Adv Indicator v. Acadia Ins

Case: 21-20092 Document: 00516494085 Page: 1 Date Filed: 10/03/2022

United States Court of Appeals

for the Fifth Circuit

United States Court of Appeals

Fifth Circuit

FILED

October 3, 2022

No. 21-20092 Lyle W. Cayce

Clerk

Advanced Indicator and Manufacturing, Incorporated,

Plaintiff—Appellant,

versus

Acadia Insurance Company; Nicholas Warren,

Defendants—Appellees.

Appeal from the United States District Court

for the Southern District of Texas

USDC No. 4:18-CV-3059

Before Jolly, Higginson, and Engelhardt, Circuit Judges.

Per Curiam:

Appellant Advanced Indicator and Manufacturing, Inc. claims its

building was damaged by Hurricane Harvey’s winds. Advanced’s insurer,

Acadia Insurance Company, determined that the damage to the building was

caused by poor maintenance and routine wear and tear. When Acadia denied

Advanced’s claim, Advanced sued. From this seemingly commonplace

insurance dispute, we are faced with jurisdictional questions that have deeply

divided district courts and a question of whether summary judgment was

properly granted.

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No. 21-20092

I.

Appellant, Advanced Indicator and Manufacturing, Inc., owned

property at 1463 Brittmore Road in Houston. The property was insured by a

policy issued by Appellee Acadia Insurance Company. The policy covered

wind damage but did not cover damage from wear and tear or lack of

maintenance.

Hurricane Harvey struck southern Texas in 2017. After the

hurricane, Advanced submitted a claim to Acadia regarding the damage to

1463 Brittmore Road, which it claimed was caused by the hurricane’s winds.

Acadia acknowledged the claim and sent an adjuster, Nick Warren, as well as

an engineer, Jason Watson, to assess the building. After inspecting the

building, Watson determined that pre-existing conditions—including

ongoing leaks from deterioration and poor workmanship—caused the

damage, rather than winds from Hurricane Harvey. Warren adopted these

conclusions in his recommendations to Acadia. Acadia then denied

Advanced’s claim based on Watson’s conclusions and Warren’s

recommendation.

On August 7, 2018, Advanced sued Acadia and Warren in state court,

alleging various claims, including breach of contract, common law bad faith,

and violations of the Texas Prompt Payment of Claims Act. On August 30,

2018, Acadia elected to accept responsibility for Warren under § 542A.006

of the Texas Insurance Code, which provides that an insurer may accept

liability for its agents. The next day, Acadia removed the case to federal

court. One week later, Warren filed a motion to dismiss, arguing in part that

Advanced could no longer state a claim against him. Advanced filed a motion

to remand the case to state court, arguing that Warren was not improperly

joined notwithstanding Acadia’s § 542A.006 election. In a management

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order, the district court denied the motion to remand and ruled without

analysis that “Nicholas Warren is struck as improvidently joined.”

Acadia later moved for summary judgment, arguing that it did not

breach the policy and that Advanced could not segregate any damages caused

by the hurricane from pre-existing damage, as required by Texas law. The

district court granted Acadia’s motion, finding that Acadia’s denial of

Advanced’s claim was based on “extensive consideration of the evidence”

and that Advanced failed to carry its burden of showing that covered and non-

covered damages could be segregated as required by Texas’s concurrent

causation doctrine. In doing so, the district court struck the declaration of

Peter de la Mora and Art Boudin, two of Advanced’s experts. The district

court further granted summary judgment on Advanced’s extra-contractual

claims. Advanced promptly appealed.

II.

We begin by considering whether the district court erred in denying

Advanced’s motion to remand. The parties agree that when Advanced filed

suit against Acadia (an out-of-state resident) and Warren (an in-state

resident), Advanced had valid claims against both defendants. Because

Advanced and Warren are both Texas residents, there was not complete

diversity at the outset of the suit, and the matter could not be removed.

Acadia then elected to accept liability for Warren pursuant to Texas

Insurance Code § 542A.006, which provides that should an insurer accept

responsibility for its agent after suit is filed, “the court shall dismiss the

action against the agent with prejudice.” TEX. INS. CODE § 542A.006(c).

Acadia filed a notice of removal the next day on the grounds that Advanced

could no longer state a claim against Warren. We must determine whether

Acadia’s § 542A.006 election made this matter removable.

