Estate of Tungpalan v. Crown Equip. Corp.
| Decision Date | 12 June 2013 |
| Docket Number | CIVIL NO. 11-00581 LEK-BMK |
| Parties | ESTATE OF ROEL TUNGPALAN, JINGLE TUNGPALAN on behalf of herself and her minor child, J.T., Plaintiffs, v. CROWN EQUIPMENT CORP., an Ohio Corporation, d/b/a "CROWN LIFT TRUCKS," and DOE ENTITIES 1-10, Defendants. |
| Court | U.S. District Court — District of Hawaii |
Before the Court are Defendant Crown Equipment Corp.'s ("Crown"1) Objections to the Magistrate Judge's: (1) Order Granting Plaintiffs' Motion to Modify Rule 16 Order to Permit Plaintiffs to File First Amended Complaint and Denying Plaintiffs' Motion to for [sic] Remand to the First Circuit Court Without Prejudice; and (2) Order Granting in Part and Denying inPart Reconsideration of the Court's December 24, 2012 Order; Order Denying Defendant's Motion to Strike First Amended Complaint; Finding and Recommendation to Remand this Action ("Objections"), filed on April 10, 2013. [Dkt. no. 115.] Plaintiffs the Estate of Roel Tungpalan and Jingle Tungpalan on behalf of herself and her minor child, J.T. (collectively "Plaintiffs"), filed their Response to the Objections ("Response") on April 25, 2013. [Dkt. no. 116.] The Court finds this matter suitable for disposition without a hearing pursuant to Rules LR7.2(d) and LR74.2 of the Local Rules of Practice of the United States District Court for the District of Hawai`i ("Local Rules"). After careful consideration of the Objections, the Response, and the relevant legal authority, and for the reasons set forth below, this Court HEREBY GRANTS IN PART AND DENIES IN PART Crown's Objections. Specifically, this Court: 1) AFFIRMS IN PART AND VACATES IN PART the magistrate judge's December 24, 2012 order modifying the scheduling order and permitting Plaintiffs to file a First Amended Complaint; 2) AFFIRMS IN PART AND VACATES IN PART the magistrate judge's March 27, 2013 order denying reconsideration of the December 24, 2012 order and denying Crown's motion to strike the First Amended Complaint; and 3) ADOPTS, AS MODIFIED, the magistrate judge's recommendation to remand this action to the State of Hawai`i First Circuit Court.
Plaintiffs originally filed this action in the State of Hawai`i First Circuit Court ("state court") on August 23, 2011. The Complaint alleges that, on or about September 2, 2009, Roel Tungpalan was operating a fork lift truck in the course of his employment with Kerr Pacific Corp., doing business as HFM Food Service ("HFM"). Roel Tungpalan died as a result of injuries he suffered when boxes of frozen food fell on him while he was operating the truck. [Id. at ¶¶ 8-10.] The Complaint alleges, inter alia, that Crown negligently "designed, manufactured, assembled, supplied, tested, marketed, promoted, sold, and/or distributed" the fork lift truck that Roel Tungpalan operated on September 2, 2009 and that a defect in the fork lift truck rendered it unreasonably dangerous for its intended or foreseeable use. [Id. at ¶¶ 9, 13, 18.] The Complaint asserts five claims - strict product liability, negligence, failure to warn, breach of warranty, and wrongful death.
On September 23, 2011, Crown removed this action to this district court based on diversity jurisdiction. [Redacted Notice of Removal at ¶¶ 3-5 ().]
The original Rule 16 Scheduling Order stated, inter alia, that the deadline to add parties and amend pleadings was April 13, 2012. [Rule 16 Scheduling Order, filed 11/2/11 (dkt. no. 14), at 2.]
On March 14, 2012, the magistrate judge approved and filed the parties' stipulation to allow HFM to enter the case as a Plaintiff-Intervenor. [Dkt. no. 32.]
On April 10, 2012, the magistrate judge issued an Amended Rule 16 Scheduling Order which stated, inter alia, that the deadline to add parties and amend pleadings was July 27, 2012. [Amended Rule 16 Scheduling Order, filed 4/10/12 (dkt. no. 35), at 2.] Following a stipulation to continue the trial date, the magistrate judge issued another Amended Rule 16 Scheduling Order on July 26, 2012, which noted that the deadline to add parties and amend pleadings was closed. [Amended Rule 16 Scheduling Order, filed 7/26/12 (dkt. no. 45), at 2.]
On October 26, 2012, Plaintiffs filed two motions to compel to address various discovery disputes. [Dkt. nos. 47, 50.]
