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Flood v. Uber Technologies Inc.

United States District Court, E.D. Louisiana

July 12, 2018


         SECTION I

          ORDER & REASONS


         Plaintiffs are a group of taxi drivers and companies (collectively, “Taxis”) that sued defendants Uber Technologies Inc. and its subsidiary Rasier LLC (collectively, “Uber”) as well as several individual Uber drivers alleging violations of the Louisiana Unfair Trade Practices Act (“LUTPA”) and other state law claims. Uber removed the case to this Court. The Taxis now move to remand. For the following reasons, the Taxis' motion is granted.


         The Taxis assert that Uber and its drivers have conspired to systematically and consistently flout several municipal and state laws designed to level the playing field between traditional taxi services and peer-to-peer ride sharing providers.[1] This conduct, the Taxis contend, creates unfair competition in violation of the LUTPA.[2]

         Uber removed the Taxis' lawsuit from the Civil District Court for the Parish of Orleans, invoking diversity jurisdiction pursuant to 28 U.S.C. § 1332. Uber recognizes that the plaintiffs and the individual Uber driver defendants are not diverse, as they are all citizens of Louisiana.[3] Uber nevertheless maintains that jurisdiction in this Court is proper because the individual Uber driver defendants are improperly joined and, as a result, their citizenship should be disregarded for diversity purposes.[4]

         Accordingly, the central question before the Court is whether the individual Uber drivers are properly joined defendants. If they are, then complete diversity is lacking, and remand is required. If they are not, then complete diversity exists, and remand would be inappropriate.


         When challenging the propriety of joinder, “[t]he removing party bears a heavy burden of proving that the joinder of the in-state party was improper . . . that is, to show that sham defendants were added to defeat jurisdiction.” Smallwood Ill. Cent. R.R. Co., 385 F.3d 568, 574 (5th Cir. 2004). “Since the purpose of the improper joinder inquiry is to determine whether or not the in-state defendant was properly joined, the focus of the inquiry must be on the joinder, not the merits of the plaintiff's case.” Id. at 573.

         A removing defendant may show improper joinder in one of 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. (quoting Travis v. Irby, 326 F.3d 644, 646-47 (5th Cir. 2003)). As to the second method-the only one at issue here-the Fifth Circuit has held that the test “is whether the defendant has demonstrated 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. In determining the validity of an improper joinder claim, the Court does “not determine whether the plaintiff will actually or even probably prevail on the merits of the claim, but look[s] only for a possibility that the plaintiff might do so.” Guillory v. PPG Indus., Inc., 434 F.3d 303, 309 (5th Cir. 2005).

         To assess a plaintiff's possibility of recovery against an in-state defendant, 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.”[5] Smallwood, 385 F.3d at 574. “Ordinarily, if a plaintiff can survive a Rule 12(b)(6) challenge, there is no improper joinder.” Id. When conducting the 12(b)(6)-style inquiry, federal pleading standards apply. Int'l Energy Ventures Mgmt., LLC v. United Energy Grp., Ltd., 818 F.3d 193, 208 (5th Cir. 2016). Further, the Court “must evaluate all of the factual allegations in the light most favorable to the plaintiff, resolving all contested issues of substantive fact in favor of the plaintiff.” Guillory, 434 F.3d at 308 (quotations omitted).

         “Any ambiguities are construed against removal because the removal statute should be strictly construed in favor of remand.” Settlement Funding LLC v. Rapid Settlements Ltd., 851 F.3d 530, 536 (5th Cir. 2017). Similarly, the Court must “resolve all ambiguities in the controlling state law in the plaintiff's favor.” Burden v. Gen. Dynamics Corp., 60 F.3d 213, 216 (5th Cir. 1995). As a general matter, 12(b)(6)-type challenges are “viewed with disfavor” and are “rarely granted.” See Leal v. McHugh, 731 F.3d 405, 410 (5th Cir. 2013).



         This Court is not the first to pass upon the question of whether the Taxis have pleaded a valid cause of action under the LUTPA. Green v. Garcia-Victor, No. 16-905 (Civ. Dist. Ct. Par. Orleans 2016), involves a virtually identical LUTPA claim brought by taxi drivers and companies against a number of individual Uber drivers. In Green, taxi drivers sued Uber drivers alleging violations of the LUTPA. Like the Taxis in the instant case, the Green plaintiffs assert that Uber drivers in New Orleans engage in a plan or practice to violate state and municipal laws in order to unfairly compete with their taxi ...

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