Deleese Allen v. Walmart Stores, L.L.C.

Case: 17-20404 Document: 00514683799 Page: 1 Date Filed: 10/16/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 17-20404 FILED
October 16, 2018
Lyle W. Cayce
DELEESE ALLEN, Clerk
Plaintiff - Appellant
v.
WALMART STORES, L.L.C.; GREGORY MOUTON; LORETTA BREWER-
WINTER; SHANDA HUTTON,
Defendants - Appellees
Appeal from the United States District Court
for the Southern District of Texas
Before STEWART, Chief Judge, and WIENER and HIGGINSON, Circuit
Judges.
CARL E. STEWART, Chief Judge:
On Wednesday, April 13, 2016, Karalee Alaine Williams (“Williams”)
was found dead in her car in the parking lot of Wal-Mart Store #2439. Her
death resulted from inhaling a large quantity of aerosol dust remover.
Williams’s mother, Plaintiff-Appellant Deleese Allen (“Allen”), brought
negligence claims in her individual capacity, against Defendants-Appellees (1)
Wal-Mart Stores, LLC (“Wal-Mart”) 1 and (2) three Wal-Mart employees,
1 There was some confusion over who was the correct Defendant in the case, Wal-Mart
Stores, LLC or Wal-Mart Stores Texas, LLC. The district court determined that the correct
Case: 17-20404 Document: 00514683799 Page: 2 Date Filed: 10/16/2018
No. 17-20404
Gregory Mouton, Loretta Ann Brewer-Winter, and Shanda Marie Hutton
(collectively the “Wal-Mart employees”). Allen also brought product liability
claims against 3M Company (“3M”) and IQ Products Company (“IQ”). The
district court dismissed Allen’s claims pursuant to Fed. R. Civ. P. 12(b)(6) for
failure to state a claim on which relief could be granted. For the following
reasons, we AFFIRM.
I. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND
Williams entered Wal-Mart Store #2439 on nine different occasions
over the course of twenty-seven (27) hours, each time purchasing cans of dust
remover. She allegedly purchased at least sixty (60) cans of dust remover over
that period.
During Williams’s first visit on Sunday, April 10, 2016, she purchased a
towel and cans of dust remover. On her second visit that day, she had soiled
herself but proceeded to buy more cans of dust remover and told the checkout
employee that she had had a seizure in the parking lot. On Williams’s third
visit the next morning, she entered the store naked from the waist down.
party was Wal-Mart Stores Texas, LLC given that it answered Allen’s complaint. Allen does
not explicitly challenge the district court’s finding that Wal-Mart Stores Texas, LLC is the
correct defendant, but she does assert that Wal-Mart did not “properly allege its citizenship.”
In its notice of removal, Wal-Mart alleges that it is a “limited liability company formed under
the laws of Delaware, with its principal place of business in Arkansas.” “Wal-Mart[,Inc.] is a
publicly traded corporation which owns and operates retail stores in Texas, in part through
its wholly-owned subsidiaries [which includes Wal-Mart Stores Texas, LLC].” Wal-Mart
Stores, Inc. v. Tex. Alcoholic Beverage Comm’n, No. 1-15-CV-134 RP, 2015 WL 11613286, at
*1 (W.D. Tex. Dec. 22, 2015). “[T]he citizenship of a LLC is determined by the citizenship of
all of its members.” Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008).
Wal-Mart Stores Texas, LLC is considered to be incorporated in Delaware and has its
principal place of business in Arkansas. See Mauer v. Wal-Mart Stores, Inc., No. 3:16-CV-
2085-BN, 2016 WL 5815892, at *3 (N.D. Tex. Oct. 5, 2016) (explaining Wal-Mart Texas, LLC’s
citizenship as of October 5, 2016, specifically explaining that Wal-Mart Stores, Texas LLC’s
sole owner, (Wal-Mart Real Estate Business Trust), is organized under the laws of Delaware
and has its principal place of business in Arkansas). Therefore, it is not considered a citizen
of Texas.
2
Case: 17-20404 Document: 00514683799 Page: 3 Date Filed: 10/16/2018
No. 17-20404
Several Wal-Mart employees noticed her condition and communicated this to
other employees. During that third visit, Wal-Mart employees gave Williams a
towel and a “sundress.” After receiving these items Williams purchased more
cans of dust remover. During each of Williams’s subsequent visits to Wal-Mart
she allegedly bought more cans of dust remover. Early Tuesday morning, April
12, 2016, Williams died in the parking lot from the effects of inhaling dust
remover, a process called “dusting,” but her body was not discovered until the
next day.
Allen initially sought a temporary restraining order (“TRO”) and a
permanent injunction in the 11th District Court of Harris County, Texas. Allen
sought the temporary restraining order for the purposes of “preserving
evidence, and the taking of evidence before it becomes inaccessible to normal
discovery.” Wal-Mart removed the case to the United States District Court for
the Southern District of Texas, Houston Division based on diversity
jurisdiction pursuant to 28 U.S.C. § 1332. When Wal-Mart removed this case,
it also filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). After Wal-
Mart filed its motion to dismiss, Allen amended her complaint to add as
defendants the Wal-Mart employees, IQ, and 3M. Allen also filed a motion to
remand, asserting that “[s]everal Texas residents’ negligence and negligence
per se contributed to the death of [Williams], and diversity jurisdiction does
not exist.”
