Resurgent Tech, LLC v. City of Galena et al

Filing 23

MEMORANDUM OPINION AND ORDER re 9 MOTION to Remand to State Court filed by Resurgent Tech, LLC. It is therefore ORDERED that Plaintiffs Motion to Remand (Dkt. #9) is hereby DENIED. Signed by Judge Amos L. Mazzant, III on 9/22/16. (cm, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

RESURGENT TECH, LLC d/b/a
VERSATEK, f/k/a VERSATEK, LLC
v.
CITY OF GALENA d/b/a PREMIER
SURGICAL INSTITUTE, and JOSEPH M.
CAPUTO

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Civil Action No. 4:16-CV-00334
Judge Mazzant

MEMORANDUM OPINION AND ORDER
Pending before the Court is Plaintiff’s Motion to Remand (Dkt #9). Having considered
the relevant pleadings, the Court is of the opinion that the Motion to Remand should be denied.
BACKGROUND
On February 12, 2016, Plaintiff Resurgent Tech, LLC d/b/a VersaTek, f/k/a VersaTek,
LLC (“Plaintiff”) filed its Original Petition against the City of Galena d/b/a Premier Surgical
Institute and Joseph M. Caputo (“Defendants”) in the 219th Judicial District Court of Collin
County, Texas (Dkt. #1, Exhibit 4). The Original Petition asserts that Plaintiff is a Texas limited
liability company with its principal place of business in Collin County, Texas, and that
Defendants are residents of Galena, Kansas (Dkt. #1, Exhibit 4 at pp. 1–2). On April 21, 2016,
Defendants received Plaintiff’s discovery responses identifying Plaintiff’s members as Adam
Nix (“Nix”) and Rob McDonald (“McDonald”) (Dkt. #1, Exhibit 9 at pp. 5–6). The discovery
responses state that both Nix and McDonald are Texas residents (Dkt. #1, Exhibit 9 at pp. 5–6).
On May 20, 2016, Defendants filed a Notice of Removal in this Court based on diversity
jurisdiction (Dkt. #1 at p. 4). On June 20, 2016, Plaintiff filed a Motion to Remand, asserting
that Defendants’ removal was untimely (Dkt. #9). On July 5, 2016, Defendants filed a Response

to Plaintiff’s Motion to Remand (Dkt. #13). Plaintiff filed a Reply on July 15, 2016 (Dkt. #15)
and Defendants filed a Sur-Reply on July 18, 2016 (Dkt. #17).
STANDARD
The timing of removal is governed by 28 U.S.C. Section 1446, which “when read as a
whole . . . provides a two-step test for determining whether a defendant timely removed a case.”
Chapman v. Powermatic, Inc., 969 F.2d 160, 161 (5th Cir. 1992). First, “if the case stated by the
initial pleading is removable, then notice of removal must be filed within thirty days from the
receipt of the initial pleading by the defendant.” Id. However, “if the case stated by the initial
pleading is not removable, then notice of removal must be filed within thirty days from the
receipt of an amended pleading, motion, order, or other paper from which the defendant can
ascertain that the case is removable.” Id.
For purposes of diversity jurisdiction, the citizenship of a limited liability company is
determined by the citizenship of its members. See Harvey v. Grey Wolf Drilling Co., 542 F.3d
1077, 1080 (5th Cir.2008); Hockessin Holdings, Inc. v. Ocwen Loan Servicing, LLC, No.
4:15CV704, 2016 WL 1046270, at *1 (E.D. Tex. Mar. 16, 2016). A party filing a notice of
removal based on diversity jurisdiction must “distinctly and affirmatively” plead the citizenship
of each party. Mullins v. Testamerica Inc., 300 F. App'x 259 (5th Cir. 2008) (citations omitted).
The basis upon which jurisdiction depends “cannot be established argumentatively or by mere
inference.” Id. at 260. A notice of removal “omitting an unincorporated organization’s members
and their respective states of citizenship . . . [is] insufficient to establish the existence of diversity
jurisdiction.” Elizondo v. Keppel Amfels, L.L.C., No. 1:14-CV-220, 2015 WL 1976434, at *2
(S.D. Tex. May 1, 2015) (citing Mullins, 300 F. App'x at 260).

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ANALYSIS
Here, Plaintiff’s Original Petition does not provide any information about the citizenship
of Plaintiff, which is determined by the citizenship of its members (Dkt. #1, Exhibit 4 at p. 1).
Plaintiff contends that Defendants were aware of Plaintiff’s Texas citizenship based on prior
conversations or should have been aware of Plaintiff’s citizenship based on publicly available
resources (Dkt. #9 at p. 11). However, jurisdiction “cannot be established argumentatively or by
mere inference” and the case, as stated by the initial pleadings, was not removable. Mullins, 300
F. App'x at 260.

Further, Defendants could not file a notice of removal upon receipt of

Plaintiff’s Original Petition because Defendants could not “distinctly and affirmatively” allege
the citizenship of each party. Id. The case did not become removable until Plaintiff disclosed
information regarding its citizenship on April 21, 2016. Defendants’ Notice of Removal was

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thus timely filed on May 20, 2016.
CONCLUSION
It is therefore ORDERED that Plaintiff’s Motion to Remand (Dkt. #9) is hereby
DENIED.

SIGNED this 22nd day of September, 2016.

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AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE

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