Ekberg v. Polytec Inc.

1

LEONARD EKBERG, Plaintiff, v. POLYTEC INC., Defendant.

No. 1:24-CV-284-DII

United States District Court, W.D. Texas, Austin Division

June 11, 2024

ORDER

ROBERT PITMAN, UNITED STATES DISTRICT JUDGE

Before the Court is Plaintiff Leonard Ekberg's (“Ekberg”) Motion For Leave To Amend His Complaint. (Dkt. 6). Defendant Polytec, Inc. (“Polytec”) filed a response in opposition, (Dkt 7); Ekberg filed a reply, (Dkt. 10); and Polytec filed a sur-reply, (Dkt. 11).^[1] Also before the Court is Ekberg's Motion To Remand To Travis County District Court. (Dkt. 8). Polytec filed a response in opposition, (Dkt. 9); and Ekberg filed a reply, (Dkt. 12). Having considered the parties' arguments, the record, and the applicable law, the Court will deny both motions.

I. BACKGROUND

Ekberg filed this action in the 459th Judicial District Court of Travis County, Texas on February 24, 2024. (Orig. Pet., Dkt 1, at 9-12). Ekberg alleges that he was injured by one of Polytec's employees on June 3, 2022, when the Polytec employee's company vehicle “collided into the left rear of Mr. Ekberg's truck and caused him significant injury.” (Id. at 10).^[2] Ekberg brought a single claim for negligence against Polytec under the theory of respondeat superior. (Id. at 10-11).

On March 15, 2024, Polytec removed the case to this Court on the basis of diversity jurisdiction. (Not. Removal, Dkt. 1, at 1-3). Ekberg is a Texas citizen, while Polytec is a California citizen, as it is incorporated and has its principal place of business there. (Id. at 1). On April 4, 2024, Ekberg filed his Motion For Leave To Amend His Complaint, (Dkt. 6), and on April 15, 2024, Ekberg filed his Motion To Remand To Travis County District Court, (Dkt. 8). Ekberg seeks leave to amend his complaint to add Polytec's employee, Vikrant Palan (“Palan”), stating that he did not know the identity of the company vehicle's driver until after filing suit. (Mot. Amend, Dkt. 6, at 1-2, 4). Ekberg then moves to remand the case under 28 U.S.C. § 1441 on the basis that complete diversity would be destroyed by the addition of Palan, a Texas citizen. (Mot. Remand, Dkt. 8, at 1, 3). Polytec opposes amendment on the basis that Ekberg seeks to add Palan for the sole purpose of destroying diversity, (Resp. Mot. Amend, Dkt. 7, at 5-6), and opposes remand for the same reason, (Resp. Mot. Remand, Dkt. 9, at 2-4).^[3]

II. LEGAL STANDARD

Generally, under Federal Rule of Civil Procedure 15(a)(2), “[t]he court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). However, a “district court, when faced with an amended pleading naming a new nondiverse defendant in a removed case, should scrutinize that amendment more closely than an ordinary amendment.” Hensgens v. Deere & Co., 833 F.2d 1179, 1182 (5th Cir. 1987). In exercising its discretion to grant or deny joinder of additional defendants, the court must balance “the danger of parallel federal/state proceedings with the inherent dangers of inconsistent results and the waste of judicial resources” against the diverse defendant's “interest in retaining the federal forum.” Id. Specifically, the Fifth Circuit has directed district courts to consider four factors when a plaintiff seeks to join a non-diverse defendant after removal:

1) the extent to which the purpose of the amendment of the complaint is to defeat federal jurisdiction; (2) the degree of dilatory conduct on the part of the plaintiff; (3) the risk of significant injury to the plaintiff if the amendment is not allowed; and (4) any other equitable considerations. The purpose of weighing these factors, according to Hensgens, is to balance the defendants' interest in maintaining a federal forum against the plaintiff's interest in avoiding multiple and parallel litigation.

Watson v. Law Enf't All. of Am., Inc., 451 F.Supp.2d 870, 873 (W.D. Tex. 2006) (citing Hensgens, 833 F.2d at 1182). The district court should remand the case to state court if it finds the joinder to be proper but maintain jurisdiction and dismiss the new party if it finds the joinder to be improper. Hensgens, 833 F.2d at 1181.

III. DISCUSSION

The Court will consider each Hensgens factor in turn in determining whether to use its discretion to grant or deny joinder of Palan, because doing so would destroy the Court's subject matter jurisdiction.

