Pitts v. Sam's E., Inc.

JOE PITTS v. SAM'S EAST, INC., ET AL.

CIVIL ACTION NO. 20-87-JWD-SDJ

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA

July 8, 2020

NOTICE

Please take notice that the attached Magistrate Judge's Report has been filed with the Clerk of the U.S. District Court.

In accordance with 28 U.S.C. § 636(b)(1), you have 14 days after being served with the attached report to file written objections to the proposed findings of fact, conclusions of law, and recommendations set forth therein. Failure to file written objections to the proposed findings, conclusions and recommendations within 14 days after being served will bar you, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions accepted by the District Court.

ABSOLUTELY NO EXTENSION OF TIME SHALL BE GRANTED TO FILE WRITTEN OBJECTIONS TO THE MAGISTRATE JUDGE'S REPORT.

Signed in Baton Rouge, Louisiana, on July 8, 2020.

/s/_________

SCOTT D. JOHNSON

UNITED STATES MAGISTRATE JUDGE

MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

Before the Court is a motion by Plaintiff Sam Pitts to remand this matter to the 19^th Judicial District Court for the Parish of East Baton Rouge, State of Louisiana. (R. Doc. 5). Defendant Sam's East, Inc. opposes remand, filing a Memorandum in Opposition to Motion to Remand (R. Doc. 6).

For the reasons that follow, it is recommended that Plaintiff's Motion to Remand be granted, and that this matter should be remanded to the 19^th Judicial District Court ("JDC") for the Parish of East Baton Rouge, State of Louisiana.

I. FACTUAL AND PROCEDURAL BACKGROUND

On May 29, 2019, Plaintiff filed suit against Defendants Sam's East, Inc. ("Sam's") and The Overhead Door Company of Shreveport, Inc. ("Overhead Door") in the 19^th Judicial District Court.¹ Plaintiff claims that on January 7, 2019, he sustained injuries at Sam's, located at 7400 Youree Drive in Shreveport, Louisiana, "when a bay door failed because its retention spring broke during normal use."² Plaintiff asserts that Overhead Door "provided the door to Sam's and/or had responsibilities for maintaining the door."³

In August 2019, when providing responses to discovery requests from Plaintiff, Overhead Door submitted past invoices for Sam's reflecting that all maintenance work for Sam's ceased in 2014.⁴ Despite this evidence, on October 18, 2019, Plaintiff filed his First Amended Petition, maintaining his allegations against Overhead Door and claiming that Overhead Door "provided the door to Sam's and/or had responsibilities for maintaining the door."⁵ Subsequently, on January 29, 2020, a site inspection was conducted at Sam's during which the representative for Overhead Door stated that Overhead Door had neither manufactured or installed the bay door involved in Plaintiff's alleged incident.⁶

On February 14, 2020, Sam's removed this matter, asserting federal subject matter jurisdiction under 28 U.S.C. § 1332.⁷ Per Sam's, Overhead Door, a nondiverse party, was improperly joined, giving this Court jurisdiction over this matter.⁸ Plaintiff, in response, filed a Motion to Remand on March 13, 2020, claiming that the Notice of Removal was untimely.⁹ Specifically, Plaintiff argues that Sam's filed its Notice of Removal more than 30 days after receiving Plaintiff's Petition, which contained all the information necessary to determine improper joinder or, alternatively, more than 30 days after it could have determined Overhead Door was fraudulently joined "through a diligent investigation and response to Plaintiff's discovery requests," which constitute "other paper" under 28 U.S.C. § 1446(b).¹⁰

Sam's filed a Memorandum in Opposition to Motion to Remand on March 20, 2020, claiming that "January 29, 2020 is the undisputed objective date wherein it was ascertained thatPlaintiff had no viable cause of action against non-diverse defendant, [Overhead Door]."¹¹ As argued by Sam's, because it filed its Notice of Removal within 30 days of the site visit, removal was timely.

II. LAW AND ANALYSIS

A party may remove an action from state court to federal court if the action is one over which the federal court has subject matter jurisdiction. Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002) (citing 28 U.S.C. § 1441(a)). The removing party bears the burden of showing that federal jurisdiction exists and that removal was proper. Id. (citations omitted). "Any doubts regarding whether removal jurisdiction is proper should be resolved against federal jurisdiction." Bartel v. Am. Export Isbrandtsen, 64 F.Supp.3d 856, 862 (M.D. La. 2014) (citing Acuna v. Brown & Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000).

