Rico v. Flores

• Citation: 481 F.3d 234
• Decision Date: 07 March 2007
• Docket Number: No. 05-41719.,05-41719.
• Parties: Juvenal Esparza RICO; Arcelia Contreras Ortega, Individually as the sole surviving heirs of the Estate of their son, Omar Esparza Contreras; Maria Ines Munoz Briones, Individually as next friend of her minor children, Ingri Marvella Reyes Munoz and Clarisa Yajaira Reyes Munoz, and as a surviving heir of the Estate of her husband, Juan Enr; Juan Antonio Reyes Aguilar, Individually; Irene Godinez Cardona, Individually as next friend of her minor son, Roberto Esparza Godinez, and as surviving heir of the Estate of her husband, Roberto Esparza Godinez, and as a surviving heir; Clementina Sanchez, Individually; Eva Cristina Sanchez Sierra, Individually as next friend of her minor children, Karla Lizeth Amador Sanchez, Nancy Marisol Amador Sanchez, and Francis Estefania Amador Sanchez, and as a surviving heir; Manuel Doblado Avila, Individually; Delmira Soler Doblado, Individually as next friend of her minor children, Nelis Avila Soler, Ever Avila Soler, and Elmer Roberto Avila Soler, and as a surviving heir of the Estate of her husband, Isidro Avila Bueso; Ludis Yesenia Soler, Individually; Obdulia Ferrufino Burgos, Individually as next friend of her minor grandchildren, Jonathan Joel Gutierrez Ferrufino, Lely Ampao Canales Ferrufino, Ivy Roxana Canales Ferrufino, and Oscar Alfredo Ferrufino; Rosa Delia Hernandez De Ardon, Individually as next friend of her minor children, Harold Mauricio Ardon Hernandez, Marelyn Ivette Ardon Hernandez, and as a surviving heir of the Estate of her husband; Sixto Acevedo; Maria Emilia Perez, Individually and as the sole surviving heirs of the Estate of their son, Byron Adner Acevedo Perez, Plaintiffs-Appellants, v. Arnulfo FLORES, Jr.; Norma Arriaga Trevino, also known as Norma Bocanegra; Union Pacific; AT&L Railroad Company, Inc.; Archer Daniels Midland Co., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

481 F.3d 234

Juvenal Esparza RICO; Arcelia Contreras Ortega, Individually as the sole surviving heirs of the Estate of their son, Omar Esparza Contreras; Maria Ines Munoz Briones, Individually as next friend of her minor children, Ingri Marvella Reyes Munoz and Clarisa Yajaira Reyes Munoz, and as a surviving heir of the Estate of her husband, Juan Enr; Juan Antonio Reyes Aguilar, Individually; Irene Godinez Cardona, Individually as next friend of her minor son, Roberto Esparza Godinez, and as surviving heir of the Estate of her husband, Roberto Esparza Godinez, and as a surviving heir; Clementina Sanchez, Individually; Eva Cristina Sanchez Sierra, Individually as next friend of her minor children, Karla Lizeth Amador Sanchez, Nancy Marisol Amador Sanchez, and Francis Estefania Amador Sanchez, and as a surviving heir; Manuel Doblado Avila, Individually; Delmira Soler Doblado, Individually as next friend of her minor children, Nelis Avila Soler, Ever Avila Soler, and Elmer Roberto Avila Soler, and as a surviving heir of the Estate of her husband, Isidro Avila Bueso; Ludis Yesenia Soler, Individually; Obdulia Ferrufino Burgos, Individually as next friend of her minor grandchildren, Jonathan Joel Gutierrez Ferrufino, Lely Ampao Canales Ferrufino, Ivy Roxana Canales Ferrufino, and Oscar Alfredo Ferrufino; Rosa Delia Hernandez De Ardon, Individually as next friend of her minor children, Harold Mauricio Ardon Hernandez, Marelyn Ivette Ardon Hernandez, and as a surviving heir of the Estate of her husband;

Sixto Acevedo; Maria Emilia Perez, Individually and as the sole surviving heirs of the Estate of their son, Byron Adner Acevedo Perez, Plaintiffs-Appellants, v. Arnulfo FLORES, Jr.; Norma Arriaga Trevino, also known as Norma Bocanegra; Union Pacific; AT&L Railroad Company, Inc.; Archer Daniels Midland Co., Defendants-Appellees.

