United States District Court, W.D. Texas, San Antonio Division.
Justin E. BRIGGS, Individually, and Justin E. Briggs as Next Friend of Austin E. Briggs, Plaintiffs,
TOYOTA MANUFACTURING OF TEXAS; Toyota Tsusho America, Inc.; Bartlette Cocke Operations, Inc.; Walbridge Aldinger Company; Walbridge Aldinger/Bartlette Cocke, a Joint Venture; GRW Engineers, Inc., and Automatic Fire Protection, Defendants.
Civil Action No. SA–07–CA–1031–FB
Attorneys & Firms
Mark O. Midani, Midani, Hinkle & Cole, L.L.P., Houston, TX, for Plaintiffs.
John W. Weber, Jr., Joseph A. Bourbois, Fulbright & Jaworski, L.L.P., Larry J. Goldman, Martin J. Phipps, Goldman Pennebaker & Phipps, PC, San Antonio, TX, Fred L. Shuchart, Gregory W. Marcum, Jay D. Hirsch, Kroger, Myers, Frisby & Hirsch, Houston, TX, for Defendants.
ORDER CONCERNING MOTION TO REMAND
FRED BIERY, UNITED STATES DISTRICT JUDGE
*1 Before the Court are Plaintiffs’ Motion to Remand (docket #19); Defendant’s Response to Plaintiff’s Motion to Remand (docket #23); Plaintiffs’ Reply to Defendant’s Response to Plaintiffs’ Motion to Remand (docket #25), and Defendant’s Sur–Reply to Plaintiffs’ Reply to Defendant’s Response to Motion to Remand (docket #27). Plaintiff believes removal is improper because the defendants are citizens of the State of Texas and the removal of this case was Untimely. In response, defendant Automatic Fire Protection (AFP) states it can establish the Texas defendants were improperly joined, and the defendants could not ascertain the amount of damages sought by the plaintiff until the filing of the second amended petition on November 29, 2007, therefore, the removal was timely.
Plaintiff Justin E. Briggs filed his lawsuit on June 15, 2007, in the 166th Judicial District Court of Bexar County, Texas, for personal injuries he suffered on March 15, 2006, when a waterline exploded in his face. In his state court petition, Mr. Briggs alleges he:
was working in the course and scope of his employment as a laborer on the premises that was owned and/or controlled by Defendants—TOYOTA MANUFACTURING OF TEXAS and TOYOTA TSUSHO AMERICA, INC. On said date BRIGGS was directed to remove a fire line because it was in the path of a grade and to [sic] close to a structure. BRIGGS isolated the area of the line that needed to be removed and relieved the pressure from the line. After the area where BRIGGS was to remove the pipe was excavated, he went to the pipe to began [sic] cutting and removing the pipe. As BRIGGS made the initial incision under the pipe, to drain any excess water, the pipe blew up in his face. BRIGGS sustained serious and debilitating injuries as a result of the explosion, including but not limited to, significant lacerations to his face and head, trauma to his ear and neurological problems.
With respect to Justin Briggs’ minor child Austin E. Briggs, the petition states:
AUSTIN E. BRIGGS has been deprived of the services of his father by reason of his inability to carry on his usual duties as a parent. AUSTIN has suffered a pecuniary loss from the diminished abilities of his father, including but not limited to, diminished care, maintenance, support, services and contributions of pecuniary value that he would, in reasonable probability, have received during his lifetime, had BRIGGS not been injured so seriously. AUSTIN has suffered additional losses by virtue of the diminution of the parent-child relationship, including society, emotional support, and happiness. AUSTIN has suffered severe mental depression and anguish, grief and sorrow as a result of the injuries sustained by his father. For those losses BRIGGS as next friend of AUSTIN seeks damages in a sum in [sic] within the jurisdictional limits of the Court.
Toyota Tsusho America, Inc. filed its answer on August 17, 2007; Toyota Motor Manufacturing of Texas filed its answer on August 18, 2007, Bartlette Cocke Operations, Inc. Walbridge Aldinger Company and Walbridge Aldinger/Bartlette, Cocke a Joint Venture filed their answer on September 11, 2007, and defendant Automatic Fire Protection, Inc. filed its answer on September 12, 2007. Defendant GRW Engineers, Inc. was served1 but later non–suited and is no longer a party to this litigation. All of the defendants propounded written discovery on plaintiff, took plaintiff’s deposition on December 17, 2007, and on December 18, 2007, the Notice of Removal was filed.
