Acosta v. Green Bay Packaging, Inc.

United States District Court, W.D. Texas, El Paso Division.

Eduardo ACOSTA, Plaintiff,

v.

GREEN BAY PACKAGING, INC. and Luis Rodriguez, Defendants.

EP-09-CA-073-FM

|

Signed 04/08/2009

Attorneys & Firms

James B. Kennedy, Jr., James Kennedy, P.L.L.C., El Paso, TX, for Plaintiff.

William O. Ashcraft, Ashcraft Law Firm, Dallas, TX, for Defendants.

ORDER GRANTING PLAINTIFF’S MOTION TO REMAND

FRANK MONTALVO, UNITED STATES DISTRICT JUDGE

*1 On this day, the Court considered Eduardo Acosta’s (“Plaintiff”) “Plaintiff’s Amended Motion to Remand” (“Amended Motion to Remand”) [Rec. No. 4], filed March 25, 2009. Plaintiff requests the Court to remand his negligence claims against Green Bay Packaging, Inc. (“GBPI”) and Luis Rodriguez (“Rodriguez”) (collectively, “Defendants”) because the claims arise under Texas workers’ compensation law and therefore removal is improper. Plaintiff also contends subject matter jurisdiction is absent in this matter because Rodriguez, like Plaintiff, is a Texas citizen, and therefore total diversity is lacking. In their “Defendants’ Response to Plaintiff’s Amended Motion to Remand” [Rec. No. 5], filed March 21, 2009, Defendants respond Plaintiff’s claims do not arise under the Texas workers’ compensation law and Rodriguez was fraudulently joined and meant only to destroy diversity for purposes of federal jurisdiction. For the reasons discussed below, the Court will grant Plaintiff’s Amended Motion to Remand.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff filed suit in state court, alleging negligence claims against Rodriguez and GBPI.¹ Plaintiff contends Rodriguez’s negligent acts and omissions were the proximate or direct cause of injuries and damages sustained by Plaintiff.² Plaintiff asserts GBPI is liable on a theory of respondeat superior or vicarious liability.³

On February 27, 2009, Defendants filed “Defendant Green Bay Packaging, Inc.’s Notice of Removal” (“Notice of Removal”) [Rec. No. 1], removing the above-captioned cause to federal court on the basis of diversity jurisdiction.⁴ GBPI alleges subject matter jurisdiction based upon diversity is appropriate in federal court because Plaintiff fraudulently joined Rodriguez in the instant action to destroy diversity and prevent the claim from being removed to federal court.⁵ Plaintiff subsequently filed his Amended Motion to Remand, requesting the Court to remand the above-captioned cause to state court because the state law governing worker’s compensation in Texas, the Texas Workers’ Compensation Act (“TWCA”), prevents removal.⁶ Because Plaintiff’s claims arise under the TWCA, the Court will not address the issue of whether total diversity exists, but instead will remand the above-captioned cause to state court.⁷

II. APPLICABLE LAW

*2 Any civil action brought in state court, over which a federal court would otherwise have original jurisdiction, may be removed by a defendant to the district court “embracing the place where such action is pending.”⁸ Within thirty days of a defendant’s filing of a notice of removal, a plaintiff may move the court to remand the cause to state court.⁹ The Court’s decision to remand is one of discretion.¹⁰

A. Section 1445(c), Title 28 of the United States Code (“section 1445(c)”)

Section 1445(c) states: “A civil action in any State court arising under the workmen’s compensation laws of such State may not be removed to any district court of the United States.”¹¹ The Fifth Circuit has held “that [section] 1445(c) prohibits removal of state worker’s compensation claims regardless of whether jurisdiction is based on diversity or federal question.”¹² However, “the statutory restriction against removal is not a matter of substantive jurisdiction, but rather a procedural defect,” which may be waived.¹³ According to the Fifth Circuit, “the ‘arising under’ standard expressed in section 1445(c) should be interpreted broadly and in a manner consistent with [the] interpretation of that standard under section 1331, which governs federal question jurisdiction.”¹⁴

