DeLaGarza v. Trafigura Trading LLC et al
ORDER GRANTING MOTION TO REMAND granting 17 Motion to Remand; denying as moot 21 Motion to Strike.(Signed by Judge Nelva Gonzales Ramos) Parties notified.(mserpa, 2)
United States District Court
Southern District of Texas
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
CORPUS CHRISTI DIVISION
CESAR PRAXEDIS DELAGARZA,
TRAFIGURA TRADING LLC, et al,
September 26, 2017
David J. Bradley, Clerk
§ CIVIL ACTION NO. 2:17-CV-188
ORDER GRANTING MOTION TO REMAND
Plaintiff Cesar Praxedis DeLaGarza (DeLaGarza) moves to remand this personal
injury matter to the Texas state court in which it was originally filed. D.E. 17. For the
reasons set forth below, the motion to remand (D.E. 17) is GRANTED, and the request
by Defendant Big West Oil, LLC (Big West) to conduct discovery into whether
Defendant Buckeye Texas Hub LLC (Buckeye Texas) was improperly joined (D.E. 20,
pp. 10–11) is DENIED. Big West’s motion to strike portions of the affidavit filed in
support of DeLaGarza’s motion (D.E. 21) is DENIED AS MOOT. Accordingly, this
case is REMANDED to the 117th Judicial District Court of Nueces County, Texas.
DeLaGarza worked as a marine terminal operator at the Buckeye Texas marine
terminal in Corpus Christi, Texas. D.E. 1-7, p. 7. He claims that he was injured while
trying to remove a defective “belly cap” attached to a tank railcar containing the chemical
Id. at 5, 6.
Buckeye Texas, among others, allegedly caused
DeLaGarza’s injuries through negligent acts or omissions. Id. at 7.
On June 5, 2017, Big West removed the case to this Court on the basis of diversity
jurisdiction, 28 U.S.C. § 1332. D.E. 1. It is undisputed that the amount in controversy
meets the requirement of § 1332(a). However, it is further undisputed that both Plaintiff
DeLaGarza and Defendant Buckeye Texas are Texas citizens for jurisdictional purposes.
This lack of diversity ostensibly eliminates complete diversity, preventing removal to
federal court. D.E. 1, p. 1. In removing the case, Big West asserts that because Buckeye
Texas is improperly joined, its citizenship need not be considered and the case is
therefore removable on the basis that the remaining Defendants are diverse. See, e.g.,
Travis v. Irby, 326 F.3d 644, 646–47 (5th Cir. 2003).
STANDARD OF REVIEW
On 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). “Any ambiguities are construed against
removal because the removal statute should be strictly construed in favor of remand.” Id.
This strict construction rule arises because of significant federalism concerns and “‘due
regard for the rightful independence of state governments.’” Shamrock Oil & Gas Corp.
v. Sheets, 313 U.S. 100, 109 (1941) (quoting Healy v. Ratta, 292 U.S. 263, 270 (1934)).
“The party seeking removal bears a heavy burden of proving that the joinder of the
in-state party was improper.” Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 574 (5th
Cir. 2004) (en banc); see also McDonal v. Abbott Labs., 408 F.3d 177, 183 (5th Cir.
2005). The removing party may prove improper joinder by demonstrating: “‘(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.’” See Crockett v. R.J.
Reynolds Tobacco Co., 436 F.3d 529, 532 (5th Cir. 2006) (quoting Travis, 326 F.3d at
647); see also Boone v. Citigroup, Inc., 416 F.3d 382, 388 (5th Cir. 2005). Here, only the
second method of proving improper joinder is at issue.
Therefore, removal will be permitted only if “there is no reasonable basis for the
district court to predict that the plaintiff might be able to recover against an in-state
defendant.” Smallwood, 385 F.3d at 573; see also Guillory v. PPG Indus., Inc., 434 F.3d
303, 308–09 (5th Cir. 2005) (“We do not determine whether the plaintiff will actually or
even probably prevail on the merits of the claim, but look only for a possibility that the
plaintiff might do so.”). “[T]he focus of the inquiry must be on the joinder, not the merits
of the plaintiff’s case.” Smallwood, 385 F.3d at 573. The statement of a claim that
ultimately lacks merit is not equivalent to an improper joinder of the defendant. See
Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 284 (5th Cir. 2007).
