A new law, Texas Insurance Code, Section 542A.006(a) matters in this case.
The case is from the Western District of Texas, Austin Division. It is styled, Yan Qing Jiang v. The Travelers Home and Marine Insurance Company and Dana Ellen Pustka.
Jiang filed this action in state district court alleging her home was damaged in a storm and that Travelers is the insurer and the adjuster was Pustka. Jiang asserted causes of action for violations of the Texas Insurance Code and the Texas Deceptive Trade Practices Act (DTPA). Travelers and Pustka had the case removed to federal court based on diversity jurisdiction, 28 U.S.C., Section 1332(a), and argue that Pustka was improperly joined in an effort to defeat diversity jurisdiction.
To establish improper joinder, the removing party has the burden to 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.
Under the second prong, of the improper joinder doctrine, a defendant must establish 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 recover against an in-state defendant. The court begins a Rule 12(b)(6) type of analysis to decide whether the joinder is proper.
Travelers argues that Pustka is improperly joined because Travelers elected responsibility under Texas Insurance Code, Section 542A.006(a). The Court agrees. Section 542A.006 requires dismissal of Jiang’s claims against Pustka. Pustika is therefore improperly joined, and Jiang’s claims against her must be dismissed.