Robogistics, LLC v. Dematic Corp. et al

Filing 46

MEMORANDUM and ORDER granting the 10 Motion to Remand Removed Action. Signed by District Judge Marcia A. Crone on 6/4/24. (kcv)

UNITED STATES DISTRICT COURT

ROBOGISTICS, LLC,
Plaintiff,
versus
DEMATIC CORP., JAMES ULINSKI, and
DEAN PRIEBE,
Defendants.

EASTERN DISTRICT OF TEXAS

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CIVIL ACTION NO. 1:23-CV-408

MEMORANDUM AND ORDER
Pending before the court is Plaintiff Robogistics, LLC’s (“Robogistics”) Motion to Remand
Removed Action (#10). Defendants Dematic Corp. (“Dematic”), James Ulinski (“Ulinski”), and
Dean Priebe (“Priebe”) (collectively, “Defendants”) filed a response in opposition (#12),
Robogistics filed a reply (#19), and Defendants filed a sur-reply (#24). Having considered the
motion, the submissions of the parties, the record, and the applicable law, the court is of the
opinion that the motion should be granted.
I.

Background
According to the petition, Robogistics manufactures complete material handling systems and

custom equipment, including industrial robots and other automated equipment and machines. In
April 2019, Dematic sent Robogistics a Request for Proposal regarding the provision of a robotic

component of an automated packing process Dematic was designing for one of its customers.
Robogistics asserts that, after months of discussions and meetings, an agreement was reached on
January 15, 2020, which was subsequently “placed on hold” and ultimately canceled.1
Thereafter, on September 17, 2020, Dematic sent Robogistics a second Request for
Proposal, which “included changes to the Project scope and terms.” After further negotiations,
Dematic accepted Robogistics’s updated proposal and placed a revised purchase order on February
10, 2021. Robogistics contends that pursuant to the parties’ agreement, Robogistics was to provide
a Robotic Gantry System (“Gantry System”) that would interface with a Warehouse Control
System (“WCS”), a computer program and software designed and built by Dematic. The WCS
would control the Gantry System in order to assemble orders for Dematic’s customer. Robogistics
alleges that “Dematic knew that it could not perform its responsibilities when it agreed to
Robogistics’s terms and conditions in February 2021.”
Robogistics provides two examples of Dematic’s purported inability to fulfill its obligations
under the parties’ agreement. First, Robogistics alleges that Dematic knew that it could not provide
the requisite hardware for temperature control. Second, according to Robogistics, Dematic knew
that it would not be able to develop a WCS that was compatible with Robogistics’s Gantry System.
Ultimately, after numerous issues arose, Dematic terminated the project in September 2023.
Robogistics filed suit in the 172nd Judicial District Court of Jefferson County, Texas,
asserting causes of action against Dematic for breach of contract, conversion, trade secret

1

As discussed below, Defendants contend that the parties entered into a Master Subcontract
Agreement (“MSA”) on September 13, 2019, and attached a copy of the MSA to their response to
Robogistics’s Motion to Remand (#12-1).

2

misappropriation, common law misappropriation, and violations of the Texas Theft Liability Act.
Robogistics also lodged claims of fraud, fraudulent concealment, and fraudulent inducement
against Dematic, as well as two employees of Dematic—Ulinski and Priebe. Dematic contends that
during the relevant time period, Ulinski was a Robotics Engineer, whereas Robogistics describes
Priebe as a “director over the project.”
Defendants removed the case to this court under 28 U.S.C. § 1441, claiming that removal
was proper because the amount in controversy exceeds $75,000.00 and complete diversity of
citizenship exists. The parties agree that Robogistics is a citizen of the State of Texas, Dematic is
a citizen of the States of Delaware and Georgia, Priebe is a citizen of the State of New Hampshire,
and Ulinski is a citizen of the State of Texas, thus making him the lone non-diverse defendant.
Defendants, however, claim that Ulinski is improperly joined and, consequently, his citizenship
does not prevent removal under § 1441.2 Robogistics filed the pending motion to remand the case
to state court, contending that Ulinski was properly joined, and, therefore, because complete
diversity does not exist among the parties, federal jurisdiction is lacking.
II.

Motion to Remand
A.

Removal Jurisdiction

“Federal courts are courts of limited jurisdiction.” Home Depot U.S.A., Inc. v. Jackson,
587 U.S. ___, 139 S. Ct. 1743, 1746 (2019) (quoting Kokkonen v. Guardian Life Ins. Co. of Am.,
511 U.S. 375, 377 (1994)); accord Gunn v. Minton, 568 U.S. 251, 256 (2013); Cleartrac, L.L.C.

2

Defendants contend that Priebe is also improperly joined, but as the parties concede, Ulinski is
the only defendant who is a citizen of Texas, and thus, only his status potentially affects the court’s
jurisdiction of this matter under 28 U.S.C. §§ 1332, 1441(b). Accordingly, the court’s analysis focuses
on whether Ulinski was properly joined.

