Opinion
PE: 23-CV-00035-DC-DF
07-26-2024
WATERBRIDGE TEXAS OPERATING, LLC and WATERBRIDGE HOLDINGS, LLC, Plaintiffs, v. PETRO GUARDIAN, LLC, Defendants.
REPORT AND RECOMMENDATION OF THE U.S. MAGISTRATE JUDGE
DAVID B. FANNIN UNITED STATES MAGISTRATE JUDGE
TO THE HONORABLE DAVID COUNTS, U.S. DISTRICT JUDGE:
BEFORE THE COURT is Waterbridge Texas Operating, LLC and Waterbridge Holdings, LLC (“Plaintiffs”) Opposed Motion to Remand to State Court (“Motion to Remand”) and Motion to Strike. (Doc. 6). This matter is before the undersigned Magistrate Judge through a standing order of referral pursuant to 28 U.S.C. § 636 and Appendix C of the Local Rules for the Assignment of Duties to United States Magistrate Judges. After due consideration and a hearing, it is ORDERED that Plaintiffs' Motion to Strike is DENIED. (Doc. 6). The Court also RECOMMENDS Plaintiffs' Motion to Remand be GRANTED. Id.
I. Background
This case poses what should have been a simple question of domicile. Plaintiffs are two LLCs doing business in Texas. (Doc. 1-5 at 1). Defendant Petro Guardian, LLC (“Petro Guardian”) is a Louisiana LLC with two members: Robert F. Morris, III and Stephen D. Morris. (Docs. 1-5 at 1; 12 at 10). Plaintiffs filed two cases against Petro Guardian in the 143rd Judicial District Court of Reeves County, Texas: the Central Reeves case and the Zenyatta case. (Doc. 6 at 2). On September 15, 2023, Petro Guardian removed both cases to this Court based on diversity jurisdiction and moved to consolidate. (Docs. 6 at 3; 13). The Court found Petro Guardian improperly removed the Central Reeves case and remanded. Waterbridge Tex. Operating, LLC v. Petro Guardian, LLC, No. PE:23-CV-00034, 2024 WL 1580199 (W.D. Tex. Apr. 11, 2024), R. & R. adopted, 2024 WL 1994261 (W.D. Tex. May 6, 2024). This rendered the Motion to Consolidate moot and left only the Zenyatta case before the Court.
Plaintiffs now move to remand the Zenyatta case and strike the affidavit submitted with Petro Guardian's removal notice. (Doc. 6). The parties dispute Petro Guardian's domicile. (See docs. 6, 12). Plaintiffs assert removal was improper because Petro Guardian failed to “name all of its members” in the removal notice and failed to “establish the citizenship of all its members at the time the lawsuit commenced.” (Doc. 6 at 12). Petro Guardian, relying on a series of affidavits from Stephen Morris and Robert Morris, counters that removal was proper because it met its burden to establish complete diversity. (Doc. 12 at 2). Petro Guardian specifically alleges both Stephen Morris and Robert Morris were Louisiana citizens at the time of filing and removal. (Doc. 12 at 2). Thus, according to Petro Guardian, this case-the Zenyatta case-is removable for diversity of citizenship. Id. at 11.
The undersigned issued a Report and Recommendation on May 24, 2024, recommending Plaintiffs' Motion to Remand and Motion to Strike be denied. (See doc. 23). Plaintiffs filed an objection. (See doc. 24). The undersigned withdrew the original Report and Recommendation on June 7, 2024. (See doc. 25). The Court then ordered supplemental briefing. Both parties filed their supplemental briefing. (See docs. 27, 29). The matter is thus ripe for review.
II. Legal Standard
A defendant may remove a civil action brought in state court if the district court has original jurisdiction through either diversity of citizenship or existence of a federal question. WMS, LLC v. Allied Prop. & Cas. Ins., 244 F.Supp.3d 567, 570 (W.D. Tex. 2017). Diversity of citizenship requires the amount in controversy to exceed $75,000 and complete diversity among the parties. 28 U.S.C. § 1332(a). “In cases removed from state court, diversity of citizenship must exist both at the time of filing in state court and at the time of removal to federal court.” Coury v. Prot, 85 F.3d 244, 249 (5th Cir. 1996).
