Galvan et al v. Hunt Refining Company et al

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
OSCAR A. GALVAN, JR.,
MARLENE BECERRA,
GERARDO CONZALEZ, JR., and
ARACELI GONZALEZ,
Plaintiffs,
v.
HUNT REFINING COMPANY and
HUNT CONSOLIDATED, INC.,
Defendants.
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Case No. 3:25-CV-2766-x
MEMORANDUM OPINION AND ORDER
Before the Court are Plaintiffs Oscar A. Galvan, Jr., Marlene Becerra, Gerado
Conzalez, Jr., and Araceli Gonzalez’s (collectively, “Plaintiffs”) motion to remand and
Defendants Hunt Consolidated, Inc’s (HCI) motion to dismiss. (Docs. 26, 35). After
due consideration, the Court GRANTS HCI’s motion to dismiss and DENIES
WITHOUT PREJUDICE Plaintiff’s motion to remand.
I. Background
This case involves injuries that Plaintiffs suffered while working at Hunt
Refining Company’s (HRC) petroleum refinery in Tuscaloosa, Alabama. Plaintiffs
were instructed to remove a flange from a pressurized piping system. Upon removal,
Plaintiffs were hit with hot steam and boiling liquid that resulted them being
hospitalized for their injuries.
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Plaintiffs subsequently brought negligence, premises liability negligent
undertaking, negligent training and supervision, gross negligence, respondeat
superior, and loss of consortium claims against HRC.
Plaintiffs also included HCI as a defendant, alleging HCI “exercised direct and
indirect control over the operations of HRC, including the policies, procedures, and
safety protocols implemented at the Tuscaloosa, Alabama refinery.”1 Plaintiffs also
alleged that “at the time of the incident, HRC and HCI, [were] operating as a joint
venture” and/or “joint enterprise where there was an agreement among the members
of the group, a common purpose, a common pecuniary interest, and an equal right of
control over the enterprise.”2
HRC and HCI removed to federal court and the Plaintiffs moved to remand,
alleging that HCI’s Texas citizenship destroyed diversity. HCI argued in response,
and in its motion to dismiss, that it had been improperly joined by Plaintiffs.
II. Legal Standard
“The burden of demonstrating improper joinder is a heavy one.”3 To establish
a claim for improper joinder, the party must show 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.”4 Under the second prong, courts
“examine whether there is no possibility of recovery by the plaintiff against an
1 Doc. 22 at 6.
2 Id. at 10.
3 McDonal v. Abbott Lab’y, 408 F.3d 177, 183 (5th Cir. 2005) (cleaned up).
4 Id.
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in-state defendant.”5 In other words, “there is no reasonable basis for the district
court to predict that the plaintiff might be able to recover against an in-state
defendant.”6
Courts determine whether there is a reasonable basis for recovery via a “Rule
12(b)(6)-type analysis.”7 Under Rule 12(b)(6), a complaint must allege sufficient facts
“to state a claim to relief that is plausible on its face.”8 And a claim is plausible on
its face when supported by enough facts that the Court can “draw the reasonable
inference that the defendant is liable for the misconduct alleged.”9 While a plaintiff
does not have to plead detailed facts at this stage, “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not
suffice.”10 Additionally, “dismissal is proper if the complaint lacks an allegation
regarding a required element necessary to obtain relief.”11
III. Analysis
HCI argues that the complaint fails to provide a reasonable basis for Plaintiffs’
recovery against HCI because (1) the complaint’s theories of agency and joint venture
5 Id. (cleaned up).
6 Id. (cleaned up).
7 Id. at 183 n.6.
8 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
9 Iqbal, 556 U.S. at 678.
10 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
11 Allen v. Walmart Stores, LLC, 907 F.3d 170, 178 (5th Cir. 2018).
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are built on conclusory statements and (2) the complaint fails to overcome the
presumption of corporate separateness. The Court agrees.
To begin with, Plaintiffs’ theories showing HCI’s control over HRC—agency
and joint venture—fail.
