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Barben v. Federal Cartridge Co.

United States District Court, D. Utah, Northern Division

January 10, 2018

JACOB SEAN BARBEN, Plaintiff,
v.
FEDERAL CARTRIDGE COMPANY, a Minnesota Corporation, Defendant.

          MEMORANDUM DECISION AND ORDER GRANTING MOTION TO AMEND COMPLAINT AND REMAND TO STATE COURT

          David Nuffer District Judge

         The case was originally filed in the Second Judicial District of Weber County, State of Utah, but was later removed on grounds of diversity jurisdiction following the state court's dismissal of Sportsman's Warehouse, Inc. (“Sportsman's Warehouse”) as a party defendant.[1]Plaintiff Jacob Sean Barben now seeks leave to amend his complaint to reassert his dismissed claims against Sportsman's Warehouse based on a subsequent change in Utah law.[2] Mr. Barben also requests the case be remanded to state court because the addition of Sportsman's Warehouse will destroy complete diversity of citizenship and subject matter jurisdiction.[3]

         Defendant Federal Cartridge Company (“Federal Cartridge”) opposes Mr. Barben's Motion arguing that Sportsman's Warehouse cannot be joined because it is not an indispensable party, and that the requested amendment is prejudicial and untimely.[4]

         Because Mr. Barben's requested amendment will not result in undue prejudice and is timely and offered in good faith, the permissive joinder of Sportsman's Warehouse as a defendant is appropriate. And because the joinder of Sportsman's Warehouse will destroy complete diversity and subject matter jurisdiction, remand to state court is necessary. Therefore, Mr. Barben's Motion[5] is GRANTED.

         DISCUSSION

         This case involves claims arises from injuries Mr. Barben sustained when his shotgun's barrel burst upon firing.[6] Mr. Barben initiated the case in state court, asserting claims for strict products liability and breach of express and implied warranties against:

• Federal Cartridge-the manufacturer of the ammunition Mr. Barben was using;
• Beretta USA Corp. (“Beretta”)-the manufacturer of the shotgun Mr. Barben was using; and
• Sportsman's Warehouse-the retailer that sold Mr. Barben the shotgun and ammunition he was using.[7]

         However, the case was removed on grounds of diversity jurisdiction following the state court's dismissal of Mr. Barben's claims against Sportsman's Warehouse.[8] The basis for the dismissal was the passive retailer doctrine.[9] This doctrine protects a retailer from strict liability arising from a defective product when (1) the retailer had no part in the product's design, manufacture, engineering, or testing; (2) the retailer had no knowledge of the product's defect; and (3) the product's manufacturer is a named party in the case.[10]

         Mr. Barben now seeks leave to amend his complaint to reassert his dismissed claims against Sportsman's Warehouse.[11] Mr. Barben maintains that the dismissal was improper because the Utah Supreme Court recently rejected the passive retailer doctrine in Bylsma v. R.C. Willey, [12] holding that the “doctrine is inconsistent with the [Liability Reform Act's] explicit retention of strict products liability.”[13] Mr. Barben also requests the case be remanded to state court because the joinder of Sportsman's Warehouse, a non-diverse party, will destroy complete diversity of citizenship and subject matter jurisdiction.[14] Federal Cartridge opposes Mr. Barben's Motion arguing that Sportsman's Warehouse cannot be joined because it is not an indispensable party, and that the requested amendment is prejudicial and untimely.[15]

         The procedure for cases removed from state court is governed by 28 U.S.C. § 1447. Subsection (e) of the statute provides 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 [s]tate court.”[16] “As § 1447(e) indicates, however, the plaintiff does not have an absolute right to join such parties.”[17]

         In the Tenth Circuit, determining whether to permit an amendment that joins a non-diverse party to a removed case requires consideration of the applicable rules:

Federal Rule of Civil Procedure 15(a)(2) allows amendments only with leave of the opposing party or the court. Further, under Rule 19 the district court must determine whether the party sought to be joined is indispensable . . . If the [party sought to be joined] is not indispensable, Rule 20(a)(2) permits joinder at the discretion of the district court . . . If the district court determines that joinder is appropriate [under Rule 20(a)(2)], § 1447(e) requires remand to state court. If the district court decides otherwise, it may deny joinder.[18]

         Federal Cartridge opposes Sportsman's Warehouse's joinder because Sportsman's Warehouse is not an indispensable party.[19] “It has long been the rule that it is not necessary for all joint tortfeasors to be named as defendants in a single lawsuit.”[20] But Sportsman's Warehouse does not need to be indispensable to be joined to the case, so long as its permissive joinder under Rule 20(a)(2) is appropriate.[21]

         Rule 20(a)(2) permits permissive joinder of defendants when:

(A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or fact common to all defendants will arise in the action.