So for purposes of determining jurisdiction, “[t]he question of whether the plaintiff
has set forth a valid claim against the in-state defendant(s) should be capable of summary
determination.” B., Inc. v. Miller Brewing Co., 663 F.2d 545, 551 (5th Cir. Unit A 1981);
see also Smallwood, 385 F.3d at 574 (approving “simple and quick exposure of the
chances of the claim against the in-state defendant alleged to be improperly joined”).
The court “need not and should not conduct a full scale evidentiary hearing on questions
of fact affecting the ultimate issues of substantive liability.” B., Inc., 663 F.2d at 551.
A. Buckeye Texas’ Alleged Lack of Employees
Big West’s fraudulent joinder argument first rests on giving dispositive force to
Buckeye Texas’ responsive pleading that it “has no employees.”
D.E. 1-16, p. 2.
Without employees, the argument concludes that Buckeye Texas: (1) cannot be held
liable for claims sounding in respondeat superior; (2) could not have attained “actual
possession and/or control” of the rail car containing the allegedly defective belly cap; and
(3) could not have had notice of the belly cap’s alleged condition. D.E. 1, pp. 3–4.
According to Big West, DeLaGarza thus has no hope of establishing a negligence claim
against Buckeye Texas, making it an improper party to this action.
The Court disagrees. It is well-established that a bare allegation in a defendant’s
pleading does not constitute proof of any fact, much less a fact that the plaintiff disputes.
See generally 5 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND
PROCEDURE § 1286 (3d ed. 2004). It is further contrary to the standard of review to
construe any facts against remand. Travis, 326 F.3d at 649; see also Acuna v. Brown &
Root Inc., 200 F.3d 335, 339 (5th Cir. 2000) (“[D]oubts regarding whether removal
jurisdiction is proper should be resolved against federal jurisdiction.”). The Court rejects
Big West’s argument that Buckeye Texas’ pleading that it has no employees should be
construed to eliminate DeLaGarza’s claim against Buckeye Texas.
Even assuming for purposes of argument that Buckeye Texas in fact has “no
employees,” DeLaGarza alleges that he suffered his injuries as a result of negligence by,
among others, “employees, agents, officers, representatives or servants of” Buckeye
Texas, a broader category than simply “employees.” D.E. 1-7, pp. 12–13. And Buckeye
Texas admits that it contracts with Buckeye Pipe Line Services Company (Buckeye Pipe
Line) to benefit from the services of Buckeye Pipe Line employees. D.E. 1-16, p. 2.
Nothing in Big West’s removal briefing addresses whether Buckeye Texas may be liable
for the actions of these workers, who admittedly labor on Buckeye Texas’ behalf.
Because Big West fails to address liability based on the actions of these workers, its
challenge is incomplete and it fails to satisfy its removal burden to show no possibility of
a claim against Buckeye Texas.
Moreover, Buckeye Texas cannot conclusively eliminate negligence liability by
calling its remaining worksite personnel “third party contractors.” D.E. 1-16, p. 2. Under
Texas law, denominating a party as an independent contractor does not prevent a finding
that it is, in fact, an employee. See Newspapers, Inc. v. Love, 380 S.W.2d 582, 590 (Tex.
1964). The dispositive fact issue involves who has actual and/or retained control over the
work. See, e.g., Thompson v. Travelers Indem. Co. of R.I., 789 S.W.2d 277, 278 (Tex.
1990). Whether Buckeye Texas had sufficient control over those employees to trigger
duties to DeLaGarza is a question that Big West has not attempted to address. Thus it has
not met its burden to show improper joinder upon removal.
B. DeLaGarza’s Workers’ Compensation Claim
As another method for demonstrating improper joinder, Big West contends that
DeLaGarza’s claim against Buckeye Texas is barred by the exclusive remedy provisions
of 33 U.S.C. § 905(a) and/or Texas Labor Code § 408.001. DeLaGarza’s pleading
alleges that he filed a claim under the Longshore and Harbor Workers’ Compensation
Act, 33 U.S.C. § 901 et. seq., against non-party Buckeye Partners, L.P. (Buckeye
Partners), which he identifies as his employer.
