Aguayo v. AMCO Insurance (59 F. Supp. 3d 1225, 2014)

MEMORANDUM OPINION AND ORDER

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on the Plaintiffs’ Motion to Remand, filed May 28, 2014 (Doc. 12)(“Motion”). The Court held a hearing on August 7, 2014. The primary issue is whether the Court should grant the Motion and remand this case to state court, because it was pending there for “more than 1 year” at the time of removal; or deny the Motion and keep the case on the ground that the Plaintiffs “acted in bad faith in order to prevent [Defendant AMCO Insurance Company] from removing the action.” 28 U.S.C. § 1446(c)(1). The Court interprets the bad-faith exception — which is only two years old and which no court has yet comprehensively construed — to require an inquiry into whether the plaintiff kept a removal-spoiling party in the ease only for the purpose of preventing removal. The Court construes this inquiry to entail a two-step standard. First, the Court assesses whether the plaintiff actively litigated its case against the removal spoiler in state court. A finding that the plaintiff did not actively litigate against the removal spoiler constitutes bad faith, and the Court will retain jurisdiction over the case. If, on the other hand, the Court finds that the plaintiff actively litigated against the removal spoiler, that finding creates a rebut-table presumption that the plaintiff acted in good faith. Second, the defendant may rebut the good-faith presumption, with evidence already in the defendant’s possession, that the plaintiff kept the removal spoiler in the case to defeat removal; the defendant will not, however, receive discovery or an evidentiary hearing in federal court to obtain such evidence. The Court adopts an expansive view of active litigation: the plaintiff need not expect to recover damages from the removal-spoiling defendant; if the plaintiff keeps the removal spoiler joined to obtain discovery from him or her, to force a settlement, to pressure the removal spoiler to testify on the plaintiffs behalf against other defendants, or to obtain a judgment against the removal spoiler that the plaintiff knows the removal spoiler cannot pay, the Court will consider the plaintiff to have actively litigated against the removal spoiler, and unless the removing defendant'can adduce other evidence of bad faith, such as communications from the plaintiff directly attesting to bad faith, the Court will presume good faith and remand the case. In- this case, the Plaintiffs’ actively litigated both against Defendant Michael Trujillo, whom the Plaintiffs twice deposed, and against Defendants Trace Spoonhoward, the New Mexico State Police (“NMSP”), and the State of New Mexico (collectively, “the State Defendants”), with whom the Plaintiffs settled, thus entitling them to a rebut-table presumption of good faith. AMCO Insurance has introduced no direct or convincing circumstantial evidence of bad faith, and has therefore failed to rebut the presumption. The Court, accordingly, grants the Motion and remands the case to state court.

FACTUAL BACKGROUND

The Court takes its facts from the Third Amended Complaint for Damages, filed in state court December 6, 2013, removed to federal court April 29, 2014 (Doc. 11-8, at 7-22)(“Complaint”). This case arises out of the July, 2010, .murder of a young man, Christopher Aguayo, by another young man, Michael Trujillo, using a gun belonging to Trujillo’s surrogate father, Spoonhoward, an officer with the NMSP. Complaint ¶¶ 12-24, at 3-4. All events occurred in Santa Fe, New Mexico, see Complaint ¶ 2, at 2, and all persons involved are New Mexico citizens with the exception of AMCO Insurance, which is a foreign corporation, see Complaint ¶¶3, 5-11, at 2-3.

Trujillo lived with his mother and Spo-onhoward, who was not Trujillo’s biological father, but to whom Trujillo would commonly refer as his “dad.” Complaint ¶ 23, at 4. See id. ¶ 26, at 4. Trujillo had disciplinary problems: in 2006, he was caught taking a pellet gun from his home to his school; in 2007, he was involved in a fight with another student at his high school; in 2009, his mother had reported him missing, and, when police found him, they reported that he was “belligerent, verbally abusive and that he referred to an officer as a pig.” Complaint ¶ 27, at 5 (internal quotation marks omitted)(quotation unattributed). See id. ¶¶ 28-29, at 5. Trujillo’s mother acknowledges that she had “extreme difficulties with her son” and worried that he might be in a gang. Complaint ¶ 28, at 5 (internal quotation marks omittedXquotation unattributed). See id. ¶ 26, at 4-5. It is unclear what role Spo-onhoward played in Trujillo’s life over the years, but Spoonhoward was aware of Trujillo’s disciplinary issues and of his possible gang affiliation. See Complaint ¶ 30, at 5.

The,NMSP had issued Spoonhoward a .357 Smith & Wesson pistol. See Complaint ¶ 17, at 3; id. ¶¶ 23-24, at 4. Pursuant to New Mexico Department of Public Safety (“NMDPS”) policy, Spoonhoward was required to safely secure the firearm at all times, whether he was on-or off-duty. See Complaint ¶¶ 31-32, at 5-6. The policy provides:

When not secured on the officer’s person or other department approved locking storage device or locked truck of an issued service vehicle, officers are to ensure that their service weapon is secured and/or stored in a safe manner; and

The service weapon shall be secured so as to be inaccessible to children or unauthorized personnel at all times.

Cqmplaint ¶ 32, at 6 (quotation unattributed).

Trujillo was able to get his hands on this pistol, and, on July 8, 2010, he had his girlfriend arrange a meeting at the Santa Fe Place Mall between him and C. Aguayo. See Complaint ¶ 12, at 3. Trujillo was angry at C. Aguayo about cellular telephone communications that C. Aguayo had engaged in with Trujillo’s girlfriend, and, when C. Aguayo arrived at the mall, Trujillo drove up to him, got out of the car, and shot him four or five times with the pistol. See Complaint ¶¶ 13-18, at 3. C. Aguayo collapsed to the ground, and Trujillo walked up to within three feet of him and emptied the rest pf the gun’s magazine into C. Aguayo. See Complaint ¶ 18, at 3. Trujillo and his girlfriend fled the scene, but Trujillo was picked up by police less than an hour after the shooting. See Complaint ¶ 19, at 3; id. ¶ 22, at 4. Immediately upon apprehension, Trujillo told police that he “ha[d] to tell you guys I got the gun from my dad[;] he’s a state cop.” Complaint ¶ 23, at 4.

C. Aguayo was bleeding, and slipping in and out of consciousness, when officers arrived at the scene. See Complaint ¶ 20, at 3. He was in great pain and at one point asked officers to shoot him to end his suffering. See Complaint ¶ 20, at 4. Officers rushed him to the hospital, but, shortly after his arrival, he succumbed to his injuries and died. See Complaint ¶ 21, at 4.

At the time C. Aguayo was murdered, the Aguayo family had an AMCO Insur.ance policy that provided them with uninsured motorist benefits. See Complaint ¶ 60, at 9. Because Trujillo used a vehicle in his commission of the crime, the Aguayo family submitted an insurance claim for the full amount of the policy, limit. See Complaint If 62, at 9. AMCO Insurance denied the claim without interviewing any witnesses or speaking with the Aguayo family. See Complaint ¶¶ 63-64, at 9-10.