In response to Allen’s motion to remand, Wal-Mart moved to strike the
joinder of the Wal-Mart employees, asserting that they had only been added to
defeat diversity jurisdiction. Wal-Mart also moved to strike IQ because Allen
had notice that IQ was not the manufacturer of the dust remover Williams had
purchased. Additionally, Wal-Mart amended its motion to dismiss because
3
Case: 17-20404 Document: 00514683799 Page: 4 Date Filed: 10/16/2018
No. 17-20404
Allen had amended her complaint. The Wal-Mart employees also filed a motion
to dismiss in their answer to Allen’s complaint.
The district court denied Allen’s motion to remand and granted Wal-
Mart and the Wal-Mart employees’ motions to dismiss as well as Wal-Mart’s
motion to strike joinder. The district court also denied Allen’s request to amend
her complaint through a motion to alter or amend judgment pursuant to Fed.
R. Civ. P. 59(e) and a motion for relief from judgment or order pursuant to Fed.
R. Civ. P. 60(b).
Allen timely appealed the district court’s order dismissing her complaint
and denying reconsideration. In July 2017, Allen’s appeal was dismissed for
want of prosecution, but it was reinstated in September 2017. On appeal, Allen
contends that the district court erred in (1) granting the Defendants-Appellees’
motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), (2) denying Allen’s
motion to remand, and (3) denying Allen’s request to amend her complaint.
II. ANALYSIS
1. Motion to Dismiss
We review de novo the district court’s order on a motion to dismiss for
failure to state a claim under Fed. R. Civ. P. 12(b)(6). In re Katrina Canal
Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007).
“To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on
its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Id. (citing
Twombly, 550 U.S. at 556). “A pleading that offers ‘labels and conclusions’ or
‘a formulaic recitation of the elements of a cause of action will not do.’” Id.
4
Case: 17-20404 Document: 00514683799 Page: 5 Date Filed: 10/16/2018
No. 17-20404
(quoting Twombly, 550 U.S. at 555). “Nor does a complaint suffice if it tenders
‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Id. (quoting
Twombly, 550 U.S. at 557). “Factual allegations must be enough to raise a right
to relief above the speculative level[.]” Twombly, 550 U.S. at 555 (citing 5
CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND
PROCEDURE § 1216 (3d ed. 2004)).
“In analyzing the complaint, we will accept all well-pleaded facts as true,
viewing them in the light most favorable to the plaintiff.” Jones v. Greninger,
188 F.3d 322, 324 (5th Cir. 1999) (citing Doe v. Hillsboro Indep. Sch. Dist., 81
F.3d 1395, 1401 (5th Cir. 1996)). However, “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not
suffice [to state a claim upon which relief can be granted].” Iqbal, 556 U.S. at
678 (citing Twombly, 550 U.S. at 555). Additionally, “[d]ismissal is proper if
the complaint lacks an allegation regarding a required element necessary to
obtain relief[.]” Rios v. City of Del Rio, Tex., 444 F.3d 417, 421 (5th Cir. 2006)
(quoting Campbell v. City of San Antonio, 43 F.3d 973, 975 (5th Cir. 1995)).
Allen claims that the Defendants-Appellees acted negligently in
continuing to sell Williams dust remover despite her impaired state. Allen
alleges that the Defendants-Appellees are liable under a theory of negligence
per se for violating Texas Health & Safety Code Chapter 485, and under the
Texas theory of general negligence. Allen also alleges that the Defendants-
Appellees breached a duty when they took affirmative steps to assist Williams.
Allen also alleges that Wal-Mart is independently liable for negligent
entrustment pursuant to Restatement (Second) of Torts § 390 and that Wal-
Mart breached a duty to Williams under a theory of premises liability. Allen
further avers that Wal-Mart owed Williams a duty in the products liability
context, invoking Texas Civil Practice & Remedies Code § 82.003(6) (2009).
5
Case: 17-20404 Document: 00514683799 Page: 6 Date Filed: 10/16/2018
No. 17-20404
“The common law doctrine of negligence consists of three elements: 1) a
legal duty owed by one person to another; 2) a breach of that duty; and 3)
damages proximately resulting from the breach.” Greater Hous. Transp. Co. v.
Phillips, 801 S.W.2d 523, 525 (Tex. 1990) (citing El Chico Corp. v. Poole, 732
S.W.2d 306, 311 (Tex. 1987), superseded by statute, Tex. Alco. Bev. Code § 2.02,
as recognized in Graff v. Beard, 858 S.W.2d 918, 919 (Tex. 1993)). “The plaintiff
must establish both the existence and the violation of a duty owed to the
plaintiff by the defendant to establish liability in tort.” Id. (citing El Chico, 732
S.W.2d at 311). “Moreover, the existence of duty is a question of law for the
court to decide from the facts surrounding the occurrence in question.” Id.
(citing Otis Eng’g Corp. v. Clark, 668 S.W.2d 307, 312 (Tex. 1983)).
