Norwood v. Grocers Supply Co Inc et al

Filing 29

MEMORANDUM RULING granting 7 MOTION to Remand filed by Kimberly Norwood. Signed by Magistrate Judge Kathleen Kay on February 25, 2013. (crt,Benoit, T)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAKE CHARLES DIVISION

KIMBERLY NORWOOD

:

CIVIL ACTION NO. 12-cv-751

VERSUS

:

JUDGE MINALDI

GROCERS SUPPLY CO. INC., ET AL

:

MAGISTRATE JUDGE KAY

MEMORANDUM RULING

There are two motions before the court. Plaintiff, Kimberly Norwood, has filed a Motion
to Remand. Doc. 7. Retail Investors of Texas, Ltd., d/b/a “Market Basket” and Commerce &
Industry Insurance Company have filed a Motion to Intervene. Doc. 17. For the reasons
discussed herein, the Motion to Remand is GRANTED. Considering our granting of the Motion
to Remand we have no jurisdiction to rule on the Motion to Intervene and therefore leave that for
disposition by the state court if any further disposition is warranted under the circumstances.
Background
Kimberly Norwood instituted suit on February 14, 2012, in the 14th Judicial District
Court of Louisiana against defendants Keith Haygood, The Grocers Supply Company, Inc.
(hereinafter “Grocers”), and Zurich American Insurance Company (hereinafter “Zurich”). The
petition alleges the defendants are liable to her for personal injuries she sustained as the result of
a workplace accident. Doc 1, Att. 1.
On March 23, 2012, Retail Investors of Texas, Ltd., d/b/a “Market Basket” (hereinafter
“RIT”) and Commerce & Industry Insurance Company (hereinafter “C&I”) purported to
intervene as plaintiffs in the state court action by filing a facsimile petition. Doc. 7, pp. 4-6.
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They asserted that they previously paid workers compensation benefits to the plaintiff and have a
right to recover from the defendants those amounts and any future amounts that may be paid.
Grocers and Zurich removed the case to this court on March 28, 2012. Doc. 1, Att. 2.
They assert that this court has subject matter jurisdiction based upon diversity of citizenship.
The notice of removal did not include the claims by the purported intervenors, RIT and C&I,
against the defendants. The removal only included the principal claims by Norwood against the
defendants.
Norwood filed a Motion to Remand on April 26, 2012, alleging that removal was
improper because the district court lacks diversity subject matter jurisdiction as there is an
absence of complete diversity between intervenor RIT and defendants Grocers and Keith
Haygood. Doc. 7, Att. 3, pp. 5-6. The defendants counter that this court has supplemental
jurisdiction of any claims-in-intervention. Doc. 12, pp. 3, 7-8.
RIT and C&I subsequently filed a Motion to Intervene in the action in this court on June
14, 2012. Doc. 17. They also maintain, however, that they timely intervened as plaintiffs in the
state court proceeding before the case was removed and that the defendants failed to include the
intervention petition when removing the case. Doc. 17, p. 2. The defendants counter that RIT
and C&I failed to intervene in the state court proceeding as the purported intervention was
untimely and ineffective. Doc. 12, pp. 2, 3.
Law & Analysis
Defendants claim this court has subject matter jurisdiction over the case on the basis of
diversity.

This court enjoys diversity jurisdiction only if amount in controversy exceeds

$75,000, exclusive of interest and costs, and is between citizens of different states. 28 U.S.C. §
1332(a)(1).

There is no apparent dispute between the parties that the judicial amount in

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controversy exceeds the jurisdictional requirement.

Rather, the dispute ultimately revolves

around whether the citizenship requirement is satisfied.
The citizenship provision requires complete diversity among the parties. Caterpillar Inc.
v. Lewis, 519 U.S. 61, 68 (1996). This action, as articulated in the notice of removal, involves
completely diverse parties.1 However, RIT and C&I believe that their domiciles should be
considered as they intervened prior to removal. They also assert that their corporate citizenship
should be included even if they failed to intervene prior to removal because they may intervene
now as of right.
If RIT and C&I intervened in the state court action or enjoy the right to intervene at this
point in the litigation, and if their interests in this suit are aligned with those of the plaintiff, then
there is an absence of complete diversity as RIT shares a domicile with defendants Haygood and
Grocers.2 The court will consider the motions in reverse order, first determining whether RIT
and C&I intervened in state court or should be permitted to intervene now, and then determining
whether remand is proper.
1. Motion to Intervene
RIT and C&I allege that they have previously paid workers compensation benefits to the
plaintiff for the same injuries that form the basis of the lawsuit. They sought to intervene in state
court and now seek to intervene in this court pursuant to a provision of Louisiana law which
affords employers and their workers compensation carriers a cause of action to recover any
payments previously made, and any future payment obligations, from a third party tortfeasor.
See La. Rev. Stat. § 23:1101(B).

