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Taylor v. Alabama CVS Pharmacy, L.L.C.

United States District Court, N.D. Alabama, Western Division

July 14, 2017




         This cause is before the court on the plaintiff's motion to remand the action to the Circuit Court of Tuscaloosa County, from which it was removed on November 10, 2016. (Doc. 1). Plaintiff filed an amended complaint on November 17, 2016, followed by her motion to remand (Doc. 5). The parties consented to the undersigned magistrate judge's dispositive authority under 28 U.S.C. § 636(c) on January 3, 2017. (Doc. 16).

         I. Procedural and Factual Background

         On October 10, 2016, the plaintiff filed her original complaint in the Circuit Court of Tuscaloosa County, Alabama (Doc. 1-4), naming as defendants “CVS Pharmacy Store #3004” and “Fictitious Defendants 1-10.” In it, she alleged that she presented a written prescription to the pharmacy on April 1, 2016, and, unbeknownst to her, the pharmacy incorrectly filled the prescription with the wrong medication (Bupropion). After taking the wrong medication for over a month, the plaintiff returned to the pharmacy on May 7, 2016, to have it re-filled, and once again, the wrong medication was given to her. After experiencing unexpected side effects, the plaintiff returned to her doctor, who informed her that the wrong medication had been used to fill the prescription. Based on these pleaded facts, the plaintiff alleged claims for negligence, wantonness, negligent/wanton training and supervision, and negligent/wanton failure to warn. In each of the four counts of the complaint, the plaintiff demanded the same relief: “Plaintiff demands judgment against all Defendants and Fictitious Defendants jointly and severally, in a sum of compensatory and/or punitive damages not in excess of the jurisdictional limits of this Court which will fairly and adequately compensate Plaintiff for the above described damages and injuries, together with interest from the date of the incident and the costs of the proceeding.”

         On November 10, 2016, Alabama CVS Pharmacy LLC (“Alabama CVS”) filed a notice of removal, alleging that such is the true legal name of the defendant (instead of CVS Pharmacy Store #3004). Alabama CVS offered the affidavit of Thomas Moffatt to establish that CVS Pharmacy Store #3004 is owned by Alabama CVS Pharmacy LLC, and that the only member of the defendant LLC is an entity known as CVS Pharmacy, Inc., which is incorporated in Rhode Island and has its principal place of business there. The defendant also asserted that the combination of the nature of the claims alleged and the plaintiff's demand for punitive damages plainly met the $75, 000.00 minimum amount in controversy. The defendant relies on 28 U.S.C. § 1332 for federal subject-matter jurisdiction.

         A week later, on November 17, 2017, the plaintiff filed an amended complaint without seeking leave to do so. (Doc. 4). In her First Amended Complaint, she substituted Alabama CVS Pharmacy LLC for the previously named CVS Pharmacy Store #3004, and she named Stephanie M. Hoffer as a defendant, alleging that Hoffer is the pharmacist who incorrectly filled the prescription.[1](Doc. 4). Alabama CVS filed a motion to strike the First Amended Complaint on November 18, 2016, contending that the court should exercise its discretion under 28 U.S.C. § 1447(e) to disallow the amendment because it will destroy the court's diversity jurisdiction. Hoffer was served with a summons and copy of the amended complaint on December 2, 2016, and filed her own motion to dismiss the amended complaint on December 22, 2016.

         The motions have been fully briefed and are ready for disposition.

         II. Analysis

         The issue boils down to whether the plaintiff should be allowed to amend the complaint to name Hoffer as a defendant in this action.[2] Doing so would destroy the diversity jurisdiction of the court and require remand. See 28 U.S.C. § 1447(e). There appears to be no dispute that, at the time of removal on November 10, 2016, there was complete diversity of citizenship among the named and served parties, [3]and the plaintiff has not disputed that the amount in controversy exceeds the jurisdictional minimum. The Moffatt affidavit attached to the notice of removal clearly established the proper identification of the defendant and, ultimately, that the defendant, Alabama CVS, is a citizen of Rhode Island. The court finds the amount in controversy to be at least $75, 000, exclusive of interest and costs, given that allegation that the defendant negligently or wantonly mis-filled a prescription twice, resulting in some undisclosed physical injury and emotional distress to the plaintiff. The demand for punitive damages removes any lingering doubt that the real amount in controversy exceeds the jurisdictional minimum.[4] Hence, but for the filing of the First Amended Complaint, there is no question about the propriety of the removal on diversity grounds.

