United States District Court, N.D. Texas, Dallas Division
MEMORANDUM OPINION AND ORDER.
A. FITZWATER UNITED STATES DISTRICT JUDGE.
removed action by plaintiff Jesus Gutierrez
(“Gutierrez”) to recover for damage to his
residence resulting from a wind and hail storm, Gutierrez
moves to remand based on lack of complete diversity, citing
the Texas citizenship of defendant Brandon Tarver
(“Tarver”), the insurance adjuster who adjusted
his claim. Defendants Allstate Fire and Casualty Insurance
Company (“Allstate”) and Tarver oppose the motion
on the basis that Tarver has been improperly joined.
Concluding that defendants have met their heavy burden of
establishing improper joinder, the court denies the motion to
residence was insured under a policy issued by Allstate.
Tarver was assigned to adjust Gutierrez's
claim. Gutierrez alleges that Allstate and/or
Tarver breached the policy and various statutory and common
law duties in connection with handling his claim. He asserts
that Allstate and Tarver misrepresented that some of the
damage to the residence was not covered under the policy,
despite being caused by a covered occurrence, in violation of
Tex. Ins. Code Ann. § 541.060(a)(1) (West 2017); failed
to attempt to settle the claim in a fair manner, in violation
of Tex. Ins. Code Ann. § 541.060(a)(2)(A); failed to
explain to Gutierrez why they offered an inadequate
settlement, in violation of Tex. Ins. Code Ann. §
541.060(a)(3); failed to affirm or deny coverage of
Gutierrez's claim within a reasonable time, in violation
of Tex. Ins. Code Ann. § 541.060(a)(4); refused to fully
compensate Gutierrez under the terms of the policy, in
violation of Tex. Ins. Code Ann. § 541.060(a)(7); and
failed to meet their obligations regarding timely
acknowledging his claim, beginning an investigation of his
claim, and requesting all information reasonably necessary to
investigate his claim within the statutorily mandated
deadline; failed to accept or deny his entire claim within
the statutorily mandated deadline of receiving all necessary
information; and failed to meet the obligation to pay a claim
without delay, in violation of Tex. Ins. Code Ann. §
from the claims Gutierrez brings against Allstate, he asserts
claims against Tarver for violating various sections of the
Texas Deceptive Trade Practices-Consumer Act
(“DTPA”), Tex. Bus. & Com. Code Ann.
§§ 17.46-17.50 (West 2017); violating § 541 of
the Texas Insurance Code; conspiracy; and negligence, gross
negligence, and negligent misrepresentation.
removed this case based on diversity of citizenship,
contending that Tarver, a Texas citizen, has been improperly
joined. Gutierrez moves to remand, maintaining that Tarver
was properly joined and that the parties are not completely
case to be removed based on diversity jurisdiction,
“all persons on one side of the controversy [must] be
citizens of different states than all persons on the other
side.” Harvey v. Grey Wolf Drilling Co., 542
F.3d 1077, 1079 (5th Cir. 2008) (quoting McLaughlin v.
Miss. Power Co., 376 F.3d 344, 353 (5th Cir. 2004))
(internal quotation marks omitted). “The jurisdictional
facts that support removal must be judged at the time of the
removal.” Gebbia v. Wal-Mart Stores, Inc., 233
F.3d 880, 883 (5th Cir. 2000) (citations omitted). Moreover,
under 28 U.S.C. § 1441(b), 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 (here, Texas).
doctrine of improper joinder is a narrow exception to the
rule of complete diversity, and it “entitle[s] a
defendant to remove to a federal forum unless an in-state
defendant has been ‘properly joined.'”
Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573
(5th Cir. 2004) (en banc); see also Meritt Buffalo Events
Ctr. LLC v. Cent. Mut. Ins. Co., 2016 WL 931217, at *2
(N.D. Tex. Mar. 11, 2016) (Fitzwater, J.). The doctrine
allows federal courts to defend against attempts to
manipulate their jurisdiction, such as by joining nondiverse
parties solely to deprive federal courts of diversity
jurisdiction. See Smallwood, 385 F.3d at 576.