Notice of Removal
*2 The notice of removal filed by Automatic Fire Protection, Inc. (AFP) asserts jurisdiction in this Court based on diversity. AFP noted plaintiff did not originally plead a maximum amount of damages, until November 29, 2007, when plaintiff filed an amended petition. With respect to the citizenship of the respective parties, defendant AFP contends as follows:
Defendant is informed and believes that Plaintiffs were, and still are, citizens of the State of Michigan and reside in Michigan. Defendant, Toyota Manufacturing of Texas, was, at the time of the filing of this action and still is, incorporated under the laws of the State of Texas, having its principal place of business in the State of Texas. Defendant, Toyota Tsusho America, Inc., was, at the time of the filing of this action and still is, incorporated under the laws of the State of Kentucky, having its principal place of business in the State of Kentucky. Defendant, Automatic Fire Protection, was, at the time of the filing of this action and still is, incorporated under the laws of the State of Texas, having its principal place of business in the State of Texas. Defendants, Bartlette Cocke Operations, Inc.; Walbridge Aldinger Company; Walbridge Aldinger/Bartlette Cocke, a Joint Venture, were, at the time of the filing of this action and still are, incorporated under the laws of the State of Texas, having their principal place of business in the State of Texas. CoDefendants Toyota Manufacturing of Texas, Toyota Tsusho America, Inc., Bartlette Cocke Operations, Inc. Walbridge Aldinger Company, Walbridge Aldinger/Bartlette Cocke, A Joint Venture, consent to the removal of this matter.
Notice of Removal, docket #1 at page 2. AFP then continues by asserting the basis for removal as follows:
Removal is proper because there is complete diversity between the parties and Plaintiffs have requested damages of more than $75,000.00 based on Plaintiffs’ Second Amended Original Petition. Plaintiffs are citizens of the State of Michigan. The Toyota Defendants are not citizens of the State of Texas, nor are incorporated under the laws of Texas or maintain a principal place of business within Texas. The amount in controversy exceeds Seventy Five Thousand Dollars ($75,000.00), excluding interest, costs and attorneys fees.
Notice of Removal, docket #1 at pages 2–3 (emphasis added).
Despite AFP’s assertion the “Toyota Defendants” are not citizens of Texas in its basis for removal, it listed in the preceding background section of the Notice of Removal Toyota Tsusho America, Inc. as the only defendant not incorporated under the laws of the State of Texas or having its principal place of business in Texas. AFP also made no mention of improper joinder in its notice of removal.
Motion to Remand
On January 16, 2008, plaintiffs filed their motion to remand contending diversity based on their citizenship does not warrant removal, and the defendants failed to timely remove this case. With respect to diversity, plaintiffs state removal is not permitted if one of the properly joined and served defendants is a citizen of the state in which the action was brought. Here, Toyota Manufacturing of Texas, Automatic Fire Protection, Inc., Bartlette Cocke Operations, Inc., Walbridge Aldinger Company and Walbridge Aldinger/Bartlette Cocke are all incorporated in the State of Texas and have their principal places of business here. Plaintiffs also allege the notice of removal was untimely because the notice of removal was not filed until December 18, 2007. This was more than 30 days after service of the petition. Plaintiffs also allege it was facially apparent from their original petition the claims would exceed the jurisdictional amount of $75,000 so any attempt to justify the delay in filing the notice of removal until plaintiffs filed their second amended petition including a specific amount would be disingenuous.
Response to Motion to Remand and Joint Motion to Dismiss
*3 Defendant AFP filed a response to plaintiffs’ motion to remand and defendants AFP, Toyota Manufacturing of Texas, Toyota TSUSHO America, Inc. Bartlette Cocke Operations, Inc., Walbridge Aldinger Company, Walbridge Aldinger/Bartlette Cocke, a Joint Venture contemporaneously filed a joint motion to dismiss plaintiffs’ case pursuant to rule 12(b)(6) of the Federal Rules of Civil Procedure based on the workers’ compensation coverage bar under an Owner Controlled Insurance Program.
In response to the motion to remand, AFP alleges all the Texas defendants were improperly joined and their citizenship should be disregarded for purposes of determining federal jurisdiction. Improper joinder in this case is due to plaintiffs’ inability to establish a cause of action against the defendant in state court. Here, plaintiffs’ claims are barred under the Texas Workers’ Compensation Act because these defendants carried workers’ compensation insurance through an Owner–Controlled Insurance Policy (OCIP). Therefore, all the Texas defendants were improperly joined and their citizenship should be disregarded for determining diversity jurisdiction. Moreover, this Court should decline to remand this case and dismiss it instead because the case is not viable as a matter of law as to any of the defendants. A remand would be a waste of judicial resources because the plaintiffs’ claims are barred as a matter of law regardless of whether these claims are brought in federal or state court. In addition, the removal is timely because it was made within 30 days of the filing of the second amended original petition in which a specific amount of damages was stated. Prior to that time, it was not facially apparent from the petition whether the damages were in excess of $75,000.