3

v. Lanrick Contractors, L.L.C., 53 F.4th 361, 364 (5th Cir. 2022); Williams v. Homeland Ins. Co.
of N.Y., 18 F.4th 806, 816 (5th Cir. 2021); Gonzalez v. Limon, 926 F.3d 186, 188 (5th Cir.
2019). “They possess only that power authorized by Constitution and statute, which is not to be
expanded by judicial decree.” Kokkonen, 511 U.S. at 377; accord Gonzalez, 926 F.3d at 188.
The court “must presume that a suit lies outside [its] limited jurisdiction, and the burden of
establishing federal jurisdiction rests on the party seeking the federal forum.” Gonzalez, 926 F.3d
at 188 (quoting Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001)); accord Hertz
Corp. v. Friend, 559 U.S. 77, 96 (2010); Settlement Funding, L.L.C. v. Rapid Settlements, Ltd.,
851 F.3d 530, 537 (5th Cir. 2017). 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); Carlsbad Tech., Inc.
v. HIF Bio, Inc., 556 U.S. 635, 638 (2009); Powerex Corp. v. Reliant Energy Servs., Inc., 551
U.S. 224, 231-32 (2007); Atkins v. CB&I, L.L.C., 991 F.3d 667, 669 n.1 (5th Cir. 2021); Green
Valley Special Util. Dist. v. City of Schertz, 969 F.3d 460, 468 (5th Cir. 2020); Allen v. Walmart
Stores, L.L.C., 907 F.3d 170, 183 (5th Cir. 2018).
When considering a motion to remand, “[t]he removing party bears the burden of showing
that federal jurisdiction exists and that removal was proper.” Barker v. Hercules Offshore Inc.,
713 F.3d 208, 212 (5th Cir. 2013) (quoting Manguno v. Prudential Prop. & Cas. Ins. Co., 276
F.3d 720, 723 (5th Cir. 2002)); accord Mitchell v. Bailey, 982 F.3d 937, 940 (5th Cir. 2020);
Morgan v. Huntington Ingalls, Inc., 879 F.3d 602, 611 (5th Cir. 2018); see 13E CHARLES A LAN
W RIGHT & A RTHUR R. MILLER, FEDERAL PRACTICE

AND

PROCEDURE § 3602.1 (3d ed. 2013).

“This extends not only to demonstrating a jurisdictional basis for removal, but also necessary
4

compliance with the requirements of the removal statute.” Leboeuf v. Hatle, No. 20-105, 2020
WL 1074952, at *1 (E.D. La. Mar. 6, 2020) (citing Roth v. Kiewit Offshore Servs., Ltd., 625 F.
Supp. 2d 376, 382 (S.D. Tex. 2008)); accord Hernandez v. State Farm Lloyds, No. DR-16-CV164-AM/CW, 2017 WL 8131570, at *2 (W.D. Tex. Sept. 19, 2017); Fort Worth & W. R.R. Co.
v. Stevenson, No. 3:15-CV-0906-B, 2015 WL 3867906, at *1 (N.D. Tex. June 22, 2015). “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 Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392, 397 (5th Cir. 2013); In re 1994
Exxon Chem. Fire, 558 F.3d 378, 395 (5th Cir. 2009).
“The removal statute ties the propriety of removal to the original jurisdiction of the federal
district courts.” Frank v. Bear Stearns & Co., 128 F.3d 919, 922 (5th Cir. 1997); see 28 U.S.C.
§ 1441(a); Grace Ranch, L.L.C. v. BP Am. Prod. Co., 989 F.3d 301, 307 (5th Cir. 2021); Hoyt
v. Lane Constr. Corp., 927 F.3d 287, 295 (5th Cir. 2019); Allen, 907 F.3d at 183. 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. Shamrock Oil & Gas
Corp. v. Sheets, 313 U.S. 100, 108-09 (1941); Pace v. Cirrus Design Corp., 93 F.4th 879, 889
(5th Cir. 2024); Valencia v. Allstate Tex. Lloyd’s, 976 F.3d 593, 595 (5th Cir. 2020); Settlement
Funding, L.L.C., 851 F.3d at 536; Afr. Methodist Episcopal Church v. Lucien, 756 F.3d 788, 793
(5th Cir. 2014). In short, any “doubts regarding whether removal jurisdiction is proper should
be resolved against federal jurisdiction.” Vantage Drilling Co. v. Hsin-Chi Su, 741 F.3d 535, 537
(5th Cir. 2014) (quoting Acuna v. Brown & Root Inc., 200 F.3d 335, 339 (5th Cir. 2000)); accord
Allen, 907 F.3d at 183; Afr. Methodist Episcopal Church, 756 F.3d at 793.
5

B.

