Estes v. Sunbridge

2008 DNH 116

• Court: District Court, D. New Hampshire
• Decided: June 13, 2008
• Docket: CV-08-25-JL
• Status: Published

Opinion

Estes v. Sunbridge CV-08-25-JL 06/13/08

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Dierdre Estes

v. Civil No. 08-25-JL Opinion No. 2008 DNH 116 Sunbridge Healthcare Corp. d/b/a/ Langdon Place of Exeter

MEMORANDUM AND ORDER

The plaintiff, Dierdre Estes, sued her former employer in

the New Hampshire Superior Court alleging wrongful termination

under New Hampshire common law. The defendants removed the

action to this court, see 28 U.S.C. § 1441, invoking its

diversity jurisdiction. Id. § 1332(a). The plaintiff has

responded with a motion: (1) to amend the complaint to join a

non-diverse defendant, and (2) to remand the action to the state

court based on the resulting lack of diversity jurisdiction. The

parties declined a hearing on the motion. For the reasons that

follow, the plaintiff’s motions to amend and to remand are

allowed. I. BACKGROUND1

Estes, a resident of New Hampshire, worked for Langdon Place

of Exeter, an elderly living community with assisted living

facilities, as the director of its Alzheimer’s unit. The

defendant, Sunbridge Healthcare Corp., a New Mexico corporation,

is the parent corporation of Langdon Place.2 Estes alleges that

soon after she was hired, while reviewing resident paperwork in

preparation for an upcoming audit by the state licensing board,

she discovered “significant problems” in the medical records of

residents on the assisted living floors. Estes brought her

concerns to the attention of her supervisor, Jean Davis, who,

according to Estes, claimed that Langdon Place regularly “fixed”

files by tearing out the problematic portions. When Estes asked

Davis why she would destroy medical records, Davis allegedly

replied, in a threatening manner, “Because I can.”

In a separate incident several days later, Estes alerted the

New Hampshire Bureau of Elderly and Adult Services after

observing an Alzheimer’s patient confined in an unsecured room at

Langdon Place for an extended time period. Upon learning that

1 The background information is taken from the plaintiff’s complaint and the parties’ pleadings. 2 It is unclear whether Langdon Place has a separate legal identity, but in any event it has not been named as a defendant here.

2 Estes had reported this incident to a state agency, Davis

allegedly berated her in front of other employees for raising a

“flag” with the state that could jeopardize the unit with respect

to the impending audit.

Estes alleges repeated subsequent instances of Davis--

directly or through subordinate employees--destroying, altering,

and falsifying residents’ medical records in preparation for the

state audit. This alleged behavior includes coercing signatures

from incapacitated residents, destroying copious amounts of

paperwork, and fabricating medication distribution records.

Estes alleges that shortly after the completion of the state

audit, she was again verbally attacked by Davis for her

“disloyalty” and pressured to reveal the names of other employees

who shared her concerns, which she refused to d o . Estes further

alleges that Davis’s treatment of her caused emotional and

physical problems resulting in lost sleep and work absences.

Estes raised concerns about Davis to fellow employees at Langdon

Place, and to human resources officers at Sunbridge Healthcare.

Nevertheless, on December 8 , 2007, a little over three months

after she began working for the defendant, Sunbridge Healthcare

terminated Estes’s employment.

Less than a week after her termination, Estes filed suit in

Rockingham County Superior Court alleging wrongful termination

3 under New Hampshire common law. The defendant removed the case

to this court on January 1 8 , 2008, invoking its diversity

jurisdiction. Just over a month later, the February 2 2 , 2008,

edition of the Exeter News-Letter quoted Davis as calling Estes a

“disgruntled former employee with a private and personal agenda”

whose conduct disrupting the “quality of life” of the Langdon

Place residents was “shameful.” Shortly after the publication of

this article, Estes moved: (1) to amend the complaint to add a

claim of intentional infliction of emotional distress against

Jean Davis, a New Hampshire resident, and (2) to remand the case

to state court on the ground that after the requested amendment

there would no longer be complete diversity of citizenship.