D.E. 1-7, p. 7.
The caption of a
deposition transcript attached to his motion for remand, however, names a different
entity, Buckeye Ltd., as appearing in DeLaGarza’s benefits matter. D.E. 17-4. Buckeye
Texas, for its part, pled that Buckeye Pipe Line is actually DeLaGarza’s employer, but
that Buckeye Texas may also be deemed DeLaGarza’s employer because Buckeye Texas
and Buckeye Pipe Line are covered by the same workers’ compensation policy. D.E. 116, pp. 1–2.
Nothing in this record explains the variance between the reference to Buckeye
Partners in DeLaGarza’s pleading, the appearance of Buckeye, Ltd. in the deposition
transcript, and Buckeye Texas’ claim that Buckeye Pipe Line and Buckeye Texas were
DeLaGarza’s employers. Big West has not supplied evidence that any compensation
claim was filed against Buckeye Pipe Line.
Furthermore, there is no evidence to
demonstrate the alleged connection between Buckeye Pipe Line and Buckeye Texas that
would justify a summary determination that Buckeye Texas was also DeLaGarza’s
deemed employer for workers’ compensation purposes. As set out above, Buckeye
Texas’ status as anyone’s employer goes to the merits and is not susceptible to summary
disposition on a motion for remand. Thus the record does not support a conclusion that
DeLaGarza’s claim is barred by either federal or state exclusive remedy provisions
contained in workers’ compensation statutes. The Court rejects this improper joinder
C. Big West’s Claim of Federal Preemption
For the first time in its response to the motion for remand, Big West argues that
DeLaGarza’s claims, based upon state law, cannot survive federal preemption, providing
an alternative reason for a finding of improper joinder. This argument was prompted by
DeLaGarza’s reliance upon the affidavit of Patrick F. Reilly (Reilly) in his motion for
remand. See D.E. 17, pp. 6–10. In that affidavit, Reilly purports to testify as an expert
regarding certain federal regulations relating to railroad industry safety standards for
“receiving facilities,” “transloading facility operators,” and “hazmat employers.” See
DeLaGarza contends these federal standards supply the duties of care
Buckeye Texas allegedly violated. D.E. 17, p. 3.1
Big West argues, instead, that DeLaGarza’s state law claims are preempted in their
entirety by the Federal Railroad Safety Act (FRSA), 49 U.S.C. § 20101, et. seq. D.E. 20,
pp. 9–10.2 The Court holds that Big West’s preemption argument is contrary to the
express provisions of federal law on railway safety.
A preliminary question is whether the Court may appropriately consider the role of federal law in DeLaGarza’s
state tort claim when DeLaGarza did not reference federal law in his complaint. Generally, “[p]ost-removal filings
may not be considered . . . when or to the extent that they present new causes of action or theories not raised in the
controlling petition filed in state court.” Griggs v. State Farm Lloyds, 181 F.3d 694, 700 (5th Cir. 1999)); see also
Rosenbrock v. Deutsche Lufthansa, A.G., Inc., No. 6:16-cv-0003, 2016 WL 2756589, at *3 (S.D. Tex. May 9, 2016)
(“‘[W]hether an action should be remanded to state court must be resolved by the district court with reference to the
complaint, the notice of removal, and the state court record at the time the notice of removal was filed.’” (quoting
14C CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 3739 (4th ed. 2016))).
The Court agrees with DeLaGarza, however, that the references to federal law in the Reilly affidavit do not present a
different cause of action or theory from the negligence claim alleged in state court. Rather than suggesting that
federal regulations supplant state law, DeLaGarza and Reilly contend that federal law supplies the standards by
which the state law negligence claims are to be adjudicated. D.E. 25, p. 3. Thus, DeLaGarza has not raised any
“new causes of action or theories.” Griggs, 181 F.3d at 700.