PROCEDURAL BACKGROUND

This case involves the Plaintiffs’ Motion to remand the case to state court after AMCO Insurance removed it to federal court, arguing that, because the case was pending in state court “more than 1 year,” AMCO Insurance’s removal was improper. 28 U.S.C. § 1446(c)(1). AMCO Insurance, for its part, contends that removal was justified under the recently passed bad-faith exception to the one-year limitation, which requires that the Plaintiffs’ actions in state court were “in bad faith in order to prevent a defendant from removing the action.” 28 U.S.C. § 1446(c)(1). . As such, the relevant background to the resolution of this Motion are the parties’ procedural actions while litigating this case in state court. The parties vary widely in the motives they ascribe to their own and each other’s actions; the objective facts of how the litigation unfolded, however, are not in dispute.

1. The Plaintiffs File Their Case in State Court.

The Plaintiffs — C. Aguayo’s family members and his personal representative — first filed suit in state court on May 24, 2012, naming Trujillo, Spoonhoward, the NMDPS, and the State of New Mexico as Defendants. See Complaint for Damages, filed in state court May 24, 2012, filed in federal court April 29, 2014 (Doc. 1-1). The Plaintiffs then filed an Amended Complaint for Damages, filed in state court November 18, 2012, filed in federal court April 29, 2014 (Doc. 1-2), which additionally alleged one claim against AMCO Insurance — for a declaratory judgment that AMCO Insurance is obligated to “pay the full measure of any judgment obtained against it.” Amended Complaint for Damages ¶ 60, at 9. See Amended Complaint for Damages ¶¶ 50-60, at 8-9. On November 18, 2013 — exactly one year after naming AMCO Insurance — the Plaintiffs dismissed Spoonhoward from the case, and on December 5, 2013, the Plaintiffs dismissed the State of New Mexico and the NMDPS from the case. See Stipulation of Dismissal with Prejudice of All Claims Against New Mexico Department of Public Safety and State of New Mexico at 1, filed in state court December 5, 2013, filed in federal court April 29, 2014 (Doc. 1-3)(“A11 claims against Defendant Trace Spoonho-ward previously were dismissed with prejudice, by stipulation filed November 18, 2013.”). On December 6, 2013, the Plaintiffs filed their most recent version of the Complaint, which names only Trujillo and AMCO Insurance. See Complaint ¶ 56-84, at 9-12. The Complaint alleges two new claims against AMCO Insurance: “bad faith” and “violations of the insurance code.” Complaint ¶¶ 70-84, at 10-12 (capitalization altered). On April 25, 2014 — six days before the case was set to go to trial in . state court — the Plaintiffs dismissed Trujillo from the case, leaving AMCO Insurance as the only Defendant. See Notice of Dismissal, filed in state court April 25, 2014, filed in federal court April 29, 2014 (Doc. 1-11); Notice of Removal ¶ 11, at 3, filed April 29, 2014 (Doc. 1).

Through all of these filings, the Plaintiffs avoided pleading a specific dollar amount of damages sought. See, e.g., Notice of Removal ¶ 10, at 3. According to an affidavit to which AMCO Insurance’s attorney swore, the Plaintiffs served AMCO Insurance with an offer of settlement on April 22, 2014, offering to dismiss the case. See Attorney’s Affidavit ¶ 4, at 1, filed April 29, 2014 (Doc. 1-5); N.M. Civ. P. 1-068 (providing that parties may make offers of settlement, which are similar to offers of judgment in the federal system, see Fed.R.Civ.P. 68). AMCO Insurance’s attorney states that she cannot provide a copy of the offer of settlement or disclose the exact amount involved, but that it is greater than $225,000.00. See Attorney’s Affidavit ¶ 4, at 1 (citing N.M.R. Evid. 11-408 (providing that offers of settlement cannot be used as evidence)).

2. AMCO Insurance Removes the Case to Federal Court.

On April 29, 2014, two days before the case was set to go to trial in state court, AMCO Insurance removed the case to federal court. See Notice of Removal at 1. It asserts diversity jurisdiction, noting that, once Trujillo was dismissed, there is complete diversity between the Plaintiffs — all New Mexico citizens — and AMCO Insurance, an Iowa citizen. See Notice of Removal ¶ 12, at 3; id. ¶¶ 13-15, at 4. See also note 2, supra, at 1229-30. It further asserts that it has met its burden in proving satisfaction of the amount-in-controversy requirement by pointing to the offer of judgment, in which the Plaintiffs seek more than $75,000.00 in damages. See Notice of Removal ¶¶ 18-19, at 5 (citing McPhail v. Deere & Co., 529 F.3d 947, 956 (10th Cir.2008))(“Documents that demonstrate a plaintiffs own estimation of the claim’s value are a proper means of supporting the allegations in the notice of removal.”).

Rather than wait for the inevitable motion to remand, AMCO Insurance preemptively addresses the timeliness of its removal. See Notice of Removal ¶ 12, at 3-4; id. ¶¶ 16-17, at 4-5; id. ¶¶ 20-39, at 5-10. It acknowledges that “removal must ordinarily be sought ... within one year of the initiation of the action,” but contends “th[at] requirement ] do[es] not apply where the plaintiffs have acted in bad faith in order to prevent removal.” Notice of Removal ¶ 12, at 3-4 (citing 28 U.S.C. § 1446(c)(1)). AMCO Insurance alleges that the “Plaintiffs have employed a variety of procedural machinations in order to thwart removal” in light of the complete-diversity requirement. See Notice of Removal ¶ 12, at 4.

AMCO Insurance’s argument is that: (i) the claims against Spoonhoward, NMDPS, and the State of New Mexico never had anything to do with AMCO Insurance, and, therefore, only Trujillo’s presence in the case made AMCO Insurance a proper party; and (ii) the Plaintiffs' kept Trujillo in the case for over a year, never intending to take him to trial, for the purpose of defeating complete diversity and keeping the case in state court. As to the first part of its two-part argument, AMCO Insurance essentially just asserts it to be true:

Plaintiffs’ claims against Defendants Spoonhoward, NMDPS and the State were unrelated to any claims against AMCO.

Plaintiffs’ claims against Defendants Spoonhoward, NMDPS and the State would have been subject to dismissal under the doctrine of fraudulent joinder, had claims against Defendant Trujillo not already been pending. See Salisbury v. Purdue Pharma, LP, 166 F.Supp.2d 546, 548 (E.D.Ky.2001) (fraudulent joinder is applicable “when the plaintiff joins a defendant who has no joint, several, or alternative liability with a diverse defendant (and there is no nexus between the claims against the diverse and non-diverse defendant)” (citation omitted)).

Notice of Removal ¶ 21, at 6 & n. 2.