         Under Utah law, defendants “found to be strictly liable for selling the defective product must pay an amount equal to the proportion of the injury found to be caused by the defective product-in other words, the proportion of the injury caused by the strictly liable defendants' collective breach of their duty not to sell a defective product.”[22] “And if there are multiple strictly liable parties, the plaintiff can recover from any of them.”[23] Therefore, Mr. Barben's products liability claims would be jointly and severally asserted against Federal Cartridge and Sportsman's Warehouse. The products liability claims also undoubtedly involve common questions of law and fact-“[whether] the product was defective, it caused some part of plaintiff's injuries, it was sold by the defendant, and the defendant is in the business of selling such products.”[24] Therefore, permissive joinder of Sportsman's Warehouse may be appropriate in this case. But this does not end the analysis.

         In exercising discretion to permit permissive joinder of a non-diverse party in a removed case, several additional factors are considered, including: “whether the amendment will result in undue prejudice, whether the request was unduly and inexplicably delayed, [and whether it] was offered in good faith[.]”[25] Also underpinning the consideration of these factors is that “court[s] should freely give leave [to amend] when justice so requires.”[26] “The purpose of the [r]ule is to provide litigants ‘the maximum opportunity for each claim to be decided on its merits rather than on procedural niceties.”[27]

         Permitting Mr. Barben's requested amendment will not result in undue prejudice

         The “most important[] factor in deciding a motion to amend the pleadings[] is whether the amendment would prejudice the nonmoving party.”[28] Federal Cartridge argues Mr. Barben's requested amendment is prejudicial because fact and expert discovery are closed, and trial is scheduled to begin in approximately nine weeks.[29] Federal Cartridge maintains that if the amendment is permitted and the case is remanded to state court, trial will be delayed and the parties will incur additional fees and expenses incident to reopening discovery and litigating the claims against Sportsman's Warehouse.[30] But these are typical occurrences when a party is added to a case and do not justify a finding of prejudice.

         “[T]he expenditure of time, money, and effort alone is not grounds for a finding of prejudice.”[31] “Courts typically find prejudice only when the amendment unfairly affects the defendants ‘in terms of preparing their defense to the amendment.'”[32] “Most often, this occurs when the amended claims arise out of a subject matter different from what was set forth in the complaint and raise significant new factual issues.”[33]

         Federal Cartridge fails to show how Mr. Barben's requested amendment would unfairly affect it in terms of preparing a defense. Indeed, Federal Cartridge cannot make such a showing. The joinder of Sportsman's Warehouse does not implicate subject matter different from what was set forth in Mr. Barben's complaint. Nor does it raise significant new factual issues.

         Mr. Barben named Sportsman's Warehouse as a defendant in the case prior to removal from state court.[34] Mr. Barben also resisted Sportsman's Warehouse's motion for summary judgment in the state court, urging that ruling on the motion be deferred until the Utah Supreme Court addressed the validity of the passive retailer doctrine in Bylsma v. R.C. Willey.[35] And while the state court ultimately dismissed Mr. Barben's claims against Sportsman's Warehouse based on the passive retailer doctrine, it expressly stated “[a]t such time as the Bylsma case is decided and upon timely application to the court, the court may have cause to revisit [its] decision.”[36] Therefore, Federal Cartridge has been well aware of Mr. Barben's desire to pursue claims against Sportsman's Warehouse, and the potential that Sportsman's Warehouse could be brought back as a defendant in the case.

         Moreover, under Utah law, “there is no separate comparison or allocation of strict liability “fault” as between the identically strictly liable defendants.”[37] “The relative culpability of the defendants does not factor into the jury's allocation at all.”[38] Therefore, the joinder of Sportsman's Warehouse should have limited or no effect on Federal Cartridge's defenses.

         Under these circumstances, permitting Mr. Barben's requested amendment ...


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