United States District Court, W.D. Texas, Austin Division
STEPHEN NELSON, Individually and on Behalf of Corridor Medical Services, Inc., a/k/a Corridor Mobile Medical Services, Plaintiff,
COMPLETE BUSINESS SOLUTIONS GROUP, INC., d/b/a PAR FUNDING, and TUCKER ALBIN & ASSOCIATES, INC., Defendants.
REPORT AND RECOMMENDATION OF THE UNITED STATES
HIGHTOWER UNITED STATES MAGISTRATE JUDGE
HONORABLE LEE YEAKEL UNITED STATES DISTRICT JUDGE
the Court are Plaintiff's Motion to Remand (Dkt. No. 15)
and Defendant's Response (Dkt. No. 16). Plaintiff did not
file a Reply. The undersigned submits this Report and
Recommendation to the District Judge pursuant to 28 U.S.C.
§ 636(b)(1)(B), Federal Rule of Civil Procedure 72, and
Rule 1(d) of Appendix C of the Local Rules.
Stephen Nelson (“Nelson”) originally filed this
case against Defendant Complete Business Solutions Group,
Inc., d/b/a PAR Funding (“PAR”) in the
250th Judicial District Court of Travis County,
Texas, on October 16, 2018. (Orig. Pet, Dkt. No. 1-4, at 1).
Nelson is a Texas resident; PAR is a Pennsylvania debt
collection company. (Id. at ¶¶ 9-10, 23).
Nelson alleges that PAR and its agents have harassed, abused,
threatened, and intimidated Nelson and his family in efforts
to collect on a purported debt. (Id. ¶ 14). He
asserts claims of trespass, violations of the Texas Debt
Collection Act, intentional infliction of emotional distress,
defamation, and intrusion. (Id. ¶¶ 18-34,
36-45, 47-49). He seeks a permanent injunction and damages.
(Id. ¶¶ 35, 46, 50- 51).
removed to this Court on November 8, 2018. (Not. Removal,
Dkt. No. 1). On November 29, 2018, without seeking leave of
court, Nelson filed a First Amended Complaint
(“FAC”) adding Tucker Albin & Associates,
Inc. (“Tucker Albin”) as a defendant in this
action and adding a claim of breach of contact against both
PAR and Tucker Albin. (FAC, Dkt. No. 5). Tucker Albin is a
Texas company. (Id. ¶ 12). Nelson then filed
the instant motion to remand, arguing that Tucker Albin's
addition to the case destroys the diversity of the parties.
(Mot. Remand, Dkt. No. 15). In his motion, Nelson correctly
notes that Tucker Albin has not yet appeared in this case.
(Id. ¶ 8). However, the record in this case
indicates that Nelson has not yet served Tucker Albin as
defendant may remove any civil action from state court to a
district court of the United States that has original
jurisdiction. 28 U.S.C. § 1441. District courts have
original jurisdiction over all civil actions that are between
citizens of different states and involve an amount in
controversy in excess of $75, 000, exclusive of interest and
costs. 28 U.S.C. § 1332(a). Diversity jurisdiction
“requires complete diversity-if any plaintiff is a
citizen of the same State as any defendant, then diversity
jurisdiction does not exist.” Flagg v. Stryker
Corp., 819 F.3d 132, 136 (5th Cir. 2016). “[T]he
removal statute is strictly construed ‘and any doubt as
to the propriety of removal should be resolved in favor of
remand.'” Gutierrez v. Flores, 543 F.3d
248, 251 (5th Cir. 2008); see also Manguno v. Prudential
Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir.
2002) (“Any ambiguities are construed against removal
because the removal statute should be strictly construed in
favor of remand.”). The removing party bears the burden
of showing that the removal was proper. Frank v. Bear
Stearns & Co., 128 F.3d 919, 921-22 (5th Cir. 1997).
subject matter jurisdiction relies on diversity, the addition
of a non-diverse party will defeat federal jurisdiction.
Hensgens v. Deere & Co., 833 F.2d 1179, 1181
(5th Cir. 1987) (citing Owen Equipment & Erection Co.
v. Kroger, 437 U.S. 365, 374 (1978)). “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.” 28 U.S.C. § 1447(e).
parties do not dispute their respective citizenship.
Nelson's sole argument in favor of remand is that the
addition of Tucker Albin has destroyed the diversity of the
parties. (Mot. Remand, Dkt. No. 15). PAR responds that
because Nelson's First Amended Complaint added a
non-diverse defendant and would divest this court of
jurisdiction, Nelson was required to seek leave of court
before filing it. (Resp., Dkt. No. 16, at 3-4). Because he
did not, PAR contends that the Court should deny joinder of
Tucker Albin and deny the motion to remand.
general rule, when a party seeks leave to amend its pleading,
a court “should freely give leave when justice so
requires.” Fed.R.Civ.P. 15(a)(2). But when a plaintiff
seeks to join defendants after removal whose joinder would
destroy subject matter jurisdiction, “the district
court must apply a higher level of scrutiny than required
under Fed.R.Civ.P. 15(a).” Allen v. Walmart Stores,
L.L.C., 907 F.3d 170, 185 (5th Cir. 2018) (citing
Hensgens, 833 F.2d at 1182). In that situation, at
the district court's discretion, “the court may
deny joinder, or permit joinder and remand the action to the
State court.” 28 U.S.C. § 1447(e); see also
Alanis v. Allstate Ins. Co., No. SA-17-CV-01060-OLG,
2018 WL 2245076, at *2 (W.D. Tex. Jan. 4, 2018).
did not seek leave of court as required before filing an
amended complaint that might divest the court of
jurisdiction. Because of this, there are grounds to strike
the First Amended Complaint without prejudice. See, e.g.,
Allen, 907 F.3d at 186 (affirming district court's
denial of motion to remand and denial of motion to amend
complaint, where plaintiff filed amended complaint joining
non-diverse defendants without leave). Because this case has
been pending for nearly a year, the original defendant
briefed the question of proper joinder in its response to the
motion to remand, and Nelson chose not to file a reply
despite the opportunity to do so, this Court will exercise
its discretion to construe the First Amended Complaint as a
motion for leave to file a First Amended Complaint.
considers four factors when exercising its discretion to
allow joinder of a non-diverse party and thereby divest
itself of jurisdiction: “(1) the extent to which the
purpose of the amendment is to defeat federal jurisdiction;
(2) whether the plaintiff has been dilatory in asking for an
amendment; (3) whether the plaintiff will be significantly
injured if the amendment is not allowed; and (4) any other
factors bearing on the ...