United States District Court, D. Nebraska
MEMORANDUM AND ORDER
Laurie Smith Camp, Chief United States District Judge
This matter is before the Court on the Findings and Recommendation issued by Magistrate Judge F.A. Gossett (Filing No. 23) and Plaintiff Union Pacific Railroad Company’s (“Union Pacific”) Motion to Amend its Complaint and for Remand (Filing No. 12). Defendants Expert Management Service (“EMS”) and Chad Archibald (collectively “Defendants”) object to the Findings and Recommendation (Filing No. 24), incorporating their previously filed brief in opposition to the Motion to Remand (Filing No. 20). For the reasons set forth below, the Findings and Recommendation will be adopted in their entirety, Plaintiff’s Motion to Amend its Complaint and for Remand will be granted, and Defendants’ Objection will be overruled.
EMS is a former vendor of Union Pacific that provided various products and services. Union Pacific alleges that it cancelled its contract with EMS upon discovering that Defendants had engaged in improper billing activity.
Judge Gossett made the following findings of fact, which are uncontested by the parties. On August 14, 2013, Union Pacific filed this action against EMS, Dan Klaus, Chad Archibald, Washington Liftruck, and Nancy Smith in the District Court of Douglas County, Nebraska. (Filing No. 23 at 1.) Union Pacific’s complaint asserted state law claims for fraudulent concealment, fraudulent misrepresentation, civil conspiracy, and an accounting. (Id.) The state court held hearings and ruled on multiple pre-trial motions. (Id. at 3.) On March 24, 2014, Union Pacific filed a Second Amended Complaint, dismissing Defendants Washington Liftruck and Nancy Smith from the action. (Id. at 1.) Thereafter, the parties commenced discovery, and a trial date was set for November 30, 2015. (Id.)
On May, 28, 2015, Union Pacific filed its Third Amended Complaint. (Id.) This complaint added Charles Pasquale as a defendant, and asserted a claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(c). Based on the new RICO claim, Defendants invoked this Court’s federal jurisdiction, and removed the suit to this Court on June, 1, 2015. (Filing No. 1.)
Union Pacific now seeks leave to dismiss its RICO claim by filing an amended complaint. (Filing No. 23 at 2.) Union Pacific argues that following dismissal of the RICO claim, this Court should remand this matter to state court for adjudication of the remaining state law claims. (Filing No. 12 at ¶¶ 7-8.) Defendants oppose the Motion to Remand, arguing that Union Pacific is engaging in “blatant forum shopping” by removing the federal claim from its complaint, and seeking remand to state court. (See Filing Nos. 20; 24.) Defendants urge this Court to exercise supplemental jurisdiction over the state claims.
STANDARD OF REVIEW
Under 28 U.S.C. § 636(b)(1)(C), the Court must make a de novo determination of those portions of the findings and recommendation to which Defendants have objected. The Court may accept, reject, modify, in whole or in part, the Magistrate Judge’s findings or recommendation. 28 U.S.C. § 636(b)(1).
I. Dismissal of Plaintiff’s RICO Claim
Union Pacific seeks to amend its complaint to dismiss its claim for violations under RICO. Defendants do not object to the dismissal of the RICO claim through the filing of an amended complaint. “[A] party may amend its pleading only with the opposing party’s written consent or with the court’s leave. The court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). Leave to amend is freely granted, unless it would prejudice the non-moving party, or if the amendment would be futile. Friedman v. Farmer, 788 F.3d 862, 869 (8th Cir. 2015) (quoting Hammer v. City of Osage Beach, 318 F.3d 832, 844 (8th Cir.2003) (quotation omitted)). In the present case, there is no indication that granting Union Pacific’s leave to amend will result in undue prejudice to Defendants, or that the amendment would be futile. Therefore, Union Pacific will be permitted to dismiss its federal claim through the filing of an amended complaint.
II. Remand of Case to State Court
Defendants oppose Union Pacific’s motion to remand this case to state court.Amending a complaint after removal to dismiss the claims upon which a court’s federal question jurisdiction was initially based does not defeat federal jurisdiction. Ching v. Mitre Corp., 921 F.2d 11, 12 (1st Cir. 1990); see also Quinn v. Ocwen Federal Bank FSB, 470 F.3d 1240, 1249 (8th Cir. 2006); Lindsey v. Dillard's, Inc., 306 F.3d 596, 598- 99 (8th Cir. 2002) ...