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denying motion to remand and granting motion to dismiss upon finding improper joinder of non-diverse defendant
Summary of this case from Eagle Oil & Gas Co. v. Travelers Prop. Cas. Co. of Am.Opinion
Civil Action No. 3:04-CV-0367-G.
July 7, 2004
MEMORANDUM ORDER
Before the court are the following motions: (1) the motion of the plaintiff Raegen Rogers ("Rogers") to remand this case to the state court from which it was previously removed; (2) the motion of the defendant Kenny Baker ("Baker") to dismiss for failure to state a claim upon which relief can be granted; and (3) the motion of the defendant American Heritage Life Insurance Company ("American Heritage") for judgment on the pleadings as to "Count B" of Rogers' petition. For the reasons discussed below, Rogers' motion for remand is denied, Baker's motion to dismiss is granted, and American Heritage's motion for judgment on the pleadings as to "Count B" is granted.
I. BACKGROUND
Rogers was employed by American Heritage as a regional marketing coordinator from November of 2002 until February of 2003. Notice of Removal of Civil Action ("Notice of Removal") at 2; Affidavit of Mary Ann Wright ("Wright Affidavit") ¶ 2, attached to Notice of Removal as Exhibit A; Plaintiff's Original Petition ("Petition") ¶ 7, attached to Notice of Filing Notice of Removal of Civil Action [ attached to Notice of Removal as Exhibit C] as Exhibit 3. Shortly after she was hired, Rogers' boss took her to Longview, Texas to meet Baker, one of the company's top salesmen. Petition ¶ 7. While there, Rogers allegedly overheard Baker tell Rogers' boss that Rogers was "hot," and that he (Rogers' boss) had "hit the jackpot with her." Id.
Rogers' petition does not identify her boss by name. See generally Petition.
Rogers alleges that in subsequent weeks Baker repeatedly asked her out on dates, even after learning that Rogers was engaged. Id. Rogers further alleges that American Heritage management was unhelpful when told of the situation. Id. Specifically, Rogers' boss stated that he would simply use Baker's alleged harassment to blackmail Baker into selling more insurance. Id.
Undeterred, Baker soon began propositioning Rogers to accompany him on weekend trips. Id. ¶ 8. After repeated rejections over the course of several days, Baker allegedly called Rogers on or about February 6, 2003 to ask "one more time." Id. She hung up the phone and again reported the events to her boss. Id. Rogers asserts that her boss responded by saying, "What do you expect Raegen, he is a salesman, he will never take no for an answer." Id. Rogers' boss then placed a telephone call to Baker. Id. Rogers claims that during the telephone call her boss and Baker agreed to terminate Rogers for complaining and rebuffing Baker's overtures. Id. She was terminated that very day. Id.
The Petition and the Notice of Removal give Rogers' termination date as February 6, 2003. Petition ¶ 7; Notice of Removal at 2. However, the Wright Affidavit gives the termination date as February 4, 2003. Wright Affidavit ¶ 2. The court accepts the February 6, 2003 termination date as correct for the purpose of deciding the motions.
Rogers filed a "Charge of Discrimination" with the Texas Commission on Human Rights ("TCHR") on or about April 2, 2003. Id. ¶ 6. The TCHR issued Rogers a notice of the right to file a civil action on October 31, 2003. Id. Less than two months later, on December 17, Rogers filed this suit in the 116th Judicial District Court of Dallas County, Texas, alleging violations of the Texas Commission on Human Rights Act ("TCHRA") against American Heritage, and asserting claims of intentional infliction of emotional distress ("IIED") against American Heritage and Baker. See generally Petition.
A notice of the right to file a civil action from the TCHR is a notice of exhaustion of administrative remedies. Rice v. Russell-Stanley, L.P., 131 S.W.3d 510, 513 (Tex.App.-Waco 2004, pet. filed); City of Houston v. Fletcher, 63 S.W.3d 920, 923 (Tex.App.-Houston [14th Dist.] 2002, no pet.). Exhaustion of administrative remedies is a necessary prerequisite to filing a civil action for violations of the Texas Commission on Human Rights Act. Jones v. Grinnell Corporation, 235 F.3d 972, 974-75 (5th Cir. 2001).
