McLaurin v. New Orleans Paddlewheels, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

MARILYN MCLAURIN CIVIL ACTION

VERSUS NO. 24-2302

ABC INSURANCE COMPANY, NEW SECTION “R”

ORLEANS PADDLEWHEELS, INC.,

AND HOSPITALITY ENTERPRISES,

INC.

ORDER AND REASONS

Plaintiff Marilyn McLaurin filed a motion to remand1 following

removal by defendants New Orleans Paddlewheels, Inc. (“NOPI”) and

Hospitality Enterprises, Inc. (“HEI”).2 Defendants oppose the motion.3 For

the following reasons, the Court denies the motion.

I. BACKGROUND

In July 2024, plaintiff Marilyn McLaurin, a citizen of Illinois, sued

defendants, two in-state corporations, in Louisiana state court for damages

resulting from an alleged slip and fall on the vessel Creole Queen, owned by

New Orleans Paddlewheels, Inc., in 2023.4

1 R. Doc. 11.

2 R. Doc. 3.

3 R. Doc. 14.

4 R. Doc 3-1 at 2–3.

Plaintiff relied on the Orleans Parish Sherriff’s office to effect service

upon defendants’ registered agent for service of process.5 On July 26, 2024,

an Orleans Parish Sheriff’s Deputy certified in the sheriff’s return that he

filed in the civil district court record that he had made personal service on

the agent, Craig Smith.6 The Sheriff’s Office entered a report on its civil

inquiry system following the service with the same information.7

Defendants, Louisiana residents, removed the case to this Court on

September 20, 2024.8 They based removal on diversity jurisdiction under

28 U.S.C. § 1332. Defendants averred that there is complete diversity of

citizenship between plaintiff and defendants9 and that the amount in

controversy exceeds $75,000 because of the extent of plaintiff’s alleged

injuries.10 Importantly, defendants contended that their agent, Smith, was

not served by the sheriff’s deputy, which allowed them as in-state defendants

to remove the case based on diversity jurisdiction and avoid the application

of the forum-defendant rule as stated in 28 U.S.C. § 1441(b)(2).11 Id. (“A civil

5 R. Doc. 11-1 at 1–2. Craig Smith is the registered agent for service of

process for both NOPI and HEI.

6 R. Docs. 11-5 and 11-6.

7 R. Doc. 11-10.

8 R. Doc. 3.

9 Id. at 2.

10 Id. at 4–5.

11 Id. at 3–4.

action otherwise removable solely on the basis of the jurisdiction under

section 1332(a) of this title 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.”). Defendants supported this assertion with

two unsworn declarations under penalty of perjury, one from Alice Brown-

Nixon, who declares that she is the person upon whom service was made on

July 26, 2024, and one from Craig Smith, who declares that he was never

served and was not in the office on July 26.12 Defendants argued that, based

on the removal statute, 28 U.S.C. § 1441(b)(2), and Fifth Circuit case law,

when a forum state defendant has not yet been properly served, it may

remove the case to federal court.13

Plaintiff now moves to remand, contending that, based on the

representations of the Orleans Parish Sheriff’s Office, the notation entered in

the civil inquiry system, and the effort she expended in attempting to ensure

that Smith was served, any questions as to whether service was proper should

be resolved in her favor.14 Additionally, plaintiff argues that defendants

waived any objections to service by failing to plead insufficient service in

12 R. Docs. 3-7 and 3-8. Defendants later submitted sworn affidavits

stating the same in their opposition to plaintiff’s motion to remand.

R. Docs. 14-1 and 14-2.

13 R. Doc. 3 at 3–4.

14 R. Doc. 11-1 at 5–6.

their answer, which was filed a week after the case was removed.15 The

parties do not dispute the timing of removal, that plaintiff and defendants

are from different states, or the amount in controversy requirements.

The Court considers the motion to remand below.

II. LEGAL STANDARD

A defendant may generally remove a civil action filed in state court if

the federal court has original jurisdiction over the action. See 28 U.S.C. §

1441(a). The removing party bears the burden of showing that federal

jurisdiction exists. See Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th

Cir. 1995). For diversity jurisdiction to exist, the amount in controversy must

exceed $75,000, and there must be complete diversity between plaintiffs and

defendants. See 28 U.S.C. § 1332(a); Owen Equip. & Erection Co. v. Kroger,

437 U.S. 365, 373 (1978). In assessing whether removal was appropriate, the

Court is guided by the principle, grounded in notions of comity and the

recognition that federal courts are courts of limited jurisdiction, that removal

statutes should be strictly construed. See, e.g., Manguno v. Prudential Prop.

