Hudson v. SEISCO International Limited, No. 2:2015cv00836 - Document 29 (E.D. La. 2015)

Court Description: ORDER AND REASONS granting 13 Motion for Partial Summary Judgment. Texas law shall apply to this matter. IT IS FURTHER ORDERED that Hudson be given until November 30, 2015, to file an amended complaint to assert his claims under applicable Texas law. Signed by Judge Susie Morgan. (bwn)

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Hudson v. SEISCO International Limited Doc. 29 U N ITED S TATES D ISTRICT COU RT EASTERN D ISTRICT OF LOU ISIAN A W ILLIAM H U D SON , Pla in tiff CIVIL ACTION VERSU S N O. 15-8 3 6 SEISCO IN TERN ATION AL LIMITED , D e fe n d an t SECTION “E” ( 3 ) ORD ER AN D REAS ON S Before the Court is Defendant’s Motion for Partial Sum m ary J udgm ent. 1 On February 13, 20 15, Plaintiff William Hudson (“Hudson”) filed this suit in the 24th J udicial District Court in J efferson Parish, Louisiana, against his form er em ployer, Defendant SEISCO International Lim ited (“SEISCO”). 2 Hudson alleges that from 20 10 to 20 14, he was em ployed as SEISCO’s vice president an d national sales m anager. 3 Hudson contends SEISCO “unilaterally and without notice reduced Hudson’s salary” on February 1, 20 14, an d term inated his em ploym ent on J une 13, 20 14, in violation of his em ploym ent agreem ent with SEISCO. 4 Hudson seeks dam ages for unpaid wages and breach of contract. 5 SEISCO rem oved the case to this Court on March 18, 20 15. 6 SEISCO, a Texas corporation, 7 filed this m otion for partial sum m ary judgm ent on J uly 2, 20 15. 8 In its m otion, SEISCO argues Texas law, and not Louisiana law, should apply to this case. 9 Hudson filed his response in opposition to SEISCO’s m otion on J uly 21, 20 15, arguing SEISCO has not proven there is a conflict between Louisiana and Texas 1 R. Doc. 13. R. Doc. 1-1. 3 R. Doc. 1-1 at 1. 4 R. Doc. 1-1 at 2– 3. 5 R. Doc. 1-1 at 4. 6 R. Doc. 1. SEISCO filed an am ended notice of rem oval on March 24, 20 15. R. Doc. 6. 7 See R. Doc. 24 at ¶ 2; R. Doc. 26 at ¶ 2. 8 R. Doc. 13. 9 Id. 2 1 Dockets.Justia.com law and, alternatively, that Louisiana has m ore contacts with the parties and contract at issue. 10 SEISCO filed a reply m em orandum in support of its m otion on Septem ber 17, 20 15. 11 STAN D ARD OF LAW Sum m ary judgm ent is proper if the m ovant shows there is no genuine dispute of any m aterial fact and the m ovant is entitled to judgm ent as a m atter of law. 12 A genuine issue of m aterial fact exists if, based on the eviden ce, a reasonable jury could return a verdict for the non-m ovant. 13 “The pleadings, depositions, adm issions, and an swers to interrogatories, together with affidavits, m ust dem onstrate that no genuine issue of m aterial fact rem ains.”14 Courts in this circuit have held, however, that factual determ inations that are antecedent to the choice-of-law determ ination “m ay properly be determ ined by the district court after considering the affidavits, depositions, and other m atters subm itted by the parties.”15 The Court views all eviden ce in a light m ost favorable to the non-m oving party and draws all reasonable inferences in favor of the non-m ovant. 16 AN ALYSIS When a court has diversity jurisdiction over a case, it m ust apply the choice-of-law rules of the forum state in which the court sits. 17 Because the forum state in this case is Louisiana, Louisiana’s choice-of-law rules apply. 18 10 R. Doc. 16. Doc. 25. 12 F ED . R. CIV. P. 56(a). 13 Pioneer Exploration, L.L.C. v. Steadfast Ins. Co., 767 F.3d 50 3, 511 (5th Cir. 20 14). 14 Barrett v. Atlantic Richfield Co., 95 F.3d 375, 383 (5th Cir. 1996) (citing Celotex Corp. v Catrett, 477 U.S. 317, 323 (1986)). 