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Glover v. Kia Motors America, Inc.

United States District Court, W.D. Tennessee, Western Division

April 25, 2018

MELVIN GLOVER, Plaintiff,
v.
KIA MOTORS AMERICA, INC., KIA MOTORS CORPORATION, HUTTON OF MEMPHIS, LLC d/b/a CHUCK HUTTON TOYOTA, LLC, and UNITED ACCESS OF MEMPHIS, LLC d/b/a UNITED ACCESS Defendants.

          MEMORANDUM OPINION AND ORDER DISMISSING DEFENDANT HUTTON OF MEMPHIS, LLC D/B/A CHUCK HUTTON TOYOTA, LLC UNDER 28 U.S.C. § 1447(E) AND DENYING DEFENDANTS' MOTION TO DISMISS UNITED ACCESS OF MEMPHIS, LLC D/B/A UNITED ACCESS

          THOMAS L. PARKER, UNITED STATES DISTRICT JUDGE

         Defendants Kia Motors America, Inc. and United Access of Memphis, LLC d/b/a United Access (collectively referred to as the “Moving Defendants”) moved to dismiss two Defendants, Hutton of Memphis. LLC d/b/a Chuck Hutton Toyota, LLC (“Hutton”), and United Access of Memphis, LLC d/b/a United Access (“United Access”), who were added as parties in the Amended Complaint. (ECF No. 15.) Moving Defendants asserted that the fraudulent joinder doctrine prevented the addition of these new Defendants. (Id.) Plaintiff filed a Response in Opposition (ECF No. 22), and the parties then exchanged a Reply (ECF No. 23) and a Sur-Reply (ECF No. 25-1.)

         After reviewing the parties' briefs, the Court determined that the fraudulent joinder doctrine standard advanced by the Moving Defendants does not control the Court's analysis of the issues, so the Court requested supplemental briefing on the applicability of 28 U.S.C. § 1447(e). The parties submitted competing briefs (ECF Nos. 37, 38) for the Court's review.

         The Court now determines that Hutton, a non-diverse party, should be DISMISSED from the Amended Complaint under 28 U.S.C. § 1447(e). (ECF No. 10.) The Motion to Dismiss as it seeks to dismiss Hutton under the fraudulent joinder doctrine is DENIED and also DENIED as it seeks to dismiss United Access. (See ECF No. 43.)

         BACKGROUND

         Plaintiff Melvin Glover (“Plaintiff or “Mr. Glover”) filed his Complaint against Kia Motors America, Inc. and Kia Motors Corporation (individually, “KMA” and “KMC, ” and collectively, the “Kia Defendants”) in the Circuit Court of Tennessee for the Thirtieth Judicial District at Memphis. (ECF No. 1-2 at PageID 6.) Plaintiff seeks to recover damages from the Kia Defendants for injuries he sustained on November 17, 2016, when the seat heater in his 2013 Kia Sorento SX (“Kia, ” “Kia Sorento, ” or “vehicle”) allegedly malfunctioned and severely burned him. (Id. at PageID 6, 9.) Plaintiff purchased the Kia as a used vehicle from Hutton. (Id. at PageID 9.) Plaintiff is a paraplegic, but the vehicle was equipped with a device which allowed him to drive it with his hands. (Id.) The Complaint brings claims against the Kia Defendants for strict liability, negligence, breach of warranty, and vicarious liability under the apparent manufacturer doctrine. (See generally id.) Specifically, Plaintiff alleges that the seat heater was defective and created an unreasonably dangerous condition for paralyzed individuals like himself and that the Kia Defendants failed to warn adequately him and others about this dangerous condition. (Id. at PageID 6.)

         KMA was served with the Summons and Complaint and timely removed this action to this Court based on diversity jurisdiction. (ECF No. 1.) Plaintiff is a citizen of Tennessee; KMA is a California corporation with its principal place of business in California, and KMC is a South Korean corporation with its principal place of business in South Korea. (ECF No. 1-2 at PageID 6.)

         Plaintiff filed an Amended Complaint without leave under Federal Rule of Civil Procedure 15(a)(1)(A), joining Defendants Hutton and United Access and asserting claims against them for negligence and breach of warranty. (ECF No. 10 at PageID 41-49.) Plaintiff alleges that Hutton “sold Plaintiff the 2013 Kia Sorento at issue in this case before the heated seat in the vehicle burned his buttocks and scrotum, ” while United Access “modified the Kia Sorento at issue in this case to allow Plaintiff to be able to drive it as a paraplegic.” (ECF No. 10 at PageID 35.)

         KMA filed its Motion requesting that this Court dismiss Hutton and United Access under the fraudulent joinder doctrine because, as KMA alleges, Plaintiff fails to bring colorable claims against Hutton and United Access under applicable Tennessee law, mainly the Tennessee Products Liability Act (“TPLA”), Tenn. Code Ann. § 29-28-101 et seq. (See ECF No. 15 at PageID 77.) KMA also alleges that Mr. Glover added Hutton and United Access to this case in an attempt to destroy diversity jurisdiction. (Id.) KMA argues in the alternative that if the Court does not dismiss Mr. Glover's claims against United Access, the case should not be remanded because United Access is a diverse party from Mr. Glover. (See id.) United Access joined KMA's Motion to Dismiss on December 27, 2017. (See ECF No. 19.)

         In response, Plaintiff argues that his claims against Hutton and United Access are colorable and, thus, the Moving Defendants have failed to invoke properly the fraudulent joinder doctrine. (See ECF No. 22.) Plaintiff argues that the Court must remand this case to the state court. (See id.)

