Burden v. General Dynamics Corp.

• Decision Date: 04 August 1995
• Docket Number: No. 94-10925,94-10925
• Citation: 60 F.3d 213
• Parties: 130 Lab.Cas. P 57,963 Jimmy L. BURDEN, et al., Plaintiffs, Jimmy L. Burden, Plaintiff-Appellant, v. GENERAL DYNAMICS CORPORATION, et al., Defendants, Homer F. Davis, Individually and Frank E. Riney, Individually, Defendants-Appellees. Summary Calendar.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 213

60 F.3d 213

130 Lab.Cas. P 57,963

Jimmy L. BURDEN, et al., Plaintiffs Jimmy L. Burden, Plaintiff-Appellant, v. GENERAL DYNAMICS CORPORATION, et al., Defendants Homer F. Davis, Individually and Frank E. Riney Individually, Defendants-Appellees.

No. 94-10925

Summary Calendar.

United States Court of Appeals Fifth Circuit.

Aug. 4, 1995.

Tim G. Sralla, Carvan E. Adkins, Fielding, Barrett & Taylor, Ft. Worth, TX, for appellant.

Stephen Lyle Tatum, Beale Dean, Brown, Herman, Scott, Dean & Miles, Ft. Worth, TX, for appellees.

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

Before DUHE, WIENER and STEWART, Circuit Judges.

WIENER, Circuit Judge:

In this employment discrimination case, Plaintiff-Appellant Jimmy L. Burden ¹ appeals from the district court's denial of his motion for remand to the state court and from its subsequent grant of summary judgment dismissing his claim as against Homer Davis and Frank Riney who, together with their employer, General Dynamics Corporation (General Dynamics), Burden had sued for, inter alia, intentional infliction of emotional distress. Finding no reversible error in the district court's determination that it had diversity jurisdiction because the non-diverse defendants, Davis and Riney, had been fraudulently joined, and agreeing with that court's take-nothing summary judgment dismissing Burden's claims against Davis and Riney, we affirm.

I FACTS AND PROCEEDINGS

Burden was hired in 1967 by the Fort Worth Division of General Dynamics. In the summer of 1992, General Dynamics informed Burden that his position with the company would be reclassified from a management position to a non-managerial personnel position. Riney, as Vice President of the Contract Estimating and Business Management Department, made the decision to reclassify Burden's job as part of an effort to reduce the General Dynamics work force. Davis--who, as Vice President of the Estimating Department, reported directly to Riney--implemented Riney's plan for job reclassifications within the company.

Prior to the reclassification of his position, Burden served as Director of Administration and Operations. On August 3, 1992, Burden's job was reclassified to the "staff" position of Estimating Specialist. Although he experienced a sharp decline in his job duties, Burden retained his previous pay grade, salary, and parking space. Effective December 31, 1992, the fifty-seven year-old Burden voluntarily retired from General Dynamics.

Burden, a Texas resident, originally filed suit in state court, seeking to recover damages against Riney, Davis, and General Dynamics for age discrimination in violation of the Texas Human Rights Act (the Act) and for negligent and intentional infliction of severe emotional distress. General Dynamics is incorporated in Delaware and has its principal place of business in Virginia. Riney and Davis are citizens and residents of Texas.

The defendants removed the case to district court based on complete diversity of citizenship, alleging that Riney and Davis had been fraudulently joined to defeat diversity jurisdiction. Burden filed a motion to remand the case to state court, contending that the district court lacked jurisdiction because Burden's action did not involve claims arising under the Constitution, treaties, or laws of the United States and because complete diversity did not exist among the parties. Not surprisingly, Burden insisted that Riney and Davis were not fraudulently joined to defeat removal to federal court.

The district court denied Burden's motion to remand the case to state court, finding on the basis of the state court pleadings, affidavits, and other evidentiary materials, that no reasonable basis existed for predicting that Burden could recover against Riney and Davis in a Texas court. The district court concluded that the joinder of Riney and Davis was fraudulent and that their presence in the action should be disregarded for removal purposes. In its ruling denying the motion to remand, the court recognized that Burden had abandoned his claims for negligent infliction of emotional distress, for which no cause of action exists in Texas. In addition, the court observed that Burden had also abandoned his claims against Riney and Davis for age discrimination in violation of the Act. Burden had not pleaded that Riney and Davis were employers for purposes of the Act and had not named Riney and Davis in the discrimination charge filed with the Texas Commission on Human Rights. The district court subsequently granted summary judgment in favor of all defendants on Burden's claims for intentional infliction of emotional distress, and rendered a final Rule 54(b) judgment dismissing only Davis and Riney as defendants in this case. ²

II ANALYSIS

A. STANDARD OF REVIEW

This appeal is interlocutory: Although the district court granted summary judgment to all defendants on Burden's emotional distress claims, it entered final judgment of dismissal as to Davis and Riney only. The court did not dismiss General Dynamics as a defendant in the case.