“Negligence per se is a common-law doctrine that allows courts to rely
on a penal statute to define a reasonably prudent person’s standard of care.”
Reeder v. Daniel, 61 S.W.3d 359, 361-62 (Tex. 2001) (citing Carter v. William
Sommerville & Son, Inc., 584 S.W.2d 274, 278 (Tex. 1979)).
a. Premises Liability
According to Allen, premises liability provides the strongest basis for
holding that Wal-Mart owed Williams a duty to cease selling her dust remover
in light of her diminished capacity. Allen’s assertion is based on the Supreme
Court of Texas’s holding in Del Lago Partners, Inc. v. Smith, 307 S.W.3d 762
(Tex. 2010). In Del Lago, the Supreme Court of Texas found that a bar had a
duty to protect a patron given the bar’s “actual and direct knowledge that a
violent brawl was imminent[.]” 307 S.W.3d at 769. However, in Del Lago, the
Supreme Court of Texas explicitly stated that “[w]e do not announce a general
rule today. We hold only, on these facts, . . . a duty arose on [the Defendant’s]
part to use reasonable care to protect the invitees from imminent assaultive
conduct.” Id. at 770.
6
Case: 17-20404 Document: 00514683799 Page: 7 Date Filed: 10/16/2018
No. 17-20404
Williams was an invitee of Wal-Mart, so Wal-Mart owed her a duty to
“use ordinary care to reduce or eliminate an unreasonable risk of harm created
by a premises condition about which the property owner knew or should have
known.” Id. at 767. However, Allen did not plead that there were any issues
with the conditions of the premises. Allen seeks to extend the holding of Del
Lago to fit the facts of this case, but Del Lago is inapplicable here.
As we elaborate below, Wal-Mart did not owe Williams a duty under
Texas Health & Safety Code § 485.031 to protect her from abusing the dust
remover. See LaFleur v. Astrodome-Astrohall Stadium Corp., 751 S.W.2d 563,
564 (Tex. App.—Houston [1st Dist.] 1998) (“As a general rule, a defendant has
no duty to prevent the criminal acts of a third party who does not act under
the defendant’s supervision or control.”). Neither was it illegal for Wal-Mart to
sell Williams dust remover, because she was an adult. See Tex. Health & Safety
Code § 485.032 (2001) (“A person commits an offense if the person knowingly
delivers an abusable volatile chemical to a person who is younger than 18 years
of age.”). Because Allen did not plead that there were any issues with the
conditions of the premises, and because, as we elaborate below, Wal-Mart did
not owe Williams any duty of care regarding her purchase or abuse of dust
remover, Wal-Mart cannot be found negligent under a theory of premises
liability. We thus hold that Allen’s negligence claim based on premises liability
fails.
b. Restatement (Second) of Torts § 390 (1965)
Allen does not assert negligent entrustment by name, but she does
advance an underlying premise of negligent entrustment, i.e., that Wal-Mart
had a duty not to sell Williams the dust remover because Wal-Mart had
knowledge of Williams’s diminished capacity and continued abuse of the dust
remover. Under Restatement (Second) of Torts § 390 (1965):
7
Case: 17-20404 Document: 00514683799 Page: 8 Date Filed: 10/16/2018
No. 17-20404
One who supplies directly or through a third person a chattel for
the use of another whom the supplier knows or has reason to know
to be likely because of his youth, inexperience or otherwise, to use
it in a manner involving unreasonable risk of physical harm to
himself and others whom the supplier should expect to share in or
be endangered by its use, is subject to liability for physical harm
resulting to them.
A Texas Court of Appeals referenced Section 390 in Kennedy v. Baird, 682
S.W.2d 377 (Tex. App.—El Paso 1984), a case regarding the negligent
entrustment of a firearm. However, Texas has not adopted Restatement
(Second) of Torts § 390 with respect to the sale of a chattel. See Jaimes v.
Fiesta Mart, Inc., 21 S.W.3d 301, 304 (Tex. App.—Houston [1st Dist.] 1999)
(emphasis omitted) (“Texas courts have declined, however, to adopt [S]ection
390 and to impose this duty on sellers of chattels.” (citing Rush v. Smitherman,
294 S.W.2d 873, 875 (Tex. Civ. App.—San Antonio 1956, writ ref’d n.r.e.)));
Nat’l Convenience Stores, Inc. v. T.T. Barge Cleaning Co., 883 S.W.2d 684, 686
(Tex. App.—Dallas 1994, writ denied).
Allen concedes that sellers are not generally subject to liability under
Section 390, but she asserts that a seller may be negligent when it has a duty
not to sell a specific product. Allen cites El Chico Corp. v. Poole, in support of
her proposition that Wal-Mart owed Williams a duty not to sell her cans of dust
remover given her diminished capacity. 732 S.W.2d 306. In El Chico, the
defendant restaurant sold alcohol to an intoxicated patron who was later
involved in a deadly collision. Id. at 308-09. The Supreme Court of Texas held
that a seller “owe[d] a duty to the general public not to serve alcoholic
beverages to a person when the [seller] knows or should know a patron is
intoxicated.” Id. at 314.
