NOLA Health Solutions LLC v. New Orleans Regional Physician Hospital Organization, Inc. et al, No. 2:2018cv07007 - Document 78 (E.D. La. 2019)

Court Description: ORDER AND REASONS: For the reasons set forth in the document, the Court finds that the parties are not completely diverse, and that the Court therefore lacks subject matter jurisdiction over the matter. Plaintiffs' complaint is DISMISSED WITHOUT PREJUDICE. Signed by Judge Sarah S. Vance on 6/7/2019. (mm)
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NOLA Health Solutions LLC v. New Orleans Regional Physician Hospital Organization, Inc. et al Doc. 78 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA NOLA HEALTH SOLUTIONS, LLC, ET AL. VERSUS CIVIL ACTION NO. 18-70 0 7 NEW ORLEANS REGIONAL PHYSICIAN HOSPITAL ORGANIZATION, INC., ET AL. SECTION “R” (2) ORD ER AN D REASON S Before the Court is defendants’ m otion to dism iss the case under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The Court finds that (1) there is not com plete diversity between the parties, and (2) the Court cannot sever the nondiverse defendants, because they are indispensable to plaintiffs’ action. The Court therefore dism isses plaintiffs’ com plaint for lack of subject m atter jurisdiction. I. BACKGROU N D This case arises from an alleged joint business venture to build and operate medical centers in the greater New Orleans area. 1 Plaintiffs are (1) 1 R. Doc. 71. For a more complete description of the facts plaintiffs allege in their com plaint, see R. Doc. 54. Dockets.Justia.com NOLA Health Solutions, LLC, a Delaware lim ited liability com pany that was form ed in J uly 20 16 for the purposes of this business venture; (2) Royd Lem us; and (3) Enrique Sanchez. 2 Defendants are (1) PH Holdings, LLC (PHH), (2) New Orleans Regional Physician Hospital Organization, d/ b/ a People’s Health, and (3) Capital City Medical Group, LLC (CCMG). CCMG and People’s Health are both wholly-owned subsidiaries of PHH. 3 People’s Health is a healthcare provider that offers its members various prepaid health plans. 4 Plaintiffs allege that at all relevant tim es for the purposes of their com plaint, PHH “controlled the actions/ decisions” of both People’s Health and CCMG. 5 Plaintiffs allege that up until around 20 10 , PHH did not directly or indirectly provide healthcare services to its m em bers. 6 Around that tim e, PHH, through People’s Health, allegedly began to explore the prospect of constructing and operating m edical clinics in Louisiana. 7 By the m iddle of 20 13, PHH had constructed one medical center in the Parish of East Baton Rouge. 8 It was also allegedly close to com pleting and opening a medical 2 3 4 5 6 7 8 R. Doc. 71 at 2 ¶¶ 1-3. Id. ¶¶ 4-6. Id. ¶ 8. Id. at 10 ¶ 19. Id. at 11 ¶ 25. Id. ¶ 26. Id. ¶ 30 . 2 center in Gretna, Louisiana, and had plans to construct another in Westwego, Louisiana. 9 Plaintiffs allege that PHH was “way over budget” on the Gretna and Westwego projects and did not have sufficient funds to complete the planned construction. 10 During the summer of 20 13, nonparty Carol Solom on—the Chief Executive Officer (CEO) of People’s Health, the Manager of CCMG, and a m ember of the Board of Managers of PHH 11—was allegedly introduced to Lem us while Solomon was visiting her niece in Miam i, Florida. 12 Solom on’s niece is the wife of Sanchez. 13 Lem us and Sanchez are both in the construction business. 14 In 20 13, Lem us also allegedly owned and operated a P.E.T.-C.T. and M.R.I. scanning and diagnostic center. 15 Solom on explained to Lem us and Sanchez defendants’ efforts to build new m edical centers in Louisiana and allegedly stated that defendants were in the process of partnering with parties who could operate the newly constructed clinics. 16 9 10 11 12 13 14 15 16 Id. at Id. at Id. at Id. at Id. Id. at Id. Id. at 11-12 ¶ 31. 12 ¶ 33. 10 ¶ 20 . 12 ¶ 36. 13 ¶ 38. 12-13 ¶ 37. 3 Plaintiffs contend that after this initial m eeting, Lem us, Sanchez, and Solom on began to discuss potential business opportunities. 