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Balboa v. Turismo Americanos, L.L.C.

United States District Court, W.D. Texas
Feb 19, 2004
Civil No. EP-03-CA-533(KC) (W.D. Tex. Feb. 19, 2004)


Civil No. EP-03-CA-533(KC)

February 19, 2004


Plaintiff moves to remand the present action to state court. For the reasons set forth herein, the motion is granted.


Plaintiffs filed their petition in 41st Judicial District Court of El Paso County, Texas. Defendants subsequently removed the action to this Court. While multiple defendants are named in the petition, for purposes of this order only the non-diverse defendants Turismo Americanos, L.L.C. ("Turismo") and Americanos USA, L.L.C. ("Americanos") bear on the jurisdiction of this Court. Defendant Omnibus De Mexico. ("Omnibus") is the only defendant to respond and is hereafter referred to as defendant.

Plaintiff alleges that Omnibus solicited United States customers for its bus line. On February 3, 2003, decedent, Celia Balboa, a Texas resident, was a passenger on a bus owned, leased or maintained by all defendants. Americanos and Turismo are Texas companies, Omnibus is a Mexican company. Allegedly the American companies had some form of agreement with Omnibus by which a passenger would generally ride a single bus into Mexico. but would do so on separate tickets sold by Americanos and Omnibus. In Mexico, the driver lost control and rolled the bus, resulting in the decedent's death. Plaintiff alleges that all defendants are liable for the negligent acts of the driver by acts or omissions in the course of the accident. Plaintiff further alleges that defendants Turismos and/or Americanos negligently entrusted the bus owned or controlled by them to the driver. Plaintiff sues as the decedent's husband.

The evidence adduced does not define the specifics of the agreement, only providing statements opining that neither Americanos nor Omnibus operated internationally.


Plaintiff moves to remand the present case to state court arguing lack of subject matter jurisdiction. Defendants respond that this Court has jurisdiction over the state court claims pursuant to 28 U.S.C. § 1332 as non-diverse defendants were fraudulently joined in an effort to defeat diversity jurisdiction.

Plaintiff's argument is little more than a statement that the parties are not of diverse citizenship thus the case should be remanded. There is no discussion of substantive state law in the discussion in support of the motion to remand, nor does plaintiff reply to defendants' response to its motion in which the merits of plaintiff's state law claims are addressed.

A. Standard

Removal is proper only if the action originally could have been brought in the district court. 28 U.S.C. § 1441; Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987); Sam L. Majors Jewelers v. ABX, Inc., 117 F.3d 922, 924 (5th Cir. 1997). This court can exercise original jurisdiction in two ways. First, it can exercise diversity jurisdiction, pursuant to 28 U.S.C. § 1332, over cases in which the amount in controversy exceeds $75,000 and complete diversity exists between all the plaintiffs and all the defendants. Second, this court can exercise federal question jurisdiction over claims arising under the Constitution, treaties or laws of the United States. 28 U.S.C. § 1331. The party invoking removal jurisdiction bears the burden of establishing federal jurisdiction. Frank v. Bear Stearns Co., 128 F.3d 919, 921-22 (5th Cir. 1997).

B. Fraudulent Joinder

Defendants argue that plaintiff has fraudulently joined non-diverse defendants in an effort to defeat diversity jurisdiction.

While the applicable standard for resolving fraudulent joinder claims bears some similarity to that employed in motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), the scope of inquiry is broader. Ross v. Citifinancial, Inc., 344 F.3d 458, 462 (5th Cir. 2003). While a motion to dismiss may be limited to the pleadings, courts may "pierce the pleadings" to evaluate fraudulent joinder claims, employ a summary-judgment like analysis. Griggs v. State Farm Lloyds, 181 F.3d 694, 700 (5th Cir. 1999). As such, a court may look outside the pleadings and consider affidavits and depositions, but not to the extent the material addresses new causes of action or theories not raised in the state court complaint. Id. While the mere possibility that a valid claim may be stated is not enough, "the burden of demonstrating fraudulent joinder is a heavy one." Id. at 701; see also McKee v. Kansas City S. Ry., No. 03-60259, 2004 WL 103439, at *6 (5th Cir. Jan. 23, 2004) ("[w]e again take note that the burden of proving fraudulent joinder is a heavy one and unless it is clear that the non-diverse defendants have been fraudulently joined the case should be remanded to the state court from which it was removed").