As to the second part, AMCO Insurance points to evidence that it says provides circumstantial proof of the Plaintiffs’ intent, including that the Plaintiffs were lethargic in pursuing their claims against Trujillo throughout the case’s lifespan and that the Plaintiffs continually hid the ball with regard to the amount of damages sought. AMCO Insurance notes that the Plaintiffs failed to serve a summons on Trujillo until September 11, 2012, and attaches an exhibit proving the date of service. See Notice of Removal ¶ 24, at 6; Summons to Michael Trujillo at 2, filed in state court September 14, 2014, filed in federal court April 29, 2014 (Doc. 1-12). It also notes that Trujillo was required to file an answer to the Complaint within thirty days of the Complaint’s filing— which he still has not done; that the Plaintiffs were entitled to a default judgment against Trujillo as early as October 12, 2012; and that the Plaintiffs did not seek a default judgment until April 9, 2014. See Notice of Removal ¶¶ 23, 25-26, at 6. See also Motion for Default Judgment, filed in state court April 9, 2014, filed in federal court April 29, 2014 (Doc. 1-9). AMCO Insurance further notes that the Plaintiffs never sought written discovery on Trujillo, nor did they inquire about his assets. See Notice of Removal ¶¶ 27-28, at 6-7. Most obviously, AMCO Insurance points to the Plaintiffs’ voluntary dismissing Trujillo from the case six days before trial. See Notice of Removal ¶ 30, at 7.

AMCO Insurance argues that, “[wjith its amendment effective January 6, 2012, 28 U.S.C. § 1446(c)(1) now recognizes the right of a defendant to remove an action kept out of federal court for more than one year by bad-faith conduct of plaintiffs,” and that “[t]he comments to the amendment indicate that it is intended to apply in circumstances such as those at bar.” Notice of Removal ¶¶ 33-34, at 8. It asserts that, because of the amendment’s recentness, “there is a dearth of circuit-level authority construing the scope of ‘bad faith,’ ” but it cites to a district court opinion, Lawson v. Parker Hannifin Corp., No. CIV 13-0923-O, 2014 WL 1158880 (N.D.Tex. Mar. 20, 2014) (O’Connor, J.), which AMCO Insurance says supports its argument.

[T]he court found sufficient ground to apply the “bad-faith” exception to the one-year rule where the plaintiff “did not take a default judgment against Hanlon [the nondiverse defendant] when he failed to timely file an answer in the State Court action ..., never served Hanlon with any discovery, ... non-suited Hanlon approximately one year and three months following the expiration of the one-year removal deadline ... [did not require] Hanlon to pay any money to Plaintiff to settle her allegedly egregious claim against him [and] took her nonsuit against Hanlon less than five weeks before the existing trial date.” Lawson, at *5 (citing Shiver v. Sprintcom, Inc., 167 F.Supp.2d 962, 963 (S.D.Tex.2001) to show that, even before the amendment to 28 U.S.C. § 1446(c)(1), a federal court would refuse to remand where the defendant removed the case outside one-year period when the plaintiff dismissed the only nondiverse defendant on the eve of trial).

See Notice of Removal ¶ 36, at 8-9. AMCO Insurance criticizes the “Plaintiffs’ stated justification for dismissing Trujillo,” arguing that, in reality, the Plaintiffs dismissed him from the case because he is judgment-proof. See Notice of Removal ¶ 37, at 9. AMCO Insurance asserts that the Plaintiffs knew from the inception of the case that Trujillo is incarcerated for murder and is extremely unlikely to have assets worth suing to collect. See Notice of Removal ¶ 37, at 9. AMCO Insurance concludes its Notice of Removal by setting forth that it has complied with all the formalities of the removal procedure. See Notice of Removal ¶¶ 40-44, at 10-11.

3. The Parties Submit Their Briefing on the Motion.

Within a month of removal, the Plaintiffs filed their Motion to remand the case back to state court. See Motion at 1. The Plaintiffs first contend that “there is a presumption against removal,” Motion at 10 (citing Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir.1995)), which “requires a federal court ‘to ... narrowly construe removal statutes,’ ” Motion at 10 (omission in original)(quoting Pritchett v. Office Depot, Inc., 420 F.3d 1090, 1095 (10th Cir.2005)). They then move to their substantive arguments, first contending that — even putting Trujillo aside — each of the State Defendants would, on their own, suffice to defeat com-píete diversity. See Motion at 11-15. Here, the Court suspects that the Plaintiffs have misapprehended AMCO Insurance’s argument. They argue strenuously that their naming of State Defendants was not done in bad faith, nor was it done to defeat diversity. See Motion at 11-15. To their credit, they present strong evidence to this effect, noting that each of the State Defendants settled out of the case — and were not merely dismissed as the Notice of Removal suggests. See Motion at 12. AMCO Insurance never argues, however, that the State Defendants were named in bad faith; rather, its argument is that, were Trujillo not named in the suit, the Plaintiffs would have no basis for joining AMCO Insurance. See Notice of Removal ¶ 21, at 6 & n. 2. The Plaintiffs address this argument, as well, albeit secondarily:

Recognizing that it cannot make a valid claim that the Aguayos somehow manipulated the State defendants to defeat diversity, AMCO drops a footnote argu-ing that the Aguayosf] claims against the State defendants “would have been subject to dismissal under the doctrine of fraudulent joinder had claims against Defendant Trujillo not already been pending.” Notice of Removal ¶ 21, at 6 n. 2. This is not so. As this Court has recognized, the standard for fraudulent joinder is “whether the defendant has demonstrated that there is no possibility that the plaintiff will recover against an in-state defendant.” Flores-Duenas v. Briones, No. CIV 13-0660 JB/CG, 2013 WL 6503537, at *22 (D.N.M. Dec. 1, 2013) (Browning, J.). The burden is on AMCO to make this showing. Ullman v. Safeway Ins. Co. [995 F.Supp.2d 1196, 1227] (D.N.M.2013) (Browning, J.) (“The party asserting fraudulent joinder bears the burden of proof.” (citations omitted)). This burden is a heavy one and presents a high hurdle to the party making the assertion. Dutcher v. Matheson, 733 F.3d 980 (10th Cir.2013); Ullman [995 F.Supp.2d at 1227], 2013 U.S. Dist. LEXIS 184761, at *83 (citing Montano v. Allstate Indemnity Co. [2000 WL 525592, at *1], 2000 U.S.App. LEXIS 6852, at *1 (10th Cir.2000) (“The case law places a heavy burden on the party asserting fraudulent joinder.”)). The analysis turns on “whether there is a reasonable basis to believe the plaintiff might succeed in at least one claim against the non-diverse defendant.” Nerad v. AstraZeneca Pharms., Inc., 203 Fed.Appx. 911, 913 (10th Cir.2006).

Motion at 14.

