Romero v. Circle K Stores, Inc., et al.

Filing 13

MEMORANDUM OPINION AND ORDER by District Judge William P. Johnson GRANTING 7 Motion to Remand. The Clerk of Court is hereby directed to take the necessary actions to remand the case to First Judicial District Court, County of Santa Fe, State of New Mexico. (mag)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
PETE ROMERO,

Plaintiff,
v.

Civil No. 17-00517 WJ-SCY

CIRCLE K STORES, INC., JAMES
GROGAN, MARK STANNEBEIN,
SAMUEL WILSON, and JOHN DOES I-X,
Defendants.

MEMORANDUM OPINION AND ORDER
GRANTING PLAINTIFF’S MOTION TO REMAND
THIS MATTER comes before the Court upon Plaintiff’s Motion to Remand, filed May
18, 2017 (Doc. 7). Having reviewed the parties’ briefs and applicable law, the Court finds that
Plaintiff’s motion is well-taken and, therefore, is granted.
BACKGROUND
This is a personal injury case. Plaintiff Pete Romero was an employee of Defendant
Circle K Stores, Inc. (“Circle K” or “Defendant” for purposes of this opinion) and was stabbed
on or about March 30, 2014 by two unknown male suspects when he attempted to block their
exit from the store after they stole an 18-pack of Corona beer. After the criminals fled the store,
Plaintiff realized he had been stabbed multiple times and sustained injuries which resulted in
internal bleeding that required surgery and subsequent surgical procedures. Plaintiff alleges that
he continues to suffer long-term effects from the attack.
Plaintiff filed this lawsuit in the First Judicial District Court, County of Santa Fe on
March 27, 2017, and Defendants removed the case to federal court on May 3, 2017 on the basis

of diversity of citizenship. Doc. 1 at 2-3.

In Count I of the complaint, Plaintiff alleges that

Circle K deliberately chose not to provide adequate security and training, placing him in an
inherently dangerous situation where it was expected he would be a crime victim and suffer harm
or death. Doc. 1-2.1 In Count II, Plaintiff claims Circle K disposed of or destroyed relevant
evidence material to Plaintiff’s claims. Id. In Count III, Plaintiff seeks compensatory and
punitive damages.
According to the Notice of Removal (Doc. 1), Plaintiff alleges that Circle K is a nonresident, for-profit corporation operating convenience stores in New Mexico. In the notice,
Defendant further certifies that Circle K is a Texas corporation with its principal place of
business in Tempe, Arizona. Circle K is a citizen of a state other than New Mexico. The dispute
here is whether the individual Circle K employees and the John Doe Defendants are proper
Defendants. Since these individual defendants are alleged to be residents of Albuquerque, New
Mexico, their presence in this case would ordinarily destroy diversity. However, Defendant
claims that they are not proper parties to this lawsuit because Plaintiff has not asserted any claim
against them and their residences in New Mexico should not be considered when evaluating
diversity of citizenship.
DISCUSSION
The question before the Court here is whether Plaintiff has fraudulently joined these
individual defendants in order to deprive Circle K of the right to have this litigated in federal

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The specific legal theory underlying Count I is not clear. It is captioned as “Willful and Intentional Misconduct”
by Circle K, but at the same time the language in Count I alludes to Circle K’s “breach of duty.” Doc. 1-2, ¶¶93-94.
However, the Court declines to construe the pleadings because Plaintiff is not proceeding pro se, but is represented
by counsel. The only issue before the Court here is whether the case should be remanded to state court. The Court
is similarly baffled with the description of the instant motion by Plaintiff’s counsel as a “Response in Opposition to
Defendant’s Notice of Removal and Plaintiff’s Motion to Remand,” since the Court is not aware of any requirement
to file a “response” to a Notice of Removal.

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court. Plaintiff also challenges Defendants’ contention that the amount-in-controversy is met for
diversity jurisdiction.
I.