& Cas. Ins., 276 F.3d 720, 723 (5th Cir. 2002); see also St. Paul Mercury

Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1938) (“The intent of Congress

15 Id. at 7; R. Doc. 8.

drastically to restrict federal jurisdiction in controversies between citizens of

different states has always been rigorously enforced by the courts.”). Though

a court must remand the case to state court if at any time before the final

judgment it appears that it lacks subject matter jurisdiction, a court’s

jurisdiction is fixed as of the time of removal. 28 U.S.C. § 1447(c); Doddy v.

Oxy USA, Inc., 101 F.3d 448, 456 (5th Cir. 1996).

For diversity jurisdiction to exist, the amount in controversy must

exceed $75,000, and there must be complete diversity of citizenship between

plaintiffs and defendants. See 28 U.S.C. § 1332(a); Owen Equip. & Erection

Co. v. Kroger, 437 U.S. 365, 373 (1978). A case may not be removed, even if

diversity of citizenship exists, “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.” 28 U.S.C. § 1441(b)(2).

III. DISCUSSION

A. Jurisdictional Requirements

Before the Court may consider whether defendants’ removal of the

action was procedurally proper, it must determine whether complete

diversity exists among all named parties. See In re Levy, 52 F.4th 244, 246

(5th Cir. 2022) (28 U.S.C. § 1441(b)(2) removal “is permissible only if

complete diversity exists among all named parties.”); Getty Oil Corp., a Div.

of Texaco, Inc. v. Ins. Co. of N. Am., 841 F.2d 1254, 1258 (5th Cir. 1988)

(“[W]hen the alleged basis for jurisdiction is diversity of citizenship, the

district court must be certain that the parties are in fact diverse before

proceeding to the merits of the case.”).

The party invoking diversity jurisdiction must properly allege the

citizenship of all parties and show that there is complete diversity. See Getty

Oil, 841 F.2d at 1259 (“[The Fifth Circuit has] stated repeatedly that when

jurisdiction depends on citizenship, citizenship must be ‘distinctly and

affirmatively alleged.’” (quoting McGovern v. Am. Airlines, Inc., 511 F.2d

653, 654 (5th Cir. 1975)) (emphasis in original)). Having a plaintiff and a

defendant who are citizens of the same state ordinarily destroys complete

diversity. See McLaughlin v. Miss. Power Co., 376 F.3d 344, 353 (5th Cir.

2004). “Citizenship for an individual is synonymous with the person's

domicile; for a corporation, it is that of the state in which it is incorporated

and the state where it has its principal place of business.” English v.

Aramark Corp., 858 F. App'x 115, 116 (5th Cir. 2021) (citing Mullins v.

TestAmerica, Inc., 564 F.3d 386, 397 n.6 (5th Cir. 2009)).

Here, plaintiff’s complaint states that she is domiciled in Illinois,

making her a citizen of Illinois for diversity purposes.16 Defendants’ notice

of removal states that they are Louisiana corporations with their principal

places of business in New Orleans, LA,17 making them citizens of Louisiana

for diversity purposes. Because no named defendant is a citizen of Illinois,

there is complete diversity between the parties.

B. The Forum-Defendant Rule

The forum-defendant rule is a procedural bar, not a jurisdictional one.

Tex. Brine Co. v. Am. Arb. Ass'n, 955 F.3d 482, 485 (5th Cir. 2020)

(recognizing that the forum-defendant rule “is a procedural rule and not a

jurisdictional one” (citing In re 1994 Exxon Chem. Fire, 558 F.3d 378, 392-

93 (5th Cir. 2009))). It serves as a statutory limitation on removal, barring

removal when there is a “properly joined and served” defendant who “is a

citizen of the State in which [the] action is brought.” 28 U.S.C. § 1441(b)(2).

