Opinion ID: 7393
Heading Depth: 2
Heading Rank: 2

Heading: fraudulent joinder claim

Text: 12 Burden argues that the district court erred in looking beyond the pleadings in determining that Riney and Davis were fraudulently joined. He contends that a conflict exists within our court's jurisprudence on the question whether only the pleadings should be considered in a fraudulent joinder claim or whether the court may instead pierce the pleadings and examine affidavits and other evidentiary material as well. In support of his position, Burden cites to Green v. Amerada Hess Corp. 14 13 In Green, we reversed the district court's denial of a motion for remand to the state court, finding that the court erred in conducting a full evidentiary hearing to resolve disputed factual issues relating to matters of substance rather than jurisdiction. We observed that, in considering a claim of fraudulent joinder, the court must normally assume all the facts as set forth by the plaintiff to be true. 15 The ambit of our holding in Green is not so broad, however, as to dictate that a district court must look solely at the pleadings in determining whether a plaintiff has any possibility of recovery in state court against the non-diverse parties whose joinder is questioned. Green merely teaches that the district court should not conduct a full-scale evidentiary hearing on questions of fact, but rather should make a summary determination by resolving disputed facts in favor of the plaintiff. 14 We clearly expressed in B., Inc. v. Miller Brewing Co. 16 that [i]n support of ... [a] motion for remand, the plaintiff may submit affidavits and deposition transcripts along with the factual allegations contained in the verified complaint. 17 Our decisions subsequent to B., Inc. have consistently maintained that a district court may look to evidence outside of the pleadings in determining a fraudulent joinder claim. 18 Thus, we hold that the district court did not err in looking beyond Burden's pleadings to determine removal jurisdiction. Lest there remain even a shadow of a doubt as to this circuit's position, we reiterate--in hopes that further pronouncement will not be necessary--that in testing for fraudulent joinder the district court in its discretion may pierce the pleadings, albeit in so doing the court should not conduct an evidentiary hearing but, based on appropriate documentation in addition to the pleadings, should instead resolve all disputed questions of fact in favor of the plaintiff. 15
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17 The removing party bears the heavy burden of proving that non-diverse defendants have been fraudulently joined to defeat diversity, either by showing that (1) there has been outright fraud in the plaintiff's recitation of jurisdictional facts, or (2) there is no possibility that the plaintiff would be able to establish a cause of action against the non-diverse defendants in state court. 19 The instant case involves the latter inquiry: whether, as a matter of law, there [is] no reasonable basis for predicting that the plaintiff might establish liability against a named in-state defendant in state court. 20 If, after resolving all disputed questions of fact and all ambiguities in the controlling state law in favor of the non-removing party (Burden), there is no possibility that the state court would recognize a valid cause of action against the non-diverse defendants (Riney and Davis), then those defendants have been fraudulently joined and must be ignored for purposes of diversity jurisdiction. 21 That being the case, the district court had proper subject matter jurisdiction to adjudicate Burden's claims, 22 so we turn now to an analysis of the state law pertinent to the instant case. 18
19 To prevail in a suit for intentional infliction of emotional distress in Texas, a plaintiff must show (1) intentional or reckless conduct; (2) that is extreme or outrageous; (3) that caused emotional distress; and (4) that was severe in nature. 23 A defendant is liable for outrageous conduct only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. 24 We here conclude that, taking the facts that Burden related in his deposition testimony to be true, no reasonable basis exists for predicting that Burden could meet the elements of an intentional infliction of emotional distress claim and recover against Riney and Davis under Texas law on that claim. 20 In his deposition Burden expressed the opinion that he was outrageously treated because, even though his job performance was excellent, he was reclassified into a position in which he was isolated and given no input into critical management decisions. He testified that the reclassification humiliated him and caused him to have problems with his health and his marriage because his former job responsibilities were given to a younger man. Burden stated that his office and secretary were taken away despite the fact that he had been assured by Davis that he (Burden) would be keeping both. He was, however, given another, slightly smaller office and access to the company's secretarial staff. Burden also testified that Davis gave him menial short-term assignments and that Davis never talked with him, in essence ostracizing him from every activity in the department. In discussing his eventual retirement from General Dynamics, however, Burden admitted in his deposition that no one ever told him explicitly that he was required to retire from the company. 