Opinion
CIVIL ACTION NO. 5:23-CV-00026
2023-10-31
Jerry TUBBS, Plaintiff, v. SWIFT TRANSPORTATION SERVICES, LLC, et al., Defendants.
Cory D. Itkin, Jason Aron Itkin, Alexandra Faye Poulson, Arnold Itkin LLP, Houston, TX, for Plaintiff. Jeffrey Christopher Wright, Fee, Smith, Sharp & Vitullo, LLP, Dallas, TX, for Defendants.
Cory D. Itkin, Jason Aron Itkin, Alexandra Faye Poulson, Arnold Itkin LLP, Houston, TX, for Plaintiff.
Jeffrey Christopher Wright, Fee, Smith, Sharp & Vitullo, LLP, Dallas, TX, for Defendants.
ORDER
Diana Saldaña, United States District Judge.
Defendants Swift Transportation Services, LLC ("Swift") and Alfredo Romanos Villareal ("Villareal") removed this case — a negligence action regarding personal injuries sustained by Plaintiff Jerry Tubbs ("Plaintiff") — from state court based on diversity jurisdiction. (Dkt. 1.) Plaintiff challenges this removal as improper and seeks remand on the basis that Plaintiff and Defendant Villareal are both citizens of Texas. (Dkt. 4.) Swift and Villareal argue that Villareal's citizenship should be ignored because he was improperly joined in this matter for the sole purpose of defeating diversity. (Dkt. 1 ¶ 6.)
Now pending is Plaintiff's Motion to Remand (Dkt. 4). Finding that diversity jurisdiction does not exist, the Court lacks subject matter jurisdiction, and Plaintiff's Motion to Remand (Dkt. 4) must be GRANTED.
Background
On or about October 20, 2022, Plaintiff sustained severe injuries when he slipped and fell into an improperly electrified fence. (Dkt. 1, Attach. 2 at ¶ 7.) Plaintiff was transported from the accident site in Laredo by ambulance and then medevac'd to the Brooke Army Medical Center in San Antonio, Texas. (Id.) Plaintiff alleges that Defendant Villareal created the slip hazard, failed to clean it up, and/or improperly electrified the fence during business hours. (Id.) Plaintiff sustained serious injuries to his head, neck, back, torso, shoulders, arms, hands, and fingers, which he alleges were proximately caused by Defendants' negligence and gross negligence. (Id.)
Plaintiff filed an action in the 341st Judicial District of Webb County, Texas, asserting that Defendants Swift and Villareal were negligent, negligent per se, and grossly negligent for the following reasons:
Failing to properly train employees, contactors, subcontractors, and/or agents; failing to properly supervise their employees, contractors, subcontractors, and/or agents; failing to provide a reasonably safe workplace; failing to provide proper and/or safe equipment; failing to have adequate and/or proper safety policies and procedures in place; failing to adhere to safety policies and procedures; creating unreasonably dangerous conditions at the worksite; failing to warn about unreasonably dangerous conditions at the worksite; failing to make unreasonably dangerous conditions at the worksite safe; failing to provide proper medical aid; vicariously liable for the conduct of its employees, contractors, subcontractors, and/or agents; violation of applicable, local, state, and federal laws and/or regulations; and other acts deemed, negligent, negligent per se, and/or grossly negligent. (Id. at ¶ 8.)
After receiving service of Plaintiff's state court petition, Swift and Villareal removed the case to this Court, arguing that Villareal's citizenship should not be considered for purposes of assessing diversity jurisdiction. (Dkt. 1, Attach. 1 at ¶ 8.)
Legal Standards
A. Removal Jurisdiction
A party may remove an action from state to federal court if the action could have originally been brought in federal court. See 28 U.S.C. § 1441(a). The removing party bears the burden of showing that federal jurisdiction exists, and that removal was proper. De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995). The removal statute is strictly construed because it "implicates important federalism concerns." Frank v. Bear Stearns & Co., 128 F.3d 919, 922 (5th Cir. 1997). In evaluating whether federal jurisdiction exists, "any doubt about the propriety of removal must be resolved in favor of remand." Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281-82 (5th Cir. 2007).
