Marren v. Stout

• Citation: 930 F.Supp.2d 675
• Decision Date: 18 March 2013
• Docket Number: Cv. No. SA:12–CV–00631–DAE.
• Parties: Jacqueline MARREN, Plaintiff, v. Patricia Pliego STOUT, Individually and as President of Alamo Travel Management, LLC d/b/a Alamo Travel Group, Inc., Defendants.
• Court: U.S. District Court — Western District of Texas

930 F.Supp.2d 675

Jacqueline MARREN, Plaintiff,

v.Patricia Pliego STOUT, Individually and as President of Alamo Travel Management, LLC d/b/a Alamo Travel Group, Inc., Defendants.

Cv. No. SA:12–CV–00631–DAE.

United States District Court,

W.D. Texas,

San Antonio Division.

March 18, 2013.

Gershon D. Cohen, Law Office of Gershon D. Cohen, Jeffrey D. Small, Law Office of Jeff Small, Olga Brown, Law Office of Olga Brown, San Antonio, TX, for Plaintiff.

Charles John Muller, IV, Strasburger & Price, LLP, Margaret Cheryl Kirby, Strasburger Price Oppenheimer Blend, San Antonio, TX, for Defendants.

ORDER: (1) GRANTING PLAINTIFF'S MOTION TO REMAND; (2) DENYING WITHOUT PREJUDICE AS MOOT DEFENDANTS' MOTION TO DISMISS

DAVID ALAN EZRA, Senior District Judge.

On March 6, 2013, the Court heard oral argument on Plaintiff's Motion to Remand to State Court (doc. # 17). Jeff Small, Esq., and Olga Brown, Esq., appeared at the hearing on behalf of Plaintiff; Margaret Cheryl Kirby, Esq., appeared on behalf of Defendants. After reviewing the Motion and the supporting and opposing memoranda, the Court GRANTS Plaintiff's Motion to Remand (doc. # 17) and DENIES WITHOUT PREJUDICE AS MOOT Defendants' Motion to Dismiss (doc. # 5).

BACKGROUND

On June 1, 2012, Plaintiff Jacqueline Marren filed suit in the 438th Judicial District Court of Bexar County, Texas, against Defendants Alamo Travel Management, LLC d/b/a Alamo Travel Group, Inc. (“Alamo Travel”); and Patricia Pliego Stout (“Stout”), individually and as President of Alamo Travel. ( Marren v. Stout, Civ. No.2012–CI–09064; doc. # 1–3 ¶¶ 3, 4.)

Plaintiff worked for Defendant Alamo Travel from 2005 through June 4, 2010. ( Id. ¶ 8.) According to the Complaint, Defendant Alamo Travel classified Plaintiff as an “employee” from 2005 through June 8, 2008; thereafter, coinciding with Plaintiff's relocation from San Antonio to Las Vegas, Alamo Travel reclassified her as an “independent contractor.” ( Id.) Plaintiff alleges that she performed the same duties in Las Vegas as she had in San Antonio but was denied benefits such as a 401(k) and paid vacation due to her improper reclassification. ( Id.) When Plaintiff raised concerns regarding her worker classification, she “was never given a direct answer.” ( Id.)

Worried that she was violating the law by paying federal income taxes as an independent contractor rather than an employee, on May 5, 2010, Plaintiff filed “an SS–Determination”—Form SS–8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding—with the Internal Revenue Service (“IRS”). ( Id. ¶ 9.) Approximately one month later, on June 4, 2010, Alamo Travel fired Plaintiff. ( Id. ¶ 11.) Then, on November 11, 2011, the IRS determined that between June 2008 and June 4, 2010, Plaintiff had in fact been an employee of Alamo Travel and that additional taxes were due from both parties. ( Id.) ¹

Plaintiff alleges three causes of action arising from this incident. First, Plaintiff alleges wrongful discharge under the Sabine Pilot doctrine, which prohibits employers from firing an employee based solely on her refusal to perform an illegal act. ( Id. ¶¶ 15–16; Sabine Pilot Serv., Inc. v. Hauck, 687 S.W.2d 733, 735 (Tex.1985)). Plaintiff claims that as a result of this wrongful termination she “was damaged by loss of the Health and welfare benefits, past wages, and future wages and mental anguish.” ( Id. ¶ 14.)

Second, Plaintiff alleges negligent misrepresentation, claiming that Defendant Alamo Travel negligently misrepresented to her in the course of its business “that the only way she could continue to work for Alamo Travel was to accept employment under the status of an independent contractor and that it was a legal classification of her worker status.” ( Id. ¶¶ 17–18.) Plaintiff claims that she relied on Defendant's misrepresentation to her detriment, “result[ing] in the following damages[:] loss of Health and Welfare Benefits, reduction in wages, loss of other benefits that Alamo Travel was required to pay and future wages.” ( Id. ¶ 19.)

