707 F.2d 201 (5th Cir. 1983), 82-4223, Green v. Amerada Hess Corp.

Docket Nº:82-4223.
Citation:707 F.2d 201
Party Name:David R. GREEN, Plaintiff-Appellant, v. AMERADA HESS CORPORATION and L.A. Stricklin, Defendants-Appellees.
Case Date:June 16, 1983
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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707 F.2d 201 (5th Cir. 1983)

David R. GREEN, Plaintiff-Appellant,

v.

AMERADA HESS CORPORATION and L.A. Stricklin, Defendants-Appellees.

No. 82-4223.

United States Court of Appeals, Fifth Circuit

June 16, 1983

Page 202

[Copyrighted Material Omitted]

Page 203

Dixon L. Pyles, Jackson, Miss., James M. Brown, Laurel, Miss., Clyde Brown, Long Beach, Miss., for plaintiff-appellant.

Edmund L. Brunini, Jr., John E. Milner, Jackson, Miss., for defendants-appellees.

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

Before CLARK, Chief Judge, THORNBERRY and RANDALL, Circuit Judges.

CLARK, Chief Judge:

David R. Green claims he was wrongfully discharged by his employer, Amerada Hess Corporation. Green also claims that L.A. Stricklin, a vice-president of Amerada Hess, had a part in his discharge. Green brought an action against Amerada Hess and Stricklin in a Mississippi court. Amerada Hess removed the action to federal court. Green moved the court to remand the action to state court. The court denied the motion, dismissed the cause against Stricklin, and granted summary judgment in favor of Amerada Hess. We hold that Green's motion to remand should have been granted, and reverse and remand with instructions that the case be returned to state court.

Green sustained a back injury in the course of performing his employment duties for Amerada Hess. Green eventually required surgery. He recuperated from the operation and resumed his employment. He was fired within one year.

Green brought an action against Amerada Hess in federal court. The basis of jurisdiction was diversity of citizenship. Green alleged that he had been discharged in retaliation for pursuing his rights under Mississippi's workmen's compensation statute. 1

The district court granted summary judgment in favor of Amerada Hess. On appeal, Green v. Amerada Hess, 612 F.2d 212 (5th Cir.), cert. denied, 449 U.S. 952, 101 S.Ct. 356, 66 L.Ed.2d 216 (1980) (Green I ), this court affirmed. We first noted that Green "did not have a written contract of employment, but was hired for an indefinite period of time." Id. at 213. After examining the conflicting caselaw of other jurisdictions, and pointing out that neither the Mississippi legislature nor the Mississippi courts had addressed the matter, the court refused to create a new cause of action for retaliatory discharge under Mississippi law. The court went on to hold that an employer under Mississippi law has the legal right to discharge an employee hired for an indefinite term without any justification. Id. at 214. The court affirmed the district court's ruling that Green had failed to state a cognizable claim.

Green remained undaunted. He filed suit in Mississippi state court alleging wrongful discharge and a variety of other claims. Green named L.A. Stricklin, and Amerada Hess as defendants. Both Stricklin and Green are Mississippi residents. Amerada Hess removed the action to federal court. It contended that Green fraudulently joined Stricklin in the action in order to destroy diversity jurisdiction. Green promptly moved the court to remand the case back to state court.

The court held a full evidentiary hearing at which live testimony, deposition transcripts, and documentary evidence were produced. The court denied Green's motion to remand. On the basis of "the strong evidence presented by Defendants and the somewhat transparent support mustered by Plaintiff," the court concluded that Stricklin was fraudulently joined. It also sua sponte dismissed Stricklin from the lawsuit pursuant to Fed.R.Civ.P. 12(b)(6).

Amerada Hess moved for summary judgment. The court held another hearing, and then granted the motion. It ruled that Green's action was barred, under federal principles of res judicata and collateral estoppel,

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by this court's prior decision in Green v. Amerada Hess, 612 F.2d 212 (5th Cir.1980). The court entered final judgment and Green appeals.

In analyzing the issues presented on this appeal, we are guided by B., Inc. v. Miller Brewing Company, 663 F.2d 545 (5th Cir.1981). In that case, the court was called upon to review the standards and procedures which are to be applied when a fraudulent joinder has been alleged. B., Inc. brought suit against Miller Brewing Company, a Wisconsin company, in Texas state court. He also named four Texas residents as defendants. Miller of Wisconsin removed to federal court. It alleged that B., Inc. fraudulently joined the Texas defendants in order to defeat diversity jurisdiction. B., Inc. moved to have the case remanded. The district court held an evidentiary hearing which lasted several days. It concluded that the Texas defendants had been fraudulently joined, and dismissed all four of them from the action.

This court reversed the judgment of the district court. We repeatedly emphasized that "district courts must not 'pretry' substantive factual issues in order to answer the discrete threshold question of whether the joinder of an in-state defendant is fraudulent." Id. at 546. The only issue that the court should address is that of its own jurisdiction.

As a procedural matter, a district court

need not and should not conduct a full scale evidentiary hearing on questions of fact affecting the ultimate issues of substantive liability in a case in order to make a preliminary determination as to the existence of subject matter jurisdiction. The question of whether the plaintiff has set forth a valid claim against the in-state defendant(s) should be capable of summary determination.

Id. at 551. Although this general command is subject to limited exceptions, 2 none of them are applicable here.

Despite this clear mandate, the district court in the instant case held an extensive evidentiary hearing. The factual issues it addressed related to matters of substance, not jurisdiction, in direct contravention of B., Inc. It examined at length Stricklin's role in the decision to terminate Green, and found "a plethora of facts which could have been ascertained by Plaintiff to verify Stricklin's lack of personal involvement." 3

The district court relied in part on Smith v. City of Jackson, 358 F.2d 705 (5th Cir.1966), in its decision to conduct a full evidentiary hearing on the motion to remand. Smith, however, was a criminal trespass case removed to federal court under 28 U.S.C. Sec. 1443. 4 The concerns in Smith were much like the concerns in Georgia v. Rachel, 384 U.S. 780, 86 S.Ct. 1783, 16 L.Ed.2d 925 (1966). The defendants in Rachel also petitioned for removal pursuant to section 1443. The Supreme Court held that

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the goals of the Civil Rights statutes, protecting the rights of the defendants to peacefully attempt to be served upon an equal basis in public restaurants, precluded the State from prosecuting these defendants in state courts, and that under section 1443, remand to the state court was improper. Rachel and Smith did not involve fraudulent...

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