Chastain v. New Orleans Paddlewheels, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

MARGARET CHASTAIN CIVIL ACTION

VERSUS NO. 21-1581

NEW ORLEANS PADDLEWHEELS, INC. SECTION D (5)

ORDER AND REASONS

Before the Court is Plaintiff Margaret Chastain’s Motion to Remand.1

Defendant New Orleans Paddlewheels, Inc. has filed a Response.2 After careful

consideration of the parties’ memoranda, the record, and the applicable law, the

Court DENIES the Motion.

I. FACTUAL BACKGROUND

On March 4, 2020, Plaintiff Margaret Chastain, a citizen of the State of

Tennessee, was a fee-paying passenger aboard the M/V Creole Queen, a passenger

vessel owned and operated by New Orleans Paddlewheels, Inc.3 While aboard the

M/V Creole Queen, the vessel was cruising down the Mississippi River to the

Chalmette Battlefield just outside New Orleans.4 As the ship was preparing to dock

at the Chalmette Battlefield, Ms. Chastain began to descend an interior stairway.5

The vessel “violently jolted as it struck the mooring facility causing her [Ms.

1 R. Doc. 6.

2 R. Doc. 8.

3 R. Doc. 1-4.

4 Id.

5 Id.

Chastain] to lose her balance and tumble down the stairs, striking her head and other

parts of her body in the process.”6

On July 12, 2021, Ms. Chastain filed suit in the 34th Judicial District Court,

Parish of St. Bernard and specifically requested service on Defendant through its

agent of service.7 On August 4th, 2021, Orleans Parish Deputy Sheriff Keith

Claiborne left the Citation and Petition for Damages with an employee of New

Orleans Paddlewheels Inc., after being told the agent for service of process, Craig

Smith, was not in the office that day.8 On August 19, 2021, Defendant New Orleans

Paddlewheels, Inc., filed a Notice of Removal based upon 28 U.S.C. §§ 1332, 1441 and

1446.9

In its Notice of Removal, Defendant maintains this Court has subject matter

jurisdiction pursuant to 28 U.S.C. § 1332, as the matter in controversy exceeds the

sum of $75,000.00, exclusive of interest and costs and is properly between citizens of

different states.10 Defendant asserted that although it is a citizen of Louisiana, the

case is removable because it had not been properly served as of the date it filed its

6 Id.

7 Id. The Court notes that Plaintiff was injured on March 4, 2020 and this lawsuit was not filed until

July 12, 2021. The state of Louisiana suspended prescription from March 17, 2020 until July 5, 2020

by executive order. See Proclamation 75 JBE 2020. However, the legislature later narrowed that

suspension, enacting La. R.S. 9:5829, which provides: “the suspension or extension of these periods

shall be limited and shall apply only if these periods would have otherwise expired during the time

period of March 17, 2020, through July 5, 2020.” See La. R.S. 9:5829. Thus far, the parties have not

raised any statute of limitations issue.

8 R. Doc. 8-1.

9 R. Doc. 1.

10 Id. As stated above, Plaintiff Ms. Chastain is a citizen of Tennessee. Defendant New Orleans

Paddlewheels, Inc. is incorporated in Louisiana and has its principal place of business there as well.

Plaintiff admits there is complete diversity and that the amount in controversy exceeds the sum of

$75,000. See R. Doc. 6-2.

Notice of Removal.11 Defendant asserts that 28 U.S.C. § 1441(b)(2) (commonly

referred to as “the forum defendant rule”) only prohibits removal if the plaintiff has

“properly joined and served” a forum state defendant.12 Defendant advises that, since

it has not been properly served in this matter, there is no prohibition against removal.

In support, Defendant cites both Second and Third Circuit cases that have allowed a

forum state defendant, which was the sole defendant in the case, to remove an action

to federal court before the plaintiff served it with the complaint.13

Plaintiff has filed a Motion to Remand.14 Plaintiff argues that the Fifth

Circuit’s decision in Texas Brine v. Am. Arbitration Ass’n. (“Texas Brine”) only allows

non-forum defendants to remove a case prior to service on the forum defendant,

known as “snap removal,” but has not been extended to a case where, as here, the

forum defendant itself filed the Notice of Removal.15 Plaintiff contends that the

removal statute should be strictly construed to prevent rewarding “gamesmanship”

by a forum defendant.16 Further, Plaintiff contends that the removal statute, 28

U.S.C § 1441, was designed to protect foreign defendants from potential prejudice in

11 Id. Defendant attached a sworn statement from its registered agent, Craig Smith, in which Mr.

Smith states he has not been served with a copy of the Citation or Petition.

