If a party is improperly joined, a court may disregard the party’s citizenship for purposes of determining subject matter jurisdiction. See Galveston Bay Biodiesel, L.P. v. Ace Am. Ins. Co. , 719 F.Supp.2d 736, 738 (S.D. Tex. 2010) (citing Smallwood v. Ill. Cent. R.R. Co. , 385 F.3d 568, 572-73 (5th Cir. 2004) (en banc) ). However, "the existence of even a single valid cause of action against in-state defendants ... requires remand of the entire case to state court."
Other courts have held that Rule 9(b) does not apply because Texas Insurance Code "claims are statutory bad faith claims and are distinct from common law fraud claims . . . ." See, e.g., Galveston Bay Biodiesel, L.P. v. Ace Am. Ins. Co., 719 F. Supp. 2d 736, 741 (S.D. Tex. 2010); see also Jimenez v. Allstate Texas Lloyd's, No. 4:10-CV-4385, 2012 WL 360096, at *3 (S.D. Tex. Feb. 2, 2012) (holding that only claims under Texas Insurance Code § 541.060(a)(1) rest on allegations of fraud, but Subsections 541.060(a)(2)(A), 541.060(a)(3), 541.060(a)(4), and 541.060(a)(7) do not). The undersigned does not here propose a resolution of the Rule 9(b) question as it is not dispositive of Jaime's motion to remand.
Other courts have held that Rule 9(b) does not apply because Texas Insurance Code "claims are statutory bad faith claims and are distinct from common law fraud claims . . . ." See, e.g., Galveston Bay Biodiesel, L.P. v. Ace Am. Ins. Co., 719 F. Supp. 2d 736, 741 (S.D. Tex. 2010); see also Jimenez v. Allstate Texas Lloyd's, No. 4:10-CV-4385, 2012 WL 360096, at *3 (S.D. Tex. Feb. 2, 2012) (holding that only claims under Texas Insurance Code § 541.060(a)(1) rest on allegations of fraud, but Subsections 541.060(a)(2)(A), 541.060(a)(3), 541.060(a)(4), and 541.060(a)(7) do not). The undersigned does not here propose a resolution of the Rule 9(b) question as it is not dispositive of Plaintiffs' motion to remand.
Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001).See, e.g., Galveston Bay Biodiesel, L.P. v. Ace Am. Ins. Co., 719 F.Supp.2d 736, 738 (S.D. Tex. 2010) (Hoyt, J.).Int'l Energy Ventures Mgmt. v. United Energy Grp., 818 F.3d 193, 209-10 (5th Cir. 2016) (quoting Smallwood, 385 F.3d at 573
Order Granting Motion to Remand at 5, Jean Pierre d/b/a Campo Verde Square v. Zurich Am. Ins. Co. and Bernard Nguyen Dang, No. 4:16-cv-00824-O (N.D. Tex. Dec. 22, 2016) (O'Connor, J.). A number of Texas courts have concluded that an insurance adjuster may be held personally liable for at least some provisions of the Texas Insurance Code. E.g. Gasch, 491 F.3d at 282 (noting general individual adjuster liability under Section 541.060); Roach v. Vehicle, 3:15-cv-3228-G, 2016 WL 795967, at *4-5 (N.D. Tex. Feb. 29, 2016) (Fish, J.) (holding individual adjuster liability is possible under Section 541.060(a)(2)); Galveston Bay Biodiesel, L.P. v. Ace Am. Ins. Co., 719 F. Supp. 2d 736, 740 (S.D. Tex. 2010) ("Under the (here applicable) Rule 12(b)(6) standard, the plaintiff only needs to allege that [the insurance adjusters] personally took some action that violated the Insurance Code, as opposed to acting in an individual capacity, as argued by the defendants."); Denley Grp., LLC v. Safeco Ins. Co. of Ind., No. 3:15-cv-1183-B, 2015 WL 5836226, at *3-4 (N.D. Tex. Sept. 30, 2015) (Boyle, J.); Progressive Island, LLC v. Scottsdale Ins. Co., No. 3:13-cv-0741-M, 2013 WL 6065414, at *2-3 (N.D. Tex. Nov. 18, 2013) (Lynn, C.J.); Lopez-Welch v. State Farm Lloyds, No. 3:14-cv-2416-L, 2014 WL 5502277, at *8 (N.D. Tex. Oct. 31, 2014) (Lindsay, J.). Other judges, however, have held that Section 541.060(a)(2) does not apply to insurance adjusters personally.
But "[t]he burden of establishing fraudulent or improper joinder rests on the party asserting it and is indeed a heavy burden." Galveston BayBiodiesel, L.P. v. Ace Am. Ins. Co., 719 F. Supp. 2d 736, 738 (S.D. Tex. 2010) (citing Travis v. Irby, 326 F.3d 644, 649 (5th Cir. 2003)). Because State Auto has not even responded to B&B's Motion to Remand, they have not technically asserted fraudulent or improper joinder, let alone met their "heavy burden" to prove it.
'" Id. Thus, under the improper joinder rule, "a court may disregard the citizenship of parties that have been improperly joined." Gavelston Bay Biodiesel, L.P. v. Ace American Ins. Co., 719 F.Supp.2d 736, 738 (S.D. Tex. 2010) (citing Smallwood, 385 F.3d at 572-73). In support of her motion to remand, Plaintiff argues that remand is required under the forum-defendant rule.