17 Plaintiffs assert that they eventually reached an agreem ent with defendants whereby Lem us and Sanchez would “m anage and supervise” the construction of the Westwego medical center for free and for reim bursem ent of their out-of-pocket costs only. 18 In exchange, plaintiffs would be granted the right to m anage and operate the Westwego and Gretna centers under a “PHH/ People’s Health” provider agreement. 19 Plaintiffs allege that defendants ultim ately reneged on this agreement, causing plaintiffs substantial dam ages. 20 NOLA Health initially filed a com plaint against defendants on J uly 26, 20 18. 21 The Court dism issed this com plaint without prejudice for lack of subject m atter jurisdiction, because NOLA Health failed to allege that there was diversity of citizenship between the parties. 22 The Court noted that NOLA Health, as well as defendants PHH and CCMG, were all lim ited liability com panies whose citizenship is determ ined by the citizenship of all 17 18 19 20 21 22 Id. at 13 ¶ 41. Id. at 34 ¶ 162, 35-36 ¶ 172. Id. Id. at 37 ¶ 180 . R. Doc. 1. R. Doc. 54 at 11-13. 4 their m embers. 23 But in its com plaint, NOLA Health did not affirm atively allege the citizenship of its members or PHH’s and CCMG’s m embers. 24 The Court also found that NOLA Health did not have Article III standing to recover for all of the claim s it asserted in its initial com plaint. 25 NOLA Health then tim ely filed an amended complaint, adding Lem us and Sanchez as plaintiffs. 26 In the am ended com plaint, plaintiffs allege causes of action of breach of contract, contractual fraud, bad faith breach of an oral contract, detrim ental reliance, and unjust enrichm ent. 27 Plaintiffs explain that NOLA Health has three members—Lemus, Sanchez, and nonparty Dr. Sonia Michael—all of whom are citizens of Florida. 28 Plaintiffs further allege that CCMG’s sole mem ber is PHH, and that PHH has 72 m embers, none of whom is a citizen of Florida. 29 Defendants now move to dism iss plaintiffs’ amended complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). 30 They argue that the 23 Id. See R. Doc. 1 at 1 ¶ 2, 2 ¶ 4 (NOLA Health stating only that it has a principal place of business in Miam i-Dade County, Florida, and that PHH’s and CCMG’s principal places of business are located in Metarie, Louisiana). 25 R. Doc. 54 at 13-20 . 26 R. Doc. 56; R. Doc. 71. 27 Id. at 33-57. 28 Id. at 3 ¶ 13. 29 Id. at 3-10 . 30 R. Doc. 61. 5 24 parties are not com pletely diverse—and that the Court therefore lacks jurisdiction over the m atter—because one of PHH’s 72 mem bers, Dr. Kevin Roache, is in fact a citizen of Florida. 31 They further argue that even if the Court does not have jurisdiction over the action, plaintiffs fail to state a claim upon which relief can be granted. 32 Plaintiffs oppose the motion. 33 II. LEGAL STAN D ARD Federal courts are courts of lim ited jurisdiction and possess power over only those cases authorized by the United States Constitution and federal statutes. Coury v. Prot, 85 F.3d 244, 248 (5th Cir. 1996). Two possibilities for jurisdiction exist: federal question jurisdiction under 28 U.S.C. § 1331, and diversity jurisdiction under 28 U.S.C. § 1332. Diversity jurisdiction exists only when there is com plete diversity of citizenship, and the am ount in controversy exceeds $ 75,0 0 0 , exclusive of interests and costs. 28 U.S.C. § 1332(a). If a district court lacks jurisdiction over the subject m atter of a plaintiff’s claims, it m ust dism iss the case. See Fed. R. Civ. P. 12(b)(1). The lack of subject m atter jurisdiction m ay be raised at any tim e during the 31 32 33 R. Doc. 61-1. Id. R. Doc. 74. 