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United States Court of Appeals Fifth Circuit F I L E D In the June 22, 2005 United States Court of Appeals Charles R. Fulbruge III for the Fifth Circuit Clerk _______________ m 04-30576 _______________ ELINA AUGUST, ET AL., Plaintiffs, ELINA AUGUST; CASIMERE AUGUST, JR.; JASON AUGUST; MALCOLM AUGUST; ANASTASIA PRINGLE; CHANTELL PRINGLE; KENTON COUSIN, ON BEHALF OF BRANDON PRINGLE; ANUSKA FAVORITE; ERANA GUATIER; DANIELLE JARROW; SCHWANN IRONS; MONICA LASALLE; AND THERESA MILLSAPS, Plaintiffs-Appellants, VERSUS BOYD GAMING CORPORATION, Defendant-Appellee. _________________________ Appeal from the United States District Court for the Eastern District of Louisiana m 2:03-CV-1431 ______________________________ Before SMITH, DENNIS, and PRADO, miss, finding that “equity would dictate that Circuit Judges. both parties be tried together.” JERRY E. SMITH, Circuit Judge:* II. We review for abuse of discretion a dis- The plaintiffs appeal the dismissal of their missal for failure to join an indispensable party lawsuit under Federal Rule of Civil Procedure under rule 12(b)(7). See HS Resources, Inc. v. 12(b)(7) for failure to join an indispensable Wingate,
327 F.3d 432, 438 (5th Cir. 2003). party. We reverse and remand. A prerequisite to a proper dismissal for failure to join an indispensable party is that the absent I. party, if added, would divest the court of sub- The plaintiffs, Louisiana residents, are dece- ject-matter jurisdiction. dents of Casimere August, who allegedly died from injuries suffered when he hit his head on Then, resolution of the motion requires a a bathroom sink after slipping on water and two-step inquiry. First a court must determine urine that had accumulated on the floor at the whether a party should be added under the re- Treasure Chest Casino. Basing jurisdiction on quirements of Federal Rule of Civil Procedure diversity of citizenship, 28 U.S.C. § 1332, 19(a); then the court must determine whether plaintiffs sued Boyd Gaming Corporation litigation can be properly pursued without the (“BGC”), a Nevada corporation that is the absent party under Federal Rule of Federal parent of the subsidiary that owned the casino, Procedure 19(b). See HS Resources, 327 F.3d Treasure Chest Casino, LLC (“TCC”). The at 439. If the absent party should be joined complaint alleged that BGC operated the ca- under rule 19(a), but the suit cannot proceed sino and that the personal injuries were a result without that party under the requirements of of BGC’s negligence in knowing of the alleg- rule 19(b), the case must be dismissed. edly hazardous condition but failing to take necessary steps to correct it. The parties do not contest that adding TCC would deprive the district court of federal jur- Plaintiffs filed an identical suit in Louisiana isdiction because it would destroy complete di- state court, adding as additional defendants versity of citizenship. We therefore proceed to TCC and Treasure Chest, Inc., both Louisiana determine whether TCC should be joined corporations. The state suit was stayed on under rule 19(a). BGC’s motion. Plaintiffs argue that the district court abus- Shortly after the federal suit was filed, BGC ed its discretion in finding that TCC was a nec- moved to dismiss under rule 12(b)(7) for essary party under rule 19(a) because, they failure to join TCC as an indispensable party. claim, TCC was at most subject to joint-and- The district court granted the motion to dis- several liability along with BGC, and as a re- sult is not a necessary party as a matter of law under Temple v. Synthes Corp.,
498 U.S. 5* (1990). In Temple, the plaintiff was injured af- Pursuant to 5TH CIR. R. 47.5, this court has ter surgery that implanted a device into his determined that this opinion should not be publis- hed and is not precedent except under the limited spine that broke inside his body. See
id. at 5.circumstances set forth in 5TH CIR. R. 47.5.4. The plaintiff filed a federal diversity suit 2 against the manufacturer and simultaneously and/or train the personnel, or maintain the filed a negligence suit in state court against the premises of the Treasure Casino, because TCC hospital and the doctor who had performed the is the only entity potentially liable for such. operation. See
id. at 6.The district court dis- BGC cites the general tenet of Louisiana missed the suit with prejudice based on the in- corporate law that a parent corporation has no terests of judicial economy, citing Provident duty to control the activities of subsidiaries or Tradesmens Bank & Trust Co. v. Patterson, to ensure that they are complying with duties
390 U.S. 102, 116-17 n.12 (1968), in which owed to third persons;2 BGC also relies on the Court recognized that one goal of rule 19 evidence that TCC managed the casino. BGC is “the interest of the courts and the public in thus concludes that its tort liability is not joint complete, consistent, and efficient settlement and several and is at most derivative of and of controversies.”