In the motion to dismiss, defendants sum up their argument as follows:
Here, TOYOTA MANUFACTURING, through an OCIP, provided workers’ compensation insurance coverage to the owner of the subject building (TSUSHO), as well as all contractors and subcontractors, like W/BC [Bartlette Cocke Operations, Inc., Walbridge Aldinger Company, and Walbridge Aldinger/Bartlette Cocke, a Joint Venture are collectively referred to as W/BC] and AFP, constructing the assembly plant. It is well established in Texas case law that this OCIP provides workers’ compensation insurance coverage, and immunes from a lawsuit, the owner and all contractors and/or subcontractors participating in the program such as each named Defendant in this case. Because AFP, TOYOTA MANUFACTURING, TOYOTA TSUSHO and W/BC all carried workers’ compensation insurance at the time of the subject incident, BRIGGS’ negligence and gross negligence claims against each Defendant are barred by the exclusive remedy provision of the Texas Labor Code. Since his claims are derivative of his father’s, Austin Briggs’ causes of action are also barred by the same provision. Therefore, this lawsuit should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) as Plaintiffs have failed to state a claim which would entitle them to relief.
Defendants’ Joint Memorandum in Support of Motion to Dismiss, docket #24 at pages 4–5 (references to Exhibits and Citations omitted).
Plaintiffs’ Reply to Defendants’ Response to the Motion to Remand
In reply to defendants’ contention it was not facially apparent plaintiffs’ damages were likely to exceed $75,000 until receipt of the second amended petition on November 29, 2007, plaintiffs state the thirty–day time period to remove this case began on October 2, 2007, when defendants received a letter from plaintiffs stating plaintiff Justin Briggs’ workers’ compensation lien was in excess of $200,000. That letter to defendants’ counsel provided as follows:
*4 I have received several requests as to the current status of Mr. Briggs’ medical situation. Please find enclosed Progress Reports that I have just recently received from Mr. Briggs’ workers compensation lawyer. I will be forwarding copies of all of Mr. Briggs’ medical records and bills as I receive them. As of September 9, 2007 Mr. Briggs’ workers comp. lien is $205,975.23, approximately $130,000 of it is medical.
Exhibit 1 to Plaintiffs’ Reply to Defendants’ Response, docket #25. With respect to defendants’ improper joinder contention, plaintiffs object to the Court’s consideration of the defendants’ exhibits because they are not properly authenticated and are irrelevant for the purposes of removal. In addition, plaintiffs note no defendant raised the workers’ compensation bar as an affirmative defense in the answers initially. From plaintiffs’ perspective, “this defense is merely an after thought by Defendants and not one that holds any merits. Clearly Toyota Manufacturing of Texas, W/BC and AFP are residents of the State of Texas, therefore diversity is not applicable in this matter.” Plaintiffs’ Reply to Defendants’ Response, docket #25 at page 5.
In response to plaintiffs’ reply, defendant AFP filed an unopposed motion for leave to file a sur–reply to plaintiffs’ reply to defendant’s response to plaintiff’s motion to remand. That motion (docket #29) is GRANTED such that Defendant’s Sur–Reply to Plaintiffs’ Reply to Defendant’s Response to Motion to Remand (docket #27) is deemed filed.
In the sur–reply, AFP responds to the assertion by plaintiffs concerning the October 2, 2007 letter. Despite the disclosure of a workers’ compensation lien in excess of $200,000, AFP maintains this statement does not “disclose whether the damages recoverable or sought by Plaintiffs exceed $75,000.00.” (Emphasis in original.) Defendant’s Sur–Reply to Plaintiffs’ Reply to Defendant’s Response to Motion to Remand, docket #27 at page 2. Pursuant to section 41.0105 of the Texas Civil Practice and Remedies Code, defendant AFP argues “ ‘the recovery of medical or health care expenses incurred is limited to the amount actually paid or incurred by or on behalf of the claimant.’ ” Id. (quoting section 41.0105 of the Texas Civil Practice & Remedies Code). Plaintiff in this case did not produce any medical records or similar documents evidencing the amount of medical expenses incurred by Justin Briggs or the amount paid by his workers’ compensation carrier.
Defendant AFP also responds to plaintiffs’ failure to authenticate argument by showing the Manual of Insurance Procedures, Certificate of Insurance for WPM, Inc. and the subcontract between AFP and WPM, Inc. were produced in discovery on January 23, 2008. The remaining certificates of insurance and OCIP workers’ compensation insurance documents are being supplemented contemporaneously. AFP also attaches an affidavit which authenticates the documents. AFP responds to the argument concerning the failure to raise the workers’ compensation bar as an affirmative defense by stating it pleaded in its First Amended Original Answer a plea to jurisdiction based on the workers’ compensation bar and requested the court dismiss plaintiff’s claims.2 AFP also argues the plaintiffs have provided no authority for the proposition an affirmative defense must be pleaded before a defendant asserts improper joinder in its removal to federal court. AFP believes plaintiffs’ assertions are misplaced and the citizenship of Toyota Manufacturing of Texas, W/BC and AFP should not be considered in determining federal jurisdiction.
