King v. Jim Jarrett, Greg Phillips, Tex. Gas Service/One Gas, Inc.

Decision Date01 October 2015
Docket NumberA-15-CV-00491-LY-ML
CourtU.S. District Court — Western District of Texas

Before the Court are Plaintiff's Motion to Remand [Dkt. #10], which also contains Plaintiff's motion for leave to amend the complaint; Defendant Texas Gas Service/ONE Gas, Inc.'s Response to Plaintiff's Motion for Leave to Amend [Dkt. #11]; Defendant's Response to Plaintiff's Motion to Remand [Dkt. #12]; Plaintiff's Reply in Support of Motion to Remand [Dkt. #21]; Defendant's Opposed Motion to Strike Exhibits 2 and 3 to Plaintiff's Reply in Support of Motion to Remand [Dkt. #22]; and Plaintiff's Response to Defendant's Opposed Motion to Strike Exhibits 2 and 3 to Plaintiff's Reply in Support of Motion to Remand [Dkt. #24].

The Motions were referred by United States District Judge Lee Yeakel to the undersigned for a Report and Recommendation as to the merits pursuant to 28 U.S.C. § 636(b), Rule 72 of the Federal Rules of Civil Procedure, and Rule 1(d) of Appendix C of the Local Rules of the United States District Court for the Western District of Texas. After reviewing the pleadings, the relevant case law, as well as the entire case file, the undersigned issues the following Orders concerning the Motion to Strike [Dkt. #22] and the Motion for Leave to Amend (contained in[Dkt. #10]) and makes the following Report and Recommendation to the District Court concerning the merits of Plaintiff's Motion to Remand [Dkt. #10].


Plaintiff, Alan King ("King") was employed by Texas Gas Service from approximately September 1, 2007 until approximately May 7, 2014. Notice of Removal [Dkt. #1], Ex. 6, Orig. Pet. at 5, 8. King's petition asserts Texas Gas Service ("TGS") is "aka ONEGAS, Inc., aka ONEOK, Inc., aka ONEOK Partnership." Id. at 1. In their Notice of Removal, Defendants have clarified that Texas Gas Service is an unincorporated division of the corporate entity ONE Gas, Inc. Notice of Removal [Dkt. #1] at 2.

King alleges that individual Defendants, Greg Phillips and Jim Jarrett, engaged in a conspiracy to defame him and cause his constructive discharge from TGS in retaliation for King's involvement in a 2012-2013 in-house investigation into gas leaks in the TGS infrastructure in Austin, Texas. Id. at 4-28. According to King, this investigation implicated Phillips in corporate mismanagement, caused the termination of some of Phillips' cronies, and left Phillips looking for revenge against those involved in discrediting him. Id.

King does not attribute any of these motives to Jarrett. Instead, King alleges Jarrett was at all times acting on Phillips' instructions, despite being "a seemingly decent person," because Phillips "significantly influences Jarrett's career, future, and financial security." Id. at 20. Specifically, King alleges Jarrett was instructed by Phillips to give King a written disciplinary letter accusing him of colluding in discriminatory employment practices at the direction of a former supervisor. Id. at 25. King alleges that, contemporaneously with the disciplinary letter, Jarrett placed him on a 90-day probationary period (his second for similar, allegedly false, allegations of discrimination). Id. King further alleges Jarrett had some role in informing"everyone" in the Austin offices of TGS that King had been disciplined for workplace discrimination, thus making it impossible for King to continue in a management role and ensuring King's constructive discharge. Id. at 33; see also Reply at 7-8 and Ex. 2, Affidavit of Alan King.

King filed suit in Texas state court on October 20, 2014, asserting claims against Jarrett, Phillips, and TGS. See generally Notice of Removal [Dkt. #1], Ex. 6, Orig. Pet. King served TGS on May 7, 2014. Though King apparently attempted to serve Jarrett and Phillips through TGS's attorney on the same date, there was no agreement in place regarding acceptance of service for those defendants, and the record reflects King has made no further attempt to serve them. Reply [Dkt. #21], Ex. 4 (service returned unexecuted as to Jarrett and Phillips); Mot. Remand [Dkt. #10], Ex. 5 (written agreement by counsel for Texas Gas Service to accept service on TGS and its parent corporation, ONE Gas, Inc "in this matter only.").