12 See R. Doc. 1 (citing 28 U.S.C. § 1441(b)(2)).

13 Id. (citing Encompass Ins. Co. v. Stone Mansion Rest. Inc., 902 F.3d 147 (3d Cir. 2018) (holding that

a forum state defendant, which was the sole defendant in the case, properly removed action to federal

court before the plaintiff served it with the complaint); see also Gibbons v. Bristol-Myers Squibb Co.,

919 F.3d 699, 704–07 (2d Cir. 2019) (“Put simply, the result here – that a home-state defendant may

in limited circumstances remove actions filed in state court on the basis of diversity of citizenship – is

authorized by the text of Section 1441(b)(2) and is neither absurd nor fundamentally unfair”);

Encompass, 902 F.3d at 152–54 (3d Cir. 2018) (holding that the “plain meaning [of section 1441(b)(2)]

precludes removal on the basis of in-state citizenship only when the defendant has been properly joined

and served” and that removal prior to service of the forum defendant “is not so outlandish as to

constitute an absurd or bizarre result”)).

14 R. Doc. 6.

15 Id. (citing 955 F.3d 482, 487 (5th Cir. 2020)).

16 R. Doc. 6-2.

defending a suit in a foreign state.17 Thus, Plaintiff asserts that allowing a forum

defendant to remove the suit “turns the purpose of the removal statute on its head.”18

In addition, Plaintiff provides a timeline showing that the process server certified

that he had personally served the Defendant’s agent of service on August 4, 2021.19

Plaintiff argues that the return of Citation provided by the Sheriff’s Office serves as

prima facie evidence of service on the Defendant and that Defendant fails to refute

this. Further, Plaintiff argues that Defendant’s Notice of Removal is an attempt to

controvert the representation of the Orleans Parish Deputy and is nothing more than

a “charade” and “gamesmanship.”20

Defendant has filed a Response.21 Defendant argues that the Fifth Circuit’s

decision in Texas Brine should be extended to allow for removal in this matter. In

support, Defendant advises that multiple Texas federal courts have allowed forum

defendants to snap remove a case if they were not properly served. Defendant

emphasizes that it was not properly served as of the time of removal. In support of

this contention, Defendant provides a Joint Stipulation in which the parties

stipulated that the registered agent for New Orleans Paddlewheels, Inc., Craig

Smith, was not personally served with the Citation or the Petition, as well as an

17 Id.

18 Id.

19 As discussed more fully in the Defendant’s Response as well as in the Analysis section of this Order,

counsel have subsequently stipulated that Defendant’s agent of service was not properly served on

August 4, 2021. See, R. Doc. 8-1. The Court is left to surmise that the certification made by the process

server on August 4, 2021 was in error.

20 R. Doc. 6-2.

21 R. Doc. 8.

affidavit from the New Orleans Paddlewheels, Inc. employee who received service of

the Citation and Petition.22

II. LEGAL STANDARD

A defendant may remove “any civil action brought in a State court of which the

district courts of the United States have original jurisdiction.”23 When original

jurisdiction is based on diversity of citizenship, the cause of action must be between

“citizens of different states” and the amount in controversy must exceed the “sum or

value of $75,000, exclusive of interest and costs.”24 “When a civil action is removed

solely under section 1441(a), all defendants who have been properly joined and served

must join in or consent to the removal of the action to federal court.”25 If consent of

all served defendants is not timely obtained, the removal is procedurally defective.26

The removal statute is strictly construed and any doubt as to the propriety of removal

should be resolved in favor of remand.27 The removing party has the burden of

proving federal diversity jurisdiction.28 Remand is proper if at any time the court

lacks subject matter jurisdiction.29

“A notice of removal of a civil action or proceeding shall be filed within 30 days

after the receipt by the defendant, through service or otherwise, of a copy of the initial

22 See R. Doc. 8-1; see also R. Doc. 8-2.

23 28 U.S.C. § 1441(a).

24 28 U.S.C. § 1332(a)-(a)(1).

25 28 U.S.C. § 1446(b)(2)(A).

26 Doe v. Kerwood, 969 F.2d 165, 167-69 (5th Cir. 1992); see also Wade v. Fireman’s Fund Ins. Co., 716

F. Supp. 226, 231 (M.D. La. 1989) (“The failure of all defendants to timely join in removal does not

deprive the Court of jurisdiction over the subject matter and constitutes a procedural defect that can

be waived by the plaintiff.”).