8
Case: 17-20404 Document: 00514683799 Page: 9 Date Filed: 10/16/2018
No. 17-20404
In this case, Wal-Mart did not owe a duty to Williams or the general
public to prevent any harm resulting from Williams’s inhalation of dust
remover, unlike the seller in El Chico, regarding the sale of alcohol. Notably,
Texas courts have not expanded the duty recognized in El Chico to cover the
sale of other potentially harmful products. The Texas legislature promptly
responded to El Chico by enacting a Dram Shop Act and making it the
exclusive basis for civil liability against alcohol providers. See Graff, 858
S.W.2d at 919 (“In El Chico this court created a common-law duty to injured
third parties on the part of commercial providers, but that duty was almost
simultaneously superseded by the legislature’s enactment of the dram shop
statute.”).
The Supreme Court of Texas later declined to recognize a common law
duty on social hosts who provide alcohol to guests, reasoning that there is no
legal duty to control the conduct of another in the absence of a special
relationship and “the common law’s focus should remain on the drinker as the
person primarily responsible for his own behavior and best able to avoid the
foreseeable risks of that behavior.” Graff, 858 S.W.2d at 920-22. Texas’s high
court has also made clear that “foreseeability alone is not sufficient to justify
the imposition of a duty.” City of Waco v. Kirwan, 298 S.W.3d 618, 624 (Tex.
2009).
Allen has not cited any Texas cases recognizing a duty not to sell
abusable volatile chemicals to an impaired person, nor do we find such a duty
under Texas law. Thus, El Chico is not applicable to this case. Accordingly, we
hold that Wal-Mart is not liable for negligent entrustment.
9
Case: 17-20404 Document: 00514683799 Page: 10 Date Filed: 10/16/2018
No. 17-20404
c. Texas Health & Safety Code Chapter 485
It is illegal under Texas Health & Safety Code § 485.031 to inhale an
abusable volatile chemical contrary to directions for its use or to its warnings,
with the intent to among other things “create or induce a condition of
intoxication, hallucination, or elation[.]” Further, it is illegal to “knowingly . . .
deliver[] or sell[] inhalant paraphernalia [to a person whom the seller knows
intends to use it to abuse a volatile chemical].” Tex. Health & Safety Code §
485.033 (2001). 2
Texas Health & Safety Code Chapter 485 is a penal statute, and the
parties contest whether Chapter 485 sets forth a civil standard of conduct. The
district court addressed this dispute and held that Chapter 485 does not set
forth a standard of conduct for a claim of negligence or negligence per se. We
agree.
We find no caselaw in which any court has created civil tort liability
based on Texas Health & Safety Code § 485.031, §485.032, or § 485.033. See
Praesel v. Johnson, 967 S.W.2d 391, 395 (Tex. 1998) (“[A court] can borrow all,
part, or none of a criminal statute as [the court] deem[s] appropriate for
establishing a duty under the civil law.” (citing Rudes v. Gottschalk, 324
S.W.2d 201, 205 (Tex. 1959.))) Tellingly, Texas courts rarely imply a civil tort
duty from a criminal statute. See Brown v. De La Cruz, 156 S.W.3d 560, 565
(Tex. 2004) (explaining that penal statutes are strictly constructed and a
2 The cans of dust remover themselves are not considered “paraphernalia” given the
definitions denoted in Section 485.001. The dust remover would be considered an “abusable
volatile chemical” because it “is packaged in a container subject to [specific] labeling
requirements[.]” Tex. Health & Safety Code § 485.001(1)(A)(i) (2015). The towels could be
considered paraphernalia because they are made of fabric. Tex. Health & Safety Code
§ 485.001(8) (2015).
10
Case: 17-20404 Document: 00514683799 Page: 11 Date Filed: 10/16/2018
No. 17-20404
private cause of action is not implied without some indication of legislative
intent); Perry v. S.N., 973 S.W.2d 301, 307 (Tex. 1998) (noting that the “norm”
is to “deriv[e] duty from the common law and look[] to the statute only for the
standard of conduct”). For example, the Texas Supreme Court has held that a
failure to report child abuse is not negligence per se even if it violates a
mandatory reporting law. Perry, 973 S.W.2d at 309. Relevant to the facts
presented here, the Supreme Court of Texas has also refused to recognize a
negligence per se cause of action against social hosts who unlawfully provide
alcohol to underage guests. Reeder, 61 S.W.3d at 364-65. We therefore conclude
that Wal-Mart and the Wal-Mart employees cannot be held liable under
Chapter 485 for negligence or negligence per se.
