Odar v. Felix Energy Holdings II LLC

Decision Date12 April 2022
Docket Number21-CV-00079-DC-DF
PartiesALFREDO ODAR, Plaintiff, v. FELIX ENERGY HOLDINGS II LLC, and ROCKY MOUNTAIN CRUDE OIL, LLC, Defendants.
CourtU.S. District Court — Western District of Texas

REPORT AND RECOMMENDATION OF THE U.S. MAGISTRATE JUDGE

DAVID B. FANNIN, UNITED STATES MAGISTRATE JUDGE

TO THE HONORABLE DAVID COUNTS, U.S. DISTRICT JUDGE:

BEFORE THE COURT is Plaintiff Alfredo Odar's (Plaintiff) Motion for Remand (hereafter Motion to Remand) (Doc. 9). This case is before the U.S. Magistrate Judge by a standing order of referral from the District Judge pursuant to 28 U.S.C. § 636 and Appendix C of the Local Rules for the Assignment of Duties to United States Magistrate Judges. After due consideration, the undersigned RECOMMENDS that Plaintiff's Motion to Remand be DENIED. (Doc. 9).

I. Background

This case's genesis is Plaintiff's employment with Defendant Rocky Mountain Crude Oil, LLC (RMCO). On March 26, 2019, Plaintiff claims he was employed with RMCO at a site in Reeves County, Texas. (Doc. 1-2 at 16). Plaintiff alleges he was working as a “tanker truck driver” for RMCO and offloading crude oil from said tanker to a depository pump allegedly owned, operated, and controlled by Defendant Felix Energy Holdings II, LLC (Felix). Id. Plaintiff alleges that while he was offloading oil via hoses, the depository pump “shut down, ” causing a “buildup of pressure in the hose” and leading to its eventual bursting. Id. at 18. According to Plaintiff, the burst hose struck his face and sprayed crude oil on him, causing him injuries and pain. Id. Plaintiff now asserts negligence claims against RMCO and Felix, as well as a premises liability claim against Felix.

On March 12, 2021, Plaintiff filed his live First Amended Petition (hereafter, “Complaint”) against RMCO and Felix under Cause No. 21-03-23887-CVR, Alfredo Odar v. Felix Energy Holdings II, LLC, et al., in the 143rd District Court of Reeves County, Texas. (Doc. 1-2 at 16). On April 22, 2021, Felix filed its first Notice of Removal (hereafter, “First Notice of Removal”) with this Court under case style Alfredo Odar v. Felix Energy Holdings II, LLC, et al. (Odar I), No. 4:21-CV-00027-DC (W.D. Tex. Apr. 22, 2021) (ECF No. 1), invoking this Court's diversity jurisdiction under 28 U.S.C. § 1332(a), premised upon RMCO's purported fraudulent joinder due to a state law immunity from suit. (Doc. 1-2 at 35-36). On May 20, 2021, Plaintiff filed a motion to remand (hereafter, “Original Motion”) in the prior removed case, asserting that RMCO appeared to be properly joined. See Odar I (ECF No. 3). On June 15, 2021, Felix filed a Notice of Non-Opposition to Remand (hereafter, “Non-Opposition Notice”), arguing that RMCO “has not answered or appeared before this Court, ” or the state court action prior to removal, and attached an agreed order granting Plaintiff's First Motion to Remand. (See Doc. 9-2 at 2-3). The Court entered an Order Granting Motion for Remand (hereafter, “Remanding Order”) on June 23, 2021. Odar I (ECF No. 5 at 1).

On October 22, 2021, Felix filed another Notice of Removal (hereafter, “Second Notice of Removal”) with this Court, effectively removing the state court case to federal court for a second time. (Doc. 1). Felix argues that removal is now timely, and that complete diversity exists because, as it alleges it can now prove based upon a Certificate of Liability Insurance (hereafter, “Insurance Document”), RMCO was fraudulently joined. See Id. Plaintiff submitted his Motion to Remand in the instant case on November 4, 2021, claiming that a second remand is appropriate for the following reasons: (1) Felix waived federal court jurisdiction by consenting to the Original Motion and is now judicially estopped removing again; (2) Felix's Second Notice of Removal is based upon the same grounds as the First Notice of Removal; (3) even if it were not, RMCO's Insurance Document does not constitute “other paper” or is untimely. (Doc. 9). Plaintiff also requests attorney's fees for the second removal. See Id. at 10-11. Felix filed a Response on November 17, 2021, to which Plaintiff produced a Reply on November 24, 2021. Accordingly, this matter is ripe for disposition.

