Opinion
Cause No. IP00-0220-C-H/G
December 20, 2000
ENTRY ON PLAINTIFFS' MOTION FOR LEAVE TO AMEND COMPLAINT AND MOTION TO REMAND TO STATE COURT
This action arises from an explosion that injured plaintiff Charles Land while he was attempting to start a Yamaha WaveRunner, which is a recreational water vehicle. The explosion occurred on June 25, 1998. Mr. Land asserts that he has suffered serious and permanent injuries that have kept him from working since the explosion. He incurred substantial medical expenses. Mr. Land and his wife April filed suit in the Hendricks Circuit Court on December 23, 1999. They named as defendants Yamaha Motor Corporation, U.S.A., Yamaha Motor Manufacturing Corporation of America, Yamaha Motor Company, Ltd., and Yamaha Corporation. The Lands alleged that defendants are liable for their injuries based on negligence and strict liability for defective products.
The Yamaha defendants removed the case to this court on February 4, 2000, which was within 30 days of the service of the complaint. The plaintiffs are citizens of Indiana. The defendant Yamaha corporations are citizens of Japan, California, and Georgia, and the amount in controversy for at least Mr. Land individually exceeds $75,000.
Defendants assert that the WaveRunner involved in this case was first sold or delivered to a consumer on July 28, 1987, more than ten years before the explosion that injured Mr. Land. Defendants filed a motion for summary judgment on March 24, 2000, contending that the statute of repose in Indiana's products liability statute, Ind. Code § 34-20-3-1(b)(2), bars plaintiffs' claims. That statute provides that product liability actions must be commenced within ten years after the delivery of the product to the initial user or consumer.
The statute provides an exception where the cause of action accrues between eight and ten years after that initial delivery. In such cases, the action must be commenced within two years after it accrues.
At the time plaintiffs filed this action, the Supreme Court of Indiana was considering a challenge to the constitutionality of the statute of repose as applied to a case where the injury occurs more than ten years after the initial delivery, so that the statute effectively forecloses any action. On May 26, 2000, however, the Supreme Court of Indiana upheld the constitutionality of the statute. McIntosh v. Melroe Co., 729 N.E.2d 972 (Ind. 2000).
The court has several times extended plaintiffs' time to respond to the motion for summary judgment. On June 22, 2000, plaintiffs moved for leave to file an amended complaint, and they also filed a motion to remand the action to state court. The latter two motions are now ripe for decision. Plaintiffs' proposed amended complaint seeks to add as defendants three Indiana companies, which would destroy diversity of citizenship, as well as a Kentucky company. The proposed amended complaint also deletes two Yamaha companies as defendants.
Because plaintiffs filed the motion to amend the complaint on June 22, 2000, just three days before the two-year anniversary of the explosion, plaintiffs also took the protective step of filing a separate lawsuit in state court against the three Indiana companies and the Kentucky company.
The proposed new defendants are Honda Dreyer Cycle, Inc., Dreyer Cycle, Inc., and Dreyer, Inc. (the "Dreyer defendants"), which are Indiana citizens, and Burnett Brothers Boat Mart d/b/a Burnett Brothers Services, Inc. ("Burnett Brothers"), which is a citizen of Kentucky. The proposed amended complaint alleges that the Dreyer defendants were negligent in the inspection, repair, and servicing of the personal watercraft, and negligent in failing to properly instruct and warn of the danger of the Yamaha WaveRunner exploding. The proposed amended complaint alleges that Burnett Brothers was negligent in the sale of the WaveRunner and in failing to properly instruct and warn of the danger of the WaveRunner exploding.
The Yamaha defendants object to the proposed amendment to add the Dreyer defendants and to the related motion to remand. (They have not opposed the proposed amendment to the extent it seeks to add Burnett Brothers as a defendant.) The Yamaha defendants contend the motion to amend should be treated essentially as a motion to join the Dreyer defendants under Fed.R.Civ.P. 19(b), which applies to joinder of parties who would destroy the court's jurisdiction. Plaintiffs respond that joinder of the Dreyer defendants under Rule 19(b) is appropriate here because it would allow plaintiffs to pursue all potentially responsible parties in one case and one trial. See Alvarez v. Donaldson Co., 213 F.3d 993, 995 (7th Cir. 2000) (affirming remand under 28 U.S.C. § 1447(e) after district court allowed plaintiffs to join non-diverse defendants whom original defendant had named in its "non-party defense" under Indiana comparative fault act).
