Short v. RaceTrac Petroleum, Inc. et al
ORDER AND REASONS GRANTING re 9 MOTION for Leave to File Amended Complaint. Signed by Magistrate Judge Joseph C. Wilkinson, Jr on 5/3/2017.(my)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CRAIG R. SHORT
RACETRAC PETROLEUM, INC.
ORDER AND REASONS ON MOTION
Plaintiff filed a motion to file a first supplemental and amending petition, Record
Doc. No. 9, which is pending before me. In his proposed amendment, plaintiff adds certain
negligence allegations and names three new defendants, all of whom were raised and
referred to by fictitious names in the original state court petition. Adding the new parties
would destroy diversity of citizenship, the sole basis for this court’s subject matter
jurisdiction. Defendant Racetrac Petroleum, Inc. (“Racetrac”) filed a timely opposition
memorandum, in which it argues that the amendment fails to state a cognizable cause of
action against the identified defendants under state law and that plaintiff should not be
permitted to defeat this court’s jurisdiction. Record Doc. No. 11. At counsel’s request,
oral argument was conducted on May 3, 2017. Having considered the written submissions
of the parties, the oral argument of counsel, the record and the applicable law, plaintiff’s
motion is GRANTED for the following reasons.
Plaintiff originally filed this personal injury suit for damages in the 22nd Judicial
Court for St. Tammany Parish in May 2016 against Racetrac as the sole specifically
identified defendant. The petition also named a “John Doe” individual defendant, a “John
Doe, Inc.” corporate defendant and two insurance companies, identified only by fictitious
letter names. Record Doc. No. 1-1 at pp. 3-4 (state court petition). Plaintiff seeks damages
allegedly resulting from a slip and fall accident at Racetrac’s Covington, Louisiana,
business location on June 29, 2015.
Racetrac removed the action to this court on December 2, 2016, based solely on
diversity of citizenship jurisdiction, alleging that plaintiff is a Louisiana citizen and
Racetrac is a citizen of Delaware and Georgia for diversity purposes. Record Doc. No. 1
at ¶¶ 2-4. No particular citizenship allegations are made as to the proposed new corporate
defendant.1 However, the proposed new individual defendants, both of whom are alleged
to have been “personally responsible” and otherwise negligent for the circumstances they
knew or should have known about that caused plaintiff’s accident, are Louisiana citizens,
like plaintiff himself. Record Doc. No. 9-1 at pp. 3-4 (proposed first supplemental and
amending petition). Thus, allowing the amendment would destroy this court’s sole basis
for subject matter jurisdiction. In its memorandum in opposition to plaintiff’s motion,
Racetrac contends that evaluating the factors articulated in Hensgens v. Deere & Co., 833
F.2d 1179, 1182 (5th Cir. 1987), weighs in favor of denying the motion. For the following
reasons, I disagree with Racetrac and grant plaintiff’s motion to amend his petition.
Federal Rule of Civil Procedure 15(a) provides that leave to amend pleadings “shall
be freely given when justice so requires.” Because the policy of Rule 15 is to permit liberal
amendment of pleadings in the absence of substantial prejudice to defendants that cannot
Defense counsel represented at oral argument that the new corporate defendant is an Alabama
citizen for diversity purposes.
be cured by other means, Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 597 (5th Cir.
1981), Rule 15(a) evinces a bias in favor of granting leave to amend. Unless there is a
substantial reason to deny leave to amend, the discretion of the district court is not broad
enough to permit denial. Stripling v. Jordan Prod. Co., 234 F.3d 863, 872 (5th Cir. 2000)
(citing Foman v. Davis, 371 U.S. 178, 182 (1962); Leffall v. Dallas Indep. Sch. Dist., 28
F.3d 521, 524 (5th Cir. 1994); Martin’s Herend Imports, Inc. v. Diamond & Gem Trading
U.S. Am. Co., 195 F.3d 765, 770 (5th Cir. 1999); Dussouy, 660 F.2d at 597-98). Thus,
“[t]he court should freely give leave when justice so requires,” Fed. R. Civ. P. 15(a)(2), but
such leave “is by no means automatic.” Wimm v. Jack Eckerd Corp., 3 F.3d 137, 139 (5th
Cir. 1993) (quotation omitted). Relevant factors to consider include “undue delay, bad faith
or dilatory motive on the part of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the opposing party, and futility of
amendment.” Id. Futility in this context means “that the amended complaint would fail
to state a claim upon which relief could be granted. . . . [Thus,] to determine futility, we
will apply the same standard of legal sufficiency as applies under Rule 12(b)(6).” Stripling,
234 F.3d at 873 (quotations and citations omitted); accord Fenghui Fan v. Brewer, 377 F.
App’x 366, 367 (5th Cir. 2010).
However, when an amendment after removal from state court would destroy subject
matter jurisdiction, 28 U.S.C. § 1447(e) applies. Section 1447(e) vests broad discretion in
the trial court by expressly providing the following choice: “the court may deny joinder,
or permit joinder and remand the action to the State court.” (Emphasis added). The
language of Section 1447(e) is entirely permissive. Exercise of this discretion depends
upon application of the factors enunciated by the Fifth Circuit in Hensgens and approved
in Tillman v. CSX Transp., Inc., 929 F.2d 1023, 1029 n.11 (5th Cir. 1991), to determine
whether the proposed amendment should be permitted. I find that application of the
Hensgens factors in this case establishes that the motion to amend should be granted.
