Diversity Jurisdiction and Georgia Personal Injury Lawsuits

If you are injured in a car accident caused by the negligence of another person, your typical remedy is to file a personal injury lawsuit in state court. Depending on certain factors, the defense may have the right to transfer the case to federal court. This is known as “removal.”

Removal is permitted under federal law when two specific conditions are met: First, the “amount in controversy” must be more than $75,000; and second, there must be “complete diversity” between the parties. This means that if you are a Georgia resident, all of the defendants named in your lawsuit must be non-Georgia residents. If even one defendant is from the same state as you, you can have your lawsuit returned to state court.

Hickerson v. Enterprise Leasing Company of Georgia, LLC

Of course, if you later try to add a Georgia defendant to an existing lawsuit in order to get your case back to state court, the federal court may stop you. Take this recent decision from the U.S. 11th Circuit Court of Appeals, Hickerson v. Enterprise Leasing Company of Georgia, LLC. This personal injury case arose from an accident involving a rental truck.

The three plaintiffs are Georgia residents who were passengers in the truck. Their lawsuit was filed in Georgia state court and initially named the two companies that owned the truck, which were out-of-state corporations. The plaintiffs alleged the defendants were negligent in renting the truck to the driver, who had no insurance. The driver himself was a relative of the plaintiffs.

The defendants removed the lawsuit from state to federal court. The plaintiffs then tried to amend their lawsuit to name the driver, who was a Georgia resident, as a co-defendant. Such an amendment would effectively require the federal court to return the case to state court. The federal judge, however, did not give the plaintiffs permission to amend their complaint because the court saw it as a deliberate attempt to defeat diversity jurisdiction.

The plaintiffs appealed the judge’s denial, but the 11th Circuit affirmed. The trial court acted within its “broad discretion” to prevent the plaintiffs from adding a defendant to their case after-the-fact. While there is no hard-and-fast rule in the 11th Circuit on how to address these situations, the Court noted the plaintiffs had “full knowledge of” the driver’s role in the accident beforehand. Indeed, the police report of the accident said the driver was at fault for what happened. So, there was no reason he could not have been named as a defendant initially. The 11th Circuit said the plaintiffs were apparently reluctant to name the driver due to their family relationship, which suggested he was only added later to defeat diversity jurisdiction.

The 11th Circuit also rejected the plaintiffs’ claim that the defense failed to show the amount in controversy was more than $75,000. The plaintiffs argued their lawsuit never specified an exact amount of damages, and that none of their “individual claims sought more than $75,000.” The Court of Appeals noted that to establish federal jurisdiction, only one plaintiff’s claim needed to exceed the $75,000 threshold. Given that all of the plaintiffs said they sustained “serious, lasting physical injuries” in the accident, it was “facially apparent that these claims are worth more than $75,000,” even if the complaint itself did not specify an exact dollar amount.

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