1

Plaintiff is a citizen of Louisiana. Defendant Keith Haygood is a citizen of Texas. Defendant Grocers is
incorporated in Texas and maintains its principal place of business in Texas. Defendant Zurich is incorporated in
New York and maintains its principal place of business in Illinois.
2
RIT is domiciled in Texas and maintains its principal place of business in Texas. C&I is a foreign insurer
authorized to business in Louisiana.

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Assuming that RIT and C&I actually made workers compensation payments to Norwood,
then they enjoyed the right to intervene in the Louisiana state court action,3 and they were
entitled to intervene without leave of court until an answer to the principal demand was filed.4 In
fact, once Norwood filed suit in state court, RIT and C&I were required to intervene in that
action or their right to recover would be waived. See Porter v. Saia Motor Freight Line, Inc., 961141 (La. App. 3 Cir. 3/19/97), 692 So. 2d 1197, 1200.
Louisiana law provides that parties may file any paper with the court by facsimile
transmission. La. Rev. Stat. 13:850. RIT and C&I filed a petition of intervention by facsimile
transmission with the state court on March 23, 2012. See Doc. 7, Att. 1. The document bears the
stamp of the Office of the Clerk of Court of Calcasieu Parish, along with the date, time, and
method and amount of payment to the court. The transmission seemingly complied with the
requirements for facsimile filing in all respects.
Defendants make a number of arguments in opposition, each of which is without merit.
First they argue that the intervention was filed on March 28, 2012 — the date of the Clerk of
Court’s stamp. The document clearly indicates that it was filed on March 23, 2012. While the
stamp was imprinted on March 28, 2012, presumably this reflects the date that the forwarded
documents were received by the clerk in accordance with Louisiana Revised Statute 13:850(B).
Filing was “deemed complete at the time that the facsimile transmission” was effected on March
23, 2012. La. Rev. Stat. 13:850(A).

3

“A third person having an interest therein may intervene in a pending action to enforce a right related to or
connected with the object of the pending action against one or more of the parties thereto by . . . Joining with
plaintiff in demanding the same or similar relief against the defendant.” La. Code Civ. Proc. art. 1091(1).
4
An intervention is an incidental demand. La. Code Civ. Proc. art. 1031(B). Thus, a petition for intervention “may
be filed without leave of court at any time up to and including the time the answer to the principal demand [was]
filed.” La. Code Civ. Proc. art. 1033. None of the defendants answered the principal demand while the case was in
state court. All defendants have filed answers in this court. See Doc. 4 (answer to principal demand by defendants
Grocers and Zurich), Doc. 11 (answer to principal demand by defendant Haygood).

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Second the defendants submit that they did not receive service or notice of the
intervention until April 13, 2012. Service or notice is not a prerequisite to intervention under
Louisiana law. See La. Code Civ. Proc. art. 1091.
Third the defendants include a laundry list of perceived deficiencies in paragraphs 2, 3,
and 5 of the intervention.

These alleged deficiencies may have provided grounds for an

exception under Louisiana law (see La. Code Civ. Proc. Arts. 925-27l); however, the defendants
fail to cite any law that these alleged deficiencies have any bearing on the effectiveness of the
intervention itself.
The undersigned concludes that RIT and C&I intervened in the state court proceeding
prior to removal. They were parties to this litigation when the case was removed to this court.
Finding their intervention to have been consummated in state court we now find ourselves
without jurisdiction to consider any additional relief sought.
2. Motion to Remand
Norwood argues in her Motion to Remand that this court lacks subject matter jurisdiction
because there is an absence of complete diversity. The defendants respond that this court has
supplemental jurisdiction over the intervenors’ claims.
As mentioned previously, intervenor RIT shares a domicile with defendants Grocers and
Haygood. Resolution of the jurisdictional question necessarily turns on whether the intervenors
are aligned with the plaintiff or with the defendants. If the intervenors are aligned as plaintiffs in
this litigation, then the court lacks both diversity and supplemental jurisdiction; however, if the
intervenors are aligned as defendants, then the court has diversity and/or supplemental
jurisdiction.

