Rico v. Flores

United States Court of Appeals
Fifth Circuit

IN THE UNITED STATES COURT OF APPEALS F I L E D
FOR THE FIFTH CIRCUIT March 7, 2007

)))))))))))))))))))))))))) Charles R. Fulbruge III
Clerk
No. 05-41719

))))))))))))))))))))))))))

JUVENAL ESPARZA RICO; ARCELIA CONTRERAS ORTEGA, Individually as
the sole surviving heirs of the Estate of their son, Omar Esparza
Contreras; MARIA INES MUNOZ BRIONES, Individually as next friend
of her minor children, Ingri Marvella Reyes Munoz and Clarisa
Yajaira Reyes Munoz, and as a surviving heir of the Estate of her
husband, Juan Enr; JUAN ANTONIO REYES AGUILAR, Individually;
IRENE GODINEZ CARDONA, Individually as next friend of her minor
son, Roberto Esparza Godinez, and as surviving heir of the Estate
of her husband, Roberto Esparza Godinez, and as a surviving heir;
CLEMENTINA SANCHEZ, Individually; EVA CRISTINA SANCHEZ SIERRA,
Individually as next friend of her minor children, Karla Lizeth
Amador Sanchez, Nancy Marisol Amador Sanchez, and Francis
Estefania Amador Sanchez, and as a surviving heir; MANUEL DOBLADO
AVILA, Individually; DELMIRA SOLER DOBLADO, Individually as next
friend of her minor children, Nelis Avila Soler, Ever Avila
Soler, and Elmer Roberto Avila Soler, and as a surviving heir of
the Estate of her husband, Isidro Avila Bueso; LUDIS YESENIA
SOLER, Individually; OBDULIA FERRUFINO BURGOS, Individually as
next friend of her minor grandchildren, Jonathan Joel Gutierrez
Ferrufino, Lely Ampao Canales Ferrufino, Ivy Roxana Canales
Ferrufino, and Oscar Alfredo Ferrufino; ROSA DELIA HERNANDEZ DE
ARDON, Individually as next friend of her minor children, Harold
Mauricio Ardon Hernandez, Marelyn Ivette Ardon Hernandez, and as
a surviving heir of the Estate of her husband; SIXTO ACEVEDO;
MARIA EMILIA PEREZ, Individually and as the sole surviving heirs
of the Estate of their son, Byron Adner Acevedo Perez

Plaintiffs-Appellants,

v.

ARNULFO FLORES, JR.; NORMA ARRIAGA TREVINO, also known as Norma
Bocanegra; UNION PACIFIC; AT&L RAILROAD COMPANY, INC; ARCHER
DANIELS MIDLAND CO.

Defendants-Appellees.
 Appeal from the United States District Court
for the Southern District of Texas
No. 1:04-CV-117

Before BARKSDALE, DeMOSS, and PRADO, Circuit Judges.

PRADO, Circuit Judge:

Plaintiff-appellant Juvenal Esparza Rico and numerous other

plaintiffs-appellants (collectively, “Plaintiffs”), who represent

the estates of ten deceased illegal immigrants, appeal the

district court’s order finding that non-diverse defendants

Arnulfo Flores, Jr. (“Flores”), and Norma Arriaga Trevino

(“Trevino”) were improperly joined and denying Plaintiffs’ motion

to remand to Texas state court. Because we conclude that the

application of the Texas unlawful acts rule to Plaintiffs’ claims

is too uncertain to support a finding of improper joinder, we

REVERSE the order of the district court and REMAND for further

proceedings consistent with this opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

This lawsuit stems from the deaths of ten illegal aliens who

stowed away in a grain hopper railroad car in an attempt to pass

undetected through the Border Patrol checkpoint at Sarita, Texas.

The ten aliens were locked into the rail car by smugglers with

whom they had conspired. They died from lack of oxygen,

overheating, and dehydration after being unable to escape. Their

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remains were found four months later in Denison, Iowa.

Plaintiffs, the surviving family members of the ten decedents,

brought suit in Texas state court against Flores, who is alleged

to have loaded the decedents into the grain hopper; Trevino, an

alleged co-conspirator in the smuggling operation; Union Pacific

Corporation and Union Pacific Railroad Company (collectively,

“Union Pacific”), the owner of the railroad car and employer of

Flores; AT&L Railroad Company, Inc. (“AT&L”), another railroad

company that may or may not have transported the rail car in

question; and Archer Daniels Midland Company (“Archer Daniels”),

the owner of the grain facility where the decedents’ remains were

ultimately found.

Against Flores and Trevino, Plaintiffs brought causes of

action for negligence and for civil conspiracy “derivative from

acts of negligence.” Against Union Pacific, Plaintiffs brought

causes of action for vicarious liability for the acts of Flores;

for negligent hiring, training, supervision, and retention of

Flores; and for premises liability. Plaintiffs did not specify

any causes of action against AT&L or Archer Daniels.