6 pendency of the case by any party or by the court. See Kontrick v. Ry an, 540 U.S. 443, 456 (20 0 4) (“A litigant generally m ay raise a court’s lack of subjectm atter jurisdiction at any tim e in the sam e civil action, even initially at the highest appellate instance.”); McDonal v. Abbott Labs., 40 8 F.3d 177, 182 n.5 (5th Cir. 20 0 5) (“[A]ny federal court m ay raise subject m atter jurisdiction sua sponte.”). “The citizenship of a party at the com mencem ent of the action is controlling for purposes of determ ining diversity jurisdiction and subsequent actions do not affect the court’s jurisdiction.” Aetna Cas. & Sur. Co. v. Hillm an, 796 F.2d 770 , 776 (5th Cir. 1986) (citing Oliney v. Gardner, 771 F.2d 856, 858 (5th Cir. 1985)) (emphasis in original). Finally, “[t]here is a presumption against subject m atter jurisdiction that m ust be rebutted by the party bringing an action to federal court.” Coury , 85 F.3d at 248. III. D ISCU SSION A. Citize n s h ip o f D r. Ke vin Ro ach e The parties dispute whether Dr. Roache was a citizen of Louisiana or Florida when this action began. 34 If Dr. Roache is found to be a citizen of 34 R. Doc. 61-1 at 10 -12; R. Doc. 74 at 9-12. 7 Florida, neither PHH or CCMG would be diverse from plaintiffs, who are all Florida citizens. 35 A person’s citizenship is determ ined by his dom icile. Mas v. Perry , 489 F.2d 1396, 1399 (5th Cir. 1974), cert. denied, 419 U.S. 842 (1974). A person’s dom icile is his “true, fixed, and permanent hom e and principal establishment, and to which he has the intention of returning whenever he is absent therefrom.” Id. (citing Stine v. Moore, 213 F.2d 446, 448 (5th Cir. 1954)). Mere residence in a state is not sufficient. Id. To determ ine a person’s dom icile, courts look to certain factors that shed light on the person’s intention to establish residence, which “m ay include the places where the litigant exercises civil and political rights, pays taxes, owns real and personal property, has driver’s and other licenses, m aintains bank accounts, belongs to clubs and churches, has places of business or em ploym ent, and m aintains a home for his fam ily.” Coury , 85 F.3d at 251. No single factor is determ inative. Id. A person’s dom icile persists until a new one is acquired, or the person’s dom icile is otherwise clearly abandoned. Id. at 250 . “There is a presum ption in favor of [a person’s] continuing dom icile which requires the party seeking 35 Plaintiffs allege that CCMG’s sole member is PHH, so its citizenship is com pletely determ ined by PHH’s citizenship. 8 to show a change in dom icile to com e forward with enough evidence to that effect. . . .” Id. But despite this presum ption, the “ultim ate burden on the issue of jurisdiction” rem ains with the “party invoking federal jurisdiction.” Id. There is no dispute that Dr. Roache was once dom iciled in Louisiana. 36 Defendants claim that Dr. Roache changed his dom icile to Florida in J une of 20 18, shortly before this action com m enced. 37 Dr. Roache and his wife each filed a Declaration of Dom icile with the Clerk of the Circuit Court in Okaloosa County, Florida, on J une 19, 20 18, declaring the state of Florida to be their place of dom icile. 38 In this declaration, Dr. Roache stated that he previously resided in Louisiana, but now “intend[ed] to m aintain” his Florida abode has his “perm anent hom e.”39 Plaintiffs argue that Dr. Roache did not in fact change his dom icile to Florida in J une 20 18, and that he rem ains a citizen of Louisiana for the purposes of diversity jurisdiction. 40 The Court will address each of the factors explicitly nam ed in Coury to determ ine Dr. Roache’s place of dom icile at the tim e this action began. 36 37 38 39 40 R. Doc. 61-3 at 3. R. Doc. 61-1 at 10 -12; R. Doc. 61-3. R. Doc. 61-3 at 3-4. Id. at 3. R. Doc. 74 at 9-12. 9 1. Coury Factors a) Civil and political rights Dr. Roache states in an affidavit that he registered to vote in Florida on or about J uly 29, 20 16, and that he is not registered to vote in any other state. 41 This factor therefore weighs in favor of a finding that Dr. Roache is dom iciled in Florida. b) Driver’s license and other licenses Dr. Roache states that he obtained a Florida driver’s license in J une 20 18, and that the license expires on August 13, 20 26. 42 Plaintiffs have presented evidence—obtained through a private investigator—that Dr. Roache was issued a Louisiana driver’s license in Septem ber 20 16. 43 It expires on August 13, 20 22. 