“Snap removal” is a widely recognized exception to the forum-defendant

rule. It occurs when a defendant removes the action to federal court before

the plaintiff properly joins and serves a defendant who is a citizen of the

16 R. Doc. 3-2 at 1.

17 R. Doc. 3 at 2.

forum state. See Tex. Brine, 955 F.3d at 485 (“The jargon for removal prior

to service on all defendants is ‘snap removal.’”). The use of snap removal by

non-forum defendants is well settled in Fifth Circuit jurisprudence. In Texas

Brine Company, L.L.C. v. American Arbitration Association Incorporated,

in which plaintiff properly served a non-forum defendant but had not yet

served a forum defendant, the Fifth Circuit 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.” Id. at 487. In that case, the court found that the “forum-

defendant rule’s procedural barrier to removal was irrelevant because the

only defendant ‘properly joined and served,’ the [removing defendant], was

not a citizen of Louisiana, the forum state.” Id. at 486 (citing § 1441(b)(2)).

Thus, removal of the action was not barred under the plain language of

Section 1441(b)(2), as the parties were completely diverse, and no forum

defendants had been served at the time of removal. Id. at 486–87; see also

id. at 486 (relying on Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699,

705 (2d Cir. 2019) (holding § 1441(b)(2) inapplicable until home-state

defendant was served and finding that, until then, the state court lawsuit was

removable, as long as the federal district court could assume jurisdiction)).

Here, unlike Texas Brine Company, L.L.C., both moving defendants

are forum defendants. The Court does not find that this renders the Section

1441(b)(2) bar applicable. The text of the statute bars removal if “any” of the

“properly joined and served” defendants is a citizen of the forum state. It

does not limit its application to cases in which the removing party is a non-

forum defendant. Texas Brine relied on the plain language of Section

1441(b)(2) to conclude that removal was proper when a forum defendant was

not properly joined and served. See Texas Brine Co., L.L.C., 955 F.3d at 486

(“[W]hen the plain language of a statute is unambiguous and does not lead

to an absurd result, our inquiry begins and ends with the plain meaning of

that language.” (quoting Dunn-McCampbell Royalty Int., Inc. v. Nat'l Park

Serv., 630 F.3d 431, 438 (5th Cir. 2011))). The plain language of the statute

compels the same conclusion here. Further, this decision is consistent with

recent cases within the Fifth Circuit. See, e.g., Chastain v. New Orleans

Paddlewheels, Inc., CV 21-1581, 2021 WL 5578443 (E.D. La. Nov. 30, 2021)

(finding that a forum defendant properly removed the case under Section

1441(b)(2) because it was improperly served); Cristea v. ArborPro, Inc., 701

F. Supp. 3d 441, 448 (E.D. La. 2023) (“[T]he Forum Defendant Rule does not

prohibit snap removal by a forum defendant.”); Baker v. Amazon Logistics,

Inc., No. CV 23-3991, 2023 WL 6880357, at *11 (E.D. La. Oct. 18, 2023)

(“[N]othing in § 1441(b)(2) prohibits a forum defendant like Walker from

removing an action based on his own improper joinder.”). Additionally, the

Third Circuit, in a case relied on by the Fifth Circuit in Texas Brine, allowed

for snap removal where the only defendant was a forum defendant. See

Encompass Ins. Co. v. Stone Mansion Rest. Inc., 902 F.3d 147, 152–154 (3d

Cir. 2018).

The principal dispute between the parties here is whether service on

the forum defendants was in fact proper. In Louisiana, a sheriff’s return of a

copy of process “shall be considered prima facie correct.” La. Code Civ. Proc.

art. 1292; see Hood Motor Co. v. Lawrence, 334 So. 2d 460, 461 (La. App. 1

Cir. 1976), writ denied, 338 So. 2d 288 (La. 1976) (“The return of a citation

or other process is prima facie evidence of service.”). But this presumption

is rebuttable. The party contesting service must “prove that, more likely than

not, service was not properly made.” Hall v. Folger Coffee Co., 874 So. 2d

90, 105 (La. 2004) (endorsing a preponderance of the evidence standard for

overcoming the prima facie presumption). “A return of citation cannot be

impeached by the uncorroborated testimony of a single witness, . . . and it

cannot be impeached by the uncorroborated testimony of the party upon

whom service is stated to have been made by the officer.” Roper v. Dailey,

393 So. 2d 85, 86 (La. 1980).

Here, plaintiff points to the sheriff’s returns for service upon NOPI and

HEI as prima facie evidence of proper service.18 The sheriff certified he

served Smith personally,19 and the civil service inquiry system indicates that

service was made on these companies through the agent, Craig Smith, at 422

Howard Ave., New Orleans, LA, on July 26, 2024.20 Plaintiff also offers an

affidavit of counsel’s law clerk, which states that he specifically stressed to an

