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Alviar v. Lillard

United States Court of Appeals, Fifth Circuit

April 14, 2017

JOE ALVIAR, JR., Plaintiff - Appellant
JOHN LILLARD, Individually, Defendant-Appellee

         Appeal from the United States District Court for the Northern District of Texas

          Before DAVIS, SOUTHWICK, and HIGGINSON, Circuit Judges.

          STEPHEN A. HIGGINSON, Circuit Judge:

         Joe Alviar, Jr. sued his former employer, Macy's Retail Holdings, Inc., a wholly-owned subsidiary of Macy's, Inc. (collectively, "Macy's"), and his former supervisor at Macy's, John Lillard, in Texas state court. After Macy's removed the case to federal district court, Alviar moved to remand and Lillard moved to dismiss the action against him under Fed.R.Civ.P. 12(b)(6). The district court denied Alviar's motion to remand, granted Lillard's motion to dismiss, and entered final judgment for Lillard under Rule 54(b). Alviar appealed, and we now affirm in part and remand in part.


         Alviar was employed as an Asset Protection Manager by Macy's. He was diagnosed with Post Traumatic Stress Disorder ("PTSD") after serving in the United States Army. Alviar alleged that he was subjected to discrimination by Lillard, the Director of Asset Protection, when Lillard expressed hostility to Alviar's PTSD and made inappropriate statements to Alviar regarding his condition.

         In August 2015, Macy's fired Alviar. Alviar alleged that Macy's stated reason for firing him was false and a "mere pretext for unlawful discrimination" based on his PTSD condition. Additionally, Alviar claimed that "Lillard interfered with [his] contract of employment with Macy's by terminating him and making the performance of the contract more difficult on account of [his] disability and status as a veteran, in violation of Macy's policy[, ] which expresses disapproval of discrimination based on disability and Veteran status." Alviar alleged that Lillard's actions were contrary to the interests of Macy's.

         Alviar sued Macy's and Lillard in Texas state court, claiming that Macy's discriminated against him based on his disability in violation of the Texas Labor Code. Additionally, he claimed that Lillard tortiously interfered with his employment contract with Macy's. Macy's removed the suit to federal court on the basis of diversity jurisdiction, contending that the district court should ignore the in-state and non-diverse citizenship of Lillard because he was improperly joined to defeat diversity. Alviar moved to remand, arguing that because Lillard-acting in his own interest-tortiously interfered with Alviar's employment contract, he was properly joined, the parties were not completely diverse, and district court lacked jurisdiction. Lillard moved to dismiss the suit against him under Rule 12(b)(6). The district court denied Alviar's motion to remand and granted Lillard's motion to dismiss. Alviar timely appealed the order dismissing the claim against Lillard.


         Alviar is a citizen of Texas and both Macy's organizations are foreign corporations. Lillard-a citizen of Texas-is an impediment to diversity jurisdiction for two reasons. First, for diversity jurisdiction to exist under 28 U.S.C. § 1332, "all persons on one side of the controversy [must] be citizens of different states than all persons on the other side." McLaughin v. Miss. Power Co., 376 F.3d 344, 353 (5th Cir. 2004) (citation omitted). Additionally, a case cannot be removed based on diversity jurisdiction if any properly joined defendant is a citizen of the state in which the action is brought. 28 U.S.C. § 1441(b)(2). "Improper joinder can be established in two ways: (1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court." Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392, 401 (5th Cir. 2013) (citation and alteration omitted). To establish improper joinder under the second prong, the defendant must demonstrate "that there is no possibility of recovery" against the in-state or non-diverse defendant, "which stated differently means that there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against an in-state [or non-diverse] defendant." Smallwood v. Illinois Cent. R. Co., 385 F.3d 568, 573 (5th Cir. 2004) (en banc). Accordingly, to determine whether an in-state or non-diverse defendant was properly joined, "[t]he court may conduct 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 . . . defendant." Id.


         "We review de novo the district court's 'determination that a party is improperly joined and [its] denial of a motion for remand.'" Davidson v. Ga- Pac., L.L.C., 819 F.3d 758, 765 (5th Cir. 2016) (quoting Kling Realty Co. v. Chevron USA, Inc., 575 F.3d 510, 513 (5th Cir. 2009)) (alteration in original).


         "Under Texas law, the elements of tortious interference with a contract are: (1) the existence of a contract, (2) willful and intentional interference, (3) interference that proximately caused damages, and (4) actual damage or loss." Mumfrey, 719 F.3d at 402 (citing Powell Indus., Inc. v. Allen, 985 S.W.2d 455, 456 (Tex. 1998) (per curiam)). "When the defendant is both a corporate agent and the third party who allegedly induced the corporation's breach, the second element is particularly important." Id. (quoting Powell, 985 S.W.2d at 456-57). "To maintain a tortious interference suit against a corporate agent or representative, a plaintiff must show that the agent acted willfully and intentionally to serve the agent's personal interests at the corporation's expense." Id. at 402-03 (citing Powell, 985 S.W.2d at 457). "Even an agent's mixed motives-benefitting himself and the corporation-are insufficient." Id. at 403 (citing Powell, 985 S.W.2d at 457). Thus, "[b]ecause a corporate officer's acts on the corporation's behalf usually are deemed corporate interests, a plaintiff must show that the agent acted solely in his own interests." Powell, 985 S.W.2d at 457 ...

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