27 Gasch v. Hartford Acc. & Indem. Co., 491 F.3d 278, 281-82 (5th Cir. 2007).

28 Garcia v. Koch Oil Co. of Tex. Inc., 351 F.3d 636, 638 (5th Cir. 2003).

29 See 28 U.S.C. § 1447(c).

pleading setting forth the claim for relief upon which such action or proceeding is

based…”30 However, “if the case stated by the initial pleading is not removable, a

notice of removal may be filed within 30 days after the receipt by the defendant,

through service or otherwise, of a copy of an amended pleading, motion, order or other

paper from which it may first be ascertained that the case is one which is or has

become removable.”31

III. ANALYSIS

A. Service on Defendant

Plaintiff and Defendant agree there is complete diversity and that the amount

in controversy exceeds the sum of $75,000. Therefore, the Court limits its analysis to

whether the defendant had been properly joined and served and, further, if

defendant’s removal was proper.

In Louisiana, service of Citation on a domestic or foreign limited liability

company must be made by personal service on its registered agent.32 La. C.C.P. art.

1266(B) designates a limited number of exceptions when service on someone other

than the registered agent may be acceptable.33 These exceptions arise when the

limited liability company has failed to designate an agent for service of process, if

there is no registered agent by reason of death, resignation, removal, or if the person

attempting to make service certifies that he is unable, after due diligence, to serve

30 28 U.S.C. § 1446(b)(1).

31 28 U.S.C. § 1446(b)(3).

32 La. C.C.P. art. 1266.

33 La. C.C.P. art. 1266(B).

the designated agent.34 Louisiana courts have held that service on a non-registered

agent is not legally sufficient.35 Further, in cases where there is no certification of an

unsuccessful due diligence attempt to serve the agent in the record, courts have

determined that substituted service on a secretary is insufficient.36

Plaintiff stresses that a return of Citation or other process is prima facie

evidence of service.37 Accordingly, official returns of public officers sworn to properly

serve process are given great weight, and the burden rests on those who attack the

returns to establish their incorrectness.38 Plaintiff argues that Defendant has the

burden of proving that the Sheriff’s Office’s representation that personal service was

made on the Defendant’s agent for service of process was inaccurate.

Here, Defendant meets that burden. The parties have jointly stipulated that

service was rendered upon a female employee of New Orleans Paddlewheels, Inc.,

and not the company’s agent of service, Craig Smith.39 Defendant has also provided

a sworn statement from New Orleans Paddlewheels, Inc.’s agent of service, Mr.

Smith, who states that he has still not received service of process of the present suit.40

34 Id.

35 See Barrow v. Fair Grounds Corp., 00–0873 (La. Ct. App. 4 Cir. 3/7/01), 782 So.2d 697 (holding that

service on a receptionist of a registered agent was not legally sufficient); see also Gerhardt's v.

American Diesel Equipment, Inc., 569 So.2d 80 (La. Ct. App. 4 Cir. 1990) (finding that service on a

corporation's manager-employee was not legally sufficient where the corporation's registered agent

had not died, resigned or been removed, but was merely temporarily absent from the state and the

date of his return was unknown).

36 Kallauner v. One Source Const., LLC, 995 So. 2d 59, 62 (La. Ct. App. 4 Cir. 2008) (finding that service

on the secretary of a company’s registered agent is not tantamount to personal service on the registered

agent himself and is not legally sufficient).

37 See R. Doc. 8; see also La. C.C.P. Art. 1292.

38 Martinez v. Silverman, 288 So.2d 88 (La. Ct. App. 4 Cir. 1974).

39 R. Doc. 8-1.

40 See R. Doc. 1-2.

Defendant has further provided an affidavit from Petre E. Turner, the New Orleans

Paddlewheels employee who received the Citation and Petition from the civil sheriff

for the present case.41 Ms. Turner advises that Mr. Smith was not in the office on

August 4, 2021 and was not available to receive service on that day.42 She confirmed

that she received the Citation and Petition from a civil sheriff on August 4, 2021.43

In contrast, Plaintiff has provided no evidence that it ever served Defendant’s

registered agent, including no evidence of Orleans Parish Deputy Sheriff Keith

Claiborne’s due diligence to locate Defendant’s registered agent. While the return of

service by the Sheriff’s Office ordinarily serves as prima facie evidence of service, here

the parties’ joint stipulation, coupled with the supporting affidavits, serve as direct

evidence that service was not effected on Defendant’s agent, as required by Louisiana

law. As a result, the Defendant, New Orleans Paddlewheels, Inc., was not properly

served.