A court has subject matter jurisdiction based on diversity if there is: (1) complete diversity of citizenship and (2) an amount-in-controversy greater than $75,000. See 28 U.S.C. § 1332(a). "It is well-established that the diversity statute requires 'complete diversity' of citizenship: A district court cannot exercise diversity jurisdiction if one of the plaintiffs shares the same state citizenship as any one of the defendants." Corfield v. Dallas Glen Hills LP, 355 F.3d 853, 857 (5th Cir. 2003). Here, it is undisputed that Defendant Swift is a Delaware corporation with its principal place of business in Arizona and that both Plaintiff and Defendant Villareal are Texas citizens. (Dkt. 4 at 1.) However, in determining whether complete diversity of citizenship exists, a court may disregard the citizenship of parties that have been "improperly joined." Smallwood v. Illinois Cent. R.R. Co., 385 F.3d 568, 572 (5th Cir. 2004) (en banc).
B. Improper Joinder
The doctrine of improper joinder provides a "narrow exception" to the rule of complete diversity. McDonal v. Abbott Labs., 408 F.3d 177, 183 (5th Cir. 2005). To establish improper joinder, the removing party must demonstrate either (1) actual fraud in the pleading of jurisdictional facts or (2) inability of the plaintiff to establish a cause of action against the nondiverse party in state court. D & J Invs. of Cenla, LLC v. Baker Hughes a G E Co., 52 F.4th 187, 195 (5th Cir. 2022) (citing Smallwood). Here, Swift asserts only the second basis of improper joinder. (Dkt. 5 at ¶ 5.) Therefore, Swift must show that there is no possibility that Plaintiff may recover against Villareal under applicable state law. D & J Invs. of Cenla, LLC, 52 F.4th at 195.
To determine whether a plaintiff has a reasonable possibility of recovery against an in-state defendant, the court conducts a "Rule 12(b)(6)-type analysis, looking initially at the allegations of the complaint to determine whether the complaint states a claim under state law against the in-state defendant." Smallwood, 385 F.3d at 573. The Court must apply the more stringent federal standards — the so-called "Twiqbal" rules — rather than the Texas "fair notice" requirements. Int'l Energy Ventures Mgmt., LLC v. United Energy Group, Ltd., 818 F.3d 193, 202 (5th Cir. 2016) (establishing that "[w]hen determining the scope of its
own jurisdiction, a federal court does so without reference to state law, much less state law governing pleadings"). Under federal law, a complaint survives a Rule 12(b)(6) motion if it "contain[s] sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell. Atl. Corp. et. al v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. The plaintiff's well-pleaded facts must allow the court to infer "more than the mere possibility" that the defendant has acted unlawfully. Id. at 679, 129 S.Ct. 1937. The factual allegations must be enough "to raise a right to relief above the speculative level[.]" Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Although the court must accept the plaintiff's factual allegations as true, it need not "accept as true conclusory allegations, unwarranted factual inferences, or legal conclusions." Plotkin v. IP Axess Inc., 407 F.3d 690, 696 (5th Cir. 2005). Ordinarily, if the plaintiff successfully states a claim for relief in the complaint, that is enough to rebut a claim of improper joinder. Smallwood, 385 F.3d at 573. However, if a plaintiff has "misstated or omitted discrete facts" that would determine the propriety of joinder, the court has discretion to "pierce the pleadings and conduct a summary inquiry." Id.
