Amending A Complaint To Join Non-Diverse Defendants

Insurance attorneys will find this Northern District, Dallas Division opinion helpful for seeing how the courts analyze situations where a complaint is trying to be amended in Federal court to add non-diverse defendants.  The case is styled, Charity Ogunro v. Allstate Vehicle And Property Insurance Company.

Ogunro filed this home insurance dispute in March 2018, naming Allstate and two adjusters.  Allstate elected legal responsibility for the adjusters and the adjusters were dismissed with prejudice, thus, giving diversity jurisdiction.

Ogunro then attempted to amend her complaint by alleging causes of action against the insurance agents who sold the policy.  By allowing the amendment, Ogunro would be able to defeat diversity jurisdiction because the agents are Texas residents and thus, this case would be remanded back to State Court.

The proper analysis is governed by 28 U.S.C., Section 1447(e) which 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.

As part of the analysis, the Court looks at the factors developed in Hensgens.  Hensgens is a 5th Circuit opinion.  The factors are: (1) the extent to which the purpose of the amendment is to defeat federal jurisdiction, (2) whether plaintiff has been dilatory in asking for amendment, (3) whether plaintiff will be significantly injured if amendment is not allowed, and (4) any other factors bearing on the equities.

This Court spent time reviewing each of the four factors and their relationship to this case.  Seeing how the Court applied these four factors to the facts in this case are worth reading.  In conclusion the Court found “Because the first and second Hensgens factors weigh against allowing the amendment and the third and fourth factors are neutral, the Court finds that Plaintiff may not join the non-diverse insurance agents.”  Thus, Ogunro was not allowed to amend the complaint and the case remained in Federal Court.

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