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Advanced offers two arguments for why remand was proper. First, it

contends Acadia’s removal in this case violates the involuntary-voluntary

rule, which states that a case may only be made removable by a voluntary act

of a plaintiff. Second, it argues that Warren was properly joined under the

specific language of § 542A.006 because Acadia only elected to accept

liability for him after suit was filed. We address each argument in turn.

“The federal courts may exercise diversity jurisdiction over a civil

action between citizens of different States if the amount in controversy

exceeds $75,000.” Flagg v. Stryker Corp., 819 F.3d 132, 135 (5th Cir. 2016)

(en banc) (citing 28 U.S.C. § 1332(a)(1)). Federal law provides that federal

courts have removal jurisdiction over suits that could have originally been

filed in federal court. See 28 U.S.C. § 1441(a). Further, if it later becomes

clear that diversity jurisdiction exists even when it was not clear from the face

of the initial pleading, the case can often be removed to federal court. See 28

U.S.C. § 1446(b)(3).

“Ordinarily, diversity jurisdiction requires complete diversity—if any

plaintiff is a citizen of the same State as any defendant, then diversity

jurisdiction does not exist.” Flagg, 819 F.3d at 136. “However, if the plaintiff

improperly joins a non-diverse defendant, then the court may disregard the

citizenship of that defendant, dismiss the non-diverse defendant from the

case, and exercise subject matter jurisdiction over the remaining diverse

defendant.” Id.

We set forth the standard for improper joinder in Smallwood v. Illinois

Central Railroad Co., 385 F.3d 568 (5th Cir. 2004) (en banc).1 A defendant

1

We have at times used the term “fraudulent joinder” interchangeably with

“improper joinder,” regardless of how such improper/fraudulent joinder was established.

See Smallwood, 385 F.3d at 571 n.1. We use the term “improper joinder” here, as it is

“preferred.” Id.

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may establish improper joinder in two ways: “(1) actual fraud in the pleading

of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of

action against the non-diverse party in state court.” Id. at 573 (quoting Travis

v. Irby, 326 F.3d 644, 646–47 (5th Cir. 2003)) (internal quotation marks

omitted). Only the second method of proving improper joinder is at issue

here. To show that a plaintiff cannot establish a cause of action against the

non-diverse party in state court, a defendant must show “that there is no

possibility of recovery by the plaintiff against an in-state defendant, which

stated differently means that there is no reasonable basis for the district court

to predict that the plaintiff might be able to recover against an in-state

defendant.” Id. “The court may conduct a Rule 12(b)(6)-type analysis,

looking initially at the allegations of the complaint to determine whether the

complaint states a claim under state law against the in-state defendant.” Id.

But when a plaintiff “has misstated or omitted discrete facts that would

determine the propriety of joinder” then “the district court may, in its

discretion, pierce the pleadings and conduct a summary inquiry.” Id.

Importantly, “to determine whether a plaintiff has improperly joined a non-

diverse defendant, the district court must examine the plaintiff’s possibility

of recovery against that defendant at the time of removal.” Flagg, 819 F.3d at

137 (emphasis in original).

Advanced argues that removal of this case based on Acadia’s post-

suit, pre-removal § 542A.006 election violates the voluntary-involuntary

rule. This judicially created rule dictates that “an action nonremovable when

commenced may become removable thereafter only by the voluntary act of

the plaintiff.” Weems v. Louis Dreyfus Corp., 380 F.2d 545, 547 (5th Cir.

1967). Advanced contends that because the § 542A.006 election was an

action of a defendant, rather than the plaintiff, it cannot make the case

removable. This question has deeply divided district courts. Some courts

have held that the voluntary-involuntary rule bars removal when an insurer

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makes a § 542A.006 election after the filing of suit. See, e.g., Morgan v. Chubb

Lloyds Ins. Co. of Tex., 541 F. Supp. 3d 754 (N.D. Tex. 2021). Others have

held that the voluntary-involuntary rule is inapplicable if the agent is

improperly joined at the time of removal. See, e.g., Ramirez v. Allstate Vehicle

& Prop. Ins. Co., 490 F. Supp. 3d 1092 (S.D. Tex. 2020).

Today we adopt the latter approach, which is a natural extension of

our precedent. Indeed, “courts have long recognized an exception to the

voluntary-involuntary rule where a claim against a nondiverse or in-state

defendant is dismissed on account of fraudulent joinder.” Crockett v. R.J.