Because “the effect of removal is to deprive the state
court of an action properly before it, removal raises
significant federalism concerns.” Gasch v. Hartford
Accident & Indem. Co., 491 F.3d 278, 281 (5th Cir.
2007) (quoting Carpenter v. Wichita Falls Indep. Sch.
Dist., 44 F.3d 362, 365-66 (5th Cir. 1995)). Therefore,
the removal statute is strictly construed, with “any
doubt about the propriety of removal [being] resolved in
favor of remand.” Id. at 281-82. In
determining whether a party was improperly joined, the court
“resolve[s] all contested factual issues and
ambiguities of state law in favor of the plaintiff.”
Id. at 281. The party seeking removal bears a heavy
burden to prove improper joinder. Smallwood, 385
F.3d at 574.
joinder is established by showing that there was either
actual fraud in the pleading of jurisdictional facts or that
the plaintiff is unable to establish a cause of action
against the nondiverse defendant in state court. Parsons
v. Baylor Health Care Sys., 2012 WL 5844188, at *2 (N.D.
Tex. Nov. 19, 2012) (Fitzwater, C.J.) (citing
Smallwood, 385 F.3d at 573). Under the second
alternative-the one at issue in this case-the test for
improper joinder is “whether the defendant has
demonstrated that there is no possibility of recovery by the
plaintiff against an in-state 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 defendant.”
Smallwood, 385 F.3d at 573; see also Travis v.
Irby, 326 F.3d 644, 648 (5th Cir. 2003) (explaining that
terms “no possibility” of recovery and
“reasonable basis” for recovery have essentially
identical meaning, and holding that pleadings must show more
than “any mere theoretical possibility of
recovery”). To assess “whether a plaintiff has a
reasonable basis of recovery under state law, ”
[t]he court may conduct a [Fed. R. Civ. P.] 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. Ordinarily,
if a plaintiff can survive a Rule 12(b)(6) challenge, there
is no improper joinder. That said, there are cases, hopefully
few in number, in which a plaintiff has stated a claim, but
has misstated or omitted discrete facts that would determine
the propriety of joinder. In such cases, the district court
may, in its discretion, pierce the pleadings and conduct a
Smallwood, 385 F.3d at 573 (footnotes omitted).
deciding whether a defendant has been improperly joined, a
federal district court must apply the federal pleading
standard. See Int'l Energy Ventures Mgmt., L.L.C. v.
United Energy Grp. Ltd., 818 F.3d 193, 207-08 (5th Cir.
2016) (on rehearing). This standard requires the plaintiff to
plead enough facts “to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (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.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
“The plausibility standard is not akin to a
‘probability requirement, ' but it asks for more
than a sheer possibility that a defendant has acted
unlawfully.” Id.; see also Twombly,
550 U.S. at 555 (“Factual allegations must be enough to
raise a right to relief above the speculative
level[.]”). “[W]here the well-pleaded facts do
not permit the court to infer more than the mere possibility
of misconduct, the complaint has alleged-but it has not
‘shown'-‘that the pleader is entitled to
relief.'” Iqbal, 566 U.S. at 679
(alteration omitted) (quoting Rule 8(a)(2)). Furthermore,
under Rule 8(a)(2), a pleading must contain “a short
and plain statement of the claim showing that the pleader is
entitled to relief.” Although “the pleading
standard Rule 8 announces does not require ‘detailed
factual allegations, '” it demands more than
“labels and conclusions.” Iqbal, 566
U.S. at 678 (quoting Twombly, 550 U.S. at 555). And
“‘a formulaic recitation of the elements of a
cause of action will not do.'” Id.
(quoting Twombly, 550 U.S. at 555).