1 IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

________________________

No. 96-40116

_________________________

In Re: JESUS RODRIGUEZ; MARIA RODRIGUEZ;

JESUS REYES; YOLANDA REYES,

Petitioners.

__________________

Petition for Writ of Mandamus to the United States

District Court for the Southern District of Texas, McAllen

____________________ March 22, 1996

Before WIENER, PARKER and DENNIS, Circuit Judges.

BY THE COURT:

IT IS ORDERED that the petition for writ of mandamus is DENIED.

James L. Dennis, dissenting:

Plaint iffs’ petition this Court pursuant to 28 U.S.C. §1651 for writ of mandamus to order the

district court to vacate its denial of the plaint iffs’ Moti on to Remand. The majority of this panel has

decided to deny the plaint iffs’ petition. However, such action skirts one of the essential purposes of

28 U.S.C. §1651, the All Writs Statute. The United States Supreme Court has stated, “We believe

that supervisory control of the District Courts by the Courts of Appeals is necessary to proper judicial

administration in the federal system. The All Writs Act confers o n t he Co urts of Appeals the

discretionary power to issue writs of mandamus in the exceptional circumstances ...”, La Buy v.

Howes Leather Co.

, 352 U .S. 249, 259-260 (1957) where ordinarily the order is non-appealable.2

Moore’s Federal Practice, supra at 110.26. See S ecurities and Exchange Commission v. Krentzman

,

397 F.2d 55 (5th Cir.1968)(issuing a writ of mandamus to (1) vacate an order of the district court

act ing “outside [its] authority” by exercising what it thought to be discretionary power it did no t

possess, and (2) enter an order directing the appropriate action). Plaint iffs filed this pet it ion

because t he district court has yet to issue a final order for the summary judgment granted t he

defendants. The dominant principle of federal appellate jurisdiction is that a judgment must be final

to be appealable. James Wm. Moore, Bernard J. Ward, Moore’s Federal Practice, Vol 9 §110.26.

However, if inexorably applied, the final judgment rule may result in injustice. Machine-like rigidity

cannot be the final goal of judicial administration. There is some need for flexibility so that, in

exceptional situations, appellate review may be had of a non-appealable order,

... such cases do arise,

and the courts should be alert to respond. Moore’s Federal Practice, supra at 110.26.

In th is case, the district court appears to have committed clear error by placing the heavy

burden of persuasion to show fraudulent joinder on the wrong party. As a result of this apparent legal

error, there is “serious doubt” whether the district court had jurisdiction to proceed further with the

case. R oche v. Evaporated Milk Ass’n , 319 U.S. 21, 26 (1943). The plaint iff’s petition for writ of

mandamus should be granted in aid of this Court’s appellate jurisdiction and to confine the district

court to a lawful exercise of its prescribed jurisdiction. I dissent from the majority’s decision to deny

the plaint iffs’ petition for mandamus and assign reasons to support the position that the district court

committed clear error by denying the plaintiffs’ Motion to Remand.

In a nutshell, the district court has exceeded its jurisdiction based on an error of law, and this

Court has the authority to grant a writ of mandamus to correct this legal error. Furthermore, because

the defendants did not submit a proposed order to the district court, as instructed by the district court,

granting summary judgment to remaining defendants, plaint iffs had no final order from which to

appeal and had no other choice but to petition this Court for writ of mandamus. The parents of

five minors who were killed following a teenage party at a city civic center during which alcoholic

beverages were consumed filed suit in Texas state court for wrongful death damages against Sonja

Sosa, the guard in charge of security at the party, and her employer Wells Fargo Security Services,

a Pennsylvania corporati on. The defendants removed the case to the federal district court, contending

that Sosa, a Texas citizen, had been fraudulently joined for the sole purpose of defeating diversity

jurisdiction. The federal district court overruled the plaint iffs’ motion to remand the case to state

court. Plaintiffs now apply to this court for relief. There is no contention that the plaintiffs are guilty

of actual fraud in their pleadings. The only issue is whether the defendants have carried their heavy

burden of showing that there is no possibility that the plaintiffs have a cause of action against Sonja

Sosa in state court.

