Coffman v. Dole Fresh Fruit Company et al
Filing
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MEMORANDUM AND ORDER granting # 6 Coffman's Motion to Remand. The court finds that because Dole's Notice of Removal was procedurally defective, this case was improvidently removed and a remand to state court is warranted. Signed by Judge Marcia A. Crone on 2/26/13. (mrp, )
UNITED STATES DISTRICT COURT
ABE COFFMAN,
Plaintiff,
versus
DOLE FRESH FRUIT COMPANY and
CHEVRON PORT ARTHUR
LUBRICATION PLANT,
Defendants.
EASTERN DISTRICT OF TEXAS
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CIVIL ACTION NO. 1:12-CV-420
MEMORANDUM AND ORDER
Pending before the court is Plaintiff Abe Coffman’s (“Coffman”) Motion to Remand (#6).
Coffman argues that the court lacks subject matter jurisdiction over this action because Defendant
Dole Fresh Fruit Co. (“Dole”) did not obtain consent from Chevron Products Company
(“Chevron”) to remove the case to federal court. Having considered the motion, the submissions
of the parties, and the applicable law, the court is of the opinion that remand is warranted.
I.
Background
On September 11, 2011, Coffman filed his original petition in the 60th Judicial District
Court of Jefferson County, Texas, asserting claims for negligence against Dole and Chevron Port
Arthur Lubrication Plant. Chevron’s counsel, however, informed Coffman that the Port Arthur
plant is not a separate entity. Coffman amended his petition to identify the defendant as Chevron,
U.S.A., but did not alter the jurisdictional facts stating that Chevron is a Texas corporation.
Chevron filed a general denial and asserted that the proper defendant is actually Chevron Products
Company, a Pennsylvania corporation, with its principal place of business in the State of
California. It is undisputed that Coffman is a citizen and resident of the State of Texas. Dole is
a Nevada corporation, with its principal place of business in the State of California.
On August 27, 2012, after discovering the true citizenship of Chevron, Dole removed the
case to this court on the basis of diversity of citizenship, alleging that complete diversity exists
among the real parties in interest and that the amount in controversy exceeds $75,000.00,
exclusive of interest and costs. On September 26, 2012, Coffman filed a motion to remand the
case to state court, contending that Chevron did not consent to the removal of the case. In
response, Dole asserts that Chevron, in fact, consented to removal by filing its answer without
opposing the removal or challenging the jurisdiction of the court. In the alternative, Dole contends
that because Chevron was fraudulently joined as a defendant to defeat diversity, its consent was
not required for removal.
II.
Analysis
“‘Federal courts are courts of limited jurisdiction.’” Rasul v. Bush, 542 U.S. 466, 489
(2004) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)); accord
Halmekangas v. State Farm Fire & Cas. Co., 603 F.3d 290, 292 (5th Cir. 2010); Johnson v.
United States, 460 F.3d 616, 621 n.6 (5th Cir. 2006); McKee v. Kan. City S. Ry. Co., 358 F.3d
329, 337 (5th Cir. 2004). “‘They possess only that power authorized by Constitution and statute,
which is not to be expanded by judicial decree.’” Rasul, 542 U.S. at 489 (quoting Kokkonen, 511
U.S. at 377 (citations omitted)). The court “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.), cert. denied, 534 U.S.
993 (2001) (citing Kokkonen, 511 U.S. at 377); see also Hertz Corp. v. Friend, 559 U.S. 77, 130
2
S. Ct. 1181, 1194 (2010); Boone v. Citigroup, Inc., 416 F.3d 382, 388 (5th Cir. 2005). In an
action that has been removed to federal court, a district court is required to remand the case to
state court if, at any time before final judgment, it determines that it lacks subject matter
jurisdiction. See 28 U.S.C. § 1447(c); Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567,
571 (2004); In re 1994 Exxon Chem. Fire, 558 F.3d 378, 392 (5th Cir. 2009); McDonal v. Abbott
Labs., 408 F.3d 177, 182 (5th Cir. 2005).