15 Southern Serv. Corp. v. Tidy Bldg. Servs., Inc., 20 0 4 WL 278490 9, at *4 (E.D. La. Dec. 1, 20 0 4) (internal quotation m arks om itted) (citing N un ez v. Hunter Fan Co., 920 F. Supp. 716, 718 (S.D. Tex. 1996)). 16 Paz v. Brush Engineered Materials, Inc., 555 F.3d 383, 391 (5th Cir. 20 0 9). 17 Pioneer Exploration, 767 F.3d at 512. 18 See id. 11 R. 2 Louisiana Civil Code Article 3515 provides the residual choice-of-law rule: “[A]n issue in a case having contacts with other states is governed by the law of the state whose policies would be m ost seriously im paired if its law were not applied to that issue.”19 A court determ ines that state by “evaluating the strength and pertinence of the relevant policies of all involved states in light of: (1) the relationship of each state to the parties and the dispute; and (2) the policies and n eeds of the interstate and international system s, including the policies of upholding the justified expectations of parties and of m inim izing the adverse consequen ces that m ight follow from subjecting a party to the law of m ore than one state.”20 Louisiana Civil Code Article 3537 provides the general choice-of-law rule applicable to contracts: [The state that would be m ost seriously im paired if its laws were not applied] is determ ined by evaluating the strength and pertinence of the relevant policies of the involved states in the light of: (1) the pertinent contacts of each state to the parties and the transaction, including the place of negotiation, form ation, and perform ance of the contract, the location of the object of the contract, and the place of dom icile, habitual residen ce, or business of the parties; (2) the nature, type, and purpose of the contract; and (3) the policies referred to in Article 3515, as well as the policies of facilitating the orderly planning of transactions, of prom oting m ultistate com m ercial intercourse, and of protecting one party from undue im position by the other. 21 The com m ents to Article 3537 instruct the Court to apply Article 3537 in conjunction with Article 3515. 22 “[T]he objective is to identify the state whose policies would be m ost seriously im paired, that is, the state that, in light of its connection to the parties and the transaction and its interests im plicated in the conflict, would bear the m ost serious legal, 19 LA. CIV. CODE art. 3515. Id. 21 LA. CIV. CODE art. 3537. 22 LA. CIV. CODE art. 3537 cm t. c. 20 3 social, econom ic, and other consequences if its law were not applied to the issue at hand.”23 If the laws of the states do not conflict, however, no choice-of-law analysis is necessary, and the Court m ust “sim ply apply the law of the forum state.”24 The Court will consider the controlling and determ inative issues in this m atter to determ ine whether the laws of Texas and Louisiana conflict with respect to the causes of action asserted. 25 When a conflict of laws exists with regard to m ore than one issue, the Court m ust analyze each issue separately, “sin ce each m ay im plicate different states, or m ay bring into play different policies from these states.”26 Dépeçage, however, “should not be pursued for its own sake.”27 “The unnecessary splitting of the case should be avoided, especially when it results in distorting the policies of the involved states.”28 Hudson seeks dam ages for unpaid wages under Louisiana Revised Statute § 23:632 and breach of contract under Louisiana Civil Code article 2749. 29 Although Hudson seeks relief under Louisian a law, the decision has not yet been m ade as to which state’s laws will apply, as the contract does not include a provision dictating the applicable law. Federal Rule of Civil Procedure 8(a) im poses a notice pleading standard and requires plaintiffs to “‘give the defendant fair notice of what the plaintiff’s claim is and the grounds 23 Id. (internal quotation m arks om itted). Mum blow v. Monroe Broadcasting, Inc., 40 1 F.3d 616, 620 (5th Cir. 20 0 5). 