United States District Court, S.D. Mississippi, Southern Division
GULF COAST COLD STORAGE, INC. a wholly owned subsidiary of Neeb Kearney & Company, Inc., suing on its own behalf and on behalf of its insurance subrogees, including Indian Harbor Insurance Company, Certain Underwriters at Lloyds Subscribing to Policy Number AMR-34288, Steadfast Insurance Company, and QBE Specialty Insurance Company; and NEEB KEARNEY AND COMPANY, LLC formerly Neeb Kearney & Company, Inc. PLAINTIFFS
PHILIPS ELECTRONICS NORTH AMERICA CORPORATION; PHILIPS LIGHTING COMPANY; A.L.P. LIGHTING COMPONENTS, INC.; A.L.P. LIGHTING AND CEILING PRODUCTS, INC.; ACUITY BRANDS LIGHTING, INC.; ACUITY BRANDS, INC.; and DOES 1-100, inclusive DEFENDANTS
MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFFS'
MOTION TO REMAND AND DENYING DEFENDANTS' MOTION FOR
GUIROLA, JR. CHIEF U.S. DISTRICT JUDGE.
THE COURT are (1) the Motion to Remand to State
Court  filed by the plaintiffs Gulf Coast Cold Storage,
Inc., suing on its own behalf and on behalf of its insurance
subrogees, including Indian Harbor Insurance Company, Certain
Underwriters at Lloyds Subscribing to Policy Number
AMR-34288, Steadfast Insurance Company, and QBE Specialty
Insurance Company, and Neeb Kearney and Company, LLC
(formerly Neeb Kearney & Company, Inc.), (2) the Motion
for Remand-Related Discovery  filed by the defendants
Philips Electronics North America Corporation, Philips
Lighting Company, A.L.P. Lighting Components, Inc., A.L.P.
Lighting and Ceiling Products, Inc., Acuity Brands Lighting,
Inc., and Acuity Brands, Inc., and (3) the Motion for Leave
to File Sur-reply  filed by the defendants. The parties
have fully briefed the Motion to Remand. The defendants did
not file a reply supporting their Motion for Remand-Related
Discovery or their Motion for Leave to File Sur-reply. After
reviewing the submissions of the parties, the record in this
matter, and the applicable law, the Court finds that the
Motion to Remand should be granted, and the Motion for
Remand-Related Discovery should be denied. The Motion for
Leave to File a Sur-reply is moot.
plaintiffs filed this lawsuit in the Circuit Court of Jackson
County, Mississippi, alleging that the defendants'
products caused a fire that damaged the A1 Cold Storage
Warehouse. Indian Harbor Insurance, Lloyds, Steadfast
Insurance, and QBE Insurance provided commercial property
insurance and business income coverage to Gulf Coast Cold
Storage (“GCCS”) and its parent company Neeb
Kearney (“Neeb”). Neeb signed a Subrogation
Receipt providing that the insurance companies had paid $8,
275, 292.78 for claims submitted as a result of the fire. The
Receipt further provides:
In consideration of and to the extent of said payment the
undersigned hereby subrogates said Insurance Companies to all
of the rights, claims and interest which the undersigned or
it's [sic] subsidiaries may have against any person or
corporation liable for the loss mentioned above paid unto it
by Insurance Companies, and authorizes the said Insurance
Companies to sue, compromise, or settle in the
undersigned's name, it's [sic] subsidiary's name,
or otherwise all such claims it is subrogated to and to
execute and sign releases and acquittances and endorse checks
or drafts given in settlement of such claims in the name of
the undersigned, with the same force and effect as if the
undersigned executed or endorsed them.
(Pls.' Mot., Ex. C, ECF No. 19-3).
defendants removed the case to this Court on the basis of
diversity jurisdiction. The plaintiffs filed a Motion to
Remand asserting that the citizenship of the insurance
subrogees listed in the case caption should be considered
when determining whether diversity of citizenship exists.
Insurance subrogees Indian Harbor and Steadfast Insurance are
residents of Delaware. The Philips defendants and the Acuity
Brands defendants are also residents of Delaware. Thus, if
the insurance subrogees are plaintiffs to the lawsuit,
diversity of citizenship does not exist. The defendants
argue that the insurance subrogees are not parties to the
lawsuit, such that the citizenship of these entities should
be disregarded. In the alternative, the defendants request
permission to conduct remand-related discovery concerning any
additional subrogation agreements entered into by GCCS, Neeb,
and the insurance subrogees that may affect their standing as
real parties in interest to the lawsuit.
