Grantham v. Ogle et al

Filing 29

MEMORANDUM OPINION AND ORDER: The Court grants 28 Motion for Leave to Join Defendant, and because AMF is a non-diverse defendant, remands this case to the 192nd Judicial District Court, Dallas County, Texas, from which it was removed. (Ordered by Magistrate Judge David L. Horan on 3/5/2025) (Attachments: # 1 Remand Letter) (ndt) Modified on 3/6/2025 (mcrd).

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
CATHERINE GRANTHAM,
Plaintiff,
V.
RIVERSIDE TRANSPORTATION,
INC. and CORY WILLIAM OGLE,
Defendants.

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No. 3:24-cv-2426-BN

MEMORANDUM OPINION AND ORDER
Plaintiff Catherine Grantham has filed an Unopposed Motion for Leave to
File an Amended Complaint and Join AMF Texas Holdings, LLC as a Defendant
(“Motion for Leave to Join Defendant”). See Dkt. No. 28. Grantham filed her
proposed amended complaint as an attachment to her motion (“Proposed Amended
Complaint”).
For the reasons explained below, the Court grants Grantham’s Motion for
Leave to Join Defendant [Dkt. No. 28] and, because AMF is a non-diverse
defendant, remands this case to state court.
Background
This case concerns a motor vehicle accident, in which Grantham alleges she
suffered severe bodily injuries as a result of Defendants’ negligence. See Dkt. No.
28-1 at 4.

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Grantham contends that her vehicle struck a tractor trailer, which was
owned and/or operated by Defendants, after it became disabled in highway traffic
due to, among other things, a malfunctioning brake line in the trailer. See id.
Grantham

filed

suit

in

state

court

against

Defendants

Riverside

Transportation, Inc. (“Riverside”), and Cory William Ogle. See Dkt. No. 1-1
Defendants Riverside and Ogle removed the case to federal court on the basis
of diversity jurisdiction. See Dkt. No. 1.
Grantham now seeks to join AMF Texas Holdings, LLC (“AMF”) as a
defendant after learning through discovery that AMF is the owner of the trailer
that was involved in the accident that forms the basis of this lawsuit. See Dkt. No.
28 at 2.
Legal Standards
When, as here, the party is not subject to an expired deadline for seeking
leave to amend, Federal Rule of Civil Procedure 15(a) requires that leave to amend
be granted freely “when justice so requires.” FED. R. CIV. P. 15(a)(2). Leave to amend
is not automatic, Jones v. Robinson Prop. Grp., L.P., 427 F.3d 987, 994 (5th Cir.
2005), but the federal rules’ policy “is to permit liberal amendment to facilitate
determination of claims on the merits and to prevent litigation from becoming a
technical exercise in the fine points of pleading,” Dussouy v. Gulf Coast Inv. Corp.,
660 F.2d 594, 598 (5th Cir. 1981).
Under Federal Rule of Civil Procedure 20, governing permissive joinder of
parties, persons “may be joined in one action as defendants if: (A) any right to relief
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is asserted against them jointly, severally, or in the alternative with respect to or
arising out of the same transaction, occurrence, or series of transactions or
occurrences; and (B) any question of law or fact common to all defendants will arise
in the action.” FED. R. CIV. P. 20(a)(2).
But the United States Court of Appeals for the Fifth Circuit has explained
that, while Federal Rule of Civil Procedure “18 allows plaintiffs to join, as
independent or alternative claims, as many claims as [they have] against an
opposing party” and “Rule 20 gives plaintiffs latitude to join defendants,” “Rules 18
and 20 say nothing about adding a claim or a party after the original complaint’s
filing.” Carver v. Atwood, 18 F.4th 494, 497 (5th Cir. 2021) (cleaned up). Rather,
“[t]hat is where Rule 15 comes in,” and “Rule 15(a)(2) requires courts freely give
leave [to amend] when justice so requires.” Id. at 497-98 (cleaned up).
And a case’s originating in state court does not change that where “‘[a]
removed action does not need to be repleaded “unless the court orders it” and, so,
“[i]n a removed case, plaintiffs can rely on the state pleadings.” Pena v. City of Rio
Grande City, 879 F.3d 613, 617 (5th Cir. 2018) (quoting FED. R. CIV. P. 81(c)(2)).
Leave under Rule 15(a)(2) “is not automatic, however, and is at the discretion
of the district court.” Moore v. Manns, 732 F.3d 454, 456 (5th Cir. 2013) (citing
Muttathottil v. Mansfield, 381 F, App’x 454, 457 (5th Cir. 2010)). “In making this
decision, a court may consider: undue delay, bad faith or dilatory motive on the part
of the movant, repeated failures to cure deficiencies by amendments previously
allowed, undue prejudice to the opposing party by virtue of allowance of the
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amendment, futility of amendment, etc.” Muttathottil, 381 F. App’x at 457 (cleaned
up).
And 28 U.S.C. § 1447(e) further governs situations where a proposed, postremoval amended complaint will join a defendant whose presence in the suit will
destroy diversity jurisdiction. See Moore, 732 F.3d at 456. That provision 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 to the State court.” 28 U.S.C. § 1447(e).
And, so, under Section 1447(e), if the plaintiff, after removal to federal court,
seeks to join a defendant who is a citizen of the same state as the plaintiff (that is, a
“non-diverse defendant”), “[t]he court should ‘use its discretion in deciding whether
to allow that party to be added’” and “should scrutinize an amended pleading
naming a new non-diverse defendant in a removed case ‘more closely than an
ordinary amendment.’” Priester v. JP Morgan Chase Bank, N.A., 708 F.3d 667, 679
(5th Cir. 2013) (quoting Hensgens v. Deere & Co., 833 F.2d 1179, 1182 (5th Cir.
1987)); Moore, 732 F.3d at 456 (quoting Hensgens, 833 F.2d at 1182).
The Fifth Circuit explained that Rule 15(a) (as it was worded at that time)
“provides that leave to amend ‘should be freely given when justice so requires,’ and
Rule 20 permits joinder of proper parties” and that, “when faced with an amended
pleading naming a new nondiverse defendant in a removed case,” “justice requires
that the district court consider a number of factors to balance the defendant’s

