The opinion
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
JULIE CALI CIVIL ACTION
VERSUS
COLGATE-PALMOLIVE COMPANY NO. 23-01605-BAJ-RLB
ET AL.
RULING AND ORDER
Before the Court is Plaintiffs Motion To Remand (Doc. 9), which seeks
remand to the 19th Judicial District Court, Parish of East Baton Rouge after the
dismissal of the only non-diverse party in this action, Defendant K&B. Defendant
LTL Management, LLC (LTL) opposes the Motion, (Doc. 17). LTL contends that
although its removal was untimely, this Court should maintain jurisdiction because
Plaintiff acted in bad faith by taking steps to avoid the possibility of removal until an
opportune time. (Doc. 29-1).
On February 29, 2024 the Magistrate Judge issued a Report and
Recommendation (R&R) (Doc. 28), recommending that Plaintiffs Motion to
Remand (Doc. 9) be granted. Defendant timely filed an objection to the R&R (Doc.
29), requesting a de novo review. It asserts that the Magistrate Judge erred in
recommending that the Motion be denied for several reasons, all which rest upon the
argument that Plaintiff intentionally evaded federal jurisdiction. For reasons herein,
the Court will adopt the R&R and Plaintiffs Motion to Remand (Doce. 9) will be
granted.
Defendant has failed to sufficiently demonstrate that Plaintiff has acted in bad
faith in an attempt to prevent the removal of this action. Although the Defendant
cites several cases in efforts to support to its arguments, none of the cases accurately
apply to the facts presented here. For instance, Defendant relies heavily upon Hoyt
v. Lane Constr. Corp. 977 F.3d 287 (5th Cir. 2019), arguing that its two-and-a-half-
year untimely removal should be upheld because Plaintiff engaged in numerous
actions that were indicative of an attempt to manipulate jurisdiction in under 28
U.S.C. §1446(c)(1). In Hoyt, the United States Court of Appeals for the Fifth Circuit
found that plaintiffs acted in bad faith when they dismissed the defendants just two
days after the one-year statutory deadline while possessing knowledge that they
lacked evidence to support the claims against the defendants. See Hoyt at 292. As the
Magistrate Judge has noted in the R&R, 28 U.S.C. §1446(c)(1) provides that:
[a] case may not be removed . .. on the basis of jurisdiction conferred by
section 1332 more than [one] year after commencement of the action,
unless ... the plaintiff has acted in bad faith in order to prevent a
defendant from removing this action. (citation omitted). “Courts
determine bad faith on a case-by-case basis, in the context of the general
rule that removal jurisdiction is to be strictly construed in favor of
remand.” Smith v. Wal-Mart Stores Texas, LLC, No. CV H-21-179, 2021
WL 4228902, at *4 (S.D. Tex. Apr. 9, 2021) (citing Boney v. Lowe’s Home
Centers, LLC, No. 3:19-CV-1211-S, 2019 WL 5579206 at *2 (N.D. Tex.
Oct. 29, 2019) (quotation marks omitted). To determine whether a
plaintiff acted in bad faith, “the question is what motivated the plaintiff
in the past—that is, whether the plaintiffs litigation conduct meant ‘to
prevent a defendant from removing the action.” Hoyt, 927 F.3d 287, 298
(5th Cir. 2019) (emphasis in the original) (citing 28 U.S.C. §1446(c)(1)).
(Doc. 28 at 4).
In this case, Defendant has failed to meet its burden to provide plausible
allegations to support the applicability of the bad faith exception for two reasons: (1)
2
Plaintiff litigated its case against K&B, and (2) Plaintiff did not engage in settlement
negotiations because K&B, petitioned for bankruptcy, barring its ability to do so at
this time.
i. Bad faith exception does not apply as set forth in Hoyt
Defendant contends that the bad faith exception should apply as set forth in
Hoyt because Plaintiff “made no effort to acquire evidence needed to hold the non-
diverse defendant [K&B] liable, which demonstrates that the only purpose in naming
[K&B] was in bad faith to prevent removal of this action to federal courts.” (Doc. 29-
1 at 6). However, this case is distinguishable from Hoyt because K&B was dismissed
almost three years after the statutory deadline, and dismissal was entered pursuant
to K&B’s petition for bankruptcy, whereas the defendants in Hoyt were dismissed
two days after the statutory deadline and were not facing bankruptcy. (Doc. 28).
Defendant further maintains that the absence of discovery by Plaintiff points
to her intention to manipulate jurisdiction by failing to litigate against K&B.