On July 9, 2004, Union Pacific removed this case to the

Southern District of Texas on the basis of diversity

jurisdiction. 28 U.S.C. 1441(b) provides that any civil action

over which the district courts have original jurisdiction that is

not founded on a claim or right arising under the Constitution,

treaties, or laws of the United States is removable only if none

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of the parties properly joined and served as defendants is a

citizen of the state in which the action is brought. Union

Pacific claimed that Defendants Flores and Trevino, citizens of

Texas, were both improperly joined because Texas’s unlawful acts

rule barred Plaintiffs’ claims against Flores and Trevino. The

unlawful acts rule is a rule of Texas common law that generally

bars claims that implicate an illegal act by the plaintiff.1

Plaintiffs filed a motion to remand on July 19, 2004,

arguing first, that removal was improper because defendants

Flores and Trevino did not consent; second, that defendants

Flores and Trevino had not raised the unlawful acts rule in their

defense; third, that the unlawful acts rule is inapplicable in

wrongful death cases because it is superseded by section 93.001

of the Texas Civil Practice & Remedies Code; and fourth, that

even if the unlawful acts rule does apply, it does not bar

Plaintiffs’ claims because Plaintiffs do not have to prove their

unlawful act to make out their causes of action.

While these arguments were being considered by the district

court, this circuit handed down its en banc decision in Smallwood

v. Illinois Central Railroad Co., 385 F.3d 568 (5th Cir. 2004)(en

banc). Smallwood held that a district court must remand a case

where a defendant asserts a defense in support of improper

1
As discussed at greater length herein, there are a number
of differently worded versions of the unlawful acts rule.

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joinder that is dispositive of all claims in the action. Id. at

571. The district court offered the parties an opportunity to

address the impact of Smallwood on their case, at which time

Plaintiffs argued that if the unlawful acts rule barred claims

against Flores and Trevino, so too it barred claims against the

diverse defendants, and therefore, under Smallwood, the case must

be remanded to state court.

On May 6, 2005, the district court handed down its

Memorandum Order and Opinion denying Plaintiffs’ motion to

remand. The district court also that day issued an order

dismissing defendant AT&L for lack of personal jurisdiction. On

May 19, 2005, the district court issued an Amended Memorandum

Opinion and Order.2 The district court’s Amended Memorandum

Opinion and Order (“Order”) rejected each of the Plaintiffs’

arguments. The district court ruled that the fact that Flores and

Trevino had not pleaded the unlawful acts rule was not

dispositive because “the issue was squarely raised by the Removal

Notice and responded to in the Motion to Remand.” Rico v. Flores,

405 F. Supp. 2d 746, 755 (S.D. Tex. 2005). The district court

also held that Flores and Trevino’s lack of consent to removal

did not bar removal because “consent need not be obtained from a

co-defendant that the removing party contends is improperly

joined.” Id. at 756. The district court held that section 93.001

2
We have not been able to discern any difference between
the original and the Amended Memorandum Opinion and Order.

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did not govern this case, and that the unlawful acts rule did bar

Plaintiffs’ claims against Flores and Trevino. The district court

found, however, that the unlawful acts rule did not bar certain

claims by Plaintiffs against Union Pacific, because the only

illegal act which Plaintiffs must show to make out these claims

was trespass, which is an exception to the unlawful acts rule.

Id. at 768-70.

In its Order, the district court noted that Title 28,

§ 1292(b) of the United States Code permits a court to certify an

interlocutory appeal where (1) a controlling question of law is

involved, (2) there is substantial ground for difference of

opinion about the question of law, and (3) immediate appeal will

materially advance the ultimate termination of the litigation.

Finding that this case met these criteria, the district court

certified the case for appeal. Id. at 770-71. We granted

Plaintiffs’ petition for permission to appeal on December 1,

2005. This appeal by Plaintiffs followed.

II. APPELLATE JURISDICTION AND STANDARD OF REVIEW

This court’s jurisdiction over Plaintiffs’ appeal “derives

from the district court’s certification of its interlocutory

order denying the motion to remand as suitable for appeal under

28 U.S.C. § 1292(b).” Ard v. Transcon. Gas Pipe Line Corp., 138

F.3d 596, 600 (5th Cir. 1998). 28 U.S.C. § 1447(d) forbids

appellate court review of district court decisions to remand in

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the face of an alleged lack of subject matter jurisdiction;

however, § 1447(d) does not preclude appellate review of a

district court decision not to remand when the district court

finds that subject matter jurisdiction exists. Bissonnet Invs.

LLC v. Quinlan, 320 F.3d 520, 525 (5th Cir. 2003). We review

questions of subject matter jurisdiction de novo. Id. at 522.

III. STANDARD FOR IMPROPER JOINDER

To establish that a non-diverse defendant has been

improperly joined to defeat diversity jurisdiction, the removing

party must prove “(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.” Smallwood, 385 F.3d at 573 (quotation omitted).

Here, there has been no claim that Plaintiffs fraudulently

pleaded jurisdictional facts, so our concern is with the second

prong. The test established by our circuit 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 making this

determination, the district court is “obliged to resolve any

contested issues of material fact, and any ambiguity or

uncertainty in the controlling state law, in [the plaintiff’s]

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favor.” Griggs v. State Farm Lloyds, 181 F.3d 694, 699 (5th Cir.

1999). Plaintiffs argue that throughout its Order, the district

court erred by resolving ambiguities in the controlling state law

in favor of Union Pacific. As discussed below, this contention

has merit.

IV. DISCUSSION

On appeal, Plaintiffs argue that (1) Union Pacific’s removal

petition was defective because all defendants did not consent to

removal; (2) the district court erred in considering the unlawful

acts rule, when it was never pleaded by the in-state defendants;

(3) section 93.001(a)(1) of the Texas Civil Practice & Remedies

Code preempts the unlawful acts rule in wrongful death cases; (4)

the unlawful acts rule does not bar Plaintiffs’ claims against

Flores and Trevino; (5) if the unlawful acts rule does bar

Plaintiffs’ claims against Flores and Trevino, it also bars

Plaintiffs’ claims against the out-of-state defendants. Union

Pacific contests these arguments.

