Stone v. Arts Center Enterprises - New Orleans, LLC et al

Filing 25

ORDER granting #21 Motion to Remand to State Court. Signed by Judge Ivan L.R. Lemelle. (jrc) (Additional attachment(s) added on 12/9/2015: #1 Letter) (jrc).

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PATTY STONE

CIVIL ACTION

VERSUS

NO. 15-3638

ARTS CENTER ENTERPRISES – NEW ORLEANS,
LLC, ET AL.

SECTION "B"(5)

ORDER AND REASONS
Before the Court is Plaintiff’s Motion to Remand (Rec. Doc.
No.

21).

Plaintiff

Patty

Stone

(hereinafter

“Plaintiff”

or

“Stone”) seeks remand to state court due to a lack of subject
matter jurisdiction resulting from the addition of a non-diverse
defendant in the Second Amended Complaint. (Rec. Doc. No. 16). The
added defendant, the City of New Orleans, does not oppose the
motion. However, the remaining defendants oppose remand at this
time. (Rec. Doc. No. 24). For the reasons enumerated below,
IT IS

ORDERED

that the

Plaintiffs’

Motion

to Remand is

GRANTED.
I.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY
This case arises out of an injury sustained by Plaintiff while

attending an event at the Mahalia Jackson Theatre in New Orleans,
LA. Plaintiff originally filed suit on July 8, 2015 in Civil
District Court for the Parish of Orleans against Arts Center
Enterprises – New Orleans, LLC (“ACE”) and an unknown insurer.
(Rec. Doc. No. 1 at 1-2). Plaintiff is a resident of Jefferson

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Parish, Louisiana. (Rec. Doc. No. 1 at 2). ACE, the alleged
operator of the Mahalia Jackson Theatre, is a Limited Liability
Company organized under the laws of Texas that has no members
domiciled in Louisiana. (Rec. Doc. No. 1 at 2).
On August 19, 2015, ACE removed the action to federal court
based on diversity jurisdiction. (Rec. Doc. No. 1). Plaintiff then
filed a First Amended Complaint naming Nova Casualty Company
(“NOVA”) as an additional defendant. (Rec. Doc. No. 6). Nova, the
liability insurer for ACE, is a foreign insurance company. (Rec.
Doc. No. 6 at 1). After discovery revealed that the Mahalia Jackson
Theatre is owned by the City of New Orleans, Plaintiff filed a
second motion to amend her complaint seeking to add the City of
New Orleans (the “City”) as a third defendant. (Rec. Doc. No. 12).
The Magistrate Judge granted the motion as unopposed (Rec. Doc.
No. 15), and the second amended complaint was filed into the
record. (Rec. Doc. No. 16). Thereafter, Plaintiff filed a motion
to remand to state court due to a lack of complete diversity. (Rec.
Doc. No. 21).1
II.

THE PARTIES’ CONTENTIONS

Plaintiff contends that the addition of the City of New
Orleans

as

a

defendant

destroys

this

Court’s

diversity

It is unclear why Plaintiff did not request remand in the same motion that
sought to add the City of New Orleans as a defendant. Nevertheless, the
motion to remand is now before this Court almost two months after the City
was added as a party.
1

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jurisdiction. (Rec. Doc. No. 21). Plaintiff cites Moor v. Alameda
County, 411 U.S. 693, 717 (1973), for the proposition that the
City of New Orleans, as a political subdivision of the state of
Louisiana, is a citizen of Louisiana for diversity purposes. (Rec.
Doc. No. 21-1 at 2). As Stone is also a citizen of Louisiana, she
urges this Court to remand the case to state court for lack of
complete diversity and thus lack of subject matter jurisdiction.
In their opposition, ACE and Nova do not contend that complete
diversity exists. Rather, they ask this Court to refrain from
acting on the motion at this time. (Rec. Doc. No. 24 at 1).
Defendants maintain that it would be prudent to defer ruling on
the motion because the City may file a Rule 12(b)(6) motion to
dismiss, which, if granted, would mean that this Court continues
to

have

diversity

jurisdiction.

(Rec.

Doc.

No.