It is undisputed that RMCO and Plaintiff both possess Texas citizenship, and that Felix is otherwise a diverse defendant. (See Docs. 9, 10). The following issues are thus presented for the Court's consideration: (1) Does an unopposed order for remand constitute an adjudication on the merits of the underlying motion to remand? (2) Does a certificate of liability insurance constitute an “other paper” pursuant to 28 U.S.C. § 1446(b)? (3) If so, does co-representation of two defendants, one of which has been fraudulently joined, by the same counsel commence the thirty-day “other paper” secondary removal timeframe?

II. Legal Standard

Federal courts are courts of limited jurisdiction, possessing “only that power authorized by [the] Constitution and statute.” Gunn v. Minton, 133 S.Ct. 1059, 1064 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). “It is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction.” Energy Mgmt. Servs., LLC v. City of Alexandria, 739 F.3d 255, 258-59 (5th Cir. 2014) (quoting Kokkonen, 511 U.S. at 377). A defendant may remove a state-court civil action to a federal district court if the latter has original jurisdiction. See 28 U.S.C. § 1441(a). “A federal district court may exercise original jurisdiction over any civil action that either satisfies diversity requirements or that arises under the federal constitution, statutes, or treaties-commonly referred to as ‘federal question' jurisdiction.” Energy Mgmt., 739 F.3d at 258-59. “Thus, under § 1441, removal is proper only when the court has original jurisdiction over at least one asserted claim under either federal question or diversity jurisdiction.” Id. at 259. Diversity jurisdiction exists “where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between. . . citizens of different States.” 28 U.S.C. § 1332(a)(1).

Once the case is removed, the district court must, however, remand [i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction.” 28 U.S.C. § 1447(c). The removing party bears the burden of proving by preponderance of evidence that federal jurisdiction exists. New Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321, 327 (5th Cir. 2008). Significantly, the jurisdictional facts must be judged as of the time of removal of the state court case to federal court. Louisiana v. Am. Nat'l Prop. & Cas. Co., 746 F.3d 633, 635 (5th Cir. 2014).

III. Discussion
1) Judicial Estoppel/Res Judicata

Plaintiff's first argument for remand is that Felix is judicially estopped from removing the case to federal court for a second time because Felix consented to the first remand, and does not here propose any new factual basis for the instant removal. (See Doc. 9). Plaintiff's argument thus rests primarily upon two facts, both of which are undisputed (1) Felix withdrew its opposition to the remand in Odar I, and (2) Felix's argument that removal is proper based upon RMCO's improper joinder is identical in this case to the one propounded in Odar I. The first issue concerning the agreed remand has not been addressed by any Fifth Circuit court, but its resolution against Felix would be dispositive of this case at this stage, warranting remand. Therefore, the Court is presented with a novel issue of significant importance: Does an order, without any substantive analysis, entered upon an unopposed motion to remand constitute an adjudication of those facts?

The federal removal statute, 28 U.S.C. § 1441(a), permits a defendant to remove any civil action filed in state court to federal court where the federal court has original jurisdiction. 28 U.S.C. § 1441(a). One such form of original jurisdiction is diversity jurisdiction, which requires an amount in controversy over $75, 000.00 and all parties to be “citizens of different States, ” known as complete diversity. 28 U.S.C. § 1332(a)(1). Assuming at this analytical juncture that the original removal in Odar I was timely, [1] the United States Court of Appeals for the Fifth Circuit has authorized subsequent removals after a case has been remanded back to state court so long as the second removal is not sought “on the same ground.” Everett Fin., Inc. v. Kocher, No. 3:19-CV-1563-B, 2019 U.S. Dist. LEXIS 161477, at *4, 2019 WL 4597574, at *2 (N.D. Tex. Sept. 20, 2019) (citing S.W.S. Erectors v. Infax, Inc., 72 F.3d 489, 492 (5th Cir. 1996)). The prohibition against removal ‘on the same ground' does not concern the theory on which federal jurisdiction exists (i.e., federal question or diversity jurisdiction), but rather the pleading or event that made the case removable.” S.W.S. Erectors, 72 F.3d at 492.

Courts must nevertheless be careful to avoid the indirect appeal or ostensible reconsideration of a prior remand order in a second removal attempt. See Ashford v. Aeroframe Servs., No. 19-cv-610, 2020 U.S. Dist. LEXIS 223196, at *26, 2020 WL 6948088, at *9 (W.D. La. May 29, 2020) report and recommendation adopted, No. 2:19-cv-610, 2020 U.S. Dist. LEXIS 222350, 2020 WL 6947844 (W.D. La. July 2, 2020). The removal statute prescribes that a remand order “is not reviewable on appeal or otherwise.” 28 U.S.C. § 1447(d). Thus, the second removal must be upon a different factual basis than the first order, one “not . . . adjudicated with the [original] remand order, ” in order to not be barred by res judicata. Green v. R.J. Reynolds Tobacco Co., No....

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