Diversity Jurisdiction

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. 28 U.S.C. §§ 1331, 1332; Home Depot U.S.A., Inc., 139 S. Ct. at 1746; 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). 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 filing and the date of removal. Standard Fire Ins. Co. v. Knowles,
568 U.S. 588, 594 (2013); Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567, 570-71
(2004); In re N&W Marine Towing, L.L.C., 90 F.4th 724, 731 (5th Cir. 2024) (quoting Manguno,
276 F.3d at 723); Moss v. Princip, 913 F.3d 508, 514 (5th Cir. 2019); Ashford v. Aeroframe
Servs., LLC, 907 F.3d 385, 386-87 (5th Cir. 2018). 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).
Complete diversity requires that no plaintiff be a citizen of the same state as any defendant.
Exxon Mobil Corp., 545 U.S. at 552; Lewis, 519 U.S. at 68; Moss, 913 F.3d at 514; Vaillancourt
v. PNC Bank Nat’l Ass’n, 771 F.3d 843, 847 (5th Cir. 2014). In cases removed from state court,
“diversity of citizenship must exist both at the time of filing in state court and at the time of removal
to federal court.” Ashford, 907 F.3d at 386-87 (quoting Coury v. Prot, 85 F.3d 244, 249 (5th Cir.
6

1996)); see Grupo Dataflux, 541 U.S. at 570-71; Borden v. Allstate Ins. Co., 589 F.3d 168, 171
(5th Cir. 2009). Furthermore, removal is appropriate only if none of the parties properly joined
and served as a defendant is a citizen of the state in which the action was brought. Pace, 93 F.4th
at 889 (quoting Lincoln Prop. Co., 546 U.S. at 84); Afr. Methodist Episcopal Church, 756 F.3d
at 793; In re 1994 Exxon Chem. Fire, 558 F.3d at 391.
C.

Improper Joinder

In the case at bar, to establish the existence of diversity jurisdiction, Defendants must show
that Ulinski was improperly joined as a defendant to this action. See Miciotto v. Hobby Lobby
Stores, Inc., No. 21-30456, 2022 WL 3210686, at *2 (5th Cir. Aug. 9, 2022) (citing Hicks v.
Martinrea Auto. Structures (USA), Inc., 12 F.4th 511, 514-15 (5th Cir. 2021)); Afr. Methodist
Episcopal Church, 756 F.3d at 793; Mumfrey, 719 F.3d at 401; In re 1994 Exxon Chem. Fire,
558 F.3d at 384-85. In determining whether a defendant is improperly joined, the “focus of the
inquiry must be on the joinder, not the merits of the plaintiff’s case.” Ticer v. Imperium Ins. Co.,
20 F.4th 1040, 1045 (5th Cir. 2021) (quoting Hicks, 12 F.4th at 515); accord Int’l Energy
Ventures Mgmt., L.L.C. v. United Energy Grp., Ltd., 818 F.3d 193, 200 (5th Cir. 2016);
McDonal v. Abbott Lab’ys, 408 F.3d 177, 183-84 (5th Cir. 2005). The removing party bears the
heavy burden of proving that a non-diverse defendant has been fraudulently joined to defeat
diversity, either by showing (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. Pace, 93
F.4th at 889 (quoting Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004)); D
& J Invs. of Cenla, L.L.C. v. Baker Hughes a G E Co., L.L.C., 52 F.4th 187, 195 (5th Cir.
2022); Ticer, 20 F.4th at 1045; Waste Mgmt. v. AIG Specialty Ins. Co., 974 F.3d 528, 533 (5th
7

Cir. 2020). There is no difference between the terms “improper joinder” and “fraudulent joinder”
in the context of removal jurisdiction. See Hoyt, 927 F.3d at 303; Smallwood, 385 F.3d at 571
n.1.
Where the defendant maintains that federal jurisdiction is proper, the court must evaluate
all the factual allegations in the plaintiff’s state court pleadings in the light most favorable to the
plaintiff, resolving all contested issues of substantive fact in favor of the plaintiff, and then examine
relevant state law and resolve all uncertainties in favor of the nonremoving party. D & J Invs. of
Cenla, L.L.C., 52 F.4th at 195; see Pace, 93 F.4th at 889; Afr. Methodist Episcopal Church, 756
F.3d at 793; Barker, 713 F.3d at 212. Furthermore, the “court must normally assume all the facts
as set forth by the plaintiff to be true.” Burden v. Gen. Dynamics Corp., 60 F.3d 213, 217 (5th
Cir. 1995) (quoting Green v. Amerada Hess Corp., 707 F.2d 201, 205 (5th Cir. 1983)); accord
D & J Invs. of Cenla, L.L.C., 52 F.4th at 195 (holding that when evaluating whether a defendant
is properly joined, the court “resolve[s] any contested issues of material fact, and any ambiguity
or uncertainty in the controlling state law, in [the plaintiff’s] favor” (quoting Rico v. Flores, 481
F.3d 234, 239 (5th Cir. 2007))); Cuevas v. BAC Home Loan Servicing, LP, 648 F.3d 242, 249
(5th Cir. 2011).
While a court, when considering allegations of improper joinder, should refrain from
pre-trying the case or conducting an evidentiary hearing, it may utilize a summary judgment-type
procedure “that allows it to pierce the pleadings and examine affidavits and deposition testimony
for evidence of fraud or the possibility that the plaintiff can state a claim under state law against
a nondiverse defendant.” Jack v. Evonik Corp., 79 F.4th 547, 555 (5th Cir. 2023); Great Plains
Tr. Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 311 (5th Cir. 2002); accord Smith
8