44 This evidence supports a finding that Dr. Roache changed his dom icile to Florida in J une of 20 18 , as defendants allege. Dr. Roache was issued a physician’s license from the Louisiana State Board of Medical Exam iners on Septem ber 1, 20 0 4. 45 This license is active through August 31, 20 19. 46 Dr. Roache stated in his affidavit that he is 41 42 43 44 45 46 R. Doc. 61-3 at 2. Id. R. Doc. 74-1 at 4, 40 . Id. at 40 . Id. at 2, 7. Id. 10 currently em ployed as an independent m edical consultant by Advanced Medical Pricing Solutions, which is located in the state of Georgia. 47 Defendants explain in their reply brief that Dr. Roache no longer actively practices as a physician. 48 This statem ent is consistent with a Dr. Roache’s LinkedIn profile, a copy of which plaintiffs have attached to their opposition. 49 The Court finds that Dr. Roache’s active physician’s license does not support a finding that he continues to be dom iciled in Louisiana. This license was issued in 20 0 4, and is therefore consistent with defendants’ contention that Dr. Roache was previously a practicing physician dom iciled in Louisiana, but that he has since changed his dom icile to Florida. c) Pay s taxes Dr. Roache states that his m ailing address designated in his federal incom e tax returns is a Florida address. 50 Plaintiffs provide no inform ation to rebut this contention. This factor therefore weighs in favor of a finding that Dr. Roache is dom iciled in Florida. 47 48 49 50 R. Doc. 61-3 at 1. R. Doc. 77 at 2. See R. Doc. 74-2. R. Doc. 61-3 at 2. 11 d) Ow ns real and personal property , and m aintains a hom e Dr. Roache states that he resides at 80 91 Sanctuary Drive, Unit 1, Naples, Florida, 3410 4 (Naples address). 51 He further states that his m ailing address is 5753 Highway 85 North, Crestview, Florida, 32536 (Crestview address). 52 Plaintiffs’ investigator confirm s that Dr. Roache has owned the property at the Naples address since 20 0 9. 53 Dr. Roache states in his affidavit that in addition to his Florida residence, he also owns property in Louisiana, Mexico, and Canada. 54 Plaintiffs’ investigator links Dr. Roache to three separate residential properties in Louisiana. 55 First, the investigator states that from Novem ber 20 0 3 to December 20 18, Dr. Roache owned a home at 10 7 Pineridge Street, 51 Id. at 1. Id. Dr. Roache listed the Crestview address on his Declaration of Dom icile. Id. at 3. Plaintiffs’ investigator states that the Crestview address is a warehouse, rather than a residential location, and that it is hom e to a m ail-forwarding business. R. Doc. 74-1 at 4. Plaintiffs argue that Dr. Roache’s Declaration of Dom icile and his affidavit are not credible pieces of evidence because of this discrepancy. R. Doc. 74 at 11. But defendants state in their reply brief that Dr. Roache’s m ail-forwarding service requires that he use his mailing address to establish his Florida residency. R. Doc. 77 at 2. Dr. Roache’s and plaintiffs’ investigator’s statements are therefore entirely consistent. The Court accordingly finds that Dr. Roache’s use of the Crestview address on his Declaration of Dom icile is not reason to question the credibility of his statements or defendants’ evidence. 53 R. Doc. 74-1 at 4. 54 R. Doc. 61-3 at 2. 55 R. Doc. 74-1 at 2-3. 12 52 in Mandeville, Louisiana. 56 According to the investigator, Dr. Roache declared this property as his homestead from 20 0 4 to 20 0 8, and again in 20 17 and 20 18. 57 This is the residence that Dr. Roache listed on his Florida Declaration of Dom icile form as his previous place of residence. 58 Second, the investigator states that from 20 0 9 to 20 12, Dr. Roache declared a property at 20 71 Tim bercreek Lane, in Mandeville, as his hom estead. 59 Third, the investigator states that in May 20 18—shortly before Dr. Roache declared Florida as his place of dom icile—Dr. Roache purchased an undeveloped tract of land at 468 Tiger Avenue, in Covington, Louisiana. 60 The investigator further states that this property is zoned as residential, and as of J anuary 24, 20 18, “a home was being constructed at this residential lot.”61 The Tiger Avenue property is the address reflected on Dr. Roache’s Louisiana physician’s license. 