Legal Standard
Federal courts are courts of limited jurisdiction; thus, there is a presumption against

removal jurisdiction, which the defendant seeking removal must overcome. See Fajen v. Found.
Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir.1982); Martin v. Franklin Capital Corp., 251 F.3d
1283, 1290 (10th Cir. 2001). Removal statutes are strictly construed, and ambiguities should be
resolved in favor of remand.
Subject-matter jurisdiction under 28 U.S.C. § 1332(a)(1) requires: (i) complete diversity
among the parties; and (ii) that the matter in controversy exceeds the sum or value of $75,000,
exclusive of interest and costs. However, fraudulent joinder is an exception to the requirement
of complete diversity. Black Iron, LLC v. Helm-Pacific, 2017 WL 2623846, at *4 (D.Utah,
2017). The joinder of a non-diverse party is “fraudulent” when it serves no purpose other than
“to frustrate federal jurisdiction.”4 Dodd v. Fawcett Publ'ns, Inc., 329 F.2d 82, 85 (10th Cir.
1964). A defendant may remove a case to federal court based upon diversity jurisdiction in the
absence of complete diversity if a plaintiff joins a non-diverse party fraudulently to defeat federal
jurisdiction. See Am. Nat'l Bank & Trust Co. v. Bic Corp., 931 F.2d 1411, 1412 (10th Cir.1991).
The citizenship of fraudulently joined defendants “should be ignored for the purposes of
assessing complete diversity.” See Dutcher v. Matheson, 733 F.3d 980, 987-988 (10th Cir. 2013).
The Tenth Circuit has stated that fraudulent joinder must be “established with complete
certainty upon undisputed evidence.” Smoot v. Chicago, Rock Island & Pacific Railroad Co.,
378 F.2d 879 (10th Cir.1967). In evaluating a claim of fraudulent joinder, “all doubts are to be
resolved against removal.” Fajen v. Found. Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir. 1982).

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In other words, the removing party “bears a heavy burden of proving fraudulent joinder, and all
factual and legal issues must be resolved in favor of the plaintiff.” See Dutcher, 733 F.3d at 988
(quoting Pampillonia v. RJR Nabisco, Inc., 138 F.3d 459, 461 (2d Cir. 1998)). This is a high bar
for Defendants to meet, and poses a standard “more exacting than that for dismissing a claim
under Fed.R..Civ.P. 12(b)(6)” and “which entails the kind of merits determination that, absent
fraudulent joinder, should be left to the state court where the action was commenced.” Montano
v. Allstate Indemnity, 2000 WL 525592 at **1-2 (10th Cir. 2000).2
The party defending removal may carry this “heavy burden” and successfully assert
fraudulent joinder by demonstrating either: (1) actual fraud in the pleading of jurisdictional facts,
or (2) the inability of the plaintiff to establish a cause of action against the non-diverse party in
state court. Dutcher v. Matheson, 733 F.3d 980, 988 (10th Cir. 2013); Black Iron, LLC v. HelmPacific, 2017 WL 2623846, at *4 (D.Utah, 2017); see also Montano v. Allstate, 2000 WL
525592 at **1-2 (to prove fraudulent joinder, the removing party must demonstrate that there is
no possibility that plaintiff would be able to establish a cause of action against the joined party in
state court).
A fraudulent joinder analysis is a jurisdictional inquiry and therefore a district court
should “pierce the pleadings, consider the entire record, and determine the basis of joinder by
any means available,” Dodd v. Fawcett Publ’ns, Inc., 329 F.2d 82, 85 (10th Cir.1964) (citations
omitted); Albert v. Smith’s Food & Drug Centers, Inc. 356 F.3d 1242, 1247 (10th Cir.
2004)(fraudulent joinder analysis is a jurisdictional inquiry); Smoot, 378 F.2d at 882 (federal

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Many district courts within the Tenth Circuit have referred to the standard for fraudulent joinder as requiring clear
and convincing evidence. See Bristow First Assembly of God v. BP p.l.c., No. 15-CV-523-TCK-FHM, 2016 WL
5415792, at *2 n.1 (N.D. Okla. Sept. 28, 2016) (finding “no significant difference between the ‘complete certainty’
language in Smoot and the ‘clear and convincing’ language in other cases); Spence v. Flynt, 647 F.Supp. 1266, 1271
(D. Wyo.1986); Castens v. Conseco Life Ins. Co., No. 11–CV–628–TCK, 2012 WL 610001, at *2 (N.D. Okla. Feb.
24, 2012); De La Rosa v. Reliable, Inc., 113 F. Supp. 3d 1135, 1163 (D.N.M. 2015).

