Johnson v. C H Wilkinson Physician Network, 1:17-cv-00534

Plaintiff Tina Johnson sued five defendants in Louisiana state court alleging discriminatory discharge under La. R.S. 23:323 and sought over $1,000,000 in damages.
Defendants removed to federal court asserting diversity jurisdiction, claiming the defendant employer C. H. Wilkinson Physician Network is domiciled in Irving, Texas.
The notice of removal did not specify the Network’s state of incorporation or explicitly state its principal place of business.
The removal alleged the other four defendants are Louisiana citizens but argued they were improperly joined and thus their citizenship should be ignored.
The court, sua sponte, directed the Network to clarify its state of incorporation within 30 days and gave Plaintiff a deadline to move to remand if she contests the improper-joinder assertion.
The court warned that failure to timely challenge improper joinder would be treated as concession, leading to dismissal without prejudice of the four Louisiana defendants and progression to scheduling.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Sufficiency of citizenship allegations for diversity	Johnson asserts case should remain in state court (remand) if diversity not established	Network contends it is domiciled in Texas and asserts diversity jurisdiction	Court held pleadings inadequate; Network must state incorporation or court will interpret domiciled-in-Texas as incorporation in Texas absent clarification
Standard for alleging corporate citizenship	N/A (burden on party removing)	Network relied on statement of Texas domicile but omitted formal incorporation/principal-place details	Court emphasized strict Fifth Circuit rule requiring specific allegations of incorp. and principal place of business
Improper joinder of non-diverse defendants	Johnson can show a reasonable basis to recover against the four Louisiana defendants	Network contends the four were improperly joined and their citizenship should be ignored	Court required Johnson to move to remand and show reasonable basis by deadline; if she does not, court will treat joinder as improper and dismiss those defendants without prejudice
Court’s duty to resolve subject-matter jurisdiction sua sponte	N/A	Network relied on removal; court must nevertheless ensure jurisdictional facts are adequate	Court reaffirmed its obligation to determine jurisdiction and improper joinder on its own initiative

Joiner v. Diamond M Drilling Co., 677 F.2d 1035 (5th Cir. 1982) (pleadings must state corporate place of incorporation and principal place of business to establish diversity)
Howery v. Allstate Ins. Co., 243 F.3d 912 (5th Cir. 2001) (Fifth Circuit requires strict adherence to diversity pleading rules)
Settlement Funding, LLC v. Rapid Settlements, Ltd., 851 F.3d 530 (5th Cir. 2017) (jurisdictional allegations must be precise and resolved early to avoid wasted litigation)
Smallwood v. Illinois Central R.R. Co., 385 F.3d 568 (5th Cir. 2004) (proper framework for evaluating improper joinder)
Gasch v. Hartford Acc. & Indem. Co., 491 F.3d 278 (5th Cir. 2007) (court must independently determine subject-matter jurisdiction)
Int’l Energy Ventures Mgmt., L.L.C. v. United Energy Grp., Ltd., 818 F.3d 193 (5th Cir. 2016) (dismissal of improperly joined defendants must be without prejudice)