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RIT and C&I claimed that they were intervening on the side of the plaintiff in the state
court action.

However, a party’s own classification of their role in the litigation is not

dispositive. It is the duty of this court to “look beyond the pleadings, and arrange the parties
according to their sides in the dispute.” City of Indianapolis v. Chase Nat. Bank of City of N.Y.,
314 U.S. 63, 69 (1941) (quoting Dawson v. Columbia Ave. Sav. Fund, Safe Deposit, Title &
Trust Co., 197 U.S. 178, 180 (1905)). The question is whether there is an “actual, substantial
controversy between citizens of different states,” and this court must look to the “principal
purpose of the suit and the primary and controlling matter in dispute.” Indemnity Ins. Co. of N.A.
v. First Nat. Bank at Winter Park, Fla., 351 F.2d 519, 522 (5th Cir. 1965) (citing City of
Indianapolis, 314 U.S. 63). Thus the court will conduct its own review of the party’s interest in
the litigation and determine whether they are more appropriately aligned with the plaintiff or
defendants.
Norwood submits that Dushane v. Gallagher Kaiser Corp., No. 05-0171, 2005 WL
1959151 (W.D. La. Aug. 10, 2005), supports the position that the intervenors’ interests are
aligned with hers. This is the only case provided by the parties that squarely confronts the
alignment question in the context of workers compensation. There the court remanded the case
to the state court after concluding that the court lacked “supplemental jurisdiction over the
employer’s intervention, when the employer [was] not diverse from all defendants but [was]
diverse from the plaintiff.” Id. at *1. The court’s analyzed the alignment issue as follows:
After careful consideration, the court finds GM is more properly considered an
intervenor-plaintiff. If allowed to intervene, GM no doubt will align itself with
Plaintiffs, as it is in GM's interest for Plaintiffs to maximize their recovery against
Defendants and thereby increase the potential for GM to recover all of the
worker's compensation benefits it already has paid Plaintiffs. The less Plaintiffs
recover, the less reimbursement GM will receive. If Plaintiffs had not filed a suit
at all, and GM filed its own suit against Defendants to seek reimbursement, GM
would be considered a plaintiff in every sense of the word. The difference here is
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that the injured employee filed his own suit, thus relegating GM to the status of
putative intervenor.
Id. at *6. At least two other federal district courts in Louisiana have addressed the alignment
issue in the workers compensation context, and they both supported a plaintiff-side alignment.5
The court finds this analysis persuasive and concludes that the interests of RIT and C&I are more
closely aligned with the plaintiff.
The defendants submit that the holding of Dushane should be limited to its facts, and in
any event, it should only govern a claim for past benefits already paid. This argument is
unpersuasive for several reasons. One, the distinction between benefits already paid and future
obligations is one without a difference. To the extent that a workers compensation carrier has
already paid support or will owe support in the future, it has an interest in seeing their injured
employee receive the maximum amount possible from the third party tortfeasor(s). Two, the
defendants’ position is untenable. In the event that a workers compensation carrier has already
paid compensation and intends to make future payments, their interests would be partiallyaligned with the plaintiff and partially-aligned with the defendant. Jurisdictional rules would be
impossible to apply if an intervenor came in on both sides of the case. See Fed. R. Civ. P. 24,
see also 28 U.S.C. § 1367. Third, this court agrees with the analysis of Paxton, 2008 WL
4977299 at *7 n.27. Compensation already paid and future compensation obligations are both
injuries an employer has sustained as a result of the alleged conduct of a third party tortfeasor.

5

See Paxton v. Kirk Key Interlock Co., LLC, No. 08-583, 2008 WL 4977299, *7 n.27 (M.D. La. Oct. 21, 2008),
report and recommendation rejected in part on other grounds, No. 08-583, 2008 WL 5043428 (M.D. La. Nov. 21,
2008) (“Since both Dow and the plaintiffs in this suit share the same ultimate interest as against ABB, i.e., recovery
of losses sustained (in the form of injuries and worker's compensation benefits paid or obligated to be paid in the
future), as a result of ABB's allegedly defective switchgear equipment and since Dow offers no resistance to the
substance of the plaintiffs' claims against ABB and merely seeks its statutorily-created right to reimbursement based
upon the substance of plaintiffs' claims, Dow should be realigned as a party plaintiff herein.”); Head v. Chesapeake
Operating, Inc., No. 10-0444, 2010 WL 2246394, *1 (W.D. La. May 26, 2010) (“The worker's compensation
intervenor in a case like this is aligned as a plaintiff, so its citizenship must be diverse from that of all defendants or
diversity will be destroyed.”).

