Eagle Water L L C v. Arch Insurance Co et al

Filing 5

MEMORANDUM ORDER. If Eagle contests the assertion that the Ashes were improperly joined, it must file a motion to remand, supported by a memorandum, by March 17, 2017 and explain why there is a reasonable basis to predict that state law would allow Eagle to recover against the Ashes. If Eagle timely files a motion to remand, it will be noticed for briefing so that Arch can respond and attempt to meet its burden on the improper joinder issue. If Eagle does not timely file a motion to re mand and challenge the improper joinder plea, the court will consider Eagle to concede the point, the Ashes will be dismissed, and the case will proceed toward a Scheduling Order. Signed by Magistrate Judge Mark L Hornsby on 02/10/2017. (crt,Crick, S)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION

EAGLE WATER, LLC

CIVIL ACTION NO. 17-cv-0250

VERSUS

JUDGE FOOTE

ARCH INSURANCE CO., ET AL

MAGISTRATE JUDGE HORNSBY

MEMORANDUM ORDER
Eagle Water, LLC filed this action in state court against Arch Insurance Company,
Gene Ash, and Nida Ash. The petition alleged that Eagle performed services to prevent
sewer water backup in a neighborhood, but waste water nonetheless backed up into the home
of Gene and Nida Ash. Eagle had a commercial liability insurance policy with Arch and put
Arch on notice of a potential claim. Arch has allegedly denied the claim based on one or
more exclusions in the policy. Eagle prays for a judgment declaring that the policy covered
all claims related to the Ashes’ claim.
Arch removed the case based on an assertion of diversity jurisdiction. Arch alleges
that it is a citizen of Missouri and New Jersey, and Eagle is alleged (on information and
belief) to have a single member who is an individual domiciled in Louisiana. There is not
complete diversity on the face of the petition, however, because both Gene and Nida Ash are
also alleged to be Louisiana citizens. Arch contends that it is not aware of any claims that
Eagle may possibly have against the Ashes, so that their citizenship should be ignored
pursuant to the improper joinder doctrine that is outlined in Smallwood v. Illinois Central RR

Co., 385 F.3d 568 (5th Cir. 2004). Eagle has not challenged the improper joinder plea, but
the court is obligated to determine subject matter jurisdiction, including whether a party is
improperly joined, on its own initiative. Gasch v. Hartford Acc & Indem. Co. 491 F.3rd 278,
281 (5th Cir. 2007).
If Eagle contests the assertion that the Ashes were improperly joined, it must file a
motion to remand, supported by a memorandum, by March 17, 2017 and explain why there
is a reasonable basis to predict that state law would allow Eagle to recover against the Ashes.
If Eagle timely files a motion to remand, it will be noticed for briefing so that Arch can
respond and attempt to meet its burden on the improper joinder issue. If Eagle does not
timely file a motion to remand and challenge the improper joinder plea, the court will
consider Eagle to concede the point, the Ashes will be dismissed, and the case will proceed
toward a Scheduling Order.
THUS DONE AND SIGNED in Shreveport, Louisiana, this 10th day of February,
2017.

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