However, Defendant minimizes the fact that there was a Peremptory Exception of No
Cause of Action pending in the 19th Judicial District Court (Doc. 1-2 at 360). A
Peremptory Exception of No Cause of Action is a dispositive motion that challenges
the availability of relief requested by a plaintiff against a specific defendant. The
Louisiana Court of Appeals for the First Circuit instructs that, “[a] court
appropriately sustains the peremptory exception of no cause of action only when...
the plaintiff has not stated a claim for which he can receive a legal remedy under the
applicable substantive law.” Cleaver v. Western Nat. Life Ins. Co. 185 So.3d 406, 410
(La. App.1. Cir. 2/28/15) (quoting City of New Orleans v. Board of Directors of
Louisiana State Museum, 98-1170 (La.3/2/99) 739 So.2d 748, 756)). See also Cleaver
v. Western Nat. Life Ins. Co. 185, So.38d 406, 410 (citing Robertson v. Sun Life
Financial, 2009-2275 (La.App.1st Cir.6/11/10), 40 So.38d. 507, 511)) (finding “One of
the primary differences between the exceptions of no cause of action and no right lies
in the fact that a frequent focus in the exception of no cause of action is on whether
the law provides a remedy against a particular defendant...”). Plaintiffs reply to the
Peremptory Exception of No Cause of Action directly contradicts Defendant's
argument. By replying to the Peremptory Exception of No Cause of Action, Plaintiff
made an effort to hold K&B liable. Nonetheless, Defendant contends that Plaintiff
only replied because of the risk of the dismissal of the lawsuit in its entirety (Doc. 29-
1 at 9). As previously noted, the state court has yet to rule on K&B’s Motion. However,
Plaintiffs response would signal that she believes she has a viable cause of action
against K&B. Thus, Plaintiffs past act of opposing the Motion undercuts Defendant’s
claims of Plaintiffs possible idleness.
In further support of its argument, Defendant asserts that the Magistrate
Judge erred by concluding that “suspicious behaviors by Plaintiff cannot be inferred
from the total absence of discovery in this case.” (Doc. 29-1 at 8). Defendant clearly
misinterprets the Court’s finding and ignores a significant portion of the analysis.
Contrary to Defendant’s description of the Court’s findings, the Magistrate Judge
pointedly instructed that “in cases where a lack of discovery played a role in the
existence of bad faith, other suspicious behaviors accompanied a lack of discovery—
behaviors that are not present here.” (Doc. 28 at 6) (quoting Guerrero v. C.R. England,
Inc. No. 7:28-CV-00053, 2023 WL 3480903 at *3 (S.D. Tex. May 16 2023)). (emphasis
added). Although the Defendant does not find Plaintiffs reply to the Peremptory
Exception of No Cause of Action compelling, the facts show otherwise.
First, Defendant argues that Plaintiff failed to litigate her case. But Defendant
also argues that Plaintiffs omnibus opposition to the dispositive motion was not, in
fact, indicative of Plaintiffs intent to “actually litigate” against K&B, but rather was
an act of bad faith in an attempt to keep K&B as a party to this action. Nevertheless,
it is undisputed that at the time of dismissal, that “the state court had not yet
determined whether the Plaintiffs claims survived the pleading stage.” (Doc. 28 at
7). As the Magistrate Judge noted, Defendant has failed to demonstrate that
“Plaintiffs lack of discovery while a dispositive motion is pending [is] ‘clear and
convincing proof of bad faith in this case.” Ud.). See Boney v. Lowe's Home Centers
LLC, No. 3:19-CV-1211-S, 2019 WL 5579206 at *2 (N.D. Tex. Oct. 29, 2019) (quoting
Bucklew v. St. Clair, Civ. A. No, 3:18-CV-2117-N(BH), 2019 WL 2724067, at *4 (N.D.
Tex. May 29, 2019) (explaining that “[I]n general, a determination of bad faith is
subject to a high burden, and courts are reluctant to find a party acted in bad faith
without “ ‘clear and convincing proof.’ ”)). Gnternal citations omitted). See also Boney,
2019 WL 5579206 at *2 (instructing that “[t]he burden of showing that Plaintiff acted
in bad faith to prevent removal lies with the Defendant.”).
As additional support, Defendant relies on Jn re Propulsid Products Liability
Litigation, No. MDL 1355, 2007 WL 1668752 (E.D. La. June 6, 2007) to argue that
Plaintiffs failure to seek discovery is an indicator of bad faith. Plaintiff's reliance on
this case is misguided. The case at first blush appears to mirror the facts before the
Court. However, none of the Defendants here were voluntarily dismissed for a
suggestion of bankruptcy. Much like the case sub judice, Plaintiff dismissed the non-
diverse Defendants three and a half years after the action was commenced, and
propounded no discovery against Defendants, nor were they deposed. The court found
that the “Plaintiff [did not offer] any justifiable reason for dismissing these non-
diverse Defendants over three years after suit was filed... and that Defendants
‘rapidly protected their removal rights by filing a notice of removal two weeks after
the last non-diverse defendant was voluntarily dismissed by Plaintiff.” Jd. at *1.
