Reynolds et al v. Cactus Drilling Company LLC et al
ORDER DENYING 7 Motion to Remand to State Court Signed by Judge David A. Ezra. (lg1)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
DAVID REYNOLDS, individually and as §
representative of the ESTATE OF
NICHOLAS REYNOLDS, and
THE PERSONAL REPRESENTATIVE §
OF THE ESTATE OF CHRISTOPHER §
JOHNSON and CACTUS DRILLING
CV No. 7:15-CV-101-DAE
ORDER DENYING PLAINTIFFS’ MOTION TO REMAND
Before the Court is a Motion to Remand filed by Plaintiffs David
Reynolds, individually and as the representative of the estate of Nicholas
Reynolds, and Rosemary Reynolds (collectively, “Plaintiffs”) (Dkt. # 7). The
Court held a hearing on the Motion on October 6, 2015. At the hearing, Greta B.
Fischer, Esq., represented Plaintiffs, and Jeffrey S. Davis, Esq., represented
Defendant Cactus Drilling Company, LLC (“Cactus Drilling”). After careful
consideration of the supporting and opposing memoranda and the arguments
presented at the hearing, the Court, for the reasons that follow, DENIES Plaintiffs’
Motion to Remand.
This action arises out of a motor vehicle accident that occurred on
April 21, 2015, in Andrews County, Texas. (“Pet.,” Dkt. # 1-2 ¶ 14.) Nicholas
Reynolds (“Reynolds”) was a passenger in a vehicle traveling southbound on U.S.
385 when it was struck head-on by a northbound vehicle driven by Christopher
Johnson (“Johnson”). (Pet. ¶¶ 14–15.) Both Reynolds and Johnson died in the
accident. (Id. ¶ 16.) Plaintiffs allege that Johnson was acting within the course
and scope of his employment with Cactus Drilling at the time of the accident. (Id.
Plaintiffs filed suit in the 109th District Court of Andrews County,
Texas on June 8, 2015. (Id. at 1.) Plaintiffs assert claims against Johnson’s estate
for negligence, negligence per se, and gross negligence, and assert claims for
negligence and gross negligence against Cactus Drilling. (Id. ¶¶ 17–31.) Cactus
Drilling was served with the action on June 15, 2015. (Dkt. # 1 at 2; Dkt. # 1-2 at
10–11.) On July 10, 2015, Cactus Drilling removed the action to this Court,
invoking the Court’s diversity jurisdiction. (Dkt. # 1.) Plaintiffs are citizens of
Missouri.1 (Pet. ¶¶ 2–3; Dkt. 1–6.) Cactus Drilling is an Oklahoma limited
liability company whose members are not Texas residents (Dkt. ## 11-1, 11-2),
and the representative of Johnson’s estate is a citizen of Texas (Pet. ¶ 5).2
At the time Cactus Drilling removed the action, Johnson’s estate had
not yet been served. Because Johnson died intestate and no estate administration
had been initiated, counsel for Plaintiffs filed an application for temporary
administration in the state court on July 7, 2015. (Dkt. # 13-1.) The state court
appointed a personal representative as the temporary administrator of Johnson’s
estate on August 18, 2015. (Dkt. # 21-1.) Johnson’s estate was served with
process and waived service of summons on August 24, 2015. (Dkt. # 21-3.)
Plaintiffs filed the instant Motion to Remand on August 2, 2015,
arguing that Cactus Drilling’s removal was improper under 18 U.S.C.§ 1441(b)(2)
because the administrator of Johnson’s estate is a citizen of Texas. (Dkt. # 7.)
The legal representative of the estate of a decedent shall be deemed to be a citizen
only of the same State as the decedent. 28 U.S.C. § 1332(c)(2). While Plaintiffs’
Petition alleged that Reynolds, the decedent, was a citizen of Texas (Pet. ¶ 4),
Cactus Drilling’s Notice of Removal provided evidence indicating that Reynolds
was in fact a citizen of Missouri (Dkt. # 1-6). Plaintiffs’ Motion to Remand does
not argue that the parties are not completely diverse. While Plaintiffs’ counsel did
argue at the hearing that Reynolds in fact may have been a citizen of Texas, the
evidence before the Court shows that Reynolds was a Missouri citizen. The Court
therefore finds that the parties are completely diverse.
The Court notes that prior to removal, Joshua Trevino filed a Petition for
Intervention claiming that he was injured in the same accident. While Trevino is a
Texas citizen, the case was removed before the state court granted his Petition, and
he was therefore not a party to the suit at the time of removal.
Cactus Drilling filed a response on August 17, 2015, contending that removal was
proper because Johnson’s estate had not been served at the time of removal. (Dkt.