When considering a motion to remand, “[t]he removing party bears the burden of showing
that federal jurisdiction exists and that removal was proper.” Manguno v. Prudential Prop. &
Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002); accord DaimlerChrysler Corp. v. Cuno, 547
U.S. 332, 342 n.3 (2006); Gutierrez v. Flores, 543 F.3d 248, 251 (5th Cir. 2008); In re Hot-Hed
Inc., 477 F.3d 320, 323 (5th Cir. 2007); Guillory v. PPG Indus., Inc., 434 F.3d 303, 308 (5th
Cir. 2005); Boone, 416 F.3d at 388. “‘This extends not only to demonstrating a jurisdictional
basis for removal, but also necessary compliance with the requirements of the removal statute.’”
Roth v. Kiewit Offshore Servs., Ltd., 625 F. Supp. 2d 376, 382 (S.D. Tex. 2008) (quoting
Albonetti v. GAF Corp. Chem. Grp., 520 F. Supp. 825, 827 (S.D. Tex. 1981)); accord
Crossroads of Tex., L.L.C. v. Great-West Life & Annuity Ins. Co., 467 F. Supp. 2d 705, 708
(S.D. Tex. 2006); Smith v. Baker Hughes Int’l Branches, Inc., 131 F. Supp. 2d 920, 921 (S.D.
Tex. 2001). “Only state-court actions that originally could have been filed in federal court may
be removed to federal court by the defendant.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392
(1987) (citing 28 U.S.C. § 1441(a)); see Aetna Health Inc. v. Davila, 542 U.S. 200, 207 (2004);
Halmekangas, 603 F.3d at 294; Gutierrez, 543 F.3d at 251. “The removal statute ties the
propriety of removal to the original jurisdiction of the federal district courts.” Frank v. Bear
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Stearns & Co., 128 F.3d 919, 922 (5th Cir. 1997); see 28 U.S.C. § 1441(a); Hoskins v. Bekins
Van Lines, 343 F.3d 769, 772 n.2 (5th Cir. 2003). Because removal raises significant federalism
concerns, the removal statutes are strictly and narrowly construed, with any doubt resolved against
removal and in favor of remand. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09
(1941); Gutierrez, 543 F.3d at 251; Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278,
281-82 (5th Cir. 2007); In re Hot-Hed Inc., 477 F.3d at 323.
Federal courts have subject matter jurisdiction and are authorized to entertain causes of
action only where a question of federal law is involved or where there is diversity of citizenship
between the parties and the amount in controversy exceeds $75,000.00, exclusive of interest and
costs. See 28 U.S.C. §§ 1331, 1332; Arbaugh v. Y & H Corp., 546 U.S. 500, 513 (2006);
Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89 (2005); Exxon Mobil Corp. v. Allapattah Servs.,
Inc., 545 U.S. 546, 552 (2005); Halmekangas, 603 F.3d at 294; McDonal, 408 F.3d at 181. In
order to determine whether jurisdiction is present in a removed action, the claims set forth in the
state court petition are considered as of the date of removal. See Wis. Dep’t of Corr. v. Schacht,
524 U.S. 381, 391 (1998); Campbell v. Stone Ins., Inc., 509 F.3d 665, 669 n.2 (5th Cir. 2007);
McGowin v. ManPower Int’l, Inc., 363 F.3d 556, 558 n.1 (5th Cir. 2004); Manguno, 276 F.3d
at 723. In removed cases where, as here, there is no suggestion that a federal question is
involved, subject matter jurisdiction exists only if there is complete diversity among the parties
and the amount in controversy exceeds $75,000.00. See 28 U.S.C. § 1332; Lincoln Prop. Co.,
546 U.S. at 89; Exxon Mobil Corp., 545 U.S. at 552; Caterpillar Inc. v. Lewis, 519 U.S. 61, 68
(1996); Halmekangas, 603 F.3d at 294; Heritage Bank v. Redcom Labs., Inc., 250 F.3d 319, 323
(5th Cir.), cert. denied, 534 U.S. 997 (2001). Complete diversity requires that no plaintiff be a
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citizen of the same state as any defendant. See Exxon Mobil Corp., 545 U.S. at 552; Caterpillar
Inc., 519 U.S. at 68; Wallace v. La. Citizens Prop. Ins. Corp., 444 F.3d 697, 702 (5th Cir.