62 With respect to personal property, Dr. Roache states that all but one of his vehicles are registered in Florida and have Florida license plates. 63 He 56 57 58 59 60 61 62 63 Id. at 2. Id. at 2, 11-24. R. Doc. 61-3 at 3. R. Doc. 74-1 at 2, 11-24. Id. at 2-3. Id. at 3. Id. at 7. R. Doc. 61-3 at 2. 13 further states that he does have one vehicle registered in South Dakota, which he keeps in Mexico. 64 That Dr. Roache owns residential properties outside of Florida does not underm ine defendants’ claim that his Florida residence at the Naples address was his dom icile at the tim e this action began. See Grey star Dev. & Constr., LP v. Crescent Prop. Partners, LLC, No. 11-2945, 20 12 WL 130 0 10 49, at *3 (E.D. La. Sept. 25, 20 12) (individual who owned property in Texas, Louisiana, Florida, and Colorado was found to be dom iciled in Texas, because he stated that he intended to m ake his Texas ranch his perm anent hom e). When viewing Dr. Roache’s real and personal property in the context of his other ties to Florida beginning in J une 20 18, this factor weighs in favor of a finding that he is dom iciled in Florida. e) Bank accounts Dr. Roache states that his m ailing address for all of his bank and investment accounts is a Florida address. 65 Plaintiffs provide no inform ation to rebut this contention. This factor therefore weighs in favor of a finding that Dr. Roache is dom iciled in Florida. 64 65 Id. R. Doc. 61-3 at 2. 14 f) Mem bership in clubs or religious centers Neither plaintiffs nor defendants mention any clubs or groups to which Dr. Roache is a mem ber. This factor therefore does not weigh in either direction. g) Place of business or em ploy m ent As already addressed, Dr. Roache has an active Louisiana physician’s license. 66 But again, Dr. Roache states that he is currently em ployed as an independent m edical consultant by Advanced Medical Pricing Solutions, which is located in Georgia. 67 Dr. Roache avers that his work is “perform ed exclusively online and can be conducted from anywhere.”68 Dr. Roache’s LinkedIn page, which plaintiffs attach to their m otion, confirm s that Dr. Roache is currently em ployed by Advanced Medical Pricing Solutions. 69 This factor therefore does not weigh in either direction. 2. Conclusion The evidence before the Court establishes that Dr. Roache was dom iciled in Florida when this action began in late J uly 20 18. Dr. Roache declared Florida to be his place of domicile in J une 20 18, 70 and he states in 66 67 68 69 70 R. Doc. 74-1 at 7. R. Doc. 61-3 at 1. Id. R. Doc. 74-2 at 1. R. Doc. 61-3 at 3. 15 his affidavit that he intends to reside in Florida perm anently. 71 The other evidence before the Court corroborates this statem ent. As of J une 20 18, Dr. Roache was registered to vote in Florida; his bank and investment accounts contained Florida m ailing addresses; he designated a Florida address on his federal incom e tax returns; he had obtained a Florida driver’s license; and nearly all of his personal vehicles were registered in Florida and had Florida license plates. 72 Because Dr. Roache represents that he changed his dom icile shortly before this action began, it is defendants’ burden to present enough evidence to establish that Dr. Roache now actually resides in Florida and intends to perm anently rem ain there. Coury , 85 F.3d at 250 . Defendants have m et this burden. See Grey star Dev. & Constr., LP, 20 12 WL 130 0 10 49, at *2-3, 5 (individual who voted in Texas, had a Texas driver’s license, paid property taxes in Texas, owned property in several states, and intended to stay with his fam ily on his ranch in Texas, was considered dom iciled in Texas even though his principal work office was located in Louisiana); cf. Hendry v. Masonite Corp., 455 F.2d 955, 955-56 (5th Cir. 1972) (finding that party did not show a change in dom icile from Mississippi to Illinois, when at the tim e of service the only hom e he owned was in Mississippi, all of his 71 72 Id. at 2. Id. at 1-2. 