The Court notes that, while the regulations referenced in Reilly’s affidavit were promulgated under the Hazardous
Materials Transportation Act (HMTA), 49 U.S.C. § 5101 et. seq., the parties’ briefing addresses preemption under
the FRSA, an approach that finds support in dicta from the Supreme Court and other persuasive authorities. See
CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 663 n.4 (1993) (preemption provision of FRSA applied to “any
Section 20106 of Title 49 of the United States Code having to do with
transportation and rail program safety, specifically states:
(b) Clarification regarding State law causes of action.—
(1) Nothing in this section shall be construed to preempt
an action under State law seeking damages for personal
injury, death, or property damage alleging that a party—
(A) has failed to comply with the Federal standard of
care established by a regulation or order issued by the
Secretary of Transportation (with respect to railroad safety
matters), or the Secretary of Homeland Security (with respect
to railroad security matters), covering the subject matter as
provided in subsection (a) of this section;3
(B) has failed to comply with its own plan, rule, or
standard that it created pursuant to a regulation or order
issued by either of the Secretaries; or
(C) has failed to comply with a State law, regulation,
or order that is not incompatible with subsection (a)(2).
49 U.S.C. § 20106(b).
This provision was added by the “Implementing
Recommendations of the 9/11 Commission Act of 2007.” Pub. L. No. 110-53, § 1528,
121 Stat. 266 (2007); see also Gauthier v. Union Pac. R.R. Co., 644 F. Supp. 2d 824, 835
regulation ‘adopted’ by the Secretary [of Transportation] . . . , regardless of the enabling legislation”); see also CSX
Transp., Inc. v. Pub. Utils. Comm’n of Ohio, 901 F.2d 497, 501 (6th Cir. 1990); Bradford v. Union Pac. R.R. Co.,
491 F. Supp. 2d 831, 839 (W.D. Ark. 2007) (“[A] regulation affecting railroad safety promulgated pursuant to the
HMTA takes FRSA’s preemptive effect.”); In re Montreal Me. & Atl. Ry., Ltd., No: 1:15-mc-22-NT, 2015 WL
3604335, at *7 (D. Me. June 8, 2015) (“[T]he FRSA preemption scheme applies in precisely the same way to
[Department of Transportation] railroad regulations promulgated under the HMTA as it does to [Department of
Transportation] railroad regulations promulgated under the FRSA.”). Even if the Court were to consider preemption
under the HMTA, on these facts, the weight of persuasive authorities indicates remand is nonetheless proper. See,
e.g., Riley v. Ala. Great S. R.R. Co., No. CIV.A. 02-1620, 2002 WL 31175209, at *4 (E.D. La. Sept. 27, 2002)
(ordering remand of state tort claims because compliance with HMTA regulations “is an affirmative defense . . . , to
be presented to the state court on remand”); Whitfield v. Triad Trans., Inc., No. 4:07CV01206-SWW, 2008 WL
139082, at *2 (E.D. Ark Jan. 10, 2008) (ordering remand, even though negligence claims “may require reference to
Section 20106(a) refers broadly to “[l]aws, regulations, and orders related to railroad safety and . . . railroad
(E.D. Tex. 2009). The plain language of the statute demonstrates that a state law claim is
not preempted, even if it relies upon federal standards to establish a defendant’s duties.
See Stevenson v. Fort Worth & W. R.R. Co., No. 3:15-CV-0625-B, 2015 WL 3884645,
at *2–3 (N.D. Tex. June 24, 2015) (no federal jurisdiction over negligence claims
premised on alleged violations of federal railroad safety regulations).
Big West’s preemption argument relies on: In re Derailment Cases, 416 F.3d 787,
794 (8th Cir. 2005); Lundeen v. Canadian Pac. Ry. Co., 507 F. Supp. 2d 1006, 1015 (D.
Minn. 2007) (issued February 2, 2007); Union Pac. R.R. Co. v. Johnstown Axel Corp.,
No. 4:07CV238-HEA, 2007 WL 1174845, at *4 (E.D. Mo. Apr. 20, 2007); Mehl v.
Canadian Pac. Ry., Ltd., 417 F. Supp. 2d 1104, 1116 (D.N.D. 2006); Olberding v. Union
Pac. R.R. Co., 454 F. Supp. 2d 884, 887 (W.D. Mo. 2006); and Mayor & City of Balt. v.
CSX Transp., Inc., 404 F. Supp. 2d 869, 875 (D. Md. 2005). These opinions were issued
prior to the August 3, 2007 passage of the preemption clarification amendment. Big
West offers nothing in support of applying the analysis of those cases to the law as it
exists after the 2007 amendment. The Court rejects Big West’s preemption argument as
directly contrary to the statute.