2006); Heritage Bank, 250 F.3d at 323. Furthermore, removal is appropriate only if none of the
parties properly joined and served as defendants are citizens of the state in which the action was
brought. See 28 U.S.C. § 1441(b); Lincoln Prop. Co., 546 U.S. at 89; Gasch, 491 F.3d at 281;
Crockett v. R.J. Reynolds Tobacco Co., 436 F.3d 529, 531-32 (5th Cir.), cert. denied, 548 U.S.
907 (2006).
A.
Consent to Removal
1.
General Rule
The procedure for effectuating removal is set forth in 28 U.S.C. § 1446.1 Johnson v.
Heublein, Inc., 227 F.3d 236, 240 (5th Cir. 2000); see In re 1994 Exxon Chemical Fire, 558 F.3d
at 391; Bd. of Regents of Univ. of Tex. Sys. v. Nippon Tel. & Tel. Corp., 478 F.3d 274, 278 (5th
Cir. 2007); City of Clarksdale v. BellSouth Telcomms., Inc., 428 F.3d 206, 210 (5th Cir. 2005).
Section 1446(a) provides:
A defendant or defendants desiring to remove any civil action or criminal
prosecution from a State court shall file in the district court of the United States for
the district and division within which such action is pending a notice of removal
signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing
a short and plain statement of the grounds for removal, together with a copy of all
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In December 2011, § 1446 was amended as part of the Federal Courts Jurisdiction and Venue
Clarification Act of 2011 (“JVCA”) to, inter alia, clarify the procedural requirements for removal.
Penson Fin. Servs., Inc. v. Golden Summit Investors Grp., Ltd., No. 3:12-CV-300, 2012 WL 2680667,
at *2 (N.D. Tex. July 5, 2012); see Pub. L. No. 112-63, § 103(b), 125 Stat. 758, 760-61 (Dec. 7, 2011).
The amendment became effective on January 6, 2012. See Pub. L. No. 112-63, § 105(d), 124 Stat. 758,
762. All cases filed prior to the effective date are governed by the pre-amendment statute. See John M.
Floyd & Assocs., Inc. v. Fiserv Solutions, Inc., No. 4:11-CV-306, 2012 WL 405485, at *1 (E.D. Tex.
Feb. 8, 2012) (noting that the amendments “apply only to any actions commenced on or after January 6,
2012”). Because Coffman filed the instant action on September 11, 2011, the JVCA amendments do not
apply.
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process, pleadings, and orders served upon such defendant or defendants in such
action.
28 U.S.C. § 1446(a). While not stated explicitly in the statute, removal generally requires the
joinder or consent of all the named and served defendants. See Rico v. Flores, 481 F.3d 234, 239
(5th Cir. 2007); Gillis v. Louisiana, 294 F.3d 755, 759 (5th Cir. 2002). The courts have
construed the governing statute to mean that “if there is only one defendant then that defendant
may remove the case; however, if there is more than one defendant, then the defendants must act
collectively to remove the case.” Doe v. Kerwood, 969 F.2d 165, 167 (5th Cir. 1992). Hence,
although “[t]here is no express statutory requirement for joinder or consent by codefendants . . .
the case law firmly establishes this requirement, which is known as the ‘rule of unanimity.’”
Spillers v. Tillman, 959 F. Supp. 364, 368 (S.D. Miss. 1997) (quoting Martin Oil Co. v.
Philadelphia Life Ins. Co., 827 F. Supp. 1236, 1237 (N.D. W.Va. 1993)); see Chicago, R. I. &
P. Ry. Co. v. Martin, 178 U.S. 245, 247-48 (1900); Palermo v. LeTourneau Techs., Inc., 542 F.
Supp. 2d 499, 504 (S.D. Miss. 2008).
The United States Court of Appeals for the Fifth Circuit has held that there must be a
timely filed, written indication from each served defendant, or from some person purporting to
act formally on the defendant’s behalf and with the authority to do so, confirming that the
defendant has actually consented to removal. See Gillis, 294 F.3d at 759; Getty Oil Corp. v. Ins.