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interests in maintaining the federal forum with the competing interests of not
having parallel lawsuits.” Hensgens, 833 F.2d at 1182.
And, so, while applying “a ‘higher level of scrutiny’ … to an amended
pleading naming a new nondiverse defendant in a removed case,” Guijarro v. Enter.
Holdings, Inc., 39 F.4th 309, 315 (5th Cir. 2022) (quoting Allen v. Walmart Stores,
L.L.C., 907 F.3d 170, 185 (5th Cir. 2018)), “[i]n deciding whether to allow leave to
amend, a court should consider several factors, including ‘[1] the extent to which the
purpose of the amendment is to defeat federal jurisdiction, [2] whether plaintiff has
been dilatory in asking for amendment, [3] whether plaintiff will be significantly
injured if amendment is not allowed, and [4] any other factors bearing on the
equities.’” Moore, 732 F.3d at 456 (quoting Hensgens, 833 F.2d at 1182).
The Fifth Circuit instructed that “[t]he district court, with input from the
defendant, should then balance the equities and decide whether amendment should
be permitted.” Hensgens, 833 F.2d at 1182.
And, as part of this analysis, “[t]he plaintiff’s failure to state a plausible claim
against a proposed defendant is evidence of the amendment’s improper purpose and
sufficient reason to deny leave to amend.” Guijarro, 39 F.4th at 315 (citing Allen,
907 F.3d at 186, and Moore, 732 F.3d at 457).
If the district court “permits the amendment of the nondiverse defendant, it
then must remand to the state court. If the amendment is not allowed, the federal
court maintains jurisdiction.” Hensgens, 833 F.2d at 1182.