*5 Because all of the defendants filed answers prior to removing this case, the motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) is untimely. FED. R. CIV. P. 12(b)(6) (a 12(b)(6) motion “must be made before pleading if a responsive pleading is allowed”); Quality Infusion Care, Inc, v. Humana Health Plan of Texas, Inc., Civil Action No. H–06–1774, 2007 WL 2330078 at *1 fn1 (S.D. Tex. Aug. 14, 2007) (“Because Defendant filed an answer in state court before removing ... its Motion to Dismiss Under Rule 12(b)(6) is untimely.”). However, this Court may consider the motion as a 12(c) motion for judgment on the pleadings provided jurisdiction exists. See Quality Infusion Care, 2007 WL 2330078 at *1 n. 1 (after finding motion to dismiss pursuant to rule 12(b)(6) untimely because defendants had filed answers, court considered motion as one for judgment on the pleading pursuant to rule 12(c)). Therefore, before this Court can consider the defendants’ motion to dismiss, which is a merits decision, it must rule on the motion to remand to determine whether jurisdiction exists. Rhodes v. Mariner Health Care, Inc., 516 F. Supp. 2d 611, 612–13 (S.D. Miss. 2007) (“ ‘jurisdictional questions must ordinarily precede merits determinations in dispositional order’ ” quoting Sinochem Int’l Co. Ltd. v. Malaysia Int’l Shipping Corp., 127 S. Ct. 1191–92 (2007); court must rule on motion to remand before reaching a 12(b)(6) motion which is “a decision on the merits”); see also Heaton v. Monogram Credit Card Bank, 231 F.3d 994, 1000 (5th Cir. 2000) (when subject matter jurisdiction is lacking, court lacks jurisdiction to grant voluntary dismissal or to dismiss claims because such decisions are rulings on the merits).
Plaintiffs’ motion to remand presents three grounds for remand: (1) untimeliness based on the original petition; (2) untimeliness based on the October 2 letter or “other paper,” and (3) lack of diversity because of the presence of in-state defendants. The Court finds merit in all three grounds and will grant the motion to remand.
Remand Granted Based on Presence of In–State Defendants
Plaintiffs assert a lack of diversity exists due to the presence of several Texas defendants. Title 28 U.S.C. § 1441(b) provides:
Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.
(Emphasis added); First Southwest Vending & Food Serv. v. Solo Cup Co., Civil Action No 3:07–CV–1936–D, 2008 WL 1757822 at *2 (N.D. Tex. Apr. 8, 2008) (“even when there is complete diversity, a case cannot be removed to a federal court in Texas when there is a properly joined and served Texas defendant”); Grizzly Mountain Aviation. Inc. v. McTurbine, Inc., Civil Action No. C–08–87, 2008 WL 938571 at *3 (S.D. Tex. Apr. 4, 2008) (“where jurisdiction is based on diversity of citizenship, an action is not removable if any defendant is a citizen of the state in which the action is brought”). Defendants contend the Texas defendants are improperly joined because there is “no reasonable basis for the court to predict a recovery by the plaintiff against the in–state defendant.” Defendant’s Response to Plaintiffs’ Motion to Remand, docket #23 at page 3. While defendants may be correct in their assertion, their claim fails for two reasons: failure to timely allege improper joinder and the “common-defense” rule.
In a procedurally similar case, the court found an untimely assertion of improper joinder would not be considered and the case was improvidently removed. Pacheco v. American Smelting & Refining Co., Inc., No. EP–05–CA–142–PRM, 2005 WL 1404152 at *2–3 (W.D. Tex. June 1, 2005). In its discussion, the court wrote:
“When a plaintiff files in state court a civil action over which the federal district courts would have original jurisdiction based on diversity of citizenship, the defendant or defendants may remove the action to federal court ... provided that no defendant is a citizen of the State in which such action is brought[.]” Pursuant to 28 U.S.C. § 1446, defendants seeking removal must file a notice of removal in federal court in the district and division where the state action has commenced. The notice of removal must contain a short plain statement of the grounds for removal and must include a copy of all “process, pleadings, and orders” served on the defendants in the state action. The notice of removal must be filed within thirty days of the defendant’s receipt of the plaintiff’s initial complaint or within thirty days of the date the defendant was served with process, whichever time period begins first.
*6 “Challenges to removal jurisdiction require an inquiry into the circumstances at the time the notice of removal is filed. Where a notice of removal fails to state a proper basis for removal,” a defendant generally will not be permitted to amend the notice after the close of the [§ 1446(b)] thirty day removal period.
In its Notice of Removal, the only ground AS–ARCO asserted in support of removal jurisdiction was diversity of citizenship between Pacheco and the three defendants. No reference was made to fraudulent or improper joinder, nor was § 1441(b) cited within the removal notice. Therefore, from the face of the removal notice, Defendants failed to state a valid basis for removal jurisdiction in their Notice of Removal—removal of a case on diversity grounds where in-state defendants are present and have been served is improper under § 1441(b).
After the Court issued an Order to Show Cause why the case should not be remanded pursuant to the “forum defendant” rule, on May 9, 2005, Defendants alleged, for the first time, that Jobe and American Eagle were improperly or fraudulently joined to defeat removal jurisdiction. Pacheco, therefore, filed a reply to Defendants’ response, and a contemporaneous Motion to Remand focusing on the propriety of joinder issue.