II. APPLICABLE LEGAL STANDARD

A single statute governs both issues before the court. As

part of the Judicial Improvements and Access to Justice Act of

1998, Congress enacted 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 to State court.3

3 Section 1447(e) supersedes Federal Rule of Civil Procedure 1 5 , which specifically allows a plaintiff to “amend its pleading once as a matter of course at any time before a response pleading is served.” Fed. R. Civ. P. 1 5 ; see also Mayes v .

4 Section 1447(e) grants courts the discretion to determine whether

or not to permit joinder of non-diverse defendants. See Casas

Office Machs. v . Mita Copystar Am., 42 F.3d 668, 674-75 (1st Cir.

1994); Kelley v . V t . Mut. Ins. Co., 407 F. Supp. 2d 301, 305 (D.

Mass. 2005) (observing that the permissive language of § 1447(e)

“makes clear that Congress granted the courts broad discretionary

power”); see also Hensgens v . Deere & Co., 833 F.2d 1179, 1182

(5th Cir. 1987). The court’s discretion is not restricted by the

status of the party to be joined as “indispensable” or

“necessary,” see Casas, 42 F.3d at 673-75,4 but is instead guided

by a variety of “equitable factors that depend upon the

circumstances.” Schrepfer v . Framatome Connectors USA, Inc., 115

F. Supp. 2d 182, 186 (D.N.H. 1999).

Rapoport, 198 F.3d 457, 462 n.11 (4th Cir. 1999); Doe v . Soc’y for Creative Anachronism, Inc., Nos. 1439-1440, 2007 WL 2155553, at *3 (E.D. Pa. July 2 5 , 2007). Therefore, the plaintiff “may not rely on Rule 15(a) to amend the pleading without leave of court and such an amendment must be analyzed pursuant to § 1447(e).” Schindler v . Charles Schwab & Co., N o . 05-0082, 2005 WL 1155862, at *2 (E.D. La. May 1 2 , 2005). 4 See also Irizarry v . Marine Powers Int’l, 153 F.R.D. 1 2 , 14 (D.P.R. 1994) (“Virtually every court confronted with this issue has unanimously agreed that the statute compels a court to focus on whether joinder would be ‘equitable’ instead of being based on whether a party is indispensable.”); Fed. R. Civ. P. 19 (required joinder of necessary parties); 14C Charles Alan Wright, et a l . , Federal Practice and Procedure § 3739, at 445 (3d ed. 1998) (“Section 1447(e) gives the court more flexibility than a strict Rule 19 analysis”).

5 While the categorization of a party as indispensable “does

not affect the Court’s weighing of the equities,” Maille v .

United States Postal Serv., Inc., N o . 08-cv-66-GZS, 2008 WL

2164566, at *1 (D. M e . May 2 1 , 2008), it does affect the court’s

options on disposition of the motion. Where the party proposed

to be added is indispensable, the court may deny joinder and

dismiss the case, see Fed. R. Civ. P. 1 9 , or allow joinder and

remand the case to the state court. See Casas, 42 F.3d at 675.

If the party is dispensable, however, the court may either deny

joinder and retain jurisdiction over the case, or permit joinder

and remand the case to state court. Id. The court cannot both

allow joinder of a non-diverse party and retain jurisdiction.

Id.

Where a plaintiff seeks to join a non-diverse party after

removal on the basis of diversity jurisdiction, the court “should

scrutinize that amendment more closely than an ordinary

amendment” in order “to balance the defendant’s interests in

maintaining the federal forum with the competing interests of not

having parallel lawsuits.” Hensgens, 833 F.2d at 1182. When

balancing the equities of a proposed joinder, courts consider a

number of factors, including “the extent to which the purpose of

the amendment is to defeat federal jurisdiction, whether

plaintiff has been dilatory in asking for amendment, whether

6 plaintiff will be significantly injured if amendment is not

allowed, and any other factors bearing on the equities.” Id.

