Combs v. Fortune Hi-Tech Marketing, Inc.
3:11-cv-01322
N.D. Tex.Aug 30, 2011Background
- Plaintiff Suzanne Combs sues Fortune Hi-Tech Marketing, Inc. in Texas state court for breach of contract and fraud.
- Fortune removed the case to the Northern District of Texas alleging federal jurisdiction under 28 U.S.C. § 1332 (diversity).
- Combs was hired in 2008 as an independent representative and promoted to an Executive position in 2009; her income allegedly dropped due to Fortune’s actions.
- Combs alleged Fortune re-coded or re-assigned sponsored representatives, reducing her income from bonuses and residuals.
- Combs’ income suspension occurred on April 6, 2011; she filed suit in state court on May 12, 2011.
- Fortune removed on June 16, 2011; Combs moved to remand on July 6, 2011; the court evaluates diversity and removal defects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether complete diversity exists between the parties | Combs domiciled in North Carolina; Fortune domiciled in Kentucky. | Fortune asserts complete diversity exists; Combs’ domicile contested. | Complete diversity exists; Combs domiciled in North Carolina, Fortune in Kentucky. |
| Whether Fortune’s removal properly pleaded diversity at filing/removal | Removal should plead diversity at the time of filing and at removal. | Removal based on diversity; adequate to allege at removal. | Defect in notice; remand not required due to amendment need; Court orders amended removal. |
| Whether the amount in controversy requirement is satisfied | Not in dispute; exceeds $75,000. | Argues jurisdiction concerns only if diversity is present. | AIC satisfied; jurisdiction adequate apart from diversity issue. |
| Procedural consequence of defects in removal | If defects exist, remand is proper. | Defects can be cured by amendment rather than remand. | Amendment permitted; Fortune must amend within three days. |
Key Cases Cited
- Gutierrez v. Flores, 543 F.3d 248 (5th Cir. 2008) (federalism and strict construction of removal statutes)
- Burden v. General Dynamics Corp., 60 F.3d 213 (5th Cir. 1995) (burden on removing party to show federal jurisdiction)
- Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568 (5th Cir. 2004) (control of removal disputes; complete diversity analysis)
- Lincoln Property Co. v. Roche, 546 U.S. 81 (2005) (complete diversity requires no shared domicile with any defendant)
- Preston v. Tenet Healthsystem Mem'l Med. Ctr., Inc., 485 F.3d 793 (5th Cir. 2007) (domicile analysis for individuals; corporate citizenships)
- In re Allstate Ins. Co., 8 F.3d 219 (5th Cir. 1993) (removal irregularities may be cured by amendment, not remand)
- D.J. McDuffie, Inc. v. Old Reliable Fire Ins. Co., 608 F.2d 145 (5th Cir. 1979) (removal defect remedies and procedures)