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Douvris v. Puna Geothermal Venture

United States District Court, D. Hawaii

December 12, 2016

GEORGE DOUVRIS, ET AL., Plaintiffs,
v.
PUNA GEOTHERMAL VENTURE, Defendant.

          ORDER GRANTING PLAINTIFFS' MOTION FOR JOINDER OF NON-DIVERSE DEFENDANT AND REMAND UNDER 28 U.S.C. 1447(e)

          Barry M. Kurren United Stales Magistrate Judge

         Before the Court is Plaintiffs'[1] Motion for Joinder of Non-Diverse Defendant and Remand Under 28 U.S.C. 1447(e) (Doc. 9). The Court heard this Motion on November 17, 2016. After careful consideration of the Motion, the supporting and opposing memoranda, and the arguments of counsel, the Court GRANTS the Motion and remands this action to state court.

         BACKGROUND

         On August 5, 2016, Plaintiffs filed a class action Complaint in state court against Defendant Puna Geothermal Venture (“PGV”), regarding the August 2014 release of hydrogen sulfide and other noxious gases into the atmosphere during Hurricane Iselle. (Complaint at 1, 3-4.) The Complaint asserts claims against PGV for negligence, strict liability, trespass, nuisance, and negligent and intentional infliction of emotional distress. (Id. at 6-11.) Plaintiffs pray for injunctive relief and general, special, consequential, and punitive damages. (Id. at 12.)

         After filing the Complaint in state court, Plaintiffs did not serve the Complaint on PGV because they were evaluating potential claims against Hawaii Electric Light Company (“HELCO”), which allegedly asked PGV to stay in operation during Hurricane Iselle. (Motion at 2, 5.) However, before being served with the Complaint, PGV became aware of the lawsuit and removed the case to federal court on August 25, 2016 on the basis of diversity jurisdiction. (Id. at 2, 5.)

         Plaintiffs now move to join HELCO as a Defendant under 28 U.S.C. § 1447(e), which authorizes joinder of defendants who would destroy jurisdiction. (Id. at 5.) In this case, because HELCO is a Hawaii corporation, it would destroy diversity jurisdiction and its joinder would require remand of this case to state court. (Id.) As discussed below, the parties dispute whether joinder of HELCO is appropriate.

         DISCUSSION

         Plaintiffs seek leave to assert claims against HELCO and remand this action to state court. (Motion at 5.) Inasmuch as HELCO's joinder will destroy this Court's diversity jurisdiction, the parties agree that this Court must analyze HELCO's joinder under 28 U.S.C. § 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.” The decision to allow joinder under Section 1447(e) is discretionary. Newcombe v. Adolf Coors Co., 157 F.3d 686, 691 (9th Cir. 1998).

         In deciding whether to allow the joinder of a non-diverse defendant under § 1447(e), courts balance the following factors:

(1) whether the new defendants should be joined under Federal Rule of Civil Procedure 19(a) as “needed for just adjudication”; (2) whether the statute of limitations would preclude an original action against the new defendants in state court; (3) whether there has been unexplained delay in requesting joinder; (4) whether joinder is intended solely to defeat federal jurisdiction; (5) whether the claims against the new defendant appear valid; and (6) whether denial of joinder will prejudice the plaintiff.

Ansagay v. Dow Agrosciences LLC, Civ. No. 15-00184 SOM-RLP, 2015 WL 9412856, at *3 (D. Haw. Dec. 3, 2015).

         At the hearing on this Motion and in their Reply brief, Plaintiffs concede the first two factors - whether joinder is mandatory under Rule 19(a) and whether the statute of limitations bars claims against HELCO in state court - weigh against joining HELCO. However, Plaintiffs argue that the remaining factors support HELCO's joinder and remand of this case.

         PGV argues that Plaintiffs' motive in joining HELCO is the most important factor to consider. (Opp. at 2.) Although Plaintiffs readily admit that they “would prefer to return to state court” (Reply at 4), the Court finds that defeating diversity jurisdiction is not their sole motive for joining HELCO. See Ansagay, 2015 WL 9412856, at *3. Indeed, Plaintiffs contemplated suing HELCO prior to filing the Complaint and informed HELCO of their intent in a demand letter. (Ex. 1 attached to Opposition.) Both the demand letter and Plaintiffs' proposed First Amended Complaint specify HELCO's conduct as it relates to the release of noxious gas by PGV. Plaintiffs' First Amended Complaint asserts claims against HELCO for negligence, negligence and intentional infliction of emotional distress, breach of contract, breach of the implied duty of good faith and fair dealing, and unfair and deceptive trade practices. (Ex. 1 attached to Motion.) In light of Plaintiffs' prior intention to hold HELCO liable for its conduct, the Court finds that Plaintiffs' request to join HELCO is not solely motivated to defeat diversity jurisdiction. See Ansagay, 2015 WL 9412856, at *3. Consequently, this factor weighs in Plaintiffs' favor.

         With respect to whether there has been unexplained delay in requesting HELCO's joinder, Plaintiffs explain that they did not name HELCO in the original Complaint because they were evaluating claims against HELCO and ultimately decided “to file the PGV complaint to avoid any statutory problems and hold off service so that Plaintiffs' counsel could make a final decision on whether to allege contract and UDAP claims against HELCO that had no similar statute of limitations.” (Reply at 5.) Plaintiffs anticipated that they could add claims against HELCO as a matter of course pursuant to Rule 15(a) prior to serving the Complaint on PGV, but Plaintiffs were unable to amend under Rule 15(a) once the case was removed. Further, the Court notes that any delay in seeking HELCO's joinder was minimal insofar as Plaintiffs' ...


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