         The Court issued an Order for Supplemental Briefing directing the parties to file supplemental briefs about: (1) the applicability of 28 U.S.C. § 1447(e) in this case; and (2) an analysis of the statute's impact, if any. (ECF No. 36.) The parties timely submitted their competing briefs. (ECF Nos. 37, 38.)

         Predictably, the Moving Defendants argue that § 1447(e) applies to Plaintiff's post-removal joinder and that the balancing of the equities under the statute reveals that the Court should deny joinder of any party which would destroy diversity. (ECF No. 37.) Plaintiff does not dispute that the Court may permit or deny joinder of a nondiverse defendant under § 1447(e) even if it is on different grounds than those argued in the briefs for Moving Defendants' Motion to Dismiss. (ECF No. 38 at PageID 214.) Yet Plaintiff maintains that his arguments against application of the fraudulent joinder doctrine and applying the § 1447(e) factors both weigh in favor of permitting joinder and remanding this case to the state court. (Id.)

         ANALYSIS

         It is undisputed that Hutton is a Tennessee citizen and that if Hutton remains in this case, its presence would destroy diversity jurisdiction. (See ECF No. 42); 28 U.S.C. §§ 1332, 1447(c). United Access is a citizen of Missouri and Indiana. (ECF No. 43.) The joinder of United Access thus does not destroy this Court's jurisdiction, and Plaintiff filed his Amended Complaint within the time provided by Rule 15. Plaintiff's joinder of United Access is not subject to this Court's current review under either the fraudulent joinder doctrine or 28 U.S.C. § 1447(e). Accordingly, the Motion to Dismiss United Access is DENIED.

         I. Determining What Standard Applies

         As a threshold matter, the Kia Defendants' removal of the Complaint was proper. A party may remove an action to federal district court if there is complete diversity of the parties, and the amount in controversy exceeds $75, 000. 28 U.S.C. 1332(a). Section 1441 authorizes the removal of “any civil action” in which “the district courts of the United States have original jurisdiction[.]” 28 U.S.C. § 1441(a). “Diversity of citizenship, the basis for jurisdiction in the present case, exists only when no plaintiff and no defendant are citizens of the same state.” Curry v. U.S. Bulk Transp., Inc., 462 F.3d 536, 540 (6th Cir. 2006) (quoting Jerome-Duncan, Inc. v. Auto-By-Tel, LLC, 176 F.3d 904, 907 (6th Cir. 1999)) (internal quotation marks omitted). As stated in the original Complaint, Plaintiff is a citizen of Tennessee, and the Kia Defendants are citizens of California and South Korea, respectively. (See ECF No. 1-2 at PageID 6-7.) Additionally, Plaintiff s prayer for compensatory damages in the amount of $1, 500, 000.00 satisfied the amount in controversy requirement at the time of removal. (See Id. at PageID 19.)

         While the Court is one of limited jurisdiction, the proper removal of the Complaint established its subject matter jurisdiction over this case. “The existence of subject matter jurisdiction is determined by examining the complaint as it existed at the time of removal.” Jackson v. Ford Motor Co., No. 15-1180, 2016 WL 270485, at *1 (W.D. Tenn. Jan. 21, 2016) (Breen, J.) (quoting Harper v. AutoAlliance Int'l, Inc., 392 F.3d 195, 210 (6th Cir. 2010) (citation omitted)).[1] Once subject matter jurisdiction based on diversity is established, the later joinder of a dispensable, nondiverse party ordinarily will not divest a federal court of it. Smoky Mountain Knife Works, Inc. v. Forward Motion Media, LLC, No. 3:13-CV-448-TAV-CCS, 2015 WL 1608785, at *2 (E.D. Tenn. Apr. 10, 2015) (citation omitted). If the parties attempt to take any step which would destroy jurisdiction, the parties are subject to the Court's discretion under 28 U.S.C. § 1447(e), and Federal Rule of Civil Procedure 15 does not apply. Colletti v. Menard, Inc., No. 14-CV-13538, 2015 WL 404356, at *2 (E.D. Mich. Jan. 29, 2015); Phillip-Stubbs v. Walmart Supercenter, No. 12-10707, 2012 WL 1952444, at *3 (E.D. Mich. May 25, 2012) (following weight of authority from other district courts that amendments as a matter of course do not “insulate a plaintiff's attempt to join non-diverse defendants”) (string citation omitted). Here, Plaintiff failed to seek permission from the Court to join Hutton.[2]

         The parties filed well-developed arguments about the fraudulent joinder doctrine and whether Hutton and United Access should be dismissed. But the fraudulent joinder doctrine, while relevant, is not the standard under which the Court must review Plaintiff's Amended Complaint; § 1447(e) is. Telecom Decision Makers, Inc. v. Access Integrated Networks, Inc., 654 Fed.Appx. 218, 221 (6th Cir. 2016) (per curiam); Walters v. Lowe's Home Imp. Warehouse of Georgetown, No. CIV.A. 5:10-302-JMH, 2011 WL 3319717, at *1 (E.D. Ky. Aug. 1, 2011). Plaintiff added Hutton and United Access as parties to the Amended Complaint after the Kia Defendants removed the original Complaint to this Court. It is undisputed that Hutton is a citizen of Tennessee and is, therefore, a nondiverse party subject to the review of § 1447(e).

         Section 1447(e) 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 the State court.” 28 U.S.C. § 1447(e). These alternatives are exclusive; the Court may not permit joinder and also retain subject matter jurisdiction. See 28 U.S.C. § 1447(c) (“If at any time ...


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