The Plaintiffs also counter AMCO Insurance’s contention that it joined Trujillo in bad faith. See Motion at 15-18. They note that AMCO Insurance’s assertion that they did not take written discovery, while true, ignores the fact that they deposed him — in fact, Trujillo initially asserted privilege, the Plaintiffs obtained a court order compelling testimony, and then they deposed him a second time. See Motion at 16 (citing Order Granting Plaintiffs’ Motion to Compel Deposition Testimony and Denying Michael Trujillo’s Motion for Protective Order, filed in state court November 27, 2013, filed in federal court May 16, 2014 (Doc. 11-15, at 38-39)). The Plaintiffs assert that “there was little need for extensive discovery as to Mr. Trujillo’s conduct, because there is no dispute that he killed Christopher Aguayo.” Motion at 16. The Plaintiffs explain their delay in serving Trujillo by contending that they could not locate where he was incarcerated while awaiting his criminal trial. See Motion at 17. They assert that they attended his sentencing hearing, where they learned that he would serve his time at the juvenile detention center in Albuquerque, New Mexico. See Motion at 17. Last, they address their reasons for dismissing Trujillo from the case: “That decision was recognition of the fact that Mr. Trujillo was not going to be able to pay any judgment obtained, ... that chasing ... Chris’s murderer for the rest of their lives to extract money would be an exercise in futility ... [, and] continued contact with Mr. Trujillo was likely to prolong the grief associated with Chris’s death.” Motion at 18. They also state that the death of Trujillo’s sister played a role in their decision, as they did not "wish to “us[e the] litigation to try and punish Mr. Trujillo or his family.” Motion at 18.

The Plaintiffs also counter AMCO Insurance’s contention that it was not aware that the amount in controversy exceeded the jurisdictional minimum until the Plaintiffs sent their offer of settlement. See Motion at 18-19. They assert that “[o]n October 16, 2013 ... the Aguayos had. told AMCO it would take multiples of the policy limits at issue to settle this case, and that[,] if mediation were to be produetive[,] an ‘opening offer’ of policy limits would be required.” Motion at 19. They argue that “[s]ection 1446(b)(3) provides that ‘notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case in one which is or has become removable,” and that several months passed between AMCO Insurance gaining this knowledge and it filing removal. Motion at 19. The Plaintiffs conclude their Motion by requesting fees and costs associated with filing the “objectively unreasonable” removal. Motion at 20-21 (citing 28 U.S.C. § 1447(c)).

AMCO Insurance responded to the Motion less than two weeks later. See Defendant’s Response to Plaintiffs Motion to Remand, filed June 10, 2014 (Doc. 15) (“Response”). After some unusually colorful opening language, AMCO Insurance characterized the statutory bad-faith exception to the one-year removal rule: “The amendment standardized an inconsistency among circuits, as the majority already applied an equitable exception to the one-year requirement and allowed removal after a year where plaintiffs had acted in bad faith to defeat diversity.” Response at 2 (citing Wilson v. Gen. Motors Corp., 888 F.2d 779, 781 (11th Cir.1989); Barnett v. Sylacauga Autoplex, 973 F.Supp. 1358 (N.D.Ala.1997); Kinabrew v. Emco-Wheaton, Inc., 936 F.Supp. 351, 351 nn. 1-2 (M.D.La.1996)). It asserts that the amendment represents “a legislative recognition that ‘[sjtrict application of the one-year limit would encourage plaintiffs to join nondiverse defendants for 366 days simply to avoid federal court, thereby undermining the very purpose of diversity jurisdiction.’ ” Response at 2 (alteration in Response)(quoting Tedford v. Warner-Lambert Co., 327 F.3d 423, 427 (5th Cir.2003) (“Tedford”)). AMCO Insurance also contends that, whatever bad faith means in this context, it cannot be the case that the Court must rely on the Plaintiffs’ own representation about the purposes behind their actions. See Response at 4 & n. 1 (citing Forth v. Diversey Corp., No. CIV 13-0808 A, 2013 WL 6096528, at *3 (W.D.N.Y. Nov. 20, 2013) (“Since it would be extraordinary for a party directly to admit a ‘bad faith’ intention, his motive must of necessity be ascertained from circumstantial evidence.”)).

AMCO Insurance also attempts to distinguish what it says is the Plaintiffs’ characterization of its removal argument — that Trujillo was never a proper party to the case — from its actual argument — that Trujillo was improperly maintained as a party all the way until immediately before trial. See Response at 4. AMCO Insurance contends that, “[i]n the roughly one page in which Plaintiffs acknowledge in any way the length of time they kept Trujillo in the case, they provide supposed reasons for dismissing their claims against Trujillo, but they provide no reason whatsoever for their failure to dismiss those claims until the eve of trial.” Response at 4 (emphasis in original). AMCO Insurance asserts that the Plaintiffs’ contention that they only realized that it would be unprofitable to take Trujillo to trial six days before the trial “strains credulity to the breaking point.” Response at 5. AMCO Insurance makes a similar argument with regard to the various emotional reasons that the Plaintiffs give for dismissing Trujillo, questioning why these reasons failed to induce them to dismiss Trujillo until the very last minute before trial. See Response at 5.

AMCO Insurance also argues that the dismissals of the State Defendants were “suspiciously timed.” Response at 8 (emphasis omitted)(capitalization altered). They highlight that the Plaintiffs dismissed Spoonhoward exactly one year following their joinder of AMCO Insurance and that they dismissed the other State Defendants the day before amending their complaint to seek money damages against AMCO Insurance. See Response at 8. AMCO Insurance concedes that the State Defendants settled out of the case, but asserts that “the settlement was reached October 2013, approximately six weeks before the dismissals were completed.” Response at 9 (emphasis in original). AMCO Insurance states that, “[wjhile it is not unheard-of that post-mediation negotiations can take a month or more, Plaintiffs cannot credibly deny that the timing of the dismissals is nonetheless dubious.” Response at 9.

The Plaintiffs replied to the Response less than three weeks later. See Plaintiffs’ Reply in Support of Their Motion to Remand, filed June 27,'2014 (Doc. 23)(“Re-ply”). They first address AMCO Insurance’s contention that there was suspicious delay between when the Plaintiffs reached a settlement agreement with the State Defendants and when the State Defendants were dismissed from the case. See Response at 3. The Plaintiffs assert that “it was the State defendants’ counsel, Mr. [Michael] Dickman, and not the Aguayos’ counsel, that drafted and filed each of the dismissals.” Response at 3 (footnote omitted). The Plaintiffs contend that this distinction is important, because, once one knows that it was the State Defendants who drafted and filed the dismissals, it becomes clear that the Plaintiffs could not have been delaying their dismissal absent a conspiracy. See Response at 3.