v. Bank of Am. Corp., 605 F. App’x 311, 313-14 (5th Cir. 2015). “Post-removal filings may not
be considered, however, when or to the extent that they present new causes of action or theories
not raised in the controlling petition filed in state court.” Martinez v. Pfizer Inc., 388 F. Supp. 3d
748, 765 (W.D. Tex. 2019) (quoting Griggs v. State Farm Lloyds, 181 F.3d 694, 700 (5th Cir.
1999)); accord Cavallini, 44 F.3d at 263.
A district court should ordinarily resolve claims of improper joinder by conducting a Rule
12(b)(6)-type analysis. Pace, 93 F.4th at 889; Jack, 79 F.4th at 555 (“Our review generally
mimics the familiar ‘Rule 12(b)(6)-type analysis.’” (quoting Smallwood, 385 F.3d at 573)); Hicks,
12 F.4th at 515; McDonal, 408 F.3d at 183 n.6; see Int’l Energy Ventures Mgmt., L.L.C., 818
F.3d at 205 (holding that the court must apply the federal, not a state, pleading standard when
testing for improper joinder); Afr. Methodist Episcopal Church, 756 F.3d at 793 (“The federal
court’s inquiry into the reasonable basis for the plaintiff’s state-court recovery is a Rule 12(b)(6)type analysis.”). If a plaintiff can survive a Rule 12(b)(6)-type challenge, there is generally no
improper joinder. Hicks, 12 F.4th at 515 (quoting Smallwood, 385 F.3d at 573); Int’l Energy
Ventures Mgmt., L.L.C., 818 F.3d at 208; Mumfrey, 719 F.3d at 401. “Once a court determines
that a nondiverse defendant is improperly joined, that party must be dismissed from the case.” In
re N&W Marine Towing, L.L.C., 90 F.4th at 731 (noting that “such dismissals must be without
prejudice”).
D.

Choice of Law

As an initial matter, Defendants contend that the court should apply Michigan law to
determine whether Robogistics can establish its fraud-based causes of action against Ulinski, while
Robogistics contends that Texas law applies. In diversity cases, federal courts follow the choice
9

of law rules of the forum state, here Texas. Nix v. Major League Baseball, 62 F.4th 920, 932 (5th
Cir.), cert. denied, 144 S. Ct. 165 (2023); PCL Civ. Constructors, Inc. v. Arch Ins. Co., 979 F.3d
1070, 1073 n.1 (5th Cir. 2020); Weber v. PACT XPP Techs., AG, 811 F.3d 758, 771 (5th Cir.
2016) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496-97 (1941)).
Courts must make an initial determination of whether the agreements at issue contain a
choice of law provision and whether that provision should be controlling. Mayo v. Hartford Life
Ins. Co., 354 F.3d 400, 403 (5th Cir. 2004). The Supreme Court of Texas has held that
contractual choice-of-law provisions should generally be enforced. Exxon Mobil Corp. v.
Drennen, 452 S.W.3d 319, 324 (Tex. 2014); DeSantis v. Wackenhut Corp., 793 S.W.2d 670,
677-78 (Tex. 1990); see Int’l Ints., L.P. v. Hardy, 448 F.3d 303, 306-07 (5th Cir. 2006); Fina,
Inc. v. ARCO, 200 F.3d 266, 269 (5th Cir. 2000). “The most basic policy of contract law is the
protection of the justified expectations of the parties.” Nexen Inc. v. Gulf Interstate Eng’g Co.,
224 S.W.3d 412, 419 (Tex. App.—Houston [1st Dist.] 2006, no pet.) (quoting Chase Manhattan
Bank, N.A. v. Greenbriar N. Section II, 835 S.W.2d 720, 723 (Tex. App.—Houston [1st Dist.]
1992, no writ)); accord Hoisting Wire Rope & Sling, LLC v. Accu-Tech Comput. Servs., No.
2:16-CV-61, 2017 WL 6816502, at *4 (S.D. Tex. Dec. 15, 2017); DeSantis, 793 S.W.2d at 677.
“The parties’ understanding of their respective rights and obligations under the contract depends
in part upon how certain they are about how the law will interpret and enforce their agreement.”
Chase Manhattan Bank, N.A., 835 S.W.2d at 723 (citing DeSantis, 793 S.W.2d at 677). “Judicial
respect for their choice promotes the policy of protecting their expectations.” Id. (citing DeSantis,
793 S.W.2d at 677); accord Cudd Pressure Control, Inc. v. Sonat Expl. Co., 202 S.W.3d 901,

10

904 (Tex. App.—Texarkana 2006, no pet.); Mary Kay Inc. v. Woolf, 146 S.W.3d 813, 816 (Tex.
App.—Dallas 2004, pet. denied).
Next, courts “must determine whether a relevant statute directs the court to apply the laws
of a particular state.” Reddy Ice Corp. v. Travelers Lloyds Ins. Co., 145 S.W.3d 337, 340 (Tex.
App.—Houston [14th Dist.] 2004, no pet.); see Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d
430, 443 (Tex. 2007); Maxus Expl. Co. v. Moran Bros., Inc., 817 S.W.2d 50, 53 (Tex. 1991);
see also RESTATEMENT (SECOND) CONFLICT