Though Defendants have submitted extensive briefing on the improper joinder issue and attached affidavit evidence in support of their position, the Court need not decide whether the forum defendants were fraudulently joined. Accoridng to AS—ARCO’s Notice of Removal, the notice was filed on the last day of the § 1446(b) thirty day period. Defendants’ first mention of fraudulent joinder came almost three weeks later. The claim of fraudulent joinder should have been stated in a timely filed removal notice in order to be preserved for the Court’s consideration as a ground for removal. Consideration of the fraudulent joinder argument at this juncture would amount to an improper amendment of Defendants’ removal petition to state an entirely new basis for removal jurisdiction. The thirty day removal period for the Defendants closed on April 18, 2005. The Defendants did not state a valid basis for removal by that date. Therefore, the Court is of the opinion that the above-captioned case was improvidently removed from state court.
Id. (citations omitted): see Kozak v. Guard–Line. Inc., Civil Action No. 3:07–CV–1976–D, 2008 WL 877740 at *4 (N.D. Tex. Mar. 14, 2008) (defendant “could not properly raise new grounds for removal by post-removal amendment of its original notice of removal. Neither can it do so in its opposition to plaintiffs’ motion to remand.”). Here, the only basis for removal was complete diversity between the parties and based on plaintiffs’ second amended petition, damages in excess of $75,000. No reference to fraudulent or improper joinder was made and no reference to section 1441(b) was cited in the notice. Assuming for this argument that the time period for removal did not begin until the filing of the second amended petition on November 29, 2007, and that defendants could properly raise improper joinder in their response to the plaintiffs’ motion to remand,3 defendants had until December 31, 2007, to amend their removal notice and raise this issue. The first reference to improper joinder was made on February 2, 2008, in defendant’s response. Therefore, because the defendants did not state a valid basis for removal, this case was improvidently removed.
*7 Even assuming improper joinder was properly alleged, it appears remand would also be proper based on the common-defense rule recognized and promulgated by the Fifth Circuit Court of Appeals in Smallwood v. Illinois Central R.R. Co., 385 F.3d 568 (5th Cir. 2004). This rule mandates “that where diverse and non-diverse defendants share[ ] a common defense, courts [cannot] find fraudulent joinder based on the merits of that common defense.” Tenbrook v. American Home Prods., No. Civ. A.3–03–CV–2879–P, 2004 WL 2208480 at *3 (N.D. Tex. Sept. 30, 2004). In discussing improper joinder and the common-defense rule, the Smallwood court wrote:
The doctrine of improper joinder rests on the[ ] statutory underpinnings [of 28 U.S.C. § 1441(a) and (b) and 28 U.S.C. § 1332], which entitle a defendant to remove to a federal forum unless an in-state defendants has been “properly joined.” Since the purpose of the improper joinder inquiry is to determine whether or not the in-state defendant was properly joined, the focus of the inquiry must be on the joinder, not on the merits of the plaintiff’s case.
Given this focus, we have recognized two ways to establish improper joinder: “(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.” Only the second way is before us today, and we explained in Travis v. Irby, that the test for fraudulent joinder is whether the defendant has demonstrated that there is no possibility of recovery by the plaintiff against an in-state defendant, which stated differently means that there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against an in-state defendant. To reduce possible confusion, we adopt this phrasing of the required proof and reject all others, whether the others appear to describe the same standard or not.
* * * *
Illinois Central argues that the district court’s finding of improper joinder was appropriate because Smallwood’s claims against MDOT were preempted by federal law. Illinois Central urges, moreover, that it is irrelevant that the FRSA equally bars claims against it.
Facing the question for the first time in an en banc proceeding, we reject the railroad’s contention. To justify removal on improper joinder grounds, Illinois Central was required to prove that the joinder of MDOT was improper. Illinois Central, however, brought no contention going to the propriety of the joinder. Rather, the basis of its contention that Smallwood could not recover went, in fact, to the entire case, although it was first directed to Smallwood’s claims against MDOT. Then, with jurisdiction secured, and with all the force of the “law of the case,” this same preemption was directed to the merits of Smallwood’s claims against the railroad.
A claim of improper joinder by definition is directed toward the joinder of the in-state party, a simple but easily obscured concept. The party seeking removal bears a heavy burden of proving that the joinder of the in-state party was improper.
Nevertheless, when, on a motion to remand, a showing that compels a holding that there is no reasonable basis for predicting that state law would allow the plaintiff to recover against the in-state defendant necessarily compels the same result for the nonresident defendant, there is no improper joinder; there is only a lawsuit lacking in merit. In such cases, it makes little sense to single out the in-state defendants as “sham” defendants and call their joinder improper. In such circumstances, the allegation of improper joinder is actually an attack on the merits of plaintiff’s case as such-an allegation that as phrased by the Supreme Court in Chesapeake & O.R. Co. v. Cockrell, “the plaintiff’s case [is] ill founded as to all the defendants.” In reaching this conclusion, we are applying our traditional improper joinder analysis.
