Unreported / Non-Citable
Background
After an insurance dispute was removed to federal court, James Rukstalis and the other plaintiffs amended their complaint to add Sean Lemmon, whose presence would destroy diversity jurisdiction. They initially argued Rule 15 gave them an absolute right to amend and sought remand.
The court required a new motion addressing 28 U.S.C. § 1447(e), which specifically governs post-removal joinder of a defendant whose addition would eliminate federal jurisdiction.
The Court’s Holding
Applying the proper factors, the court granted leave to join Lemmon and said it would remand after the amended complaint was filed. But it rejected the plaintiffs’ claim that amendment as of right deprived the court of control over jurisdiction-destroying joinder.
Section 1447(e) gives a district court discretion either to deny joinder or permit it and remand. That specific post-removal rule operates as an exception to Rule 15’s more general amendment provisions, consistent with Ninth Circuit authority.
Key Takeaways
- Adding a nondiverse defendant after removal is governed by Section 1447(e), even when Rule 15 might otherwise permit amendment as of right.
- The court must evaluate the fairness and propriety of joinder.
- A jurisdiction-destroying amendment does not become effective merely because it was filed.
- If joinder is permitted, remand follows once complete diversity disappears.
Why It Matters
Removal strategy cannot be separated from party-joinder strategy. Plaintiffs seeking to add a local defendant should address Section 1447(e) factors directly; defendants opposing remand should focus on those factors rather than only alleging fraudulent joinder.