A district court's refusal to remand an action to the state court is ordinarily not a final order and cannot be reviewed unless the court enters a final judgment. ³ The district court in the instant case, however, expressed its intent to enter a final and appealable judgment, pursuant to Rule 54(b), in favor of Riney and Davis--but not General Dynamics--in its order granting summary judgment, stating that "there is no just reason for delay in, and [the court] hereby directs, entry of final judgment as to the dismissal of plaintiffs' claims against defendants Davis and Riney." ⁴ As Burden appeals from the entry of judgment ordering that he take nothing against Riney and Davis and dismissing his claims against them, we review the denial of the motion to remand and the grant of summary judgment as to Riney and Davis only.

Our review of the district court's decision to deny the motion to remand to state court is de novo, as it is a question of law. In determining the validity of a claim of fraudulent joinder, the district court "must evaluate all of the factual allegations in the light most favorable to the plaintiff, resolving all contested issues of substantive fact in favor of the plaintiff." ⁵ The court must also resolve all ambiguities in the controlling state law in the plaintiff's favor. ⁶ If the plaintiff has any possibility of recovery under state law against the party whose joinder is questioned, then the joinder is not fraudulent in fact or law. ⁷ We do not determine whether the plaintiff will actually or even probably prevail on the merits of the claim, but look only for a possibility that the plaintiff might do so. ⁸

In reviewing a grant of summary judgment, we apply the same standards as those that govern the district court in its determination. ⁹ Summary judgment must be granted if the court, viewing the facts and inferences in the light most favorable to the non-moving party, determines that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." ¹⁰ The moving party must demonstrate by competent evidence that no issue of material fact exists. ¹¹ The non-moving party then has the burden of showing the existence of a specific factual issue which is disputed. ¹² If any element of the plaintiff's case lacks factual support, a district court should grant a defendant's motion for summary judgment. ¹³

B. FRAUDULENT JOINDER CLAIM

1. Scope of District Court's Examination

Burden argues that the district court erred in looking beyond the pleadings in determining that Riney and Davis were fraudulently joined. He contends that a conflict exists within our court's jurisprudence on the question whether only the pleadings should be considered in a fraudulent joinder claim or whether the court may instead "pierce the pleadings" and examine affidavits and other evidentiary material as well. In support of his position, Burden cites to Green v. Amerada Hess Corp. ¹⁴

In Green, we reversed the district court's denial of a motion for remand to the state court, finding that the court erred in conducting a full evidentiary hearing to resolve disputed factual issues relating to matters of substance rather than jurisdiction. We observed that, in considering a claim of fraudulent joinder, the "court must normally assume all the facts as set forth by the plaintiff to be true." ¹⁵ The ambit of our holding in Green is not so broad, however, as to dictate that a district court must look solely at the pleadings in determining whether a plaintiff has any possibility of recovery in state court against the non-diverse parties whose joinder is questioned. Green merely teaches that the district court should not conduct a full-scale evidentiary hearing on questions of fact, but rather should make a summary determination by resolving disputed facts in favor of the plaintiff.

We clearly expressed in B., Inc. v. Miller Brewing Co. ¹⁶ that "[i]n support of ... [a] motion for remand, the plaintiff may submit affidavits and deposition transcripts along with the factual allegations contained in the verified complaint." ¹⁷ Our decisions subsequent to B., Inc. have consistently maintained that a district court may look to evidence outside of the pleadings in determining a fraudulent joinder claim. ¹⁸ Thus, we hold that the district court did not err in looking beyond Burden's pleadings to determine removal jurisdiction. Lest there remain even a shadow of a doubt as to this circuit's position, we reiterate--in hopes that further pronouncement will not be necessary--that in testing for fraudulent joinder the district court in its discretion may "pierce the pleadings," albeit in so doing the court should not conduct an evidentiary hearing but, based on appropriate documentation in addition to the pleadings, should instead resolve all disputed questions...