United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND OPINION
Rosenthal Chief United States District Judge.
and Michael Ciccone filed suit in Texas state court after a
single-vehicle accident damaged Ciccone's car and injured
Pan, the driver. (Docket Entry No. 1-1 at 26, ¶ 15). Pan
and Ciccone allege that the accident occurred because a tire
manufactured by Sumitomo Rubber Industries and Sumimoto
Rubber North America blew out. They sued Sumimoto for strict
products liability, negligence, and negligent representation.
Id. at 27-31, ¶¶ 18-31. They also sued
Discount Tire Company of Texas, the company that sold,
installed, inspected, and serviced the tire, for negligence
in installing, inspecting, and maintaining it. Id.
at 31-32, ¶¶ 39- 41. Sumimoto removed on the basis
of diversity jurisdiction, alleging that Discount Tire of
Texas, the in-state defendant, was improperly joined. 28
U.S.C. §§ 1332, 1441(b). Sumimoto based its removal
on a Texas statute that protects nonmanufacturing sellers
from product-liability suits, arguing that Pan and Ciccone
have no reasonable basis to recover against Discount Tire
Company of Texas under Texas law. See Tex. Civ.
Prac. & Rem. Code § 82.003; (Docket Entry No. 1 at
6, ¶17). Pan and Ciccone moved to remand, arguing that
they adequately pleaded an exception to that statute. (Docket
Entry No. 5 at 2-3, ¶ 7).
on the pleadings, the motions and responses, the parties'
arguments and submissions, and the applicable law, this court
denies the motion to remand and dismisses Discount Tire
Company of Texas from this lawsuit as an improperly joined
party. The reasons are explained below.
The Legal Standard
defendant may remove a case to federal court when federal
subject-matter jurisdiction exists and the removal procedure
has been properly followed. See 28 U.S.C. §
1441; 28 U.S.C. § 1332(a). Although there is complete
diversity between Pan and Ciccone (Texas citizens) and the
Sumimoto defendants (citizens of Japan and California),
Discount Tire Company of Texas is a citizen of Texas. If
properly joined, Discount Tire Company of Texas's
presence in the suit as an in-state defendant precludes
federal removal jurisdiction. The issue is whether Pan and
Ciccone have stated a valid state-law cause of action against
Discount Tire Company of Texas.
removing defendant [need not] demonstrate an absence of
any possibility of recovery . . . the defendant must
demonstrate only that there is no reasonable basis
for predicting that the plaintiff will recover in state
court.” Gray ex rel. Rudd v. Beverly Enters.-Miss.,
Inc., 390 F.3d 400, 405 (5th Cir. 2004) (emphasis in
original). A “mere theoretical possibility of recovery
under local law” is not enough. See Badon v. RJR
Nabisco, Inc., 236 F.3d 282, 286 n. 4 (5th Cir.2000);
accord Ross v. Citifinancial, Inc., 344 F.3d 458,
462 (5th Cir. 2003).
Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573
(5th Cir. 2004) (en banc), cert. denied, 544 U.S.
992, 125 S.Ct. 1825, 161 L.Ed.2d 755 (2005), the Fifth
Circuit clarified the procedure for determining whether there
is a reasonable basis for recovery against the in-state
defendant. A court may conduct a Rule 12(b)(6) analysis,
examining the allegations in the complaint to determine
whether they state a claim under state law against the
in-state defendant, or, after examining the pleadings, decide
to conduct a summary inquiry. Smallwood, 385 F.3d at
573-74. Generally, if a plaintiff's pleading survives the
Rule 12(b)(6) analysis, then there is no improper joinder.
Guillory v. PPG Indus., Inc., 434 F.3d 303, 309 (5th
Cir. 2005). The state-court petition filed when the case is
removed controls the analysis. Bell v. Thornburg,
743 F.3d 84, 85-86 (5th Cir. 2014) (per curiam) (citing
Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d
256, 264 (5th Cir. 1995) (“Limiting the removal
jurisdiction question to the claims in the state court
complaint . . . permits early resolution of which court has
jurisdiction, so that the parties and the court can proceed
with, and expeditiously conclude, the litigation.”)).
determining whether a plaintiff has a reasonable basis for
recovery on at least one claim under state law, the district
court is limited to the causes of action and allegations
asserted in the complaint. Campbell v. Stone Ins.,
Inc., 509 F.3d 665, 668-69 n. 2 (5th Cir. 2007); see
Freeport-McMoRan, Inc. v. K N Energy, Inc., 498 U.S.
426, 428, 111 S.Ct. 858, 112 L.Ed.2d 951 (1991) (per curiam).
The district court must resolve all factual disputes and
ambiguities in state law in favor of the plaintiff.
Travis, 326 F.3d at 649; McKee v. Kan. City S.
Ry. Co., 358 F.3d 329. 333 (5th Cir. 2004). If the
record reveals a reasonable basis of recovery on any cause of
action, a court must remand the entire suit to state court.
Gray, 390 F.3d at 412 (presence of unavailing claims
does not defeat remand); Rainwater v. Lamar Life Ins.
Co., 391 F.3d 636, 638 (5th Cir. 2004).
Whether State or Federal Pleading Standards Govern the
Improper Joinder Inquiry
deciding a motion to remand based on jurisdiction when an
in-state defendant is a party, federal district courts must
evaluate whether there is a claim against that party using
the federal pleading standards instead of the more lenient
“fair notice standard” of Texas state courts.
Peña v. City of Rio Grande City, 879 F.3d
613, 617 (5th Cir. 2018) (“Pleadings must be reviewed
under the federal pleading standard because the question of
improper joinder ‘[a]t bottom . . . is solely about
determining the federal court's
jurisdiction.”' (citation omitted)). This court
evaluates Pan's and Ciccone's claims under Rule
12(b)(6), which allows dismissal if a plaintiff fails
“to state a claim upon which relief can be
granted.” Fed.R.Civ.P. 12(b)(6). Rule 12(b)(6) must be
read in conjunction with Rule 8(a), which requires “a
short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed.R.Civ.P. 8(a) (2).
A complaint must contain “enough facts to state a claim
to relief that is plausible on its face.” Bell
Atlantic Corporation v. Twombly, 550 U.S. 544,
570 (2007). Rule 8 “does not require ‘detailed
factual allegations, ' but it demands more than an
accusation.”' Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (citing Twombly, 550 U.S. at 555).
Whether the Petition Alleges a Reasonable Basis for the
Plaintiffs to Recover Against Direct Tire Company of
state-court petition asserts only state-law negligence claims
against Discount Tire Company of Texas. Chapter 82 of the
Texas Civil Practice and Remedies Code governs product
liability actions. A “products liability action”
any action against a manufacturer or seller for recovery of
damages arising out of personal injury, death, or property
damage allegedly caused by a defective product whether the
action is based in strict tort liability, strict products
liability, negligence, misrepresentation, breach of express
or implied warranty, or any other theory or combination of
Tex. Civ. Prac. & Rem. Code § 82.001. In 2003, the
legislature added § 82.003, limiting a plaintiff's
ability to recover against nonmanufacturing sellers in a
products-liability action. Section 82.003 states that a
nonmanufacturing seller “is not liable for harm caused
to the claimant by that product unless the claimant
proves” that at least one of seven exceptions ...