For the same reasons, neither Wal-Mart nor the Wal-Mart employees
can be held civilly liable for allegedly aiding and abetting Williams in violating
Texas Health & Safety Code § 485.031.
d. Assumed Duty Pursuant to an Affirmative Action
“Texas law generally imposes no duty to take action to prevent harm to
others absent certain special relationships or circumstances.” Torrington Co.
v. Stutzman, 46 S.W.3d 829, 837 (Tex. 2000) (citing SmithKline Beecham Corp.
v. Doe, 903 S.W.2d 347, 353 (Tex. 1995)). However, Texas courts “have
recognized that a duty to use reasonable care may arise when a person
undertakes to provide services to another, either gratuitously or for
compensation.” Id. (citing Fort Bend Cty. Drainage Dist. v. Sbrusch, 818
S.W.2d 392, 396 (Tex. 1991)). This recognition relies in part on Restatement
(Second) of Torts § 323 (1965), which states that “[o]ne who undertakes,
gratuitously or for consideration, to render services to another . . . is subject to
liability to the other for physical harm resulting from his failure to exercise
reasonable care to perform his undertaking, if . . . his failure to exercise such
11
Case: 17-20404 Document: 00514683799 Page: 12 Date Filed: 10/16/2018
No. 17-20404
care increases the risk of such harm, or . . . the harm is suffered because of
other’s reliance upon the undertaking.”
Wal-Mart and the Wal-Mart employees may only be held liable for
negligent undertaking if “(1) [they] undertook to perform services that [they]
knew or should have known were necessary for [Williams’s] protection, (2)
[they] failed to exercise reasonable care in performing those services, and
either (3) [Williams] relied upon [their] performance, or (4) [their] performance
increased [Williams’s] risk of harm.” Torrington Co., 46 S.W.3d at 838-39
(citing Colonial Sav. Ass’n v. Taylor, 544 S.W.2d 116, 118 (Tex. 1976)).
Allen asserts that Wal-Mart and the Wal-Mart employees knew that
Williams was abusing the dust remover and that when the Wal-Mart
employees undertook actions to assist Williams on her third visit to the Wal-
Mart by providing her with a towel and a sundress, they engendered a duty
not to increase her risk of harm.
However, Allen failed to plead that the employees’ alleged assistance
either induced reliance or increased Williams’s risk of harm. See Torrington
Co., 46 S.W.3d at 838 n.7. We thus hold that Wal-Mart and the Wal-Mart
employees are not liable for any negligence based on the assistance that they
gave to Williams. Rios, 444 F.3d at 421 (“Dismissal is proper if the complaint
lacks an allegation regarding a required element necessary to obtain relief[.]”
(quoting Campbell, 43 F.3d at 975)).
e. Products Liability under Texas Civil Practice & Remedies Code §
82.003(6)
Pursuant to Texas Civil Practice & Remedies Code § 82.003(6), “[a] seller
that did not manufacture a product is not liable for harm caused to the
claimant by that product unless the claimant proves . . . that . . . the seller
12
Case: 17-20404 Document: 00514683799 Page: 13 Date Filed: 10/16/2018
No. 17-20404
actually knew of a defect to the product at the time the seller supplied the
product; and . . . the claimant’s harm resulted from the defect[.]”
Allen alleges that Wal-Mart “has long been aware of the hazards and
dangers associated with inhalant abuse” and cites several instances where
suits were brought against Wal-Mart because individuals had abused dust
remover bought from Wal-Mart. However, Allen did not plead specific facts
regarding any actual defect with respect to the dust remover that was sold to
Williams. Allen’s failure to plead specific facts regarding any actual defect in
the dust remover sold to Williams is fatal to Allen’s claim that Wal-Mart
violated Section 82.003(6). Consequently, we conclude that Wal-Mart is not
liable for negligence under a products liability theory. 3
f. Wal-Mart Employees’ Individual Liability
Under Leitch v. Hornsby, “individual liability arises only when the officer
or agent owes an independent duty of reasonable care to the injured party
apart from the employer’s duty.” 935 S.W.2d 114, 117 (Tex. 1996). For the Wal-
Mart employees to be individually liable they must have owed Williams an
independent duty apart from any duty that Wal-Mart owed Williams. The Wal-
Mart employees did not owe Williams a duty not to sell her dust remover, and
did not have a duty to protect her from abusing the dust remover that she
bought. See Tex. Health & Safety Code § 485.032; LaFleur, 751 S.W.2d at 564.
Moreover, Allen has not identified any other independent duty that the Wal-
Mart employees might have owed Williams. We thus conclude that the Wal-
Mart employees cannot be held liable in their individual capacities.
3 We also note that the claims against IQ and 3M were also properly dismissed.
13
Case: 17-20404 Document: 00514683799 Page: 14 Date Filed: 10/16/2018
No. 17-20404
2. Allen’s Motion to Remand
The parties disagree as to the correct standard of review for Allen’s
motion to remand. Wal-Mart contends that the proper standard of review is
abuse of discretion given that Allen amended her complaint after the case was
removed. See Hensgens v. Deere & Co., 833 F.2d 1179, 1182 (5th Cir. 1987),
appeal after remand, 869 F.2d 879 (5th Cir. 1989), cert. denied sub nom. Deere
& Co. v. Hensgens, 493 U.S. 851 (1989) (“[T]he district court, when confronted
with an amendment to add a non[-]diverse non[-]indispensable party, should
use its discretion in deciding whether to allow that party to be added.”).
However, the proper standard of review of a district court’s denial of a
motion to remand is de novo. Luckett v. Delta Airlines, Inc., 171 F.3d 295, 298
(5th Cir. 1999) (citing Allen v. R&H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir.