If removed, however, a party may move to remand. 28 U.S.C. § 1447(c). On a motion to remand, the removing party bears the burden of establishing by a preponderance of evidence that federal jurisdiction exists, and removal was not procedurally defective. New Orleans & Gulf Coast Ry. Co. v. Barrois, 533 F.3d 321, 327 (5th Cir. 2008); WMS, 244 F.Supp.3d at 570. “Where there is a defective allegation of citizenship, a removing party may supplement its allegations to cure the defect.” Molina v. Wal-Mart Stores Tex., LP, 535 F.Supp.2d 805, 807 (W.D. Tex. Feb. 27, 2008) (citing D.J. McDuffie, Inc. v. Old Reliable Fire Ins., 608 F.2d 145, 147 (5th Cir. 1979)). Any doubt as to whether removal was proper should be resolved in favor of remand. 28 U.S.C. § 1447(c).
III. Discussion
A. Plaintiffs' Motion to Strike Is Denied
Plaintiffs move to strike the affidavit filed with Petro Guardian's removal notice under Federal Rule of Civil Procedure 12(f). (Doc. 6 at 4). Rule 12(f) allows the court to strike an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter from the pleading. FED. R. CIV. P. 12(f). Rule 12(f) applies only to pleadings as defined by Rule 7(a). Stokes v. United States, No. 17-CV-115, 2017 WL 11717525, at *1 (W.D. Tex. Dec. 11, 2017); FED. R. CIV. P. 7(a). Under Rule 7(a), affidavits are not pleadings, and thus not subject to Rule 12(f). See United States v. Coney, 689 F.3d 365, 379 n.5 (5th Cir. 2012) (citing 5C Charles Alan Wright et al., FEDERAL PRACTICE & PROCEDURE 1380, 1380 n.8.50); Morehouse v. Ameriquest Mortg. Co., No. 05-CV-75, 2005 WL 8160875, at *2 (E.D. Tex. July 14, 2005) (“[Affidavits] are not materials that can be properly stricken under a procedural Rule 12(f) motion.”); see also NexBank, SSB v. Bank Midwest, N.A., No. 12-CV-1882, 2012 WL 4321750, at *2 (N.D. Tex. Sept. 21, 2012) (denying a motion to strike a notice of removal because it was not a pleading under Rule 7(a)). Since affidavits are not considered pleadings under Rule 7(a), Rule 12(f) does not apply to the affidavit filed with Petro Guardian's removal notice.
Further, even if Rule 12(f) did apply, Plaintiffs have not demonstrated that the affidavit is redundant, immaterial, impertinent, or scandalous. A federal court “has wide, but not unfettered, discretion” in determining what evidence to consider for jurisdictional determinations. Coury, 85 F.3d at 249. Such evidence may include affidavits. Id.; see Molina, 535 F.Supp.2d 805 (W.D. Tex. 2008) (“A court may consider information contained in an affidavit filed subsequent to the notice of removal to determine whether there is an adequate basis for removal.”). For these reasons, it is ORDERED that the Motion to Strike is DENIED.
Plaintiffs contend that federal courts cannot look beyond the pleadings to determine diversity jurisdiction, citing language from the Supreme Court's decision in Provident Savs. Life Assur. Soc. of N.Y. v. Ford, 114 U.S. 635 (1885). (Doc. 6 at 5). But Provident applies to cases with assignment of a complete cause of action to defeat removal. Grassi v. Ciba-Geigy, Ltd., 894 F.2d 181, 182-83 (5th Cir. 1990). The Fifth Circuit has explained that the first Provident proposition-that federal courts cannot look beyond the pleadings- “was largely abandoned in subsequent decisions of [the Supreme Court], decisions which recognize that federal courts do possess some inherent authority to look beyond the pleadings...to protect a litigant's right to diversity jurisdiction.” Id. at 183.
Plaintiffs also cite to S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489 (5th Cir. 1996), contending that a selfserving affidavit is not an “other paper” under 28 U.S.C. § 1446(b)(3). (Doc. 6 at 4-5). Yet Petro Guadian timely removed this case under 28 U.S.C. § 1446(b)(1)-not 28 U.S.C. § 1446(b)(3). So Petro Gurdian does not contend- nor rely-on the “other paper” doctrine for removal. This is different than the Central Reeves case where Petro Guardian relied on the “other paper” doctrine because the 30-day window under 28 U.S.C. § 1446(b)(1) lapsed. See Waterbridge Tex. Operating, 2024 WL 1580199, at *3-4.