Id. We affirmedon the secondary to TCC’s liability. ground that the district court did not abuse its discretion in ordering joinder under rule 19, Despite BGC’s arguments, there is suffi- because the claims “overlapped.”
Id. at 7.cient evidence in the record to support a the- ory of direct liabilitySSevidence that BGC at The Supreme Court reversed for abuse of least may have at least assumed a duty to op- discretion, holding that joint tortfeasors are erate and manage the casino. First, Plaintiffs not necessary parties as a matter of law. See point to a “Management Agreement” between
id. The Courtcited the longstanding rule that the parties according to which BGC assumed “it is not necessary for all joint tortfeasors to the duty and responsibility to “supervise and be named as defendants in a single lawsuit” direct the management and operation of the and noted, by citing the advisory committee [casino]” and to “hire, supervise and terminate note to rule 19(a), that nothing in rule 19 all personnel of [the casino].” BGC claims this “changed that principle.” The Court conclud- agreement no longer represents the actual ed that “no inquiry under Rule 19(b) [was] operating structure of the enterprise, but it necessary, because the threshold requirements does not point to anything in the record to of Rule 19(a) [had] not been satisfied.”
Id. support thiscontention that the agreement is no longer valid. Plaintiffs assert that because BGC and TCC are potential joint tortfeasors,1 TCC is not a Moreover, beyond the agreement, plaintiffs necessary party under Temple, so the district have identified evidence that the casino holds court abused its discretion in dismissing. BGC out as its operator SSthe record reflects Although BGC acknowledges the validity of that the casino’s website states that “[t]he the Temple rule, it asserts that the rule is in- Chest is owned and operated by parent com- applicable here because it claims that BGC has no direct tort liability for failure to supervise 2 Bujol v. Entergy Servs., Inc., 2004 La. LEXIS 1784, at *27-*28 (La. May 25, 2004) (“While gen- 1 In their state court complaint, plaintiffs al- erally a parent corporation, by virtue of its owner- leged that BGC and TCC jointly own and operate ship interest, has the right, power, and ability to the Treasure Chest Casino, are each responsible for control its subsidiary, a parent corporation gener- knowingly ignoring a dangerous condition; plain- ally has no duty to control the actions of its subsid- tiffs prayed for a judgment “jointly, severally, and iary and thus no liability for a failure to control the in solido . . . .” actions of its subsidiary.”). 3 pany, Boyd Gaming Corporation, which is one of the most highly respected in the gaming industry.” The plaintiffs are not relying on BGC’s mere status as the parent corporation in establishing its ground for tort liability; rather, they have alleged an independent, di- rect ground for liability. Based on this theory, TCC is a joint tortfeasor, and BGC’s attempt to distinguish Temple fails. In sum, plaintiffs have adequately alleged a ground for direct liability on the part of BGC, based on evidence that it may have assumed a duty through contract to supervise and train employees and maintain the premises at the casino. It follows that the district court abused its discretion in deciding to dismiss under rule 12(b)(7), because TCC is not a necessary party as a matter of law, based on the unqualified, broad rule established by Tem- ple, that joint tortfeasors are not necessary parties. REVERSED and REMANDED. 4
Document Info
Docket Number: 04-30576
Citation Numbers: 135 F. App'x 731
Judges: Dennis, Prado, Smith
Filed Date: 6/23/2005
Precedential Status: Non-Precedential
Modified Date: 8/2/2023