Selma Roadhouse Companeros, Ltd. v. Leal

SELMA ROADHOUSE COMPANEROS, LTD. and RESTAURANT LANDINVESTMENT, INC., Plaintiffs, v. ROWDY LEAL, et al., Defendants.

CV. NO. SA-13-CV-00620-DAE

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION

DATED: August 22, 2013

ORDER: (1) GRANTING PLAINTIFFS' MOTION TO REMAND;

(2) DENYING DEFENDANTS' MOTION TO TRANSFER VENUE

On August 21, 2013, the Court heard the Motion to Remand brought by Plaintiffs Selma Roadhouse Companeros, Ltd. and Restaurant Land Investment, Inc. (collectively, "Plaintiffs"). The Court also heard the Motion to Transfer Venue brought by Defendants.¹ After reviewing the motions and the supportingand opposing memoranda, the Court GRANTS Plaintiffs' Motion to Remand (doc. # 6) and DENIES Defendants' Motion to Transfer Venue (doc. # 5).

BACKGROUND

In February 2012, Defendants—current and former employees of Paramount Restaurants Group, Inc. and Strickland Restaurants, Inc.—filed a federal lawsuit in the United States District Court for the Northern District of Texas, No. 2:12-cv-00038-J, styled Rowdy Leal, et al. v. Paramount Restaurants Inc., et al. (hereinafter the "Amarillo Lawsuit"). (See Doc. # 1-4 at 3.) In the Amarillo Lawsuit, Defendants bring various claims under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., relating to an employee stock ownership plan ("ESOP"). (Id.) Although Plaintiffs are not parties to the Amarillo Lawsuit, Defendants maintain that Plaintiffs are "part of the overall operation" because the ESOP at issue "owned an interest in [Plaintiffs]." (Doc. # 7 at 3-4.)

Defendants filed two Notices of Lis Pendens,² which both list the Amarillo Lawsuit, against two contiguous properties owned by Plaintiffs in BexarCounty, Texas. (Doc. # 1-6 at 12-17.) The properties are located in the city of Selma and are leased to a company operating a Chuy's restaurant. (Id.)

On June 14, 2013, Plaintiffs filed suit against Defendants in the 131st Judicial District Court of Bexar County, Texas, seeking to cancel the notices of lis pendens. (Doc. # 1-6 at 9.) More specifically, Plaintiffs allege that the notices do not comply with Texas Property Code § 12.007. (Id. at 10.) In the alternative, Plaintiffs seek a declaratory judgment "stating that the Notices of Lis Pendens do not in any way constitute a cloud on the title" to their properties. (Id.) The petition also seeks attorneys' fees under Texas Civil Practice and Remedies Code § 37.009. (Id.)

According to Plaintiffs, the case was set for expedited consideration in state court and, in early July 2013, the district judge held a hearing where she twice expressed an inclination to expunge the notices of lis pendens. (Doc. # 8 at 3.) Soon after the hearing, on July 12, 2013, Defendants removed the case to this Court on the basis of federal question jurisdiction. (Doc. # 1.)

On July 16, 2013, Defendants filed a motion to transfer venue, asking the Court to transfer this case to the United States District Court for Northern District of Texas, Amarillo Division. (Doc. # 5.) Two days later, Plaintiffs filed amotion to remand the action to state court. (Doc. # 6.) The parties fully briefed both motions. (See Docs. ## 7-10.)

DISCUSSION

I. Motion to Remand

A. Legal Standard for Removal

"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, 248 (5th Cir. 1996). 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 (1987) (citing 28 U.S.C. § 1441(a)). The removing party bears the burden of establishing that federal jurisdiction exists. De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995). To determine whether jurisdiction is present for removal, the court considers the claims in the state court petition as they existed at the time of removal. Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th Cir. 1995). A district court must remand a case if, at any time before final judgment, it appears the court lacks subject-matter jurisdiction. See 28 U.S.C. § 1447(c); Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 571 (2004). Any "doubtsregarding whether removal jurisdiction is proper should be resolved against federal jurisdiction." Acuna v. Brown & Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000).