Co. of N. Am., 841 F.2d 1254, 1262 n.11 (5th Cir. 1988); see also Extreme Outdoors Ltd. v. Gary
Yamamoto Custom Baits, Inc., No. H-08-1259, 2008 WL 2810874, at *4 (S.D. Tex. July 21,
2008); Smith v. Union Nat’l Life Ins. Co., 187 F. Supp. 2d 635, 640 (S.D. Miss. 2001); Spillers,
959 F. Supp. 2d at 369. “Although it is not necessary that all defendants sign the notice of
removal, each defendant who has been served must at least communicate its consent to the court
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no later than thirty days from the day on which the first defendant was served.” Spillers, 959 F.
Supp. 2d at 368; see also Gillis, 294 F.3d at 759; Smith, 187 F. Supp. 2d at 640. Under the
general rule, the failure to include all defendants properly joined and served in the state action
renders the notice of removal defective. See Farias v. Bexar Cnty. Bd. of Trs. for Mental Health
Mental Retardation Servs., 925 F.2d 866, 871 (5th Cir.), cert. denied, 502 U.S. 866 (1991); Acme
Brick Co. v. Agrupacion Exportadora de Maquinaria Ceramica, 855 F. Supp. 163, 165 (N.D.
Tex. 1994).
District courts within the Fifth Circuit have closely adhered to the requirements espoused
in Getty Oil Corp. and § 1446. See, e.g., Louisiana v. Aspect Energy, LLC, No. 2:11-CV-489,
2011 WL 3759754, at *2-3 (W.D. La. Aug. 23, 2011); Extreme Outdoors Ltd., 2008 WL
2810874, at *4-5; Rodriguez v. Nat’l R.R. Passenger Corp., 483 F. Supp. 2d 553, 558 (W.D.
Tex. 2007). “Because removal raises significant federalism concerns, the removal statute is
strictly construed and any doubt as to the propriety of removal should be resolved in favor of
remand.” Gutierrez v. Flores, 543 F.3d 248, 251 (5th Cir. 2008) (internal quotation and citation
omitted). “District courts have no power to overlook procedural errors relating to the notice of
removal; instead, a district court must remand a case which was removed pursuant to a
procedurally defective notice.” Harden v. Field Mem. Cmty. Hosp., 516 F. Supp. 2d 600, 606
(S.D. Miss. 2007) (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941)).
Here, Dole contends that Chevron’s post-removal actions, including filing an answer and
opposing the motion to remand, demonstrate consent for removal. Courts, however, have
regularly rejected the argument that consent is evidenced by filing an answer. See, e.g., Spoon
v. Fannin Cnty. Comm. Supervision & Corr. Dept., 794 F. Supp. 2d 703, 709 (E.D. Tex. 2011)
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(rejecting defendant’s argument that the filing of a motion to dismiss after removal was sufficient
to evidence consent); Grigsby v. Kansas City S. Ry. Co., No. 12-CV-776, 2012 WL 3526903, at
*2 (W.D. La. Aug. 13, 2012) (“The mere filing of an answer does not constitute an expression
of consent.”); Snead v. Woodbine Prod. Co., No. 08-1301, 2008 WL 4610236, at *2 (“While it
is true that [Defendant] filed a timely answer to the plaintiff’s complaint and that it did not object
to the removal with that answer, [Defendant] did not timely file any document expressly
consenting to removal.”). Moreover, any consent denoted by Chevron’s opposition to remand,
which was filed outside of the thirty-day time period, is untimely. Therefore, Chevron did not
consent to removal.
2.