American Heritage removed the case to this court on the basis of diversity jurisdiction on February 19, 2004. Notice of Removal at 3-4. American Heritage is a Florida corporation with its principal place of business in Florida. Id. at 3. However, like the plaintiff Rogers, Baker is a citizen of Texas and is, therefore, non-diverse. See id. at 4; Petition ¶ 4. American Heritage contends that Rogers "cannot state a claim for [IIED] against . . . Baker," and that Baker was "fraudulently joined solely to defeat diversity of citizenship and prevent removal." Notice of Removal at 4. Accordingly, American Heritage argues, the court should disregard Baker's citizenship. Id. at 4, 8.
On March 22, 2004, Rogers filed the instant motion to remand See generally Plaintiff's Motion for Remand and Brief in Support ("Motion for Remand"). Rogers argues that American Heritage "cannot meet its burden for removal by proving that fraudulent joinder occurred" because her "claims against Baker . . . have factual and legal merit." Id. at 4.
II. ANALYSIS A. Fraudulent Joinder 1. The Legal Standard
For this court to have diversity jurisdiction over a case, there must be complete diversity of citizenship between the plaintiff and all defendants. Owen Equipment Erection Company v. Kroger, 437 U.S. 365, 373-74 (1978). This means that the plaintiff cannot be a citizen of the same state as even one defendant. Id. Moreover, under 28 U.S.C. § 1441(b), a case cannot be removed based on diversity jurisdiction if a named defendant is a citizen of the state in which the action is brought. 28 U.S.C. § 1441(b). If a defendant has been fraudulently joined, however, the citizenship of that defendant is disregarded for purposes of determining diversity and applying § 1441(b). See Burden v. General Dynamics Corporation, 60 F.3d 213, 217-18 (5th Cir. 1995); Tedder v. F.M.C. Corporation, 590 F.2d 115, 117 (5th Cir. 1979). Fraudulent joinder is established by showing that (1) there was actual fraud in the pleading of jurisdictional facts or that (2) the plaintiff is unable to establish a cause of action against the non-diverse defendant. Travis v. Irby, 326 F.3d 644, 647 (5th Cir. 2003). American Heritage argues that Baker was fraudulently joined under the second ground. Notice of Removal at 4. To establish fraudulent joinder under the second ground, a defendant must show that there is no reasonable basis for predicting that state law might impose liability against the non-diverse defendant. Badon v. RJR Nabisco Inc., 236 F.3d 282, 286 n. 4 (5th Cir. 2000) ("[T]here must at least be arguably a reasonable basis for predicting that state law would allow recovery in order to preclude a finding of fraudulent joinder.") (emphasis in original); Great Plains Trust Company v. Morgan Stanley Dean Witter Company, 313 F.3d 305, 312 (5th Cir. 2002) ("If there is `arguably a reasonable basis for predicting that the state law might impose liability on the facts involved,' then there is no fraudulent joinder.") (emphasis added) (quoting Badon, 236 F.3d at 286). A " mere theoretical possibility of recovery under local law" does not "suffice to preclude removal." Badon, 236 F.3d at 286 n. 4 (emphasis in original); see also Griggs v. State Farm Lloyds, 181 F.3d 694, 701 (5th Cir. 1999) ("[W]e have never held that a particular plaintiff might possibly establish liability by the mere hypothetical possibility that such an action [against the non-diverse defendant] could exist.").The court uses standards similar to those used for motions under Federal Rule of Civil Procedure 12(b)(6) to determine whether a "reasonable basis" exists. Ross v. Citifinancial, Inc., 344 F.3d 458, 462 (5th Cir. 2003); see also Travis, 326 F.3d at 648. The court must take the plaintiff's "well pleaded allegations of fact" as true. Associated Builders, Inc. v. Alabama Power Company, 505 F.2d 97, 100 (5th Cir. 1974); see also Travis, 326 F.3d at 648-49 ("[T]he district court . . . must . . . take into account all unchallenged factual allegations . . . in the light most favorable to the plaintiff."). "Any contested issues of fact and any ambiguities of state law must" also be resolved in favor of the plaintiff. Travis, 326 F.3d at 649. As a result, "[t]he burden of persuasion on those who claim fraudulent joinder is a heavy one." Id.
It is well settled that in a fraudulent joinder analysis the district court may "pierce the pleadings" and consider summary judgment-type evidence. Travis, 326 F.3d at 648-49. However, since the parties did not submit any summary judgment evidence, the court looks only to the pleadings in its consideration of this motion.
