Whitmire v. Victus Limited

• Decision Date: 02 June 2000
• Docket Number: No. 99-60743,99-60743
• Citation: 212 F.3d 885
• Parties: (5th Cir. 2000) PAULA JO WHITMIRE, Plaintiff-Appellant, v. VICTUS LIMITED T/A MASTER DESIGN FURNITURE, Defendant-Appellee. Summary Calendar
• Court: U.S. Court of Appeals — Fifth Circuit

Page 885

212 F.3d 885 (5th Cir. 2000)

PAULA JO WHITMIRE, Plaintiff-Appellant, v.VICTUS LIMITED T/A MASTER DESIGN FURNITURE, Defendant-Appellee.

No. 99-60743

Summary Calendar

UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

June 2, 2000

Appeal from the United States District Court for the Northern District of Mississippi.1:97-CV-321.Neal B Biggers, Jr, Chief Judge.

Before SMITH, BARKSDALE and PARKER, Circuit Judges.

ROBERT M. PARKER, Circuit Judge.

Plaintiff-Appellant brought suit in federal district court asserting causes of action under federal statute and state common law.Plaintiff asserted that subject matter jurisdiction was proper under the court's grant to hear questions of federal law and supplemental authority over pendent state law claims.The district court granted defendant's motion for summary judgment on plaintiff's federal claims and dismissed plaintiff's state law claims without prejudice.Plaintiff sought to preserve her case in federal court by amending her pleadings to properly allege that all requirements of diversity jurisdiction were satisfied from the inception of her case and that diversity could serve as an alternative basis for jurisdiction.The district court denied plaintiff's motion, and she appeals.

The issues on appeal are narrow and based upon a clear and complete record from the district court, and neither party seeks oral argument.Consequently, we believe this case to be best suited for resolution on summary calendar.Specifically, we are asked to decide whether the failure to state that the requirements of diversity jurisdiction were satisfied at the time this case was filed is correctable pursuant to federal statute which authorizes the correction of "defective allegations of jurisdiction," and whether the district court abused its discretion by denying plaintiff leave to make such amendments.As we answer both questions in the affirmative, we REVERSE and REMAND.

I.

On October 6, 1997, Paula Jo Whitmire brought suit in federal district court alleging violations of the Family Medical Leave Act and the Americans with Disabilities Act.In addition, Whitmire asserted state law claims for intentional infliction of emotional distress, breach of "an implied duty of good faith in an employment relationship," and violation of "Mississippi law protection against assault."In her complaint, Whitmire asserted that the court had federal question jurisdiction over her federal statutory claims, see28 U.S.C. 1333(1994), and supplemental jurisdiction over her state law claims.See28 U.S.C. 1367(1994).Although jurisdiction was also proper from the inception of the case pursuant to the court's jurisdiction to hear diversity cases, Whitmire made no such allegation in her complaint.Also, Whitmire, a citizen of the State of Mississippi, failed to state that the defendant was not a citizen of Mississippi or that the amount in controversy exceeded the statutory minimum.See28 U.S.C. 1332(1994).¹

On December 11, 1998, defendant filed a motion for summary judgment challenging all of plaintiff's claims, and the district court granted summary judgment to the defendant on the federal claims.The court dismissed the federal claims with prejudice, and dismissed the state law claims without prejudice.Immediately thereafter, Whitmire moved for leave to amend her complaint by alleging diversity jurisdiction.Whitmire did not propose to add any new causes of action or new parties, nor did she seek to introduce any new substantive facts to the case.The district court denied her motion for leave to amend.Whitmire appeals.

II.

A grant or denial of a motion to amend pleadings is an exercise of discretion by the district court; we review only for abuse of that discretion.SeeHypes v. First Commerce Corp., 134 F.3d 721, 728(5th Cir.1998).

III.

A.

When prosecuting a suit in federal court, "the plaintiff has the burden of pleading the existence of the court's jurisdiction, and, in a diversity action, the plaintiff must state all parties' citizenships such that the existence of complete diversity can be confirmed."Chemical Leaman Tank Lines, Inc. v. Aetna Casualty and Surety Co., 177 F.3d 210, 222 n.13(3d Cir.1999);seeFED. R. CIV. P. 8.Nevertheless, "[a] failure to allege facts establishing jurisdiction need not prove fatal to a complaint."Canedy v. Liberty Mutual Ins. Co., 126 F.3d 100, 103(2d Cir.1997).A plaintiff may correct a failure to set forth diversity as an alternate basis for jurisdiction by amending her complaint pursuant to 28 U.S.C. 1653(1994).This statutory provision, titled "Amendment of pleadings to show jurisdiction," provides:

Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts.