B. Plaintiffs' Motion to Remand Should Be Granted
Petro Guardian removed this action pursuant to 28 U.S.C. § 1446(b)(1). As the removing party, Petro Guardian has the burden of pleading diversity of citizenship, and if diversity is challenged, Petro Guardian also has the burden to defeat the challenge. Guerrero v. State Farm Mut. Auto. Ins., 181 F.3d 97, 97 (5th Cir. 1999) (citing Ray v. Bird & Son & Asset Realization Co., 519 F.2d 1081, 1082 (5th Cir. 1975)). To defeat the challenge, Petro Guardian must show by a preponderance of evidence that diversity of citizenship exists. New Orleans & Gulf Coast Ry. Co., 533 F.3d at 327; Mendez v. FCA U.S. LLC, No. SA:15-CV-00340, 2015 WL 4041669, at *2 (W.D. Tex. June 30, 2015). Plaintiffs contend Petro Guardian “has consistently failed to meet its burden” to establish diversity of citizenship. (Doc. 29 at 2).
It is undisputed that Plaintiffs filed this case on August 11, 2023. (Doc. 1 at 1). Petro Gurdian was served the Original Petition on August 22, 2023. (Doc. 1 at 2). Petro Guardian removed the case on September 15, 2023. (Doc. 1 at 1). Petro Guardian thus removed this case within the 30-day window allowed under 28 U.S.C. § 1446(b)(1). It is also undisputed that the amount in controversy exceeds $75,000. (Doc. 12 at 9 n.3).
Petro Guardian takes issue with Plaintiffs' argument that Petro Guardian “must establish the citizenship of all its members conclusively.” (Docs. 27 at 7 n.7; 24 at 12). It is well established in the Fifth Circuit that, when a party removes an action based on diversity, the removing party must distinctly and affirmatively allege the citizenship of the parties. Settlement Funding, LLC v. Rapid Settlements, Ltd., 851 F.3d 530, 536 (5th Cir. 2017); Stafford v. Mobil Oil Corp., 945 F.2d 803, 804-05 (5th Cir. 1991). A party may supplement its citizenship allegations to cure a jurisdictional defect. Molina, 535 F.Supp.2d at 807. The removing party “bears the burden of demonstrating that federal jurisdiction exists...by a preponderance of the evidence.” New Orleans & Gulf Coast Ry. Co., 533 F.3d at 327.
1. Petro Guardian's Removal Notice Fails to Allege Complete Diversity
Petro Guardian faces two issues. First, Petro Guardian does not adequately plead diversity jurisdiction in its removal notice. Petro Guardian is an LLC. “[T]he citizenship of an LLC is determined by the citizenship of all its members.” MidCap Media Fin., LLC v. Pathway Data, Inc., 929 F.3d 310, 314 (5th Cir. 2019) (citing Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008)). So to adequately allege complete diversity in the removal notice, Petro Guardian needs to “distinctly and affirmatively” allege the citizenship of its two members:
Stephen Morris and Robert Morris. Howery v. Allstate Ins., 243 F.3d 912, 919 (5th Cir. 2001); SXSW, LLC v. Federal Ins., 83 F.4th 405, 407 (5th Cir. 2023). Petro Guardian does not. Instead, Petro Guardian incorrectly alleges complete diversity as if it were a corporation rather than an LLC. (Doc. 1 at 3); MidCap, 929 F.3d 314 (“[A]llegations regarding the citizenship of a corporation must set out the principal place of business of the corporation as well as the state of its incorporation.”). In fact, nowhere in the removal notice nor the Original Answer does Petro Guardian identify its members or their domiciles. (See docs. 1 at 4; 7-1 at 2). Petro Guardian thus fails to adequately allege complete diversity in its removal notice. See IFG Port Holdings, LLC. v. Lake Charles Harbor & Terminal Dist., 82 F.4th 402, 409 (5th Cir. 2024); Molina, 535 F.Supp.2d at 807 (“Because Defendant does not identify its members or their citizenship, the Court finds its allegations regarding citizenship to be defective.”).
“Defendant Petro Guardian is a Louisiana limited liability company with its principal place of business in Louisiana and is a citizen of the State of Louisiana for diversity purposes. Accordingly, Petro Guardian is of diverse citizenship to Plaintiffs.” (Doc. 1 at 3).
