• April 9, 2018

Photo by Jonathan Rotondo-McCord

Update (April 9, 2018): We recently stumbled across the linked order from U.S. District Court Chief Judge John R. Tunheim (D. Minn.) in which he denied plaintiffs’ request to amend their securities fraud class action complaint (Lusk v. Lifetime) because the plaintiffs made no formal motion to amend until the hearing on the motion for judgment on the pleadings.

In fact, it is a big stretch to say that plaintiffs’ counsel “made a formal motion to amend” at the hearing. It is even a stretch to say that plaintiffs’ counsel made any motion at the hearing, formal or informal.

After the hearing, plaintiffs’ brought a (defective) formal motion to amend. U.S. Mag. Judge Becky Thorson (D. Minn.) rejected the motion because it failed to comply with local rules.

Then, Judge Tunheim granted the defendants’ motion for judgment on the pleadings.

Then, the plaintiffs tried to bring a motion to amend but they no longer had the benefit of the rather liberal standards that apply to motions to amend. Rather, they faced (and flunked) the far more difficult standards that apply to a motion to amend a judgment or a motion for relief from judgment.

In our experience, it is common include, in a response to a motion to dismiss, a little note asking for leave to amend if the court should find merit in the motion to dismiss (sometimes a footnote, sometimes a section of the brief). To our surprise, it appears that the Lusk plaintiffs failed to include this common stop-gap/risk mitigation measure in their response to defendants’ motion for judgment on the pleadings. But, even if they had included “a little note asking for leave to amend” in a response brief, would Court would have considered that to be a “formal motion”?

If not, then, in theory, this ruling could significantly alter how civil litigators proceed when they are on the receiving ends of rule 12 motions. That would be unfortunate. Forcing a “formal motion” to amend before a hearing or decision on a motion to dismiss would be needlessly expensive. More importantly, the plaintiffs would obviously not have the benefit of the court’s analysis of how the initial complaint was deficient when seeking to amend the complaint to address perceived deficiencies.

Original post (May 15, 2015) (under the headline: Civ Pro Geek-Out Post: Where Do John Doe and Jane Roe Live and Do We Care?):Civ-Pro-by-Randy-WickMinnesota Litigator receives increasingly positive feedback and its readership has grown slowly but steadily over the past six years.  But will yet another esoteric post on civil procedure rules cause Minnesota Litigator visits to plummet???


Bill Griffith's "Zippy the Pinhead"

Bill Griffith’s “Zippy the Pinhead”

Of course not! Minnesota Litigator readers are tireless and unrelenting in their overwhelming hunger for exegeses of civil procedure arcana! This is fun! Fasten your pocket protectors!

Seriously, to me there is something interesting about the inclusion of fictional defendants in U.S. civil litigation and it is even more interesting that the addition of “No One In Particular” could have ramifications for federal diversity jurisdiction (and interesting that the rule might be different as between cases brought originally in federal court vs. those removed to federal court from state court).

Federal courts are courts of limited jurisdiction and some cases can only get into federal court if there is “complete diversity” between the parties – that is, plaintiff and defendant must be “citizens of different states” (along with fulfillment of some other prerequisites for diversity jurisdiction).

So let’s say that the estate of decedent Nada Payich, a citizen of Nebraska, sued her nursing home in connection with her alleged mistreatment in Nebraska state court. Let’s say the nursing home was a Delaware LLC whose members were citizens of Delaware and California. Let’s say Nada also sued John Does 1-18, ABC Co., and XYZ Co. (contractors and subcontractors who performed work in the nursing home apparently related to Nada’s demise).

Assuming the amount in controversy exceeds the $75,000 required threshold for diversity jurisdiction, does the federal court have jurisdiction so as to rule on the Nursing Home’s motion to compel arbitration, which the defendant brought in federal court? Does the mere inclusion of John Doe and ABC Co. in the complaint — who we might imagine may well turn out to be Nebraska businesses and, if so, would ruin the requirement of “complete diversity” — destroy the federal court’s jurisdiction and preclude the court from ruling on the motion to compel arbitration under the Federal Arbitration Act (“FAA”)? (The FAA, by the way, does not create any independent federal-question jurisdiction.)

To my surprise,

[Some] courts hold that the presence of John Doe defendants destroys original diversity jurisdiction, because courts cannot simply presume diversity is present and the proponent of jurisdiction cannot prove diversity without some indication of the Does’ citizenship…Other courts have held that the mere presence of Doe defendants does not destroy diversity, unless, of course, they are later revealed to have the same citizenship as a plaintiff.

U.S. District Court for the District of Nebraska (U.S. District Court Judge John M. Gerrard) held that there was no diversity jurisdiction over the defendants motion to compel arbitration. It seems to me that the judge got it right.

First, Defendant could have removed the state law case to federal court and then moved to compel arbitration because the removal statute, unlike the diversity statute, specifically instructs courts to ignore “fictional defendants” in analyzing jurisdiction. Second,

The Court may not simply presume the John Doe defendants are diverse from the plaintiff. That is especially so where, as here, the John Doe defendants are employees, administrators, and owners of a facility located in Omaha, Nebraska.

The practice pointer: be careful to give some thought as to whether you want to include fictional defendants if you might have a federal jurisdiction battle and keep in mind that “original diversity jurisdiction” might be subject to a different rule than “removal diversity jurisdiction.”



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