Third and finally, Plaintiff alleges that Defendants committed fraud (1) when they represented to her that “relocating to Las Vegas with her family would not affect her employment with Alamo Travel and that she would continue as an ‘employee’ ” ( id. ¶ 20); and (2) when, a few days before Plaintiff's departure for Las Vegas, Defendant Stout represented to Plaintiff “that she would have to be classified as an ‘independent contractor’ in order to meet the legal requirements of her employment status in Nevada” ( id. ¶ 21). Defendants made these material representations, alleges Plaintiff, “with the intent to deprive [her] of her Health and Welfare Benefits, 401K contributions and other employee benefits required of an employer servicing a government contract....” ( Id. ¶ 22.)

On June 26, 2012, Defendants timely removed the case pursuant to 28 U.S.C. § 1441(b), arguing that this Court has federal-question jurisdiction because “[t]he gravamen of Plaintiff's claims is that Defendants failed to abide by their statutory duty under FICA [the Federal Insurance Contributions Act, 26 U.S.C. §§ 3101–3128] to classify plaintiff as an employee....” (Doc. # 1 ¶ 9.) ( See doc. # 1 at 1.) On the following day, Defendants filed the Motion to Dismiss for Failure to State a Claim that is now before the Court. (Doc. # 5.) The Court scheduled a hearing on Defendants' Motion for Monday, January 22, 2013. (Doc. # 16.) Over the weekend preceding the hearing, Plaintiff filed a Motion to Remand to State Court, arguing that this case does not present a federal question sufficient to justify the exercise of federal jurisdiction over her state-law claims. (Doc. # 17.) In light of Plaintiff's Motion, the Court granted Defendants leave to file a response and scheduled a hearing on both Motions for March 6, 2013.

DISCUSSION

I. Plaintiff's Motion to Remand to State Court

A. Legal Standard

“It is axiomatic that the federal courts have limited subject matter jurisdiction and cannot entertain cases unless authorized by the Constitution and legislation.” Coury v. Prot, 85 F.3d 244 (5th Cir.1996). Pursuant to Article III and 28 U.S.C. § 1331, federal courts have jurisdiction over civil actions “arising under” federal law. This grant of jurisdiction is to be strictly construed, however, and doubts are resolved against federal jurisdiction. See Boelens v. Redman Homes, Inc., 748 F.2d 1058, 1067 (5th Cir.1984). The court must begin with the presumption that it does not have jurisdiction, and “the burden of establishing federal jurisdiction rests on the party seeking the federal forum.” Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir.), cert. denied,534 U.S. 993, 122 S.Ct. 459, 151 L.Ed.2d 377 (2001) (citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994)). The parties may not create federal jurisdiction by consent. Fed.R.Civ.P. 12(h)(3); Elam v. Kansas City S. Ry. Co., 635 F.3d 796, 802 (5th Cir.2011).

A defendant may remove a case from state to federal court if the case could have been filed in federal court originally. Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) (citing 28 U.S.C. § 1441(a)). A removing defendant bears the burden of establishing by a preponderance of the evidence that the federal court has subject-matter jurisdiction. De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir.1995). The removal statutes are to be construed “strictly against removal and for remand.” Eastus v. Blue Bell Creameries, L.P., 97 F.3d 100, 106 (5th Cir.1996); see also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108–109, 61 S.Ct. 868, 85 L.Ed. 1214 (1941) (acknowledging “the Congressional purpose to restrict the jurisdiction of the federal courts on removal” and the need for “strict construction of such legislation”). A district court must remand a case if, at any time before final judgment, it appears the court lacks subject-matter jurisdiction. See28 U.S.C. § 1447(c); Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 571, 124 S.Ct. 1920, 158 L.Ed.2d 866 (2004); In re 1994 Exxon Chem. Fire, 558 F.3d 378, 392 (5th Cir.2009).

B. Federal–Question Jurisdiction

The presence or absence of a federal question necessary to support removal is governed by the well-pleaded complaint rule, under which “federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint.” Caterpillar Inc., 482 U.S. at 392–93, 107 S.Ct. 2425. The well-pleaded complaint rule recognizes that the plaintiff is the “master of the claim,” and a plaintiff may—except in cases of complete federal preemption—“avoid federal jurisdiction by exclusive reliance on state law.” Id. To support removal based on federal-question jurisdiction, a defendant must show that the plaintiff has (1) alleged a federal claim, Am. Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260, 36 S.Ct. 585, 60 L.Ed. 987 (1916); (2) alleged a state cause of action that Congress has transformed into an inherently federal claim by completely preempting the field, Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987); or (3) alleged a state-law claim that necessarily raises a disputed and substantial issue of federal law that a federal court may entertain without disturbing federal/state comity principles, Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005).

In the instant case, the Complaint alleges only state-law causes of action: wrongful discharge, negligent misrepresentation, and fraud. ( See doc. # 1–3 ¶¶ 15–24.) Moreover, Defendants conceded at the hearing that Plaintiff's claims are not preempted by federal law. Instead, Defendants argue that this Court has federal-question jurisdiction because each of Plaintiff's state-law causes of action raises a substantial...