21 According to Burden, in one conversation with Riney, Burden expressed his dissatisfaction with his new position under the reclassification scheme. Burden admitted, however, that he did not know whether Riney did anything in response to that conversation. Burden also stressed that Riney and Davis had not implemented the reclassification plan in accordance with company policy. 22 Taking all of Burden's allegations as true, the actions of Riney and Davis might be deemed insensitive to Burden's feelings and contrary to the company's policy or procedure for implementing job reclassifications. Still, there is nothing in the pleadings, affidavits, or deposition testimony to indicate that the conduct of Riney or Davis even came close to the level of outrageousness needed to succeed on a Texas claim of intentional infliction of emotional distress. All of the Texas cases which have adjudicated such a claim have required conduct far more egregious than that described here by Burden. 23 For example, in Nayef v. Arabian American Oil Co. 25 , the Texas Court of Appeals held that it was not extreme and outrageous conduct for an employer to dispute an employee's claimed inability to do desert driving, to refuse to provide the employee with transportation, and to transfer the employee to a different position and location, without any reduction in salary or benefits. 26 Similarly, in Randall's Food Mkts., Inc. v. Johnson 27 , the Texas Supreme Court held that it was not extreme and outrageous for an employer to question an employee in a severe and curt tone about her taking a wreath from the store where she worked without paying for it. 28 In the same vein, the Texas Court of Appeals in Sebesta v. Kent Elecs. Corp. 29 stated that it was not extreme and outrageous for employer to arrange an exit parade of the terminated employee for the busiest part of day, to give the employee a memorandum containing negative comments regarding her job performance, and to tell the employee, immediately before her termination, that she could apply vacation days to days she had missed due to jury duty. 30 24 On the other end of the spectrum, the Texas Court of Appeals in Hooper v. Pitney Bowes, Inc. 31 , found that supervisors' statements that an employee was cultist, occult, unchristian, a sorceress, satanistic, and a witch were sufficient to support a jury's implicit finding of extreme and outrageous conduct because of the high degree of opprobrium attached to those terms. 32 Burden proffers nothing of that extreme nature here. In another such case, Wornick Co. v. Casas 33 , the Texas Supreme Court surveyed Texas cases in which conduct had been found to be outrageous in the employment setting 34 and compared them to the facts of the case then before it. The Casas court concluded that, when compared to the conduct considered in the cases surveyed, the subject employer's conduct--having a security guard escort the plaintiff from the workplace after she was discharged--was not sufficiently outrageous, as a matter of law, to state a claim for intentional infliction of emotional distress. 35 25 The federal experience with this Texas tort has paralleled that of the state courts. In Wilson v. Monarch Paper Co. 36 , we reviewed a district court jury verdict awarding the plaintiff damages for, inter alia, intentional infliction of emotional distress based on Texas law. The plaintiff presented evidence that his former job responsibilities were assigned to a younger man, that the plaintiff's supervisor refused to speak with him, that the supervisor acknowledged that such silence was an indication that the plaintiff's job was in trouble, and that one of plaintiff's managers referred to him as old and even prepared and posted a sign stating that the plaintiff was old. Most significantly, the plaintiff, who formerly held an executive managerial position in the company, was transferred to a warehouse where his primary duties were to sweep and clean up after the employees in the warehouse cafeteria. We held that, except for the employer's extremely painful and embarrassing steep downhill push of the plaintiff to demeaning and degrading job duties, the employer's conduct was within the realm of an ordinary employment dispute and was not so extreme and outrageous as to support an intentional infliction of emotional distress claim. 