Gorney v. Hansen Beverage Company

Filing 29

ORDER that 21 Amended Complaint is STRICKEN. If Gorney desires to add Cold Spring to this case, he shall file a Motion for Leave to Amend and supporting memorandum on or before April 29, 2011. Defendants (including any proposed Defendants) shall jo intly serve and file a memorandum in response to Gorneys Motion on or before May 13, 2011. After the Motion (if any) has been fully briefed, the Court will advise the parties if it desires a hearing. (Written Opinion). Signed by Judge Richard H. Kyle on 04/12/11. (kll)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

James Derek Gorney,
Plaintiff,
Civ. No. 10-2386 (RHK/JSM)
ORDER

v.
Hansen Beverage Company, Cold Spring
Brewing Company, and Ball Corporation,
Defendants.

This matter is before the Court sua sponte.
This is a personal-injury action in which Plaintiff James Derek Gorney alleges that
he was injured by a piece of glass inside a can of Monster Energy Drink designed,
produced, manufactured, distributed, and/or sold by Defendant Hansen Beverage
Company (“Hansen”). Gorney commenced the action in June 2010 in Hennepin County,
Minnesota District Court, claiming that the “small piece of glass” in the can caused “a
sharp pain in his mouth” and “bleeding” for which he received medical treatment. He
asserted claims for negligence, breach of warranty, and strict liability. Hansen later
removed the action to this Court, invoking diversity jurisdiction – it averred that it is a
California corporation with its principal place of business in California and that Gorney is
a Minnesota citizen. (See Notice of Removal (Doc. No. 1) ¶ 5; Compl. ¶ 1.)1

1

The Complaint actually alleged that Gorney is a Minnesota resident. Yet, citizenship is
determined by an individual’s domicile, e.g., Yeldell v. Tutt, 913 F.2d 533, 537 (8th Cir. 1990),
and residence and domicile are not synonymous, see Sanders v. Clemco Indus., 823 F.2d 214,
216 (8th Cir. 1987) (district court properly determined it lacked diversity jurisdiction where

Following removal, the parties proceeded with discovery, during which Hansen
identified the manufacturer of the can in question (Ball Corporation (“Ball”)) and the
entity that filled that can with Monster Energy Drink (Cold Spring Brewing Company
(“Cold Spring”)). Gorney then sought leave to amend his Complaint to add Ball and
Cold Spring as Defendants. Hansen stipulated to that amendment (see Doc. No. 15), and
Gorney filed an Amended Complaint (Doc. No. 21) against Hansen, Ball, and Cold
Spring. The Amended Complaint alleges that Ball is an Indiana corporation with its
principal place of business in Colorado (id. ¶ 4), but alleges only that Cold Spring is a
Colorado corporation “doing business in” Minnesota (id. ¶ 3). In other words, the
Amended Complaint does not aver the location of Cold Spring’s principal place of
business – a necessary fact for determining whether diversity exists. See 28 U.S.C.
§ 1332(c)(1) (corporation’s citizenship determined by its place of incorporation and
principal place of business). And it is now clear that Cold Spring’s principal place of
business is, in fact, located in Minnesota. (See Answer (Doc. No. 28) ¶ 3.)
Based on the foregoing, it is apparent that Cold Spring’s addition to this case has
destroyed diversity jurisdiction. Unfortunately, no party seems to have recognized this
problem before Gorney sought leave to amend the Complaint, or before the Amended
Complaint was filed.
The Court is not without guidance in this situation, however. The Eighth Circuit
has counseled that “when a trial court grants a plaintiff leave to amend the complaint by

complaint alleged only residency of plaintiffs). Nevertheless, there does not appear to be any
dispute that Gorney is a Minnesota domiciliary and, hence, a Minnesota citizen.
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naming additional defendants, and the plaintiff fails to inform the court that one or more
of those defendants will destroy diversity, the trial court may reconsider its earlier
decision” granting amendment. Bailey v. Bayer CropScience, L.P., 563 F.3d 302, 307
(8th Cir. 2009). The Amended Complaint “should be considered a nullity and the Court
given an opportunity to consider whether justice requires that [the plaintiff] be permitted
to join [the additional] defendant.” Id. (citation omitted). That is consistent with 28
U.S.C. § 1447(e), which provides: “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.” Whether to permit diversitydestroying joinder in this situation lies in the Court’s sound discretion, and in exercising
that discretion, consideration must be given to, among other things, the extent to which
joinder of the nondiverse party is sought to defeat federal jurisdiction, whether the
plaintiff has been dilatory in asking for amendment, and whether the plaintiff will be
significantly injured if amendment is disallowed. Bailey, 563 F.3d at 309; Ryan ex rel.
Ryan v. Schneider Nat’l Carriers, Inc., 263 F.3d 816, 819 (8th Cir. 2001) (per curiam).
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
ORDERED that the Amended Complaint (Doc. No. 21) is STRICKEN. If Gorney
desires to add Cold Spring to this case, he shall file a Motion for Leave to Amend and
supporting memorandum before the undersigned on or before April 29, 2011. Any such
Motion shall address the factors set forth in Bailey regarding the propriety of amendment
under the present circumstances. Defendants (including any proposed Defendants) shall
jointly serve and file a memorandum in response to Gorney’s Motion on or before May

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13, 2011. After the Motion (if any) has been fully briefed, the Court will advise the
parties if it desires a hearing.2

Date: April 12, 2011

s/Richard H. Kyle
RICHARD H. KYLE
United States District Judge

2

If the Court were to grant leave to add Cold Spring, diversity would be destroyed and remand
would be required. Remand might be appropriate for another reason, however. As noted above,
the initial Complaint alleged that Gorney cut his mouth on a “small piece of glass,” necessitating
medical attention. It did not allege any claim for lost wages, emotional distress, permanent
injury, or any other type of damages. Nevertheless, the Complaint demanded “an amount greater
than Fifty Thousand and no/100 Dollars.” Hansen removed the action to this Court on the basis
of these bare-bones allegations, asserting in its Notice of Removal that “[u]pon information and
belief, the amount in controversy exceeds $75,000.” And indeed, in his Amended Complaint
Gorney now seeks in excess of $75,000, the threshold for diversity jurisdiction. Yet, the Court
harbors serious doubts whether $75,000 actually is in controversy here. It is dubious that a cut
caused by a “small piece of glass” entitles Gorney to recover such a sizeable amount, especially
without any suggestion that he suffered a permanent injury (or other type of significant injury).
And it makes no difference that Gorney has alleged that his damages are that high. See, e.g.,
James Neff Kramper Family Farm P’ship v. IBP, Inc., 393 F.3d 828, 831 (8th Cir. 2005) (“We
do not assume the claimed amount is the actual amount in controversy if the court questions
whether the amount alleged is legitimate.”) (internal quotation marks and citation omitted); Mo.
ex rel. Pemiscot County, Mo. v. W. Sur. Co., 51 F.3d 170, 173 (8th Cir. 1995) (“The plaintiff’s
allegations of requisite jurisdictional amount are not necessarily dispositive of the issue.”).
Simply put, the parties should consider whether this case involves an amount sufficient to invoke
diversity jurisdiction, or rather whether it belongs in state court.
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