(cited with approval in Casas, 42 F.3d at 675 n . 8 ) .

III. ANALYSIS

Here, Estes argues that these factors weigh in favor of the

amendment, and specifically that her purpose is not to destroy

diversity, but to join Davis as a defendant for conduct that,

while factually related to the state court writ, occurred more

than two months after the initial complaint was filed. Estes

asserts that, after reading Davis’s quote in the Exeter News-

Letter, she promptly moved to amend her complaint. The

defendants counter that Estes is merely trying to divest the

court of jurisdiction, evidenced by the fact that Estes never

contemplated bringing a claim against Davis until the case was

removed to federal court. While acknowledging that the newspaper

article quoting Davis was published well after Estes had filed

her state writ of summons, they argue that Estes has nevertheless

been dilatory in seeking to join Davis.

The record before the court suggests that Estes is correct;

her primary motivation in joining Davis appears to be to seek

recovery for her post-removal statements in the Exeter News-

Letter, and not to divest the court of jurisdiction. See

7 Schindler, 2005 WL 1155862, at *2 (“when a plaintiff states a

valid claim against a defendant, it is unlikely that the primary

purpose of bringing [that defendant] into a litigation is to

destroy diversity jurisdiction”). While it is true that Estes’s

motion to amend was filed after removal, a fact which standing

alone potentially cuts in favor of denying joinder, see Rapoport,

198 F.3d at 463 (noting that courts carefully scrutinize attempts

to add a non-diverse defendant after removal), Estes was not, and

could not have been, aware of Davis’s allegedly calumnious

statements until February 2 2 , 2008, the date they first appeared

in the News-Letter.

Upon learning of Davis’s statements, Estes diligently filed

her proposed amendment with the court. Indeed, even though Estes

waited nearly four months after the original writ was filed in

state court, she asked the court to add Davis only two weeks

after the statements were published in the Exeter News-Letter.

Compare Hensgens, 833 F.2d at 1182 (dilatory tactics in seeking

amendment weigh in favor of allowing joinder) with Sutton v .

Hollywood Entm’t Corp., 181 F. Supp. 2d 504, 508 (D. Md. 2002)

(relevant time period is that which elapses between removal and

the proposed amendment, not the filing of the complaint and the

amendment).

8 The court recognizes that Davis’s identity and activities

are referenced throughout Estes’s original state court writ.

Until Davis was publicly quoted in the local newspaper, however,

her conduct relative to Estes was largely confined to the

relatively private sphere of employment at Langdon Place. That

Estes chose not to allege intentional infliction of emotional

distress until Davis began criticizing Estes in the public sphere

does not undermine her position under a Hensgens-Casas analysis.5

Estes’s proposed amendment is a legitimate effort to assert

a colorable related claim arising after removal. Applying the

third Hensgens factor, she will suffer unnecessary harm if she is

forced to pursue that claim in a parallel state proceeding while

her claim against Sunbridge is litigated in this court. This

approach would force her--as well as the federal and state court-

-to duplicate their efforts by litigating several of the same

issues twice. Compared to the minimal harm that will come to

Sunbridge by having to defend itself in state, rather than

federal, court, avoiding that harm to Estes cuts in favor of

allowing the amendment. Kelley, 407 F. Supp. 2d at 308-309.

5 The court expresses no view on whether Davis’s alleged treatment of Estes, apart from the statements in the News-Letter, could have given rise to a colorable claim for intentional infliction of emotional distress.

9 IV. CONCLUSION

After considering the equitable factors relating to the

proposed joinder, Estes’s motion to join Davis as a defendant is

allowed. Therefore, following the joinder of a non-diverse party

to a case based on complete diversity, the court is compelled to

allow Estes’s motion to remand the action to state court.

SO ORDERED.

Joseph N. Laplante United States District Judge

Date: June 1 3 , 2008

cc: Benjamin T . King, Esq. Charles G. Douglas, III, Esq. Debra Weiss Ford, Esq.