On October 30, 2012, Plaintiffs filed their Motion to Modify Rule 16 Order to Permit Plaintiffs to File First AmendedComplaint and for Remand to the First Circuit Court ("Motion to Amend"). [Dkt. no. 57.] In the Motion to Amend, Plaintiffs sought leave to add Diversified Equipment, Inc. ("Diversified") and Interlake/Mecalux ("Interlake") as additional defendants. According to Plaintiffs, Interlake manufactured and Diversified sold and installed the HFM warehouse racking system from which the boxes of frozen food fell on Roel Tungpalan. [Mem. in Supp. of Motion to Amend at 6.]
On December 24, 2012, after briefing by the parties and a hearing on December 4, 2012, the magistrate judge issued the first order that Crown challenges in the Objections - the Order Granting Plaintiffs' Motion to Modify Rule 16 Order to Permit Plaintiffs to File First Amended Complaint and Denying Plaintiffs' Motion for Remand to the First Circuit Court Without Prejudice ("12/24/12 Order"). [Dkt. no. 83.] The magistrate judge found that Plaintiffs had been diligent in pursuing discovery and in seeking to amend the scheduling order. Further, in light of the stage of the case at the time, there was good cause to amend the scheduling order. [Id. at 2-3.] The magistrate judge also found that Plaintiffs had not acted in bad faith, and that there was no undue delay or prejudice. Finally, the magistrate judge found that, based on the facts identified to that point, the proposed amendment was not futile. The magistrate judge therefore granted Plaintiffs leave to amendpursuant to Fed. R. Civ. P. 15(a). [Id. at 3-4.] To the extent that the Motion to Amend sought remand of the action after the filing of the First Amended Complaint, the magistrate judge denied the request without prejudice to the refiling of a motion to remand at a later date. [Id. at 4.]
Plaintiffs filed their First Amended Complaint on December 4, 2012, based upon the magistrate judge's oral ruling at the hearing on the Motion to Amend. [Dkt. nos. 74 (Minutes), 75 (First Amended Complaint).]
On January 7, 2013, Crown filed a motion seeking reconsideration of the 12/24/12 Order ("Motion for Reconsideration") and a motion to strike the First Amended Complaint ("Motion to Strike"). [Dkt. nos. 85, 86.]
On March 27, 2013, following briefing by the parties and a hearing on February 1, 2013, the magistrate judge issued the second document that Crown challenges in the Objections - the Order Granting in Part and Denying in Part Reconsideration of the Court's December 24, 2012 Order; Order Denying Defendant's Motion to Strike First Amended Complaint; Findings and Recommendation to Remand this Action ("3/27/13 Order & Recommendation"). [Dkt. no. 113.] The magistrate judge granted reconsideration of the 12/24/12 Order only to the extent that the magistrate judge found and recommended that the action be remanded to the state court. the magistrate judge denied reconsideration in all other respectsand denied Crown's Motion to Strike.
The magistrate judge concluded that 28 U.S.C. § 1367(b) prevents plaintiffs from evading diversity jurisdiction by joining a non-diverse defendant, but § 1367(b) did not preclude the joinder of Diversified, a non-diverse party, and Interlake because Plaintiffs' proposed amendment was legitimate (i.e. the amendment was not for the purpose of evading jurisdiction). The magistrate judge therefore rejected Crown's argument that allowing Plaintiffs to add Diversified and Interlake as additional defendants was improper. [3/27/13 Order & Recommendation at 3-4.] The magistrate judge concluded that, with the joinder of a non-diverse party, remand was mandatory pursuant to 28 U.S.C. § 1447(e). [Id. at 4-6 (citing Stevens v. Brink's Home Security, Inc., 378 F.3d 944, 946, 949 (9th Cir. 2004); Orlando v. Carolina Cas. Ins. Co., 1:07cv92 AWI SMS, 2008 WL 5247718, at *1 (E.D. Cal. Dec. 17, 2008)).]
Crown's primary argument is that the magistrate judge erred in relying upon § 1447(e) to allow Plaintiffs to amend their Complaint to add the non-diverse defendant, Diversified. Crown contends that 28 U.S.C. § 1367(b) required the denial of Plaintiffs' request to join Diversified as an additional defendant.
Crown further argues that, even assuming, arguendo,that § 1447(e) applied, the magistrate judge clearly erred in his analysis of the factors relevant to a § 1447(e) joinder. According to Crown: Diversified is not a necessary party under Fed. R. Civ. P. 19(a); Plaintiffs' claims against Diversified are time barred; Plaintiffs unduly delayed in identifying Diversified as a potential defendant; the joinder of Diversified is solely for the purpose of destroying diversity jurisdiction; Plaintiffs' claims against Diversified are meritless because Diversified had nothing to do with the racking that was involved in the incident in question; and Plaintiffs will not suffer...
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