In the Original Answer, Petro Guardian “denies it has Texas members residing in Midland, Texas” but does not state the citizenship of either member. (Doc. 7-1 at 2). Such a general allegation without factual specificity is insufficient. See Knighten Mach. & Serv., Inc. v. Aqua Terra Permian, LLC, 2021 WL 2930093, at *2 (W.D. Tex. Feb 25, 2021).
2. Petro Guardian's Supplemental Affidavits Fail to Allege Complete Diversity
The Court turns to Petro Guardian's second issue: its several attempts to rectify the defect in its diversity of citizenship allegations. “Where there is a defective allegation of citizenship,” as in this case, “a removing party may supplement its allegations to cure the defect.” Molina, 535 F.Supp.2d at 807 (citing D.J. McDuffie, Inc., 608 F.2d at 147); see also 28 U.S.C. § 1653. The court is permitted to consider post-removal affidavits to determine whether removal was proper. Molina, 535 F.Supp.2d at 807; see Donegan v. Toro Co., No. EP-22-CV-00332, 2022 WL 17365275, at *6 (W.D. Tex. Nov. 30, 2022) (finding an affidavit submitted with defendant's response to plaintiff's motion to remand sufficient to show diversity). Here, Petro Guardian supplements its allegations with three affidavits: two from Stephen Morris and one from Robert Morris.
Plaintiffs direct the Court's attention to the Supreme Court's decision in Grupo Dataflux, 541 U.S. at 570-75. (Doc. 14 at 4-5). There the Supreme Court reiterated the long-held rule that “[w]here there is no change of party, a jurisdiction depending on the condition of the party is governed by that condition, as it was at the commencement of the suit.” Id. at 576 (alteration and emphasis in original). Here, the Court seeks to determine Stephen Morris's domicile when the suit began, aligning with Grupo. Plaintiffs also cite to Settlement Funding, 851 F.3d at 536-37, but there the Fifth Circuit did not reach the issue of whether a post-removal affidavit could be considered because the party providing the affidavit admitted it was erroneous. (Doc. 14 at 5).
Attached to Petro Guardian's Response is a sworn statement from Robert Morris (“the Robert Morris Affidavit”). (See doc. 12-2). Therein Robert Morris identifies the “two individual-members” that own Petro Guardian as Robert Morris and Stephen Morris. Id. at 2. He also affirms both members reside in Louisiana and intend to remain Louisiana residents indefinitely. Id. at 2-3. At first blush, the Robert Morris Affidavit appears to rectify Petro Guardian's failure to “distinctly and affirmatively” allege the citizenship of its two members in the removal notice. See Molina, 535 F.Supp.2d at 807 (finding an affidavit with the citizenship of a limited partnership's members to remedy the failure to state the citizenship of the members in the removal notice). But Plaintiffs argue that Petro Guardian fails to remedy its defective allegations because it never states when any of its members began residing in Louisiana. (See docs. 6 at 13; 14 at 5; 29 at 4).
The Robert Morris Affidavit was the second affidavit Petro Guardian submitted, but it was the first time Petro Guardian identified its members. (See doc. 1-7). The First Stephen Morris Affidavit was submitted with the removal notice but it failed to identify Petro Guardian's members. Id.
Diversity of citizenship must exist both at the time of filing in state court and at the time of removal to federal court. Coury, 85 F.3d at 249. For Petro Guardian to meet its burden, it must show by a preponderance of evidence that both Robert Morris and Stephen Morris were citizens of states other than Texas on August 11, 2023 (filing) and on September 15, 2023 (removal). Ashford v. Aeroframe Servs., LLC, 907 F.3d 385, 386-87 (5th Cir. 2018) (citing Coury, 85 F.3d at 248-49); Midcap, 929 F.3d at 314. If Petro Guardian shows diversity existed at filing and removal, then future changes in the Morris' domicile will not destroy diversity. Coury, 85 F.3d at 249; Beneplace, Inc v. Pitney Bowes, Inc, No. A-15-CV-65, 2016 WL 11582929, at *4 (W.D. Tex. June 30, 2016), R & R adopted, 2016 WL 11582930 (W.D. Tex. July 29, 2016).