Exception to General Rule
Under recognized exceptions to the general rule, however, all defendants need not join in
the notice of removal when: (1) the case is governed by § 1441(d) in which defendants who are
foreign states, instrumentalities, or entities thereof wish to remove (Arango v. Guzman Travel
Advisors Corp., 621 F.2d 1371, 1377-78 (5th Cir. 1980)); (2) the non-joining defendant is merely
a nominal or formal party (Farias, 925 F.2d at 871; Johnson, 892 F.2d at 423); (3) the codefendant is a federal officer (28 U.S.C. § 1442(a)); (4) the removed claim is separate and
independent under 28 U.S.C. § 1441(c) (Henry v. Indep. Am. Sav. Ass’n, 857 F.2d 995, 999 (5th
Cir. 1988)); or (5) the defendant was improperly or fraudulently joined (Jernigan, 989 F.2d at
815).
The Fifth Circuit has held that there is no difference between the terms “improper joinder”
and “fraudulent joinder” in the context of removal jurisdiction. See Smallwood v. Ill. Cent. R.R.
Co., 385 F.3d 568, 571 n.1 (5th Cir. 2004), cert. denied, 544 U.S. 992 (2005). “The removing
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party has the burden of establishing improper joinder by showing: Plaintiff’s inability to establish
a claim under state law against the non-diverse defendant [(the “claim route”)]; or actual fraud in
pleading jurisdictional facts [(the “actual fraud route”)].” Melder v. Allstate Corp., 404 F.3d 328,
330 (5th Cir. 2004); accord Smallwood, 385 F.3d at 573.
Dole contends that because its removal was based on fraudulent joinder, Chevron’s consent
to removal was not required. Dole’s assertion of fraudulent joinder is based not on Coffman’s
inability to establish a claim against Chevron, but rather on Coffman’s mis-pleading of facts
regarding Chevron’s citizenship. In response, Coffman contends that his mistake in pleading the
wrong Chevron defendant was not actual fraud such that fraudulent joinder occurred, thereby
excusing Dole from obtaining Chevron’s consent.
Few courts have addressed fraudulent joinder based on actual fraud in the pleading of
jurisdictional facts. The doctrine is typically referred to as an actual or outright fraud in the
pleadings. See Cuevas v. BAC Home Loans Servicing, LP, 648 F.3d 242, 249 (5th Cir. 2011)
(actual fraud); Smallwood, 385 F.3d at 573 (actual fraud); Great Plains Trust Co. v. Morgan
Stanley Dean Witter & Co., 313 F.3d 305, 312 (5th Cir. 2002) (outright fraud); Delgado v. Shell
Oil Co., 231 F.3d 165, 179 (5th Cir. 2000) (outright fraud); Jernigan v. Ashland Oil Inc., 989
F.2d 812, 815 (5th Cir.), cert. denied, 510 U.S. 868 (1993) (outright fraud). In order to establish
the premise that an intentional misstatement of jurisdictional facts is not required, Dole cites to
cases stating that fraudulent joinder does not require a showing of any intent or motive to deceive.
These cases, however, analyze and refer to the claim route of the fraudulent joinder doctrine, not
the actual fraud route. For example, in Holden v. Ill. Tool Works, Inc., the court focuses on
“whether plaintiff has asserted a valid state-law cause of action against the nondiverse defendant.”
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No. H-08-2783, 2008 WL 4937597, at *2 (S.D. Tex. Nov. 17, 2008), aff’d, 429 F. App’x 448
(5th Cir. 2011). Although the court mentions, in a footnote, that “‘[f]raudulent joinder’ does not
require a showing that the plaintiff had an intent to deceive or knew that the facts alleged were
false,” the case cited in support of the proposition is Poulos v. Naas Foods, Inc. Id. at *2 n.1.
In Poulos, the 7th Circuit discusses the fraudulent joinder principle:
When speaking of jurisdiction, “fraudulent” is a term of art. Although false
allegations of jurisdictional fact may make joinder fraudulent, in most cases
fraudulent joinder involves a claim against an in-state defendant that simply has no
chance of success, whatever the plaintiff’s motive. . . . No matter what the
plaintiff’s intentions are, an out-of-state defendant may need access to federal court
when the plaintiff’s suit presents a local court with a clear opportunity to express
its presumed bias—when the insubstantiality of the claim against the in-state
defendant makes it easy to give judgment for the in-state plaintiff against the out-ofstate defendant while sparing the in-state defendant.