2. Rogers' Claim For Intentional Infliction of Emotional Distress
The basis for American Heritage's argument that removal is proper and Rogers' motion for remand should be denied is its contention that Baker has been fraudulently joined, thus allowing the court to ignore his citizenship for the purpose of determining whether diversity jurisdiction exists. Notice of Removal at 4. American Heritage's contention of fraudulent joinder rests primarily on its assertion that there is no reasonable basis to predict that Texas state law might impose liability against Baker for IIED. See id. Specifically, American Heritage argues that Rogers' allegations about what Baker did, even if true, are "insufficiently extreme or outrageous" to state a claim of IIED. See id. at 5.In Twyman v. Twyman, 855 S.W.2d 619, 621-22 (Tex. 1993), the Texas Supreme Court adopted the Restatement's formulation of IIED. Under the Restatement and Twyman, a plaintiff claiming IIED must show that: (1) the defendant acted intentionally or recklessly; (2) the defendant's conduct was extreme and outrageous; (3) the defendant's conduct proximately caused the plaintiff's emotional distress; and (4) the emotional distress suffered by the plaintiff was severe. Id. at 621 (citing RESTATEMENT (SECOND) OF TORTS § 46). "It is for the court to determine, in the first instance, whether the defendant's conduct may reasonably be regarded as so extreme and outrageous as to permit recovery." Danawala v. Houston Lighting Power Company, 14 F.3d 251, 256 (5th Cir. 1993) (quoting Wornick Company v. Casas, 856 S.W.2d 732, 734 (Tex. 1993)). To satisfy the second element of IIED, conduct must be "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community." Morgan v. Anthony, 27 S.W.3d 928, 929 (Tex. 2000) (quoting Twyman, 855 S.W.2d at 621); see also GTE Southwest, Inc. v. Bruce, 998 S.W.2d 605, 611 (Tex. 1999); Wornick Company v. Casas, 856 S.W.2d 732, 734 (Tex. 1993). Insensitive or even rude behavior is generally not sufficient. Hoffman-La Roche, Inc. v. Zeltwanger, 69 S.W.3d 634, 646 (Tex.App.-Corpus Christi 2002, pet. granted). Likewise, "[m]ere insults, indignities, threats, annoyances, petty oppressions, or other trivialities do not rise to the level of extreme and outrageous conduct." Id.
Courts also consider the context and the relationship between the parties when determining whether specific conduct is extreme and outrageous. Verhelst v. Michael D's Restaurant San Antonio, Inc., 154 F. Supp. 2d 959, 965 (W.D. Tex. 2001). In the context of the workplace, "Texas courts have adopted a strict approach to intentional infliction of emotional distress claims. . . ." Hoffman-La Roche, Inc., 69 S.W.3d at 646. "[A] claim for intentional infliction of emotional distress will not lie for mere `employment disputes,'" Johnson v. Merrell Dow Pharmaceuticals, Inc., 965 F.2d 31, 33 (5th Cir. 1992); rather, such a claim "exists only in the most unusual of circumstances." GTE Southwest, Inc., 998 S.W.2d at 613. Even if conduct rises to the level of illegality, it is not necessarily extreme and outrageous. See Wilson v. Monarch Paper Company, 939 F.2d 1138, 1143 (5th Cir. 1991) ("[A]lthough this sort of conduct often rises to the level of illegality, except in the most unusual cases it is not the sort of conduct, as deplorable as it may sometimes be, that constitutes `extreme and outrageous' conduct.") (emphasis in original). Accordingly, even though conduct may qualify as sexual harassment, "it does not necessarily become intentional infliction of emotional distress under Texas law." Prunty v. Arkansas Freightways, Inc., 16 F.3d 649, 654 (5th Cir. 1994).