OF

LAWS § 6 (“A court, subject to constitutional

restrictions, will follow a statutory directive of its own state on choice of law.”).
If there is a conflict in the law on an issue, absent a choice of law provision or statutory
direction, “Texas courts use the ‘most significant relationship’ test set forth in the Restatement
(Second) of Conflict of Laws (1971)” to determine the controlling law. Mayo, 354 F.3d at 403
(citing Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 420-21 (Tex. 1984)); accord Hughes
Wood Prods., Inc. v. Wagner, 18 S.W.3d 202, 205 (Tex. 2000); Doctor v. Pardue, 186 S.W.3d
4, 8 (Tex. App.—Houston [1st Dist.] 2006, pet. denied) (citations omitted); Reddy Ice Corp., 145
S.W.3d at 340 (citations omitted). Under Texas law, courts examine the following general factors
in deciding which state’s law to apply:
(a)
(b)
(c)
(d)
(e)
(f)
(g)

the needs of the interstate and international systems;
the relevant policies of the forum;
the relevant policies of other interested states and the relative interests of
those states in the determination of the particular issue;
the protection of justified expectations;
the basic policies underlying the particular field of law;
certainty, predictability, and uniformity of result; and
ease in determination and application of the law to be applied.

11

Mayo, 354 F.3d at 403-04 (quoting RESTATEMENT (SECOND)

OF

CONFLICT

OF

LAWS § 6(2)

(1971)).
In the case at bar, the Master Services Agreement (“MSA”) between Robogistics and
Dematic expressly states, in relevant part: “This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Michigan without regard to the conflicts of law rules of
such state” (#12-1).3 Ulinski, however, was not a party to that agreement; thus, the provision does
not govern Robogistics’s claims against him. See Mayo, 354 F.3d at 403; Quicksilver Res., Inc.
v. Eagle Drilling, LLC, 792 F. Supp. 2d 948, 953 (S.D. Tex. 2011) (noting that the choice of law
provision did not apply to “the individual defendants because none was a party to the [] Contracts,
and, thus, none is subject to the choice-of-law provisions therein”). Moreover, even if Ulinski
were bound by the choice of law provision, the MSA’s choice of law clause appears limited to the
interpretation and enforcement of the contractual agreement and is too narrow to extend to
Robogistics’s fraud claims. See C-Bons Int’l Golf Grp., Inc. v. Lexington Ins. Co., No.
3:19-CV-0663-B, 2019 WL 5427574, at *3 (N.D. Tex. Oct. 22, 2019) (“Texas law requires a
court to read a choice-of-law provision narrowly.”); Stier v. Reading & Bates Corp., 992 S.W.2d
423, 433 (Tex. 1999) (holding that a provision stating that an “agreement shall be interpreted and
enforced in accordance with the laws of the State of Texas, . . . applies only to the interpretation
and enforcement of the contractual agreement. It does not purport to encompass all disputes
between the parties or to encompass tort claims.”); see also Benchmark Elecs., Inc. v. J.M. Huber
Corp., 343 F.3d 719, 726 (5th Cir.) (holding that “narrow” contract clause, which stated that the

3

While not referenced in Robogistics’s pleadings, the court finds it appropriate to “pierce the
pleadings” and consider the MSA. See Jack, 79 F.4th at 555; Ticer, 20 F.4th at 1047.

12

“[a]greement shall be governed by, and construed in accordance with, the internal laws of the State
of New York,” dealt only with the construction and interpretation of the contract), opinion
modified on denial of reh’g, 355 F.3d 356 (5th Cir. 2003).
Thus, there is no controlling choice of law provision. In addition, the parties identify no
applicable statute directing the court to apply the law of a particular state. Defendants contend that
Texas and Michigan law require similar elements to establish fraud, while Robogistics asserts that
Texas law differs substantially from Michigan law in this regard. Specifically, Robogistics notes
that the Texas economic loss rule differs in application from its Michigan counterpart. Further,
Robogistics observes that Texas law, unlike Michigan law, allows an employee of a corporation
to be held “liable for tortious acts which he directs or participates in during his employment.”
Accordingly, the court must examine the relationships of the States of Texas and Michigan to the
occurrence and to the parties with regard to Robogistics’s claim asserted against Ulinski.
As previously noted, Robogistics is a Texas LLC and has its principal place of business in
Texas, while Dematic is a Delaware corporation with its principal place of business in Georgia.
Further, Ulinski and Priebe, employees of Dematic, are residents of Texas and New Hampshire,
respectively. Dematic contends that Michigan has a substantial connection to the case, as Dematic’s
North American operations are based in Grand Rapids, Michigan. Robogistics claims that the
parties negotiated the terms of their agreement in Texas, held multiple meetings in Texas, and that
the Gantry System was built in Texas. In addition, Ulinski, whom Robogistics claims made the
misrepresentations, resides in Texas. Overall, the court finds that Texas has a more substantial
relationship to the occurrence and the parties, and, thus, Texas law should control the court’s
inquiry as to whether Ulinski was properly joined.
13

E.