MOTION TO REMAND
courts are courts of limited jurisdiction. We must presume
that a suit lies outside this limited jurisdiction, and the
burden of establishing federal jurisdiction rests on the
party seeking the federal forum.” Howery v.
Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001).
The federal removal statute, 28 U.S.C. § 1441(a),
permits defendants to remove “any civil action brought
in a State court of which the district courts of the United
States have original jurisdiction.” Federal courts have
original jurisdiction over controversies between citizens of
different states when the amount in controversy exceeds $75,
000, exclusive of interest and costs. 28 U.S.C. §
‘citizens' upon whose diversity a plaintiff grounds
jurisdiction must be real and substantial parties to the
controversy.” Navarro Sav. Ass'n v. Lee,
446 U.S. 458, 460 (1980); see also KeyBank Nat'l
Ass'n. v. Perkins Rowe Ass'n, LLC, 539 F.
App'x 414, 416 (5th Cir. 2013). “Thus, a federal
court must disregard nominal or formal parties and rest
jurisdiction only upon the citizenship of real parties to the
is a rough symmetry between the real party in interest
standard of Rule 17(a) and the rule that diversity
jurisdiction depends upon the citizenship of real parties to
the controversy. But the two rules serve different purposes
and need not produce identical outcomes in all cases.”
Aetna Cas. & Sur. Co. v. Iso-Tex, Inc., 75 F.3d
216, 218 n.2 (5th Cir. 1996). Fed.R.Civ.P. 17(a) provides
that “[a]n action must be prosecuted in the name of the
real party in interest.” “The real party in
interest is the person holding the substantive right sought
to be enforced, and not necessarily the person who will
ultimately benefit from the recovery.” Farrell
Constr. Co. v. Jefferson Parish, La., 896 F.2d 136, 140
(5th Cir. 1990). State law governs the question of whether a
party holds the substantive right. Id. Under
Mississippi law, the right of subrogation is a
“substantive right protected under the law.”
Miss. Food & Fuel Workers' Comp. Trust v.
Tackett, 778 So.2d 136, 142-43 (¶26) (Miss. Ct.
App. 2000) (citing McDonald v. E.J. Lavino Co., 430
F.2d 1065 (5th Cir. 1970). Since the insurance subrogees in
the present case had a right to subrogation, they cannot be
considered nominal or formal parties to this lawsuit.
Nevertheless, GCCS claimed in the case caption to be
prosecuting this lawsuit on behalf of the insurance
subrogees; thus, the question remains whether the insurance
subrogees were actually named as parties to this lawsuit.
citizenship of one who has an interest in the lawsuit but who
has not been made a party to the lawsuit . . . cannot be used
. . . to defeat diversity jurisdiction.” Corfield
v. Dallas Glen Hills LP, 355 F.3d 853, 864-65 (5th Cir.
2003) (quoting Plains Growers, Inc. v. Ickes-Braun
Glasshouses, Inc., 474 F.2d 250, 252 (5th Cir. 1973)).
“The plain meaning of the phrases ‘on whose
behalf' or ‘on behalf of' is an act by a
representative of, or an act for the benefit of,
another.” United States v. Dish Network,
L.L.C., 667 F.Supp.2d 952, 963 (C.D. Ill. 2009); see
also Tallman v. HL Corp., No. 14-5550 (WHW)(CLW), 2015
WL 306964, at *6 (D.N.J. Jan. 20, 2015) (“‘On
behalf of' generally means ‘for the benefit of,
' as in a derivative suit brought by a shareholder
through which the corporation would recover . . . or a claim
brought by a guardian because her ward was unable to do
“the caption of a complaint is not necessarily
determinative with respect to whether the plaintiff is acting
in a representative capacity, ” a district judge may
consider the case caption as a factor when attempting to
identify the parties to the lawsuit. Jones v. Tex. Tech
Univ., 656 F.2d 1137, 1143 (5th Cir. 1981); see also
Tallman, 2015 WL 306964, at*7 (since the case caption
conflicted with the body of the complaint, the court resolved
its doubt as to the identity of the plaintiffs in favor of
remand); Dressler v. Hartford Fin. Servs. Grp.,
Inc., No. 14-02134 MMM (MANx), 2014 WL 12560795, at *3
(C.D. Cal. May 27, 2014) (holding that defendants who were
not listed in the case caption but were listed in the body of
the complaint should be considered when considering diversity
of citizenship); Fed. Ins. Co. v. Brasscraft Mfg.
Co., No. 13-08867MMM (Ex.), 2014 WL 545786, at *4 (C.D.
Cal. Feb. 10, 2014) (holding ...