Reynolds Tobacco Co., 436 F.3d 529, 532 (5th Cir. 2006). Moreover, our en

banc court stressed that “to determine whether a plaintiff has improperly

joined a non-diverse defendant, the district court must examine the

plaintiff’s possibility of recovery against that defendant at the time of

removal.” Flagg, 819 F.3d at 137 (emphasis in original). In this case, Warren

was improperly joined after Acadia’s election because § 542A.006’s

mandate that an agent be dismissed with prejudice dictates that Advanced

had no possibility of recovery against him. Taking our holdings in Crockett

and Flagg together, the answer to this case becomes clear: because Warren

was improperly joined at the time of removal, Acadia’s removal was proper.

Our recent decision in Hoyt v. Lane Construction Corp. confirms this

analysis. 927 F.3d 287 (5th Cir. 2019). In that case, the Texas plaintiffs sued

three defendants, two of whom were Texas residents and one of whom was

not, in state court. Id. at 291. The plaintiffs voluntarily dismissed one in-

state defendant, and the state court granted another in-state defendant’s

motion for summary judgment. Id. at 292. The out-of-state defendants then

removed to federal court. Id. The plaintiffs moved to remand the case to

state court, arguing (as relevant here) that the state-court’s grant of an in-

state defendant’s motion for summary judgment could not serve as the basis

for removal because it violated the voluntary-involuntary rule. Id. On appeal,

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we held that the in-state defendant who was dismissed was improperly

joined, as clearly demonstrated by the state court’s grant of summary

judgment. Id. at 296–97. We further held that because improper joinder is

an exception to the voluntary-involuntary rule, that rule did not bar removal

in this case. Id. If the state court’s post-filing, pre-removal ruling dismissing

an in-state defendant can make a case removable, so too can a § 542A.006

election, which eviscerates any claim against an agent. Advanced attempts

to distinguish Hoyt by arguing that the state court’s ruling only confirmed

that the in-state defendant had been improperly joined at the time suit was

filed. But as we stated in Flagg, “the district court must examine the

plaintiff’s possibility of recovery against that defendant at the time of

removal.” 819 F.3d at 137 (emphasis in original).

Advanced makes a second, and related, argument based on the

language of § 542A.006.2 The statute provides that when an insurer elects

to accept responsibility for an agent before an action is filed, “no cause of

action exists against the agent related to the claimant’s claim, and, if the

claimant files an action against the agent, the court shall dismiss that action

with prejudice.” TEX. INS. CODE § 542A.006(b). But when an insurer elects

to accept responsibility for an agent after an action is filed, the statute

provides that “the court shall dismiss the action against the agent with

prejudice.” Id. § 542A.006(c). Advanced argues that because Acadia

elected to accept responsibility for Warren after suit was filed, Warren was

properly joined as § 542A.006(c), rather than § 542A.006(b), applies, and

2

Advanced arguably raised this argument for the first time at oral argument. This

argument is not clearly framed, and is in tension with, Advanced’s opening brief.

Generally, we do not consider arguments raised for the first time at oral argument. See

Martinez v. Mukasey, 519 F.3d 532, 545–46 (5th Cir. 2008). But because some of the cases

Advanced cited to clearly rely on this argument, and because district courts are split on this

issue, we find it appropriate to reach the argument here.

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§ 542A.006(c) excludes the language “no cause of action exists against the

agent related to the claimant’s claim.” This dispute has likewise divided

district courts. Some courts have agreed with Advanced that difference

between the language of the subsections is significant. See, e.g., Stephens v.

Safeco Ins. Co. of Ind., No. 4:18-00595, 2019 WL 109395, at *6–7 (E.D. Tex.

Jan. 4, 2019). Others have found the difference insignificant as

§ 542A.006(c) still requires a court to dismiss the claim against the insurer

with prejudice. See, e.g., Electro Grafix, Corp. v. Acadia Ins. Co., No. SA-18-

CA-589-XR, 2018 WL 3865416, at *3-4 (W.D. Tex. Aug. 14, 2018).

We hold that Advanced’s argument is unavailing because it fails to

consider Flagg’s command that “the district court must examine the

plaintiff’s possibility of recovery against that defendant at the time of

removal.” 819 F.3d at 137 (emphasis in original). Because Acadia elected to

accept liability for Warren before removal, even though suit had already been

filed, the statute required that “the court shall dismiss the action against the

agent with prejudice.” TEX. INS. CODE § 542A.006(c). At the time of

removal, then, it would have been proper for the district court to find that

“there is no possibility of recovery by [Advanced] against an in-state

defendant”—here, Warren. Smallwood, 385 F.3d at 573. Accordingly, the

differences between §§ 542A.006(b) and 542.006(c) are not material as long

as the insurer elects to accept liability for the agent before removal.

