Opinion
Civil Action No: SA-04-CA-0491-XR.
October 4, 2004
ORDER
On this date the Court considered Plaintiff's Motion to Remand After considering Plaintiff's motion, as well as the pleadings, Defendant's response, and advisories to the Court by both parties, the Court is of the opinion that Plaintiff's motion should be GRANTED (docket no. 9) and this case should be REMANDED.
I. Factual and Procedural Background
Plaintiff was an employee of Defendant ILD Telecommunications ("ILD") in Bexar County, Texas. Plaintiff claims she was the subject of offensive sexual comments and conduct by Defendant Jose Melendez and that Melendez was an employee of ILD and acting in the course and scope of his employment during this time. Plaintiff also claims she was the victim of discrimination and retaliation after she reported her allegations to her immediate supervisors. Plaintiff resigned on or about October 14, 2003.
Plaintiff filed this claim in County Court at Law No. 10 for Bexar County, Texas on April 29, 2004. Plaintiff had previously filed two charges with the Equal Employment Opportunity Commission and been issued a right to sue letter. In the state court, Plaintiff alleged sexual harassment and retaliation under TEX. LAB. CODE § 21.051, et. seq., as well as claims for intentional infliction of emotional distress, assault, and negligent retention and supervision. Plaintiff made no claim or reference to any federal claim or federal law. ILD apparently received a copy of Plaintiff's petition on May 10, 2004. At the time of removal, approximately five weeks after Plaintiff's suit was initially filed, Melendez had not yet been served with process. ILD claimed removal was proper on two bases, federal question jurisdiction and diversity jurisdiction. ILD asserted that Plaintiff's claim was properly construed as a federal Title VII claim for sexual harassment and that therefore there was proper federal question jurisdiction. ILD also claimed that, because Melendez had not been served in the state court proceeding, he had been fraudulently joined to defeat diversity jurisdiction. Plaintiff responded that she intended only to go forward with the sexual harassment claim under state law and that she had no intention of pleading a federal claim. She also responded that she intended to go forward with her claims against Melendez and that attempts to serve Melendez were ongoing.
Plaintiff claims that ILD was served with process on or about May 6, 2004. Neither party has provided the Court with a copy of the return of service in order to verify when service was executed. ILD provided in its notice of removal the docket sheet from the state court which apparently indicates service was executed May 10, 2004. Neither side has adequately briefed the issue of timeliness of removal, therefore the Court accepts the information in the docket sheet. Based on the Court's resolution of the issues in this case, it is ultimately immaterial whether Defendant's removal was timely or not.
Melendez was eventually served on June 14, 2004.
II. Analysis
A. RemovalRemoval of state court actions is proper only where the case could originally have been brought in federal court. 28 U.S.C. § 1441(a) provides,
Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United State have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.
ILD asserts that removal was proper because Plaintiff's claim is properly considered a Title VII claim, and that Plaintiff's state court petition was "artfully pleaded" in order to avoid federal jurisdiction. ILD also asserts that removal was proper because Melendez was fraudulently joined.
B. Federal Question Jurisdiction
Federal question jurisdiction arises from 28 U.S.C. § 1331. Section 1331 provides that "[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, law or treaties of the United States." Allegations of sexual harassment are covered by 42 U.S.C. § 2000 et seq., commonly referred to as Title VII. Federal district courts have original jurisdiction over Title VII claims. 42 U.S.C. § 20003-5(f).
Title VII rights can be waived, but there must be some evidence of waiver. See U.S. Equal Employment Opportunity Comm. v. T.I.M.E.-D.C., 659 F.2d 690, 693 (5th Cir. 1981). Plaintiff alleged sexual harassment solely under state law despite the fact that her allegations may suffice to allege violations of Title VII and the fact the she went through the Title VII prerequisite of filing claims with the EEOC and receiving a right to sue letter. Claims under TEX. LABOR CODE § 21.051, et. seq. are separate and distinct from claims under Title VII. Plaintiff may bring suit under the state law and forego her remedies under the federal law. Accordingly, Plaintiff has waived her possible claims under Title VII by failing to plead them in state court and continuing to assert that she has no intention to pursue federal remedies. See Williams v. Vought, 68 S.W.3d 102, 112
(Tex.App.-Dallas 2001, no pet.) (noting that plaintiff had waived right to bring a Title VII claim in federal court because such a suit was not filed after the EEOC issued a right to sue letter).
C. Diversity Jurisdiction
ILM claims that removal was proper under the alternate ground that diversity jurisdiction exists. Diversity jurisdiction exists where the matter in controversy sought exceeds the sum or value of $75,000 and where the action is between the citizens of different states. 28 U.S.C. § 1332(a)(1). Complete diversity is a statutory requirement under § 1332. Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806); McLaughlin v. Mississippi Power Co., 376 F.3d 344, 353 (5th Cir. 2004). "The concept of complete diversity requires that all persons on one side of the controversy be citizens of different states than all persons on the other side." Harrison v. Prather, 404 F.2d 267, 272 (5th Cir. 1968). No action may be removed from state court, other than one involving federal question jurisdiction, where a defendant is a citizen of the state in which the action is brought. 28 U.S.C. § 1441(b). An action may be removed when a defendant is a citizen of the state in which the action was brought, however, where that defendant has been fraudulently joined for the sole purpose of defeating federal jurisdiction. McKee v. Kansas City Southern Ry. Co., 358 F.3d 329, 333 (5th Cir. 2004). The test for fraudulent joinder is whether the defendant has demonstrated that there is no possibility of recovery by the plaintiff against the in-state defendant. Travis v. Irby, 326 F.3d 644, 648 (5th Cir. 2003); see also Smallwood v. Illinois Cent. R.R. Co., No. 02-60782, 2004 WL 2047314 (5th Cir. Sept. 10, 2004) (stating the test for fraudulent joinder and noting that "stated differently [it] means that there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against an in-state defendant").