A. Failure to Obtain Consent for Removal

Plaintiffs argue that under 28 U.S.C. § 1446, Union

Pacific’s removal was invalid because it lacked the consent of

Flores and Trevino. To support this argument, Plaintiffs cite

Getty Oil Corp. v. Insurance Co. of North America, 841 F.2d 1254,

1262 (5th Cir. 1988). Getty Oil, however, states that “[28 U.S.C.

§ 1446] has been interpreted to require that all then-served

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properly joined defendants join in the removal petition.” Id. at

1262 (emphasis added). This statement does not support

Plaintiffs’ position, since Union Pacific claims that Flores and

Trevino were not properly joined. In Jernigan v. Ashland Oil

Inc., 989 F.2d 812, 815 (5th Cir. 1993), this court held that a

removing party need not obtain the consent of a co-defendant that

the removing party contends is improperly joined. The Jernigan

court explained that such a requirement would be “nonsensical, as

removal in those cases is based on the contention that no other

proper defendant exists.” Id. Therefore, the district court was

correct in holding that the absence of consent by Flores and

Trevino did not render Union Pacific’s removal invalid.

B. Failure to Plead Unlawful Acts Rule by In-State Defendants

Plaintiffs next contend that the failure of Flores and

Trevino to plead the unlawful acts rule in their respective

answers bars Union Pacific from relying on this rule when

claiming improper joinder.

The district court reasoned that Rule 8 of the Federal Rules

of Civil Procedure allows a technical failure in pleading so long

as “the matter is raised in the trial court in a manner that does

not result in unfair surprise.” Rico v. Flores, 405 F. Supp. 2d

at 755. Noting that Union Pacific “squarely raised” the unlawful

acts rule in its removal notice, and that Plaintiffs responded in

their own briefing, the district court concluded that there was

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no unfair surprise. Id.

This analysis misses the point. Plaintiffs argue that, in

accordance with the law of improper joinder, Union Pacific must

demonstrate that “there is no possibility of recovery by the

plaintiff against an in-state defendant.” Smallwood, 385 F.3d at

573. Union Pacific has attempted to make this showing by pointing

to the unlawful acts rule. Plaintiffs argue, however, that

regardless of the applicability of this rule to their claims,

their possibility of recovery against Flores and Trevino remains

strong so long as Flores and Trevino do not plead the unlawful

acts rule in their defense. Both defendants pleaded a general

denial in their answers, and neither raised the unlawful acts

rule. Plaintiffs correctly argue, therefore, that the fact that

Union Pacific raised the rule in a timely fashion is irrelevant.

It is possible, however, that the Texas unlawful acts rule

is imposed as a matter of public policy, and that a Texas court

will refuse to enforce claims that are barred by public policy

even when that policy is not affirmatively invoked by a party.

See Phillips v. Phillips, 820 S.W.2d 785, 789 (Tex. 1991).3

3
There are several cases in which a Texas court declared
enforcement of the unlawful acts rule to be a matter of public
policy. Cf. Saks v. Sawtelle, Goode, Davidson & Troilo, 880
S.W.2d 466, 470 (Tex. App.–-San Antonio 1994, writ denied)
(“[P]ublic policy bars recovery for injuries arising from a
knowing and willful crime.”); Dover v. Baker, Brown, Sharman &
Parker, 859 S.W.2d 441, 451 (Tex. App–-Houston [1st Dist.] 1993,
no writ) (“[W]here [plaintiff] was a knowing and wilful party to
the illegal acts which contributed to his injury, public policy

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However, because our conclusion that the application of the

unlawful acts rule to Plaintiff’s claims is too uncertain to

support improper joinder requires remand to the state court, we

need not decide this issue.

C. Preemption of Unlawful Acts Rule in Wrongful Death Cases

Plaintiffs argue that for wrongful death suits, the unlawful

acts rule is preempted by section 93.001(a)(1) of the Texas Civil

Practice & Remedies Code. Section 93.001 reads as follows:

§ 93.001. Assumption of the Risk: Affirmative Defense

(a) It is an affirmative defense to a civil action for
damages for personal injury or death that the plaintiff,
at the time the cause of action arose, was:

(1) committing a felony, for which the plaintiff has been
finally convicted, that was the sole cause of the damages
sustained by the plaintiff . . . .

(c) In an action to which this section applies, this
section shall prevail over any other law.

Plaintiffs argue that section 93.001(c) provides that

section 93.001(a)(1) prevails over any other law relating to

civil actions for damages for personal injury or death.

Plaintiffs therefore argue that section 93.001(a)(1), which

requires that a plaintiff have been finally convicted of a felony

before the defense is available, prevails over the unlawful acts

rule, which has no such requirement.

The district court rejected the Plaintiffs’ argument,

clearly bars him from bringing suit to recover damages resulting
from those acts.”).

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declaring that the “plain wording” of the statute indicates that

section 93.001(a)(1) controls only when a plaintiff has been

finally convicted of a felony offense. As a result, the district

court concluded that section 93.001(a)(1) does not preempt the

unlawful acts rule in Plaintiffs’ case, since they have not been

finally convicted.

