N.E. Bridge Contractors, Inc. v. Aspen Aerials, Inc.

United States District Court

District of Massachusetts

)

N.E. Bridge Contractors, Inc., )

)

Plaintiff, )

)

v. )

) Civil Action No.

Aspen Aerials, Inc., ) 18-11748-NMG

)

Defendant. )

)

MEMORANDUM & ORDER

GORTON, J.

This jurisdictional dispute arises out of an underlying

tort suit where a truck equipped for bridge-inspecting

malfunctioned. The plaintiff initially filed its suit in state

court and defendant removed to federal court. Shortly

thereafter, plaintiff amended its complaint to add a non-diverse

defendant and moved to remand.

I. Background

In late 2016, N.E. Bridge Contractors, Inc. (“Bridge

Contractors” or “plaintiff”) purchased a new truck from Tri

State Truck Center, Inc. (“Tri State”). In January, 2017, the

truck was shipped from Tri State to Minnesota, where Aspen

Aerials, Inc. (“Aspen” or “defendant”) affixed bridge inspection

equipment (“the A-62”) onto the truck. Plaintiff took delivery

of the truck with the A-62 equipment in July, 2017. One year

later, the truck malfunctioned while it was rented out to a

third party.

On August 6, 2018, Bridge Contractors, a Massachusetts

company, filed suit against Aspen, a Minnesota company, in

Bristol County Superior Court. Shortly after filing its initial

complaint, plaintiff moved for a preliminary injunction to

prevent Aspen from selling its assets to a third party. The

Bristol County Superior Court declined to hear argument on that

motion but did hear argument on another motion for a preliminary

injunction that plaintiff sought against Aspen with respect to a

different suit that arose in Rhode Island. As part of the two

requests for injunctive relief, plaintiff sought to attach

Aspen’s assets located in Minnesota. On August 10, 2018,

plaintiff filed a separate suit in Minnesota, where Aspen was

named as the only defendant.

One week later, Aspen removed the initial Bristol County

Superior Court action to this Court and had until September 11,

2018, to respond to the removed complaint. Before it did so,

plaintiff filed an amended complaint on August 23 pursuant to

Fed. R. Civ. P. 15(a)(1)(A), which added Western Star Truck

Sales Inc., an Oregon corporation and the manufacturer of the

truck (“Western Star”) and Tri State, a Massachusetts

corporation, as defendants (“the additional defendants”).

Plaintiff filed its motion to remand the day after filing its

amended complaint.

Aspen alleges that plaintiff deliberately added a non-

diverse defendant to destroy diversity through improper

amendment under Fed. R. Civ. P. 15(a)(1). It further contends

that under 28 U.S.C. § 1447, 1) Tri State is a dispensable party

that should be dismissed from this action and 2) the Court

should exercise its equitable power to reject plaintiff’s

amendment.

Plaintiff responds that the claims against Aspen and the

additional defendants arise from the same nexus of operative

facts and that the district court has discretion under § 1447(e)

to remand and not to apply Fed. R. Civ. P. 19(b) mechanically.

It submits that 1) it intended all along to amend the initial

complaint, 2) it was distracted by the pending preliminary

injunction motions in state court and 3) even under a Fed. R.

Civ. P. 19(b) analysis, Tri State is an indispensable party to

this suit.

II. Legal Analysis

A. Fraudulent Joinder Doctrine

The doctrine of “fraudulent joinder”, in which a district

court can disregard, for jurisdictional purposes, the

citizenship of non-diverse defendants at the time of removal,

does not apply after a case has been removed. Universal Truck &

Equip. Co. v. Southworth-Milton, Inc., 765 F.3d 103, 108 (1st

Cir. 2014); Kauders v. Uber Techs., Inc., 2017 U.S. Dist. LEXIS

65912, at *5 (D. Mass. May 1, 2017) (citing Mayes v. Rapoport,

198 F.3d 457, 461 (4th Cir. 1999) (fraudulent joinder has no

effect once the district court actually possesses jurisdiction,

including after the case has been properly removed)).

At issue here is whether Fed. R. Civ. P. 15(a)(1) permits a

plaintiff to add a non-diverse party as a matter of course after

removal. Although the First Circuit has not addressed that

precise issue, most courts have concluded that plaintiffs cannot

destroy diversity through amendment as a matter of right and

have, instead, analyzed whether joinder of the non-diverse

defendant is appropriate under 28 U.S.C. § 1447(e) in the first

instance. Kauders, 2017 U.S. Dist. LEXIS 65912, at *7; see also

Casas Office Machines, Inc. v. Mita Copystar Am., Inc., 42 F.3d

668 (1st Cir. 1994) (annulling a district court’s diversity

jurisdiction when the district court allowed the plaintiff to

substitute an unidentified defendant with a newly identified,

non-diverse defendant after removal).