24

at

1-2).

Accordingly, Defendants implore this Court to reserve judgment on
the present motion until after the City has filed responsive
pleadings.
III. LAW AND ANALYSIS
“If 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 State court.” 28 U.S.C. § 1447(e). Here, the
Court permitted the joinder of the City, leaving the question of

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whether the addition of the City destroys the Court’s diversity
jurisdiction.
Under

28

U.S.C.

§

1332(a),

“district

courts

shall

have

original jurisdiction of all civil actions where the matter in
controversy exceeds the sum or value of $75,000 . . . and is
between citizens of different States.” It is well-established that
such diversity jurisdiction exists only when there is “complete
diversity” between the parties. Harrison v. Prather, 404 F.2d 267,
272 (5th Cir. 1968). “The concept of complete diversity requires
that all persons on one side of the controversy be citizens of
different states than all persons on the other side.” Id. (citing
Strawbridge v. Curtiss, 7 U.S. 267 (1806)). “The burden of pleading
the

diverse

jurisdiction;

citizenship
and

if

the

is

upon

the

diversity

party

invoking

jurisdiction

is

federal
properly

challenged, that party also bears the burden of proof.” Mas v.
Perry, 489 F.2d 1396, 1399 (5th Cir. 1974) (internal citations
omitted). “To be a citizen of a State within the meaning of section
1332, a natural person must be both a citizen of the United States,
and a domiciliary of that State.” Id. (internal citations omitted).
Additionally, “a political subdivision of a State, unless it is
simply the arm or alter ego of the State, is a citizen of the State
for diversity purposes.” Moor v. Alameda County, 411 U.S. 693, 717
(1973) (internal quotations mark omitted), overruled on other
grounds, Monell v. Dep’t of Soc. Servs., 436 U.S. 658, 98 (1978).
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Here,

the

Plaintiff,

Patty

Stone,

is

a

natural

person

domiciled in Louisiana, meaning she is a citizen of Louisiana.
Defendants do not contest this. “The City of New Orleans is a
political subdivision of the State of Louisiana.” Creekmore v.
Public Belt R.R. Comm’n of New Orleans, 134 F.2d 576, 577 (5th
Cir. 1943). A political subdivision “is independent from the state,
rather than an arm or agent of the state.” Trosclair v. City of
Westwego, 1995 WL 311978, No. 94-689, at *3 (E.D. La. May 18,
1995). “[I]t is not entitled to Eleventh Amendment immunity and is
considered a citizen of the state for purposes of diversity
jurisdiction.”
considered

a

Id.

Accordingly,

citizen

of

the

Louisiana

City
for

of

New

diversity

Orleans

is

purposes.

Defendants also do not contest this point. As the plaintiff and a
single defendant are citizens of the same state, there is only
minimal

diversity

and

this

Court

lacks

subject

matter

jurisdiction.
Under the traditional view, a case should not remain in
federal court after the addition of a party that destroys diversity
jurisdiction. See Doleac ex rel. Doleac v. Michalson, 264 F.3d
470, 475 (5th Cir. 2001). However, defendants maintain that this
Court should not adhere to this traditional view because there is
a chance that the City of New Orleans may ultimately be dismissed.
Yet, this is pure speculation on Defendants’ part. They have
provided no reasons why it is possible or even likely that the
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City would be dismissed. Moreover, dismissal of the City would
require this Court to rule on a 12(b)(6) motion without subject
matter jurisdiction over the case. Such action would be improper.
See Superior Scrap Metals, Inc. v. ADM Growmark River Sys., Inc.,
1994 WL 589628, No. 94-2212, at *4 (E.D. La. Oct. 26, 1994) (“[A]
federal district court must remand an action to state court if it
allows the joinder of nondiverse parties, even if the action had
previously been properly removed.”).
IV.

CONCLUSION

In light of the foregoing,
IT IS

ORDERED

that the Plaintiffs’ motion to

remand is

GRANTED. The above-captioned matter is hereby REMANDED to state
court.
New Orleans, Louisiana, this 8th day of December, 2015.

____________________________
UNITED STATES DISTRICT JUDGE

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