III.

We now consider whether the district court erred in granting

summary judgment.3 We review a grant of a motion for summary judgment

3

Appellant argues that the district court improperly struck the declarations of

Peter de la Mora and Art Boudin. Because we find the district court erred in granting

summary judgment based on other record evidence, we need not reach this question.

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de novo and apply the same standard as the district court, viewing the

evidence in the light most favorable to the nonmovant. First Am. Title Ins.

Co. v. Cont’l Cas. Co., 709 F.3d 1170, 1173 (5th Cir. 2013). Summary

judgment is appropriate where “there is no genuine dispute as to any material

fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV.

P. 56(a). “A dispute about a material fact is genuine if the evidence is such

that a reasonable jury could return a verdict for the nonmoving party.” Stults

v. Conoco Inc., 76 F.3d 651, 654 (5th Cir. 1996) (quoting Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986)) (cleaned up). “Courts do not disfavor

summary judgment, but, rather, look upon it as an important process through

which parties can obtain a ‘just, speedy and inexpensive determination of

every action.’” Goldring v. United States, 15 F.4th 639, 644 (5th Cir. 2021)

(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986)).

The district court essentially granted summary judgment on

Advanced’s policy breach claim for two reasons. First, the district court

credited Acadia’s investigation over Advanced’s investigation, essentially

finding that Hurricane Harvey did not cause Advanced’s damages. Second,

the district court found that because Advanced could not differentiate its pre-

existing losses from its Hurricane Harvey losses, its claim fails under Texas’s

concurrent causation doctrine. We address each argument in turn.

Because we have diversity jurisdiction over this suit, we apply Texas

law. Greenwich Ins. Co. v. Capsco Indus., Inc., 934 F.3d 419, 422 (5th Cir.

2019). In a claim for breach of an insurance contract, Texas law requires the

insured to prove: “(1) the existence of a valid contract; (2) performance or

tendered performance by the plaintiff; (3) breach of the contract by the

defendant; and (4) damages sustained by the plaintiff as a result of the

breach.” Certain Underwriters at Lloyd’s of London v. Lowen Valley View,

L.L.C., 892 F.3d 167, 170 (5th Cir. 2018) (quoting Smith Int’l., Inc. v. Egle

Grp., LLC, 490 F.3d 380, 387 (5th Cir. 2007)) (internal quotation marks

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omitted). The view taken by the district court seems to have been that Acadia

did not breach the contract because it properly denied Advanced’s claim

based on Watson’s report and Warren’s recommendation.

The question before us is whether Advanced has put forth sufficient

summary judgment evidence to create a disputed issue of material fact

regarding whether the damage to the building came from a covered cause,

here, wind from Hurricane Harvey. We hold that it has. Specifically,

Advanced points to the testimony of Thomas Ross, a public adjuster, who

stated that the roofing system “completely failed,” and that the damage was

“absolutely” caused only by the hurricane. De la Mora, Advanced’s expert,

also testified at his deposition that the damage was caused by Hurricane

Harvey. Finally, the record contains previous reports demonstrating that the

building was in good shape. Viewing this evidence in the light most favorable

to Advanced, a reasonable jury could find that Hurricane Harvey’s winds

were the cause of the damage to the building. To be sure, Acadia offers

evidence to the contrary. But this evidence serves only to create a factual

dispute.

We next turn to the district court’s alternative holding: that the

concurrent causation doctrine bars Advanced’s claim because it cannot

segregate covered losses from non-covered losses.4 Under this doctrine,

4

This Court has recognized the substantial gaps in the concurrent causation

doctrine and, as a result, twice certified questions to the Supreme Court of Texas,

including:

1. Whether the concurrent cause doctrine applies where there is any non-covered

damage, including “wear and tear” to an insured property, but such damage does not

directly cause the particular loss eventually experienced by plaintiffs;

2. If so, whether plaintiffs alleging that their loss was entirely caused by a single,

covered peril bear the burden of attributing losses between that peril and other, non-

covered or excluded perils that plaintiffs contend did not cause the particular loss; and

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“when covered and non-covered perils combine to create a loss, the insured

is entitled to recover that portion of the damage caused solely by the covered

peril.” Dallas Nat’l Ins. Co. v. Calitex Corp., 458 S.W.3d 210, 222 (Tex. App.