For an individual, “citizenship has the same meaning as domicile,” and “the place of residence is prima facie the domicile.” MidCap, 929 F.3d at 313 (quoting Stine v. Moore, 213 F.2d 446, 448 (5th Cir. 1954)). That said, an allegation of residency alone does not satisfy an allegation of citizenship. Accordant Commc'ns, LLC v. Sayers Constr., LLC, Nos. 20-50169, 2050513, 2020 WL 7663827, at *2 (5th Cir. Dec. 3, 2020) (per curiam) (citing MidCap, 929 F.3d at 314). Rather, for individuals, domicile requires “not only residence in fact but also the purpose to make the place of residence one's home.” Id. In other words, to establish a person's domicile or citizenship, a removing party must show (1) physical presence in the state and (2) an intent to remain indefinitely. Preston v. Tenet Healthsystem Mem'l Med. Ctr., 485 F.3d 793, 797-98 (5th Cir. 2007).
Federal courts also consider several non-determinative factors when determining domicile. Coury, 85 F.3d at 251. These factors include where a person “exercises civil and political rights, pays taxes, owns real and personal property, has a driver's license and other licenses, maintains bank accounts, belongs to clubs and churches, has places of business or employment, and maintains a home for his family.” Id. Statements of intent to remain in a domicile or establish a new one are entitled to little weight if conflicting with objective facts. Acridge v. Evangelical Lutheran Good Samaritan Soc., 334 F.3d 444, 448 (5th Cir. 2003).
The Court turns to the three supplemental affidavits to determine whether Petro Guardian bears its burden to show Robert and Stephen Morris were domiciled in Louisiana at the time of filing and removal. The Court refers to the three affidavits as: (1) the First Stephen Morris Affidavit, (2) the Robert Morris Affidavit, and (3) the Second Stephen Morris Affidavit.
When the Court decided the Central Reeves case, there were only two affidavits. Now there are three affidavits and two of those affidavits are sworn statements by Stephen Morris, so the Court renames the affidavits for clarity.
a. Stephen Morris
Petro Guardian provides two sworn statements from Stephen Morris. The first statement (“First Stephen Morris Affidavit”) was submitted with Petro Guardian's removal notice and again with its Response. (See docs. 1-7; 12-1). Dated September 14, 2023, the First Stephen Morris Affidavit only provides that at the time of removal-September 15, 2023-Stephen Morris was one of Petro Guardian's members and he resided in Louisiana. Id. at 2 (“Neither me nor any of the other members of Petro Guardian, LLC reside in Midland, Texas nor are any of the members of Petro Guardian, LLC residents of the State of Texas.”); see Knighten Mach. & Serv., Inc. v. Aqua Terra Permian, LLC, 2021 WL 2930093, at *2 (W.D. Tex. Feb 25, 2021) (asserting no members of an LLC were Texas citizens or maintained a principal place of business in Texas was factually insufficient). This does not rectify Petro Guardian's defective citizenship allegations. It provides no information on Robert Morris; he is not even named. And it provides no information on Stephen Morris's citizenship before September 14, 2023. See Waterbridge Tex. Operating, LLC, 2024 WL 1580199, at *5. Thus, the First Stephen Morris Affidavit does not remedy Petro Guardian's failure to allege diversity jurisdiction.
After the Court remanded the Central Reeves case, Petro Guardian supplemented its briefing with a second sworn statement from Stephen Morris (“Second Morris Affidavit”). (See doc. 22 at 5-6). Therein Stephen Morris definitively affirms: “Louisiana was my home where I intended to remain at all times between January 2020 and April 2024, until I moved to Mississippi.. .on April 3, 2024.” Id. at 6. The Second Morris Affidavit establishes Stephen Morris's domicile in Louisiana at time of filing and removal.
Turning to the factors above, Stephen Morris affirms between January 2020 and April 2024 he and his wife raised their four children in their Louisiana home on Chamale Drive. Id. He voted in Louisiana, owned personal property in Louisiana, maintained bank accounts in Louisiana, and obtained a Louisiana hunting license between January 2020 and April 2024. Id. Stephen Morris even explains his ties to Texas, stating he “visited Texas less than five times in 2023” and “visited Texas only once in 2024.” (Doc. 22 at 6). He states “[d]ocuments filed with the Texas Secretary of State merely reveal that Petro Guardian has a ‘business address' or ‘registered office'” in Texas. Id. According to Stephen Morris, that property was neither his home nor where he intended to remain when this case was filed and removed. Id. Taken together, the Court finds this sufficient to show Stephen Morris was domiciled in Louisiana both on August 11, 2023 and September 15, 2023.