B. Snap Removal by a Forum Defendant Before Service

28 U.S.C. § 1441 authorizes a defendant to remove “any civil action brought in

a State court of which the district courts of the United States have original

jurisdiction.”44 Under subsection (b) of the statute, known as the forum defendant

rule, “a civil action otherwise removable solely on the basis of the jurisdiction under

§ 1332(a) of this title [28 U.S.C. § 1332(a)] may not be removed if any of the parties

in interest properly joined and served as defendants is a citizen of the State in which

41 R. Doc. 8-2.

42 Id.

43 Id.

44 28 U.S.C. § 1441(a).

such action is brought.”45 Relying on the text of the statute, non-forum defendants

who have not properly served have removed cases to federal court. This process of

removal is referred to as “snap removal” and has been upheld by the Fifth Circuit. In

Delgado v. Shell Oil Co., the Fifth Circuit upheld the right of a non-forum defendant

to remove a case to federal court prior to formal service.46 The Fifth Circuit has

further defined this right of snap removal. In Texas Brine Co. LLC v. Am. Arbitration

Ass’n. the Fifth Circuit allowed snap removal by a non-forum defendant based upon

the lack of service upon a forum defendant prior to removal.47 The Fifth Circuit, after

a thorough review of the statute, found the text of the statute unambiguous. Further,

the Court rejected the plaintiff’s argument that allowing for removal would lead to

an absurd result or result in an abuse of the statute. Thus, the Court held that “[a]

non-forum defendant may remove an otherwise removable case even when a named

defendant who has yet to be ‘properly joined and served’ is a citizen of the forum

state.”48

The Fifth Circuit’s ruling in Texas Brine has been upheld in the Eastern

District of Louisiana. In Hotard v. Avondale Indus., Judge Brown explained “[a] non-

forum defendant may remove an otherwise removable case even when a named

defendant who has yet to be ‘properly joined and served’ is a citizen of the forum

45 28 U.S.C. § 1441(b)(2).

46 231 F.3d 165 (5th Cir. 2000).

47 955 F.3d 482, 487 (5th Cir. 2020).

48 Id.

state.”49 Similar decisions within this court were issued in Henry v. Clarkson50 and

Ellis v. Miss. Farm Bureau Cas. Ins. Co.51

Here, the Court is confronted with a slightly different issue than that

presented in Texas Brine, namely: whether a forum-defendant can snap remove a

proceeding to federal court prior to service. The Court looks to existing precedent

within the Fifth Circuit for guidance.

Following Texas Brine, a series of district court decisions in the Fifth Circuit

have extended the logic of the Fifth Circuit’s decision to allow a forum defendant to

snap remove a case to federal court if they have not yet been properly served. In Latex

Construction Company v. Nexus Gas Transmission, LLC, a court in the Southern

District of Texas, after a thorough analysis of the plain language of § 1441(b)(2), held

that snap-removal by a forum defendant before it had been properly served was

allowable.52 The Court explained that whether Ҥ 1441(b)(2) was meant to be a bright-

line rule keyed on whether a forum defendant has been served” and that there was

no reason for the court to “add a layer of complexity to this statute by limiting its

application to instances in which a non-forum defendant has already been served.”53

The court further noted that the Fifth Circuit in Texas Brine had relied on cases

allowing for snap removal by a forum defendant, including a case in which the

removing party was the sole defendant.54 Notably, the Fifth Circuit in Texas Brine

49 No. 20-1877, 2020 WL 5088639, at 10 (E.D. La. Aug. 28, 2020).

50 No. 20-2628, 2020 WL 7245065, at 3-4 (E.D. La. Dec. 9, 2020).

51 No. 20-1012, 2020 WL 2466247, at 9 (E.D. La. May 13, 2020).

52 No. 4:20-1788, 2020 WL 3962247 (S.D. Tex. July 13, 2020).

53 Id.

54 Id. (citing Texas Brine, 955 F.3d at 486 (citing Encompass 902 F.3d 147); see also Gibbons, 919 F.3d

at 706.

referenced with approval the Third Circuit's reasoning in Encompass Ins. Co. v. Stone

Mansion Rest. Inc. that a plain reading of § 1441(b)(2) allowing for snap removal by

a forum resident who is the sole defendant in the case “gives meaning to each word

and abides by the plain language [of the statute].”55

Similarly, the Northern District of Texas in Serafini v. Southwest Airlines Co.