16 household furnishings were in Mississippi, his fam ily still lived in Mississippi, and he still voted as a Mississippi resident). Plaintiffs bear the ultim ate burden of showing that the Court has diversity jurisdiction over this action, see Coury , 85 F.3d at 250 , and they have failed to do so. Plaintiffs rely heavily on their investigator’s statem ents that Dr. Roache continues to own residential property in Louisiana. 73 But as already addressed, that Dr. Roache owns real property outside of Florida does not counteract the overwhelm ing evidence showing that in J une 20 18 he changed his domicile to Florida and intended to rem ain there. The Court accordingly finds that Dr. Roache was dom iciled in Florida starting in J une 20 18, and that he was therefore a Florida citizen when this action began. PHH and CCMG were thus both citizens of Florida, and this case lacked com plete diversity of the parties when NOLA Health filed the initial com plaint. 74 73 See R. Doc. 74 at 9-12. In their opposition, plaintiffs request an evidentiary hearing on the question of Dr. Roache’s dom icile. R. Doc. 74 at 13. Plaintiffs cite W illiam son v. Tucker, 645 F.2d 40 4 (5th Cir. 1981), in support of their request. Id. In W illiam son, the Fifth Circuit noted that when a defendant m oves to dism iss an action for lack of jurisdiction, “the district court m ust give the plaintiff an opportunity for discovery and for a hearing that is appropriate to the nature of the m otion to dism iss.” W illiam son, 645 F.2d at 414. This requirement has been satisfied here. Plaintiffs have had a significant am ount of tim e to develop factual inform ation regarding Dr. Roache’s dom icile, and they have presented that inform ation to the Court in 17 74 B. In d is pe n s ability o f N o n d ive rs e Partie s Plaintiffs state in a footnote in their opposition brief that if the Court were to determ ine that the parties are not com pletely diverse, they would “request” that the Court “drop CCMG and PHH as defendants pursuant to [Federal Rule of Procedure 21] so that this action can proceed solely against [People’s Health].”75 Defendants do not address this footnote in their reply brief. Rule 21 states that “[m ]isjoinder of parties is not a ground for dism issing an action,” and that “[o]n m otion or on its own, the court m ay at any tim e, on just term s, add or drop a party.” Fed. R. Civ. P. 21. Although by its terms Rule 21 covers only instances of “m isjoinder,” “it is well settled that Rule 21 invests district courts with authority to allow a dispensable party to be dropped at any tim e.” N ew m an-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 832 (1989); see also Moss v. Princip, 913 F.3d 50 8, 519 (5th Cir. 20 19) (district court did not abuse its discretion in determ ining partnership was a dispensable party that could be dropped under Rule 21 to preserve the Court’s diversity jurisdiction over an action); Wright & Miller, 7 Federal opposition to defendants’ m otion. Plaintiffs do not explain how an oral hearing would provide the Court with any other useful inform ation that could plausibly im pact its ruling. 75 R. Doc. 74 at 12 n.3. 18 Practice and Procedure § 1685 (3d ed. 20 19) (“Courts frequently employ Rule 21 to preserve diversity jurisdiction over a case by dropping a nondiverse party if the party’s presence in the action is not required under Rule 19.”). As these authorities indicate, a Court m ay exercise this discretion under Rule 21 only if the nondiverse party is dispensable to the plaintiff’s action under Rule 19. Rule 19 directs federal courts to join “required” parties when feasible. Moss, 913 F.3d at 515. When joining a “required” party is not feasible—such as when its joinder would defeat diversity jurisdiction—“the court m ust determ ine whether the party is merely necessary to the litigation, or in fact indispensable.” Id. (internal quotation m arks om itted). If the parties are indispensable, the proper action is to dism iss the entire case for lack of subject m atter