1995)). Abuse of discretion is not the correct standard of review because
Hensgens concerns a party’s motion to amend its complaint after removal, and
Allen did not initially move to amend her complaint. Instead, she amended as
matter of right under Fed. R. Civ. P. 15(a), which does not require the court’s
approval. See Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 597 (5th Cir.
1981) (“[Fed. R. Civ. P.] 15(a) . . . governs amendments to pleadings. Although
the plaintiff is allowed, as a matter of right, one amendment before any
responsive pleading has been filed, subsequent amendments are permitted
only with leave of the trial judge.”). After amending her complaint, Allen
sought remand to the state court.
The district court’s ruling did not consider the propriety of the
amendment itself, but instead considered whether there was proper joinder of
the Wal-Mart employees. The district court sustained Wal-Mart’s objection to
joinder of the non-diverse Wal-Mart employees and granted Wal-Mart’s motion
to strike the non-diverse defendants.
14
Case: 17-20404 Document: 00514683799 Page: 15 Date Filed: 10/16/2018
No. 17-20404
“Under 28 U.S.C. § 1441(a), any state court civil action over which the
federal courts would have original jurisdiction may be removed from state to
federal court.” Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281 (5th
Cir. 2007). A case may be removed pursuant to 28 U.S.C. § 1332 if there is
complete diversity of citizenship and the amount in controversy is greater than
$75,000 exclusive of interests and costs. “If at any time before final judgment
it appears that the district court lacks subject matter jurisdiction, the case
shall be remanded.” 28 U.S.C. § 1447(c). If a party is improperly joined, a
court may disregard the party’s citizenship for purposes of determining subject
matter jurisdiction. See Galveston Bay Biodiesel, L.P. v. Ace Am. Ins. Co., 719
F. Supp. 2d 736, 738 (S.D. Tex. 2010) (citing Smallwood v. Ill. Cent. R.R. Co.,
385 F.3d 568, 572-73) (5th Cir. 2004) (en banc)). However, “the existence of
even a single valid cause of action against in-state defendants . . . requires
remand of the entire case to state court.” Gray ex rel. Rudd v. Beverly Enters.-
Miss., Inc., 390 F.3d 400, 412 (5th Cir. 2004).
“To demonstrate improper joinder of resident defendants, the removing
defendants must demonstrate either: ‘(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.’” Gasch, 491 F.3d at 281 (quoting
Crockett v. R.J. Reynolds Tobacco Co., 436 F.3d 529, 532 (5th Cir. 2006)); see
also Int’l Energy Ventures Mgmt., L.L.C. v. United Energy Grp., Ltd., 818 F.3d
193, 199 (5th Cir. 2016) (“A defendant is improperly joined if the moving party
establishes that (1) the plaintiff has stated a claim against a diverse defendant
that he fraudulently alleges is non[-]diverse, or (2) the plaintiff has not stated
a claim against a defendant that he properly alleges is non[-]diverse.” (citing
Smallwood, 385 F.3d at 573)). In deciding improper joinder, we must “resolve
all contested factual issues and ambiguities of state law in favor of the plaintiff
15
Case: 17-20404 Document: 00514683799 Page: 16 Date Filed: 10/16/2018
No. 17-20404
[and remand].” Gasch, 491 F.3d at 281 (citing Guillory v. PPG Indus., Inc., 434
F.3d 303, 308 (5th Cir. 2005)).
There is no allegation of fraud in the pleadings alleged in this case. We
thus must assess whether Allen has a basis of recovery against the Wal-Mart
employees who would be non-diverse defendants. In assessing whether a
plaintiff is able to establish a cause of action against the non-diverse party in
state court, the test for improper joinder is “whether the defendant has
demonstrated that there is no possibility of recovery by the plaintiff against an
in-state defendant[.]” Smallwood, 385 F.3d at 573. To determine whether a
party has a “reasonable basis of recovery under state law,” we may apply a Fed.
R. Civ. P. 12(b)(6)-type analysis. Id. Thus, if Allen has not stated a claim for
relief against the Wal-Mart employees, then they were improperly joined and
we may disregard their citizenship. See Galveston Bay Biodiesel, L.P., 719 F.
Supp. 2d at 738.
As described in detail in our analysis of the Wal-Mart employees’ motion
to dismiss, those employees did not owe Williams any duty of care, especially
since they were not prohibited from selling dust remover to Williams who was
an adult. 4 Therefore, reviewing the dismissal of Allen’s motion to remand
under a de novo standard of review, we affirm the district court’s denial of
Allen’s motion to remand.
4 There is no improper joinder if the reason “that there is no reasonable basis for
predicting that state law would allow the plaintiff to recover against the in-state defendant
necessarily compels the same result for the non[-]resident defendant.” See Smallwood, 385
F.3d at 574. This is not the case here because Allen asserts at least one analytically distinct
claim against Wal-Mart alone. See Boone v. Citigroup, Inc., 416 F.3d 382, 391-92 (5th Cir.
2005).