* * * *
*8 The Supreme Court thus made clear that the burden on the removing party is to prove that the joinder of the in-state parties was improper—that is, to show that sham defendants were added to defeat jurisdiction. A showing that plaintiff’s case is barred as to all defendants is not sufficient. When the only proffered justification for improper joinder is that there is no reasonable basis for predicting recovery against the in-state defendant, and that showing is equally dispositive of all defendants rather than to the in-state defendants alone, the requisite showing has not been made.
* * * *
It is urged that this application of the improper joinder doctrine undermines the purpose of diversity jurisdiction, which is to protect out-of-state defendants from local bias, the proverbial “home cooking.” But our holding today is narrow. It applies only in that limited range of cases where the allegation of improper joinder rests only on a showing that there is no reasonable basis for predicting that state law would allow recovery against the in-state defendant and that showing is equally dispositive of all defendants.
The doctrine of improper joinder implements our duty to not allow manipulation of our jurisdiction. We are not persuaded that we can or should—as we are not urged to do—hold that Strawbridge v. Curtiss does not apply to suits wholly lacking “merit,” at least as seen by a federal court. That is not a rule of joinder, but a recrafting of Strawbridge. Until Congress changes our jurisdiction and allows us to hear cases based on something less than complete diversity, we cannot act. And make no mistake, whether to confer diversity is a quintessential political decision belonging to Congress, as congressional efforts to respond to abuses in state court class action litigation by allowing their removal on minimal diversity have so recently reminded us.
* * * *
It is argued that our holding undermines judicial economy by forcing a federal district court to remand a meritless case to state court rather than dismiss it outright. This argument, however, misconstrues the inquiry on removal. When a defendant removes a case to federal court on a claim of improper joinder, the district court’s first inquiry is whether the removing party has carried its heavy burden of proving that the joinder was improper. Indeed until the removing party does so, the court does not have the authority to do more; it lacks the jurisdiction to dismiss the case on its merits. It must remand to the state court.
Smallwood, 385 F.3d at 573–76.
Applying the common defense doctrine to the facts before this Court, it appears remand is proper and necessary. Defendants contend in both their response to the motion to remand and in their contemporaneously filed motion to dismiss that plaintiffs’ claims are barred as a matter of law as to all of the named defendants under the exclusive remedy provision of the Texas Labor Code regardless of whether these claims are brought in federal or state court. Thus, pursuant to the holding in Smallwood, the requisite and heavy burden of joinder has not been made and the case must be remanded. See Tenbrook, 2004 WL 2208480 at *4 (N.D. Tex. Sept. 3b, 2004) (in applying Smallwood and the common defense rule to the case before it involving joinder of Texas citizens, court found remand necessary even though the defendants’ argument for dismissal may have been legally sound because it went to the merits of the case not to the issud of joinder; defendants alleged the National Vaccine Injury Compensation Act precluded civil actions concerning vaccine related injuries until administrative remedies were exhausted; it was undisputed that plaintiffs had not exhausted their administrative remedies; in response to claims of judicial economy the court in a footnote stated: “claims of judicial economy in this case seem dubious at best. After all, Defendants removed this case to federal court before asserting statutory preemption. If Plaintiffs’ claims are in fact preempted, the state court is no less qualified to make that determination. To now argue extraneous legal proceedings ignores the whole of the procedural history.”) (Italics in original).
Remand Based on Timeliness of Removal Notice
*9 Plaintiffs also contend in their motion to remand the removal of this case on December 18, 2007, was untimely because it was facially apparent from their original petition filed June 15, 2007, their damages would exceed $75,000. Plaintiffs point to the language in their petition concerning the damages sought and the injury suffered:
As BRIGGS made the initial incision under the pipe, to drain any excess water, the pipe blew up in his face. BRIGGS sustained serious and debilitating injuries as a result of the explosion, including but not limited to, significant lacerations to his face and head, trauma to his ear and neurological problems.
Plaintiffs’ Original Petition, attached to Notice of Removal, docket #1. Plaintiffs sought damages to compensate plaintiff Justin Briggs for: (1) physical pain he suffered; (2) mental anguish he suffered; (3) the amount of reasonable medical expenses necessarily incurred in the treatment of his injuries; (4) loss of earnings; and (5) damages resulting from the physical impairment suffered by Justin Briggs and the resulting inability to do those tasks and services that he ordinarily would have been able to perform. In the alternative, plaintiffs argue even if it was not facially apparent from their original petition, defendants were on notice no later than October 2, 2007, when all defense counsel received a letter with the amount of the workers’ compensation lien Which at that time was approximately $330,000, that plaintiffs’ damages exceed $75,000. Therefore, defendant’s notice of removal filed December 18, 2007, is untimely.