The first Hensgens factor is the extent to which joinder of a non-diverse party is
sought to defeat federal jurisdiction. It is clear from plaintiff’s original filing decision that
he prefers to pursue his case in state court. Racetrac argues that its employees who are now
named as individual defendants have no legal duty to plaintiff under applicable Louisiana
law; indicating that plaintiff’s motive must therefore be to defeat diversity jurisdiction.
Defendant cites applicable state law to the effect that subordinate employees of Racetrac,
like the individuals now named as proposed new defendants cannot be personally liable for
negligence in these kinds of circumstances, unless they personally know or personally
should know of the alleged non-performance or mal-performance and nevertheless failed
to cure the risk of harm. Record Doc. No. 11 at pp. 5-6 (defendant’s opposition
memorandum, citing Gros v. Warren Properties, Inc., 2012 WL 59096724, at *7 (E.D. La.
Nov. 26, 2012), and Canter v. Koehring Co., 283 So. 2d 716, 721 (La. 1973). I find that
plaintiff’s proposed amendment adequately makes the kinds of allegations of personal
knowledge and responsibility that may fit the exception noted in the cited Louisiana cases,
if proven. On the current record, I cannot conclude that the proposed amendment fails to
state a claim upon which relief might be granted as a matter of law and note that the
potential liability of the individual defendants as a matter of law appears more
appropriately addressed later in these proceedings on motion for summary judgment, if a
set of undisputed material facts is established.
Under these circumstances, I cannot conclude that plaintiff’s principal motivation
is to defeat this court’s subject matter jurisdiction. Plaintiff’s original naming of these
individuals and a second corporate defendant using fictitious names at a time when their
actual identities were unknown indicated a desire on plaintiff’s behalf to include them as
parties from the outset of this litigation, before removal occurred. This desire was made
express in the original petition, when plaintiff clearly stated that these fictitious names were
being used only until actual identities could be ascertained. Record Doc. No. 1-1 at pp. 3-4
(petition at ¶’s B-E). Although defendant addressed the naming of “John Doe” defendants
in its notice of removal, Record Doc. No. 1 at pp. 2-3, ¶ 5, the notice makes no allegations
that their joinder was in any way fraudulent. A finding of liability is better and more
reliably made if all alleged wrongdoers are in the same case and able to defend themselves
directly. In addition, there are procedural and discovery advantages available to plaintiff
if the new parties are named defendants rather than merely non-party witnesses. For these
reasons, I cannot find that plaintiff’s principal motivation in adding these defendants at this
time is to defeat federal jurisdiction. This factor weighs in favor of permitting the
The second Hensgens factor is whether plaintiff has been dilatory in asking for the
amendment. The record establishes that plaintiff’s motion was timely, having been
submitted to the court on March 23, 2017, Record Doc. No. 8, the deadline for amendments
set in the court’s scheduling order. Record Doc. No. 7. Although the original filing on that
date was marked “deficient” by the clerk, and the deficiency was not cured until March 27,
2017, four days after the deadline, both the Federal Rules of Civil Procedure and Fifth
Circuit precedent are clear that these circumstances do not affect timeliness. “The clerk
must not refuse to file a paper solely because it is not in the form prescribed by these rules
or by a local rule or practice.” Fed. R. Civ. P. 5(d)(4). In addition, “[a] local rule imposing
a requirement of form must not be enforced in a way that causes a party to lose any right
because of a nonwillful failure to comply.” Fed. R. Civ. P. 83(a)(2). The Fifth Circuit has
recognized that this court’s local electronic filing requirements are such rules and that the
filing date for timeliness purposes under these circumstances is the earlier “deficient” filing
date. Darouiche v. Fid. Nat’l Ins. Co., 415 F. App’x 548, 552 (5th Cir. 2011). The instant
motion to amend must therefore be considered timely, and the second Hensgens factor also
weighs in favor of permitting the amendment.
The third Hensgens factor is whether plaintiff would be significantly injured if the
requested amendment is not allowed. Considerations of cost and efficiency, both for the
parties and for the courts involved, militate in favor of not requiring plaintiff to prosecute
his claims against Racetrac in this court, while other defendants are pursued in the state
court, when all claims arise from the same incident. Thus, plaintiff runs substantial risk of
significant injury if he is not permitted to add as defendants those parties whose actions are
alleged to have caused or contributed to his damages. This factor weighs in favor of
permitting the amendment.
The final Hensgens consideration is any other factor bearing on the equities. This
case involves state law claims in the precise state district court jurisdiction where plaintiff
resides, where defendant conducts business, where the incident occurred and where most
of the witnesses and evidence can be found. The case presents no compelling federal
interest. It also involves the application of state law. The interest of the judicial system in
avoiding parallel actions is significant. For all of the reasons discussed above, I find that
the equities favor permitting plaintiff’s amendment in this case.
For similar reasons, the Rule 15 factors also weigh in favor of permitting the
amendment. Neither undue delay nor prior amendments have occurred. The parties will
not be prejudiced by the amendment, as ample time remains before the discovery deadline,
the trial date and other deadlines by which all parties may prepare this case for trial. The
potential loss of this court as a forum because the amendment destroys subject matter
jurisdiction would not prejudice any party because the state court is not only convenient but
also able and available to adjudicate the matter fully and efficiently. For the reasons
addressed above, the amendment does not appear futile.
Accordingly, because on balance the Hensgens and Rule 15 factors weigh in favor
of permitting the amendment, plaintiff’s motion to amend is GRANTED. Whether the case
should now be remanded from this court to the state court from which it was removed, as
provided in 28 U.S.C. § 1447(e), is a matter solely within the province of the presiding
New Orleans, Louisiana, this _________ day of May, 2017.
JOSEPH C. WILKINSON, JR.
UNITED STATES MAGISTRATE JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?