Plaintiffs insist that the district court misread the “plain

wording” of the statute, claiming that the word “action” in

section 93.001(c) refers to the “civil action for damages for

personal injury or death” mentioned in section 93.001(a). This

interpretation of “action” is likely correct, but

section 93.001(c) references not just an “action” but “an action

to which this section applies.” The language “to which this

section applies” appears to limit the reach of section 93.001(c)

to situations where sections 93.001(a)(1) or 93.001(a)(2) apply.

Otherwise, the result would be that section 93.001(c) would

prevail over all other law relating to civil actions for damages

for personal injury or death, which seems improbable. On the

other hand, it also seems improbable that a statute that creates

a narrow, specific defense to a wrongful death action would leave

unaffected the much broader defense of the unlawful acts rule.4

We have not identified any caselaw directly addressing the

4
Unless, of course, the unlawful acts rule does not apply
to wrongful death actions. See herein, section IV(D)(1).

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preclusive effect of section 93.001(c).5

The district court’s interpretation of section 93.001 was

likely correct, but there remains substantial uncertainty about

the relationship of section 93.001 to the unlawful acts rule.

This uncertainty supports our conclusion that the district

court’s finding of improper joinder was in error.

D. Unlawful Acts Rule Applied to Plaintiffs’ Claims Against
Flores and Trevino

(1) Does the unlawful acts rule apply to wrongful death
claims?

It is undisputed that there are no Texas cases applying the

unlawful acts rule to a wrongful death claim. Plaintiffs argue

that the district court wrongfully engaged in speculation about

whether the Texas courts would apply the unlawful acts rule to a

wrongful death claim, and made an “Erie guess” that they would.

Plaintiffs contend that after acknowledging the lack of caselaw

on this point, the district court should have ruled that Union

Pacific had failed to meet its burden for demonstrating improper

joinder.

Union Pacific counters that the unlawful acts rule is a

5
One potentially relevant case is Ward v. Emmett, 37 S.W.3d
500 (Tex. App.–-San Antonio 2001, no pet.). In this case, the
defendants raised both the unlawful acts rule and section 93.001,
and the trial court granted summary judgment on both grounds. The
court of appeals affirmed, discussing section 93.001 and the
unlawful acts rule without any suggestion that one preempted the
other. The court of appeals’ analysis, however, was not
especially searching.

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general rule that applies across the board where a plaintiff

committed an unlawful act that contributed to the plaintiff’s

injuries. Union Pacific argues, therefore, that it is unnecessary

for a Texas court to have specifically held that the unlawful

acts rule applies to wrongful death suits for the district court

in this case to have concluded properly that it does apply.

Further, Union Pacific argues that no Texas cases applying the

unlawful acts rule have drawn distinctions based on the nature or

severity of the plaintiff’s injuries.

The unlawful acts rule was first fully stated by the

Texas Supreme Court in the 1888 case Gulf, Colorado & Santa

Fe Railway Co. v. Johnson, 9 S.W. 602, 603 (Tex. 1888).

There the Court declared,

It may be assumed, as undisputed doctrine, that no action
will lie to recover a claim for damages if, to establish
it, the plaintiff requires aid from an illegal
transaction, or is under the necessity of showing or in
any manner depending upon an illegal act to which he is a
party. . . .
. . . [W]here it is shown that, at the time of the
injury, the plaintiff was engaged in the denounced or
illegal act, the rule is, if the illegal act contributed
to the injury, he cannot recover . . . .

Subsequent cases state the rule in equally sweeping terms. “The

unlawful act rule provides that no action may be predicated upon

an admittedly unlawful act of the party asserting it.” Rodriquez

v. Love, 860 S.W.2d 541, 544 (Tex App.–-El Paso 1993, no writ).

“No recovery can be had if it is necessary for the plaintiff to

prove, as part of his cause of action, his own illegal contract

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or other illegal transaction.” Marathon Oil Co. v. Hadley, 107

S.W.2d 883, 885 (Tex. Civ. App.–-Fort Worth 1935, writ dism’d).

These statements lend support to Union Pacific’s position that

the unlawful acts rule is one of general application which

applies to all claims, including wrongful death claims.

It appears, however, that Texas courts have also created a

number of exceptions to the unlawful acts rule. In De Vall v.

Strunk, 96 S.W.2d 245, 247 (Tex. Civ. App.–-Galveston 1936, no

writ), the court found the “strict general [unlawful acts] rule

applicable only where the participating parties in an illegal or

immoral transaction are of equal guilt with reference thereto.”

In Pyeatt v. Stroud, 264 S.W. 307, 309 (Tex. Civ. App.–-Galveston

1924), aff’d, 269 S.W. 430, (Tex. Comm’n App. 1925), the court

found an exception to the rule where “the injury was caused by

the willful or wanton act of the party causing such injury.” In

Duncan Land & Exploration, Inc. v. Littlepage, 984 S.W.2d 318,

329 (Tex. App.–-Fort Worth 1998, pet. denied), the court

concluded that “the extraordinary circumstances of this case

dictate that public policy should not preclude [plaintiff] from

recovery as a matter of law.” The court also noted that “courts

in oil and gas cases have only invoked the illegal acts rule

against a private entity when doing so favored the Railroad

Commission.” Id. at 330 n.4.