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Analysis
Grantham requests leave to amend her complaint and join AMF as a
defendant based upon recently discovered facts learned through discovery. See Dkt.
No. 28 at 2. Specifically, Grantham learned that AMF is the owner of the trailer
that was involved in the accident that forms the basis of this lawsuit. See id. And,
so, she asserts that she has a negligence claim against AMF that arises from the
same facts as her claims against Riverside and Ogle. See id. at 3.
Grantham’s Proposed Amended Complaint includes a negligence claim
against AMF, and the parties do not dispute that Grantham has stated with
sufficient plausibility a claim against AMF for Rule 15(a)(2)’s purposes. See Dkt. No.
28-1 at 6.
But that does not end the Court’s inquiry. “The court has a duty to determine
whether it properly has jurisdiction over this action, especially since the [Proposed]
Amended Complaint add[s] a new party.” Seeley v. Walmart Inc., No. 3:24-cv-1269L, 2024 WL 3418825, at *3 (N.D. Tex. July 12, 2024) (citing Ruhgras AG v.
Marathon Oil Co., 526 U.S. 574, 583 (1999); McDonal v. Abbott Labs., 408 F.3d 177,
182 n.5 (5th Cir. 2005)).
Diversity jurisdiction under 28 U.S.C. § 1332(a) is the only basis for federal
subject matter jurisdiction that Defendants invoked in their Notice of Removal. See
Dkt. No. 1.
Diversity of citizenship exists between the parties only if each plaintiff has a
different citizenship from each defendant. Getty Oil Corp. v. Insurance Co. of N.
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Am., 841 F.2d 1254, 1258 (5th Cir. 1988). In other words, 28 U.S.C. § 1332 requires
complete diversity of citizenship; that is, a district court cannot exercise jurisdiction
if any plaintiff shares the same citizenship as any defendant. See Corfield v. Dallas
Glen Hills LP, 355 F.3d 853, 857 (5th Cir. 2003).
Grantham has affirmatively pled that both she and AMF are citizens of
Texas. See Dkt. No. 28-1 at 2-3. And, so, AMF is a non-diverse defendant, and the
Court no longer has diversity jurisdiction over this action. Her Proposed Amended
Complaint acknowledges this. See id. at 3 (“Given that Plaintiff and Defendant
AMF are both citizens of Texas, this Court now lacks subject matter jurisdiction
over this matter because there is no longer diversity of citizenship.”).
And, so, because AMF is a non-diverse defendant, the Court must also
analyze the amendment under the Hensgens factors: “[1] the extent to which the
purpose of the amendment is to defeat federal jurisdiction, [2] whether plaintiff has
been dilatory in asking for amendment, [3] whether plaintiff will be significantly
injured if amendment is not allowed, and [4] any other factors bearing on the
equities.” Moore, 732 F.3d at 456 (cleaned up).
The Court first considers Grantham’s purpose in seeking to add AMF as a
defendant.
Courts in this district addressing this factor assess “’the viability of the
claims alleged against a new defendant, the timing of a plaintiff's attempt to add
the defendant, and whether the plaintiff knew or should have known the identity of
the new defendant prior to removal.’” Ascent Emergency Med. Ctr. LLC v. Zelis
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Claims Integrity, LLC, No. 3:23-cv-2523-D, 2024 WL 2097708, at *3 (N.D. Tex. May
8, 2024) (quoting Appliance All., LLC v. Sears Home Appliance Showrooms, LLC,
2015 WL 9319179, at *5 (N.D. Tex. Dec. 23, 2015); cleaned up).
And “[w]hen a plaintiff states a viable claim against a non-diverse defendant,
courts generally find that the ‘principal purpose of the amendment was not to defeat
federal jurisdiction.’” Diaz v. Quantem Aviation Servs., LLC, Defendant., No. 3:23cv-1975-B, 2024 WL 1607066, at *2 (N.D. Tex. Apr. 11, 2024) (cleaned up).
Grantham asserts that the primary purpose of the amendment is to add a
new defendant whose identity had recently been disclosed through discovery. See
Dkt. No. 28 at 3. And the parties do not dispute that Grantham has a viable claim
for negligence against AMF “[s]ince it owned the trailer, and the trailer’s breaks
malfunctioned, which caused Riverside’s tractor trailer to stall in the middle of the
