United States District Court, S.D. Illinois
TRUMBULL INS. CO., as Subrogee of John and Linda Eibeck, and THE CINCINNATI INS. CO., as Subrogee of TKM Group, d/b/a Marion RV Storage, Plaintiffs,
TIFFIN MOTORHOMES, INC., Defendant/Crossclaimant, and THETFORD CORPORATION, d/b/a Norcold, and NORCOLD, INC., Defendants/Crossclaim Defendants.
MEMORANDUM AND ORDER
PHIL GILBERT DISTRICT JUDGE.
matter comes before the Court on the responses of defendants
Norcold, Inc. and Thetford Corporation (by a limited
appearance) (Doc. 66) and of defenda versity no longer exists
and should not remand this case to the Circuit Court for the
First Judicial Circuit, Williamson County, Illinois, pursuant
to 28 U.S.C. § 1447(e). That provision states, “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.” “When
joinder of a nondiverse party would destroy subject matter
jurisdiction, 28 U.S.C. § 1447(e) applies and provides
the district court two options: (1) deny joinder, or (2)
permit joinder and remand the action to state court.”
Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752,
759 (7th Cir. 2009).
order to show cause, the Court noted that complete diversity
existed at the time of removal because the plaintiffs were
citizens of Connecticut and Ohio, respectively, and the
defendants, were citizens of Alabama and Michigan,
respectively. However, it appeared to the Court that the
later addition of Norcold, Inc., as a defendant in the First
Amended Complaint might have destroyed complete diversity
because there were indications Norcold's principal place
of business was in Ohio and was therefore a citizen of Ohio.
If plaintiff Cincinnati Insurance Company and defendant
Norcold are both citizens of Ohio, complete diversity no
longer exists. For this reason, the Court issued the order to
defendants have responded essentially admitting, but not
expressly stating, that Norcold's principal place of
business was and is in Ohio. Norcold and Thetford blame the
plaintiffs for not disclosing Norcold's citizenship when
they sought leave to amend their complaint. Norcold and
Thetford believe this failure increased their work
unnecessarily and caused them to waste their resources.
Consequently, they ask that if the Court remands this case,
it order the plaintiffs to pay for their reasonable costs and
expenses incurred as a consequence of the plaintiffs'
delinquency. Alternatively, they ask the Court to reconsider
its decision to allow the plaintiffs to amend their pleading
to add Norcold as a defendant.
part, Tiffin, the defendant who removed the case, joins in
Norcold's and Thetford's request that the Court
retain jurisdiction over this case. Citing
Freeport-McMoRan, Inc. v. K N Energy, Inc., 498 U.S.
426 (1991), it argues that subsequent events cannot divest
this Court of jurisdiction where jurisdiction existed at the
time of removal. Decision to Allow Adding Norcold as a
Defendant The Court declines to revisit the decision to
allow the plaintiffs to add Norcold as a defendant. In making
this decision, the Court has considered the equities,
including “(1) the plaintiff[s'] motive for seeking
joinder, particularly whether the purpose is to defeat
federal jurisdiction; (2) the timeliness of the request to
amend; (3) whether the plaintiff will be significantly
injured if joinder is not allowed; and (4) any other relevant
equitable considerations.” Schur v. L.A. Weight
Loss Ctrs., Inc., 577 F.3d 752, 759 (7th Cir. 2009).
case involves a fire that allegedly began with a defective
motor home refrigerator that resulted in the destruction of
the entire motor home owned by plaintiff Trumbull Insurance
Company's subrogor and stored in a motor home storage
facility owned by plaintiff Cincinnati's subrogor.
Norcold manufactured the allegedly defective refrigerator and
therefore is an entirely appropriate-even
indispensable-defendant in this tort action. There is no
suggestion the plaintiffs joined it simply to defeat federal
jurisdiction or for any other improper purpose.
the plaintiffs will be prejudiced if Norcold is not allowed
to be joined because it will be forced to litigate against
potentially responsible parties in two different lawsuits in
two different forums. Additionally, it appears that the
plaintiffs added Norcold fairly early in the case, less than
two months after filing the case.
Norcold and Thetford complain that they have been forced to
do unnecessary work because the plaintiffs failed to notify
the Court of Norcold's citizenship when they filed the
First Amended Complaint. The Court notes, however, that
Norcold itself could have nipped this jurisdictional problem
in the bud by promptly informing the plaintiffs and/or the
Court of its own citizenship, rather than letting
the case proceed until the Court detected a potential
problem. The Court has little sympathy for a litigant's
complaints of additional costs where the litigant had in its
own power the means to avoid them. Furthermore, the Court
notes that the work Norcold has done on this case will be
useful to its defense in state court, so it has not been
circumstances, the Court will not revisit its decision to
allow Norcold to be added a defendant in this case.
of Complete Diversity
extent Tiffin suggests the Court can still exercise diversity
jurisdiction, it is wrong. The cases its cites address
circumstances where a party's citizenship changed after
the filing of the complaint or the notice of removal. For
example, in Freeport-McMoRan, Inc. v. K N Energy,
Inc., 498 U.S. 426 (1991), complete diversity existed
when the plaintiffs filed the breach of contract action in
federal court, but the plaintiffs then transferred their
interest in the contract to a non-diverse party and
substituted that party as a plaintiff. Id. at 427.
The Court held that the post-filing transfer of the
plaintiffs' contractual interests to a non-diverse party
that was not indispensable at the outset did not deprive the
Court of diversity jurisdiction that existed at the time of
filing. Id. at 427-28. This result is consistent
with the long-standing rule that “[w]here there is no
change of party, a jurisdiction depending on the condition of
the party is governed by that condition, as it was at the
commencement of the suit.” Conolly v. Taylor,
27 U.S. 556, 565 (1829); accord Grupo Dataflux v. Atlas
Glob. Grp., L.P., 541 U.S. 567, 574 (2004) (addressing a
change in citizenship of a continuing party).
rule is not relevant where a plaintiff files a post-removal
amended complaint adding a new defendant not because an
original defendant has transferred its original interest in
the case, but because the new defendant is a newly identified
potentially responsible party. There, the Court looks to the
amended pleading to determine whether it continues to have
the subject matter jurisdiction it had at the time of
removal. See Rockwell Int'l Corp. v. United
States, 549 U.S. 457, 474 (2007).
Freeport-McMoRan rule is not relevant to this case
because no party has transferred its interest or changed its
condition after removal. On the contrary, the plaintiffs have
added a completely new party that was not present at the time
of removal. Under 28 U.S.C. § 1447(e), the addition of
that non-diverse party requires this Court to remand this
case. See Schur v. L.A. Weight Loss Centers, Inc.,
577 F.3d 752, 759 (7th Cir. 2009).