28 U.S.C. 1653(1994).Section 1653 was enacted as part of the Judicial Code revisions of 1948.Its predecessor, enacted 35 years earlier, "expressly limited jurisdictional amendments to cases in which diversity jurisdiction 'in fact existed at the time the suit was brought or removed, though defectively alleged.'"Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 831, 104 L. Ed. 2d 893, 109 S. Ct. 2218(1989).According to the revision notes to 1653, the statute was amended "solely to expand the power to cure defective allegations of jurisdiction from diversity cases to all cases."Id.(citing Historical and Revision Notes to 28 U.S.C. 1653);see alsoMobil Oil Corp. v. Kelley, 493 F.2d 784, 788(5th Cir.1974).

We have repeatedly noted that 1653 is to be broadly construed to avoid dismissals of actions on purely "technical" or "formal" grounds.SeeMiller v. Stanmore, 636 F.2d 986, 990(5th Cir.1981);see alsoGoble v. Marsh, 238, 684 F.2d 12, 17(D.C. Cir.1982)(in enacting 1653 "Congress intended to permit amendment broadly to avoid dismissal of suits on technical grounds").Furthermore, technical defects or failure to specifically allege the citizenship of a party can be cured even in the appellate courts.SeeD.J. McDuffie Inc. v. Old Reliable Fire Ins. Co., 608 F.2d 145, 146(5th Cir.1979).In general, a motion for leave to amend should be granted if it would do nothing "more than state an alternative jurisdictional basis for recovery upon the facts previously alleged."Miller, 636 F.2d at 990.Our sistercourts are no less charitable in their interpretation of 1653.See, e.g., Canedy, 126 F.3d at 103("Unless the record clearly indicates that complaint could not be saved by any truthful amendment, we generally afford opportunity for amendment.")(citation omitted);Scattergood v. Perelman, 945 F.2d 618, 626(3d Cir.1991);see alsoQuinn v. McGraw-Hill Companies, Inc., 168 F.3d 331, 334 n.1(7th Cir.1999).

"[A]district court's power to authorize amendments to cure a competence problem under section 1653, and by extension under Rule 15(a), turns on the nature of the jurisdictional defect."Falise v. American Tobacco Co., 241 B.R. 63, 65(E.D.N.Y.1999)(Weinstein, J.).While a district court can "remedy inadequate jurisdictional allegations," it cannot remedy "defective jurisdictional facts."Newman-Green, 490 U.S. at 831, 832 n.5(citingPressroom Unions-Printers League Income Security Fund v. Continental Assurance Co., 700 F.2d 889, 893(2d Cir.1983));Aetna Casualty & Surety Co. v. Hillman, 796 F.2d 770, 775-776(5th Cir.1986);Boelens v. Redman Homes, Inc., 759 F.2d 504, 512(5th Cir.1985).The danger against which a court must guard is that a party will attempt to use 1653 to retroactively create subject matter jurisdiction.SeeMOORE ET AL., MOORE'S FEDERAL PRACTICE 15.14[3], at 15-34(3d ed. 1999)("Essentially, a plaintiff may correct the complaint to show that jurisdiction does in fact exist; however, if there is no federal jurisdiction, it may not be created by amendment.").The cause for this concern is readily apparent: "never having had power to act in the matter, the court never had authority to permit an amendment to the complaint."Falaise, 241 B.R. at 66.²

Accordingly, courts have rejected attempts to add new claims to satisfy the amount in controversy necessary for diversity jurisdiction, seeState Farm Mutual Automobile Ins. Co. v. Narvaez, 149 F.3d 1269, 1272(10th Cir.1998), or add new parties to their case to preserve a federal forum, seeMills v. State of Maine, 118 F.3d 37, 53-54(1st Cir.1997)(rejecting attempt to add party in an effort to come within scope of Ex Parte Young[209 U.S. 123, 52 L. Ed. 714, 28 S. Ct. 441] doctrine).Similarly, we rejected arguments that 1653 could properly be invoked to reassert causes of action to serve as statutory bases for federal question jurisdiction when they had been previously dropped from the complaint.SeeBoelens, 759 F.2d at 512.

Since Whitmire's jurisdictional problems are of the "technical" or "formal" variety, they fall squarely within the ambit of 1653.There can be no question that allowing Whitmire to cure her jurisdictional defect by stating the requisite facts showing that diversity jurisdiction exists as an alternative basis for subject matter jurisdiction would not create jurisdiction where it did not previously exist.Having determined that 1653 is the proper tool to employ in this situation and that the district court was authorized by statute to allow such an amendment, we now address whether the district court committed an abuse of discretion when it denied Whitmire's motion for leave to amend.

B.

Leave to amend pleadings "shall be freely given when justice requires."FED. R. CIV. P. 15(a).We have explained that the propriety of allowing amendment to cure jurisdictional defects should be governed by the same standard as other amendments to pleadings, namely the standard set forth by the Supreme Court:

In the absence of any apparent or declared reason--such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failures to cure deficiencies by amendments previously allowed, undue...