Rawls v. Old Republic Gen. Ins. Grp., Inc.

• Citation: 489 F.Supp.3d 646
• Decision Date: 25 September 2020
• Docket Number: Civil Action No. 5:19-CV-159
• Parties: Maria RAWLS, Plaintiff, v. OLD REPUBLIC GENERAL INSURANCE GROUP, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of Texas

489 F.Supp.3d 646

Maria RAWLS, Plaintiff,
v.
OLD REPUBLIC GENERAL INSURANCE GROUP, INC., et al., Defendants.

Civil Action No. 5:19-CV-159

United States District Court, S.D. Texas, Laredo Division.

Signed September 25, 2020

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Kathryn Snapka, The Snapka Law Firm, Gregory Wayne Turman, Corpus Christi, TX, for Plaintiff.

Ronald Lee Bair, Bair Hilty PC, Houston, TX, for Defendants.

MEMORANDUM & ORDER

Diana Saldaña, United States District Judge

This is a personal injury case arising from the injuries, and eventual death, of Roger Rawls ("Rawls"). (Dkt. 1, Ex. 4 at ¶ 14.)¹ The injury and death were allegedly caused by a workplace accident that occurred on October 26, 2017 in Luling, Texas, at a facility owned by Defendant Quality Carriers, Inc. ("Quality Carriers").² (Id. )

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Rawls was employed by Quality Carriers as a trailer truck driver and operator at the time of the incident. (Id. ; see Dkt. 17 at ¶ 13.) Plaintiffs are Maria Rawls, individually, as the representative of the Estate of Rawls, and as next friend of Rawls's minor children. (Dkt. 1, Ex. 4 at ¶ 2.) Maria Rawls is the surviving spouse of Rawls. (Id. ) Plaintiffs allege that Rawls was injured while conducting a pre-trip inspection of a Quality Carriers-owned International-brand truck (the "Tractor")³ when his foot fell through a gap in the Tractor's catwalk and that these injuries ultimately led to his death on November 3, 2017. (Dkt. 1, Ex. 4 at ¶ 16.) Plaintiffs are thus suing Quality Carriers for negligence, alleging that Quality Carriers breached its duty of care to Rawls with regard to his workplace safety. (Id. at ¶¶ 21–23.) Plaintiffs are also suing Defendant Navistar, Inc. ("Navistar")⁴ on products liability grounds, alleging that Navistar improperly designed and/or manufactured the Tractor on which Rawls was injured. (Id. at ¶¶ 24–28.) Plaintiffs further allege that Defendant Old Republic General Insurance Group, Inc. ("Old Republic") has wrongfully refused to pay the claim related to Rawls's death, for which a decision by the Texas Workers' Compensation Commission is forthcoming. (Id. at ¶ 17.) As of the date this case was removed to federal court, the "final appeals denial [for Plaintiffs' workers' compensation claim] has not yet been made."⁵ (Dkt. 8 at 5.)

Now pending are Plaintiffs' Motion to Remand (Dkt. 3) and Navistar's Motion to Dismiss for Lack of Personal Jurisdiction, Motion to Dismiss for Failure to State a Claim Upon Which Relief Can be Granted, and Motion to Dismiss or Transfer Venue (collectively, the "Motion to Dismiss"). (Dkt. 2).

Background & Procedural History

Plaintiffs originally filed this suit in Texas State court in Webb County, but in November of 2019, Navistar removed the

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case to the Laredo Division of the Southern District of Texas. (Dkt. 1 at 1–2.) Navistar's removal invokes the Court's diversity jurisdiction under 28 U.S.C. § 1332. (Id. at 3.) Navistar alleges that Plaintiffs are citizens of Texas, all Defendants are citizens of other States, and the amount in controversy exceeds $75,000. (Id. at 3–4.) Plaintiffs' Motion to Remand (Dkt. 3) does not contest these allegations, but rather hinges on the statutory non-removability of workers' compensation claims under 28 U.S.C. § 1445(c). (Dkt. 3 at 4.) According to Plaintiffs, because the suit includes a workers' compensation claim related to an alleged wrongful denial of Rawls's death benefits, it must be remanded to state court.⁶ (Id. ) In its response (Dkt. 7), Navistar counters that Plaintiffs' workers' compensation claim was improperly⁷ joined to defeat removal and the Court must therefore dismiss the claim and dispose of Plaintiffs' sole justification to remand the case. (Id. at 1–2.)

Regarding the Motion to Dismiss (Dkt. 2), because the Court finds that Navistar's motion to dismiss for lack of personal jurisdiction (Dkt. 2 at 4–9) should be granted, it need not address arguments made for and against dismissal on other grounds. However, over the course of multiple responses, replies, and supplements, the issue of personal jurisdiction has evolved as the parties alleged more jurisdictional facts and provided relevant evidence of such facts. (See Dkts. 2, 4, 6, 11, 12, 15.) In its most current form, the question has boiled down to whether Navistar should have expected the Tractor to be purchased or used in Texas given Navistar's affiliations with both the State itself and the entities to which the Tractor was transferred prior to its eventual arrival in Texas. Plaintiffs also ask that the Court provide opportunity for jurisdictional discovery on these topics. (See Dkt. 12 at 9–10.)