The Plaintiffs next defend their contention that they did not initiate or maintain their action against Trujillo in an attempt to defeat diversity. See Response at 6-8. They argue that there is no reason “why the Aguayos would retain a damages expert after AMCO was added as a party to this case if they did not intend to pursue their claims against Mr. Trujillo.” Response at 6 (emphasis in original)(citing Plaintiff John Aguayo Sr.’s Third Supplemental Responses and Objections to Defendant AMCO Insurance Company’s Interrogatories and Requests for Production, filed June, 27, 2014 (Doc. 23)). The Plaintiff assert that

AMCO is inconsistent in presenting its false accusations. For example, in addressing the commonsense notion that if the Aguayos had not intended to seek damages against Mr. Trujillo there would have been no need to name him as a party, AMCO[ ] states “Trujillo was a teenager incarcerated for murder; Plaintiffs could never have viewed him as a viable source of recovery.” Response at 5. However, only one page later in its response AMCO chastises the Aguayos for failing to inquire as to Mr. Trujillo’s ability to pay a judgment. Response at 6-7. Similarly, AMCO argues that the initial identification of Mr. Trujillo as a party to this matter is immaterial because “the central thrust” of its notice of removal is “not that Plaintiffs improperly sued Trujillo in the first instance; AMCO’s point is that Plaintiffs maintained their claims against Trujillo until the eleventh hour.” Response at 4. Yet, AMCO subsequently argues that the Aguayos inclusion of Mr. Trujillo as a party was done with the intent “to defeat federal diversity jurisdiction once they named their insurer as a defendant.” Response at 5.

Response at 7 n. 3.

The Plaintiffs do not set forth the appropriate legal standard for the Court to apply, but they distinguish AMCO Insurance’s cases. See Response at 9-11. They argue that Lawson v. Parker Hannifin Corp., the case upon which AMCO Insurance relies most heavily, is distinguishable, because in that case, the plaintiff “promised the court in a verified motion that she would diligently prosecute her action, but took no steps to move the case forward.” Reply at 10. They contend that Forth v. Diversey is distinguishable for similar reasons:

There, the district court found compelling the plaintiffs unfulfilled promise to dismiss a defendant he knew was not a proper party. The court noted that the plaintiffs explanation for reneging on his commitment was that the plaintiff claimed he needed more discovery, but that the plaintiff refused the defendant’s offer to sit for a deposition.

Reply at 10.

4. The Court Holds a Hearing on the Motion.

The Court held its hearing on August 7, 2014. See Transcript of Hearing (taken August 7, 2014)(“Tr.”). The Court began the hearing by noting that it had been faced with a similar motion to remand— relying on the new bad-faith exception in 28 U.S.C. § 1446(c)(1) — in Peshlakai v. Ruiz, No. CIV 13-0752 JB/ACT (D.N.M. 2013) (Browning, J.). See Tr. at 2:3-19 (Court). The Court noted that, although in that case the plaintiffs ultimately decided to withdraw their motion to remand and try their case in front of the Court, it had some experience wrestling with the statute’s meaning, and it would take some work to ascertain what Congress meant for the exception’s scope to be. See Tr. at 2:15-3:23 (Court).

The parties kept their presentations brief. AMCO Insurance stated that its argument focuses on the “plain text of the statute!,] which requires an intent by the plaintiffs to try and ... defeat diversity jurisdiction.” Tr. at 4:16-18 (Garcia). The Court asked how it could give content to the bad-faith exception and “still somewhat respect the plaintiffs "ability to be master of his or her complaint and where they want to litigate the case.” Tr. at 6:4-8 (Court). AMCO Insurance acknowledged that “it is generally correct that plaintiffs try to stay out of Federal Court,” Tr. at 6:10-11 (Garcia), but that the test should be “whether there was any motivation ... more than just this generalized desire ... to stay out of Federal Court,” Tr. at 6:19-21 (Court).

The Court noted that, when it addressed the issue in Peshlakai v. Ruiz, “not a single district court had interpreted this” statutory exception. Tr. at 6:25-7:1 (Court). AMCO Insurance first contended that, regardless of the proper substantive standard, the Court should use a preponderance of the evidence standard to evaluate the evidence of bad faith. See Tr. at 7:5-14 (Garcia). It noted, however, that at least one court had applied a clear-and-convincing standard to the question of bad faith. See Tr. at 7:17-20 (Garcia)(referring to Forth v. Diversey Corp., 2013 WL 6096528).

The Plaintiffs elaborated on their assertion in the Reply that the delay in dismissing the State Defendants was attributable to the State Defendants. See Tr. 10:22-14:4 (Garcia, Court). The Plaintiffs stated that the dismissal was entered as soon as the State Defendants produced the settlement check. See Tr. at 14:1M: (Garcia). The Plaintiffs also noted that Trujillo had counsel, and that Trujillo’s counsel and mother contributed to the delay in seeking discovery from and ultimately dismissing Trujillo. See Tr. at 15:14-25 (Garcia). The Plaintiffs also reiterated that they were in no rush to seek discovery from Trujillo, both because he was incarcerated and because “[tjhere was no dispute as to liability.”. Tr. at 15:22-25 (Garcia). The Plaintiffs repeated their assertions that they deposed Trujillo twice — because he invoked the Fifth Amendment to the Constitution of the United States on their first attempt to depose him — and that he did not oppose a default motion filed against him. See Tr. at 17:21-25 (Garcia). Last, the Plaintiffs asserted that dismissing defendants on the eve of trial is standard issue narrowing and does not reflect an intent to circumvent federal jurisdiction. See Tr. at 19:2-7 (Garcia)(“I don’t think that’s unusual. Every trial I’ve been involved with people pa[re] down their cases, claims, et cetera, in order to have a streamlined trial.”).

AMCO Insurance argued that, in its view, the statute is not “talking about unethical conduct” when it refers to bad faith. Tr. at 21:22-24 (Wesner). AMCO Insurance stated that it had looked at the amendment’s legislative history and that it indicates that Congress intended the bad-faith exception to be a codification of the equitable exception that had developed in the case law before the amendment’s passage. See Tr. at 22:21-23:16 (Wesner, Court). The Court asked whether there was “any problem with naming Trujillo” in the first instance, and AMCO Insurance answered that there was not. Tr. at 25:7-10 (Court, Wesner). AMCO Insurance then argued:

There are two points in the time line I think where that becomes relevant. First is when they’ve let out the other state defendants and this becomes a case clearly where they’re looking to Amco for their recovery. At that point there was no articulable reason to keep Trujillo in the case they knew he had no assets they knew they were looking for Amco for all their recovery and the only reason that makes any sense to keep him in the case at that point was to stay out of Federal Court.

Tr. at 26:5-14 (Wesner). AMCO Insurance also clarified that it could not remove the action earlier than it did, because, unlike fraudulent joinder, the bad-faith exception is an exception only to the one-year limitation, and not to complete diversity — meaning that it could not remove the case until Trujillo was dismissed. See Tr. at 28:19-30:23 (Wesner, Court). The Court accepted this explanation. See Tr. at 30:21-25 (Wesner, Court)(“MR. WES-NER: I’m not aware of a doctrine on which you can argue bad faith keeping a defendant in the case who is still in the case. THE COURT: You may be right. You may be right.”).

AMCO Insurance concluded by summarizing its argument:

THE COURT: All right. ' What is your bad faith argument? Is it I guess just the dismissal of Mr. Trujillo and the timing of it or is it also the delay in the dismissal of the stipulations as to the state defendants!?]