2015) (collecting cases). “Because an insured can recover only for covered

events, the burden of segregating the damage attributable solely to the

covered event is a coverage issue for which the insured carries the burden of

proof.” Id. (citing Wallis v. United Servs. Auto. Ass’n, 2 S.W.3d 300, 303

(Tex. App. 1999)). “Failure to segregate covered and noncovered perils is

fatal to recovery.” Id. at 223 (quoting Comsys Info. Tech. Servs., Inc. v. Twin

City Fire Ins. Co., 130 S.W.3d 181, 198 (Tex. App. 2003)) (internal quotation

marks and alternation omitted). An insured may carry its burden by putting

forth evidence demonstrating that the loss came solely from a covered cause

or by putting forth evidence by which a jury may reasonably segregate

covered and non-covered losses. See Travelers Indem. Co. v. McKillip, 469

S.W.2d 160, 162 (Tex. 1971).

Here, the same evidence that supports Advanced’s argument that

Hurricane Harvey caused some of its damage supports its argument that

Hurricane Harvey caused all of the damage. Indeed, both Ross and De la

Mora testified that the hurricane was the sole cause of Advanced’s loss.

3. If so, whether plaintiffs can meet that burden with evidence indicating that the

covered peril caused the entirety of the loss (that is, by implicitly attributing one hundred

percent of the loss to that peril).

Overstreet v. Allstate Vehicle & Prop. Ins. Co., 34 F.4th 496, 497, 499 (5th Cir.

2022), certified question accepted (May 27, 2022), certified question dismissed (Sept. 16,

2022); Frymire Home Servs., Inc. v. Ohio Sec. Ins. Co., 12 F.4th 467, 472 (5th Cir. 2021),

certified question accepted (Sept. 10, 2021), certified question dismissed (Dec. 3, 2021).

Because both Overstreet and Frymire settled after certification, this Court’s questions

regarding when the doctrine applies and a plaintiff’s burden of proof remain unanswered.

This is of no import, however, because our conclusion today does not exclusively rest on

the application of the concurrent causation doctrine.

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Accordingly, because a jury could reasonably find that all of Advanced’s loss

comes from a covered cause, the concurrent causation doctrine does not bar

recovery. See id.

Finally, we turn to Advanced’s bad faith and TPPCA claims. The

district court dismissed Advanced’s bad faith claims because it dismissed

Advanced’s breach of contract claim. The Texas Supreme Court has

described breach of contract and bad faith claims as “largely interwoven.”

USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479, 489 (Tex. 2018).

Accordingly, because we reverse the district court’s dismissal of Advanced’s

breach of contract claim, we find it appropriate to reverse the dismissal of

Advanced’s bad faith claims as well.

For similar reasons, we reverse the district court’s dismissal of

Advanced’s TPPCA claim. To prevail on a TPPCA claim for damages and

interest, an insured must demonstrate the insurer’s (1) liability under the

policy, and (2) failure to comply with the TPPCA. Barbara Techs. Corp. v.

State Farm Lloyds, 589 S.W.3d 806, 812–13 (Tex. 2019). A wrongful rejection

of a claim, if reduced to judgment, can be considered a delay in payment

under the TPPCA. See Higginbotham v. State Farm Mut. Auto. Ins. Co., 103

F.3d 456, 461 (5th Cir. 1997); see also Barbara Techs., 589 S.W.3d at 819–20

(explaining that the TPPCA can apply in cases where “there is a judgment

that the insurer wrongfully rejected the claim”). Accordingly, should

Advanced succeed on its breach claim, it may succeed on its TPPCA claim

as well. We therefore reverse the dismissal of this claim.

In sum, we find that summary judgment was not warranted on

Advanced’s breach of contract claim given the evidence Advanced has put

forth. This conclusion requires reversal of the district court’s dismissal of

Advanced’s other claims.

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IV.

For the foregoing reasons, we AFFIRM the district court’s denial of

the motion to remand, REVERSE the grant of summary judgment on

Advanced’s claims, and REMAND the matter to the district court for

proceedings consistent with this opinion.

