Adams et al v. Wal-Mart Stores Inc
Filing
16
ORDER denying 9 Motion to Remand. Wal-Mart is directed to file anamended notice of removal no later than July 18, 2014 and make detailed allegations of its citizenship. Signed by Magistrate Judge Mark L Hornsby on 6/26/14. (crt,Kennedy, T)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
ALEXANDRIA DIVISION
AMANDA ADAMS, ET AL
CIVIL ACTION NO. 14-cv-0757
VERSUS
JUDGE DRELL
WAL-MART STORES, INC.
MAGISTRATE JUDGE HORNSBY
MEMORANDUM RULING
The Motion to Remand
Amanda and Sam Adams (“Plaintiffs”) filed suit against Wal-Mart in state court for
damages allegedly suffered after a board of fabric fell from a top shelf in the fabric
department and hit Amanda on her head. Plaintiffs allege that Wal-Mart was negligent for
not instructing its employees how to properly stack the fabric, allowing the fabric to be
stacked at an unreasonable height without protection, and failing to warn patrons that the
fabric was not secure. Wal-Mart removed the case based on an assertion of diversity
jurisdiction.
Plaintiffs, who are Louisiana citizens, have filed a Motion to Remand (Doc. 9) based
on an assertion that it is necessary to join as defendants Wal-Mart employees who are also
Louisiana citizens, which would destroy diversity. Plaintiffs assert that they recently
learned, through Wal-Mart’s answers to discovery requests, of the names of employees
allegedly responsible for the negligence. The cited discovery includes an answer by WalMart to a request for the names of the fabric department manager and store manager. Wal-
Mart also provided the names of two individuals who are believed to have worked in the
fabric department during the time of the alleged accident. Wal-Mart stated in another answer
that it was unknown who last stacked the fabric before the accident. Nothing in the
discovery responses indicates that any of the persons named did anything that could be
described as negligence or fault related to the accident. They are merely identified as
employees connected to the fabric department.
The Motion to Remand (Doc. 9) is denied because remand is neither required nor
appropriate based on the mere identification of non-diverse potential defendants who a
plaintiff states might be joined. If Plaintiffs wish to attempt to add any individual defendants,
they should file a motion for leave to amend and accompany it with a proposed amended
complaint that identifies the proposed new defendants and sets forth allegations against them
which it believes are adequate to state a claim upon which relief may be granted.
If Plaintiffs seek such an amendment, and the joinder of the proposed new
defendant(s) would destroy subject matter jurisdiction, the court may (1) deny joinder or (2)
permit joinder and remand the case. 28 U.S.C. § 1447(e). The court’s decision of the issue
is guided by the factors set forth in Hensgens v. Deere & Co., 833 F.2d 1179 (5th Cir. 1987).
See also Cobb v. Delta Exports, Inc., 186 F.3d 675, 678-79 (5th Cir. 1999). Although leave
to amend is ordinarily freely granted, Hensgens instructs that when a district court is faced
with an amendment that adds a non-diverse party it “should scrutinize that amendment more
closely than an ordinary amendment.” Id. at 1182.
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The court must balance the defendant’s interests in maintaining the federal forum with
the competing interest of not having parallel lawsuits. Factors to be considered include (1)
the extent to which the purpose of the amendment is to defeat federal jurisdiction, (2)
whether the plaintiff has been dilatory in asking for the amendment, (3) whether the plaintiff
will be significantly injured if the amendment is not allowed, and (4) any other factors
bearing on the equities. Hensgens, 833 F.2d at 1182; Hawthorne Land Co. v. Occidental
Chemical Corp., 431 F.3d 221, 227 (5th Cir. 2005).
Local Rule 7.6 requires that any motion for leave to amend that proposes to add a
party that may destroy diversity of citizenship in a removed case must include notification
to the court of that issue and an accompanying memorandum that sets forth facts relevant to
the determination that will have to be made under Section 1447(e) and the Hensgens factors
discussed above. If Plaintiffs attempt to add a non-diverse store manager or employee,
Plaintiffs should also specifically explain in their memorandum why each proposed
defendant is potentially personally liable and the claim is not precluded by Canter v.
Koehring Co., 283 So.2d 716 (La. 1973) and related jurisprudence. Under Louisiana law,
a store manager or other employee may not be held liable for an invitee’s injury on store
premises unless four distinct Canter criteria are satisfied. Carter v. Wal-Mart Stores Inc.,
2005 WL 1831092 (W.D. La. 2005) (Drell, J.) (plaintiffs, who were injured when a metal
display rack fell, had no claim against Wal-Mart managers and employee) and Carino v.
Wal-Mart Louisiana, LLC, 2006 WL 335784 (W.D. La. 2006) (Melancon, J.) (collecting
cases where injured customers were found to have no claim against store managers).
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Wal-Mart’s Allegations of Citizenship
Wal-Mart, as the removing party, has the burden of establishing diversity of
citizenship. That burden includes alleging its own citizenship in accordance with the rules
for an LLC as set forth in Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077 (5th Cir. 2008).
If the members are themselves partnerships, LLCs, corporations or other form of entity, their
citizenship must be alleged in accordance with the rules applicable to that entity, and the
citizenship must be traced through however many layers of members or partners there may
be. Feaster v. Grey Wolf Drilling Co., 2007 WL 3146363 (W.D. La. 2007). The court has
explained the need for such detail in cases such as Burford v. State Line Gathering System,
LLC, 2009 WL 2487988 (W.D. La. 2009).
The notice of removal in this case identifies Wal-Mart Stores East, LP as the sole
member of Wal-Mart Louisiana, LLC. It does not go on to identify with specificity the
member(s) of the LP. It does refer to the LP as “an indirectly, wholly owned subsidiary” of
Wal-Mart Stores, Inc., which is incorporated in Delaware and has its principal place of
business in Arkansas. That does not, however, provide with specificity the layers of
information needed to ensure diversity.
Wal-Mart has alleged detailed information about its layers in other cases, such as in
paragraph 5 of the notice of removal in Riggio v. Wal-Mart, 14 CV 0442. The result may
be the same in the end, but the detail is needed to avoid a waste of time and resources such
as in Howery v. Allstate, 243 F.3d 912 (5th Cir. 2001), where Allstate saw a favorable
judgment slip away on appeal because it neglected to plead all details of its citizenship when
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in district court. Similarly, the Court in Mullins v. TestAmerica, Inc., 2008 WL 4888576
(5th Cir. 2008) refused to consider the merits of an appeal until the record distinctly and
affirmatively alleged the citizenship of a limited partnership. The Court turned to the merits
only after the citizenship had been traced, with specificity, “down the various organizational
layers” and in accordance with the rules that apply to the various forms of entities. Mullins
v. TestAmerica Inc., 564 F.3d 386, 397-98 (5th Cir. 2009). Wal-Mart is directed to file an
amended notice of removal no later than July 18, 2014 and make detailed allegations of its
citizenship.
THUS DONE AND SIGNED in Shreveport, Louisiana, this 26th day of June, 2014.
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