United States District Court, E.D. Kentucky, Central Division, Lexington
MEMORANDUM OPINION AND ORDER
KAREN K. CALDWELL, District Judge.
This matter is before the Court on plaintiff Patsy Lawson's motion to file an amended complaint (DE 10) to join Melissa Johnson, April Harris, Carolyn Coscia, and Rose Joynt as defendants. Plaintiff has simultaneously filed a motion to remand (DE 11) on the grounds that joining the aforementioned persons would destroy diversity and divest this Court of jurisdiction. For the reasons discussed below, plaintiff's motions will be denied.
Plaintiff's original complaint was filed on August 23, 2013, in the Montgomery Circuit Court. (DE 1-1). Lawson alleges that during her visit to Lowe's Home Centers, LCC ("Lowe's") in Mt. Sterling, Kentucky on June 24, 2013, she tripped and fell on a water hose lying on the ground of the store's garden center. (DE 1-1, 6-1). She claims that "[a]s she stepped across the hose, the hose was raised and entangled her feet which caused her to fall." (DE 6-1 at ¶ 8). Lawson alleges that her right shoulder was fractured as a result of the fall. (DE 6-1 at ¶ 11).
Plaintiff's complaint asserted negligence claims against Lowe's Home Centers, Inc. as well as an "Unknown Defendant." (DE 1-1). Plaintiff alleges that the "Unknown Defendant" is "an employee of Lowe's that was working in its garden center on June 24, 2013." (DE 1-1 at ¶ 3).
On November 4, 2013, Lowe's removed the case to this Court based on diversity jurisdiction. (DE 1). Lawson is a Kentucky resident, and Lowe's is a limited liability company whose only member is Lowe's Companies, Inc., a North Carolina corporation. (DE 1, 1-1). Lowe's Companies, Inc.'s principal place of business is located in North Carolina. (DE 1-1). There is no dispute that the amount in controversy exceeds the requirement under 28 U.S.C. § 1332(a). Based on these facts, complete diversity existed at the time of removal.
On November 15, 2013, plaintiff filed a motion to remand the case to state court for lack of diversity jurisdiction. (DE 5). In support of her motion, Lawson attached as an exhibit an amended complaint adding four non-diverse Lowe's employees as defendants. (DE 5-1). On May 15, 2014, this Court denied plaintiff's motion to remand, explaining that diversity jurisdiction existed under the original complaint and plaintiff's attached amended complaint was procedurally insufficient to destroy diversity jurisdiction. (DE 8). This Court instructed Lawson to file a motion requesting leave to amend if she desired to amend her complaint. (DE 8).
On May 22, 2014, Lawson filed a motion to amend her complaint. (DE 10). The only changes from her original complaint are the substitution of Melissa Johnson, April Harris, Carolyn Coscia, and Rose Joynt for the "Unknown Defendant." (DE 10-1). Specifically, Lawson alleges that those four persons were Lowe's employees working in its garden center on June 24, 2013, and negligently created the condition that caused plaintiff to fall and be injured. (DE 10-1). Plaintiff states that she recently learned the identities of those four Lowe's employees through discovery. (DE 5). Simultaneously with the motion to amend the complaint, plaintiff filed a second motion to remand the case to state court. (DE 11). As grounds for that motion, plaintiff notes that the four Lowe's employees are Kentucky residents, who, if joined, would destroy diversity jurisdiction. (DE 11).
Amendments to pleadings are generally governed by Rule 15 of the Federal Rules of Civil Procedure, which allows a plaintiff to amend a complaint "once as a matter of course" within twenty-one (21) days of a defendant's answer or motion to dismiss under Rule 12. Fed.R.Civ.P. 15(a)(1)(B). Rule 15 provides that even if the party does not seek the amendment within the of-right period, the court may give leave to permit such an amendment and "should freely give leave when justice so requires." Fed.R.Civ.P. 15(a)(2). The Sixth Circuit has recognized that "where the underlying facts would support a claim leave to amend should be granted, except in cases of undue delay, undue prejudice to the opposing party, bad faith, dilatory motive, repeated failure to cure deficiencies by amendments previously allowed, or futility." Duggins v. Steak N Shake, Inc., 195 F.3d 828, 834 (6th Cir. 1999) (citing Foman v. Davis, 371 U.S. 178 (1962)).