B. § 1447(e) Analysis

Although the First Circuit has not addressed the precise

issue of Rule 15 amendments post-removal, both the Fourth and

Fifth Circuits found that such joinder is to be determined by

the “sound discretion” of the district court and does not

require a strict Fed. R. Civ. P. 19(b) analysis for

dispensability. Mayes v. Rapoport, 198 F.3d 457, 462 (4th Cir.

1999); Hensgens v. Deere & Co., 833 F.2d 1179 (5th Cir. 1987).

In exercising its discretion under § 1447(e), the district court

is entitled to consider all relevant factors, including:

the extent to which the purpose of the amendment is to

defeat federal jurisdiction, whether the plaintiff has been

dilatory in asking for amendment, whether the plaintiff

will be significantly injured if amendment is not allowed,

and any other factors bearing on the equities.

Mayes, 198 F.3d at 462.

The Court is not convinced that plaintiff’s failure to amend the

Minnesota suit while, at the same time, adding Tri State as a

defendant in this one was done simply to destroy diversity. Nor

does the Court find that plaintiff was dilatory in seeking an

amendment within 21 days of filing its complaint. The Court is,

however, disconcerted by the fact that plaintiff failed to name

Tri State as a defendant in its initial complaint. If Tri State

is an indispensable party, as plaintiff now contends, it should

have named Tri State in the first instance. Moreover, plaintiff

should have clearly foreseen that, under the circumstances,

Aspen not only had the right but indeed was likely to remove

this case to federal court. 28 U.S.C. § 1332.

Notwithstanding plaintiff’s procedural shortcomings, the

Court finds that Tri State is an indispensable party to this

suit pursuant to Fed. R. Civ. P. 19(b). See Casas, 42 F.3d at

675 (holding that indispensability is relevant to a § 1447(e)

analysis).

Fed. R. Civ. P. 19(b) provides that

[T]he court must determine whether, in equity and good

conscience, the action should proceed among the existing

parties or should be dismissed.

In making such a determination, the Court must also consider:

the extent to which 1) a judgment rendered in Tri State’s

absence might prejudice Tri State or the existing parties, and

2) any prejudice could be reduced or avoided, and whether 3) a

judgment rendered in Tri State’s absence would be adequate and

4) plaintiff would have an adequate remedy if the action were

dismissed for non-joinder. Id.

The first factor weighs in favor of joinder. Contrary to

defendant’s contention, Tri State, as the seller of the

allegedly defective truck manufactured by Western Star, is a

related party that may be subject to product liability. See

Rafferty v. Merck & Co., 92 N.E.3d 1205, 1213 (2018) (typically,

where a consumer is injured by a product, Massachusetts law

holds the manufacturer and/or seller responsible under a theory

of products liability); Brown v. Husky Injection Molding Sys.,

Inc., 751 F. Supp. 2d 298, 303 (D. Mass. 2010) (unlike defective

design cases, in manufacturing defect cases plaintiff must show

that the defect was not caused by intermediaries between the

manufacturer and the consumer); see also § 16.9. Seller’s

liability to third person, 37 Mass. Prac., Tort Law § 16.9 (3d

ed.) (noting that the Restatement, Third, Torts does not

differentiate between manufacturers, wholesale distributors and

retail sellers when it comes to product liability). Thus, a

judgment in Tri State’s absence may prejudice Aspen and Western

Star in that neither party may be able to recover damages for

which Tri State could ultimately be responsible. Moreover,

plaintiff may also be prejudiced by having to bear the costs of

separate litigation if joinder is denied.

As to the second factor, there does not appear to be, nor

does either party suggest, any way to structure the federal

litigation so as to avoid the potential severance problems.

The third factor of whether judgment would be “adequate” in

Tri State’s absence relates to the public interest in “complete,

consistent, and efficient settlement of controversies”.

Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S.

102, 111 (1968). Plaintiff contends that the causes of actions

against all three defendants are intertwined and thus judgment

in the absence of any of the three parties would create a risk

that the party actually responsible for a component of the

damage would not be held liable. Moreover, plaintiff submits

that there is a risk of 1) conflicting judgments with parallel

litigation stemming from the same operative facts and/or 2)

deflection of blame to absent defendants resulting in inadequate

recovery. This Court agrees and finds that the third factor

weighs in favor of joinder.

The fourth factor is of less consequence because plaintiff

could bring suit against Tri State in its pending state court

action but that doesn’t counter-balance the first three factors.

On balance, the Court finds that Tri State is an

indispensable party within the meaning of Fed. R. Civ. P. 19(b).

For that primary reason, joinder will be allowed and

consequently, pursuant to § 1447(e), the action will be remanded

to state court.

ORDER

For the foregoing reasons, plaintiff’s motion to remand

(Docket No. 8) is ALLOWED.

So ordered.

_/s/ Nathaniel M. Gorton____

Nathaniel M. Gorton

United States District Judge

Dated March 6, 2019