B. TWCA

According to Texas courts, “the rights and obligations of the parties regarding compensation claims are controlled by [the TWCA].”¹⁵ Unlike most states, Texas law permits an employer to opt out of obtaining workers’ compensation insurance coverage.¹⁶ If an employer does not obtain workers’ compensation insurance coverage, it must notify the workers’ compensation commissioner or face administrative penalties under the TWCA.¹⁷ An employer also faces administrative penalties under the TWCA if it fails to notify its employees it does not have workers’ compensation insurance coverage.¹⁸ The Fifth Circuit stated that despite an employer’s option out of workers’ compensation insurance coverage pursuant to the TWCA, “the non-subscriber’s employees retain the right to sue their employer in state court, and the employer is deprived of traditional common law defenses.”¹⁹

Specifically, the TWCA, as codified in Texas Labor Code section 406.033 (“section 406.033”) provides:

(a) In an action against an employer who does not have workers’ compensation insurance coverage to recover damages for personal injuries or death sustained by an employee in the course and scope of the employment, it is not a defense that:

(1) the employee was guilty of contributory negligence;

(2) the employee assumed the risk of injury or death; or

(3) the injury or death was caused by the negligence of a fellow employee.

*3 ...

(d) In an action described by Subsection (a) against an employer who does not have workers’ compensation insurance coverage, the plaintiff must prove negligence of the employer or of an agent or servant of the employer acting within the general scope of the agent’s or servant’s employment.²⁰

Although the TWCA eliminated a negligence claim against a subscribing employer, it preserved the negligence cause of action for an employee injured by a non-subscribing employer.²¹ Hence, this Court has previously found “when an employee ... brings a negligence suit against his non[-]subscribing employer, such a suit arises under the [TWCA].”²²

III. DISCUSSION

Plaintiff contends his negligence action against Defendants arises under the TWCA and therefore section 1445(c) procedurally bars the Court from hearing the matter.²³ Defendants rely upon Ehler v. St. Paul Fire and Marine Insurance Co.²⁴ to argue that simply because negligence is a tort does not mean it arises under the TWCA.²⁵ Defendants also contend the Fifth Circuit’s comment in Hook v. Milling Co.,²⁶ stating employee injury negligence claims are causes of action created by Texas common law rather than the TWCA, suggests the Court should remand the above-captioned cause.²⁷ Defendants further rely upon cases from the Northern District of Texas (“Northern District”), including Eurine v. Wyatt Cafeterias, Inc., to contest that a negligence claim arises under the TWCA.²⁸ Finally, Defendants argue the Fifth Circuit’s decision in Boelens v. Redman Homes, Inc.,²⁹ and the Northern District’s subsequent decision in Eurine, demonstrate that simply because a federal law deprives a defendant of a defense does not mean a cause of action may then arise under that same law.³⁰

First, Ehler’s decision was premised on the fact that TWCA did not address or eliminate the plaintiff’s cause of action for fraud or misrepresentation, a common law action for rescission and cancellation of a contract, not negligence,³¹ and, as Plaintiff points out, the employee’s action in that case was against the workers’ compensation insurance provider, not the employer.³² Second, the issue before the Fifth Circuit in Hook was one of preemption, in particular whether the Employee Retirement Income Security Act (“ERISA”) preempted the plaintiff’s negligence claim.³³ While the Fifth Circuit did in fact state that Congress did not intend to preempt state law causes of action dating back to the last century,³⁴ the Fifth Circuit also noted “the TWCA vests employees of non-subscribing employers with the right to sue their employers for work-related injuries or death.”³⁵ The clear implication of “vests” is that there is a right pursuant to the statute, which may “vest.”

*4 Eurine also relates to the issue of preemption.³⁶ In the initial decision (“Eurine I”), the Northern District found the plaintiff’s plan was an ERISA plan, and not a worker’s compensation plan that offered the plaintiff benefits similar to worker’s compensation benefits, and therefore the plaintiff’s claims were preempted by ERISA.³⁷ In a subsequent Memorandum Opinion and Order (“Eurine II”), in which the Northern District reconsidered its holding on preemption in Eurine I, the Northern District found the implicated benefit plan was not preempted by ERISA and remanded the matter to state court.³⁸ While the Northern District stated “[state common law] causes of action were not created by the workers’ compensation laws and do not arise under them,”³⁹ on the same day, the Northern District, in a published Memorandum Opinion and Order, declared:

the [Texas] Legislature preserved the common law right of action for the employees of an employer who elected not to carry workers’ compensation insurance coverage, and enhanced those rights by a statutory provision that prevented an employer in such an action from asserting defenses that theretofore had been available to employers.⁴⁰

The Northern District perpetuated Eurine II’s statement on the issue in Pyle v. Beverly Enterprises-Texas, Inc., declaring a negligence claim in the employment context does not arise under the TWCA,⁴¹ rather than follow the line of reasoning from the Nunez decision.