also examined the question of whether snap removal is proper when the removing

party is the sole defendant and a forum defendant.56 In Serafini, the court upheld

forum defendant Southwest Airlines’ removal of the case to federal court because it

had not been properly joined and served at the time of removal.57 The court explained

that “[u]nder the statute's [§ 1441(b)(2)] plain text, a forum defendant may engage in

snap removal when it is the sole defendant.”58

Finally, the court in Mirman Group, LLC v. Michaels Stores Procurement

Company, Inc., upheld the removal of the case by a forum defendant who had not yet

been properly served with process.59 The court explained “Absent controlling

authority to the contrary, this court is bound by Texas Brine. It therefore concludes

that § 1441(b)(2) does not preclude removal because Mirman and Michaels are

55 Id. (citing 902 F.3d 147).

56 485 F. Supp 3rd 697 (N.D. Tx. 2020).

57 Id. at 701. The court explained that “[e]xtending the Texas Brine reasoning as the Latex Construction

court did, this Court also holds that ‘[t]he plain language of § 1441(b)(2) does not limit snap removal

to cases involving multiple defendants or require that a defendant have been served before effecting

removal of a case from state court.’ Under the statute's plain text, a forum defendant may engage in

snap removal when it is the sole defendant. Therefore, Southwest's removal was proper. In the

statute's words, the case was ‘otherwise removable,’ because this Court has original jurisdiction of a

case originally filed in Texas state court in which the parties are diverse.”

58 Id.

59 No. 3:20-CV-1804-D, 2020 WL 5645217 (N.D. Tex. Sep. 22, 2020) (Slip copy).

completely diverse citizens, and although Michaels, the sole defendant, is a citizen of

the forum state, it removed the case before it was served with process.”60

While the Court is aware that the rulings from other district courts are not

controlling, their reasoning and analysis is persuasive. The Court begins and ends

with the text itself for its finding. 28 USC § 1441(b)(2) states “a civil action otherwise

removable solely on the basis of the jurisdiction under § 1332(a) of this title [28 U.S.C.

§ 1332(a)] may not be removed if any of the parties in interest properly joined and

served as defendants is a citizen of the State in which such action is brought.”61

Giving meaning to each word in the text, the Court finds that Defendant was not

“properly joined and served” as a defendant. Indeed, the parties have stipulated that

Defendant’s agent of service was not served.62 The Court rejects Plaintiff’s argument

that allowing for removal “violates the letter and spirit” of the law.63 Instead, the

Court is satisfied that its holding does the contrary and conforms with the letter of

the law and further does not lead to an absurd result. In the present case, Plaintiff is

a Tennessee resident and Defendant, the sole defendant, is a Louisiana corporation

with its principal place of business in Louisiana, thus there is complete diversity of

citizenship.64 In addition, the amount in controversy exceeds $75,000.65 Accordingly,

the requirements for diversity of citizenship are met.

60 Id. at *2.

61 28 U.S.C. § 1441(b)(2).

62 See R. Doc. 8-1

63 R. Doc. 6.

64 R. Doc. 1-4.

65 Id.

Importantly, as determined above, Defendant was not properly served. The

Fifth Circuit has upheld the right of a defendant to remove a case to federal court

prior to formal service.6* The Court also notes that the Fifth Circuit’s decision in

Texas Brine relied upon case law that allowed forum defendants to snap remove cases

to federal court.®7 This Court has determined that the text of 28 USC § 1441(b)(2) is

unambiguous. Applying the text as written by Congress, and since the sole

defendant—which happens to be a forum defendant—was not properly served,

removal was procedurally proper.

Accordingly, Defendant’s removal of this case was proper.

IV. CONCLUSION

IT IS HEREBY ORDERED that Plaintiff Margaret Chastain’s Motion to

Remand is DENIED.

New Orleans, Louisiana, November 30, 2021.

WENDY B. fe

United States District Judge

66 Delgado, 231 F.3d 165.

87 The Fifth Circuit in Texas Brine cited a comment by the Second Circuit: “[w]le agree with a comment

made by the Second Circuit: ‘By its text, then, Section 1441(b)(2) is inapplicable until a home-state

defendant has been served in accordance with state law; until then, a state court lawsuit is removable

under Section 1441(a) so long as a federal district court can assume jurisdiction over the action.” Texas

Brine, 955 F.3d at 486 (quoting Gibbons, 919 F.3d at 705).