UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 94-10809

MICHAEL ELLIOTT AND VIVIAN ELLIOTT,

Plaintiffs-Appellees,

VERSUS

ROBERT TILTON AND MARTE TILTON (Each Individually and d/b/a ROBERT TILTON MINISTRIES), WORD OF FAITH WORLD OUTREACH CENTER CHURCH, INC., and WORD OF FAITH OUTREACH CENTER CHURCH,

Defendants-Appellants.

Appeal from the United States District Court For the Northern District of Texas November 7, 1995

Before HIGGINBOTHAM and PARKER, Circuit Judges, and MCBRYDE1, District Judge.

ROBERT M. PARKER, Circuit Judge:

I. PROCEDURAL HISTORY

Plaintiffs Michael and Vivian Elliott sued Robert Tilton,

Marte Tilton, Word of Faith World Outreach Center Church, Inc.

("the Incorporated Church"), and Word of Faith World Outreach

Center Church ("the Church") alleging fraud, intentional infliction

of emotional distress, conspiracy, and breach of contract. After

1 District Judge of the Northern District of Texas, sitting by designation. trial, the jury returned a verdict for Plaintiffs. Defendants

appealed. In our opinion of August 31, 1995, this court vacated

the judgment of the district court and dismissed Plaintiffs' claims

without prejudice after finding that Plaintiffs failed in their

burden to establish subject matter jurisdiction by not alleging the

citizenship of each of the members of the Church. Elliott v.

Tilton,

(5th Cir. 1995).

Plaintiffs then moved to dismiss the Church as a nondiverse

party in order to achieve diversity after judgment. This motion

was filed within the fourteen days allowed by F.R.A.P. 40 for

filing of a petition for rehearing. Although Plaintiffs failed to

file a timely petition for rehearing, they did file a motion asking

this court to treat their motion to dismiss as a petition for

rehearing. Such motion was granted. We now grant the petition for

rehearing and withdraw our earlier opinion.

II. ANALYSIS

Plaintiffs moved to dismiss the Church as a nondiverse party

in order to achieve diversity after judgment on the grounds that

the Church is not an indispenable party and dismissing the Church

would not prejudice the remaining Defendants. Newman-Green, Inc.

v. Alfonzo-Larrain,

,

(1989). In

Newman-Green, the Court held:

Although we hold that the courts of appeals have the authority to dismiss a dispensable nondiverse party, we emphasize that such authority should be exercised sparingly. In each case, the appellate court should carefully consider whether the dismissal of a nondiverse party will prejudice any of the parties in the litigation. It may be that the presence of the nondiverse party produced a tactical advantage for one party or another. If factual disputes arise, it might be appropriate to remand the case to the district court, which would be in a better position to make the prejudice determination.

Newman-Green,

,

.

In the present case, the district court is in a far better

position to weigh the contentions of the parties concerning trial

tactics and the impact the presence of the nondiverse party had on

the remaining Defendants. We therefore remand the case to the

district court to make the appropriate determinations and to rule

on the motion to dismiss. We neither state nor imply any

indication of our views as to the merits of these issues.

Furthermore, if the motion to dismiss is granted, the district

court is instructed to reform the judgment accordingly; if the

motion is denied, the district court is instructed to dismiss

Plaintiffs' claims without prejudice for lack of subject matter

jurisdiction.

We therefore REMAND the case to the district court.