Defendant AFP contends its removal notice was timely because it was not until plaintiffs filed their second amended petition on November 29, 2007, that it was facially apparent plaintiffs’ damages would likely exceed $75,000. Pursuant to 28 U.S.C. § 1446, the removal period did not begin to run until the filing of the second amended petition, and defendant’s removal is, therefore, timely. 28 U.S.C. § 1446(b) (“If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or Other paper from which it may first be ascertained that the case is one which is or has become removable”). Defendant contends it was not until the second amended petition was filed affirmatively stating the amount of damages being sought as $2,676,000 that it could first be ascertained this case is one which may be removed. The October 2 letter referenced by plaintiffs also did not provide the notice required because it did not disclose whether the damages “recoverable or sought by Plaintiffs exceed $75,000.” In support of its arguments, defendant relies on Chapman v. Powermatic, Inc., 969. F.2d 160 (5th Cir. 1992), John H. Carney & Assocs. v. State Farm, 376 F. Supp. 2d 697 (N.D. Tex. 2005), and Goryews v. Murphy Exploration & Prod., No. V–06–01, 2007 WL 2274400, *3–4 (S.D. Tex. Aug. 8, 2007).
In claiming it was not facially apparent plaintiffs’ damages were likely to exceed $75,000, defendant quotes only a portion of plaintiffs’ original petition, i.e. the plaintiff “ ‘sustained lacerations to his face and head, trauma to his ear and neurological problems’ related to a pipe that exploded in his face.” As set forth above, the original petition states Mr. Briggs “sustained serious and debilitating injuries as a result of the explosion, including but not limited to, significant lacerations to his face and head, trauma to his ear and neurological problems.” (Emphasis added.) In addition to seeking damages for physical pain, mental anguish, reasonable medical expenses, loss of earnings, and physical impairment damages, plaintiff Briggs alleged defendants “acted with reckless disregard and total want of care,” and seeks exemplary damages pursuant to the Texas Practice and Remedies Code. Moreover, Mr. Briggs states he “has been damaged, and will be damaged, in an amount far in excess of the minimal jurisdictional limits of the Court.” (Emphasis added.) These pleadings seem to be in line with other cases in which courts have found it facially apparent from the petition the amount in controversy exceeded $75,000. Gebbia v. Wal–Mart Stores. Inc., 233 F.3d 880, 883 (5th Cir. 2000) (allegations of injuries to “right wrist, left knee and patella, and upper and lower back” and seeking damages for “medical expenses, physical pain and suffering, mental anguish and suffering, loss of enjoyment of life, loss of wages and earning capacity, and permanent disability and disfigurement” found to be facially apparent damages exceeded $75,000 despite post-removal affidavit from plaintiff seeking less than $75,000 in damages); Hernandez v. CST Drilling Fluid, Inc., Civil Action No. C–08–11, 2008 WL 150962 at *3 (Jan. 11, 2008) (relying on Gebbia, court concluded allegations plaintiff was “ ‘seriously injured’ in the accident in question, and that his ‘foot and toes were crushed” in addition to seeking damages for “physical pain, mental anguish, loss of earnings and earning capacity, physical impairment, disfigurement and medical care” affirmatively revealed the amount in controversy greater than $75,000 and removal untimely); Valadez v. Cogema Mining, Inc., C.A. No. C–06–176, 2006WL 2092447 at *2–3 (S.D. Tex. July 26, 2006) (plaintiff stated he was injured from being tossed about in a cab of a truck causing serious injuries; plaintiff sought damages for “ ‘(1) Physical Pain, Suffering & Mental Anguish’; (2) ‘Lost Wages & Loss of WageEarning Capacity’; (3) ‘Reasonable & Necessary Medical Care in the Past & Future’; and (4) ‘Physical Incapacity, Scarring & Disfigurement’ ”; the petition also stated the plaintiff would in the future continue to experience physical pain, suffering and mental anguish, plaintiff had lost earning capacity for the remainder of his life, and plaintiff would “ ‘require additional medical attention for medical care, nursing, and/or hospital services’ and will suffer from physical incapacity and disfigurement ‘for a long time in the future, if not for the balance of his natural life’ ”; relying on the Gebbia opinion, court found the petition facially apparent to support federal jurisdiction and the removal untimely; court found reliance on the Chapman decision misplaced stating “Chapman’s petition stated merely that he had ‘suffered damages in excess of the minimal jurisdictional limits of the court’ ”; court noted the holding in Chapman and Bosky did not affect the holding in Gebbia stating, “in cases, where a litany of damages has been presented, a defendant is considered on notice, even in the absence of a specified dollar amount”). Based on the foregoing discussion, the Court finds the decision in John H. Carney & Assocs. v. State Farm Lloyds, 376 F. Supp. 2d 697, 702 (N.D. Tex. 2005), distinguishable in that the only allegation concerning damages was “the amount in controversy exceeds the minimum jurisdictional limit of the Court.” Here, plaintiffs presented a litany of damages being sought and a statement they were damaged and would be damaged “in an amount far in excess of the minimal jurisdictional limits of the Court.”
