moved to remand this case to the Superior Court.
AARP and NRTA are national organizations created to serve the interests of senior citizens. Plaintiff Miller was appointed Executive Director of AARP and NRTA in February, 1976. She alleges that while she was Executive Director, she gradually became aware of a scheme by which the individual defendants were controlling the Associations for their own profit and as a part of their business empire. Plaintiff alleges that her efforts to expose the relationship and to make AARP and NRTA independent of the individual defendants led to her dismissal in October, 1977. Plaintiff alleges that defendant Leonard Davis personally and through the other defendants concealed the true nature of the Associations from her; that they constantly attempted to exert control over the Associations and interfere with plaintiff's carrying out of her responsibilities; and that they defamed plaintiff and caused her removal from her position when Davis became alarmed at her refusal to take part in the alleged scheme.
Defendant Leonard Davis was involved in creating a group health insurance plan for NRTA members in the mid-1950's. The results were successful, and subsequently Davis helped to organize AARP to extend group health insurance benefits to more people. Davis also took part in forming defendant Colonial Penn Group, Inc. (CPG), parent corporation for an insurance company. CPG provides insurance coverage to many of the Associations' members, through the Associations' insurance trusts. Plaintiff alleges, among other things, that CPG has a virtual monopoly on AARP and NRTA members' insurance business and therefore extracts monopolistic prices. Plaintiff further alleges that information about this relationship was kept from her as Executive Director, as was financial information about the Associations. Defendants contend in response that plaintiff was dismissed because she was attempting to fire employees in order to replace them with people personally loyal to her. Plaintiff brought this action in May, 1978. Subsequently, plaintiff Miller was sued by AARP in the Superior Court of the District of Columbia, for breach of a consulting agreement. The alleged breach stems from the allegations made by Ms. Miller in the instant case, which AARP claims were disloyal actions contravening the consulting agreement. Ms. Miller has also filed a counterclaim in that action which is substantially similar to the complaint in this action.
Plaintiff has moved to amend her complaint, adding AARP and NRTA, among others, as defendants, and adding a claim that on August 17, 1978, AARP refused to allow her to inspect the Association's books. Plaintiff argues that the liberal construction afforded Federal Rule of Civil Procedure 15(a)
supports her claim to amend. Defendants argue that the proposed amendment should not be allowed because it will destroy diversity jurisdiction. Defendants assert that no new matter would be raised by the amended complaint, and they have a right to a federal forum which should not be prejudiced.
A number of courts have held that amendment to add parties who are merely proper and not indispensable forces remand when the parties added are nondiverse. E.g., Highway Construction Co. v. McClelland, 15 F.2d 187 (8th Cir. 1926); Heintz v. Ohio Casualty Insurance Co., 112 F. Supp. 199 (S.D.Cal.1953); Rowland v. Sellers, 111 F. Supp. 5 (E.D.Tenn.1953). Professor Moore, however, has stated what seems to be the better rule applicable to amendments adding parties that would destroy diversity:
In the exercise of a sound discretion the district court may permit a new party to be added, although his citizenship destroys diversity and requires a remand. But unless there are strong equities in favor of the amendment, or unless the party is an indispensable party, the court should normally deny leave to amend . . . .