Stephen Morris moved to Mississippi on April 3, 2024. This does not affect the Court's determination that Stephen Morris was domiciled in Louisiana on August 11, 2023 and September 15, 2023. Changes in domicile after the case is removed do not destroy diversity jurisdiction. Coury, 85 F.3d at 249-50; see also Mletzko v. Dailey, No. EP-20-CV-205, 2020 WL 5820535, at *4-5 (W.D. Tex. Sept. 29, 2020). The Court is also not convinced Stephen Morris's move to Mississippi contradicts his prior intent to remain in Louisiana indefinitely. Those statements were made in September 2023 and October 2023. He moved months after those statements were made.
Yet Plaintiffs contest this finding. Plaintiffs argue Stephen Morris's affidavits contradict Petro Guardian's filings with the Texas Secretary of State. (Doc. 6 at 7). It is true that a “statement of intent is relevant to the determination of domicile,” but “entitled to little weight if [conflicting] with the objective facts.” Coury, 85 F.3d at 251. But there are no conflicting facts here.
Under the Texas Business Organizations Code, “each foreign filing entity” must maintain a registered agent and registered office in Texas. TEX. BUS. ORGS. CODE § 5.201(b)(1)(2)(A). A registered agent is a Texas resident for the purpose of “being served any process, notice, or demand required or permitted by law.” TEX. BUS. ORG. CODE § 5.201(a)(b)(1). Petro Guardian is a foreign LLC in Texas. (Doc. 6-1). As evidenced by this case, Petro Guardian does business in Texas. In compliance with the Texas Business Organizations Code, it has a registered agent, Stephen Morris. (Doc. 1-7 at 2). At most these documents show an allegation of residency, and an allegation of residency alone cannot satisfy an allegation of citizenship. At minimum these documents show Stephen Morris was physically present in Texas. This aligns with the Second Stephen Morris Affidavit in which he affirms he visited Texas in 2023. Thus, these documents shed no light on Stephen Morris's citizenship nor conflict with the objective facts. MidCap, 929 F.3d at 313 (citing Strain v. Harrelson Rubber Co., 742 F.2d 888, 889 (5th Cir. 1984)).
Even so, Petro Guardian still does not meet its burden to show diversity. The Second Stephen Morris Affidavit once again provides no information on Robert Morris's domicile on August 11, 2023 or September 15, 2023. Petro Guardian must show both Stephen Morris and Robert Morris were domiciled in Louisiana at all relevant times to meet its burden.
b. Robert Morris
As mentioned, Petro Guardian attached the Robert Morris Affidavit to its Response. (See doc. 12-2). Dated October 17, 2023, Robert Morris therein affirms he resides in the State of Louisiana at his home located on Delta Lane, which he owns. Id. at 1. He intends to remain in Louisiana indefinitely. Id. Robert Morris also provides his Louisiana driver's license number, but never states when it was issued.
Plaintiffs contend the Robert Morris Affidavit only reveals facts about Robert Morris's citizenship at the time Robert Morris executed the affidavit on October 17, 2023. (Doc. 14 at 5). Plaintiffs thus argue the Robert Morris affidavit “do[es] not address facts as they existed” on August 11, 2023 (filing) or September 15, 2023 (removal). (Docs. 14 at 5; 29 at 4). The Court agrees. Nothing in the Robert Morris Affidavit-or either of Stephen Morris's affidavits-show Robert Morris was domiciled in Louisiana on August 11, 2023 and September 15, 2023. See SXSW, LLC, 83 F.4th 408-09 (holding that diversity at the time of filing could not be determined from documents later filed because the court had no way of knowing whether those later documents reflected an LLC's membership structure at the time of filing); Chambers v. Bielss, No. 08-CV-372, 2008 WL 5683483, at *4 (W.D. Tex. Dec. 8, 2009) (holding that the plaintiff failed to show the defendant was nondiverse when deposition testimony did not specify the defendant moved to Texas before the start of the suit); see also Maldonando v. Bankers Standard Ins., No. 15-6644, 2016 WL 945057, at *2 (E.D. La. Mar. 14, 2016) (finding diversity when the affidavits established defendant was diverse at all relevant times); Nyamtsu v. Melgar, No. H-13-2333, 2013 WL 6230454, at *3 (W.D. Tex. Dec. 2, 2013) (holding that a sworn statement stating defendant's residence and domicile changed prior to the filing and removal showed diversity). Thus, Petro Guardian still does not meet its burden as to Robert Morris.