The applicable statute here is 28 U.S.C. § 1447(e): "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." Section 1447(e) leaves the decision to the discretion of the district court. Buttons v. National Broadcasting Co., 858 F. Supp. 1025, 1027 (C.D. Cal. 1994); Wyant v. National R.R. Passenger Corp., 881 F. Supp. 919, 923 (S.D.N.Y. 1995).
In exercising that discretion under section 1447(e), courts consider several factors: "(1) any delay, and the reasons for the delay, in seeking to amend; (2) any resulting prejudice to the defendant; (3) the likelihood of multiple litigation; and (4) the plaintiffs' motivation in moving to amend." Mammano v. American Honda Motor Co., 941 F. Supp. 323, 325 (W.D.N.Y. 1996), quoting Wyant v. National R.R. Passenger Corp., 881 F. Supp. at 923; accord, Hensgens v. Deere Co., 833 F.2d 1179, 1182 (5th Cir. 1987) (requiring district court to consider factors before allowing joinder of non-diverse party under earlier version of removal statute).
The factors to be considered under § 1447(e) are generally consistent with the factors to be considered under Rule 19(b), which include: "first, to what extent a judgment rendered in the person's absence might be prejudicial to the person or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person's absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder." See Alvarez, 213 F.3d at 995.
In this case, on the present record, there are persuasive reasons not to allow the proposed amendment to add the Dreyer defendants. Delay is not a serious issue here, though, because plaintiffs sought to add the non-diverse defendants just five months after removal, and before the statute of limitations would run. Joinder of the Dreyer defendants would prejudice the Yamaha defendants by denying them what would otherwise be their right, which they properly invoked, to have a federal court forum for this case.
The likelihood of multiple litigation is minimal in this case. Although the Lands filed a parallel state court proceeding against the Dreyer defendants, those defendants moved for summary judgment in that case on the basis that none of them had ever performed any service or maintenance on the WaveRunner in question. See Def. Supp. Auth., Exs. A, B C. The motion for summary judgment in the state court included an affidavit from Larry Bush, a prior owner of the WaveRunner in question. Bush said in his affidavit that he had earlier told a representative of the Lands' law firm that Dreyer Yamaha had serviced the WaveRunner, but that he was mistaken and had confused it with a different watercraft. Id., Ex. B. Plaintiffs did not oppose the motion for summary judgment filed by the Dreyer defendants in the state court.
On this record, the only objectively apparent motivation for plaintiffs to have added the non-diverse defendants in this case was to defeat federal jurisdiction. There is no threat of divided responsibility or inadequate relief. See Buttons v. National Broadcasting Co., 858 F. Supp. at 1027 (denying joinder and remand where some non-diverse defendants appeared to have no responsibility for alleged defamation, and local network affiliate offered no prospect of relief in addition to that available from national network; primary motive for adding parties was to destroy diversity); cf. Alvarez, 213 F.3d at 995 (joinder of non-diverse defendants appropriate where original defendant identified them as responsible non-parties).
There simply is no basis to treat the proposed Dreyer defendants as parties who must be added to this action to protect the rights of the Lands or of any other person or entity. The Dreyer defendants' addition to this case would serve only to force a remand to state court, where dismissal of the claims against the Dreyer defendants would be virtually certain and immediate. Under these circumstances, the court exercises its bounded discretion to deny in part and grant in part plaintiffs' motion for leave to file an amended complaint. Plaintiffs' motion for leave is denied to the extent it seeks to add Honda Dreyer Cycle, Inc., Dreyer Cycle, Inc., and Dreyer, Inc. as defendants. Plaintiffs' motion for leave is granted to the extent it seeks to add Burnett Brothers Boat Mart d/b/a Burnett Brothers Services, Inc. as a defendant, and plaintiffs may, if they wish, file a revised amended complaint no later than January 16, 2001. The court denies plaintiffs' motion to remand because diversity of citizenship remains complete.
So ordered.