McDermott v. CareAllies, Inc.

• Decision Date: 30 November 2020
• Docket Number: 2:20-cv-03496-KSH-CLW
• Citation: 503 F.Supp.3d 225
• Parties: Karen MCDERMOTT, Plaintiff, v. CAREALLIES, INC. and Amanda Calvitti, Defendants.
• Court: U.S. District Court — District of New Jersey

503 F.Supp.3d 225

Karen MCDERMOTT, Plaintiff,

v.CAREALLIES, INC. and Amanda Calvitti, Defendants.

2:20-cv-03496-KSH-CLW

United States District Court, D. New Jersey.

Signed November 30, 2020

Michael R. Dichiara, Krakower Dichiara LLC, Park Ridge, NJ, for Plaintiff.

Joshua David Allen, Carla D. Macaluso, Jackson Lewis P.C., Berkeley Heights, NJ, for Defendants.

OPINION AND ORDER

Cathy L. Waldor, U.S.M.J

Introduction

This matter comes before the Court on the motion of plaintiff Karen McDermott ("Plaintiff") to remand this action to the Superior Court of New Jersey [D.E. 16]. Defendants CareAllies, Inc. ("CareAllies") and Amanda Calvitti ("Calvitti") (collectively, "Defendants") have opposed the motion [D.E. 17]; Plaintiff has filed a reply [D.E. 18]; and the Honorable Katharine S. Hayden has referred the motion to the undersigned. For the reasons stated below, Plaintiff's motion is GRANTED.

Background

Plaintiff initially brought this action in New Jersey Superior Court in February 2020. See D.E. 1, Exhibit A. Plaintiff's original complaint names one defendant, Qualcare, Inc. ("Qualcare") and alleges that after working for Qualcare for approximately six years, Plaintiff was unlawfully terminated under circumstances relating to her FMLA leave and subsequent claim for disability benefits. Id. at ¶¶ 7-16.

The original complaint sounds in disability discrimination and retaliation under the New Jersey Law Against Discrimination (the "NJLAD"). Id. at ¶¶ 17-32.

The action was timely removed to this Court. D.E. 1. The Notice of Removal provides that CareAllies—not Qualcare—is Plaintiff's former employer, and therefore, the proper defendant entity. Id. at ¶ 5(b). In the Notice of Removal, CareAllies asserted federal jurisdiction based on diversity of citizenship under 28 U.S.C. ¶ 1332(a) ; namely, that Plaintiff is a citizen of New Jersey; that CareAllies is a Delaware corporation with its headquarters and principal place of business in Texas; and that Qualcare's New Jersey corporate residence is irrelevant because Qualcare never employed Plaintiff. Id. at ¶¶ 5, 7, n.1, and Exhibits B, C, D.

Before an answer was interposed, Plaintiff filed an Amended Complaint (the "Amended Complaint") as a matter of course, as authorized under FED. R. CIV. P. 15(a)(1). D.E. 5; see FED. R. CIV. P. 15(a)(1) ; see, e.g., Granger v. Assocs. Abstract, 2010 WL 11692440, at *4, 2010 U.S. Dist. LEXIS 155303 at *14 (D.N.J. Apr. 6, 2010) ("Under Rule 15(a), a party has a right to amend a complaint as a matter of course as to any party that has not answered."). The Amended Complaint differs from the original complaint in three respects, one of which is central to this motion. First, it proceeds against CareAllies rather than Qualcare. See generally Amended Complaint; id. at ¶ 9. Second, it adds a breach of contract claim. Id. at ¶¶ 38-42. Third—and where things get procedurally thorny—it names Calvitti as a defendant. Calvitti is alleged to be Plaintiff's former manager "and an aider and abettor of Defendant CareAllies[’] discrimination against Plaintiff." Id. at ¶ 6.

The addition of Calvitti complicates matters because Calvitti, like Plaintiff, is a New Jersey resident. Id. at ¶¶ 4, 7. As noted, the Notice of Removal claims federal jurisdiction based on 28 U.S.C. § 1332(a), which requires "complete diversity," i.e., that "in cases with multiple plaintiffs or multiple defendants, no plaintiff be a citizen of the same state as any defendant." Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 419 (3d Cir. 2010) (citing cases).¹ Thus, Calvitti's presence arguably destroys the basis for federal jurisdiction over this matter.

Shortly after Plaintiff filed the Amended Complaint, Defendants moved to compel arbitration. D.E. 7. The Court administratively terminated that motion pending decision on the present motion. D.E. 15.

Analysis

Analytical Framework

The key question in deciding this motion presents itself at the very outset; viz., what is the correct framework in addressing how Plaintiff's post-removal addition of Calvitti impacts the question of remand?