MR. WESNER: We raised a couple other factors in the briefing. We raised the timing of their dismissal of the state defendants The first amended complaint against A[MOO], in which they first brought A[MCO] in the case was November 18, 2012. Their dismissal of defendant Spoonhoward was November 18, 2018. Now, we can’t read their minds. [W]e know all we have to go on in these eases is circumstantial evidence.... The Court in [Forth v. Diversey Corp.] noted that it would be extraordinary for a party directly to admit a bad faith intention. His motive must of necessity be ascertained from circumstantial evidence. And for while we think the center piece of our argument removing this case to federal court is that they kept Michael Trujillo in the case knowing that they couldn’t recover anything against him right up until the [e]ve of trial. We think there is' other circumstantial evidence that the plaintiffs wanted to keep this case out of federal [e]ourt. They did let the state defendants out with some ... suspicious timing. Another element is failure to disclose the amount in controversy and it’s come up in the briefing that we had every reason to suspect that the plaintiffs were seeking more than if the jurisdictional amount in controversy and that’s true, we did suspect that but they didn’t unequivocally state the amount they were seeking until their offer of judgment, which was not until April 22, before a May 5th trial date. Up until then we served discovery, plaintiffs responded to discovery on April 1st and refused to identify the amount they were seeking. So the amount in controversy, the timing of the state defendant dismissals, that’s circumstantial evidence. But the real clincher, the point and I think the one factor that would stand alone without any shenanigans with the amount in controversy without any suspicious timing on the state dismissals we would still be having these arguments just because they kept Michael Trujillo in the case without [ — ]

THE COURT: So that’s the big issue for you[?]

MR. WESNER: Yes, it is, Your Hon- or.

Tr. at 31:12-33:10 (Court, Wesner).

The Court stated that it was not prepared to rule from the bench, as it wanted to flesh out the meaning of bad faith before applying it; the Court also noted that, however it ended up defining the exception, it doubted that this case would qualify for the exception, and, thus, it was likely to remand the case. See Tr. at 44:20-45:17 (Court).

LAW REGARDING DIVERSITY JURISDICTION

“Subject-matter jurisdiction under 28 U.S.C. § 1332(a)(1) requires: (i) complete diversity among the parties; and (ii) that ‘the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs.’ ” Thompson v. Intel Corp., No. CIV 12-0620 JB/LFG, 2012 WL 3860748, at *12 (D.N.M. Aug. 27, 2012) (Browning, J.) (citing 28 U.S.C. § 1332(a)). As the Court has previously explained, “[t]he Supreme Court of the United States has described this statutory diversity requirement as ‘complete diversity,’ and it is present only when no party on one side of a dispute shares citizenship with any party on the other side of a dispute.” McEntire v. Kmart Corp., No. CIV 09-0567 JB/LAM, 2010 WL 553443, at *3 (D.N.M. Feb. 9, 2010) (Browning, J.) (citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267-68, 2 L.Ed. 435 (1806); McPhail v. Deere & Co., 529 F.3d 947, 951 (10th Cir.2008)). The amount-in-controversy requirement is an “estimate of the amount that will be put at issue in the course of the litigation.” Valdez v. Metro. Prop. & Cas. Ins. Co., 867 F.Supp.2d 1143, 1162 (D.N.M.2012) (Browning, J.) (citing McPhail v. Deere & Co., 529 F.3d at 956). The Court will discuss the two requirements in turn.

1. Diversity of Citizenship.

For diversity jurisdiction purposes, citizenship is determined by a person’s domicile. See Crowley v. Glaze, 710 F.2d 676, 678 (10th Cir.1983). “A person’s domicile is defined as the place in which the party has a residence in fact and an intent to remain indefinitely, as of the time of the filing of the.lawsuit.” McEntire v. Kmart Corp., 2010 WL 553443, at *3 (citing Crowley v. Glaze, 710 F.2d at 678). See Freeport-McMoRan, Inc. v. KN Energy, Inc., 498 U.S. 426, 428, 111 S.Ct. 858, 112 L.Ed.2d 951 (1991) (holding that diversity jurisdiction is assessed as of the time at which the suit is filed). If neither a person’s residence nor the location where the person has an intent to remain can be established, the person’s domicile is that of his or her parents at the time of the person’s birth. See Gates v. Comm’r of Internal Revenue, 199 F.2d 291, 294 (10th Cir.1952) (“[T]he law assigns to every child at its birth a domicile of origin. The domicile of origin which the law attributes to an individual is the domicile of his parents. It continues until another domicile is lawfully acquired.”). Additionally, “while residence and citizenship are not the same, a person’s place of residence is prima facie evidence of his or her citizenship.” McEntire v. Kmart Corp., 2010 WL 553443, at *3 (citing State Farm Mut. Auto. Ins. Co. v. Dyer, 19 F.3d 514, 520 (10th Cir.1994)). A corporation, on the other hand, is “deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.” Gadlin v. Sybron Int’l Corp., 222 F.3d 797, 799 (10th Cir.2000) (quoting 28 U.S.C. § 1332(c)(1)).

2. Amount in Controversy.

The amount-in-controversy requirement, which presently stands at $75,000.00, must be satisfied as between a single plaintiff and a single defendant for a federal district court to have original jurisdiction over the dispute; “a plaintiff cannot aggregate independent claims against multiple defendants to satisfy the amount-in-controversy requirement,” nor can multiple plaintiffs aggregate their claims against a single defendant to exceed the threshold. Martinez v. Martinez, No. CIV 09-0281 JB/KBM, 2010 WL 1608884, at *18 (D.N.M. Mar. 30, 2010) (Browning, J.). If multiple defendants are jointly liable, or jointly and severally liable, on some of the claims, however, the amounts of those claims may be aggregated to satisfy the amount-in-controversy requirement as to all defendants jointly liable for the claims. See Alberty v. W. Sur. Co., 249 F.2d 537, 538 (10th Cir.1957); Martinez v. Martinez, 2010 WL 1608884, at *18. Similarly, multiple plaintiffs may aggregate the amounts of their claims against a single defendant if the claims are not “separate and distinct.” Martin v. Franklin Capital Corp., 251 F.3d 1284, 1292 (10th Cir.2001) (Seymour, C.J.). Multiple claims by the same plaintiff against the same defendant may be aggregated, even if the claims are entirely unrelated. See 14AA Charles A. Wright, Arthur R. Miller, Edward H. Cooper, Vikram D. Amar, Richard D. Freer, Helen Hershkoff, Joan E. Steinman & Catherine T. Struve, Federal Practice and Procedure, Jurisdiction § 3704 (4th ed.). While the rules on aggregation sound complicated, they are not in practice: if a single plaintiff—regardless whether he or she is the only plaintiff who will share in the recovery—can recover over $75,000.00 from a single defendant—regardless whether the defendant has jointly liable co-defendants—then the court has original jurisdiction over the dispute between that plaintiff and that defendant. The court can then exercise supplemental jurisdiction over other claims and parties that “form part of the same case or controversy under Article III,” 28 U.S.C. § 1367(a), meaning that they “derive from a common nucleus or operative fact,” United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).