Rogers' support for her allegations of IIED consists of (1) Baker's statement that "she is hot," as well as other "similar comments," Petition ¶ 7; (2) his persistence in trying to get her to go on a date with him, id.; (3) his asking her to go on weekend trips, id. ¶ 8; and (4) her subsequent firing, id. ¶¶ 8-9. Even taking these facts as true, the court cannot conclude that Baker could be liable to Rogers for IIED under Texas law. His conduct, while deplorable, was not "so outrageous in character and extreme in degree that it surpassed all possible bounds of decency such that it was utterly intolerable in a civilized community." See Anderson v. Conseco Finance Leasing Trust, No. 4:01-CV-0254-A, 2001 WL 611160, at *1, *3 (N.D. Tex. June 1, 2001) (holding that a defendant's conduct was not sufficiently extreme or outrageous where defendant was alleged to have made sexual innuendos and lewd sexual comments toward the plaintiff, persistently tried to persuade the plaintiff to have a relationship despite her objections, arranged a business trip so as to require the plaintiff to stay in his hotel room, enquired about the type of undergarments the plaintiff wore, and subjected the plaintiff to retaliatory treatment when rebuffed); see also Wilson v. Sysco Food Services of Dallas, Inc., 940 F. Supp. 1003, 1007, 1013 (N.D. Tex. 1996) (holding that defendant's conduct was not sufficiently extreme or outrageous where defendant was alleged to have recounted his sexual exploits to the plaintiff in lurid detail, suggested that the plaintiff have sex with him in order to keep her job, implied that the plaintiff sleep with customers if necessary and reprimanded the plaintiff when she refused, and fired the plaintiff in retaliation). Even if, as Rogers asserts, Baker's conduct constitutes "pervasive sexual harassment," Petition ¶¶ 13, 19, her claim for IIED is still without merit. See Contreras v. Waffle House, Inc., No. 3:01-CV-0701-P, 2002 WL 1477442, at *6, *11 (N.D. Tex. July 9, 2002) (holding that alleged harassment was "constant and pervasive," but that it was not "`extreme and outrageous' behavior that would rise to the level of that required to support [an] IIED claim"). The Fifth Circuit has clearly stated that even though conduct may constitute sexual harassment, "it does not necessarily become intentional infliction of emotional distress under Texas law." Prunty, 16 F.3d at 654.
The conduct alleged in this case is clearly not so extreme and outrageous as to sustain a claim of IIED. There is, as a result, no reasonable basis for predicting that Texas state law might impose liability against Baker. Accordingly, the court finds that Baker was fraudulently joined, that this court has diversity jurisdiction over this case, and that removal was proper. Rogers' motion for remand is therefore denied.
B. Defendants' Motions
Baker has moved for dismissal pursuant to FED. R. CIV. P. 12(b)(6) or 12(c), and American Heritage has moved for judgment on the pleadings pursuant to FED.R. CIV.P. 12(c). Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of a complaint for "failure to state a claim upon which relief can be granted." FED.R.CIV. P. 12(b)(6). There are two primary principles that guide the court's determination of whether dismissal under 12(b)(6) should be granted. First, a motion under Rule 12(b)(6) should be granted only if it appears beyond doubt that the nonmovant can prove no set of facts in support of her claims that would entitle her to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Leffall v. Dallas Independent School District, 28 F.3d 521, 524 (5th Cir. 1994); see also Kaiser Aluminum Chemical Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982) (citing WRIGHT MILLER, FEDERAL PRACTICE AND PROCEDURE: CIVIL § 1357 at 598 (1969), for the proposition that "the motion to dismiss for failure to state a claim is viewed with disfavor and is rarely granted"), cert. denied, 459 U.S. 1105 (1983). Second, the court must accept all well-pleaded facts as true and view them in the light most favorable to the nonmovant. Capital Parks, Inc. v. Southeastern Advertising and Sales System, Inc., 30 F.3d 627, 629 (5th Cir. 1994); Norman v. Apache Corporation, 19 F.3d 1017, 1021 (5th Cir. 1994); Chrissy F. by Medley v. Mississippi Department of Public Welfare, 925 F.2d 844, 846 (5th Cir. 1991).The court may also dismiss a complaint by rendering a "judgment on the pleadings." FED.R.CIV.P.12(c). The standard for deciding motions under Rule 12(c) is the same as the standard for deciding motions under Rule 12(b)(6). Great Plains Trust Company, 313 F.3d at 313 n. 8 (citing 5A WRIGHT MILLER, FEDERAL PRACTICE AND PROCEDURE § 1368 at 591 (Supp. 2002) ("A number of courts have held that the standard to be applied in a Rule 12(c) motion is identical to that used in a Rule 12(b)(6) motion.") (footnote omitted)).