B. Federal Question Jurisdiction

Federal courts have jurisdiction over civil actions "arising under" federal law. See 28 U.S.C. § 1331 ("The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States."). 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. 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 (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 (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, 314 (2005).

Here, Plaintiffs' petition seeks to cancel two notices of lis pendens pursuant to the Texas Property Code. Thus, looking at the face of the complaint, Plaintiffs have not brought a federal claim. Nonetheless, Defendants maintain that federal question jurisdiction exists, and thus removal was proper, because Plaintiffs' state-law claim is preempted by ERISA. Defendants do not argue that this action presents a substantial question of federal law sufficient to support federal jurisdiction under Grable and its progeny.

A defense of federal preemption is typically insufficient to permit removal of a case to federal court. See Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 14 1983 ("[I]t has been settled law that a case may not be removed to federal court on the basis of a federal defense, including the defense of preemption, even if the defense is anticipated in the plaintiff's complaint, and even if both parties admit that the defense is the only question truly at issue in the case."). However, the Supreme Court has fashioned an exception to this rule through the doctrine of "complete preemption." See Metro. Life, 481 U.S. at 63-64. Complete preemption arises whenever Congress "so completely pre-empt[s] a particular area that any civil complaint raising this select group of claims is necessarily federal in character." Id.

With respect to ERISA, the Supreme Court has held that the doctrineof complete preemption applies to state-law claims that duplicate, supplement, or supplant one of the remedies provided in ERISA's civil enforcement provision, § 502(a). See Aetna Health Inc. v. Davila, 542 U.S. 200, 207-09 (2004). "Section 502, by providing a civil enforcement cause of action, completely preempts any state cause of action seeking the same relief." Giles v. NYLCare Health Plans, Inc., 172 F.3d 332, 337 (5th Cir. 1999). Stated differently, "if an individual, at some point in time, could have brought his claim under [ERISA § 502], and where there is no other independent legal duty that is implicated by a defendant's actions, then the individual's cause of action is completely pre-empted by [ERISA § 502]." Davila, 542 U.S. at 210.

In this case, Plaintiffs' state-law claim does not fall within the scope of § 502 of ERISA. Congress enacted ERISA to "protect . . . the interests of participants in employee benefit plans and their beneficiaries" by setting out substantive regulatory requirements for employee benefit plans and to "provid[e] for appropriate remedies, sanctions, and ready access to the Federal courts." Davila, 542 U.S. at 208 (quoting 29 U.S.C. § 1001(b)). Section 502(a) of ERISA provides that a "civil action may be brought . . . by a participant or beneficiary . . . to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits . . ." 29 U.S.C.§ 1132(a)(1)(B). Here, Plaintiffs are not participants in or beneficiaries of an ERISA plan, much less seeking to recover benefits or to enforce rights in connection with such a plan. Plaintiffs merely seek to remove two notices of lis pendens from the Official Public Records of Bexar County filed against their property by Defendants.

The Texas lis pendens statute provides litigants a way to constructively notify anyone taking an interest in real property that a claim is being litigated against the property. In re Collins, 172 S.W.3d 287, 292 (Tex. App. 2005). Pursuant to Texas Property Code § 12.007, a notice of lis pendens may be filed during the pendency of an action involving (1) title to real property, (2) the establishment of an interest in real property, or (3) the enforcement of an encumbrance against real property. Id. at 292-93 (citing Tex. Prop. Code § 12.007(a)). Under Texas Property Code § 12.0071, a party may file an application³ to have a lis pendens expunged if "the pleading on which the notice isbased does not contain a real property claim" or "the claimant fails to establish by a preponderance of the evidence the probable validity of the real property claim." See In re Cohen, 340 S.W.3d 889, 892 (Tex. App. 2011) (citing Tex. Prop. Code § 12.0071).

Here, Plaintiffs claim that Defendants failed to comply with the requirements of ...