Satisfaction of the amount-in-controversy requirement must be established by a preponderance of the evidence. See McPhail v. Deere & Co., 529 F.3d at 953. In the context of establishing an amount-in-controversy, the defendant seeking removal could appear to be bound by the plaintiffs chosen amount of damages in the complaint, which would seem to allow a plaintiff to avoid federal jurisdiction “merely by declining to allege the jurisdictional amount [in controversy].” McPhail v. Deere & Co., 529 F.3d at 955. The Tenth Circuit’s decision in McPhail v. Deere & Co. has foreclosed such an option from a plaintiff who wishes to remain in state court. McPhail v. Deere & Co. holds that a defendant’s burden in establishing jurisdictional facts is met if the defendant proves “jurisdictional facts that make it possible that $75,000 is in play.” McPhail v. Deere & Co., 529 F.3d at 955.

In McPhail v. Deere & Co., the Tenth Circuit relied on the United States Court of Appeals for the Seventh Circuit’s decision in Meridian Securities Insurance Co. v. Sadowski in which the Honorable Frank H. Easterbrook, United States Circuit Judge, explained how a removing defendant asserting diversity jurisdiction in the face of a silent complaint might proceed:

[T]he removing defendant, as proponent of federal jurisdiction, must establish what the plaintiff stands to recover. We have suggested several ways in which this may be done—by contentions, interrogatories or admissions in state court; by calculation from the complaint’s allegations[;] by reference to the plaintiffs informal estimates or settlement demands[;] or by introducing evidence, in the form of affidavits from the defen-. dant’s employees or experts, about how much it would cost to satisfy the plaintiffs demands. The list is not exclusive; any given proponent of federal jurisdiction may find a better way to establish what .the controversy between the parties amounts to, and this demonstration may be made from either side’s viewpoint (what a judgment would be worth to the plaintiff, or what compliance with an injunction would cost the defendant). Once the estimate has been made—and contested factual allegations that support the estimate have been established in a hearing under Rule 12(b)(1) by admissible evidence ... then ... the case stays in federal court unless it is legally certain that the controversy is worth less than the jurisdictional minimum.

Meridian Sec. Ins. Co. v. Sadowski 441 F.3d at 541-42 (citations omitted). The Tenth Circuit adopted the Seventh Circuit’s reasoning, stating:

Meridian eliminates the double standard that would come from misunderstanding what “preponderance of the evidence” requires. The proponent of federal jurisdiction must prove contested facts; and because a defendant has no control over the complaint, he cannot put a large sum of money in controversy simply by demanding it, as a plaintiff often can. But once those underlying facts are proven, a defendant (like a plaintiff) is entitled to stay in federal court unless it is “legally certain” that less than $75,000 is at stake.

McPhail v. Deere & Co., 529 F.3d at 954. Thus, a defendant removing a matter to federal court has met his or her burden in proving the amount-in-controversy requirement if the defendant has proved any contested facts regarding the amount-in-controversy, and the amount-in-controversy is not legally certain to be less than $75,000.00.

As the Court has previously explained, “[i]n the absence of an explicit demand for more than $75,000.00, the defendant must show how much is in controversy through other means.” Salazar v. GEICO Ins. Co., No. CIV 10-0118 JB/RLP, 2010 WL 2292930, at *3 (D.N.M. Apr. 27, 2010) (Browning, J.) (citing McPhail v. Deere & Co., 529 F.3d at 955). The Tenth Circuit has identified the means upon which a defendant may rely to show how much is in controversy: (i) the defendant may rely on an estimate of the potential damages from the allegations in the complaint; (ii) the defendant may rely on other documentation to provide a basis for determining the amount in controversy, such as interrogatories obtained in the state court before removal, affidavits, or other evidence submitted in federal court afterward; and (iii) the defendant may rely on the plaintiffs proposed settlement amount if it appears to reflect a reasonable estimate of the plaintiffs claim, because the plaintiffs own estimation of its claim is a proper means of supporting the allegations in the notice of removal. See Salazar v. GEICO, 2010 WL 2292930, at *3 (citing McPhail v. Deere & Co., 529 F.3d at 956). In McPhail v. Deere & Co., the Tenth Circuit found that the defendant met its burden to support diversity jurisdiction where the plaintiffs complaint was silent on the amount in controversy. In its notice of removal, the defendant represented that the amount in controversy exceeded $75,000.00, and incorporated electronic-mail messages and letters of conversations between the parties’ attorneys discussing the value of the claim. The defendant’s counsel interpreted the conversation . as meaning that the plaintiff was seeking more than $75,000.00, but the plaintiffs counsel refused to concede an amount in controversy in excess of $75,000.00, stating “it may very well be” that the amount in controversy would exceed $75,000.00. 529 F.3d at 957. The Tenth Circuit found that the background information provided enough supplementary information for the district court to conclude that it was not legally certain that the plaintiff would recover an amount less than $75,000.00. See 529 F.3d at 957. In so ruling, the Tenth Circuit gave the example of a case in which a defendant has allegedly breached a contract and the plaintiff seeks damages in an indeterminate amount. The Tenth Circuit suggested that “a defendant might support jurisdiction by attaching a copy of the contract, valued at more than $75,000, to the notice of removal.” 529 F.3d at 956.

An example of an amount-in-eontroversy which is not legally certain to reach $75,000.00 is seen in Martin v. Franklin Capital Corp., 251 F.3d 1284 (10th Cir.2001). See 251 F.3d at 1291. In Martin v. Franklin Capital Corp., the defendant’s notice of removal totaled up all of the dollar figures in the plaintiffs complaint, but some of the dollar amounts were considered background information that were not linked to the plaintiffs attempts to recover damages. See 251 F.3d at 1291. Because the Tenth Circuit found that the defendant’s notice of removal depended on an erroneous “construction of the [plaintiffs] pleading,” the Tenth Circuit held that the amount-in-controversy requirement was not met. 251 F.3d at 1291.

LAW REGARDING SUPPLEMENTAL JURISDICTION

It is a fundamental precept of American law that the federal courts are “courts of limited jurisdiction.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005). Federal courts “possess only that power authorized by [the] Constitution and statute.... ” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). Among the powers that Congress has bestowed upon the courts is the power to hear controversies arising under federal law — federal-question jurisdiction — and controversies arising between citizens of different states — diversity jurisdiction. See 28 U.S.C. §§ 1331-32. Section 1367 additionally grants the federal courts power to hear claims over which the court lacks original jurisdiction, if those claims are part of the same constitutional case - as claims over which the court has original jurisdiction. See 28 U.S.C. § 1367(a).