*10 Even if the Court were to agree with AFP and find it was not facially apparent from plaintiffs’ original petition the amount in controversy exceeded $75,000, the Court cannot agree the October 2, 2007 letter did not provide the “other” paper which would have started the running of the thirty-day removal period. Defendant AFP contends this letter cannot be the trigger for the starting of the removal period because it does not “disclose whether the damages recoverable or sought by Plaintiffs exceed $75,000.00” Defendant’s Sur–Reply to Plaintiffs’ Reply to Defendant’s Response to Motion to Remand, docket #27 at page 2. Defendant notes only medical or health care expenses actually paid or incurred by the claimant can be recovered pursuant to section 41.0105 of the Texas Civil Practice and Remedies Code, and in Goryews v. Murphy Exploration & Prod. Com., Civil Action No. V–06–01, 2007 WL 2274400 at *3–4 (S.D. Tex. Aug. 8, 2007), the court interpreted section 41.0105 to mean “a defendant employer [is] only liable for the reduced medical expenses actually paid by an injured employee’s workers compensation carrier, and not the amount billed by the employee’s medical providers.” Because plaintiffs did not produce any medical records or similar documents evidencing the amount of medical expenses plaintiffs incurred or paid by his workers’ compensation carrier, this information does not meet the “other” paper requirement and does not start the removal time period.
Because the October 2, 2007 letter states Mr. Briggs’ workers’ compensation “lien” is $205,975.23, and $130,000 of it is medical, it appears these expenses have actually been incurred and paid by his workers’ compensation carrier, and therefore the defendants were on notice that the amount in controversy exceeded $75,000. Accordingly, the Court finds at the very latest, the time for filing the notice of removal began to run upon receipt of the October 2, 2007 letter, and the removal on December 18, 2007, was untimely.
Accordingly, IT IS HEREBY ORDERED that the Motion to Remand (docket #19) is GRANTED and this case is REMANDED to the 166th Judicial District Court of Bexar County, Texas. IT IS FURTHER ORDERED that the Clerk of the Court send a certified copy of this Order to the clerk of the state court.
It is so ORDERED.
According to the Notice of Removal (docket #1), defendant GRW Engineers, Inc. had not been served at the time of removal. The information concerning service and nonsuit was obtained from plaintiff’s motion to remand.
Defendant states “Plaintiffs disingenously assert in their Reply that AFP did not raise the worker’s compensation bar as an affirmative defense in its answers and, therefor, the citizenship of Toyota Manufacturing of Texas, W/BC, and AFP should be considered in determining the propriety of removal. To the contrary, AFP pled in its First Amended Original Answer a plea to jurisdiction based on the workers’ compensation bar and requested that the court dismiss Plaintiffs’ claims.” (Emphasis added.) This Court has reviewed Defendant, Automatic Fire Protections’ First Amended Original Answer referenced in the footnote as attached as Exhibit “C” and cannot find any such assertion. The answer is a general denial, it asserts affirmative defenses as to exemplary damages, contributory negligence, and offset. The plea to the jurisdiction provides as follows: “Defendant, AUTOMATIC FIRE PROTECTION, denies that this Court has jurisdiction and asks the court to dismiss Plaintiffs’ suit.” While it is true AFP asked the court to dismiss plaintiffs’ case, no mention or reference is made to the workers’ compensation bar.
In Kozak v. Guard–Line, Inc., Civil Action No. 3:07–CV–1976–D, 2008 WL 877740 at *4 (N.D. Tex. Mar. 14, 2008), the held the defendant could not properly raise new grounds for removal after the 30–day deadline for removal had elapsed and could not raise new grounds in its response to its motion to remand. The court explained:
The power to amend pleadings to show jurisdiction is controlled by 28 U.S.C. § 1653. Section 1653 does not allow the removing party to assert additional grounds of jurisdiction not included in the original pleading. The [notice] may be amended only to set out more specifically grounds for removal that already have been stated, albeit imperfectly, in the original [notice]; new grounds may not be added and missing allegations may not be furnished.
Prime Income Asset Mgmt. Co. V. Waters Edge Living LLC, 2007 WL 2229050, at *7 (N.D. Tex. Aug. 3, 2007) (Fitzwater, J.) (Citing Iwag v. Geisel Compania Maritima, S.A., 882 F. Supp. 597, 601 (S.D. Tex. 1995)).
“[T]he Court will not permit a removing defendant to defeat a remand motion by relying in its opposition on grounds fro removal not included in its original or amended notice of removal.” Id. at *8 (citations and internal quotations mark omitted). Although in Prime Income Asset Management the court declined to consider a wholly different basis for removal than that which had been asserted in the notice of removal (whereas here UOP presents new grounds for removal that still relate to improper joinder), the court cannot conclude that UOP is simply attempting “to set out more specifically grounds for removal that already have been stated, albeit imperfectly, in the original [notice].”