"However, when a case has been removed to federal court and the amendment to the complaint would divest the court of jurisdiction, Congress has left the decision to the discretion of the courts." Cooper v. Thames Healthcare Group, LLC, No. 13-14-GFVT, 2014 WL 941925, at *2 (E.D. Ky. Mar. 11, 2014) (citing 28 U.S.C. § 1447(e)). Section 1447(e) 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." See also Collins ex rel. Collins v. Nat'l Gen. Ins. Co., No. 10-13344, 2010 WL 4259949 (E.D. Mich. Oct. 25, 2010). "The general impetus for applying § 1447(e) is for the trial court to use its discretion and determine if allowing joinder would be fair and equitable." City of Cleveland v. Deutsche Bank Trust Co., 571 F.Supp.2d 807, 823 (N.D. Ohio 2008) (quoting Harmon v. McCreary, No. 07-3-DLB, 2007 WL 4163879, at *3 (E.D. Ky. Nov. 20, 2007)); see also Lynch v. Lear Seating Corp., No. CIV.A.3:00CV-323-S, 2001 WL 1774429, at *1 (W.D. Ky. Aug. 23, 2001) ("Essentially, joinder of a nondiverse party after removal is permissible if such joinder would be fair.")
Though the Sixth Circuit has provided little guidance on this statutory section,  courts in this district generally consider the following factors when reviewing a motion to amend a complaint under Section 1447(e): "(1) the extent to which the purpose of the amendment is to defeat federal jurisdiction; (2) whether the plaintiff has been dilatory in seeking amendment; (3) whether the plaintiff will be significantly prejudiced if amendment is not allowed; and (4) any other equitable factors."
Cooper, 2014 WL 941925, at *2 (quoting Premium Fin. Grp., LLC v. MPVF LHE Lexington LLC, No. 5:13-CV-362-KKC, 2014 WL 112308, at *4 (E.D. Ky. Jan. 9, 2014)); see also Brandenburg v. Stanton Health Facilities, L.P., No. 5:14-183-DCR, 2014 WL 4956282, at *2 (E.D. Ky. Oct. 2, 2014); Davis v. Owners Ins. Co., No. 5:14-cv-169-JMH, 2014 WL 3339587, at *3 (E.D. Ky. July 9, 2014); Lester v. Extendicare, Inc., No. 6:13-CV-21, 2013 WL 3781300, at *3 (E.D. Ky. July 18, 2013). Other district courts in this circuit have found the first factor is "often of paramount importance' because the ultimate question is whether the primary purpose of the proposed joinder is to divest the federal forum of jurisdiction." Brandenburg, 2014 WL 4956282, at *2 (citing Bridgepointe Condominiums, Inc. v. Integra Bank Nat'l Ass'n, No. 08-475-C, 2009 WL 700056, at *2 (W.D. Ky. Mar. 13, 2009); City of Cleveland, 571 F.Supp.2d at 824-25; J. Lewis Cooper Co. v. Diageo N. Am., Inc., 370 F.Supp.2d 613, 618 (E.D. Mich. 2005)).
Before applying these factors, it is important to note the absence of the sole factor discussed by Lowe's. In its response to plaintiff's motion to amend and second motion to remand, Lowe's contends that "it is well settled law that the district court may deny a motion to amend if the court concludes that the pleading as amended could not withstand a motion to dismiss.'" (DE 14 at 3-4 (quoting Martin v. Associated Truck Lines, Inc., 801 F.2d 246, 248 (6th Cir. 1986)). Lowe's argues that the amended complaint "does not contain sufficient allegations to state a colorable cause of action of premises liability against the 4 named individual employees." (DE 14 at 4). This standard, however, relates to whether a fraudulent joinder has occurred or whether permitting the plaintiff to amend her complaint would be futile. See Coyne v. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999) ("To prove fraudulent joinder, the removing party must present sufficient evidence that a plaintiff could not have established a cause of action against non-diverse defendants under state law."); Martin, 801 F.2d at 248 (stating that "the district court may deny a motion to amend if the court concludes that the pleading as amended could not withstand a motion to dismiss" where the plaintiffs sought to amend their complaint to include two additional claims). Although the concepts of joinder of non-diverse parties and fraudulent joinder are ...