interstate highway.” Id.
And, so, this factor weighs in favor of granting leave to amend.
In determining if a plaintiff has been dilatory, “courts consider the amount of
time that has passed between the plaintiff’s motion to amend and the filing of the
original petition and notice of removal.” Ybarra v. Walmart Inc., No. SA-23-CV00932-XR, 2023 WL 7783142, at *3 (W.D. Tex. Nov. 13, 2023) (cleaned up). “If
significant activity beyond the pleading stage has not yet occurred, courts often find
that amendment is timely, unless the plaintiff ‘had ample information about [the
proposed defendant’s] identity and involvement in [the underlying controversy]
before [plaintiff] filed the suit in state court.’” Skinner Cap. LLC v. Arbor E&T,
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LLC, No. 3:23-cv-2320-D, 2024 WL 1219235, at *3 (N.D. Tex. Mar. 21, 2024) (citing
Estate of Alex ex rel. Coker v. T-Mobile US, Inc., No. 3:17-cv-2622-M, 2018 WL
993784, at *2 (N.D. Tex. Feb. 21, 2018) (alterations in original; quoting Gallegos v.
Safeco Ins. Co. of Ind., Civ. A. No. H–09–2777, 2009 WL 4730570, at *4 (S.D. Tex.
Dec. 7, 2009)).
Grantham filed her Motion for Leave to Join Defendant approximately seven
months after filing her petition in state court and four months after the case was
removed to federal court. See Dkt. No. 1; Dkt. No. 28.
But Grantham contends that she only recently learned of AMF’s role on
January 24, 2025 through discovery and that, on doing so, she sought leave to join
AMF promptly and diligently by filing her motion approximately two weeks later.
See Dkt. No. 28 at 4. Specifically, “Defendant Riverside identified AMF as the owner
of the trailer in response to [Grantham’s] interrogatories.” Id. at 2-3.
No significant activity beyond the pleading stage had occurred, and
Grantham filed her motion before the amendment deadline. See Diaz, 2024 WL
1607066, at *3; cf. Allen v. Walmart Stores, L.L.C., 907 F.3d 170, 186 (5th Cir. 2018)
(“As to Falcon Safety Products, [plaintiff] was dilatory in seeking to add this
manufacturer. [Plaintiff’] had knowledge that Falcon Safety Products was the
correct manufacturer as early as the day that she filed her amended complaint.”).
And, so, Grantham has not been dilatory in seeking amendment.
The Court must also assess if Grantham would “suffer a significant injury if
the Court denied her leave to amend.” Diaz, 2024 WL 1607066, at *3.
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The Court considers whether the plaintiff can obtain complete relief without
the amendment, whether the plaintiff can pursue any potential claims in state
court, and whether “[p]laintiff will be required to litigate separate claims in
separate forums – on different timetables, under different procedural rules, and
with potentially conflicting results – arising out of the same set of facts.” Ybarra,
2023 WL 7783142, at *4; see also Mid-Am. Supply Corp. v. Truist Bank, No. 4:21CV-00841, 2023 WL 1765908, at *5 (E.D. Tex. Feb. 3, 2023).
Grantham will suffer injury if amendment is denied because she would be
required to bring two separate lawsuits related to a single accident, which could
potentially lead to inconsistent results regarding liability and damages. And, so,
this factor weighs in favor of permitting the amendment.
And there are no other factors bearing on the equities that the Court should
consider.
And, so, the balance of the Hensgens factors weighs in favor of granting
Grantham leave to amend to join AMF as a defendant, after which the Court will no
longer have subject-matter jurisdiction under Section 1332(a) and must remand the
case to state court.
Recommendation
The Court grants Grantham’s Motion for Leave to Join Defendant [Dkt. No.
28] and, because AMF is a non-diverse defendant, remands this case to the 192nd
Judicial District Court, Dallas County, Texas, from which it was removed.
SO ORDERED.
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DATED: March 5, 2025

_________________________________________
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE

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