To put it simply, courts in this district routinely look to affidavits to rectify defects in jurisdictional allegations. See Mendez, 2015 WL 4041669, at *3; Molina, 535 F.Supp.2d at 807; Donegan, 2022 WL 17365275, at *6; Beneplace, Inc, 2016 WL 11582929, at *7. The issue in this case is very simple: no affidavit affirms both Stephen and Robert Morris were Louisiana citizens on August 11, 2023 and September 15, 2023. See Mendez, 2015 WL 4041669, at *3 (finding an affidavit from a party affirming it was not an LLC member at the time of filing or removal sufficient to show diversity); Sloan v. Roybal, No. 22-CV-905, 2023 WL 4938095, at *3 (N.D. Tex. Apr. 28, 2023) (finding an affidavit that defendant has been domiciled in New Mexico since before the suit sufficient to show diversity); Dees v. Singh, No. 17-CV-2885, 2018 WL 4184783, at *3 (N.D. Tex. Aug. 31, 2019) (holding that an affidavit stating a party was domiciled in Canada at the time the action was filed and removed was sufficient to cure a defective removal notice). That is all Petro Guardian needed to affirm; somehow it never does.
3. Petro Guardian's Supplemental Briefing Still Fails to Show Diversity
Petro Guardian now makes its fourth attempt to satisfy its burden. After the original Report and Recommendation was withdrawn, the Court ordered supplemental briefing on a narrow question: Whether the Robert Morris Affidavit sufficiently establishes Robert Morris's domicile at the time the case was filed and removed to federal court. (Doc. 26 at 1). The order limited the supplemental briefing to 10 pages and evidence currently in the record. Id. Petro Guardian goes beyond this narrow scope. For the first time, Petro Guardian submits property records from the St. Tammany Parish Assessor's Office and other public filings asking the Court to take judicial notice. (See doc. 27). Plaintiffs understandably object to Petro Guardian's “late filed evidence” and ask the Court to strike the evidence from the record. (Doc. 29 at 3).
A court may take judicial notice of public records when determining diversity jurisdiction. Swindol v. Aurora Flight Scis. Corp., 805 F.3d 516, 519 (5th Cir. 2015) (accepting public records for diversity determination); DTND Sierra Invs., LLC v. JPMorgan Chase Bank, NA, No. SA-12-CV-1076, 2013 WL 12106228, at *3 (W.D. Tex. Jan. 23, 2013) (accepting tax records to determine amount in controversy). And when it comes to the Court's subject matter jurisdiction, the Court cannot not turn a blind eye to objective evidence. See Arena v. Graybar Elec. Co., 669 F.3d 214 (5th Cir. 2012) (finding a magistrate judge was incorrect to ignore late presented evidence on jurisdiction); see also MidCap, 929 F.3d at 315 (explaining where there is some evidence jurisdiction exists but the record is unclear the record may be supplemented). For these reasons, the Court does not strike Petro Guardian's proffered public filings despite the fact they contradict the Court's Order.
Petro Guardian argues the new public filings confirm “Robert Morris has lived, worked, and paid taxes in Louisiana since at least 2017.” (Doc. 27 at 1). The Court doubts whether the parish tax assessor filings confirm Robert Morris paid property taxes on the Delta Lane property. “[A] tax assessor's constitutional authority does not include tax collection. An assessor is responsible for assessing property for purposes of ad valorem taxes.” Bonvillain v. La. Land & Expl. Co., 702 F.Supp.2d 667, 672 (E.D. La. 2010). Looking at the documents, the Court does not see any evidence of tax payment-only an assessment of the property's value. (See doc. 272).
In any event, the documents show Robert Morris owned the Delta Lane property in 2022 and 2023. Id. at 1, 3. This is the same property Robert Morris refers to as his home on October 17, 2023. (See doc. 27-1 at 1); see Ramsey v. Chhean, No. 20-2557, 2020 WL 7422913, at *4 (E.D. La. Dec. 18, 2020) (listing tax returns and property ownership as evidence of domiciliary intent). Petro Guardian also provides Louisiana and Texas state filings. Those filings show Robert Morris as an officer of Petro Guardian, a Louisiana LLC, since at least 2017. (See doc. 27-3). Pre-suit ownership of a business is domiciliary evidence. See Ramsey, No. 20-2557, 2020 WL 7422913, at *4 (E.D. La. Dec. 18, 2020) (finding a driver's license, vehicle registration, and 2018 establishment of an LLC all evidence of domicile). And unlike Stephen Morris, neither Petro Guardian's Louisiana nor Texas filings list anything other than a Louisiana work address for Robert Morris. (Docs. 6-1 at 1, 27-3, 27-4). Petro Guardian thus contends “[t]he greater weight of the credible evidence confirms that [Robert] Morris's domicile was Louisiana in August 2023, when Plaintiffs filed their lawsuit and in [September] 2023 when Petro Guardian removed this case.” (Doc. 27 at 7).
