Source: http://la.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20190610_0001266.C05.htm/qx
Timestamp: 2020-06-05 10:12:55
Document Index: 743067082

Matched Legal Cases: ['§ 1446', '§ 1446', '§ 1446', '§ 1446', '§ 1446', '§ 1446', '§ 1446', '§ 1446', '§ 1446', '§ 1446', '§ 1446', '§ 103', '§ 2000', '§ 1446', '§ 1446', '§ 1446', '§ 1446']

FindACase™ | Hoyt v. The Lane Construction Corp.
Hoyt v. The Lane Construction Corp.
LINDSEY HOYT, Individually, and Independently as Administrator of the Estate of Jeffery Hoyt and as Next Friend of Joel Hoyt, Evan Hoyt, and Katie Hoyt; PATRICK HOYT, Plaintiffs-Appellants,
THE LANE CONSTRUCTION CORPORATION, Defendant-Appellee.
The Hoyts and Storm engaged in settlement discussions. They never reached agreement. Yet on September 22, 2017-one year and two days after the suit began-the Hoyts voluntarily dismissed their claims against Storm. The Hoyts received no compensation from Storm.
Lane moved for summary judgment on the Hoyts' claims for premises liability and gross negligence. The federal district court granted the motion.
It dismissed the claims against Lane with prejudice. The Hoyts timely appealed.
The Hoyts' first motion for remand turns on timeliness. Under 28 U.S.C. § 1446(c), the defendant in a diversity case has one year following the commencement of an action to remove it. But Congress created an exception to this time bar where "the district court finds that the plaintiff has acted in bad faith in order to prevent a defendant from removing the action." Id. § 1446(c)(1). Here, the district court found the Hoyts acted in bad faith by improperly joining Storm (which prevented complete diversity and hence precluded removal).[1] The district court therefore denied the Hoyts' motion to remand under § 1446(c)'s time bar.
Exercising its role as factfinder, the district court found the Hoyts "knew months beforehand that the evidence would not support the claims against Storm." That was not clear error. The Hoyts dismissed Storm a mere two days after the one-year deadline expired. They did so without receiving any consideration from Storm. Before that dismissal, the Hoyts seem to have pursued their claim against Storm only half-heartedly. Their witness list for trial did not include any fact witnesses from Storm. And the Hoyts' expert witnesses made no serious efforts to establish Storm's liability. All of this suggests the Hoyts kept Storm in the case for one purpose and one purpose only-to prevent removal during § 1446(c)'s one-year removal period. Two days after accomplishing that purpose, the Hoyts dismissed Storm for free.
Nor can the Hoyts win a remand by raising "fact issues" regarding their good faith. True, "we resolve all contested factual issues . . . in favor of the plaintiff" when determining whether it improperly joined a non-diverse defendant. Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281 (5th Cir. 2007). That makes sense because, when considering whether "the plaintiff [is able] to establish a cause of action against the non-diverse party in state court," the question is what the plaintiff might prove in the future. Ibid.; see Guillory v. PPG Indus., Inc., 434 F.3d 303, 308 (5th Cir. 2005); Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004) (en banc). When it comes to bad faith, by contrast, the question is what motivated the plaintiff in the past-that is, whether the plaintiff's litigation conduct meant "to prevent a defendant from removing the action." 28 U.S.C. § 1446(c)(1). The district court found as a matter of fact the Hoyts acted in bad faith. The Hoyts failed to carry their burden to prove that finding was clearly erroneous.
Before 2011, § 1446 prohibited defendants like Lane from removing a case "more than 1 year after commencement of the action"-full stop. 28 U.S.C. § 1446(b) (2006). The statutory text contained no exceptions. Believing this old version of § 1446(b) was "not inflexible," however, Tedford ruled "the conduct of the parties may affect whether it is equitable to strictly apply the one-year limit." 327 F.3d at 426. In light of the plaintiff's "efforts to manipulate statutory rules," the Tedford Court concluded, "[e]quity demands [the plaintiff] be estopped from seeking to remand the case on the basis of the one-year limit in § 1446(b)." Id. at 428 & n.13.