1. Baker's Rule 12(b)(6) and 12(c) Motions
Rogers supports her claim of IIED against Baker by specifically pleading that: (1) Baker told Rogers' boss that Rogers was "hot," and that her boss had "hit the jackpot" by hiring her, Petition ¶ 7; (2) Baker relentlessly tried to get Rogers to go on a date with him, id.; (3) Baker repeatedly asked Rogers to accompany him on weekend trips, id. ¶ 8; and (4) Baker and Rogers' boss agreed to fire Rogers for complaining and rebuffing Baker's sexual overtures, id. ¶¶ 8-9. As discussed supra at 6-11, these facts do not make out a claim for IIED under Texas law. Therefore, even accepting Rogers' allegations as true, and viewing them in the light most favorable to Rogers, the court concludes that Rogers can prove no set of facts showing that Baker's conduct was sufficiently extreme or outrageous to sustain a claim for IIED. Accordingly, Baker's Rule 12(b)(6) and 12(c) motions are granted.
2. American Heritage's Rule 12(c) Motion
Rogers also asserts a claim of IIED against her employer, American Heritage. Petition ¶¶ 19-21. "Corporations can, of course, act only through agents of some character." Hammerly Oaks, Inc. v. Edwards, 958 S.W.2d 387, 391 (Tex. 1997) (citation and internal quotation marks omitted); see also Norton Refrigerated Express, Inc. v. Ritter Brothers Company, Inc., 552 S.W.2d 910, 912 (Tex.Civ.App.-Texarkana 1977, writ ref'd n.r.e.) (stating that a corporation "by its nature must act through agents"). In addition to Rogers' allegations regarding the conduct of Baker, an agent of American Heritage, Rogers also makes allegations regarding the conduct of her boss, another agent of American Heritage. Petition ¶¶ 7-9. Rogers alleges that: (1) she told her boss about Baker's overtures, id. ¶ 7; (2) her boss did nothing to assist her; rather, he stated that he would use Baker's actions to blackmail him into selling more insurance, id.; (3) when her boss was again made aware of Baker's actions he responded by saying, "What do you expect, Raegen, he is a salesman, he will never take no for an answer," id. ¶ 8; and (4) her boss fired her for not giving in to Baker's sexual advances, id. ¶¶ 8-9. These alleged actions, like those of Baker, do not constitute a cause of action for IIED under Texas law. McCray v. DPC Industries, Inc., 875 F. Supp. 384, 392 (E.D. Tex. 1995) (holding that any alleged failure by the defendant's supervisory personnel to address a situation between the plaintiff and a co-worker did not rise to the level of extreme and outrageous conduct); Hoffman-La Roche, Inc., 69 S.W.3d at 647 ("[T]ermination of employment, even if the termination is wrongful, is not legally sufficient evidence that the employer's conduct was extreme and outrageous.") (citing Southwestern Bell Mobile Systems v. Franco, 971 S.W.2d 52, 54 (Tex. 1998)); see also Shaheen v. Motion Industries, Inc., 880 S.W.2d 88, 92 (Tex.App.-Corpus Christi 1994, writ denied) (holding that plaintiff could not state a claim for IIED based on discharge where the plaintiff had only alleged that the motivation for the discharge was outrageous, not that the discharge itself was outrageous); Doe v. Beaumont I.S.D., 8 F. Supp. 2d 596, 615 (E.D. Tex. 1998) (holding that school principal's failure to report allegations of sexual abuse against a teacher, while in violation of state law, was not so extreme and outrageous as to sustain a claim for IIED).Where an employer is sued for the actions of its employees, a finding that the employees are not liable relieves the employer of liability. 27 AM.JUR.2D Employment Relationship § 469 (2003); see also 30 C.J.S. Employer-Employee § 229 (2003) ("Where the liability of the employer is based upon the liability of the employee, the employer cannot be liable if the employee is not liable."). Therefore, because Rogers can prove no set of facts showing that the conduct of American Heritage's agents — Baker and Rogers' boss — was sufficiently extreme or outrageous, Rogers claim of IIED against American Heritage fails. Accordingly, American Heritage's 12(c) motion is granted.
III. CONCLUSION
For the reasons stated above, Rogers' motion to remand is DENIED and her request for attorney's fees is DENIED as moot. Furthermore, Baker's 12(b)(6) and 12(c) motions, as well as American Heritage's 12(c) motion, are GRANTED. Rogers' claims against American Heritage under the TCHRA, as alleged in Count A of her petition, is unaffected by this memorandum order.