LeBlanc v. Cleveland
2001 WL 473727, 248 F.3d 95 (2001)
Rule of Law:
Federal Rule of Civil Procedure 21 permits the dropping of dispensable, non-diverse parties at any stage to cure jurisdictional defects, with such amendments relating back to the original filing. Amendments to allege diversity jurisdiction under 28 U.S.C. § 1653 and Rule 15 also relate back to the original complaint, meaning a party's citizenship for diversity purposes is assessed at the time the complaint was first filed. Relief from a final judgment under Rule 60(b)(6) is warranted for 'extraordinary circumstances' when substantial justice would be served, especially to prevent a plaintiff from being left without a remedy, provided there is no undue prejudice to the opposing party.
Facts:
- On July 4, 1994, Etoile LeBlanc and Stephen Ossen were injured when a motor boat struck the kayak they had rented on the Upper Hudson River.
- LeBlanc suffered serious injuries as a result of the accident.
- Robert Grant owned the motor boat and Terry Cleveland operated it.
- LeBlanc and Ossen had rented their kayak, life vests, and other equipment from J.R.D. Retailers, Ltd. ('Syd and Dusty’s').
- Syd & Dusty's allegedly contributed to the accident by providing LeBlanc and Ossen a darkly colored kayak and life vests, which made them difficult to see on the river.
- At the time LeBlanc filed her initial complaint in March 1995, she was a Canadian citizen residing temporarily in New York and was not a legal permanent resident of the United States.
- On March 6, 1997, LeBlanc, still a Canadian citizen residing in New York, obtained legal permanent resident status.
Procedural Posture:
- On March 29, 1995, Etoile LeBlanc and Stephen Ossen (plaintiffs) brought an action against Robert Grant and Terry Cleveland (defendants) in the Southern District of New York, alleging negligence and invoking admiralty jurisdiction.
- On September 22, 1995, the action was transferred to the Northern District of New York.
- Defendants Grant and Cleveland filed a third-party complaint under Rule 14(c) against J.R.D. Retailers, Ltd. ('Syd and Dusty’s'), alleging Syd & Dusty’s negligence.
- In March 1997, Syd & Dusty’s moved to dismiss the complaint against it for lack of subject-matter jurisdiction.
- On October 2, 1997, the District Court for the Northern District of New York granted Syd & Dusty’s motion, dismissing the complaint against it on the basis that admiralty jurisdiction was lacking, finding the Hudson River not a navigable waterway at the accident location.
- LeBlanc and Ossen separately appealed the district court's decision dismissing the admiralty claim, and a panel of the Second Circuit affirmed that decision (LeBlanc v. Cleveland, 198 F.3d 353 (2d Cir.1999)).
- On November 20, 1997, LeBlanc moved the District Court for the Northern District of New York (1) to vacate the judgment of October 2, 1997, and to reinstate her complaint pursuant to Fed.R.Civ.P. 60(b); (2) to amend her complaint pursuant to 28 U.S.C. § 1653 and Fed.R.Civ.P. 15 to allege diversity subject-matter jurisdiction; and (3) to discontinue the action as to the non-essential, non-diverse plaintiff, Stephen Ossen, pursuant to Fed.R.Civ.P. 21.
- By Order filed on June 23, 1998, the district court denied LeBlanc’s motions and dismissed the case, reasoning that her choice of admiralty jurisdiction was a deliberate strategy not warranting Rule 60(b) relief and that amendment would be futile due to lack of diversity.
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Issue:
Did the district court abuse its discretion by denying a plaintiff's motions under Rules 60(b), 21, and 15 to vacate a judgment, drop a non-diverse co-plaintiff, and amend the complaint to allege diversity jurisdiction, when the original claim based on admiralty jurisdiction was dismissed, and the plaintiff's citizenship for diversity purposes changed during the litigation?
Opinions:
Majority - PER CURIAM
Yes, the district court abused its discretion in denying LeBlanc's motions. First, regarding LeBlanc’s Rule 21 motion to drop Stephen Ossen, the Court agreed that Ossen was dispensable to the suit. LeBlanc's rights were not inexorably intertwined with Ossen’s, she could recover completely in his absence, and she would lack an adequate remedy if the action were dismissed. Citing Newman-Green, Inc. v. Alfonzo-Larrain and Curley v. Brignoli, Curley & Roberts Assocs., the Court established that Rule 21 permits dropping a dispensable non-diverse party, even on appeal, and once a party is dropped, the complaint is read as if they were never included, with the jurisdictional cure relating back to the outset of the action. Second, the Court addressed LeBlanc’s Rule 15 motion to amend her complaint under 28 U.S.C. § 1653 to allege diversity jurisdiction. The district court had incorrectly concluded that such an amendment would be futile. The appellate court held that an amendment to allege diversity jurisdiction relates back under Rule 15, and therefore, LeBlanc’s citizenship for diversity purposes must be assessed at the time the original complaint was first filed. Citing E.R. Squibb & Sons, Inc. v. Lloyd’s & Co. and Smith v. Sperling, the Court reaffirmed that federal jurisdiction, once attached, is not defeated by a party’s later change of domicile. Since LeBlanc was a non-permanent resident Canadian citizen when she filed the complaint in 1995, she was diverse from the New York citizen defendants and Syd & Dusty’s, establishing diversity jurisdiction at the operative time, despite her later acquisition of permanent resident status in New York. Finally, the Court found that the district court abused its discretion in denying LeBlanc’s Rule 60(b) motion to vacate the judgment and reinstate her complaint. The lower court's finding of futility was erroneous given the availability of Rule 21 and 15 amendments. The Court held that LeBlanc demonstrated 'extraordinary circumstances' under Rule 60(b)(6), which should be liberally construed when substantial justice will be served. It was reasonable for LeBlanc to wait to drop Ossen until admiralty jurisdiction was resolved, to promote judicial economy. Syd & Dusty’s would not suffer undue prejudice, as they had received notice, and trial preparations and discovery were substantially completed. In contrast, denying the motion would leave LeBlanc without a remedy due to a potential statute of limitations bar in concurrent state court action and her inability to re-file in federal court due to her current non-diverse citizenship.
Analysis:
This case significantly reinforces the flexibility and remedial nature of federal procedural rules, particularly in curing jurisdictional defects. It solidifies the 'time-of-filing' rule for diversity jurisdiction, protecting litigants from losing federal court access due to subsequent changes in domicile. Furthermore, the decision provides a strong example of what constitutes 'extraordinary circumstances' warranting relief under Rule 60(b)(6), emphasizing the importance of preventing a plaintiff from being left without any judicial remedy. This ruling allows parties to pursue federal claims even after initial jurisdictional missteps, provided the opposing party is not unduly prejudiced, promoting access to justice.