jurisdiction. Rule 19(b) directs courts to consider four factors in assessing whether a party is indispensable: (1) the extent to which a judgm ent rendered in the person’s absence m ight prejudice that person or the existing parties; (2) the extent to which any prejudice could be lessened or avoided by: (A) protective provisions in the judgm ent; (B) shaping the relief; or (C) other measures; 19 (3) whether a judgm ent rendered in the person’s absence would be adequate; and (4) whether the plaintiff would have an adequate rem edy if the action were dism issed for nonjoinder. Id. (citing Fed. R. Civ. P. 19(b)). Courts do not always engage in a step-by-step analysis of the Rule 19(b) factors when determ ining whether a party is indispensable. Indeed, the Suprem e Court has explained that “there is no prescribed form ula for determ ining in every case whether a person is an indispensable party.” Provident Tradesm ens Bank & Tr. Co. v. Patterson, 390 U.S. 10 2, 117 n.14 (1968). For instance, the Fifth Circuit and other circuits have found a party to be indispensable when it is the “prim ary participant” in the factual scenario underlying a plaintiff’s claim s. See Freem en v. Nw . Acceptance Corp., 754 F.2d 553, 559 (5th Cir. 1985) (collecting cases). In Freem an, the plaintiffs nam ed as a defendant a parent corporation but did not sue the parent’s subsidiary, whose presence could have destroyed diversity jurisdiction. Id. at 554-55. The Fifth Circuit noted that the plaintiffs sought “to im pose liability on [the parent] not for its own acts, but for those of [the subsidiary].” Id. at 559. The court found that in such a situation—when the absent party was not just an “active participant” in the allegations, but the “prim ary participant”—the subsidiary was an indispensable party. Id.; see also H.D. Corp. of P.R. v. Ford Motor Co., 791 F.2d 987, 992-93 (1st Cir. 20 1986) (parent company was an indispensable party when it was “clear from the face of the complaint that plaintiffs’ . . . claim s [were] largely directed against the parent com pany”). More recently, the First Circuit affirm ed a district court’s dism issal of an action for lack of diversity jurisdiction for sim ilar reasons. See B. Fernandez & HN OS, Inc. v. Kellogg USA, Inc., 516 F.3d 18 (1st Cir. 20 0 8). In Kellogg, nonparty Kellogg Caribbean, which would have destroyed diversity jurisdiction if it were included in the m atter, sought to intervene. Id. at 20 . The plaintiffs had brought the action against only Kellogg USA, an affiliate of Kellogg Caribbean. Id. The First Circuit noted that “a close reading of the [com plaint] reveals . . . Kellogg Caribbean as playing a significant role throughout the course of Kellogg USA’s alleged legal violations.” Id. at 27. The court concluded that because “Kellogg was a central player—perhaps even the primary actor—in the alleged breach, the practical course” was to “proceed in a forum where [Kellogg Caribbean] m ay join.” Id. Here, PHH is sim ilarly the m ain participant in the unlawful actions underlying plaintiffs’ com plaint, and it is therefore an indispensable party. Plaintiffs allege that all relevant tim es, “PHH, through its Board of Managers, controlled the actions/ decisions of its subsidiaries, People’s Health and 21 CCMG.”76 Carol Solom on, whom plaintiffs allege was defendants’ representative throughout their negotiations, was a member of PHH’s Board of Managers. 77 Indeed, plaintiffs allege throughout their com plaint that PHH was the m ain actor in the factual events underlying their claim s. 78 Thus, as in Freem an and Kellogg, PHH is an indispensable party under Rule 19(b). See id. at 26-27; Freem en, 754 F.2d at 559. The Court also finds both PHH and CCMG to be indispensable parties under the Rule 19(b) factors. The first factor concerns the potential prejudice to the absent or existing parties if the action were to go forward. First, People’s Health could be prejudiced if this action were to proceed against it alone, because People’s Health could also be named as a defendant in any state court action plaintiffs were to bring against PHH and CCMG. People’s 76 R. Doc. 71 at 10 ¶ 19. Id. ¶ 20 . 