In addition, as was central to the district court’s

conclusion that the unlawful acts rule does not apply to

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Plaintiffs’ claim against Union Pacific (see herein, section

IV(E)), it appears that the unlawful acts rule does not apply to

cases where the unlawful act in question was trespass. Texas

courts have repeatedly held that a landowner owes a duty to a

trespasser “to refrain from injuring the trespasser willfully,

wantonly, or through gross negligence.” State v. Shumake, 199

S.W.3d 279, 285 (Tex. 2006); see also Tex. Util. Elec. Co. v.

Timmons, 947 S.W.2d 191, 193 (Tex. 1997). The cases that

articulate this duty do not mention the unlawful acts rule, even

though it would appear that the trespasser’s injury is a direct

result of his violation of the law. Indeed, we have found no

Texas cases applying the unlawful acts rule to the claims of a

trespasser.

In light of these exceptions, it is apparent that the Texas

courts’ application of the unlawful acts rule has not been nearly

as uniform as Union Pacific suggests. Consequently, we cannot say

with any certainty that the Texas courts would apply the unlawful

acts rule to a wrongful death claim.

(2) If the unlawful acts rule does apply to wrongful death
claims, does it necessarily bar Plaintiffs’ claims
against Flores and Trevino?

The Johnson case alone contains multiple differently worded

statements of the unlawful acts rule–-one focusing on the timing

of the plaintiff’s injury, another on how the plaintiff makes out

his claim, and yet another on the cause of the plaintiff’s

injury. Plaintiffs make arguments based on each version. Relying

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on Johnson’s “at the time of the injury,” language,6 Plaintiffs

contend that at the time of the decedents’ injuries, which in a

wrongful death suit is the time of death, the decedents were not

engaged in an unlawful act. They argue that, once past the

Sarita, Texas checkpoint, the decedents were no longer violating

the immigration laws. This argument has some merit, since at that

point the decedents’ illegal entry was completed. See 8 U.S.C. §

1325; United States v. Rincon-Jimenez, 595 F.2d 1192, 1193-94

(9th Cir. 1979). It is therefore likely that the only offense

that the decedents were committing past the Sarita, Texas

checkpoint was trespass.

Cases since Johnson have downplayed the timing element and

focused on whether to make out their claim, plaintiffs must show

an illegal act on their part. “[I]f a party can show a complete

cause of action without being obliged to prove his own illegal

act, although said illegal act may appear incidentally and may be

important in explanation of other facts in the case, he may

recover.” Norman v. B.V. Christie & Co., 363 S.W.2d 175, 178

(Tex. Civ. App–-Houston 1962, writ ref. n.r.e.); see also

Rodriquez, 860 S.W.2d at 544; Marathon Oil Co., 107 S.W.2d at

885.

6
“[W]here it is shown that, at the time of the injury, the
plaintiff was engaged in the denounced or illegal act, the rule
is, if the illegal act contributed to the injury, he can not
recover . . . .” Johnson, 9 S.W. at 603.

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 Plaintiffs assert that they succeed under this version of

the unlawful acts rule as well. They argue that they do not need

to prove any illegal act, other than perhaps trespass, to make

out their negligence claim against Flores and Trevino. The

context of the trespass, an effort to evade inspection at the

border crossing, need not enter the analysis. There is at least

one Texas case supporting this logic: In Murry v. Campbell, 338

S.W.2d 483 (Tex. Civ. App.–-Amarillo 1960, no writ), the court

permitted a creditor to recover on a note even though the source

of the debt was an illegal craps game.

Union Pacific, in turn, refers this court to the causation

language from Johnson (“if the illegal act contributed to the

injury he can not recover”), which was cited recently in Dover,

859 S.W.2d at 451. In Dover, the court concluded that the

plaintiff’s claims were barred because his illegal conduct was

“inextricably intertwined with [his] claims,” and that his

“illegal act contributed to his injury.” Id. Picking up on this

language, Union Pacific argues that the decedents’ illegal acts

contributed to and were inextricably intertwined with their

deaths.

At least one Texas case supports a contrary view. In Petta

v. Rivera, 985 S.W.2d 199, 204 (Tex. App.–-Corpus Christi 1998),

rev’d on other grounds, 44 S.W.3d 575 (Tex. 2001), the court held

that the unlawful acts rule did not bar the plaintiff from

bringing suit against a police officer, even though her conduct

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in fleeing the officer was illegal. The court found that “the

evidence does not show that [plaintiff’s] conduct contributed to

her alleged injuries,” for “Petta’s flight did not cause Rivera”

to curse her, beat her car with a nightstick, and then shoot at

her. Id. A Texas court could likewise conclude that the

decedents’ unlawful acts did not cause Flores and Trevino to

leave them to their deaths (allegedly) in the railcar.

In sum, there are multiple versions of the unlawful acts

rule, versions which emphasize different links between a

plaintiff’s illegal acts and injuries suffered. For each of these

versions, Plaintiffs raise a plausible argument. The district

court erred by resolving the ambiguities of Texas’s unlawful acts

rule against Plaintiffs. See Griggs, 181 F.3d at 699. Moreover,

the contours of the unlawful acts rule are simply too unclear to

say that because of this rule, Plaintiffs have no possibility of

recovery from Flores and Trevino. See Smallwood, 385 F.3d at 573.

E. Unlawful Acts Rule Applied to Plaintiffs’ Claims Against
Union Pacific

The same ambiguities that complicate the application of the

unlawful acts rule to Plaintiffs’ claims against Flores and

Trevino also make uncertain the rule’s application to Plaintiffs’

claims against Union Pacific.