1. Congressional Authority to Exercise Supplemental Jurisdiction.

Although a statutory basis is necessary for federal courts to exercise jurisdiction over a controversy, “it is well established — in certain classes of cases — that, once a court has original jurisdiction over some claims in the action, it may exercise supplemental jurisdiction over additional claims that are part of'the same case or controversy.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. at 552, 125 S.Ct. 2611. The Supreme Court has long subscribed to the concept of supplemental jurisdiction recognized in two common-law doctrines, pendent jurisdiction and ancillary jurisdiction; § 1367’s passage permitted codified those forms of jurisdiction, and additionally courts to also hear cases under pendent-party jurisdiction, which the Supreme Court had previously disallowed in Finley v. United States, 490 U.S. 545, 109 S.Ct. 2003, 104 L.Ed.2d 593 (1989). Federal courts may exercise pendent jurisdiction over state law claims when “state and federal claims ... derive from a common nucleus of operative fact.” United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). Supplemental jurisdiction gives federal courts the flexibility to hear a cause of action after the introduction of third parties, whose insertion into the litigation does not have the support of any independent grounds for federal jurisdiction, when those parties share a common interest in the outcome of the litigation and are logical participants in it. See Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 375 n. 18, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978).

In 1988, the Honorable William H. Rehnquist, then-Chief Justice of the Supreme Court, created the Federal Courts Study Committee to analyze the federal court system and to recommend reforms. See James v. Chavez, No. CIV 09-0540 JB/CG, 2011 WL 6013547, at *5 (D.N.M. Nov. 21, 2011) (Browning, J.) (citing 16 Moore’s Federal Practice § 106.04[5] (Matthew Bender 3d ed.)). In response to the Committee’s findings regarding pendent, ancillary, and pendent-party jurisdiction, Congress codified the doctrines when it passed the Judicial Improvements Act of 1990:

[I]n any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties.

28 U.S.C. § 1367(a). In enacting 28 U.S.C. § 1367, Congress conferred upon federal district courts “supplemental forms of jurisdiction ... [that] enable them to take full advantage of the rules on claim and party joinder to. deal economically — in single rather than multiple litigation — with matters arising from the same transaction or occurrence.” Report of the Federal Courts Study Committee, Part II.2.B.2.b. (April 2, 1990), reprinted in 22 Conn. L.Rev. 733, 787 (1990).

2. The District Courts’ Discretion to Exercise Supplemental Jurisdiction.

The Tenth Circuit has followed the Supreme Court’s lead in classifying supplemental jurisdiction not as a litigant’s right, but as a matter of judicial discretion. See Estate of Harshman v. Jackson Hole Mountain Resort Corp., 379 F.3d 1161, 1165 (10th Cir.2004) (citing City of Chi. v. Int’l Coll. of Surgeons, 522 U.S. 156, 173, 118 S.Ct. 523, 139 L.Ed.2d 525 (1997)). In circumstances where the supplemental jurisdiction statute may support supplemental jurisdiction, the district court retains discretion to decline to exercise that jurisdiction. The traditional analysis, based on the Supreme Court’s opinion in United Mine Workers v. Gibbs, compelled courts to consider “judicial economy, convenience and fairness to litigants” when deciding whether to exercise supplemental jurisdiction. 383 U.S. at 726, 86 S.Ct. 1130. Similarly, Congress’ supplemental jurisdiction statute enumerates four factors that the court should consider:

(1) the claim raises a novel or complex issue of State law,

(2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,

(3) the district court has dismissed all claims over which it has original jurisdiction, or

(4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

28 U.S.C. § 1367(c). In applying these factors, district courts should seek to exercise supplemental jurisdiction in an effort to “vindicate values of economy, convenience, fairness, and comity....” Estate of Harshman v. Jackson Hole Mountain Resort Corp., 379 F.3d at 1164. Numerous courts have acknowledged that 28 U.S.C. § 1367(c) necessarily changed the district courts’ supplemental jurisdiction discretion analysis and that, unless one of the conditions of 28 U.S.C. § 1367(c) exists, courts are not free to decline jurisdiction. See Itar-Tass Russian News Agency v. Russian Kurier, Inc., 140 F.3d 442, 447 (2d Cir.1998) (“[Section 1367 has indeed altered Gibbs’ discretionary analysis.”); McLaurin v. Prater, 30 F.3d 982, 985 (8th Cir.1994) (“The statute plainly allows the district court to reject jurisdiction over supplemental claims only in the four instances described therein.”); Exec. Software N. Am. v. U.S. Dist. Ct., 24 F.3d 1545, 1557 (9th Cir.1994) (“By codifying preexisting applications of Gibbs in subsections (c)(1)-(3), however, it is clear that Congress intended the exercise of discretion to be triggered by the court’s identification of a factual predicate that corresponds to one of the section 1367(c) categories.”), overruled on other grounds by Cal. Dep’t of Water Res. v. Powerex Corp., 533 F.3d 1087 (9th Cir.2008); Palmer v. Hosp. Auth., 22 F.3d 1559, 1569 (11th Cir.1994) (“[Supplemental jurisdiction must be exercised in the absence of any of the four factors of section 1367(c)....”) (emphasis in original); Bonadeo v. Lujan, No. CIV 08-0812 JB/ACT, 2009 WL 1324119, at *8 (D.N.M. Apr. 30, 2009) (Browning, J.) (“28 U.S.C. § 1367(c) changed the district courts’ supplemental jurisdiction discretion analysis to prohibit courts from declining jurisdiction unless one of the conditions of 28 U.S.C. § 1367(c) exists.”). At least one other district court in the Tenth Circuit besides this Court has reached the same conclusion. See Gudenkauf v. Stauffer Commc’ns, Inc., 896 F.Supp. 1082, 1084 (D.Kan.1995) (“[A]ny exercise of discretion declining jurisdiction over pendent claims or parties cannot occur until ‘triggered’ by the existence of one of the four conditions enumerated.”).

The Tenth Circuit has held that district courts should presume to decline jurisdiction over state claims when federal claims no longer remain: “When all federal claims have been dismissed, the court may, and usually should, decline to exercise jurisdiction over any remaining state claims.” Koch v. City of Del City, 660 F.3d 1228, 1248 (10th Cir.2011) (quoting Smith v. City of Enid ex rel. Enid City Comm’n, 149 F.3d 1151, 1156 (10th Cir.1998)). This proclamation is consistent with the Supreme Court’s statement that

[n]eedless decisions of state law should be avoided both as a matter of comity and to promote justice between the parties, by procuring for them a surer-footed reading of applicable law. Certainly, if the federal claims are dismissed before trial, even though not insubstantial in a jurisdictional sense, the state claims should be dismissed as well.

United Mine Workers of Amer. v. Gibbs, 383 U.S. at 726, 86 S.Ct. 1130 (footnote omitted). The Court has previously stated that a district court should usually decline to exercise supplemental jurisdiction when 28 U.S.C. § 1367(c) applies. See Armijo v. New Mexico, No. CIV 08-0336 JB/ACT, 2009 WL 3672828, at