To establish fraudulent joinder, the party seeking removal to the federal forum must either show, by clear and convincing evidence, "(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court." Smallwood v. Illinois Cent. RR., 342 F.3d 400, 402 (5th Cir. 2003). Under the second prong, the question is "whether there is arguably a reasonable basis for predicting that state law might impose liability. . . . This means that there must be a reasonable possibility of recovery, not merely a theoretical one." Ross v. Citifinancial, Inc., 344 F.3d 458, 462 (5th Cir. 2003).

In support of its position that defendant Turismos was fraudulently joined, defendant provides the following information gathered through interrogatories. Turismos has no Texas employees, no Texas offices, no El Paso facilities, no principal office within Texas and no Texas employees charged with formulating or modifying policies and procedures. See App. of State Court Documentation 17, interrogatory responses 13-17. Furthermore, Turismos has no contract, lease or agreement of any kind with Omnibus. See App. of State Court Documentation 17, interrogatory response 19.

From the above responses, defendant argues that Turismos may not be held liable for either negligence or negligent entrustment. A claim of negligence entails a legal duty owed by a defendant, breach of that duty; and damages to a plaintiff proximately resulting from the breach. Greater Houston Transportation Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990). The threshold question of law is the existence of a legal duty. Id. A claim of negligent entrustment is substantiated through proof of (1) entrustment of a vehicle by its owner, (2) to an unlicensed, incompetent, or reckless driver, (3) that the owner knew or should have known to be unlicensed, incompetent, or reckless and (4) negligence by the driver on the occasion in question and (5) proximately caused the accident. Schneider v. Esperanza Transmission Co., 744 S.W.2d 595, 596 (Tex. 1987).

The parties do not address the choice of law question manifest in a case in which a defendant and a tort occurred in Mexico. This Court is bound to apply the Texas choice of law rules, Mayo v. Hartford Life Ins. Co., 354 F.3d 400, 403 (5th Cir. 2004), and Texas follows the "most significant relationship" test defined in sections 6 and 145 of the Restatement (Second) of Conflicts, Gutierrez v. Collins, 583 S.W.2d 312, 318 (Tex. 1979). Any attempt to determine the appropriate law absent either facts or argument would be a pointless exercise. As defendant cites to Texas law and plaintiff does not cite to any authority addressed to the merits of his petition that might indicate a choice of law, this Court will assume for purpo ses of this motion that Texas law applies.

While the above may shed light on Turismos's relationship with Omnibus, it is silent on Turismos's relationship with Americanos. The evidence contemplates only direct liability for tortious activity resulting from operation of the bus and does not address the possibility of indirect liability resulting from the operation. See Turner v. Cross, 18 S.W. 578, 581 (1892) (discussing the legal relationship between a common carrier and a receiver including both direct and vicarious liability).

"Common carriers" are "those in the business of carrying passengers and goods who hold themselves out for hire by the public." Mount Pleasant Indep. Sch. Dist. v. Lindburg, 766 S.W.2d 208, 213 (Tex. 1989)." Common carriers, as would appear to be involved herein, "are held to a higher standard of care when transporting passengers." Speed Boat Leasing, Inc. v. Elmer, S.W.3d —, NO. 03-0037, 2003 WL 23018578 (Tex.Sup.Ct. Dec. 19, 2003). There is further indication under Texas law that a duty to protect passengers may not be delegated by a common carrier to another party. Bennevendo v. Houston Transit Co., 238 S.W.2d 271, 273 (Tex.App. 1951).

There apparently has not been a decision by the Texas Supreme Court on whether such a duty can be delegated by a common carrier. As such, this Court must "determine, in its best judgment, how the highest court of the state would resolve the issue if presented with the same case." American Intern. Specialty Lines Ins. Co. v. Canallndem. Co., 352 F.3d 254, 260 (5th Cir. 2003).