Under the this court’s holding in Smallwood, this case must

be sent back to state court if the same principal that bars

Plaintiffs’ claims against Flores and Trevino also bars

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Plaintiffs’ claims against the diverse defendants. 385 F.3d at

571. To the extent that Union Pacific’s liability rests on a

theory of respondeat superior or negligent

hiring/training/supervision, it appears that Union Pacific cannot

be liable where the claims against Flores and Trevino are barred.

Relying on the supposed trespass exception to the unlawful acts

rule, however, the district court concluded that the Plaintiffs’

premises liability claims against Union Pacific were not barred.

The court reasoned that the Plaintiffs would need to prove their

trespass, but not any other illegal acts, to make out their

premises liability claim against Union Pacific.

It is not clear, however, that a Texas court would use this

mode of analysis. Relying on the causation language from Johnson

and Dover, the Texas court might reason that the decedents’

attempt to enter this country unlawfully most certainly

contributed to, and indeed was “inextricably intertwined with,”

the injuries they ultimately suffered. Following this logic, the

Plaintiffs’ claims against both in-state and out-of-state

defendants would be barred, and remand to state court would be

required under Smallwood. This additional layer of uncertainty

supports our conclusion that the district court erred by

resolving the ambiguities of Texas’s unlawful acts rule against

Plaintiffs.

V. CONCLUSION

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 While the district court’s interpretations of the Texas

unlawful acts rule are not unreasonable, there are alternative

reasonable interpretations that a Texas court might reach. Our

precedent concerning improper joinder counsels that if there is

ambiguity in the state law, this ambiguity must be resolved in

favor of the plaintiff. After thus resolving the ambiguity, a

court may find that there is improper joinder only when there is

“no reasonable basis . . . to predict that the plaintiff might be

able to recover against an in-state defendant.” Smallwood, 385

F.3d at 573. This case does not meet that high standard.

REVERSED and REMANDED for proceedings consistent with this

opinion.

RHESA HAWKINS BARKSDALE, Circuit Judge, concurring in part and

dissenting in part:

For this 28 U.S.C. § 1292(b) interlocutory appeal from a

remand-denial because of improper joinder, I concur in part IV.A

of the majority opinion (holding the absence of consent by in-

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state defendants Flores and Trevino did not render Union

Pacific’s removal invalid). In parts IV.B and C, the majority

does not decide: whether the failure of the in-state defendants

to plead the unlawful-acts rule bars Union Pacific from relying

on it; and whether the unlawful-acts rule is preempted by TEX.

CIV. PRAC. & REM. CODE § 93.001(a)(1). Although I would answer both

questions in the negative, my dissent is limited to the issues

decided by the majority in parts IV.D (interpreting and applying

Texas’ unlawful-acts rule to claims against Flores and Trevino)

and E (applying that rule for claims against Union Pacific).

Because I disagree with the majority’s improper-joinder analysis,

I must respectfully dissent from those two parts.

Despite, or perhaps because of, its exhaustive analysis of

Texas caselaw, the majority’s improper-joinder analysis loses

sight of the proverbial forest for its trees. Its in-depth

discussion of Texas’ unlawful-acts rule fails, inter alia, to

give effect to the very sound public policy underlying it. Along

that line, the majority’s application of our court’s controlling

improper-joinder test, stated by our en-banc court in Smallwood

v. Illinois Central Railroad Co., 385 F.3d 568 (5th Cir. 2004),

is overly, and erroneously, restrictive. Therefore, essentially

for the reasons stated by the district court, I would affirm:

(1) its dismissal of Flores and Trevino on improper-joinder

grounds; and (2) its denial of plaintiffs’ motion to remand to

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state court. Rico v. Flores, 405 F. Supp. 2d 746 (S.D. Tex.

2005).

I.

Although the district court, by a 6 May 2005 order, allowed

the parties to begin discovery, it does not appear it was

commenced. Accordingly, the relevant facts come from the

operative complaint.

This wrongful-death action arises out of the deaths of ten

illegal aliens (decedents) who entered into an illegal agreement

to pass undetected through the Sarita, Texas, border-patrol

checkpoint, in violation of United States immigration laws.

Plaintiffs’ complaint states, inter alia: co-conspirator Flores,

a Union Pacific employee, helped the decedents cross into the

United States and hid them from the authorities; Flores accepted

a monetary fee from the decedents in exchange for his allowing

them to stow away on a Union Pacific railcar; and Flores and co-

conspirator Trevino (in-state defendants) loaded the decedents

onto that railcar, promising them safe passage beyond the border.

II.

Union Pacific, the diverse defendant, removed this action to

federal court on the basis that the in-state defendants were

joined improperly to prevent such removal. See 28 U.S.C. §

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1441(b) (an action for which there is diversity jurisdiction, as

in the action at hand, “shall be removable only if none of the

parties in interest properly joined and served as defendants is a

citizen of the State in which such action is brought” (emphasis

added)). Smallwood adopted the following for the applicable

improper-joinder inquiry for such a situation, explicitly

rejecting all others:

[W]hether 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.

385 F.3d at 573 (emphasis added). “In making this legal

determination, we are obliged to resolve any contested issues of

material fact, and any ambiguity or uncertainty in the

controlling state law, in [plaintiffs’] favor.” Griggs v. State

Farm Lloyds, 181 F.3d 694, 699 (5th Cir. 1999). As repeated in

Smallwood, however, “[a] ‘mere theoretical possibility of

recovery under local law’ will not preclude a finding of improper

joinder”. Id. at 573 n.9 (quoting Badon v. RJR Nabisco, Inc.,

236 F.3d 282, 286 n.4 (5th Cir. 2000)). Further, Smallwood

adopted a second step for improper-joinder inquiries:

When a nonresident defendant’s showing that
there is no reasonable basis for predicting
that state law would allow recovery equally
disposes of all defendants, there is no
improper joinder of the in-state defendant.