Significantly, the burden of demonstrating improper joinder — which rests on the removing party — is a "heavy one." Cuevas v. BAC Home Loans Servicing, LP, 648 F.3d 242, 249 (5th Cir. 2011). "When determining whether a defendant has met its burden, the Court must resolve all contested issues of substantive fact in favor of the plaintiff." Gray v. Beverly Enterprises-Mississippi, Inc., 390 F.3d 400, 412 (5th Cir. 2004). Likewise, the Court "must resolve any uncertainties as to the current state of controlling substantive law in favor of the plaintiff." B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir. 1981). The "existence of even a single valid cause of action against in-state defendants (despite the pleading of several unavailing claims) requires remand of the entire case to state court." Gray, 390 F.3d at 412.
C. The Forum Defendant Rule
Even if a court possesses subject matter jurisdiction over the controversy, another procedural obstacle stands in the way of removal: the forum defendant rule. The forum defendant rule prohibits defendants from removing an otherwise removable action if any of the properly joined and served defendants is a citizen of the forum-state. See 28 U.S.C. § 1441(b)(2). In other words, even if the parties are completely diverse, removal would still be procedurally improper if one of the properly joined and served defendants hails from the forum state. Texas Brine Co., LLC v. Am. Arbitration Ass'n, Inc., 955 F.3d 482, 485 (5th Cir. 2020) (recognizing that the "forum defendant rule is a procedural rule and not a jurisdictional one").
Discussion
1. The forum defendant rule prevents application of the improper joinder doctrine against a properly joined defendant.
As a threshold matter, Plaintiff argues, inter alia, that the forum defendant rule bars removal of this case because Villareal is a Texas citizen who has been served with process and filed an answer in state court. (Dkt. 4 at 3.) The Court agrees. As noted, the forum defendant rule provides that "[a] civil action otherwise removable on the basis of [diversity jurisdiction]
may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." 28 U.S.C. § 1441(b)(2). The Fifth Circuit Court of Appeals has not directly addressed whether the forum defendant rule applies to allegations of improper joinder. Butler v. ENSCO Intercontinental GmbH, 2017 WL 496073 at *6-7 (S.D. Tex. Feb. 7, 2017) (Rosenthal, C.J.) (noting the existence of split authorities). However, the Court is guided by the decision in Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278 (5th Cir. 2007). In that case, the Fifth Circuit held that removal statutes are "strictly construed, and any doubt about the propriety of removal must be resolved in favor of remand." Id. at 281-82. Gasch is consistent with the premise that "federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). Indeed, district courts "must presume that a suit lies outside this limited jurisdiction, and the burden of establishing federal jurisdiction rests on the party seeking the federal forum." Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001) (citing Kokkonen, 511 U.S. at 377, 114 S.Ct. 1673).
Here, it is uncontested that Plaintiff and Villareal are Texas citizens. (Dkt. 4 at 1.) Nor is it disputed whether Villareal was properly served. (Id.) Further, Swift has failed to cite any authority requiring the Court to discard the forum defendant rule. (Dkts. 1 and 5.) Thus, the Court declines to do so here. However, our unwillingness to abandon the forum defendant rule does not conclude our inquiry. Rather, the Court must conduct a 12(b)(6) examination to determine whether Plaintiff's Complaint (Dkt. 1, Attach. 2) states a plausible claim for relief against Defendant Villareal that is enough to rebut Swift's allegation of improper joinder. Smallwood v. Illinois Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004) (en banc). For the following reasons, the Court finds that it has.
2. Plaintiff pled specific facts that would allow him to recover against Defendant Villareal.
Swift urges the Court to deny Plaintiff's Motion to Remand (Dkt. 4) because Villareal was improperly joined. (Dkt. 1, Attach. 1 at ¶ 8.) Swift asserts that "[p]laintiff fails to plead any specific facts to support any claims against Defendant [Villareal] that would allow Plaintiff to recover against this alleged in-state defendant in his individual capacity (as opposed to recovery from Defendant Villareal's employer)." (Id.) It further alleges:
Plaintiff's "overbroad, vague and unsubstantiated pleadings fail to properly plead any facts to identify or show the relationship between the two Defendants or the relationship between Plaintiff and each of the Defendants, because Plaintiff knows that the disclosure of such omitted facts would reveal that Plaintiff cannot recover against this alleged in-state Defendant Villareal in his individual capacity. (Id.)