Other courts disagreed. They held that § 1446 did not allow for equitable tolling or estoppel. See, e.g., Brock v. Syntex Labs., Inc., No. 92-5740, 1993 WL 389946, at *1 (6th Cir. Oct. 1, 1993); Kinabrew v. Emco-Wheaton, Inc., 936 F.Supp. 351, 352 n.1 (M.D. La. 1996) (collecting cases). This split persisted until 2011, when Congress amended § 1446. See Federal Courts Jurisdiction and Venue Clarification Act of 2011, Pub. L. No. 112-63, § 103(b), 125 Stat. 758, 760 (2011). By adding the bad-faith exception to the one-year deadline, Congress resolved the conflict.
If Congress wanted to resolve the conflict by adopting the Tedford standard, it could have done so. Cf. 42 U.S.C. § 2000bb(b)(1) (listing the restoration of "the compelling interest test as set forth in Sherbert v. Verner, 374 U.S. 398 (1963) and Wisconsin v. Yoder, 406 U.S. 205 (1972)" as a purpose of the Religious Freedom Restoration Act). But it did not. Congress instead chose to replace Tedford's equitable-estoppel principle with a "bad faith" standard. See 28 U.S.C. § 1446(c)(1). And we presume that choice of different text carries with it a choice of different meaning. Cf. Henson v. Santander Consumer USA Inc., 137 S.Ct. 1718, 1723 (2017) ("[W]hen we're engaged in the business of interpreting statutes we presume differences in language . . . convey differences in meaning."). We therefore no longer apply the old § 1446 and the Tedford exception we created. We now apply the new § 1446 and the bad-faith exception Congress created. See Thompson v. Deutsche Bank Nat'l Tr. Co., 775 F.3d 298, 303 (5th Cir. 2014).
Our holding is consistent with the principle that "Congress is vested with the power to prescribe the basic procedural scheme under which claims may be heard in federal courts." Patsy v. Bd. of Regents, 457 U.S. 496, 501 (1982). Once Congress has prescribed those procedures, we cannot add to them. See, e.g., Ross v. Blake, 136 S.Ct. 1850, 1857 (2016) (holding the Prison Litigation Reform Act does not admit of judge-made exceptions). We do not exalt judge-made doctrines over valid laws. See Am. Express Co. v. Italian Colors Rest., 570 U.S. 228, 235-39 (2013) (refusing to apply "a judge-made exception to the FAA" broadly because "[t]he FAA does not sanction such a judicially created superstructure"); CLS Bank Int'l v. Alice Corp. Pty., 717 F.3d 1269, 1303 (Fed. Cir. 2013) (en banc) (Rader, C.J., concurring in part and dissenting in part) ("[J]udge-made exceptions to properly enacted statutes are to be narrowly construed.").
It does not matter the House Report accompanying the 2011 statute cites Tedford. That's for two reasons. First, when "a statute's text is clear, courts should not resort to legislative history." Adkins v. Silverman, 899 F.3d 395, 403 (5th Cir. 2018). And we think the new § 1446(c)(1) is clear. But second, in all events, the report cites Tedford only once, and only then to explain the conflict the amendment would resolve. See H.R. Rep. 112-10, at 15 (2011), as reprinted in 2011 U.S.C.C.A.N. 576, 580. The report does not say the bill would adopt the Tedford standard. Instead, it refers to the statutory bad-faith exception as a "new standard." Ibid. Relying on a single reference to Tedford- without accounting for the author's description of the bad-faith standard as "new"-would be "akin to 'looking over a crowd and picking out your friends.'" Patricia M. Wald, Some Observations on the Use of Legislative History in the 1981 Supreme Court Term, 68 Iowa L. Rev. 195, 214 (1983) (quoting Harold Leventhal's description of problems with citing legislative history).
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thus, even if the Hoyts&#39; litigation conduct would not satisfy the old Tedford standard (an issue we need not decide), that is no reason to reverse the district court's finding ...