No. 05-41719.

United States Court of Appeals, Fifth Circuit.

March 7, 2007.

Adrian Rafael Martinez, Roerig, Oliveira & Fisher, McAllen, TX, for Rico and Ortega.

Alberto Tover Garcia, III (argued), McAllen, TX, for Plaintiffs-Appellants.

Neil Ernest Norquest (argued), Rodriguez, Colvin & Chaney, McAllen, TX, Mitchell C. Chaney, Joseph A. Rodriguez, Robert Patrick Rodriguez, Rodriguez, Colvin & Chaney, Brownsville, TX, for Union Pacific.

Tom Lockhart, Adams & Graham, Harlingen, TX, for AT&T R. Co., Inc. and Archer Daniels Midland Co.

Todd Lafferty, Watonga, OK, for AT&T R. Co., Inc.

Appeal from the United States District Court for the Southern District of Texas.

Before BARKSDALE, DeMOSS and PRADO, Circuit Judges.

PRADO, Circuit Judge:

Plaintiff-appellant Juvenal Esparza Rico and numerous other plaintiffs-appellants (collectively, "Plaintiffs"), who represent the estates of ten deceased illegal immigrants, appeal the district court's order finding that non-diverse defendants Arnulfo Flores, Jr. ("Flores"), and Norma Arriaga Trevino ("Trevino") were improperly joined and denying Plaintiffs' motion to remand to Texas state court. Because we conclude that the application of the Texas unlawful acts rule to Plaintiffs' claims is too uncertain to support a finding of improper joinder, we REVERSE the order of the district court and REMAND for further proceedings consistent with this opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

This lawsuit stems from the deaths of ten illegal aliens who stowed away in a grain hopper railroad car in an attempt to pass undetected through the Border Patrol checkpoint at Sarita, Texas. The ten aliens were locked into the rail car by smugglers with whom they had conspired. They died from lack of oxygen, overheating, and dehydration after being unable to escape. Their remains were found four months later in Denison, Iowa. Plaintiffs, the surviving family members of the ten decedents, brought suit in Texas state court against Flores, who is alleged to have loaded the decedents into the grain hopper; Trevino, an alleged co-conspirator in the smuggling operation; Union Pacific Corporation and Union Pacific Railroad Company (collectively, "Union Pacific"), the owner of the railroad car and employer of Flores; AT&L Railroad Company, Inc. ("AT&L"), another railroad company that may or may not have transported the rail car in question; and Archer Daniels Midland Company ("Archer Daniels"), the owner of the grain facility where the decedents' remains were ultimately found.

Against Flores and Trevino, Plaintiffs brought causes of action for negligence and for civil conspiracy "derivative from acts of negligence." Against Union Pacific, Plaintiffs brought causes of action for vicarious liability for the acts of Flores; for negligent hiring, training, supervision, and retention of Flores; and for premises liability. Plaintiffs did not specify any causes of action against AT&L or Archer Daniels.