Plaintiff's Original Petition alleges that both Plaintiff and Jarrett are citizens of Texas, and that Defendant TGS "is a limited partner of ONEOK, Limited Partnership . . .which is composed of individual partners who variously reside throughout Texas." Notice of Removal [Dkt. #1], Ex. 6, Orig. Pet. at 1-2. Defendant TGS nevertheless removed the case to federal court on June 5, 2015, citing diversity of citizenship as the basis for federal subject matter jurisdiction. See generally Notice of Removal [Dkt. #1]. According to TGS, it is "an unincorporated division of ONE Gas, Inc., an Oklahoma corporation," and thus has no common citizenship with Plaintiff, King or the Texas forum. Id. at 2. Defendant further contends that Jarrett, the only other Texas defendant, is improperly joined and therefore should not be considered for purposes of examining federal subject matter jurisdiction. Id.. Plaintiff responds that he intended to state his claims against TGS as a component entity of ONEOK Partners, L.P., a limited partnership with various Texas members. Mot. Remand [Dkt.#10] at 2. Plaintiff further asserts he has stated multiple claims for relief against Jarrett under Texas law. Id. at 5-8. In the alternative, Plaintiff asserts that any questions raised as to the validity of his claims against Jarrett apply with equal force to his claims against the non-diverse defendants, such that the District Court should remand the case under the "equally dispositive" doctrine. Id. at 9-10. Finally, Plaintiff seeks leave to amend the complaint to more clearly assert his claims against ONEOK Partners, L.P. if necessary. Id. at 11 and Ex. 7, Proposed Amended Complaint.

In support of his contention that ONEOK Partners, L.P. should be a party defendant in this case, Plaintiff provides an affidavit stating he believed Jarrett and Phillips acted on behalf of ONEOK Partners, L.P. in disciplining him, and he provides copies of various letters, including a disciplinary letter from Phillips, written on "ONEOK" stationery. Reply [Dkt. #21], Ex. 2. Defendant asserts this evidence is inadmissible and moves to strike Plaintiff's affidavit and the attached correspondence. Opp. Mot. Strike [Dkt #22]. Defendant opposes Plaintiff's motion to amend the complaint to add ONEOK Partners, L.P., see generally Resp. Mot. Leave to File Am. Compl. [Dkt. #11], and asserts Plaintiff's existing claims against TGS are analytically distinct from his claims against Jarrett, such that the "equally dispositive" doctrine should not defeat federal subject matter jurisdiction over this case. Resp. Mot. Remand [Dkt. #12] at 19.

A. Federal Subject Matter Jurisdiction

In an action that has been removed to federal court, a district court is required to remand the case to state court if, at any time before final judgment, it determines that it lacks subjectmatter jurisdiction. 28 U.S.C. § 1447(c); see also Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 571 (2004); In re 1994 Exxon Chem. Fire, 558 F.3d 378, 392 (5th Cir. 2009). When considering a motion to remand, "[t]he removing party bears the burden of showing that federal jurisdiction exists and that removal was proper." Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002); accord DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n.3 (2006).

Generally, a federal court has jurisdiction over a case in two circumstances. The first, known as federal question jurisdiction, exists if a case "arises under the Constitution, treaties or laws of the United States." 28 U.S.C. § 1331. Removal based on federal question jurisdiction is proper if the complaint establishes (1) federal law creates the cause of action, or (2) federal law is a necessary element of one of the well-pleaded claims. Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 808-09 (1988). The Original Petition at issue in this case asserts only state law claims: fraudulent inducement, tortious interference with contract or existing business relationship, intentional infliction of emotional distress, defamation, negligence, and violations of the Texas Labor Code, Chapter 21. Notice of Removal [Dkt. #1], Ex. 6, Orig. Pet. at 28-36. Therefore, federal question jurisdiction is not at issue here. Aaron v. Nat'l Union Fire Ins. Co., 876 F.2d 1157, 1160-61 (5th Cir. 1989).

The second circumstance in which a federal court has jurisdiction is frequently termed diversity jurisdiction. See generally 28 U.S.C. § 1332 (setting out the elements required for jurisdiction based on "diversity of citizenship"). "Diversity jurisdiction under 28 U.S.C. § 1332 only exists where the parties are citizens of different states and the amount in controversy exceeds $ 75,000." White v. FCI USA, Inc., 319 F.3d 672, 674-675 (5th Cir. 2003). The party seeking to invoke federal diversity jurisdiction bears the burden of establishing both that theparties are diverse and that the amount in controversy exceeds $75,000. St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998); De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995). Furthermore, removal is appropriate "only if none of the parties properly joined and served as defendants is a citizen of the state in which the action was brought." Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281 (5th Cir. 2007) (citing 28 U.S.C. § 1441(b)(2)). These necessary elements must exist "both at the time of filing in state court and at the time of removal to federal court." Coury v. Prot, 85 F.3d 244, 249 (5th Cir. 1996...

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