“An agency relationship exists when an individual has either actual authority
or apparent authority to act on behalf of another.”12 To show that HCI had actual or
apparent authority over HRC, Plaintiffs allege:
• HCI had “the right to control the means, method, and details of [HRC’s
employees’] work”13
• HCI “retained contractual control over the employees’ operation of the
refinery”14
• HCI and HRC had “an equal right of control over the enterprise”15
• “HCI exercised direct and indirect control over the operations of HRC,
including the policies, procedures, and safety protocols implemented at the
Tuscaloosa, Alabama refinery”16
• “HRC acted within the scope of its agency and was acting with the consent,
permission, ratification, authorization, and knowledge of HCI. All actions of
HRC alleged herein were ratified and approved by HCI and their respective
12 Exela Enter. Sols., Inc. v. NLRB, 32 F.4th 436, 446 (5th Cir. 2022).
13 Doc. 22 at 6.
14 Id. at 10.
15 Id.
16 Id. at 6.
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officers, directors, controlling persons, agents, aiders and abettors or co-
conspirators”17
Merely stating a parent company controlled or ratified a subsidiary’s acts
without any additional facts is insufficient—even at this stage of litigation—to
plausibly allege that an agency relationship exists.18 Accordingly, Plaintiffs’ agency
theory fails.
Their joint venture theory is similarly infirm. All Plaintiffs allege to support
this theory is that “[b]oth HRC and HCI also operated as a joint venture and/or joint
enterprise where there was an agreement among the members of the group, a
common purpose, a common pecuniary interest, and an equal right of control over the
enterprise.”19 Nothing more. These are textbook conclusory statements and cannot
make Plaintiffs’ claims against HCI plausible.
Because these theories fail, Plaintiffs’ complaint must overcome the Fifth
Circuit’s strong presumption of corporate separateness.20 This presumption “may be
overcome by clear evidence . . . something beyond the subsidiary’s mere presence
within the bosom of the corporate family.”21 To guide courts and plaintiffs, the Fifth
Circuit set out seven factors to consider:
(1) amount of stock owned by the parent of the subsidiary; (2) did the two
corporations have separate headquarters; (3) did they have common
officers and directors; (4) did they observe corporate formalities; (5) did
17 Id. at 10.
18 Schakosky v. Client Servs., Inc., 634 F. Supp. 2d 732, 735–36 (E.D. Tex. 2007).
19 Doc. 22 at 10.
20 See Dickson Marine Inc. v. Panalpina, Inc., 179 F.3d 331, 338 (5th Cir. 1999).
21 Id.
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they maintain separate accounting systems; (6) did the parent exercise
complete authority over general policy; (7) did the subsidiary exercise
complete authority over daily operations.22
None of these factors favor Plaintiffs’ position.
First, Plaintiffs make no allegations about HCI’s ownership of HRC stock, the
physical headquarters of HRC and HCI, corporate formalities, or the accounting
practices of HRC and HCI. So the first, second, fourth, fifth, and seventh factors
decisively favor HCI.
Second, Plaintiffs allege that HCI controls HRC because (1) there is one
common officer and two common board members,23 (2) six of HRC’s officers and board
members have offices at HCI’s Dallas building,24 (3) HCI’s Dallas address is listed on
HRC’s tax filings as HRC’s mailing address,25 and (4) HRC’s website advertises that
HCI provides access to “people, operations and business support.”26
But that is insufficient, as a matter of law, to overcome the presumption of
separateness. That burden “is a significant one.”27 It is especially difficult to clear at
without discovery, which is why parties ordinarily add other parties later in the suit
if there is disregard for corporate forms. Sparse allegations of the third and sixth
factors cannot make it plausible that the Plaintiffs prevail on a seven-factor test.
22 Id. at 339.
23 Doc. 39-1, Ex. 4.
24 Doc. 39-1, Ex. 3.
25 Id.
26 Doc. 39-1, Ex.7.
27 Edwards Co., Inc. v. Monogram Indus., Inc., 700 F.2d 994, 1000 (5th Cir. 1983).
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So Plaintiffs have failed to plead facts providing a reasonable basis for recovery
against HCI, and the Court must dismiss their claims.
IV. Conclusion
For the foregoing reasons, the Court GRANTS HCI’s motion to dismiss and
DISMISSES WITHOUT PREJUDICE Plaintiffs’ claims against HCI. The Court
also GRANTS Plaintiffs leave to amend their complaint to cure these defects within
twenty-eight days of the date of this order. The changes to the complaint are limited
to curing the defects this order identifies. Because Plaintiffs’ amended complaint will
invariably affect the merits of Plaintiffs’ motion to remand, the Court DENIES
WITHOUT PREJUDICE Plaintiffs’ motion to remand.
IT IS SO ORDERED this 3rd day of March, 2026.
__________________________________
BRANTLEY STARR
UNITED STATES DISTRICT JUDGE
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