D. Motion to Strike the Reilly Affidavit
Big West also moves to strike portions of the Reilly affidavit on the grounds that
Reilly impermissibly states legal conclusions and offers opinions that are not based on
specialized knowledge or supported by sufficient facts or data.
D.E. 21, pp. 2–3.
However, it is not necessary for purposes of this proceeding to assess Big West’s
objections to the Reilly affidavit.
While the Court may “pierce the pleadings” and consider summary judgment-type
evidence to determine whether a plaintiff has any reasonable basis of recovery against the
in-state defendant,4 it is unnecessary to do so in this case because Big West has not
carried its burden of showing that there is any fatal defect in DeLaGarza’s claims on their
face. Thus the Reilly affidavit is not necessary to support DeLaGarza’s claims. As the
Court finds no reason to consider the substance of the contested affidavit, there is no need
to address Big West’s objections to it. The Court DENIES AS MOOT Big West’s
motion to strike portions of the affidavit (D.E. 21).
E. Big West’s Request for Leave to Conduct Discovery
Big West requests leave to conduct discovery into Buckeye Texas’ joinder,
reciting as areas of inquiry (1) Buckeye Texas’ status as a “receiving facility” or
“transloading facility operator” under federal law; (2) whether any Buckeye Texas
employees were present at the accident site; (3) the extent of Buckeye Texas’ control
over its subcontractors at the site; and (4) whether DeLaGarza’s workers’ compensation
claim provides his sole means of recovery. D.E. 20, pp. 10–11.
Discovery into improper joinder ordinarily “should not be allowed except on a
tight judicial tether, sharply tailored to the question at hand, and only after a showing of
its necessity.” Smallwood, 385 F.3d at 574. Rather than the merits, the discovery should
concern “discrete and undisputed facts that would preclude plaintiff’s recovery against
the in-state defendant.” Id. at 573–74. “[D]iscrete and undisputed facts” are those that, if
true, would necessarily defeat the claim against the in-state defendant. See id. at 574
See, e.g., Travis, 326 F.3d at 648–49.
n.12. The Court must avoid “the danger of being drawn into a full-blown resolution of
the merits at the jurisdictional stage.” Garcia v. Ford Motor Co., No. 1:12-CV-181, 2013
WL 12137090, at *7 (S.D. Tex. May 10, 2013).
Here, the discovery Big West requests goes to the merits and exceeds the scope of
the Court’s determination of the propriety of removal and remand. See, e.g., Wells Fargo
Bank, N.A. v. Am. Gen. Life Ins. Co., No. 4:09-CV-712-Y, 2010 WL 7526986, at *3
(N.D. Tex. Fed. 24, 2010) (rejecting “broad, merit-related discovery” into improper
joinder); see also Watkins v. Gen. Motors, LLC, No. H-11-2106, 2011 WL 3567017, at
*3 (S.D. Tex. Aug. 12, 2011) (ordering remand because “this early stage is not the time
to resolve a central disputed fact in this case”). Questions regarding Buckeye Texas’
duties to DeLaGarza, its control over worksite personnel, and its workers’ compensation
policy coverage are fact-intensive determinations that go to the merits of Buckeye Texas’
liability and thus cannot be resolved on a motion to remand. Big West’s request for
limited discovery is therefore DENIED.
For the foregoing reasons, the Court concludes that Big West has not sustained its
burden to demonstrate that DeLaGarza has no viable claim against Buckeye Texas and
that Buckeye Texas is improperly joined. Consequently, removal based upon diversity
jurisdiction is improper. DeLaGarza’s motion to remand (D.E. 17) is GRANTED, Big
West’s request for discovery (D.E. 20, pp. 10–11) is DENIED, and Big West’s motion to
strike (D.E. 21) is DENIED AS MOOT. The Court ORDERS this action REMANDED
to the 117th Judicial District Court of Nueces County, Texas, the court from which it was
removed. The Court instructs the Clerk to terminate this federal action.
ORDERED this 26th day of September, 2017.
NELVA GONZALES RAMOS
UNITED STATES DISTRICT JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?