28 U.S.C. § 1446 sets forth the general procedure for removal. See Vinson v. Sheraton Operating Corp., No. 01-1444, 2001 WL 1090793, at *1 (E.D. La. Sept. 14, 2001). Generally, a civil action must be removed within 30 days after the defendant received "a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within 30 days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter." 28 U.S.C. § 1446(b)(1). However, if the case is not removable based on the initial pleading, "a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." § 1446(b)(3). "The information supporting removal in a copy of an amended pleading, motion, order or other paper... must be unequivocally clear and certain to start the time limit running." Bourgeois v. Huntington Ingalls Inc., No. 20-1002, 2020 WL 2488026, at *3 (E.D. La. May 14, 2020) (quoting Morgan v. Huntington Ingalls, Inc., 879 F.3d 602, 608-09 (5th Cir. 2018)).

"While the language of § 1446(b) does not expressly mention fraudulent joinder, courts have held that defendants have thirty days to remove a case once they discover the existence of fraudulent joinder." Ayres v. Sears, 571 F.Supp.2d 768, 772-73 (W.D. Tex. 2008) (citations omitted); see also Delaney v. Viking Freight, Inc., 41 F.Supp.2d 672, 674 (E.D. Tex. 1999) ("In the fraudulent joinder context, a defendant has 30 days from the date that the fraudulent joinder could first be ascertained in which to file a notice of removal.") (citing Jernigan v. Ashland Oil Inc., 989 F.2d 812, 817 (5th Cir. 1993)); Delatte v. Zurich Ins. Co., 683 F.Supp. 1062, 1064 (M.D. La. 1988) (finding removal on the basis of fraudulent joinder untimely when it was not done within 30 days of the nondiverse defendants' settlements with plaintiff).

"Removal statutes are to be construed strictly against removal and for remand, and a failure to timely file a notice of removal is a defect that requires remand to state court." Delaney, 41 F.Supp.2d at 674 (citing Eastus v. Blue Bell Creameries, L.P., 97 F.3d 100, 106 (5th Cir. 1996); Royal v. State Farm Fire & Cas. Co., 685 F.2d 124, 127 (5th Cir. 1982)) (internal quotations omitted).

A. Citizenship of the Parties

Federal district courts have original jurisdiction over all civil actions where the matter in controversy exceeds $75,000 and is between citizens of different states. 28 U.S.C. § 1332(a)(1). Here, Plaintiff is a citizen of Texas.¹² For the purposes of diversity jurisdiction, "a corporation shall be deemed to be a citizen of every State and foreign state by which it has been incorporatedand of the State or foreign state where it has its principal place of business." 28 U.S.C. § 1332(c)(1). Sam's is incorporated in Arkansas and also has its principal place of business there.¹³ As such, it is an Arkansas citizen. Overhead Door is incorporated in Louisiana, with its principal place of business is in Shreveport, Louisiana, and therefore is a citizen of Louisiana.¹⁴ However, under 28 U.S.C. § 1441(b)(2), "[a] civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." As a citizen of Louisiana, Overhead Door is a nondiverse party. However, Sam's argues that Overhead Door is an improperly joined party, such that its citizenship should not be considered in determining jurisdiction.¹⁵

B. Improper Joinder of Overhead Door

When a nondiverse party is properly joined as a defendant, the case may not be removed under 28 U.S.C. § 1332. Schaefer v. Kodiak Mfg. Inc., No. 11-619, 2011 WL 1656081, at *2 (E.D. La. May 2, 2011). However, a defendant may remove by showing that the nondiverse party was improperly joined.¹⁶ Id. (citing Smallwood v. Ill. Cent. R.R. Co., 352 F.3d 220, 222 (5th Cir. 2003)); see also Turbine Generation Servs. LLC v. Gen. Elec. Co., No. 19-1257, 2020 WL 2758971, at *3 (W.D. La. Mar. 27, 2020) ("The improper joinder doctrine is a narrow exception to the complete diversity rule.") (citing McDonald v. Abbott Labs., 408 F.3d 177, 183 (5th Cir. 2005)). The burden of proving improper joinder to prevent diversity is a heavy one that rests on the removing party. Skidmore v. Beech Aircraft Corp., 672 F.Supp. 923, 925 (M.D. La. 1987)(citations omitted). Improper joinder is established by demonstrating either (1) actual fraud in the pleading of jurisdictional facts, or (2) the inability of the plaintiff to establish a cause of action against a nondiverse party in state court. Crockett v. R.J. Reynolds Tobacco Co., 436 F.3d 529, 532 (5th Cir. 2006) (citing Travis v. Irby, 326 F.3d 644, 646-47 (5th Cir. 2003)).

Here, according to Sam's, Trey Turner, the corporate representative of Overhead Door, stated at the January 29, 2020 site inspection that Overheard Door "did not manufacture nor install the alleged overhead door...