# 13.) Plaintiffs filed a reply, and Cactus Drilling filed a surreply. (Dkt. ## 13,
20.) Plaintiffs filed their own surreply after Johnson’s estate was served, and
Cactus Drilling filed an additional surreply arguing that this service did not change
the propriety of removal because Johnson’s estate had not been served at the time
of removal. (Dkt. ## 21, 22.)
A defendant may remove to federal court any civil action brought in
state court over which the district court would have had original jurisdiction.
28 U.S.C. § 1441(a); Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392, 397 (5th Cir.
2013). Original jurisdiction may be based on either diversity of citizenship or the
existence of a federal question. Halmekangas v. State Farm Fire & Cas. Co., 603
F.3d 290, 295 (5th Cir. 2010). Diversity jurisdiction exists where the amount in
controversy exceeds $75,000 and there is complete diversity of citizenship between
the parties—in other words, every plaintiff must be diverse from every defendant.
28 U.S.C. § 1332(a); Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996); Harvey v.
Grey Wolf Drilling Co., 542 F.3d 1077, 1079 (5th Cir. 2008).
On a motion to remand, the removing party bears the burden of
establishing that one of these bases of jurisdiction exists. Shearer v. Sw. Serv. Life
Ins. Co., 516 F.3d 276, 278 (5th Cir. 2008). To determine whether jurisdiction is
present, the court considers the claims in the state court petition as they existed at
the time of removal. Louisiana v. Am. Nat’l Prop. Cas. Co., 746 F.3d 633, 637
(5th Cir. 2014) (citing Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256,
264 (5th Cir. 1995)). Because removal jurisdiction implicates federalism concerns,
all ambiguities must be construed in favor of remand. Barker v. Hercules
Offshore, Inc., 713 F.3d 208, 212 (5th Cir. 2013) (citing Manguno v. Prudential
Prop. & Cas. Co., 276 F.3d 720, 723 (5th Cir. 2002)).
Because the parties are completely diverse, the only question at issue
in Plaintiffs’ Motion for Remand is whether the forum-defendant rule set out in 28
U.S.C. § 1441(b)(2) renders Cactus Drilling’s removal improper. Under that
statute, a civil action removable solely on the basis of diversity jurisdiction “may
not be removed if any of the parties in interest properly joined and served as
defendants is a citizen of the State in which such action is brought.” § 1441(b)(2).
The forum-defendant rule is a procedural requirement, and violation of the rule
does not deprive a district court of subject matter jurisdiction where the parties are
completely diverse. In re 1994 Exxon Chem. Fire, 558 F.3d 376, 393 (5th Cir.
2009) (citing In re Shell Oil Co., 932 F.2d 1518, 1519 (5th Cir. 1991)).
Here, the administrator of Johnson’s estate is a citizen of Texas.
Cactus Drilling argues that its removal was nevertheless proper because Johnson’s
estate had not been served at the time of removal, and that Johnson’s estate is
therefore not a party in interest “properly joined and served” under the terms of the
statute. It argues that as a result, its removal of this action was not barred by the
forum-defendant rule and that Plaintiffs’ Motion for Remand should be denied.
The Fifth Circuit has not ruled on whether the forum-defendant rule
bars removal where the forum defendant was not served with process at the time of
removal, and district courts are split on the issue. The majority of courts that have
considered the question have ruled that the plain language of § 1441(b)(2) bars
removal only where the forum defendant was “properly joined and served” at the
time of removal, and that the presence of a forum defendant in the action does not
render removal improper where the forum defendant was not served at the time of
removal. See, e.g., Harvey v. Shelter Ins. Co., No. 13–392, 2013 WL 1768658, at
*2 (E.D. La. Apr. 24, 2013); Holmes v. Lafayette, No. 4:11CV021-B-S, 2013 WL
654449, at *1 (N.D. Miss. Feb. 21, 2013); Ott v. Consol. Freightways Corp. of
Del., 213 F. Supp. 2d 662, 666 (S.D. Miss. 2002); In re Norplant Contraceptive
Prods. Liability Litig., 889 F. Supp. 271, 275 (E.D. Tex. 1995) (finding “numerous
cases which support the proposition that . . . the citizenship of unserved defendants
should not be considered under 28 U.S.C. § 1441(b)); see also 14B Wright &
Miller, Federal Practice and Procedure, § 3723 (4th ed. 2009) (noting that the 1948
amendment to § 1441(b) inserted the language “and served,” “which implies that a
diverse, but resident defendant who has not been served may be ignored in
determining removability.”); McCall v. Scott, 239 F.3d 808, 813 n.2 (6th Cir.
2001) ((“Where there is complete diversity of citizenship . . . the inclusion of an
unserved resident defendant in the action does not defeat removal under 28 U.S.C.
§ 1441(b).”). Under this reasoning, forum defendants who have not been served at
the time of removal are not “properly joined and served as defendants” under the
statute, and thus do not bar removal.