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Kurt D. Engelhardt, Circuit Judge, concurring:

I join the panel’s opinion in full because it properly applies this court’s

binding precedents. I write separately to highlight an important implication

of this decision. Specifically, our holding all but eviscerates the voluntary-

involuntary rule. As our opinion explains, that rule holds that “‘an action

nonremovable when commenced may become removable thereafter only by the

voluntary act of the plaintiff.’” Crockett v. R.J. Reynolds Tobacco Co., 436 F.3d

529, 532 (5th Cir. 2006) (quoting Weems v. Louis Dreyfus Corp., 380 F.2d 545,

547 (5th Cir. 1967)) (emphasis added). The voluntary-involuntary rule is

derived from century-old Supreme Court caselaw. See Powers v. Chesapeake

& Ohio Ry. Co., 169 U.S. 92 (1898); Am. Car & Foundry Co. v. Kettelhake, 236

U.S. 311 (1915). And it has been firmly established in the Fifth Circuit at least

since Weems, 380 F.2d at 547, where we held that the voluntary-involuntary

rule survived the enactment of 28 U.S.C. § 1446(b).

Despite this storied history, for practical purposes the voluntary-

involuntary rule does not survive our ruling today. If, as here, a defendant

can take a post-filing, pre-removal action which the negates the claim against

the in-state defendant, thereby triggering the improper joinder “exception,”

then the voluntary-involuntary rule does not exist in practice.1

As our opinion explains, this outcome is dictated by our intervening

decisions in Crockett, 436 F.3d at 532, which held that improper joinder is an

1

I note that some district courts have suggested that our intervening caselaw since

Weems has only cabined the voluntary-involuntary rule to cases where there is a reasonable

“possibility of some court restoring an in-state defendant to the case, which would undo

federal diversity jurisdiction.” Valverde v. Maxum Cas. Ins. Co., 558 F. Supp. 3d 385, 398

(S.D. Tex. 2021). But the voluntary-involuntary rule has always been based in part on a

policy of favoring a plaintiff’s right to determine the removability (and jurisdiction) of his

or her case. See Insinga v. LaBella, 845 F.2d 249, 253–54 (11th Cir. 1988) (per curiam)

(explaining how such a policy is rooted in the Supreme Court’s early jurisprudence on the

voluntary-involuntary rule).

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exception to voluntary-involuntary rule, and Flagg v. Stryker Corp., 819 F.3d

132, 137 (5th Cir. 2016) (en banc), which emphasized the need to focus our

improper joinder analysis on the facts as they stood at the time of removal.

Neither case explicitly overruled the voluntary-involuntary rule, but reading

those holdings together requires effectively overruling it in this case, even

though the rule existed decades before either decision.

Moreover, both Crockett and Flagg have been the subject of criticism,

particularly for how their broad holdings apply to cases like this one. District

courts have complained that Crockett’s characterization of improper joinder

as an “exception” to the voluntary-involuntary rule is misleading, as they

should be viewed as separate but sometimes competing doctrines. See, e.g.,

Morgan v. Chubb Lloyds Ins. Co. of Tex., 541 F. Supp. 3d 754, 763–64 (N.D.

Tex. 2021). Indeed, the sole authority Crockett cited to hold that the

characterization of improper joinder as an exception to the voluntary-

involuntary rule is “settled law” is the Eleventh Circuit case Insinga. See

Crockett, 436 F.3d at 532 n.2. But that case dealt with a different situation

involving a defendant entitled to sovereign immunity. The Insinga court

therefore emphasized that the case “involve[d] a determination by the [state]

court that the resident defendant was never properly before the court, rather

than a determination that the court had jurisdiction of that defendant but that

the case against him, although not frivolous, was not meritorious.” 845 F.3d

at 254–55 (emphasis added).

District courts have also implicitly criticized Flagg’s requirement that

we focus on jurisdictional facts as they stood at the time of removal in

improper joinder cases. See Stephens v. Safeco Ins. Co. of Ind., No. 4:18-cv-

595, 2019 WL 109395, at *5 (E.D. Tex. Jan. 4, 2019) (“Whether a non-

diverse defendant is improperly joined is a binary question; the defendant is

either a proper party when joined to [the] suit or the defendant is an improper

party when joined to the suit. . . . It does not follow that a non-diverse

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defendant that is initially properly joined may become initially improperly

joined.”). And despite the Flagg court’s broad language, that case’s focus

was on whether post-removal events could revive a claim against an in-state

defendant, not whether pre-removal (but post-filing) events could mandate

removal. But whatever the faults of Crockett and Flagg, they bind this court

today.

Our precedents in this field have flummoxed parties and district

courts alike. I hope that our decision today offers some clarity. But I

recognize that, given the wicked web our caselaw weaves, these concerns may

merit further consideration in a future appropriate case.

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