowed the Treatment Plant to flood. Rec. Doc. 20 at 5, ¶25, 32. Thereafter, on August 7, the
Court vacated the order granting leave to file the amended complaint because Kohler and the
plaintiff were non-diverse. Rec. Doc. 34. On September 15, the Court continued the trial and
ordered that the parties submit briefing as to the issue of whether Kohler is an indispensable
party under Fed. R. Civ. P. 19, whose presence would deprive the Court of subject-matter
jurisdiction over this case. Rec. Doc. 37.
II. LAW AND ANALYSIS
28 U.S.C. §1447(e) provides that "[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." Leave to amend is not automatic, and
is at the discretion of the district court. Moore v. Manns, 732 F.3d 454, 456 (5th Cir. 2013). In
Hensgens v. Deere & Co., the Fifth Circuit set out factors for district courts to consider when
deciding whether to allow the addition of a non-diverse party following removal. These include:
1) the extent to which the purpose of the amendment is to defeat federal jurisdiction, 2) whether
plaintiff has been dilatory in asking for amendment, 3) whether plaintiff will be significantly
injured if amendment is not allowed, 4) and any other factors bearing on the equities. 833 F.2d
1179, 1182 (5th Cir. 1987). In that case, the Fifth Circuit also discussed the danger of parallel
federal and state proceedings, with its "inherent dangers of inconsistent results and the waste of
judicial resources," and weighed these against the diverse defendant's interest in retaining the
federal forum. Id.
Here, FHP points to ongoing litigation in state court involving the parties named in this
action. Rec. Doc. 38 at 4. On March 6, 2014, the Sewerage and Water Board filed suit against
FHP in the Civil District Court for the Parish of Orleans, claiming damages during Hurricane
Isaac arising from FHP's work. Rec. Doc. 25-2. FHP has filed a Third Party Demand in this
action, naming Veolia and Kohler, inter alia, as third party defendants. Rec. Doc. 38-1 at 7. The
Third Party Demand makes allegations and claims that are substantially similar to those made in
the recently vacated amended complaint in this action. Id. Furthermore, like the instant action,
the state court action arises from the conduct of the parties that resulted in damage at the
Treatment Plant during Hurricane Isaac.
Without reaching the question of whether Kohler is an indispensable party, the Court
finds that joinder of Kohler is appropriate. See Hensgens, 833 F.2d at 1182 ("[T]he balancing of
these competing interests is not served by a rigid distinction of whether the proposed added party
is an indispensable or permissive party.") Applying the Hensgens factors, the Court finds that
there is no indication that Kohler has been added solely to defeat federal jurisdiction or that FHP
was dilatory in asking for leave to file an amended complaint joining Kohler. However, were the
Court to refuse joinder of Kohler in order to retain jurisdiction over the action, all parties would
be subject to duplicative and piecemeal litigation that risks inconsistent results. See Lafourche
Parish Water Dist. no. 1 v. Traylor Bros., Inc., (E.D. La. 2009) ("[A]bsent joinder, plaintiff will
be forced to litigate in both state and federal courts simultaneously, which would waste resources
for the parties, as well as the state and federal courts.") Thus, the Court finds that the Hensgens
factors and the equities weigh in favor of allowing joinder of Kohler and remanding this action to
the state court.
IT IS ORDERED that within ten days plaintiff seek leave of the Court to file an amended
complaint joining Kohler as an additional defendant in this action.
New Orleans, Louisiana this 2nd day of December, 2014.
HELEN G BERRIGAN
UNITED STATES DISTRICT JUDGE
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