The Court disagrees. Plaintiff alleges specifically that Villareal "[i]s believed to have created the slip hazard, failed to clean it up, and/or improperly electrified the fence during business hours." (Dkt. 1, Attach. 2 at ¶ 7.) Swift, as the party bearing the heavy burden of establishing improper joinder, fails to offer any facts refuting Plaintiff's claim that Villareal was personally involved in the conduct that gave rise to Plaintiff's injuries. (Dkt. 1, Attach. 1, at ¶ 8.) See Cuevas v. BAC Home Loans Servicing, LP, 648 F.3d 242, 249 (5th Cir. 2011). Moreover, courts throughout the
Southern District of Texas have rejected charges of improper joinder where the plaintiff has pled facts alleging that the instate defendant "caused, created, and/or was personally involved with the injury-inducing hazard." (Dkt. 4 at 5.) See Adame v. PetSmart, LLC, 2022 WL 961547, at *3 (S.D. Tex. Mar. 15, 2022) (remanding the case where nondiverse employee-defendant was responsible for creating a slip hazard); Mason v. Amazon.com Services, LLC, 2020 WL 6551143, at *2 (S.D. Tex. Oct. 30, 2020) (remanding where "[i]t is plausible that Plaintiff could recover against [the manager] if in fact he created a dangerous condition and then did nothing to remedy the situation, or otherwise personally caused Plaintiff's injury"); Gonzalez v. Wal-Mart Stores Tex., LLC, 2013 WL 1827924, at *3 (S.D. Tex. Apr. 30, 2013) (remanding where the in-state employee-defendant inspected a vehicle whose tire subsequently failed).
Still, Swift contends that the instant case is distinguishable because the injured plaintiff here, Mr. Tubbs, was an employee, rather than a customer. (Dkt. 5 at ¶ 7.) Accordingly, Swift alleges that Texas law bars recovery against an individual employee like Defendant Villareal unless he "owe[d] an independent duty of reasonable care to the injured party apart from the employer's duty of care." (Id. at ¶ 8.) Swift relies on the Texas Supreme Court's decision in Leitch v. Hornsby, a case involving an injured employee who brought a negligence action against his corporate employer and two of its officers. Leitch v. Hornsby, 935 S.W.2d 114, 116 (Tex. 1996). The Leitch Court held that "unless alter ego is established, corporate officers are subject to personal liability for their actions within the employment context only when they breach an independent duty of care" (emphasis added). Leitch, 935 S.W.2d at 117.
However, this Court declines to extend the Leitch decision to the instant case for two reasons. First, the Court finds that the issue of whether corporate officers owe an independent duty of care raises starkly different questions than whether ordinary employees, such as Defendant Villareal, owe such a duty. Second, the Court finds that in disputes such as this, "Texas law is clear that an employee can be held individually liable for negligent conduct resulting in injury." Richardson v. Wal-Mart Stores, LLC, 192 F.Supp.3d 719, 723 (S.D. Tex. 2016) (citing Crooks v. Moses, 138 S.W.3d 629, 637 (Tex.App.-Dallas 2004, pet. denied)). Therefore, the Court concludes that Defendant Swift has not satisfied its "heavy burden" of establishing federal jurisdiction over this case and Plaintiff's Motion to Remand (Dkt. 4) must be granted.
Conclusion
Villareal and Plaintiff are both citizens of Texas. Consequently, complete diversity does not exist in this case. The Court cannot properly exercise jurisdiction over this action.
Accordingly, Plaintiff's Motion to Remand (Dkt. 4) is GRANTED. The case is REMANDED to the 341st Judicial District Court of Webb County, Texas.
IT IS SO ORDERED.