In determining whether a case was properly removed, this Court repeatedly has held that the3

district courts and this court must not “pretry” subst ant ive factual issues in order to answer the

discrete threshold question of whether the joinder of an in-state defendant is fraudulent. D odson v.

Spiliada Maritime Corp., 951 F.2d 40, 42 (5th Cir.1992); Green v. Amerada Hess Corp

., 707 F.2d.

201, 204 (5th Cir.1983); B., Inc. V. Miller Brew ing Co., 663 F.2d 545, 546 (5th Cir.1981). Even

in a case in which “state law liabil it y was at best uncertain, this court has held that the case was

cognizable only in state courts.” B., Inc. at 550, n. 11.

The burden of persuasion placed upon those who cry “fraudulent joinder” is indeed a heavy

one. In order to establish that an in-state defendant has been fraudulently joined, the removing party

must show ei

t her t hat there is no possibility that the plaintiff would be able to establish a cause of

action against the in-state defendant in state court; or that there has been outright fraud in the

plaint iff’s pleadings of jurisdictional facts. B

., Inc. v. Miller Brew ing Co., 663 F.2d 545, 549 (5th

Cir.1981).

The district court (or t his court in its de novo review) must evaluate all of the factual

a llegations of the parties contained in their pleadings, depositions and affidavits in the light most

favorable to the plaint iff, resolving all contested issues of substantive fact in favor of the plaint iff. I d

at 549, citing authorities. Moreover, the district court must resolve any uncertainties as to the current

state of controlling substantive law in favor of the plaintiff. I d at 550. If there is even a possibility

that a state court would find a cause of action stated against any one of the named in-state defendants

on the facts alleged by the plaint iff, the federal court must find that the in-state defendants have been

properly joined, that there is incomplete diversity, and that the case must be remanded to the state

courts. Id at 550. In other words, the question is whether there is arguably a reasonable basis for

predicting that the state law might impose liabilit y on the facts involved. If that possibility exists, a

good faith assertion of such an expectancy in a state court is not a sham and is not fraudulent in facto

or in law. Id at 550 quoting from Brown, C.J., in Bobby Jones Garden Apartments v. Suleski , 391

F.2d 172, 177 (5th Cir.1968).

I n essence, the district court, or this court on review, should conclude there is no federal

jurisdiction and remand the case to the state court if either federal court “cannot predict with absolute

certainty that a Texas court would summarily dismiss the causes of ac t ion asserted against [the]

defendant [].” B

. Inc. V. Miller Brewing Co

., 663 F.2d at 554. See also, D odson v Spiliada

Maritime Corp

., 951 F.2d at 42-43, quoting other sources. If that prediction cannot be made “a good

faith assertion of such an expectancy in a state court is not a sham

... and is not fraudulent in fact or

in law.” B

. , Inc, 663 F.2d at 550 (quoting Brown, CJ in Bobby Jones Garden Apts 391 F.2d at 177).

In this case, the facts, as alleged and reasonably inferred, in the lig ht most favorable to the

plaintiffs are as follows. On December 12, 1992, the plaintiffs’ minor children and others attended4

a quinceanera to celebrate the 15th birthday of a young woman hosted by her pa rents for thei r

daughter and 150 of her friends at Houston’s Magnolia Civic Center which they rented from the city.

The City of Houston contra ct ed fo r security for the event with Wells Fargo Guard Services. The

security company assigned its employee, Sonja Sosa, a trained, licensed security guard equipped with

uniform, badge and a 357 magnum, to provide security at the party. In her deposition, Sosa admitted

that she was aware that minors were drinking alcohol inside the center and in the parking lot during

the quinceanera. She stopped some of the minors from drinking by taking away their beer. At one

point she threatened to shut the party down by calling the Houston Police Department. However,

she allowed most of the minors who were drinking to continue to consume beer and did not call the

police. A few hours after they left the party in one of the minors’ car, five of the children were killed

in a one automobile accident. The driver was one of the minors who had been drinking at the party.