Fraud Claims

Robogistics alleges causes of action for fraud, fraudulent concealment, and fraudulent
inducement as to Ulinski. Robogistics’s petition, under the heading “Introduction,” alleges that
between 2021 and the end of 2022, during multiple engineering meetings, Ulinski made
misrepresentations concerning certain temperature specifications for the project, specifically that
the “temperature issues were not the fault of Dematic and instead the fault of Robogistics.”
Robogistics further alleges that “Dematic and Ulinski wrongfully cast Robogistics as the cause of
the Project delay, thereby engaging in a stall tactic to allow Dematic to perpetrate its fraud on
Robogistics to claim ownership rights to use the Gantry System (including but not limited to its
source code and intellectual property) without paying fully for such ownership and use.”
Later in the petition, under “Causes of Action,” “Active Fraud, Fraudulent Concealment[,]
and Fraud in the Inducement,” Robogistics states: “Dematic, Ulinski and Priebe knowingly
omitted material facts and/or provided false and misleading information about its ability to complete
and provide software and an operational WCS system, necessary for the operation and completion
of the Gantry System.” Thereafter, “Dematic, Ulinski and Priebe made additional representations,
and knowingly omitted material facts and/or provided false and misleading information to
Robogistics, including but not limited to representations and promises as to Dematic’[s] contractual
obligations, which Dematic did not intend to perform or knew at the time it could not perform
which it did not disclose to Robogistics.”
In their notice of removal, Defendants appear to allege that Robogistics cannot assert a
cause of action against Ulinski, in his individual capacity, based on his actions undertaken as an
employee of Dematic. In their response to Robogistics’s Motion to Remand, Defendants contend
14

that Robogistics failed to state a claim against Ulinski as a matter of law, and further, the economic
loss doctrine bars recovery for fraud.
1.

Individual Liability

Under Texas law, a corporate employee may be held individually liable for tortious acts
that he directs or in which he personally participates during his employment. See Transcor Astra
Grp. S.A. v. Petrobras Am. Inc., 650 S.W.3d 462, 478 (Tex. 2022), cert. denied, 143 S. Ct. 2493
(2023); Leyendecker & Assocs., Inc. v. Wechter, 683 S.W.2d 369, 375 (Tex. 1984). This is
generally true even where an employee acts within the scope of his employment. Transcor Astra
Grp. S.A., 650 S.W.3d at 478 (“But the fact that an individual was acting in a corporate capacity
does not prevent the individual from being held personally—or ‘individually’—liable for the harm
caused by those acts.” (citing Franka v. Velasquez, 332 S.W.3d 367, 383 (Tex. 2011); Miller v.
Keyser, 90 S.W.3d 712, 717 (Tex. 2002))); see RESTAT E ME NT (T HIRD)

OF

A GENCY § 7.01

(stating that “[a]n agent is subject to liability to a third party harmed by the agent’s tortious
conduct. Unless an applicable statute provides otherwise, an actor remains subject to liability
although the actor acts as an agent or an employee, with actual or apparent authority, or within the
scope of employment”); see also Land v. Wal-Mart Stores of Tex., LLC, No. SA-14-CV-009-XR,
2014 WL 585408, at *3 (W.D. Tex. Feb. 13, 2014) (“There is no reason to believe that . . .
employees are somehow immunized for their own torts if they were acting in the scope of their
employment.”); Bell v. Wal-Mart, No. 4:11-CV-576, 2011 WL 5022815, at *3 (N.D. Tex. Oct.
18, 2011); Carrion v. Ethicon Endo-Surgery, Inc., No. C-11-19, 2011 WL 649596, at *4 (S.D.
Tex. Feb. 11, 2011). Thus, Ulinski may be found personally liable for any acts of fraud he
committed, even if such actions were within the scope of his employment.
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2.

Stating a Claim for Fraud

In Texas, common law fraud may consist of an affirmative misrepresentation or, in certain
circumstances, the concealment or non-disclosure of a material fact. To recover for fraud through
affirmative misrepresentation, the plaintiff must establish that:
(1)

the defendant made a material representation concerning an existing fact;

(2)

the representation was false when it was made;

(3)

the speaker knew the misrepresentation was false, or made it recklessly
without knowledge of its truth and as a positive assertion;

(4)

the speaker made the misrepresentation with the intent that it should be acted
upon;

(5)

the plaintiff acted with justifiable reliance on the misrepresentation; and

(6)

the plaintiff suffered injury as a result.