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 In such a situation, the entire suit must be
remanded to state court.

Id. at 571 (emphasis added). These two steps are addressed in

turn.

A.

For the first step, the unlawful-acts rule applies in this

wrongful-death action and results in there being “no reasonable

basis ... to predict ... plaintiff[s] might be able to recover

against [the] in-state defendant[s]”. Id. at 573. Accordingly,

I would affirm Flores and Trevino’s dismissal on improper-joinder

grounds.

1.

The decedents engaged willingly in criminal conduct that,

tragically, lead to their deaths. Along that line, Flores

pleaded guilty to conspiring to transport illegal aliens, in

violation of 8 U.S.C. §§ 1324(a)(1)(A)(ii), (a)(1)(v)(I). United

States v. Flores, No. CR M-03-661 (S.D. Tex. 1 August 2003). The

district court took judicial notice that Trevino pleaded guilty

to a similar § 1324 offense. Rico, 405 F. Supp. 2d at 752.

Despite acknowledging decedents’ criminal conduct, the majority,

resting heavily on several perceived “exceptions” to the

unlawful-acts rule, “cannot say with any certainty that the Texas

courts would apply the unlawful acts rule to a wrongful death

claim”. Maj. Opn. at 16. This conclusion is flawed in several

respects.

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 First, it ignores well-settled Texas law regarding wrongful-

death claims. Texas’ wrongful-death act “applies only if the

individual injured would have been entitled to bring an action

for the injury if he had lived”. TEX. CIV. PRAC. & REM. CODE §

71.003(a). Accordingly, any defense which would have defeated

the decedent’s claim likewise defeats that of his wrongful-death

beneficiary. E.g., Slaughter v. Southern Talc Co., 949 F.2d 167,

173 (5th Cir. 1991) (“Plaintiffs in a [Texas] wrongful death

action are in the procedural shoes of the decedent, and defenses

to the decedent’s personal injury action are defenses to the

wrongful death plaintiffs’ claim.”); Diaz v. Westphal, 941 S.W.2d

96, 98 (Tex. 1997) (“The right to maintain such actions ‘is

entirely derivative of the decedent’s right to have sued for his

own injuries immediately prior to his death, and is subject to

the same defenses to which the decedent’s action would have been

subject.’” (quoting Russell v. Ingersoll-Rand Co., 841 S.W.2d

343, 347 (Tex. 1992))).

Moreover, as the majority acknowledges, “[t]here are several

cases in which a Texas court declared enforcement of the unlawful

acts rule to be a matter of public policy”. Maj. Opn. at 10 n.3.

Nevertheless, the majority’s erroneous conclusion about the

rule’s application in a wrongful-death action contravenes the

reasonable and oft-stated rationale for that rule: “[P]ublic

policy bars recovery for injuries arising from a knowing and

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willful crime”. Saks v. Sawtelle, Goode, Davidson & Troilo, 880

S.W.2d 466, 470 (Tex. App. — San Antonio 1994, writ denied). See

also Ward v. Emmett, 37 S.W.3d 500, 502 (Tex. App. — San Antonio

2001, no pet.) (“Courts ... have used this rule, along with

public policy principles, to prevent a plaintiff from recovering

damages that arose out of his or her own illegal conduct.”);

Dover v. Baker, Brown, Sharman & Parker, 859 S.W.2d 441, 451

(Tex. App. — Houston [1st Dist.] 1993, no writ) (“[W]here

[plaintiff] was a knowing and wilful party to the illegal acts

which contributed to his injury, public policy clearly bars him

from bringing suit to recover damages resulting from those

acts.”); Houston Ice & Brewing Co. v. Sneed, 132 S.W. 386, 388

(Tex. Civ. App. 1910, writ denied) (“it is against public policy

to allow redress for any agreement or act in violation of law”).

In the light of the rule’s compelling public-policy

rationale, it is not surprising that it has been stated broadly.

See, e.g., Stevens v. Hallmark, 109 S.W.2d 1106 (Tex. Civ. App. —

Austin 1937, no writ) (“no legal right, which will form the basis

of a cause of action, arises out of an unlawful act; and ... no

such alleged right can be asserted in the courts, the foundation

of which must be predicated upon the admittedly unlawful act of

the party asserting it” (emphasis added)). Most importantly, it

is not surprising that the rule, which has been applied in

actions sounding in both contract and tort, appears to apply

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regardless of the type claim raised. As the Texas Court of Civil

Appeals stated in Houston Ice:

To refuse such ... damages on a contract of
indemnity because against public policy, and
to allow the recovery of such ... damages
because founded on deceit, is merely to
change the form of the action, and by such
indirection to nullify the principle. If it
is against public policy and void in one form
of action, no good reason exists why it
should not be equally so in the other, as
having in each suit the tendency to interfere
with the due administration of the law.

132 S.W. at 388.

In sum, particularly given the sound public policy

underlying the unlawful-acts rule, there is “no reasonable basis”

to predict a Texas court would not apply it in this action.

2.