Petro Guardian stated this case was removed in October 2023. (Doc. 27 at 7). This is incorrect. Assuming it was a typographical error, the Court corrected the date in the quote.
Courts “‘consider[] the entire record to determine whether.. .evidence of residency' is “sufficient to establish citizenship.” Donegan, 2022 WL 17365275, at *5 (quoting Preston, 485 F.3d at 800) (alternations in original). Considering the entire record, Petro Guardian fails to show by a preponderance of evidence that Robert Morris was a Louisiana citizen at the time of filing and removal. That Robert Morris owned and more likely than not paid taxes on the Delta Lane property in 2022 and 2023 does not show Robert Morris considered the Delta Lane property his home on August 11, 2023 and on September 15, 2023. See Allen v. Pittman, No. 18-CV-00632, 2018 WL 6790648, at *3 (W.D. Tex. Nov. 1, 2018) (“[A] party can be domiciled in one state despite owning property in another state.”), R & R adopted, 2018 WL 6795963, (W.D. Tex. Nov. 19, 2018); see Wells Fargo Bank, NA v. Farkas, No. A-15-CV-00165, 2015 WL 6506405, at *2 (W.D. Tex. Oct. 26, 2015) (explaining reliance on public records is appropriate where the public record provides competent proof of citizenship). And while pre-suit ownership of a business is domiciliary evidence, generally it is accompanied by other evidence. See Ramsey, 2020 WL 7422913, at *4 (finding a driver's license, vehicle registration, and 2018 establishment of an LLC all evidence of domicile). Here, the only other evidence Robert Morris provides is his Louisiana driver's license number, but he never states when the driver's license was issued. Nyamtsu, 2013 WL 6230454, at *3 (looking to when a party received a license in the state he claimed as his domicile).
In sum, Petro Guardian bears the burden to show diversity of citizenship. The Fifth Circuit has not adopted a burden-shifting scheme where Plaintiffs must provide conflicting evidence. See Donegan, 2022 WL 17365275, at *5-6 (W.D. Tex. Nov. 30, 2022). “To the contrary, the Fifth Circuit has suggested in a different but related context that a party who bears the burden on a jurisdiction issue cannot ‘ultimately prevail.. .just because the opposing party offer[s] no rebuttal evidence' regarding the party's citizenship[.]” Id. at *6 (citing Preston, 495 F.3d at 800). Despite several attempts and a hearing, Petro Guardian has not met its burden to show Robert Morris was domiciled in Louisiana on August 11, 2023 and September 15, 2023. For this reason, the Court RECOMMENDS Plaintiffs' Motion to Remand be GRANTED. (Doc. 6).
IV. Conclusion and Recommendation
The undersigned RECOMMENDS Plaintiffs' Motion to Remand be GRANTED. (Doc. 6). It is also ORDERED that Plaintiffs' Motion to Strike is DENIED. Id.
It is so ORDERED.
Instructions for Service and Right to Appeal/Object
In the event that a party has not been served by the Clerk with this Report and Recommendation electronically, pursuant to the CM/ECF procedures of this District, the Clerk is ORDERED to mail such party a copy of this Report and Recommendation by certified mail, return receipt requested . Pursuant to 28 U.S.C. § 636(b), any party who desires to object to this report must serve and file written objections within fourteen (14) days after being served with a copy unless the time period is modified by the District Court. A party filing objections must specifically identify those findings, conclusions, or recommendations to which objections are being made; the District Court need not consider frivolous, conclusive, or general objections. Such party shall file the objections with the Clerk of the Court and serve the objections on the Magistrate Judge and on all other parties. A party's failure to file such objections to the proposed findings, conclusions, and recommendations contained in this report shall bar the party from a de novo determination by the District Court. Additionally, a party's failure to file written objections to the proposed findings, conclusions, and recommendations contained in this report within fourteen (14) days after being served with a copy shall bar that party, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions accepted by the District Court. Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1428-29 (5th Cir. 1996).