Because Plaintiff dismissed K&B for the suggestion of bankruptcy, a fact that makes
this case distinguishable from In Re Propulsid Products Liability, Defendant has
failed to prove with clear and convincing evidence that Plaintiffs reason for
dismissing K&B was indicative of bad faith.
Relevant here, even if Defendant suspected that Plaintiffs motive was to evade
federal jurisdiction, Defendant could have challenged the validity of Plaintiffs claims
against K&B by asserting a claim for fraudulent joinder. It did not do so.
Nevertheless, “the [Clourt is not required to ‘engage in speculation to interpret the
cause of Plaintiffs conduct.” Fruge v. Burlington Resources Oil & Gas. Co. LP, No.
2:14-cv-2382, 2015 WL 4134992 at *2 (W.D. La July 7, 2015) (quoting Foster v.
London, No. Civ. A. 04-2645, 2004 WL 2496216 at *8 (K.D. La. Nov. 4, 2004)). See
also Fruge v. Burlington Resources Oil & Gas. Co. LP at *2 (finding that “if the
petitions failed to state any causes of action against DNR and the DEQ, Burlington
was on notice that Fruge had fraudulently joined the [the defendants].”). Because
Defendant here did not bring a claim for fraudulent joinder, it has effectively waived
that argument.
Next, Defendant asserts that the lack of any evidence regarding settlement
also points to bad faith on the part of the Plaintiff. Defendant attempts to distinguish
this case from Hill v. State Farm Mut. Auto Insurance Co. No.CV 17-71-BAJ-RLB,
2017 WL 2644259 (M.D. La. May 18, 2017), report and recommendation adopted, No.
CV 17-71-00071-BAJ-RLB, 2017 WL 2637398 (M.D. La. June 19, 2017). In Hill,
plaintiff was struck by a minor while inside of her vehicle and sustained injuries. She
later settled with defendants after presenting them with her life care plan and
economist report. Jd. at *5. Defendant relies upon Hill to point to the lack of financial
remuneration between K&B and Plaintiff; however, Defendant’s cited authority is
inapplicable here because Hill did not involve a defendant who was dismissed for a
suggestion of bankruptcy.
Defendant also contends that the Magistrate Judge’s analysis did not consider
any factors apart from timeliness and that it failed to address Plaintiffs alleged
failure to prosecute her claims against K&B in state court. (Doc. 29-1 at 11). To
support its argument, Defendant relies on Flores v. Intex Recreation Corp., No. 2:20-
CV-73, 2020 WL 6385679 (S.D. Tex. July 2, 2020). See Id. at *8, in arguing that the
Magistrate Judge should have “considered the timing of the dismissal relative to the
one-year bar, the plaintiffs half-hearted pursual of the claim, and whether plaintiffs
had received consideration for their dismissal of the nondiverse defendant.” However,
the Magistrate Judge adequately addressed all three criteria in the R&R and the
Court is satisfied with the analysis. (See Doc. 28 at 4-7).
Defendant makes a last-ditch effort to attempt to show Plaintiffs bad faith by
asserting that there are other bankrupt Defendants that Plaintiff has yet to dismiss
from this action. (Doc. 38 at 4). The Court cannot speculate as to why the Plaintiff
has elected to not dismiss such parties. However, regarding K&B, Defendant has not
overcome its burden of proving that Plaintiffs acts were in bad faith by clear and
convincing evidence. More importantly, K&B’s petition for bankruptcy could result in
a stay of all proceedings against it. Therefore, lack of evidence of a settlement between
K&B and Plaintiff is not dispositive. See 11 U.S.C.A §862 (a)(1) (explaining that
“[w]hen a bankruptcy petition is filed, most judicial actions against the debtor
commenced before the filing of the petition are automatically stayed.”).
Having conducted a de novo review of Defendant’s Notice of Removal (Doc. 1),
Plaintiffs Motion To Remand (Doc. 9), the Defendant’s opposition (Doc. 17), the R&R
and Defendant’s objections to the R&R (Doc. 29), the Court APPROVES the R&R
(Doc. 28), and ADOPTS it as the Court’s opinion in this matter.
Accordingly,
IT IS ORDERED that Plaintiffs Motion To Remand (Doce. 9) be and is
hereby GRANTED.
Baton Rouge, Louisiana, this?! day of June, 2024
Boa ®
JUDGE BRIAN A. CKSON
UNITED STATES TRICT COURT
MIDDLE DISTRICT OF LOUISIANA