78 See, e.g., id. at 10 ¶ 23 (alleging that the “prom ises and com m itm ents Ms. Solom on m ade, and the actions Mr. Lem us and Mr. Sanchez took . . . in reliance thereon were ultim ately for PHH’s benefit”); id. at 11-12 ¶¶ 24-34 (alleging that PHH m ade the strategic decision to begin providing direct healthcare services, and also instigated the construction of the m edical centers); id. at 18 ¶ 68 (alleging that Solom on provided Lem us and Sanchez with docum ents and other inform ation that “appeared to m anifest PHH’s intention (through People’s Health) to proceed with the parties’” objective to have plaintiffs run the Westwego and Gretna medical centers); id. at 28 ¶ 130 (alleging that “PHH’s Board” passed a resolution authorizing People’s Health and CCMG to enter into a term sheet with plaintiffs that allegedly m aterially changed the terms the parties previously agreed to). 22 77 Health “has an interest in avoiding m ultiple and repetitive litigation.” Pulitzer-Polster v. Pulitzer, 784 F.2d 130 5, 1313 (5th Cir. 1986); see also Schutten v. Shell Oil Co., 421 F.2d 869, 873 (5th Cir. 1970 ) (noting that a defendant has a right to be safe from needless m ultiple litigation). Second, PHH and CCMG could be prejudiced in their absence, because a ruling in this case could prejudice them in a subsequent state court action. Even if PHH and CCMG were not bound by this Court’s ruling under the doctrine of res judicata, an adverse ruling against People’s Health “would be persuasive precedent in a subsequent proceeding, and would weaken [their] bargaining position for settlem ent purposes.” Acton Co., Inc. of Mass. v. Bachm an Foods, Inc., 668 F.2d 76, 78 & 81 (1st Cir. 1982). The first Rule 19(b) factor therefore supports a finding that PHH and CCMG are indispensable parties. The second Rule 19(b) factor asks whether this potential prejudice can be lessened or avoided by any protective m easures. The Court finds there is no clear way to fashion a prospective judgment or relief to avoid this potential prejudice. The third Rule 19(b) factor concerns whether the Court could render an adequate judgment if the action were to proceed without PHH and CCMG. A judgm ent is “adequate” if it furthers the public interest in “com plete, consistent, and efficient” resolution of controversies. Provident Tradesm ens 23 Bank & Tr. Co., 390 U.S. at 111. As already addressed, allowing this action to proceed could result in separate federal and state actions against defendants involving identical factual m atters. In such a situation, the public interest is furthered by ensuring that the action can be prosecuted against all of the required parties in one setting. Id. Finally, the fourth Rule 19(b) factor concerns whether the plaintiff has an adequate rem edy if the case is dismissed. The Court sees no reason why this action cannot proceed in Louisiana state court. In particular, there is no risk that dism issal would operate to plaintiffs’ prejudice on the basis that their claim s brought in state court would be untim ely. The parties dispute whether som e of plaintiffs’ claim s are subject to Louisiana’s one-year prescriptive period for delictual actions, or its ten-year period for contractual actions. 79 But the parties appear to agree that if the one-year period applies, plaintiffs’ claim s would be untim ely in this action. 80 Thus, dism issing this m atter and forcing plaintiffs to bring their claim s in state court will have no effect on the question of whether some of their claim s are prescribed. 79 80 See R. Doc. 74 at 19-20 ; R. Doc. 77 at 8-10 . Id. 24 IV. CON CLU SION For the reasons stated above, the Court finds that the parties are not com pletely diverse, and that the Court therefore lacks subject m atter jurisdiction over the m atter. Plaintiffs’ com plaint is DISMISSED WITHOUT PREJ UDICE. New Orleans, Louisiana, this _ _7th _ _ _ day of J une, 20 19. _____________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 25