United States District Court, N.D. Indiana, Hammond Division
MEMBER SELECT INSURANCE COMPANY AAA a/s/o MICHAEL BOOMSMA and JUDY BOOMSMA, Plaintiff,
CUB CADET, LLC, KOHLER, CO., and DON BALES, INC, Defendants.
OPINION AND ORDER
R. CHERRY, UNITED STATES DISTRICT COURT MAGISTRATE JUDGE
matter is before the Court on a Motion for Leave to File
First Amended Complaint at Law [DE 20], filed by Plaintiff
Member Select Insurance Company on November 9, 2016.
Defendant Cub Cadet, LLC filed a response on November 23,
2016. On the same date, both Defendant Don Bales, Inc. and
Defendant Kohler Co. filed notices that they joined in their
co-defendant's response. Plaintiff filed a reply on
December 5, 2016.
through the proposed First Amended Complaint, seeks to add
plaintiffs, defendants, and claims to this litigation and to
name MTD Consumer Group, Inc., as the proper defendant in
place of Defendant Cub Cadet, LLC.
agree that the proper name of the party sued as “Cub
Cadet LLC” is “MTD Consumer Group, Inc” and
have no objection to amending the Complaint to properly name
this party. Therefore, the request to amend the Complaint to
properly name this party is granted. In the remainder of this
opinion, the Court will refer to this party as MTD.
argue that the remaining proposed amendments to the Complaint
are futile and that Plaintiff's motive in seeking to add
the proposed new plaintiffs, Michael Boomsma and Judy
Boomsma, is to destroy this Court's subject matter
jurisdiction. The Court construes this latter argument as an
argument that the proposed amendments as to the Boomsmas are
brought in bad faith. The Court will first address the bad
faith argument and then address the futility argument.
Rule of Civil Procedure 15(a)(2) provides that a party
“may amend its pleading only with the opposing
party's written consent or the court's leave”
and that “[t]he court should freely give leave when
justice so requires.” Fed.R.Civ.P. 15(a)(2). The United
States Supreme Court has explained that “freely
give” means that a court should not deny leave to file
an amended complaint in the absence of any apparent or
declared reasons, “such as undue delay, bad faith or
dilatory motive on the part of the movant, repeated failure
to cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party by virtue of allowance of the
amendment, futility of amendment, etc.” Foman v.
Davis, 371 U.S. 178, 182 (1962); see also Bausch v.
Stryker Corp., 630 F.3d 546, 562 (7th Cir. 2010). The
decision whether to grant or deny a motion to amend lies
within the sound discretion of the district court. See
Campbell v. Ingersoll Milling Mach. Co., 893 F.2d 925,
927 (7th Cir. 1990).
Rule of Civil Procedure 20 governs the permissive joinder of
parties. Because Defendants do not argue that Rule 20's
requirements are not met as to the proposed new parties and
because, upon review of the proposed First Amended Complaint,
the Court finds that the requirements of Rule 20 are
satisfied as to the parties sought to be joined, the Court
will restrict its analysis below to the issues of bad faith
and futility under Rule 15.
motion to amend a complaint is properly denied if the
amendment is sought in bad faith. Foman, 371 U.S. at
182. Defendants argue that the factors to be used when
deciding whether to join a party outlined in Schur v.
L.A. Weight Loss Ctrs., Inc., 577 F.3d 752 (7th Cir.
2009), should guide the Court's analysis. The factors are
“(1) the plaintiff's motive for seeking joinder,
particularly whether the purpose is to defeat federal
jurisdiction; (2) the timeliness of the request to amend; (3)
whether the plaintiff will be significantly injured if
joinder is not allowed; and (4) any other relevant equitable
considerations.” Id. at 759. Plaintiff
counters that the Schur factors only apply when
nondiverse defendants-not nondiverse plaintiffs-are sought to
be added. Though the facts of Schur involved joinder
of nondiverse defendants, the Schur factors were
adopted “for determining whether post-removal joinder
of a nondiverse party is appropriate” under 28
U.S.C. 1447(e). Id. (emphasis added). The Seventh
Circuit Court of Appeals, in adopting the Schur
factors, did not restrict the factors' application only
to instances where the nondiverse party sought to be joined
is a defendant.
is one significant difference, however, between
Schur and the instant litigation. In addition to
adding parties, Plaintiff is also seeking leave to file
claims under the Magnuson-Moss Warranty Federal Trade
Commission Improvement Act (“Magnuson-Moss Act”),
and, for the reasons stated in the futility analysis below,
Plaintiff (though not the Boomsmas) will be granted leave to
bring those claims. Therefore, though the Boomsmas, if
joined, would be nondiverse parties, it appears that the
Court could still exercise subject matter jurisdiction over
this litigation via federal question and supplemental
jurisdiction. Consequently, the Court is not tasked with
performing analysis under 28 U.S.C. 1447(e).
issue for the Court to resolve here is whether Plaintiff
seeks joinder of the Boomsmas in bad faith. The Court's
ability to exercise jurisdiction even if the parties are
joined does not disallow a finding of bad faith due to
attempted destruction of jurisdiction. See Sorosky v.
Burroughs Corp., 826 F.2d 794, 805 (9th Cir.
1987) (holding, despite the plaintiff's argument that
diversity jurisdiction was already destroyed and therefore
denial of leave to amend the complaint for bad faith was
inappropriate, “[t]he question . . . is not whether
diversity jurisdiction existed, but instead whether the
motion to amend was brought in bad faith.”).
though the first Schur factor-Plaintiff's
motive-is an issue for the Court here in determining whether
the joinder of the Boomsmas is in bad faith, the
Schur factors as a whole are not the appropriate
framework for deciding the question at hand. See
Schur, 759 F.3d at 759; Beil v. Ill. Mun. League
Risk Mgmt. Ass'n, Case No. 16-cv-356, 2016 WL
3999895, at *2-3 (S.D. Ill. July 26, 2016) (applying the
Schur factors where joinder would destroy subject
amendments that clearly try to avoid unfavorable consequences
on the merits or gain a tactical advantage are brought in bad
faith. See Vitrano v. United States, 721 F.3d 802,
807 (7th Cir. 2013); see also Dussouy v. Gulf Coast Inv.
Corp., 660 F.2d 594, 599 (5th Cir. 1981). Relevant to
the bad faith determination are whether it is likely
Plaintiff knew the facts pertinent to the amendment before
the original complaint was filed and whether Plaintiff is
trying to forum shop. See Hernandez v. DMSI Staffing,
LLC.,79 F.Supp.3d 1054, 1059 (N.D. Cal. 2015); see
also Johnson v. Gen. Motors Corp., No. 03-865, ...