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The defendants argue that Kelly v. Scottsdale Ins., 465 Fed. Appx. 296 (5th Cir. 2012),
stands for the proposition that a workers compensation carrier is properly aligned with the
defendants. The court of appeals in Kelly affirmed a decision of the trial court granting summary
judgment to the defendant UM carrier. Id. at 297. The motion was granted only to the extent
that the intervening employer could not seek reimbursement from the defendant UM carrier of
the intervening employer under the theory that the intervening employer was subrogated to the
rights of the plaintiff employer when workers compensations payments were made. Id. at 297,
301. The court held that the UM carrier and the employer were bound in solido to the employee,
and a subrogation-based theory of reimbursement would impermissibly entitle the plaintiff
employee to double recovery. Id. at 298-99.
The Kelly decision does not govern the instant case. The court was faced with a motion
for summary judgment. Id. at 298. It did not address the proper alignment of the intervenors,
and there is no language in the opinion that suggests the appropriate method to interpret the
interests of intervening workers compensation carriers under Louisiana law.
Defendants argue that despite the procedural differences, the rationale of Kelly governs
because of the in solido nature of liability. However, the mere fact that a workers compensation
carrier and third party tortfeasor may be solidarily liable to an injured employer does not mean
that the interests of the carrier and tortfeasor are automatically aligned. As the Dushane court
discussed, an intervening employer has a strong interest in ensuring that the injured employee to
whom they have paid out compensation recovers damages from the third party tortfeasor. 2005
WL 1959151 at *6. The interests of the employer and the third party tortfeasor are wholly
adverse.

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This court concludes that the interests of the intervenors are more aligned with the
plaintiff than the defendants and turns to the question of whether this court has subject matter
jurisdiction over the claim.
The defendants’ original basis for removal alleged that diversity of parties granted this
court subject matter jurisdiction. However, this allegation failed to include the domicile of RIT
and C&I in this calculus. As detailed above, RIT is a domiciliary of Texas, and the defendants,
Grocers Supply Co. and Keith Haygood, are also domiciled in Texas. Thus, there is an absence
of complete diversity necessary to satisfy the requirements of 28 U.S.C. § 1332.
This court may exercise supplemental jurisdiction over “claims that involve the . . .
intervention of additional parties” when those claims “are so related to the claims in the action
within such original jurisdiction that they form part of the same case or controversy . . . .” 28
U.S.C. § 1367(a). However, the intervenors are parties made plaintiff under Rule 24 of the
Federal Rules of Civil Procedure. The court may not exercise supplemental jurisdiction “over
claims by plaintiffs . . . interven[ing] as plaintiffs under Rule 24 . . . when exercising
supplemental jurisdiction over such claims would be inconsistent with the jurisdictional
requirements of [28 U.S.C. §] 1332.” 28 U.S.C. § 1367(b). Thus, this court lacks supplemental
jurisdiction over the claims of RIT and C&I because, as previously discussed, there is an absence
of complete diversity.
Conclusion
The Motion to Intervene is DENIED as MOOT insofar as the court concludes that RIT
and C&I properly intervened in the state court action prior to the defendants’ removal to federal
court.

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The Motion to Remand is GRANTED. The court finds that the interests of the
intervenors RIT and C&I are aligned with the plaintiff given the substantive workers’
compensation laws of Louisiana and the facts of this case. Considering this alignment, the court
concludes that neither 28 U.S.C. § 1332 nor 28 U.S.C. §1367 confer subject matter jurisdiction
upon this court.
A separate order of remand is being issued herewith. As set forth in that order, the effect
of the order will be suspended for a period of fourteen (14) days from today’s date to allow the
parties to appeal to the district court for review. Should either party seek review from the district
court, then the effect of this order is suspended until final resolution of the issue by the district
court.

THUS DONE this 25th day of February, 2013.

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