         As stated, the principal question is whether the plaintiff's First Amended Complaint should be allowed where doing so will destroy complete diversity between the parties and require remand of the case to state court. At the outset, the plaintiff argues that 28 U.S.C. 1447(e) does not apply because the amendment does not “add” or “join” a new defendant, but, rather, substitutes the true name of Stephanie Hoffer for one of the fictitiously named defendants in the original complaint. She points out that § 1447(e) reads:

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. [Emphasis added].

         Plaintiff contends she is not “join[ing] additional defendants, ” but merely identifying correctly the true name of a defendant pleaded in the original complaint, namely one of the Fictitious Defendants.

         There is some limited Eleventh Circuit authority for such an argument. In Ingram v. CSX Transportation, Inc., 146 F.3d 858 (11th Cir. 1998), the plaintiff filed suit in Alabama circuit court against CSX for injuries she suffered in a railroad-crossing accident. The crossing was owned by the City of Albertville, Alabama, who was not named as a defendant in the original complaint. Because of the diversity of citizenship between the plaintiff and CSX, the railroad removed the action to the federal district court. After the removal, the plaintiff moved for leave to amend the complaint to add the City as an additional defendant. The district court granted the motion, but only upon the express understanding that doing so would not divest the court of the subject-matter jurisdiction that existed at the time of removal. After the district court granted summary judgment to both defendants, the plaintiff appealed, arguing that the court lacked subject-matter jurisdiction because her own amended complaint adding the City destroyed diversity and required a remand to state court. In response, the defendants argued that because diversity existed when the case was removed, the court did not lose jurisdiction by allowing the post-removal amendment.

         Addressing these arguments, the court of appeals wrote:

The appellees argue that the district court's diversity jurisdiction was determined at the time CSX filed its notice of removal. The appellees rely on the Supreme Court's decision in Freeport-McMoRan, Inc. v. K N Energy, Inc., which held that “[d]iversity jurisdiction, once established, is not defeated by the addition of a nondiverse [dispensable] party to the action.” 498 U.S. 426, 428, 111 S.Ct. 858, 112 L.Ed.2d 951 (1991). In Freeport, a gas seller brought a breach of contract action against a buyer. The seller then assigned its interest in the contract and substituted the nondiverse assignee as a plaintiff pursuant to Fed.R.Civ.P. 25(c). In a per curiam opinion, the Supreme Court held that “diversity of citizenship is assessed at the time the action is filed[, ]” and that “if jurisdiction exists at [that] time ... such jurisdiction may not be divested by subsequent events.” Freeport-McMoRan, 498 U.S. at 428, 111 S.Ct. 858. The court rejected the opposite rule, which it reasoned could “have the effect of deterring normal business transactions during the pendency of what might be lengthy litigation.” 498 U.S. at 428, 111 S.Ct. 858. The appellees assert that, under Freeport, federal diversity jurisdiction attached at the time of removal and was not destroyed when the district court added the City as a defendant. We disagree.
CSX and the City construe Freeport's holding too broadly. Freeport does not stand for the proposition that all additions of nondiverse parties are permissible as long as complete diversity existed at the time of commencement of the lawsuit. Instead, the holding in Freeport relies upon the assignee's having been substituted as a plaintiff under Fed.R.Civ.P. 25(c). In this case, the City's addition was unrelated to rule 25. As a result, we find Freeport to be inapplicable. When the district court granted Ingram's motion to add the City as a defendant, complete diversity no longer existed between the parties, thereby destroying subject matter jurisdiction.
Although Ingram styled her motion to add the City as a motion to amend her complaint pursuant to Fed.R.Civ.P. 15(a), this amendment amounted to a joinder, pursuant to Fed.R.Civ.P. 20. We presume that Ingram sought to add the City because her alleged right to relief against it arose out of the same transaction or occurrence as her alleged right to relief against CSX, and because questions of law or fact common to both defendants were likely to arise in the action. See Fed. R. Civ. P. 20(a). Thus, in determining whether to grant Ingram's motion, the district court should have considered 28 U.S.C.A. § 1447(e), which provides: “If after removal the plaintiff seeks to join additional defendants whose ...

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