Although the facts ar e in dispute as to how much the deceased minors drank at the party or

afterwards, autopsy reports of record indicate that they all had high blood alcohol contents at the time

of the accident. An investigation report of the Texas Alcoholic Beverage Commission indicated that

the partying minors were allowed to buy and consume beer on the premises and that the host parents

were allowed to serve kegs of beer at the party. .

Sosa’s security guard background included training at a two week school where she learned

how to handle a police baton, how to carry, handle, shoot, and when to use hand weapons, and other

“dos and don’ts” of basic security. As a result of that training Sosa was issued a certificate by the

training center commissioning her as a security guard and giving her the right to carry firearms.

She stated in her deposition that her job the evening of the party was to protect the premises

from damage, and to report any “violation of the law” that she observed to the city administrator at

the facilit y. In her log, written by her at intervals during the party, she stated twice that her authority

included calling the Houston Police Department if the “problem” with underage beer drinking was

not controlled. In her deposition she stated it was her duty to follow written orders posted at the

site, but at the time the deposition was taken, she could not recall if the orders said anything about

the consumption of alcohol. However, t he Cit y of Houston Manual of Policies and Procedures

mandates that “The serving of alcoholic beverages is not allowed” at the subject facilit y. Affidavit s

of minor and adult guests at the party stated that Sosa observed and knew minors were drinking at

the party and on the premises.

Resolving any uncertainties of state law in Plaint iffs’ favor, it can be inferred reasonably that

Sosa’s job, as a commissioned, uniformed, badged, security guard, trained to use and carrying a 357

magnum gun, who was hired by the City of Houston for security purposes at the public facilit y,

included enforcement of state laws and city ordinances during the activities at the Magnolia Center.

Sections 106.05, and 106.06 of the Texas Alcoholic Beverage Code states that it is illegal for minors5

to be served or to consume alcoholic beverages. Houston’s manual of policies and procedures for

its civic center and other centers prohibits serving alcoholic beverages on the premises..

Applying the principles set forth in B., Inc.; Amerada Hess ; Bobby Jones ; and Dodson to the

present case, it is clear that the district court erred in concluding that the defendants had borne their

heavy burden of proving “fraudulent joinder.” First, the district committed error in placing the burden

of persuasion on the wrong party. That court ruled that the p laint iffs must “give me a case that says

that a person who has been hired as a security guard has the responsibility for making sure at a party

that no minors drink. That that is a recognizable cause of action in the state of Texas.” Thus, the

district court applied a rule that is the obverse of the Fif t h Circuit’s precedents with regard to

“fraudulent joinder” to defeat diversity. Instead, the district court should have followed our cases

that require the defendants to cite a case or law that would enable a federal court to “predict with

absolute certainty that a Texas court would summarily dismiss” the cause of action against the

pertinent defendant. B

. Inc., 663 F.2d at 550. Consequently, the district court would have been more

correct to require the defe ndants to “give me a case that a security guard has no responsibility to

control illegal, under age drinking or to take any precautions to abate the risks created by minority

drunkenness during a party on city property and drunken driving afterwards.” Second, the district

court also erred when it “pretried” the proximate cause issue on the merits, by finding “[i]n this case,

this injury occurred four hours after they had left the party there.”

There is no Texas case or law which makes it possible for any federal court to predict with

absolute certainty that a Texas court would summarily dismiss the cause of action asserted against

the defendant security guard Sosa. Quite to the contrary, (1) there are Texas cases which reasonably

could be extended by analogy to afford a common law cause of action against an armed, badged and

uniformed security guard for foreseeable harm caused by her negligent failure to control il l egal

underage drinking and evident drunkenness at a public facilit y where she is assigned to maintain order

and safety; (2) there are Texas cases, laws and ordinances which easily could be applied to impose

a duty upon a security guard as a municipalit y’s custodian and delegate to maintain order and safety

at a city recreational facilit y during its rental to private persons, thus affording p erso ns injured

proximately by the guard’s derelictions a negligent per se cause of action; and, (3) there are Texas

cases that may support a contractual liability theory against Sosa.