Wesdem, L.L.C. v. Ill. Tool Works, Inc., 70 F.4th 285, 291 (5th Cir. 2023); CBE Grp., Inc. v.
Lexington L. Firm, 993 F.3d 346, 350 (5th Cir. 2021) (quoting JPMorgan Chase Bank, N.A. v.
Orca Assets G.P., L.L.C., 546 S.W.3d 648, 653 (Tex. 2018)); D’Onofrio v. Vacation Publ’ns,
Inc., 888 F.3d 197, 218 (5th Cir. 2018); see Barrow-Shaver Res. Co. v. Carrizo Oil & Gas, Inc.,
590 S.W.3d 471, 496 (Tex. 2019); Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am.,
341 S.W.3d 323, 337 (Tex. 2011). “Fraud is never presumed, and it is plaintiff’s burden to allege
and prove actionable fraud.” William B. Roberts, Inc. v. McDrilling Co., 579 S.W.2d 335, 339
(Tex. Civ. App.—Corpus Christi 1979, no writ); accord Priddy v. Rawson, 282 S.W.3d 588, 598
(Tex. App.—Houston [14th Dist.] 2009, pet. denied).
Fraudulent inducement “arises only in the context of a contract and requires the existence
of a contract as part of its proof.” Haase v. Glazner, 62 S.W.3d 795, 798 (Tex. 2001); accord
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Binh Hoa Le v. Exeter Fin. Corp., 990 F.3d 410, 415 n.11 (5th Cir. 2021). Stated differently,
“the elements of fraud must be established as they relate to an agreement between the parties.”
Haase, 62 S.W.3d at 798-99; see Wesdem, L.L.C., 70 F.4th at 291 n.4; IAS Servs. Grp., L.L.C.
v. Jim Buckley & Assocs., Inc., 900 F.3d 640, 647 (5th Cir. 2018).
Fraud by nondisclosure, another subtype of fraud, requires that the plaintiff prove: “(1) the
defendant deliberately failed to disclose material facts to the plaintiff that the defendant had a duty
to disclose, (2) the defendant knew the plaintiff was ignorant of the facts and that the plaintiff did
not have an equal opportunity to discover them, (3) by failing to disclose the facts, the defendant
intended to induce the plaintiff to take some action or refrain from acting, and (4) the plaintiff relied
on the nondisclosure and suffered injury as a result of that reliance.” Jang Won Cho v. Kun Sik
Kim, 572 S.W.3d 783, 801 (Tex. App.—Houston [14th Dist.] 2019, no pet.); accord CBE Grp.,
Inc., 993 F.3d at 353; D’Onofrio, 888 F.3d at 218; E-Learning LLC v. AT&T Corp., 517 S.W.3d
849, 862 (Tex. App.—San Antonio 2017, no pet.).
Here, the court cannot conclude that there is no reasonable basis upon which Robogistics
may recover from Ulinski. Robogistics alleges that from 2021 through 2022, Ulinski made
material misrepresentations concerning the temperature issues the parties experienced with the
project. According to the petition, the temperature issues arose when Dematic indicated that the
robotic system would need to operate at 10 degrees Fahrenheit, only to inform Robogistics after
the project was well underway that the system would need to operate at negative 10 degrees
Fahrenheit. Robogistics contends that Ulinski falsely represented that Robogistics was responsible
for the miscommunication concerning the operating temperature and resulting issues, making these
false representations during multiple meetings. Under Robogistics’s theory of the case, Ulinski
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made the misrepresentations, knowing that they were false, with the intent to stall the project. This
resulted in the parties’ making changes to their agreement, requiring Robogistics to make several
adjustments to its design and causing a substantial delay of the project, which ultimately, according
to Robogistics, provided Defendants with an excuse to terminate the parties’ agreement.
With respect to the fraudulent inducement claim, Defendants assert that Ulinski could not
have induced Robogistics to enter into the parties’ agreement because Dematic hired Ulinski in
September 2020, after the parties entered into the MSA on September 13, 2019. Robogistics,
however, contends that it submitted a new proposal in December 2020 based on the materially
changed conditions and that Dematic accepted the new proposal on February 10, 2021. According
to the facts as presented by Robogistics, therefore, Ulinski potentially had input into the
negotiations from December 2020 to February 2021.
Accordingly, the court finds that Defendants have failed to demonstrate that there is no
possibility that Robogistics could establish its claims of fraud, fraudulent concealment, and
fraudulent inducement against Ulinski. Therefore, it must be determined whether the economic
loss rule precludes Robogistics’s potential recovery against Ulinski.
3.