Plaintiff's argument is primarily grounded in fraudulent joinder, a decidedly plaintiff-friendly doctrine which provides that "[w]hen a non-diverse party has been joined as a defendant, then in the absence of a substantial federal question² the removing defendant may avoid remand only by demonstrating that the non-diverse party was fraudulently joined"; i.e., that "there is no reasonable basis in fact or colorable ground supporting the claim against the joined defendant, or no real intention in good faith to prosecute the action against the defendants or seek a joint judgment." In re Briscoe, 448 F.3d 201, 217 (3d Cir. 2006) (quoting Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 (3d Cir. 1992) ). Defendants, meanwhile, primarily contend that the Court should apply 28 U.S.C. § 1447(e),³ which states that "[i]f 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." 28 U.S.C. § 1447(e). In analyzing joinder under section § 1447(e), courts in the Third Circuit "regularly apply the factors set forth by the United States Court of Appeals for the Fifth Circuit in Hensgens v. Deere & Co., 833 F.2d 1179 (5th Cir. 1987), cert. denied, 493 U.S. 851, 110 S. Ct. 150, 107 L. Ed. 2d 108 (1989)"; i.e., "(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." City of Perth Amboy v. Safeco Ins. Co. of Am., 539 F. Supp. 2d 742, 752-53 (D.N.J. 2007) (citing Hensgens, 833 F.2d at 1182 and collecting cases); report and recommendation adopted, 539 F. Supp. 2d 742 (D.N.J. 2008).⁴

The parties’ dispute over how to address this motion is for good reason. As will be discussed, Calvitti was not fraudulently joined; conversely, the Hensgens factors appear to favor Defendants. Thus, this threshold question is also a dispositive one. Moreover, both arguments carry water. Indeed, there is a sharp split of opinion as to which standard applies in the specific situation before the Court—i.e., where post-removal, a plaintiff amends her complaint as of right to add a non-diverse party—with considerable authority on both sides of the ledger. As noted in Sussman v. Capital One, N.A., 2014 WL 5437079, 2014 U.S. Dist. LEXIS 151866 (D.N.J. Oct. 24, 2014):

[w]hen a claimant amends his complaint as a matter of right under Rule 15(a) of the Federal Rules of Civil Procedure to join non-diverse parties who would destroy diversity jurisdiction, some debate exists between district courts as to whether Section 1447(e) —which permits the court to deny joinder where a party seeks to add parties that would destroy diversity jurisdiction—still applies. Most courts and commentators appear to embrace the applicability of Section 1447(e) under such circumstances. Some courts, however, suggest that the fraudulent joinder analysis ... applies to determine whether parties, who are added to a complaint that has been amended post-removal, are improperly joined.

Id. 2011 WL 1256618, at *3, 2014 U.S. Dist. LEXIS 151866, at *5-7 (collecting cases on both sides of dispute; citations omitted). Ultimately, the Court will conclude that fraudulent joinder provides the proper framework, and therefore, because Calvitti's joinder was not fraudulent, that remand is proper.⁵

Mayes v. Rapoport, 198 F.3d 457 (4th Cir. 1999) is the leading case supporting a § 1447(e) / Hensgens analysis. In a frequently-cited footnote, the Fourth Circuit explains that in circumstances such as here, " § 1447(e) conflicts with Rule 15(a), which permits a plaintiff to amend his complaint without leave of court ‘before a responsive pleading is served.’ " Id. at 462 n.11 (quoting Fed. R. Civ. P. 15(a) ).⁶ The conflict arises "because, if the plaintiff can add a nondiverse defendant without the district court exercising its discretion over whether the defendant should be joined, then, under § 1447(e), the district court would be forced to remand the case without determining the propriety of joinder." Id.; see also Mackey v. J.P. Morgan Chase Bank, N.A., 786 F. Supp. 2d 1338, 1340 (E.D. Mich. 2011) ("[T]here is ‘an inherent tension between the right to amend a complaint once as a matter of course under Rule 15(a) and the discretion conferred by § 1447(e),’ as Rule 15(a) seemingly leaves no role for the court to play in determining whether a non-diverse defendant should be joined as a party.") (quoting Collins v. National General Insurance Co., 2010 WL 4259949, 2010 U.S. Dist. LEXIS 113325 (E.D. Mich. Oct. 25, 2010) and citing J. Lewis Cooper Co. v. Diageo North America, Inc., 370 F. Supp.2d 613, 618 (E.D. Mich. 2005) ). Mayes answers that a cohesive reading of Rules 15(a), 19, and 21, along with § 1447(e), "resolves any doubts over whether the district court has authority to pass upon any attempts -- even those for which the plaintiff needs no leave of court -- to join a nondiverse defendant" and concludes that "a district court has the authority to reject a post-removal joinder that implicates 28 U.S.C. § 1447(e), even if the joinder was without leave of court." Mayes, 198 F.3d at 462 n.11 (citing authorities).

Bevels v. American States Ins. Co., 100 F. Supp. 2d 1309 (M.D. Ala. June 20, 2000) adds a practical consideration:

[i]f the rule were to the contrary, that is, if a plaintiff could destroy diversity jurisdiction merely by naming a non-diverse defendant after removal, without seeking leave of the court, ... a plaintiff whose only motive was to avoid the federal forum could do so simply by amending the complaint once it was removed.

Id. at 1313. For these reasons, these (and other) courts hold that "a party may not...