Opinion
EP-06-CA-22-PRM.
June 26, 2006
ORDER DENYING PLAINTIFF'S MOTION TO REMAND
On this day, the Court considered Plaintiff Rodolfo Perez's ("Plaintiff") "Motion to Remand" ("Motion"), filed on February 9, 2006, and Defendants L-3 Communications Corporation, L-3 Communications Vertex Aerospace LLC, L-3 Communications, and Vertex Aerospace LLC's (collectively "Defendants") "Response to Plaintiff's Motion to Remand" ("Response"), filed on February 21, 2006 in the above-captioned cause. After careful consideration, the Court is of the opinion that Plaintiff's Motion should be denied for the reasons set forth below.
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff initiated this action by filing his "Original Petition" ("Petition") in the 34th District Court of El Paso County on November 30, 2005. Defs.' Resp., Ex. A. In his Petition, Plaintiff alleges that, on or about June 30, 2004, Defendants discharged Plaintiff from his employment as a painter due to "an alleged reduction in force." Pl.'s Pet. at 2. Plaintiff contends that his age was a "motivating factor in [Defendants] decision to terminate him." Id. Accordingly, Plaintiff filed the underlying cause of action pursuant to the Age Discrimination in Employment Act ("ADEA"). Id. at 2-3.
On December 10, 2005, Plaintiff served L-3 Communications Vertex Aerospace LLC, L-3 Communications, and Vertex Aerospace LLC (collectively "the Vertex Defendants") by serving a local site supervisor, Dionicio Luna ("Luna"), pursuant to state court orders authorizing service on Luna as registered agent for the Vertex Defendants. Pl.'s Mot. at 3, Ex. D (Orders Authorizing Service). On December 15, 2005, Plaintiff served L-3 Communications Corporation by serving its registered agent CT Corporation System. Id., Ex. E. On January 10, 2006, Defendants filed their "Original Answer" ("Answer") generally denying Plaintiff's claims. Defs.' Answer. On January 17, 2006, Defendants removed this action to federal district court by filing their Notice of Removal. Defs.' Notice of Removal at 1. Defendants asserted that removal was proper pursuant to 28 U.S.C. § 1331 because the case contains a claim arising under federal law, specifically the ADEA. Id. at 2.
On February 9, 2006, Plaintiff filed the instant Motion, asking the Court to remand the case to state court due to Defendants' failure to timely seek removal. Pl.'s Mot. at 1. Defendants counter that they timely removed the above-captioned cause if the Court does not consider the allegedly improper service of process on Luna. Defs.' Resp.
II. LAW
A. Removal Requirements
The jurisdiction of federal courts is limited. Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). As such, a presumption exists against the existence of federal jurisdiction, and "the burden of establishing federal jurisdiction rests on the party seeking the federal forum." Id. This burden "extends not only to demonstrating a jurisdictional basis for removal, but also necessary compliance with the requirements of the removal statute." Blanchard v. Wal-Mart Stores, Tex., LP, 368 F.Supp.2d 621, 623 (E.D. Tex. 2005) (internal quotations omitted). Any doubts as to the propriety of removal jurisdiction should be resolved in favor of remand. Acuna v. Brown Root Inc., 200 F.3d 335, 339 (5th Cir. 2000).
The starting point for the analysis of any removal issue is 28 U.S.C. § 1441, which provides the types of actions generally removable from state court to federal district court. 28 U.S.C. § 1441. In addition to demonstrating that the subject matter is properly removable, a defendant must also satisfy certain procedural requirements to remove an action to the federal forum. Most relevant to the instant inquiry is 28 U.S.C. § 1446(b), which requires a defendant to file a notice of removal "within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading. . . ." 28 U.S.C. § 1446(b).
The time period for removal commences only after a defendant has been formally served. Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347-48 (1999) (noting that a defendant's receipt of an informal copy of the complaint is insufficient to trigger the thirty-day time period for removal); City of Clarksdale v. Bellsouth Telecomms., Inc., 428 F.3d 206, 210 (5th Cir. 2005). Furthermore, in cases involving multiple defendants, the thirty-day time period begins to run from the date the first defendant is properly served. Getty Oil Corp. v. Ins. Co. of N. Am., 841 F.2d 1254, 1262 (5th Cir. 1988). If the first served defendant fails to remove the case within thirty days of service, this failure precludes removal by later served defendants. Brown v. Demco, Inc., 792 F.2d 478, 481-82 (5th Cir. 1986).