Orleans Parish Sheriff’s Office employee that only Smith be personally

served and that the employee confirmed to him that Smith was personally

served.21

Defendants submit two affidavits attesting that service was not

properly effected on either of the businesses. First, defendants provide the

affidavit from Alice Brown Nixon, an employee of New Orleans Tours, Inc.,

which is not a party to this case but is also located at 4220 Howard Ave.22

She attests that she was the receptionist on July 26 and was served by the

sheriff’s deputy in this matter. Defendants also proffer an affidavit from

Craig Smith, the registered agent for service of process for both defendants,

18 R. Docs. 11-5 and 11-6.

19 Id.

20 R. Docc. 11-10 at 1–2.

21 R. Doc. 11-9 at 2.

22 R. Doc. 14-1 at 1.

who attests that he was not served with process and that he was not at 4220

Howard Ave. on July 26, 2024.23

Defendants present more than uncorroborated testimony of the party upon

whom service is stated to have been made. The two affidavits are sufficient

to overcome plaintiff’s evidence. Taken together, defendants’ affidavits

illustrate that the officer likely served process on the receptionist of New

Orleans Tours, Inc. While the sheriff’s returns serve as prima facie evidence

of proper service, this evidence can be overcome by a preponderance of the

evidence, and that standard is met here. Defendants’ affidavits demonstrate

that, more likely than not, service was not properly made on Smith. See

Harvey Canal Ltd. P'ship v. Nat'l Response Restoration Corp, 380 So. 3d

683, 687–688 (La. App. 5 Cir. 2024) (holding that defendant met the

preponderance standard to overcome the presumption of correct service

when he testified that he was never served, and defendant’s friend who was

performing work on defendant’s house testified that, despite not being

domiciled at the property, the deputy served him with process at defendant’s

dwelling). Plaintiff’s reliance on the affidavit of counsel’s law clerk does not

change this conclusion, because it is based on a hearsay statement by an

employee of the sheriff’s office.

23 R. Doc. 14-2 at 2.

Plaintiff’s arguments in the alternative are unpersuasive.24 Plaintiff

argues that service should be deemed proper because defendants allowed

“their employee Alice Brown-Nixon [to] ‘accept service’ . . . when she was not

the proper agent.”25 They contend that Brown-Nixon should have told sheriff

that Craig Smith, the proper agent, was not present. But there is no evidence

in the record that Brown-Nixon was employed by defendants, and there is no

basis for imposing a legal duty on a receptionist requiring her to verify proper

service. It is well settled that “[t]he plaintiff is responsible for having the

summons and complaint served.” Fed. R. Civ. P. 4(c)(1) (emphasis added);

see also Price v. Hous. Auth. of New Orleans, No. CIV.A. 09-4257, 2010 WL

2836103, at *2 (E.D. La. July 16, 2010) (“The Court emphasizes that it is the

plaintiff’s responsibility to ensure that the defendants are properly served.”).

Additionally, removal was not improper by virtue of defendants’ failure

to assert insufficient service of process in its answer. Defendants had already

properly removed the case before they filed an answer. Their failure to

24 While plaintiff seems to suggest that defendants were acting in bad

faith to avoid proper service based on their history and the

circumstances of this case, R. Doc. 11-1 at 6–7, she has not made a

factual record supporting this allegation or cited any authority that

authorizes the Court to depart from the text of Section 1441(b)(2) and

the principles of Texas Brine.

25 R. Doc. 11-1 at 6.

thereafter assert insufficiency of service of process does not affect the

propriety of removal.

Because defendants were not correctly joined and served, they properly

removed this case based on diversity jurisdiction.

IV. CONCLUSION

For the foregoing reasons, the Court DENIES plaintiffs motion to

remand.

New Orleans, Louisiana, this_3rd__ day of December, 2024.

bernk Vaver,

SARAH S. VANCE

UNITED STATES DISTRICT JUDGE

14