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courts may look beyond the pleadings to determine if joinder is fraudulent); see also De La Rosa
v. Reliable, Inc., 113 F.Supp.3d at 1151.
II.

Analysis
A.

Fraudulent Joinder

Defendants’ argument for fraudulent joinder focuses on the inability of the plaintiff to
establish a cause of action against the individual defendants under state law.

See Smoot, 378

F.2d at 882.
As stated in the complaint, Defendant James Grogan was the manager of Circle K; and
Mark Stannebein and Samuel Wilson were Assistant Managers. Doc. 1-2, ¶¶3-6. Counts I and
II mention Circle K but none of these individual defendants, including the John Doe defendants.
However, the complaint does contain an allegation that:
Plaintiff Pete Romero had previously complained to one of the Circle K
managers, Defendant James Grogan “on more than one occasion that he felt
unsafe working at Store 1447 because of the high crime in the area, and
questioned Mr. Grogan as to why circle K did not hire security to guard Store
1447 during graveyard shifts.
Doc. 1-2, ¶28. Even though this assertion is contained in the fact section of the complaint and
not in either of the counts, one cannot say that there is no possibility that Plaintiff can establish a
cause of action against Defendant Grogan for the conduct alleged in the complaint. Nor is there
complete certainty, based on undisputed evidence, that Plaintiff has no legal claim against
Grogan under any of the alleged theories in the complaint. As a Circle K manager who had
notice of the unsafe conditions by Plaintiff, Defendant Grogan could be liable to Plaintiff for
failure to address these security concerns.

This one claim against one of the non-diverse

defendants is sufficient to defeat diversity jurisdiction. See McPhail v. Deere & Co., 529 F.3d
947, 951 (10th Cir. 2008) (under 28 U.S.C. § 1332(a), the citizenship of all defendants must be
different from the citizenship of all plaintiffs) (emphasis added); Carden v. Arkoma Associates,
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494 U. S. 185, 187 (1990) (diversity statute requires complete diversity of citizenship). Thus,
Defendants have not satisfied their heavy burden of establishing fraudulent joinder, and as a
result, there cannot be federal diversity jurisdiction in this court.
B.

Amount in Controversy

In addition, Plaintiff challenges Defendant’s argument that the amount-in-controversy
requirement has been met, claiming that Defendant has not offered independent facts to support
that argument.

Doc. 7 at 11.

However, the Court need not delve into this challenge further,

since federal jurisdiction does not exist because of a lack of complete diversity alone. See
Martin v. Franklin Capital Corp., 251 F.3d 1284, 1290 (10th Cir. 2001); Laughlin v Kmart
Corp., 50 F.3d 871, 873 (10th Cir. 1995) (requiring both the requisite amount in controversy and
the existence of diversity on the face of either the complaint or the removal notice for purposes
of diversity jurisdiction) (emphasis added).3
THEREFORE,
IT IS ORDERED that Plaintiff’s Motion to Remand, (Doc. 7) is hereby
GRANTED for reasons described in this Memorandum Opinion and Order and that this action is
REMANDED to the First Judicial District Court, County of Santa Fe, State of New Mexico.
The Clerk of Court is hereby directed to take the necessary actions to remand the case.

________________________________
UNITED STATES DISTRICT JUDGE

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However, the Court cannot resist noting that Plaintiff relies on an incorrect standard for the amount-in-controversy
requirement. According to recent United States Supreme Court precedent, a defendant’s notice of removal “need
include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold.” Dart
Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547 (2014). A defendant is required to submit evidence
establishing the amount “only when the plaintiff contests, or the court questions” the defendant’s allegation.” Id.

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