B. Service of Process
Proper service of process is "fundamental to any procedural imposition on a named defendant." Murphy Bros., Inc., 526 U.S. at 350. The adequacy of service of process effectuated prior to removal is governed by the law of the state in which the action was originally filed. Freight Terminals, Inc. v. Ryder System, Inc., 461 F.2d 1046, 1052 (5th Cir. 1972); see also Norsyn, Inc. v. Desai, 351 F.3d 825, 829 (8th Cir. 2003) (noting that where service occurs prior to removal, a court determines whether the service was sufficient in accordance with state law). Cf. City of Clarksdale, 428 F.3d at 210-11 (noting that "the term `service of process' is defined by state law" and looking to Mississippi law to determine whether the plaintiff properly effected service). Accordingly, the Court relies on Texas law to determine the validity of Plaintiff's service.
III. ANALYSIS
The central issue to this dispute is whether the December 10, 2005 service on Luna, the site supervisor of L-3 Communications Vertex Aerospace LLC at Ft. Bliss, Texas, was proper for any of the Vertex Defendants, thereby triggering the thirty day time period for removal for all Defendants. Defendants jointly filed their Notice of Removal on January 17, 2006.
Plaintiff asserts that the Vertex Defendants were first properly served on December 10, 2005. Accordingly, Plaintiff contends that all Defendants were required to file their notice of removal by no later than January 9, 2006, and therefore, Defendants' Notice of Removal is untimely. Pl.'s Mot. at 3-4. Defendants counter that the December 10, 2005 service of process should not be considered because it was improper. Defs.' Resp. ¶ 3. Furthermore, Defendants allege that they timely removed within thirty days of December 15, 2005, the first date Defendants contend Plaintiff properly effected service. Defs.' Resp. ¶ 6.
Plaintiff assert two separate arguments that the December 10, 2005 service on the Vertex Defendants was proper. First, Plaintiff asserts that the service on Luna was proper because state court orders expressly authorized such service. Alternatively, Plaintiff argues that the service was proper because Luna was the person in charge of Defendants' business at the date of the service.
A. Court Ordered Service
Plaintiff avers without any supporting legal authority that the December 10, 2005 service of process on the Vertex Defendants by serving Luna was proper because the trial court issued orders authorizing service upon him. Pl.'s Mot. at 5. The trial court's orders authorizing service direct private process servers to serve the Vertex Defendants "by personally serving his/her/their registered agent, DIONICIO LUNA" pursuant to Rules 103 and 106 of the Texas Rules of Civil Procedure. Pl.'s Mot., Ex. C (emphasis added). There are three possible ways this Court can construe the court's orders, none of which support Plaintiff's argument: (1) The court was authorizing service on Luna on the condition that he is in fact a registered agent for the Vertex Defendants; (2) The court orders were somehow designating Luna as a registered agent for the Vertex Defendants; or (3) The court orders were authorizing a form of substituted service on Luna.
The trial court orders authorize service on Luna in a specific capacity, as registered agent for the Vertex Defendants. Accordingly, service on Luna pursuant to the trial court's orders is valid only to the extent that Luna is a registered agent of the Vertex Defendants. Certificates from the Secretary of State show that Luna is not a registered agent for any of the Vertex Defendants. Defs.' Resp ¶¶ 15-16, Ex. B, D. Furthermore, by affidavit, Luna states that he is not a registered agent for service, rather he is merely a local branch site supervisor. Defs.' Resp. ¶ 3, Ex. G; see also Barr v. Zurich Ins. Co., 985 F. Supp. 701, 703 (S.D. Tex. 1997) (stating that "it is clear that service on any corporate employee is insufficient to give notice of suit"). Accordingly, the Court does not agree with Plaintiff that he was able to serve Luna pursuant to the court's order, considering that he did not comply with the court's orders and serve Luna in the capacity of a registered agent. See Mass. Newton Buying Corp. v. Huber, 788 S.W.2d 100, 103 (Tex.App.-Houston 1990, no writ) (noting that if service is made on an agent of a foreign corporation, then there must be an affirmative showing by the plaintiff that the person served was in fact a registered agent for service of process).
Plaintiff fails to provide any legal authority for the proposition that a state trial court order can denominate a person the registered agent for a business entity. Rather, the Texas Business Corporation Act and the Texas Limited Liability Company Act statutorily regulate the process for designating and maintaining a registered agent for service. See TEX. BUS. CORP. ACT ANN. arts. 2.09, 2.11, 8.08, 8.10 (Vernon 2003 Supp. 2005) (providing the process for designating a registered agent and enumerating the proper recipients of service for corporations and foreign corporation); TEX. REV. CIV. STAT. ANN. art. 1528n, art. 2.05, 2.08 (Vernon Supp. 2005) (providing the process for designating a registered agent and designating the proper recipients of service for limited liability companies and foreign limited liability companies).