On July 9, 2004, Union Pacific removed this case to the Southern District of Texas on the basis of diversity jurisdiction. 28 U.S.C. 1441(b) provides that any civil action over which the district courts have original jurisdiction that is not founded on a claim or right arising under the Constitution, treaties, or laws of the United States is removable only if none of the parties properly joined and served as defendants is a citizen of the state in which the action is brought. Union Pacific claimed that Defendants Flores and Trevino, citizens of Texas, were both improperly joined because Texas's unlawful acts rule barred Plaintiffs' claims against Flores and Trevino. The unlawful acts rule is a rule of Texas common law that generally bars claims that implicate an illegal act by the plaintiff.¹

Plaintiffs filed a motion to remand on July 19, 2004, arguing first, that removal was improper because defendants Flores and Trevino did not consent; second, that defendants Flores and Trevino had not raised the unlawful acts rule in their defense; third, that the unlawful acts rule is inapplicable in wrongful death cases because it is superseded by section 93.001 of the Texas Civil Practice & Remedies Code; and fourth, that even if the unlawful acts rule does apply, it does not bar Plaintiffs' claims because Plaintiffs do not have to prove their unlawful act to make out their causes of action.

While these arguments were being considered by the district court, this circuit handed down its en banc decision in Smallwood v. Illinois Central Railroad Co., 385 F.3d 568 (5th Cir.2004) (en banc). Smallwood held that a district court must remand a case where a defendant asserts a defense in support of improper joinder that is dispositive of all claims in the action. Id. at 571. The district court offered the parties an opportunity to address the impact of Smallwood on their case, at which time Plaintiffs argued that if the unlawful acts rule barred claims against Flores and Trevino, so too it barred claims against the diverse defendants, and therefore, under Smallwood, the case must be remanded to state court.

On May 6, 2005, the district court handed down its Memorandum Order and Opinion denying Plaintiffs' motion to remand. The district court also that day issued an order dismissing defendant AT&L for lack of personal jurisdiction. On May 19, 2005, the district court issued an Amended Memorandum Opinion and Order.² The district court's Amended Memorandum Opinion and Order ("Order") rejected each of the Plaintiffs' arguments. The district court ruled that the fact that Flores and Trevino had not pleaded the unlawful acts rule was not dispositive because "the issue was squarely raised by the Removal Notice and responded to in the Motion to Remand." Rico v. Flores, 405 F.Supp.2d 746, 755 (S.D.Tex.2005). The district court also held that Flores and Trevino's lack of consent to removal did not bar removal because "consent need not be obtained from a co-defendant that the removing party contends is improperly joined." Id. at 756. The district court held that section 93.001 did not govern this case, and that the unlawful acts rule did bar Plaintiffs' claims against Flores and Trevino. The district court found, however, that the unlawful acts rule did not bar certain claims by Plaintiffs against Union Pacific, because the only illegal act which Plaintiffs must show to make out these claims was trespass, which is an exception to the unlawful acts rule. Id. at 768-70.

In its Order, the district court noted that Title 28, § 1292(b) of the United States Code permits a court to certify an interlocutory appeal where (1) a controlling question of law is involved, (2) there is substantial ground for difference of opinion about the question of law, and (3) immediate appeal will materially advance the ultimate termination of the litigation. Finding that this case met these criteria, the district court certified the case for appeal. Id. at 770-71. We granted Plaintiffs' petition for permission to appeal on December 1, 2005. This appeal by Plaintiffs followed.

II. APPELLATE JURISDICTION AND STANDARD OF REVIEW

This court's jurisdiction over Plaintiffs' appeal "derives from the district court's certification of its interlocutory order denying the motion to remand as suitable for appeal under 28 U.S.C. § 1292(b)." Ard v. Transcon. Gas Pipe Line Corp., 138 F.3d 596, 600 (5th Cir.1998). 28 U.S.C. § 1447(d) forbids appellate court review of district court decisions to remand in the face of an alleged lack of subject matter jurisdiction; however, § 1447(d) does not preclude appellate review of a district court decision not to remand when the district court finds that subject matter jurisdiction exists. Bissonnet Invs. LLC v. Quinlan, 320 F.3d 520, 525 (5th Cir.2003). We review questions of subject matter jurisdiction de novo. Id. at 522.

III. STANDARD FOR IMPROPER JOINDER

To establish that a non-diverse defendant has been improperly joined to defeat diversity jurisdiction, the removing party must prove "(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a...