Having considered Parties' filings and the applicable law, the Court concludes that Plaintiffs' Motion to Remand (Dkt. 3) must be denied, and Navistar's Motion to Dismiss for Lack of Personal Jurisdiction (Dkt. 2) must be granted. The Court also concludes that transfer of venue would not be proper either pursuant to Navistar's Motion to Dismiss or Transfer Venue (Dkt. 2) or as a matter of the Court's sua sponte authority at this time. See Caldwell v. Palmetto State Sav. Bank of S.C. , 811 F.2d 916, 919 (5th Cir. 1987) (holding that "a district court may transfer a case upon a motion or sua sponte" under both 28 U.S.C. § 1404 and § 1406 ). Because Plaintiffs' claims against Navistar are dismissed for lack of personal jurisdiction, the Court does not reach Navistar's Motion to Dismiss for Failure to State a Claim (Dkt. 2). See Mejia v. Travis Buquet Constr., LLC , No. CV 6:16-01504, 2017 WL 946715, at *1 (W.D. La. Mar. 8, 2017) ("Generally the court should not consider challenges under Rule 12(b)(6) until after jurisdiction and venue challenges are resolved.")

Discussion

"Customarily, a federal court first resolves doubts about its jurisdiction over

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the subject matter" before addressing objections to personal jurisdiction. Ruhrgas AG v. Marathon Oil Co. , 526 U.S. 574, 578, 119 S.Ct. 1563, 143 L.Ed.2d 760 (1999). Keeping with this custom, the Court first considers Plaintiffs' Motion to Remand (Dkt. 3) before turning to Navistar's Motion to Dismiss (Dkt. 2).

A. Motion to Remand

Diversity jurisdiction exists where the amount in controversy exceeds $75,000 and no plaintiff is a citizen of the same state as any defendant. 28 U.S.C. § 1332(a)(1) ; Lincoln Prop. Co. v. Roche , 546 U.S. 81, 89, 126 S.Ct. 606, 163 L.Ed.2d 415 (2005) (citing Strawbridge v. Curtiss , 7 U.S. (3 Cranch) 267, 267, 2 L.Ed. 435 (1806) ). Here, Plaintiffs do not argue that the amount in controversy and diversity of citizenship requirements are not met, and the Court finds that they are. (See Dkt. 3.) Thus, the only question for the Court is whether the inclusion of a non-removable workers' compensation claim requires that the entire action be remanded to state court.

As a preliminary note, most federal courts deciding an improper joinder issue are faced with an alleged improper joinder of parties , rather than an improper joinder of claims , as is the case here. However, the few courts that have addressed improper joinder of claims have applied improper joinder of parties jurisprudence. See Parent v. Murphy Expl. & Prod. Co. - USA , No. CIV. A. 07-446-C, 2008 WL 191636, at *5 (M.D. La. Jan. 22, 2008) ("[T]he court can see no reason not to apply [an improper joinder of parties] analysis to an assertion of [improper] joinder of claims."); see also Dagon v. BNSF Ry. Co. , No. 19-CV-00417-JPG, 2020 WL 4192348, at *5 (S.D. Ill. July 21, 2020) (concluding that the same jurisprudence should be used for "these analogous doctrines" because any reason to apply different evidentiary standards was "not readily apparent"). Joining with these sister courts, the Court applies the Fifth Circuit jurisprudence on improper joinder of parties to the alleged improper joinder of claims here.⁸

1. Legal Standard

The removing party bears the heavy burden of demonstrating improper joinder. Smallwood v. Ill. Cent. R.R. Co. , 385 F.3d 568, 574 (5th Cir. 2004) (en banc). To establish improper joinder, the removing party must demonstrate either (1) actual fraud in the pleading of jurisdictional facts, or (2) the plaintiff's inability to establish a cause of action in state court against the party or claim alleged to be improperly joined. Id. at 573 (citing Travis v. Irby , 326 F.3d 644, 646-47 (5th Cir. 2003) ). Only the second prong, which requires the removing party to show that there is "no possibility of recovery by the plaintiff" on the claim meant to defeat federal jurisdiction, is relevant here. See id.

To determine whether a plaintiff has any possibility of recovery, a court should "conduct a Rule 12(b)(6)-type analysis, looking initially at the allegations of the complaint to determine whether the complaint states a claim under state law against the in-state defendant. Id. Ordinarily, if a plaintiff can survive a Rule 12(b)(6) challenge, there is no improper joinder." Id. But in some cases, a court

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may, in its discretion, "pierce the pleadings and conduct a...