The following cases could r easonably be extended by analogy to afford the plaintiffs a

common law cause of action against Sosa: O tis Engineering Corporation v. Clark

, 668 S.W.2d 307

(Tex. 1983)(Plain t iffs-husbands had wrongful death actions against a defendant employer who

allowed its employee to leave work in a drunken condition and cause the fatal accident thirty minutes

later, some three miles away from the plant, although the employee was not in the course of hi s

employment at the time of the mishap. The court adopted Restatement (Second) of Torts, Section6

319, that recognizes a duty for an employer to be one of a reasonably prudent employer under the

same or similar circumstances to prevent an incapacitated employee, under control of the employer,

from causi ng an unreasonable risk of harm to others and stated further that “[s]uch a duty may be

analog ized t o cases in which a defendant can exercise some measure of reasonable control over a

dangerous person when there is a recognizable great danger of harm to th ird persons,” [and that]

“changing social conditions lead to the recognition of new duties. No better statement can be made,

than that the courts will find a duty where, in general, reasonable men would recognize and agree it

exists” Id . at 310); El Chico Corporation v. Evans

, 732 S.W.2d 306, (Tex.1987)(holding that an

a lco ho lic beverage licensee owes a common law duty to the general public not to serve alcoholic

beverages to a person when the licensee knows or should know that the patron is intoxicated, and

the licensee who violates that duty is negligent as a matter of law.); Berly v. D & LSecurities and

Investigations, Inc.

, 876 S.W.2d 179 (Tex.App. 1994)(recognizing the common law duty of a

security guard to take affirmative action to control or avoid incr easing the danger from another’s

conduct that the security guard has at least partially created, holding that evidence raised a material

issue of fact as to whether the store employee’s death was reasonably foreseeable, whether t he

security guard failed to use proper procedures in stopping, searching, and handcuffing the shoplifter,

and whether the shooting would not have taken place but for any such failure.)

Sosa’s allowance of alcoholic beverages to be served to minors on city property in violation

of Texas law and city ordina nces was arguably negligence per se under Texas law. R yan v.

Friesenhahn , 911 S.W.2d 113 (Tex.App. 1995)(holding that a cause of action existed against t he

hosts-defendants who invited and then serve d a minor alcoholic beverages on the defendants’

property. Later that night the minor was killed in an auto accident. The court found that allowing

the deceased, a minor, to become intoxicated, in direct violation with the Texas Alcoholic Beverage

Code 106.06 was negligence per se because the fatally injured party was among the class of persons

the statute protects.)

The contract by which Wells Fargo agreed to provide security at the party is not of record,

but since it is the heavy burden of the defendant to prove fraudulent joinder for the purpose of

demonstrating that there is federal jurisdiction in this case , it sho uld be presumed or inferred for

purposes of deciding this discrete threshold issue that the contract is susceptible to the interpretation

that Wells Fargo agreed to maintain safety and order by having its security guard enforce laws and

ordinances against alcohol consumption on the premises and against providing alcoholic beverages

to minors. Accordingly, Texas case law may suppo rt finding a duty imposed on Ms. Sosa arising

from the contract that existed between the Wells Fargo and the City to provide security for the party:

Nixon v. Property Management Company

, 690 S.W.2d 546 (Tex. 1985) (where the Texas Supreme

C o urt fo und that the trier of fact must determine whether the apartment management company,7

c ontracted to manage the apartment complex and as such charged with a duty to deter crime by

keeping vacant apartment windows and doors secured, violated a Dallas City Ordinance on minimum

standards for landowners, without a valid excuse, and thus would be per se negligent.); Midkiff v.

Hines

, 866 S.W.2d 328(Tex.App. 1993) (find ing t here was a genuine issue of material fact in

det ermining the duty of a defendant security company that contracted to provide security fo r a

shopping center, because such a defendant has a duty to prevent criminal acts of third persons where

the criminal conduct is the foreseeable or where it reasonably appears or should appear to him that

others in the exercise of their lawful rights may be injured.); Barefield v. City of Houston

, 846 S.W.2d

399 (Tex.App. 1992) (inferring that a security firm contracted to provide security services during a

concert has a duty to protect concert goers on the leased against criminal acts of third persons).