16
Case: 17-20404 Document: 00514683799 Page: 17 Date Filed: 10/16/2018
No. 17-20404
3. Allen’s Motion to Replead
“[The Fifth Circuit] generally review[s] a decision on a motion to alter or
amend judgment under Rule 59(e) for abuse of discretion.” Miller v. BAC Home
Loans Servicing, L.P., 726 F.3d 717, 721–22 (5th Cir. 2013) (quoting Pioneer
Nat. Res. USA, Inc. v. Paper, Allied Indus., Chem. & Energy Workers Int’l
Union Loc. 4–487, 328 F.3d 818, 820 (5th Cir. 2003), modified on other grounds
on denial of reh’g). Because Allen sought to amend her complaint using Fed. R.
Civ. P. 59(e) or 60, we must also consider whether the district court abused its
discretion in not allowing Allen to amend her complaint. See Rosenzweig v.
Azurix Corp., 332 F.3d 854, 863 (5th Cir. 2003).
Allen sought to amend her complaint under Fed. R. Civ. P. 59(e) and
60(a). When a court enters a final judgment, a party may move to amend its
complaint under Fed. R. Civ. P. 59(e) or 60 rather than under Fed. R. Civ. P.
15(a). See Rosenzweig, 332 F.3d at 864. However, our analysis of a party’s Fed.
R. Civ. P. 59(e) motion “should be governed by the same considerations
controlling the exercise of discretion under [Fed. R. Civ. P.] 15(a).” Dussouy,
660 F.2d at 597 n.1.
Allen asserts that she “is now in possession of additional party names
not known when substantive motions were filed,” and that the district court
erred in not letting her amend her complaint to reflect the addition of these
parties. Allen also asserts that she has SKU numbers (numbers used to
identify inventory) as well as twelve point-of-sale receipts, which include
twelve different Wal-Mart employee identification numbers. Allen claims that
she has the names of eighteen Wal-Mart employees who “interacted with
Plaintiff during her time at the Wal-Mart store.”
In determining whether to allow a party to amend its complaint, “[t]he
court should freely give leave [to amend] when justice so requires.” Fed. R.
17
Case: 17-20404 Document: 00514683799 Page: 18 Date Filed: 10/16/2018
No. 17-20404
Civ. P. 15(a)(2). The United States Supreme Court has listed several factors
for a court to consider when it analyzes a party’s motion for leave to amend,
including “undue delay, bad faith or dilatory motive on the part of the movant,
repeated failure to cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party by virtue of allowance of the amendment, [and]
futility of amendment[.]” Foman v. Davis, 371 U.S. 178, 182 (1962).
“[O]utright refusal to grant the leave without any justifying reason
appearing for the denial is not an exercise of discretion; it is merely abuse of
that discretion and inconsistent with the spirit of the Federal Rules.” Id. at
182; but see Rhodes v. Amarillo Hosp. Dist., 654 F.2d 1148, 1154 (5th Cir. Unit
A Sept. 1981) (“The strong preference for explicit reasons [for the district
court’s denial of the plaintiff’s motion to amend] yields to the presence here of
ample and obvious grounds for denying leave to amend; the district court could
confidently have relied on any or all of them. The mere absence under these
circumstances of articulated reasons for denial does not indicate an abuse of
the court’s discretion.”).
Allen sought to amend her complaint to add non-diverse parties after the
case has been removed, so the district court must apply a higher level of
scrutiny than required under Fed. R. Civ. P. 15(a). See Hensgens, 833 F.2d at
1182 (“The district court, when faced with an amended pleading naming a new
non[-]diverse defendant in a removed case, should scrutinize that amendment
more closely than an ordinary amendment.”). “[T]he court should consider the
extent to which the purpose of the amendment is to defeat federal jurisdiction,
whether [the] plaintiff has been dilatory in asking for amendment, whether
[the] plaintiff will be significantly injured if amendment is not allowed, and
any other factors bearing on the equities.” Id.
18
Case: 17-20404 Document: 00514683799 Page: 19 Date Filed: 10/16/2018
No. 17-20404
The district court denied Allen’s request to amend her complaint because
it did not fall under either Fed. R. Civ. P. 59(e) or 60(b). Beyond that, the
district court did not provide any further reasons for denying Allen’s request
to amend her complaint. The lack of analysis does not automatically require
us to determine that the district court abused its discretion, but “the [district
court’s] reasons [for denial] would have to be readily apparent[.]” Dussouy, 660
F.2d at 597. 5 The grounds for the district court’s ruling here are apparent. We
therefore conclude that the district court did not abuse its discretion in denying
Allen’s request to amend her complaint.
The parties that Allen sought to add were: (1) Wal-Mart employees who
sold Williams cans of dust remover, and (2) the manufacturer of the dust
remover, Falcon Safety Products. The Wal-Mart employees that Allen sought
to add are assumed to be Texas citizens, which would compromise our subject
matter jurisdiction over this case. Allen alleges that “[m]ultiple individuals . .