Defendant also makes much of the fact that Americanos is not licensed to operate in Mexico. and Omnibus is not licensed to operate in the United States. Such would not preclude actions against companies unauthorized to do business in the forum as a result of tortious activities. See, e.g., Southland Mower Co., Inc. v. Jordan, 587 S.W.2d 215 (Tex.App. 1979) (involving default judgment on tort claim against company not authorized to do business in Texas). Nor does the absence of a lease agreement necessarily absolve Americanos of liability. Finally, the reference to Department of Transportation ("DOT") certification, specifically that all Americanos buses are certified and the bus involved was not, such is contradicted to some degree by the deposition testimony of Alfonso Penedo, President of Americanos, who testified in response to a question as to why his buses needed maintenance in Mexico. that "[w]e have a pool of buses that we lease to each other" (a "pool equipment arrangement") and that "the customers ride the same bus . . . all the way into Mexico." Penedo Dep. at 24. Penedo later adds that the particular Mercedes-Benz bus involved in the accident was not certified by the DOT thus would not be permitted to enter the United States, and as Americanos does not own, operate or lease non-DOT certified buses, the bus involved was not their bus. Id. at 56. Penedo further added that Omnibus and Americanos issued separate tickets.

Finally, defendant cites Carey v. Sub Sea International, Inc., 49 F. Supp.2d 919, 922 (E.D. Tex. 1999), for its statement that defendants are fraudulently joined in a tort case when "not remotely connected to the tragedy." While this Court does not disagree with this proposition, it would point out that in that case "[s]upporting affidavits and exhibits to the defendants' motions amply support[ed] the defendant['s]. . . contention of fraudulent joinder." Id.

Rather than providing evidence supporting positions of ownership and agreements in the form of titles, contracts and licenses, defendant provides statements that it has no ownership interest or agreements. Ownership is a question of law to be determined based on evidence provided. Foust v. Old American County Mut. Fire Ins. Co., 977 S.W.2d 783, 787 (Tex.App. 1998). The same is true of determinations as to the existence of or interpretation of agreements. Reilly v. Rangers Management, Inc., 727 S.W.2d 527, 529 (Tex. 1987). While this Court is loathe to impose an original requirement on the corporate filings, licenses and tickets, see, e.g., Adams v. New York City Tr. Auth., 88 N.Y.2d 116, 120 (1996), that would typically define a corporations duties and agreements with its passengers, see FED. R. EVID. 1002 ("[t]o prove the content of a writing . . . the original writing . . . is required"), a non-judicial statement in interrogatory or affidavit as to legal duties or obligations of the non-diverse defendants is not sufficient in light of the heavy burden imposed on those asserting fraudulent joinder. Absent any of the evidence that would reasonably be anticipated as evidence in defining corporate obligations, defendants have not established that the non-diverse defendants were fraudulently joined. Rookard v. Mexicoach, 680 F.2d 1257 (9th Cir. 1982), illustrates the complexity of the analysis required for the present case, and the lengths to which defendant must go to vitiate plaintiff's claims in the present case. Rookard involved negligence claims against an American bus company and two Mexican bus companies arising from a crash that occurred in Mexico. Id. at 1258. The complaint may not be read as precluding the very theories of tort and agency law raised therein. Id. at 1259. While Rookard provides that "[a] common carrier has no liability, per se, for the torts committed by a connecting carrier," id. at 1260, and thus was "not responsible as a common carrier for the torts of subsequent carriers," Id., the decision also devotes significant time to the question of the American carrier's agency and potential liability and the many factual issues involved in resolving such questions, id. at 1261-63. After considering the questions, the court concluded that a number of factual issues precluded summary judgment. Id. at 1263.

In order to avoid an order remanding the present case to state court, defendant would effectively have to establish that all four claims against the non-diverse defendants lack colorable merit.

While Rookard applies California law, the basic tort theories of negligence applicable to common carriers do not differ substantially from the Texas principles raised earlier in this Order.

In light of the foregoing, defendant has not carried its burden in establishing that the negligence and negligent entrustment claims are without merit. As such, this Court is required to conclude that it is without jurisdiction to hear the present claims.


Plaintiffs motion to remand (Doc. No. 4) is granted. The Clerk shall close the file.


Summaries of

Balboa v. Turismo Americanos, L.L.C.

United States District Court, W.D. Texas
Feb 19, 2004
Civil No. EP-03-CA-533(KC) (W.D. Tex. Feb. 19, 2004)
Case details for

Balboa v. Turismo Americanos, L.L.C.

Case Details

Full title:AUGUSTIN BALBOA, JR., individually and as representative of the Estate of…

Court:United States District Court, W.D. Texas

Date published: Feb 19, 2004


Civil No. EP-03-CA-533(KC) (W.D. Tex. Feb. 19, 2004)