37 26 After examining the facts of the instant case--viewed most favorably to Burden--we find that his post-reclassification assignments do not even approximate the extremely humiliating shift in duties and working conditions experienced by the plaintiff in Wilson. Although Burden alleges that the reclassification resulted in his performing menial assignments, his own testimony indicates that he was given assignments involving coordinating projects, reviewing budgets, and reviewing and compiling evaluations of proposed company Standard Practices. He also testified in his deposition that he was appointed by Davis to serve as Vice Chair of the Proposal Council, which reviewed the proposal process by obtaining input from the company's different functional departments. Moreover, Burden was given an office that was comparable to his former office, albeit slightly smaller, and was allowed to retain his parking space as well as his former earnings level, which had increased by $16,500 in July 1992, just a month before his reclassification. Unlike the demeaning and degrading change to visually apparent janitorial duties in Wilson, the changes in Burden's employment were non-apparent to the casual observer and were significantly more subtle in quality. 27 Burden also testified that he received a nasty anonymous letter, which stated negative reasons why Burden should get out of there. Although preparation and delivery of this letter is the only fact contained in Burden's testimony that could even arguably reflect extreme or outrageous conduct, the letter was anonymous and no record evidence indicates that either Riney or Davis sent it. Moreover, according to Burden's own testimony, when he informed Davis that he had received the letter, Davis volunteered to refer the matter to Security and stated that the sender, if identified, would be discharged. We are not persuaded that Burden has any possibility of recovery in a Texas court on the basis of that anonymous letter alone. 28 Neither are we swayed by Burden's argument that, because only a few Texas cases deal with a claim of intentional infliction of emotional distress, the district court erred in speculating what a Texas court would do. The tort of intentional infliction of emotional distress was explicitly recognized in Twyman v. Twyman 38 , a 1993 case. The Texas cases that have applied the four-part test enunciated in Twyman have been consistent in using the stringent extreme and outrageous element of the claim. 29 Here the district court properly relied on those Texas cases to guide its reasoning. Given the utter lack of record evidence of any conduct explicitly attributable to Riney or Davis that could meet the established criteria for a claim of intentional infliction of emotional distress, we conclude that the district court did not err in determining that those two defendants were fraudulently joined. 30 In sum, we are satisfied that no reasonable jury in Texas could find that the conduct of Riney and Davis in changing Burden's duties after reclassification constituted extreme and outrageous conduct. Even though the determination whether a valid intentional infliction of emotional distress claim exists necessarily depends on the facts of each case, we conclude that, as a matter of law, the facts portrayed by the pleadings, affidavits, and deposition testimony in the instant case do not reveal any conduct that go[es] beyond all possible bounds of decency, and [that could] be regarded as atrocious [ ] and utterly intolerable in a civilized community. 39 31 Burden nevertheless contends that if he had been given more discovery time he could have established additional facts that would tend to demonstrate the true, non-pretextual reasons behind the defendants' conduct. In his response to the defendants' motion for summary judgment, Burden alternatively requested the district court to grant a continuance of the hearing on the motion so that he could have more time for discovery. The court ruled on the summary judgment motion without granting a continuance. As Burden himself asserts, however, additional time for discovery would have aided him only in determining whether Riney and Davis acted intentionally or recklessly. Nothing in Burden's argument suggests that more time for discovery would have produced a cure for his failure to meet the second prong for a valid claim of intentional infliction of emotional distress--that the defendant's conduct was extreme and outrageous--regardless of whether it was intentional or reckless. We therefore find that the district court did not abuse its discretion in failing to delay its consideration of the defendant's summary judgment motion. 40 32 Texas courts have held that, as a matter of law, the fact of termination alone cannot constitute outrageous behavior; rather, the extreme and outrageous element focuses only on the manner of termination. 41 Here, Burden's employment with General Dynamics was not terminated; yet Burden alleges--analogous to constructive termination--that the actions of Riney and Davis in reclassifying him directly resulted in his voluntary retirement from the company. But, as we have previously noted, Burden's pleadings, affidavits, and deposition testimony do not contain evidence or allegations of conduct by Riney and Davis, in reclassifying Burden's job, that a Texas court could possibly deem to be extreme and outrageous. 33 In conclusion, we agree with the district court's determination that there is no basis for believing that Burden could recover from Riney and Davis in a Texas court and that, therefore, they were fraudulently joined to defeat diversity jurisdiction. 42