Gladys City Company v. Linde, Inc.
1:24-cv-00412
E.D. Tex.Jun 23, 2025Background
- Gladys City Company entered a forty-year lease with Linde, Inc. in October 2023 for the development of a helium truck terminal, with a monthly rent of approximately $50,000.
- The lease included “Tenant Contingencies,” allowing Linde to terminate the agreement before January 1, 2024, if the contingencies were not met despite using good faith commercial efforts.
- Linde terminated the lease in December 2023, citing unmet contingencies related to environmental assessments and remitted a $125,000 termination fee.
- Gladys alleges Linde did not act in good faith regarding the contingencies and filed suit, including claims against Matthew Thomas (an alleged Linde agent), in Texas state court.
- Defendants removed the case to federal court, asserting improper joinder of Thomas (a Texas resident) to preserve diversity jurisdiction; Gladys moved to remand and sought leave to amend to clarify claims against Thomas.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether leave to amend the complaint should be granted before deciding the motion to remand | Amendment clarifies allegations against Thomas and is necessary for justice | Remand must be based on pleadings at removal; amendments should not defeat jurisdiction | Leave to amend is granted; clarifies existing claims |
| Whether Gladys’s amendment introduces new claims against Thomas | Only clarifies and amplifies pre-existing claims | Attempts to defeat jurisdiction with new claims | No new claims—just clarification of existing ones |
| Adequacy of Gladys’s state court petition under pleading standards | Original petition met Texas “fair notice” standard | Texas pleading standard irrelevant in federal court | Satisfaction of state standard supports fairness of amendment |
| Applicability of federal pleading amendments in removed cases | Amendment conforms claims to federal standard, serving justice | Amendment improper before remand ruling | Federal policy favors liberal leave to amend for justice |
Key Cases Cited
- Morgan v. Chapman, 969 F.3d 238 (5th Cir. 2020) (Leave to amend should be freely given when justice so requires)
- Brown v. Taylor, 911 F.3d 235 (5th Cir. 2018) (Liberal amendment policy to allow determination on merits)
- Benson v. St. Joseph Reg’l Health Ctr., 575 F.3d 542 (5th Cir. 2009) (Discretion to deny leave to amend is limited if no substantial reason exists)
- Jones v. Robinson Prop. Grp., L.P., 427 F.3d 987 (5th Cir. 2005) (Broad discretion to allow amendments unless substantial reason to deny)