While Defendants attempt to create an illusion of dissension among the Fifth Circuit district courts sitting in Texas, the fact is only the Northern District disagrees on the issue of whether a negligence claim against a non-subscribing employer in Texas does or does not arise under the TWCA,⁴² and the Northern District itself has fluctuated on the issue.⁴³ This Court falls in line with the majority of the district courts in Texas, finding Plaintiff’s negligence claims against GBPI, his employer who is a non-subscriber, and Rodriguez, GBPI’s alleged agent, arise under the TWCA. In coming to this conclusion, the Court relies primarily on its decision in Illinois National Insurance Co. v. Hagendorf Construction Co., which held the same.⁴⁴ Nonetheless, the Court also finds Texas law to be persuasive on the point.

While federal law governs removability, Texas law may be persuasive to determine whether a cause of action is removable.⁴⁵ The Texas Supreme Court has found section 406.033 “governs an employee’s personal-injury action against his or her employer, when the employer is a non[-]subscriber under the Act.”⁴⁶ According to the Texas Supreme Court, in enacting this provision, “the Legislature intended to delineate explicitly the structure of an employee’s personal-injury action against his or her non[-]subscribing employer.”⁴⁷

*5 Other Texas courts have noted “that when an employee files suit against a non-subscribing employer, that suit is ‘an action to collect benefits [and damages] under the workers’ compensation laws of Texas.”⁴⁸ This holding is premised on the notion that the TWCA creates a statutory burden for an employee to prove an employer’s negligence and an employee is not subject to the common law defenses an employer would have available to it if it had otherwise subscribed to worker’s compensation insurance coverage.⁴⁹ Under Texas law, then, “an employee’s negligence action against his non[-]subscribing employer is brought ‘under the workers’ compensation laws of Texas,” not only common law.⁵⁰ Clearly, Texas’ own take on the issue is that Plaintiff’s negligence claims fall squarely within the TWCA, thus lending support to the Court’s conclusion that Plaintiff’s claims arise under the TWCA.

Furthermore, the congressional policy behind section 1445(c) suggests the same conclusion. A key purpose of section 1445(c) is “[t]o restrict diversity jurisdiction and to stop the removal of compensation cases which were increasing the already overburdened docket of the federal courts.”⁵¹ Where a state maintains a workers’ compensation system, which permits employers to elect coverage, this congressional policy applies equally to negligence claims, which would, in all likelihood, otherwise be controlled by the workers’ compensation system, but for the employer’s election to be a non-subscriber.

Finally, simple statutory construction leads to the same conclusion. It is paradoxical to state that a plaintiff’s negligence claims against a non-subscriber employer do not arise under the TWCA when whether a plaintiff may maintain any action against an employer can only be determined by looking to the TWCA to discern if a defendant employer is a “subscriber” to worker’s compensation insurance coverage under the TWCA.⁵² Similarly, whether a plaintiff’s cause of action will be viable is contingent upon whether any of section 406.003’s defenses will apply.⁵³ Likewise, whether the plaintiff has a viable cause of action depends upon whether the employee validly waived the cause of action.⁵⁴ A plaintiff only knows he has a cause of action against an employer if he consults the TWCA. Simply put, if a plaintiff’s negligence claim against a non-subscribing employer does not conform to the statutory strictures of the TWCA, the plaintiff has no claim.

IV. CONCLUSION AND ORDERS

This Court’s law clearly states an employee’s negligence claim against a non-subscribing employer arises under the TWCA. This conclusion is bolstered by Texas courts’ own interpretation of the TWCA, congressional policy, and statutory construction. Hence, the Court finds remand of Plaintiff’s negligence claims to be appropriate. Accordingly, the Court enters the following orders:

1. “Plaintiff’s Amended Motion to Remand” [Rec. No. 4] is GRANTED.

2. The Clerk of the Court shall immediately REMAND this matter to the 448th Judicial District Court, El Paso County, Texas.

3. All pending motions are DENIED as MOOT.

4. The Clerk of the Court is instructed to CLOSE this case.

SO ORDERED.