A. Purpose of the Amendment

The first Hensgens factor is “the extent to which the purpose of that amendment is to defeat federal jurisdiction.” Hensgens, 833 F.2d at 1182. This factor has been described as the most important factor of the four. Flores v. Arch Ins. Co., No. 5:15-CV-299, 2015 WL 4430866, at *2 (W.D. Tex. July 17, 2015); Wein v. Liberty Lloyds of Texas Ins. Co., No. A-15-CA-19-SS, 2015 WL 1275915, at *6 (W.D. Tex. Mar. 19, 2015); Adey/Vandling, Ltd. v. Am. First Ins. Co., No. A-11-CV-1007-LY, 2012 WL 534838, at *4 (W.D. Tex. Feb. 17, 2012). “Bearing on this factor is whether the plaintiff knew or should have known the identity of the non-diverse defendant when the state court petition was filed.” Zimmerman v. Travelers Lloyds of Texas Ins. Co., No. 5:15-CV-325, 2015 WL 3971415, at *7 (W.D. Tex. June 30, 2015); see also Flores, 2015 WL 4430866, at *3. When a plaintiff knew or should have known the identity of the nondiverse defendant at the time the lawsuit was originally filed, courts often view the later attempt to join the nondiverse defendant with suspicion that the plaintiff's primary purpose is to defeat jurisdiction. Wein, 2015 WL 1275915, at *5; Flores, 2015 WL 4430866, at *3; Martinez v. Holzknecht, 701 F.Supp.2d 886, 889 (S.D. Tex. 2010) (collecting cases). The inference is especially strong “when the motion to remand is made within the same pleading as the motion for leave to amend.” Zimmerman, 2015 WL 3971415, at *7 (citing Smith v. Robin America Inc., NO. H-08-3565, 2009 WL 2485589, at *5 (S.D. Tex. Aug. 7, 2009)).

Here, Ekberg contends that he did not know of Palan's identity until after he filed suit, arguing that Polytec only identified Palan to Ekberg on March 22, 2024, after which, Ekberg moved to amend within two weeks. (Mot. Amend, Dkt. 6, at 4). In response, Polytec argues that Ekberg only requested this information for the first time on March 20, 2024. (Resp. Mot. Amend, Dkt. 7, at 6). Polytec also argues that Ekberg had the opportunity to request this information when he reached out to counsel approximately two weeks before filing suit, on February 12, 2024. (Id.). In reply, Ekberg states that he “had been in contact with Defendant's liability insurance adjuster for over seventeen months before filing suit.” (Reply Mot. Amend, Dkt. 10, at 1). Polytec responds by arguing that Ekberg had the opportunity to identify Palan before filing suit through communications with Polytec's insurer, but Ekberg's counsel did not participate in reciprocal pre-suit discovery with the insurer. (Sur-Reply Mot. Amend, Dkt. 11, at 1-4).

The Court agrees with Polytec. Ekberg knew that a Polytec employee was involved in the accident when he filed his original petition in state court.^[4] The only mystery to Ekberg was the identity of the employee. Rather than trying to find out this information prior to filing suit-which he did more than 20 months after the vehicle accident-Ekberg waited until after Polytec removed this case on the basis of diversity jurisdiction. Like other courts in this circuit, this fact raises an inference that Ekberg's purpose in seeking amendment is to defeat jurisdiction. And, at any rate, even crediting Ekberg's contention that he was unable to identify Palan before filing suit, if Ekberg believed that Polytec's employee was an integral part of the suit, Ekberg could have sued the employee in a placeholder capacity, such as “John Doe.” See 28 U.S.C. § 1441(b) (defendants may be “sued under fictious names,” though their citizenship “shall be disregarded” when analyzing the propriety of removal on diversity grounds). Accordingly, the Court finds that Ekberg's primary purpose for seeking to join Palan as a defendant is to defeat jurisdiction. The first, and most important, Hensgens factor weighs against Ekberg.

B. Whether Plaintiff Has Been Dilatory

The second Hensgens factor requires the Court to consider whether Ekberg was dilatory in seeking to join Palan. Hensgens, 833 F.2d at 1182. Generally, a plaintiff is not dilatory in seeking to amend a complaint when no trial or pre-trial dates have been scheduled and “no significant activity beyond the pleading stage has occurred.” Zimmerman, 2015 WL 3971415, at *8; Flores, 2015 WL 4430866, at *5. However, courts have found delays of one month following removal or two months following the filing of the original complaint to be dilatory. Wein, 2015 WL 1275915, at *6; Phillips v. Delta Air Lines, Inc., 192 F.Supp.2d 727, 729 (E.D. Tex. 2001); see also Aaron Irigoyen & Rosie Irigoyen v. State Farm Lloyds, No. CA-C-03-324-H, 2004 WL 398553, at *4 (S.D. Tex. Jan. 5, 2004) (finding an interval of two-and-a-half months between notice of removal and request for joinder to be dilatory). Here, the Court finds that Ekberg was generally diligent in seeking amendment and remand, having filed his motions within one month of removal. (See Not. Removal, Dkt. 1 (filed Mar. 15, 2024); Mot. Amend, Dkt. 6 (filed Apr. 4, 2024); Mot. Remand, Dkt. 8 (filed Apr. 15, 2024)). Accordingly, Ekberg was not dilatory in seeking to join Palan, and this factor weighs in his favor.

C. Injury to Plaintiff

The third Hensgens factor is whether a plaintiff will be significantly injured if amendment is not allowed. Hensgens, 833 F.2d at 1182. When considering this factor, courts look to “whether a plaintiff can be afforded complete relief in the absence of the amendment.” Zimmerman, 2015 WL 3971415, at *9 (quoting Lowe...