Agyei v. Endurance Power Products, Inc.

198 F. Supp. 3d 764, 2016 WL 4272996, 2016 U.S. Dist. LEXIS 101817
CourtDistrict Court, S.D. Texas
DecidedAugust 1, 2016
DocketCIVIL ACTION NO. 4:15-CV-1389
StatusPublished
Cited by9 cases

This text of 198 F. Supp. 3d 764 (Agyei v. Endurance Power Products, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Agyei v. Endurance Power Products, Inc., 198 F. Supp. 3d 764, 2016 WL 4272996, 2016 U.S. Dist. LEXIS 101817 (S.D. Tex. 2016).

Opinion

ORDER ADOPTING REPORT AND RECOMMENDATION

KEITH P. ELLISON, UNITED STATES DISTRICT JUDGE

Pending before the Court is Defendants’ joint motion seeking to dismiss Plaintiffs Amended Complaint, to dismiss Defendant UTP Engine, Inc. from this case, and to have the Court retain jurisdiction (Doc. No. 32). All nondispositive and dispositive matters in this case were referred to Magistrate Judge Dena Hanovice Palermo in this Court’s order of June 8, 2016. On July 15, 2016, Judge Palermo issued a Report and Recommendation recommending that Defendants’ joint motion be denied and that the case be remanded. The time for filing objections has passed, and no objections were filed.

Pursuant to Federal Rule of Civil Procedure 72(b), the Court has reviewed the Report and Recommendation for clear error. Finding no clear error, the Court adopts the Report and Recommendation in its entirety. Accordingly, Defendants’ Joint Motion (Doc. No. 32) is hereby DENIED. The case is REMANDED to the 268th Judicial District Court of Fort Bend County, Texas. IT IS SO ORDERED.

REPORT AND RECOMMENDATION ON DEFENDANTS’ JOINT MOTION TO DISMISS

DENA HANOVICE PALERMO, UNITED STATES MAGISTRATE JUDGE

On June 8, 2016, United States District Judge Keith P. Ellison referred all nondis-positive and dispositive matters in this case pursuant to 28 U.S.C. § 636(b)(1)(A)-(B). [Doc. No. 26.] Now before the Court is Defendants’ joint motion seeking to dismiss Plaintiffs Amended Complaint, to dismiss Defendant UTP Engine, Inc. from this case, and to have the Court retain jurisdiction. [Doc. No. 32.] Plaintiff has filed a response opposing Defendants’ motion and requesting that the Court remand this matter to Texas state court. [Doc. No. 33.] For the following reasons, the Court RECOMMENDS that Defendants’ joint motion be DENIED and that the case be [768]*768REMANDED to the 268th Judicial District Court of Fort Bend County, Texas.

BACKGROUND

Plaintiff, a Texas citizen, originally filed this suit on April 15, 2015 in Texas state court. The original petition named Endurance Power Products, Inc. (“Endurance”), a Delaware corporation with a principal place of business in Nebraska, as the sole defendant and asserted claims against it under the Texas Deceptive Trade Practices Act (“DTPA”), Tex Bus. & Com. Code Ann. § 17,41 et seq., and common-law fraud. (Orig. Pet. ¶¶ 13-19 [Doc. No. 1-4].) On May 22, 2015, Endurance removed the suit to federal court on the basis of diversity. (Not. of Removal ¶¶ 5, 8-13 [Doc. No. 1].) Six days later, on May 28, 2015, Endurance filed a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. [Doc. No. 5.]

On July 10, 2015, Plaintiff filed an Amended Complaint joining UTP Engine, Inc. (“UTP”) as a defendant. (Am. Compl. ¶ 3 [Doc. No. 12].) The amended complaint alleges that UTP sold a defective connecting rod, which Endurance produced, that was installed in Plaintiffs truck. (Id. ¶ 5.) Plaintiff further alleges that the defective connecting rod caused his truck to break down in the middle of a freeway in Louisiana and that the truck had to be towed to Houston for repair. (Id.) Plaintiff asserts strict liability and common-law fraud claims against both Defendants, a negligence claim against Endurance, and a DTPA claim against UTP. (Id. ¶¶ 6-24.)

On July 13, 2015, Judge Ellison held a hearing on Endurance’s motion to dismiss, denying that motion as moot in light of Plaintiffs amended complaint. In April and May of 2016, Defendants each filed a motion for summary judgment. [Doc. Nos. 21, 22.] While those motions were pending, it came to the Court’s attention that UTP is a Texas corporation.1 At a hearing held before Judge Ellison on June 23, 2016, the parties acknowledged that UTP is a Texas citizen for diversity purposes.

ANALYSIS

A. Legal Standard Governing Joinder of a Nondiverse Defendant After Removal

Federal district courts have diversity jurisdiction over “civil actions where the matter in controversy exceeds the sum of $75,000, exclusive of interest and costs, and is between citizens of different States.” 28 U.S.C. § 1332(a)(1).2 The diversity statute has long been interpreted to mandate a rule of “complete diversity,” meaning that it “applies only to cases in which the citizenship of each plaintiff is diverse from the citizenship of each defendant.” Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68, 117 S.Ct. 467, 136 L.Ed.2d 437 (1996) (citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806)); see also Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005).

Because both UTP and Plaintiff are Texas citizens, UTP’s joinder, if permit[769]*769ted,3 would destroy complete diversity— and thus diversity jurisdiction—in this case. See Hensgens v. Deere & Co., 833 F.2d 1179, 1181 (5th Cir.1987) (“[ajlthough it is true that most subsequent events will not defeat jurisdiction, addition of a nondi-verse defendant will”); Rouf v. Cricket Commc’ns, Inc., No. H-13-2778, 2013 WL 6079255, at *2 (S.D.Tex. Nov. 19, 2013) (Miller, J.) (“An amendment to the complaint that adds a non-diverse party after removal will defeat jurisdiction, and the court must remand.”).4 When a plaintiff seeks to join a nondiverse defendant after the case has been removed, the district court’s analysis begins with 28 U.S.C. § 1447(e), which states:

If after removal the plaintiff seeks to join additional defendants whose joinder [770]*770would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court.

These are the district court’s only options; “the court may not permit joinder of non-diverse defendants but then decline to remand.” Cobb v. Delta Exports, Inc., 186 F.3d 675, 677 (5th Cir.1999); accord Doleac ex rel. Doleac v. Michalson, 264 F.3d 470, 477 (5th Cir.2001) (statute “direct[s] remand if the district court permits joinder of a defendant whose citizenship destroys subject matter jurisdiction”); Schur v. L.A. Weight Loss Centers, Inc., 577 F.3d 752, 759 (7th Cir.2009) (“These are the only options; the district court may not permit joinder of a nondiverse defendant and retain jurisdiction.” (footnote omitted)); Bailey v. Bayer CropScience L.P.,

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198 F. Supp. 3d 764, 2016 WL 4272996, 2016 U.S. Dist. LEXIS 101817, Counsel Stack Legal Research, https://law.counselstack.com/opinion/agyei-v-endurance-power-products-inc-txsd-2016.