Economic Loss Doctrine

Defendants argue that the economic loss doctrine bars Robogistics from asserting its fraud
causes of action, as these claims arise from an alleged breach of contract.
In Texas, the economic loss rule “generally precludes recovery in tort for economic losses
resulting from a party’s failure to perform under a contract when the harm consists only of the
economic loss of a contractual expectancy.” Chapman Custom Homes, Inc. v. Dall. Plumbing
Co., 445 S.W.3d 716, 718 (Tex. 2014) (citing LAN/STV v. Martin K. Eby Constr. Co., 435
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S.W.3d 234, 242 (Tex. 2014)); Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 S.W.3d 1,
12 (Tex. 2007); Fuller v. Le Brun, 616 S.W.3d 31, 44 (Tex. App.—Houston [1st Dist.] 2020).
“In determining whether a claim can be brought as a tort, consideration must be given to ‘the
source of the defendant’s duty to act (whether it arose solely out of the contract or from some
common-law duty) and the nature of the remedy sought by the plaintiff.’” Ibe v. Jones, 836 F.3d
516, 526 (5th Cir. 2016) (quoting Crawford v. Ace Sign, Inc., 917 S.W.2d 12, 13 (Tex. 1996));
Golden Spread Coop., Inc. v. Emerson Process Mgmt. Power & Water Sols., Inc., 360 F. Supp.
3d 494, 517 n.21 (N.D. Tex. 2019) (quoting Chapman Custom Homes, Inc., 445 S.W.3d at
718)), aff’d, 954 F.3d 804 (5th Cir. 2020); Rosetta Res. Operating, LP v. Martin, 645 S.W.3d
212, 227 (Tex. 2022). “Tort obligations are in general obligations that are imposed by law—apart
from and independent of promises made and therefore apart from the manifested intention of the
parties—to avoid injury to others.” El Paso Mktg., L.P. v. Wolf Hollow I, L.P., 383 S.W.3d 138,
142-43 (Tex. 2012) (quoting Sw. Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991));
accord Pease v. State Farm Lloyds, 441 F. Supp. 3d 461, 465 (W.D. Tex. 2020). That is, “a
duty in tort does not lie when the only injury claimed is one for economic damages recoverable
under a breach of contract claim.” LAN/STV, 435 S.W.3d at 242 n.35 (quoting Wansey v. Hole,
379 S.W.3d 246, 248 (Tex. 2012)); see Glob. Hunter, LLC v. Des Moines Flying Serv., Inc., No.
1:18-CV-062-C, 2019 WL 7757888, at *2 (N.D. Tex. June 18, 2019); Strobach v. WesTex Cmty.
Credit Union, 621 S.W. 3d 856, 878 (Tex. App.—El Paso, no pet.).
In Formosa Plastics Corp. USA v. Presidio Engineers and Contractors, Inc., the Texas
Supreme Court created an exception to the economic loss rule, holding that tort damages are
recoverable for certain fraud claims even where the injury asserted is purely an economic loss.
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960 S.W.2d 41, 47 (Tex. 1998); W. Loop Hosp., LLC v. Hous. Galleria Lodging Assocs., LLC,
649 S.W.3d 461, 488 (Tex. App.—Houston [1st Dist.] 2022, pet. denied). Specifically, the Court
differentiated between the duty to “abstain from inducing another to enter a contract through the
use of fraudulent misrepresentations” and the duties “established by the contract itself.” Formosa
Plastics Corp. USA, 960 S.W.2d at 46. Ultimately, the Court concluded that “if a plaintiff
presents legally sufficient evidence on each of the elements of a fraudulent inducement claim, any
damages suffered as a result of the fraud sound in tort.” Id. at 47.
Here, Robogistics’s causes of action against Ulinski include a claim for fraudulent
inducement, which falls within the Formosa Plastics Corp. USA exception and is not barred by
the economic loss rule. As the court need only find the possibility that Robogistics can state a
single claim under state law against Ulinski, it need not consider whether Robogistics’s claims of
fraud and fraudulent concealment are barred by the economic loss rule. This is not a case where
“there [is] no possibility of recovery because of a legal bar to recovery or because the elements
of the claim [are] plainly not satisfied.” Hicks, 12 F.4th at 516 (citing Allen, 907 F.3d at 183-84).
Likewise, this is not a case where the petition is entirely devoid of specific allegations about
Ulinski’s allegedly fraudulent conduct. Cf. Int’l Energy Ventures Mgmt., L.L.C., 818 F.3d at 209;
Murray v. Gen. Motors, L.L.C., 478 F. App’x 175, 181 (5th Cir. 2012) (“[T]he only allegations
in the complaint concerning fraud stated that ‘the defendants negligently, gross [sic] negligently,
and fraudulently misrepresented and made omissions to the public, including the plaintiffs, about
the safety and maneuverability of the 2006 Chevrolet HHR automobile.’”).
It has been firmly established by the Fifth Circuit that fraudulent joinder cannot be found
if “there is any possibility that the plaintiff has stated a cause of action against any non-diverse
20

defendant.” Sid Richardson Carbon & Gasoline Co., 99 F.3d at 751; see Melder v. Allstate
Corp., 404 F.3d 328, 330 (5th Cir. 2005); Smallwood, 385 F.3d at 573; Hart v. Bayer Corp., 199
F.3d 239, 247 (5th Cir. 2000). In this instance, while Robogistics’s ability to recover is not
certain, the court is unable to conclude that Robogistics cannot possibly prevail against Ulinski for
his alleged fraudulent inducement. Hence, “[t]aking [Robogistics’s] allegations in this case to be
true, [the court] cannot predict with absolute certainty that a Texas court would summarily dismiss
the causes of action asserted against [Ulinski].” B., Inc. v. Miller Brewing Co., 663 F.2d 545, 554
(5th Cir. 1981).
III.

Conclusion
Taking all allegations set forth as true and taking all inferences in a light most favorable to

Robogistics, the petition at least raises the possibility that Robogistics could succeed in establishing
a claim of fraudulent inducement against Ulinski that would not be barred by the economic loss
doctrine under Texas law. Accordingly, Ulinski’s citizenship cannot be ignored for the purposes
of determining subject matter jurisdiction. His presence in this civil action means that there is not
the complete diversity of citizenship necessary to maintain federal jurisdiction over this case. Thus,
Robogistics’s Motion to Remand Removed Action (#10) is GRANTED.
SIGNED at Beaumont, Texas, this 4th day of June, 2024.

________________________________________
MARCIA A. CRONE
UNITED STATES DISTRICT JUDGE

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