Lastly, nothing in the record or the trial court's orders suggests that the trial court was authorizing substituted service on Luna. Texas Rule of Civil Procedure 106 governs the method of service. TEX. R. CIV. P. 106. Pursuant to Texas Rule of Civil Procedure 106(a), process must be served on the defendant in person or by registered or certified mail. Id. However, Texas Rule of Civil Procedure 106(b) allows the court to order substituted service if certain procedural prerequisites have been met, including the filing of a motion supported by an affidavit. Wilson v. Dunn, 800 S.W.2d 833, 836 (Tex. 1990). Failure to strictly comply with the procedural requirements for substituted service will render service invalid. Id. It is apparent from the trial court's orders authorizing service that it was not authorizing substituted service on Luna. Rather, it was merely ordering that Plaintiff personally serve the Vertex Defendants by means of their "registered agent." See Stylemark Const., Inc. v. Spies, 612 S.W.2d 654, 655 (Tex.App.-Houston [14th Dist.] 1981, no writ) (noting that plaintiff attempted substituted service only after unsuccessful attempts to personally serve the defendant corporation through its registered agent). Furthermore, even if the Court were to assume from Plaintiff's argument that the service on Luna was a form of substituted service, the service would be improper because there is no evidence that Plaintiff complied with any of the requirements for substituted service. See Wilson, 800 S.W.2d at 836 (Tex. 1990) (holding that service was ineffective where the motion for substituted service was not supported by an affidavit).
Texas Rule of Civil Procedure 106(b) provides:
Upon motion supported by affidavit stating the location of the defendant's usual place of business or usual place of abode or other place where the defendant can probably be found and stating specifically the facts showing that service has been attempted under either (a)(1) [personal service] or (a)(2) [mailed service] at the location named in such affidavit but has not been successful, the court may authorize service
(1) by leaving a true copy of the citation, with a copy of the petition attached, with anyone over sixteen years of age at the location specified in such affidavit, or
(2) in any other means that the affidavit or other evidence before the court shows will be reasonably effective to give the defendant notice of suit.
In sum, the Court is not persuaded by Plaintiff's argument that service on Luna was proper pursuant to the trial court orders authorizing service. The court's orders required that service be effected on Luna as the registered agent for the Vertex Defendants. Luna is not the registered agent for any of the Vertex Defendants. Accordingly, service pursuant to the court orders was improper.
B. Person In Charge
Pursuant to the Texas long-arm statute ("section 17.043"), process may be effected on "the person in charge . . . of any business in which the nonresident is engaged in this state if the nonresident is not required by statute to designate or maintain a registered agent for service of process." TEX. CIV. PRAC. REM. CODE ANN. § 17.043 (Vernon 1997). Plaintiff argues that Luna as a site supervisor qualifies as a person in charge, and therefore is a proper recipient for service. Defendants challenge that Plaintiff failed to strictly comply with the requirements of the Texas long-arm statute, thereby rendering service invalid.
1. Defendants L-3 Communications Corporation L-3 Communications
L-3 Communications Corporation is a foreign corporation registered to do business in the state of Texas. The parties do not dispute that Plaintiff properly served L-3 Communications Corporation through its registered agent CT Corporation System on December 15, 2005. Pl.'s Mot. at 3; Defs.' Resp. ¶ 4. However, Plaintiff maintains that L-3 Communications Corporation was actually first served on December 10, 2005 as a result of the service on L-3 Communications via Luna. Pl.'s Mot. at 2-3.
Plaintiff invokes Texas Rule of Civil Procedure 28 for the proposition that Plaintiff may sue Defendant L-3 Communications Corporation under its assumed or common name L-3 Communications. Pl.'s Mot. at 2; TEX. R. CIV. P. 28. Plaintiff offers no evidence demonstrating that L-3 Communications is, in fact, the assumed or common name of L-3 Communications Corporation. However, the Court need not resolve this issue because, even assuming arguendo that L-3 Communications is the assumed or common name of L-3 Communications Corporation, service on Luna would not be proper.
L-3 Communications Corporation is a Delaware corporation authorized to do business in Texas. Defs.' Resp. ¶ 2, Ex. B. Pursuant to Texas Business Corporation Act article 8.08, a foreign corporation authorized to conduct business in Texas is required to designate and maintain a registered agent. Furthermore, L-3 properly designated and maintains CT Corporation Systems as its registered agent in Texas. Accordingly, Plaintiff's primary argument that Luna qualifies as a "person in charge" for the receipt of service pursuant to section 17.043 is inapplicable because L-3 Communications Corporation is required by statute to designate and maintain a registered agent. See TEX. CIV. PRAC. REM. CODE ANN. § 17.043 (exempting from coverage nonresidents who are "required by statute to designate or maintain a registered agent for service of process"). Furthermore, pursuant to Texas Business Corporation Act article 8.10, if a foreign corporation is authorized to conduct business in Texas, the only proper recipients of service of process are the president, vice-presidents, registered agent, or, in limited circumstances, the Secretary of State. Luna, as site-supervisor, does not qualify as any of these individuals. See Mass. Newton Buying Corp., 788 S.W.2d at 103 ("Execution of a citation on an employee in a local place of business does not constitute adequate service on a foreign corporation.").