Finally, there are ca ses fro m o t her states directly holding a security guard liable for not

preventing minors from drinking that we cannot predict with certai nt y would not be applied by

analogy by the Texas courts to bar dismissal of the plaint iffs’ causes of action against the defendant

Sosa: e .g., Kramer v. Continen tal Casualty Company , 641 So.2d 557 (La.App. 3rd

Cir.1994)(holding security guards of a hotel had a duty to prevent underage alcoholic consumption

by hotel guests and were liable for the wrongful death of a minor who consumed alcohol at the motel

and was later killed in a traffic accident); Professional Sports, Inc. v. Gillette Security, Inc. , 766 P.2d

91 (AZ. App.Div 1, Dep.A 1989)(holding the security company had a duty arising out of its contract

to protect third party patrons of the ball park, including underage drinking patrons).

In B., Inc

, Judge Goldberg, with Judges Brown and Ainsworth joining, said that in treating

the issue of “fraudulent joinder” we would do well to recall certain jurisdictional fundamentals:

“ It is axiomatic that t he jurisdiction of the federal courts is limited,

with its scope defined by the Constitution and b y statute. Where a

federa l co urt proceeds in a matter without first establishing that the

dispute is within the province of controversies ass igned to it by the

Constitution and statute, the federal tribunal poac hes upon the

terri tory of a coordinate judicial system, and its decisions, opinions,

and orders are of no effect. Thus the trial court must be certain of its

jurisdiction before embarking upon a safari in search of a judgment on

the merits.

“ Because the establishment of a basis for the exercise of subject

matter jurisdiction is the sine qua non of fed eral litigation, we have

consistently held that it is the party who urges ju risdicti on upon the

court who must always bear the burden of demonstrating that the case8 is one which is properly before the federal tribunal. Applying this well

established principle to matters similar to the case at bar, we find that

where an out-of

-st ate defendant removes an action from state to

federal court, the burden is upon the removing party to plead a basis

for jurisdiction. Similarly, where there have been allegations of

“fraudulent joinder,” it is clear that the burden is upon the removing

party to prove the alleged “fraud.” Id at 548-549.

***

“ When confronted with allegat io ns of fraudulent joinder, the trial

cou rt ’s vision must be synoptic rather that microscopic. The court

must take c are not to focus solely upon the factual minutiae of the

i ndividual case and thereby lose sight of the important quest ions of

federal j urisdiction presented when the propriety of removal is

contested.

“The federal judiciary is now seen in some quarters as an ever growing

monolith. It behooves those of us in federal tribunals to be certain of

our jurisdictional underpinnings before we embark upon a full scale

t rial, and we should constantly remind ourselves that we must not

trespa ss upo n t he judicial “turf” of the state courts. Many

commentators have suggested that diversity is a judicial farce, but for

now it remains a judicial fact. If there is complete diversity between

the adverse parties, the defendant is entitled to a federal forum; but,

if the plaint iff and even one properly joined defendant are residents of

the same state, the federal court has n o business taking jurisdiction

over the action.” Id

at 554.(citations omitted)

In my opinion, the district court erred in determining that it had jurisdiction to try this case.

The defendant did not carry its heavy burden to show fraudulent joinder. The district court and this

court cannot predict with absolute certainty that a Texas court would summarily dismiss the causes

of action asserted against the defendant Sosa. If we approve the dist rict court’s decision we, in

effect, will have allowed the district court to overrule and turn upside down this cou rt ’s carefully

crafted precedents governing the proof of fraudulent joinder for the sole purpose of defeati ng a

federal court’s diversity jurisdiction. Instead, we will encourage district courts to follow an obverse

rule, i.e., that anytime an in-state plaint iff sues an out-of-state employer alleging that the employer

is vicariously liable for the negligence of its in-state employee, the plaint iff has the burden of showing9

there is a state case factually on all fours in his favor in order to avoid removal and trial of his state

cause of action by the fe deral courts. I believe that such a rule is statutorily unwarranted and

therefore an unconstitutional expansion of the federal courts’ limit ed diversity jurisdiction. I dissent

from this Court’s decision to deny the plaint iffs’ the requested relief - to reverse the district court’s

ruling and cause this state wrongful death action to be remanded to the state court.