. were negligent and violated Texas Health & Safety Code § 485 by providing
5 See Dussouy, 660 F.2d at 600 (reversing the district court’s judgment and remanding
the case, the Fifth Circuit held that the reasons for the district court’s denial of plaintiff’s
motion to dismiss were not “readily apparent” and that the district court should allow the
plaintiff to amend his complaint); but see Mayeaux v. La. Health Serv. & Indem. Co., 376 F.3d
420, 426 (5th Cir. 2004) (holding that the district court did not abuse its discretion despite
the district judge and magistrate judge’s failure to provide express reasoning for their denial,
because there were obvious reasons for the denial due to the undue prejudice to the
defendant); United States ex rel. Willard v. Humana Health Plan of Tex. Inc., 336 F.3d 375,
387 (5th Cir. 2003) (holding that the district court did not abuse its discretion in not allowing
the plaintiff to amend its complaint because the plaintiff had already had two opportunities
to amend their complaint); Ashe v. Corley, 992 F.2d 540, 543 (5th Cir. 1993) (holding that the
district court did not abuse its discretion despite not articulating its reasons for denying the
plaintiffs’ motion because the plaintiffs had already amended their complaint twice and failed
to timely comply with a court order to amend their complaint before finally seeking an
amendment the week before trial); Rhodes, 654 F.2d at 1154 (affirming the denial of the
plaintiff’s motion to amend without any reasoning from the district court, because the fact
that the plaintiff filed its amendment thirty months after the original complaint was an
“obvious ground” to deny the plaintiff’s motion to amend).
19
Case: 17-20404 Document: 00514683799 Page: 20 Date Filed: 10/16/2018
No. 17-20404
abusable volatile chemicals to [Williams] . . . and they violated the basic
common law duty not to provide a mentally impaired person with goods or
materials by which the mentally impaired person could injure themselves or
others.”
Looking at the exhibits attached to Allen’s motion, the receipts allegedly
have employee identification numbers, which would allow Allen to identify the
employees who interacted with Williams. However, even if Allen had the exact
identification of the Wal-Mart employees who interacted with Williams, these
Wal-Mart employees would not be liable for the reasons outlined above.
The district court did not explicitly weigh the Hensgens factors but the
fact that Allen would still fail to state a plausible claim against any Wal-Mart
employee gives an apparent reason for the district court’s denial of Allen’s
motion to amend. 6 Additionally, Allen’s continued failure to state a plausible
claim would outweigh the other Hensgens factors.
As to Falcon Safety Products, Allen was dilatory in seeking to add this
manufacturer. Allen had knowledge that Falcon Safety Products was the
correct manufacturer as early as the day that she filed her amended complaint.
In a prior exchange, Wal-Mart’s Counsel had sent an e-mail to Allen’s Counsel
stating that “the brand of the electronics cleaner Karalee Williams bought was
Dust-Off.” Allen’s Counsel stated that he did not see this e-mail until after the
complaint was filed; however, Allen did not file a separate request to amend
until almost a year after gaining knowledge of the correct manufacturer.
6 See Moore v. Manns, 732 F.3d 454, 457 (5th Cir. 2013) (“Although the district court
did not expressly examine the other Hensgens factors—Moore’s timing; whether he would be
significantly injured if the additional parties were not added; and additional equitable
considerations—we cannot conclude, upon review of the briefs and record, that any of those
factors tip the scale for Moore [because his amendment only served to destroy diversity].”).
20
Case: 17-20404 Document: 00514683799 Page: 21 Date Filed: 10/16/2018
No. 17-20404
The district court noted that Allen filed suit against the wrong
manufacturers, IQ and 3M, and dismissed them from the case. Allen had prior
knowledge that Falcon Safety Products was the actual manufacturer, but she
never sought to amend her complaint before the district court ruled on the
Defendants-Appellees’ motions to dismiss. Therefore, allowing Allen to amend
her complaint at this stage would not be proper because it would impose an
undue burden on the court. See Mayeaux, 376 F.3d at 426 (“[D]elay alone is an
insufficient basis for denial of leave to amend: [t]he delay must be undue, i.e.,
it must prejudice the non[-]moving party or impose unwarranted burdens on
the court.”). The dilatory nature of Allen’s request to add Falcon Safety
Products and the burdensome effect that adding Falcon Safety Products would
have on the court outweigh the other Hensgens factors. 7
III. CONCLUSION
For the reasons stated above, we AFFIRM the district court’s denial of
Allen’s complaint for her failure to state a claim on which relief can be
granted. 8 We also (1) AFFIRM the district court’s denial of Allen’s motion to
remand and (2) AFFIRM that court’s denial of Allen’s motion to alter or amend
as to her request to amend her complaint and for more time to conduct
discovery.
Allen also sought more time for discovery, however, because we affirm the district
7
court’s denial of Allen’s motion to amend, we decline to address whether Allen should be
entitled to more discovery.
Allen asserts for the first time on appeal that the district court erred by denying her
8
due process in dismissing her claims on evidentiary grounds. Because Allen did not raise this
claim in the district court, we decline to address this claim. See NCDR, L.L.C. v. Mauze &
Bagby, P.L.L.C., 745 F.3d 742, 752 (5th Cir. 2014) (“As a general rule, ‘[a]n argument not
raised before the district court cannot be asserted for the first time on appeal.’”) (quoting XL
Specialty Ins. Co. v. Kiewit Offshore Servs., Ltd., 513 F.3d 146, 153 (5th Cir. 2008)).
21