2. Defendants Vertex Aerospace LLC L-3 Communications Vertex Aerospace LLC
L-3 Communications Vertex Aerospace LLC ("Vertex LLC") is the successor-in interest to Vertex Aerospace LLC, which no longer existed in December 2005. Pl.'s Mot. at 2; Defs.' Am. Ans. ¶ 14. Accordingly, the Court need only consider whether the December 10, 2005 service on Vertex LLC was proper. Vertex LLC is a Delaware limited liability company with its principal place of business in Mississippi. Defs.' Resp. ¶ 2. Furthermore, it is a wholly owned subsidiary of L-3. Defs.' Resp. ¶ 2. While it conducts business in Texas, it is not registered to do business in Texas with the Texas Secretary of State. Pl.'s Mot. at 5.
According to article 2.05 of the Texas Limited Liability Act, a foreign limited liability "subject to [the] Act" must designate and continuously maintain a registered agent and registered office. TEX. REV. CIV. STAT. ANN. art. 1528n, art. 2.05. It is not clear from the record whether Vertex LLC conducted business in such a manner as to be "subject to [the] Act" and, therefore, "required" to designate a registered agent. If Vertex LLC was required to designate a registered agent, service on Luna as a "person in charge" is inapplicable. See TEX. CIV. PRAC. REM. CODE ANN. § 17.043 (exempting from coverage nonresidents who are "required by statute to designate or maintain a registered agent for service of process"). However, even assuming arguendo that Vertex LLC was not subject to the Texas Limited Liability Act, service on Vertex LLC through Luna was improper.
Article 7.01B of the Texas Limited Liability Act enumerates a variety of activities that a limited liability company may conduct without bringing it within the purview of the statute.
When service is effected pursuant the Texas long-arm statute, "the plaintiff must allege facts that, if true, would make the defendant amendable to process under that statute and the record must contain proof of service of process on the defendant in the manner prescribed by the statute." World Distribs., Inc. v. Knox, 968 S.W.2d 474, 477-78 (Tex.App.-El Paso 1998, no pet.); Am. Type Culture Collection v. Coleman, 83 S.W.3d 801, 807 (Tex. 2002). There is no indication in the record that Plaintiff was attempting to serve any defendant pursuant to the Texas long-arm statute. Plaintiff's original petition indicates that Vertex LLC could be served by serving Luna. However, it does not identify him as "a person in charge" nor does it indicate that Vertex LLC does not have a registered agent for service, thereby making it amenable to service of process under the Texas long-arm statute. Defs.' Resp., Ex. A. Furthermore, the orders authorizing service on Luna indicate that Plaintiff was attempting service on him as a "registered agent" rather than a "person in charge." Pl.'s Mot., Ex. D. Accordingly, Plaintiff has failed to allege facts that would support service of process on any of the Defendants pursuant to the Texas long-arm statute. Furthermore, the record demonstrates that service was not attempted pursuant to the Texas long-arm statute.
Even if the Court were to conclude that service pursuant to the Texas long-arm statute was appropriate, Plaintiff's failure strictly comply with the requirements of the statute would nonetheless render the December 10, 2005 service invalid. Where service is effected pursuant to section 17.043 of the Texas long-arm statute, there is a procedural requirement that "a copy of the process and notice of the service must be immediately mailed to the nonresident or the nonresident's principal place of business . . . by registered mail or by certified mail, return receipt requested." TEX. CIV. PRAC. REM. CODE ANN. § 17.045(c)-(d). There is no indication Plaintiff complied with these forwarding requirements and, therefore, service would also be improper pursuant to the Texas long-arm statute. See Kim v. Fank Mohn A/S, 909 F.Supp. 474, 479 (S.D. Tex. 1995) (citing Whitney v. L L Realty Corp., 500 S.W.2d 94 (Tex. 1974)) (noting that "Texas courts strictly construe the long-arm statute, and consistently conclude that failure to strictly comply with the statute by forwarding a copy of the process to the nonresident defendant as required by section 17.045 deprives the court of jurisdiction").
IV. CONCLUSION
Plaintiff's December 10, 2005 service of process on the Vertex Defendants through Luna was not proper either pursuant to the orders authorizing service or the Texas long-arm statute. Because the service on Luna was not proper, the service on L-3 Communications Corporation on December 15, 2005 was the first formal service triggering Defendants' thirty-day period for removal. Defendants timely removed the above-captioned cause within thirty days of December 15, 2005. Accordingly, the Court concludes that remand should be denied.
Accordingly, IT IS ORDERED that Plaintiff's Motion to Remand (Docket No. 6) be DENIED.