959 F.2d 69, 73 (7th Cir. 1992) (citations omitted). It is clear that motive and intent are not at
issue in the claim route of fraudulent joinder. Without addressing intent in the context of the
actual fraud route, the court states that false allegations may render joinder fraudulent. Id. The
discussion in Poulos is reiterated in other decisions, as well. See, e.g., Schur v. L.A. Weight Loss
Centers, Inc., 577 F.3d 752, 763 n.9 (7th Cir. 2009) (“Actual fraud in alleging jurisdictional fact
will suffice to invoke the doctrine, but the more typical ground is that a plaintiff brought a claim
against a nondiverse defendant ‘that simply has no chance of success, whatever the plaintiff’s
motive.’” (quoting Poulos, 959 F.2d at 73)). The court was unable to unearth any cases stating
that motive and intent are irrelevant when dealing with the actual fraud route.
Finally, both parties cite to Augustine v. Emps. Mut. Cas. Co., which analyzes the actual
fraud route of fraudulent joinder at issue in the instant motion. No. 2:08-CV-1102, 2010 WL
4930317, at *6-7 (W.D. La. Nov. 30, 2010). In Augustine, the defendants removed the case
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initially filed in state court on several grounds, including that the plaintiff mis-pleaded the
citizenship of one of the defendants in the original petition. Id. at *6-7. The removing defendant
maintained that it was not required to obtain consent from the defendant whose citizenship was
incorrectly pleaded because he was improperly joined. Id. at *6. The court discussed whether
there was “actual fraud in the pleading” and whether such fraud would excuse the consent
requirement. Id. at *7. Using Black’s Law Dictionary, the court defined “actual fraud” as “a
concealment or false representation through a statement or conduct that injures another who relies
on it in acting.” Id. at *7 (quoting BLACK’S LAW DICTIONARY 685 (8th ed. 2004)). The court
concluded that the plaintiff’s original petition naming the defendant as a Louisiana citizen was a
“‘false representation’ that was made to conceal [the defendant’s] true citizenship and was made
by plaintiffs deliberately so that [the other defendant] would rely upon that statement to conclude
it was unable to remove this matter because true diversity did not exist.” Id. After the plaintiffs
acknowledged that they were aware that the defendant was not a Louisiana citizen at the time they
filed their petition, the court noted that the “plaintiffs have conceded that there was a deliberate
‘false representation’ made in the pleading itself.” Id.
Based on Augustine, the court finds that “actual fraud in the jurisdictional facts” requires
more than a mistake or omission in the pleadings. While courts have opined that motive or intent
is not required, they were referring to the claim route of the fraudulent joinder doctrine, which
is not at issue in the instant case. Although Coffman brought suit against the wrong Chevron
entity, there is no evidence of “actual fraud” in an attempt to conceal the citizenship of the
Chevron defendant. Further, Dole does not argue that Coffman intentionally mis-pleaded the facts
in order for Dole to “rely upon that statement to conclude it was unable to remove” the case
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because diversity did not exist. See Augustine, 2010 WL 4930317, at *7. Without any indication
that Coffman purposefully included the wrong defendant in its petition or concealed the true
citizenship of Chevron, Dole has not met its burden of proving fraudulent joinder. Recognizing
the Fifth Circuit’s reasoning that requiring consent from a party when the removing defendant
asserts that no other proper defendant exists would be “nonsensical,” Jernigan, 989 F.2d at 815,
Chevron remains an active defendant in the instant case. As such, its consent was required for
removal. Accordingly, Dole’s removal was procedurally defective.
III.
Conclusion
Based on the foregoing analysis, the court finds that because Dole’s Notice of Removal was
procedurally defective, this case was improvidently removed and a remand to state court is
warranted. Accordingly, Coffman’s Motion to Remand is GRANTED. An order remanding this
action to.the 60th Judicial District Court of Jefferson County, Texas, will be entered separately.
SIGNED at Beaumont, Texas, this 7th day of September, 2004.
SIGNED at Beaumont, Texas, this 26th day of February, 2013.
________________________________________
MARCIA A. CRONE
UNITED STATES DISTRICT JUDGE
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