ILM claims that there is fraudulent joinder for the reason that Melendez had not been served with the original petition in the state court proceeding. ILM asserts that this evidences that Plaintiff has no intention of recovering against Melendez and that the joining of Melendez was solely to avoid federal jurisdiction. ILM has failed to cite a single case which has accepted this theory of fraudulent joinder. The Court has, however, found a number of cases rejecting this same theory wherein the plaintiff may still properly serve the in-state defendant. See, e.g., Loeffelbein v. Mulberg Weiss Bershad Hynes Lerach, LLP, No. CIV.A.-02-2435-CM, 2003 WL 21313957 (D. Kan. May 23, 2003); Lauderdale v. Merck Co., Inc., 219 F. Supp.2d 747, 749-50 (N.D. Miss. 2002) (noting that the plaintiff may still serve the in-state defendant for good cause even when the time period for service has run); Zaini v. Shell Oil Co., 853 F. Supp. 960, 964-65 (S.D. Tex. 1994) (refusing to accept that a failure to serve a defendant raises a presumption of fraudulent joinder). Similarly, the Court refuses to accept ILM's theory that a failure to execute service of process on the in-state defendant within five weeks of filing a petition in state court raises some type of presumption that the plaintiff does not intend to prosecute her case against the in-state defendant.
Melendez was served on June 14, 2004 through state processes. ILM claims that Melendez was not properly served, however, because once the case was removed to federal court, service must have taken place through federal processes. While it may be that Melendez was improperly served under federal rules, that does not change the Court's analysis in examining whether Melendez was fraudulently joined. Whether Melendez was properly served is a question for the state court to decide.
ILM also claims that Melendez was fraudulently joined on the basis of a recent Texas Supreme Court case, Hoffman-La Roche Inc. v. Zeltwanger, No. 02-0120, 2004 WL 1908322 (Tex. Aug 27, 2004). In Hoffman-La Roche, the Court ruled that a plaintiff cannot sue her employer for both sexual harassment under the Texas Commission on Human Rights Act ("TCHR"), TEX.LABOR CODE § 21.001 et seq., and the common law tort of intentional infliction of emotional distress. Id. at 6. This is because the tort of intentional inflection of emotional distress is meant to be a "gapfiller" tort when the plaintiff has no other recognized theory of redress and "should not be extended to thwart legislative limitations on statutory claims for mental anguish and punitive damages." Id. Because the TCHR provides a cause of action for sexual harassment against employers, there is no cause of action against employers for intentional infliction of emotional distress when the conduct made the basis of the tort is the same conduct made the basis for the sexual harassment claim. Id. The Court in Hoffman-La Roche made no mention of liability with regard to the individual employee who was the subject of the offending conduct. ILM attempts to extend Hoffman-La Roche's holding to state that there is no claim for intentional infliction of emotional distress, and by inference, assault, against any single defendant associated with an employer where there has been a claim of sexual harassment under the TCHR. As far as this Court can discern, this extension has no basis in the Texas Supreme Court's holding. While there may be no claim for intentional infliction of emotional distress against ILM in this case, there is no basis for holding that Plaintiff has no possibility of recovery for this tort against Melendez.
The individual employee defendant was found liable for intentional infliction of emotional distress but was not a party to the appeal. Hoffman-La Roche Inc. v. Zeltwanger, No. 02-0120, 2004 WL 1908322, *1 (Tex. Aug 27, 2004).
A decision more properly reserved for the state court.
Accordingly, the Court finds that the in-state defendant was not fraudulently joined and that the Court is without subject matter jurisdiction in this case.
D. Plaintiff's Request For Attorney's Fees
Because the Court lacks subject matter jurisdiction, the case must be remanded to the state court. Under 28 U.S.C. § 1447(c), "[a]n order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." At the time of removal, there was no federal claim alleged by Plaintiff and no diversity. ILM had no basis for invoking federal jurisdiction and removing the case to federal court. Accordingly, the Court orders ILM to pay $1,500 to Plaintiff as just costs and expenses, including attorney's fees.
III. Conclusion
Defendant ILM removed to federal court on the basis of federal question jurisdiction and diversity jurisdiction. As Plaintiff had not alleged a federal cause of action in her state court petition and complete diversity did not exist, ILM had no basis for removing the case to federal court. The Court therefore GRANTS Plaintiff's Motion to Remand (docket no. 9) and REMANDS this case to County Court at Law No. 10 for Bexar County, Texas. Defendant ILM is also ORDERED to pay costs and expenses, including attorney's fees, in the sum total of $1,500 to Plaintiff.