When insurance lawyers know of a defendant who could be named in a lawsuit, they need to sue that defendant immediately. Waiting until after a non-diverse defendant has removed the case to Federal Court may be waiting too long. This is illustrated in the Southern District of Texas, Houston Division, opinion styled, Ali Duhaly v. The Cincinnati Insurance Company.
Duhaly sued Cincinnati in State Court alleging Cincinnati was liable for injuries incurred in a car wreck with Broderick Williams. But, in the lawsuit Duhaly did not sue Williams until after the case was removed to Federal Court. Cincinnati alleges the attempt to sue Williams after removal is only an attempt to defeat diversity jurisdiction.
Federal Rule of Civil Procedure 15(a) states that the court should freely give leave to amend when justice so requires. But this is not automatic. The Fifth Circuit has said that when a party seeks to amend to add a new, non-diverse party, the amendment should be closely scrutinized.