George v. SI Group, Inc. d/b/a Schenectady International, Inc. et al

Filing 46

ORDER denying 19 Motion to Remand.(Signed by Judge George C Hanks, Jr) Parties notified.(ltrevino, 3)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
GALVESTON DIVISION
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Plaintiff,
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VS.
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SI GROUP, INC. D/B/A SCHENECTADY §
INTERNATIONAL, INC., et al,
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Defendants.
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March 31, 2017
David J. Bradley, Clerk

JAMES GEORGE,

CIVIL ACTION NO. 3:16-CV-360

ORDER
Before the Court is Plaintiff’s Motion to Remand. Dkt. 19. After considering the
motion, the parties’ pleading, and relevant authority, the Court finds that removal was
proper and will therefore deny Plaintiff’s Motion to Remand.
This case stems from a workplace injury sustained by the Plaintiff, James George
(“George”) in August 2016. George filed his original petition in the 412th Judicial
District Court of Brazoria County, Texas. Dkt. 1-3. Defendants timely removed the case
on December 21, 2016. Dkt. 1. Defendants based removal on the Court’s diversity
jurisdiction. According to Defendants, there is complete diversity between George and
all Defendants. George filed the instant Motion to Remand. Dkt. 19. Defendants
Evergreen Tank Solutions, Inc. (“Evergreen”) (Dkt. 28), Brenner Tank Services, LLC,
and Walker Group Holdings, LLC (Dkt. 29) and SI Group, Inc. (Dkt. 30) each filed
separate responses, to which George filed a Reply. Dkt. 31. Plaintiff’s Motion to
Remand argued that the Court lacks subject matter jurisdiction because: 1) Evergreen is a
non-diverse party, having its principal place of business in Texas; 2) Defendants fail to
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meet their heavy burden to show that Evergreen was fraudulently joined; and 3) it is
unclear whether all Defendants consented to removal.
Several of these issues have resolved.

It is undisputed that Evergreen is

incorporated in Delaware. Evergreen stipulates that the fraudulent joinder claim does not
apply. Dkt. 28. Further, all Defendants have now confirmed that they consent to
removal.

Dkts. 28-30.

The only remaining issue therefore is whether Evergreen’s

principal place of business is in Texas—as George claims—or in Arizona—as Evergreen
claims.
Generally, a defendant may remove to federal court any state court civil action
over which the federal court would have “original jurisdiction.” 28 U.S.C. § 1441(a); see
Gasch v. Hartford Acc. & Indem. Co., 491 F.3d 278, 281 (5th Cir.2007). Federal courts
have “original jurisdiction” over civil actions where the parties are diverse and the matter
in controversy exceeds the sum or value of $75,000, exclusive of interests and costs. 28
U.S.C. § 1332(a). When determining citizenship for diversity, a corporation is “deemed
to be a citizen of every State and foreign state by which it has been incorporated and of
the State or foreign state where it has its principal place of business ….” 28 U.S.C. §
1332(c)(1). “Courts have recognized that a subsidiary corporation which is incorporated
as a separate entity from its parent corporation is considered to have its own principal
place of business.” Coghlan v. Blue Cross Blue Shield of Texas, Civil Action No. H-122703, 2013 WL 150711 (S.D. Tex. Jan. 14, 2013) (citations omitted) (internal quotation
marks omitted). The United States Supreme Court defines the principal place of business
(“PPB”) as “the place where a corporation’s officers direct, control, and coordinate the
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corporation’s activities [known as its] ‘nerve center.’” Hertz Corp. v. Friend, 559 U.S.
77, 92-93 (2010).
The decision whether to remove is based on the facts as they existed at the time of
removal. Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995). “[D]oubts
regarding whether removal jurisdiction is proper should be resolved against federal
jurisdiction.” Acuna v. Brown & Root Inc., 200 F.3d 335, 339 (5th Cir.2000). The
removing party therefore bears the burden of showing by a preponderance of the
evidence that removal is proper. Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d
720, 723 (5th Cir.2002). Once this burden has been met, “removal is proper, provided
plaintiff has not shown that it is legally certain that his recovery will not exceed the
amount stated in the state complaint.” De Aguilar v. Boeing Co., 47 F.3d 1404, 1412 (5th
Cir. 1995).
The dispositive issue before the Court is whether Evergreen was a subsidiary
incorporated as a separate entity from Mobile Mini on the date of removal, December 21,
2016. George’s Motion to Remand alleges that Evergreen’s president is based in Texas.
It further alleges that Evergreen is a subsidiary and separate entity to Mobile Mini, Inc.
(“Mobile Mini”), which acquired Evergreen in 2014. The Motion argues that because
Evergreen is an independently operated subsidiary to Mobil Mini, it retains its own
citizenship for diversity purposes. George attaches, inter alia, the following evidence to
support his contention:
 a 2015 Texas Franchise Tax Public Information Report listing Evergreen’s PPB as
Houston, Texas and its president as a Houston resident (Dkt. 1-12);

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 Evergreen’s website listing its Corporate Office as having a Houston, Texas address;
 a 2014 Mobile Mini press release announcing its purchase of “Houston, TX-based
Evergreen Tank Solutions,” which would continue to be run by its president (Dkt. 194);
 a 2014 Mobile Mini press release stating that Evergreen “will continue to operate as a
separate subsidiary under the ETS name” (Dkt. 19-5);
 an online profile of Evergreen stating that it is headquartered in Texas (Dkt. 19-8).
Evergreen’s Opposition to Plaintiff’s Motion to Remand argues that George
improperly relied upon outdated information showing that Evergreen was a subsidiary of
Mobile Mini. Dkt. 28. It attached the following evidence in support:
 An affidavit signed by Mobile Mini’s Director of Risk Management, stating that:
o Evergreen is a wholly owned subsidiary of Mobile Mini;
o Evergreen’s corporate headquarters are located in Arizona and have been
located there since before the incident leading to this litigation occurred;
o All Evergreen decision makers, including its CEO, Director, and Senior Vice
President/General Counsel, are all located in Arizona;
o Evergreen’s former president left the company in 2015;
o Evergreen did not have a Houston office at the time of the incident giving rise
to this litigation;
o A typographical error on Evergreen’s website listing Texas as its contact
information has been corrected to reflect its corporate headquarters in Arizona.
 A Texas Franchise Tax 2016 Annual Public Information Report lists its principal
office and PPB as Arizona;
 Evergreen’s website lists Arizona as its corporate headquarters.
Id.
The Court finds that the affidavit and 2016 Public Information Report attached to
Evergreen’s Opposition establish by a preponderance of the evidence that its PPB is—
and was, at the time of removal—located in Arizona. This evidence is largely consistent

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with George’s evidence that Evergreen’s PPB in 2014 was in Texas. Evergreen’s PPB
prior to December 22, 2016, however, is of no moment to this discussion. George’s
Reply did not sufficiently refute Evergreen’s evidence. Plaintiff’s Motion to Remand is
therefore DENIED.
SIGNED at Galveston, Texas, this 31st day of March, 2017.
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George C. Hanks Jr.
United States District Judge

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