Because the unlawful-acts rule is applicable to this

wrongful-death action, the above-stated controlling inquiry for

improper joinder in this action is “whether ... there is no

reasonable basis for the district court to predict ...

plaintiff[s] might be able to recover against [Flores and

Trevino]”. Smallwood, 385 F.3d at 573 (emphasis added). If such

reasonable basis is lacking, there is improper joinder.

The majority, relying on perceived “ambiguities” surrounding

the unlawful-acts rule, concludes it cannot “say ... [p]laintiffs

have no possibility of recovery from Flores and Trevino”. Maj.

Opn. at 19. This conclusion, however, ignores the alternative in

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our controlling test. As discussed, Smallwood equates “no

possibility of recovery” with “no reasonable basis”. The

majority, however, seemingly substitutes an “absolutely no basis”

requirement for the “no reasonable basis” requirement. In any

event, even assuming arguendo the existence of such

“ambiguities”, to be resolved in plaintiffs’ favor, they

establish, at most, the above-discussed “mere theoretical

possibility of recovery under local law [, which] will not

preclude a finding of improper joinder”. Smallwood, 385 F.3d at

573 n.9 (quotation omitted) (emphasis added).

In stating the unlawful-acts rule, Texas courts have not

always used precisely the same language. Nonetheless, it is

clear that, “if the illegal act is inextricably intertwined with

the claim and the alleged [injuries] would not have occurred but

for the illegal act, the plaintiff is not entitled to recover”.

Sharpe v. Turley, 191 S.W.3d 362, 366 (Tex. App. — Dallas 2006)

(emphasis added). As alleged in the complaint, plaintiffs’

claims against Flores and Trevino are based on their: loading

the decedents into a railcar from which they would be unable to

escape; locking it from the outside; failing to warn the

decedents of their inability to unlock it; failing to timely

release them; and failing to inform others that the decedents

were locked in it. It cannot reasonably be suggested that the

decedents’ illegal agreement to violate United States immigration

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laws – the sole reason for their presence in the railcar – was

not “inextricably intertwined” with their tragic deaths; rather,

plaintiffs’ claims arise directly out of that illegal agreement.

As discussed, “[Texas] public policy bars recovery for

injuries arising from a knowing and willful crime”. Saks, 880

S.W.2d at 470. In the light of that public policy, and

regardless of the specific formulation of the unlawful-acts rule,

there is “no reasonable basis” to predict plaintiffs might be

able to recover against Flores and Trevino.

B.

Because there is “no reasonable basis” of recovery against

the in-state defendants, resulting in their joinder being

improper, Smallwood’s earlier-quoted second step must be

addressed: whether the unlawful-acts rule “equally disposes of

all defendants”. 385 F.3d at 571 (emphasis added). If so,

notwithstanding the improper joinder, the action must be remanded

to state court. Id. Although the majority does not explicitly

make this determination, its opinion indicates that, because the

unlawful-acts rule does not dispose of all of plaintiffs’ claims

against Union Pacific, remand to state court would not be

required under this second step.

As analyzed by the majority opinion at 3, plaintiffs

presented claims against Union Pacific for, inter alia, premises

liability. Along that line, and as the majority acknowledges,

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“Texas courts have repeatedly held that a landowner owes a duty

to a trespasser ‘to refrain from injuring the trespasser

willfully, wantonly, or through gross negligence’”. Maj. Opn. at

16 (quoting State v. Shumake, 199 S.W.3d 279, 285 (Tex. 2006)).

Because Texas courts have done so without mention of the

unlawful-acts rule, this landowner’s duty appears to exist

independently of any illegal act by the trespasser (other than

the trespass itself). Accordingly, the unlawful-acts rule would

arguably not bar plaintiffs’ premises-liability claim, regardless

of the decedents’ illegal agreement. See Macias v. Moreno, 30

S.W.3d 25, 29 (Tex. App. — El Paso 2000, pet. denied) (“if a

party can show a complete cause of action without [having] to

prove their own illegal act, although the illegal act may appear

incidentally ..., they may recover”).

Consistent with the district court’s ruling, the majority

acknowledges: “[I]t appears that the unlawful acts rule does not

apply to cases where the unlawful act in question was trespass”.

Maj. Opn. at 16 (emphasis added). A Texas court might find the

decedents’ illegal acts “inextricably intertwined” with their

premises-liability claim and thus apply the unlawful-acts rule to

bar recovery on it. See Maj. Opn. at 20-21. This, however, is

the same type of “mere theoretical possibility”, discussed supra,

that does not require remand under this second step for improper-

joinder analysis.

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 III.

Pursuant to Smallwood’s two-step test, primarily at issue in

this interlocutory appeal is: (1) whether there is “no

reasonable basis for the district court to predict ...

plaintiff[s] might be able to recover against [the] in-state

defendant[s]”, 385 F.3d at 573; and (2) if “no reasonable basis”

exists, whether that showing disposes of the claims against all

defendants, id. at 571. Because there is “no reasonable basis”

and that showing does not dispose of all claims against Union

Pacific, I would affirm both the district court’s dismissal of

Flores and Trevino and its denial of remand to state court.

As instructed by Smallwood, “[t]he doctrine of improper

joinder implements our duty to not allow manipulation of our

jurisdiction”. Id. at 576 (emphasis added). In the light of the

sound public policy for the unlawful-acts rule, it is obvious

plaintiffs engaged in such proscribed manipulation. It is our

duty to prevent it. Accordingly, I respectfully dissent.

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