Other courts have held that the presence of a forum defendant in the
action bars removal even if the forum defendant was not served at the time of
removal. See, e.g., NFC Acquisition, LLC v. Comerica Bank, 640 F. Supp. 2d
964, 969 (N.D. Ohio 2009); Grizzly Mountain Aviation, Inc. v. McTurbine, Inc.,
619 F. Supp. 2d 282, 286 & n.5 (S.D. Tex. 2008); Sullivan v. Novartis Pharms.,
575 F. Supp. 2d 640, 642–47 (D.N.J. 2008); Vivas v. Boeing Co., 486 F. Supp. 2d
726, 734–35 (N.D. Ill. 2007). These courts reason that the purpose of the
forum-defendant rule is to restrict diversity jurisdiction where the defendant is a
citizen of the state in which the suit was brought and thus has no need of the
protection of a federal forum. See NFC Acquisition, 640 F. Supp. 2d at 968.
Because allowing removal where the forum defendant has not yet been served
could allow defendants to circumvent the forum-defendant rule by removing the
action before service on the forum defendant, these courts have held that applying
the plain language of the statute would be inconsistent with Congress’s intent and
remanded regardless of service on the forum defendant. See NFC Acquisition, 640
F. Supp. 2d at 969; Grizzly Mountain Aviation, 619 F. Supp. 2d at 286 & n.5;
Sullivan, 575 F. Supp. 2d at 647; Vivas, 486 F. Supp. 2d at 734–35.
While the Court shares the concern that allowing removal prior to
service on a forum defendant could allow forum manipulation by defendants, this
concern does not override the plain language of the statute. Section 1441(b)(2)
prohibits removal only where a forum defendant has been “properly joined and
served,” and an otherwise proper removal is thus not rendered defective by the
presence of a forum defendant in the action who had not been served at the time of
removal. The parties are completely diverse, and there was no forum defendant
properly served at the time of removal. As a result, remand is not required.
Because the factual basis for removal is assessed at the time of removal, the fact
that Johnson’s estate has since been served does not alter the analysis. See Gebbia
v. Wal-Mart Stores, Inc., 233 F.3d 880, 883 (5th Cir. 2000); see also Ott, 213 F.
Supp. 2d at 666 (denying remand where forum defendant was not served until after
Plaintiffs cite Zaini v. Shell Oil Co., 853 F. Supp. 960, 963 (S.D. Tex.
1994), for the proposition that the Court must consider the citizenship of all named
defendants regardless of service in determining whether to remand. (Dkt. # 13 at
1–2.) In Zaini, however, the question before the district court was whether the
parties were completely diverse, and thus whether the court had subject matter
jurisdiction over the action. 853 F. Supp. at 963. It is well-established that the
existence of diversity is determined based on the citizenship of the named parties
and not the fact of service. N.Y. Life Ins. Co. v. Deshotel, 142 F.3d 873, 883 (5th
Cir. 1998). The question here is not whether the parties are completely diverse, but
whether a named but unserved forum defendant bars removal under the
forum-defendant rule, and Zaini thus fails to support Plaintiffs’ position.
The Court additionally notes that there is no indication that Cactus
Drilling’s removal here was a product of forum manipulation. Many of those
courts that have required remand under § 1441(b)(2) despite the lack of service on
the forum defendant found that the defendants in those actions had sought to
circumvent the forum-defendant rule by strategically filing for removal before the
plaintiffs were able to serve the forum defendant. See Grizzly Mountain Aviation,
619 F. Supp. 2d at 285, 286 n.5 (finding that the defendant “was engaging in forum
manipulation in its extremely quick removal of the case” where the defendant filed
its notice of removal one business day after the action was filed in state court);
NFC Acquisition, 640 F. Supp. 2d at 967, 969 (remanding where the defendant
filed for removal “immediately” after service); Vivas, 486 F. Supp. 2d at 733
(characterizing a defendant’s removal as a “strategic move” and remanding where
the defendant filed its notice of removal before it or any other defendants had been
served). Here, Plaintiff filed this action in state court on June 8, 2015, and Cactus
Drilling was served with process on June 15, 2015. (Dkt. # 1-2.) Cactus Drilling
filed its Notice of Removal on July 10, 2015, 25 days later, and there is thus no
indication that its removal was an attempt to circumvent the forum-defendant rule.
In summary, the Court finds that Cactus Drilling’s removal is not
barred by the plain language of § 1441(b)(2), and that concerns regarding the
potential for forum manipulation by defendants through application of the statute’s
plain language are not at issue here. Plaintiffs’ Motion for Remand should
therefore be denied.
For the foregoing reasons, the Court DENIES Plaintiffs’ Motion for
Remand (Dkt. # 7).
IT IS SO ORDERED.
DATED: Midland, Texas, October 7, 2015.
David Alan Ezra
Senior United States Distict 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?