25 See id. (com paring New York and Louisiana contract laws with regard to “the controlling issue in this m atter”); Rainbow USA, Inc. v. N utm eg Ins. Co., 612 F. Supp. 2d 716, 727 (E.D. La. 20 0 9) (applyin g Louisiana law after concluding that the laws of New York and Louisiana were “substantially sim ilar with respect to the determ inative issues in this case” and “any m inor differences between the laws will have no m easurable effect on the outcom e”). 26 LA. CIV. CODE art. 3515 cm t. d. 27 Id. 28 Id. 29 R. Doc. 1-1 at 4. 24 4 upon which it rests.’”30 So long as the plaintiff has given the defendant fair notice of the nature of the claim s, the Court m ay apply the conflict-of-law rules of the forum to determ ine the laws under which the claim s will be judged. In this case, Hudson’s petition for dam ages satisfies this notice pleading requirem ent and puts SEISCO on fair notice that Hudson is m aking claim s for unpaid wages and breach of em ploym ent contract. Accordingly, the Court will analyze the underlying allegations of his claim s, irrespective of whether Louisiana law or Texas law applies, to determ in e which state has the greater interest in this m atter. First, the Court m ust determ ine whether a conflict exists with respect to the laws applicable to these causes of action in Texas and Louisiana. Under Louisiana law, a claim ant m ay sue his or her em ployer to recover any unpaid wages pursuant to Louisiana Revised Statute § 23:631. 31 The claim ant m ay recover penalty wages if the court determ ines the em ployer’s failure to pay wages was not in good faith. 32 The claim ant m ay also recover attorney’s fees. 33 Under Texas law, a claim ant m ay seek recovery of unpaid wages from an em ployer either by filing a claim with the Texas Workforce Com m ission (“Com m ission”) or by filing suit in a court of law asserting com m on-law claim s. 34 To proceed before the Com m ission, the claim ant m ust first file a wage claim with the Com m ission within 180 days of the date the wages were due for paym ent. 35 Under that scenario, the claim ant m ay bring a suit in court only to appeal a final order from the 30 Lovick v. Ritem oney Ltd., 378 F.3d 433, 438 (5th Cir. 20 0 4) (quotin g Sw ierkiew icz v. Sorem a N .A., 534 U.S. 50 6, 50 7 (20 0 2)). 31 LA. R EV. STAT. § 23:631. 32 LA. R EV. STAT. § 23:632. 33 See LA. R EV. STAT. § 23:632(c). 34 See Aguirre v. Trevino, No. 2:14-CV-423, 20 15 WL 3770 638, at *3 (S.D. Tex. J an. 14, 20 15) report and recom m endation adopted as m odified, No. 2:14-CV-423, 20 15 WL 38 82453 (S.D. Tex. J une 17, 20 15). 35 See TEX. LABOR CODE §§ 61.0 0 1, 61.0 51. 5 Com m ission. 36 The Com m ission m ay im pose a penalty against the em ployer if it determ ines the em ployer acted in bad faith in not paying wages. 37 Unlike Louisiana law, however, Texas law does not allow the claim ant to seek attorney’s fees through his unpaid wages claim . 38 If a claim ant files suit in court under a breach of contract theory, Texas law allows a prevailing claim ant to recover attorney’s fees on a breach of contract claim even if the contract does not provide for the recovery of attorney’s fees by the prevailing party. 39 Louisiana law does not perm it recovery of attorney’s fees through a breach of contract claim unless the contract provides for attorney’s fees. 40 Therefore, there are differences between the laws of Texas and the laws of Louisiana as to both causes of action, and the Court m ust undergo Louisiana’s choice-oflaw analysis. 41 Hudson’s claim s for both unpaid wages and breach of contract are based upon Hudson’s em ploym ent agreem ent with SEISCO. Both Texas’s and Louisiana’s interests and contacts with regard to each issue turn largely on the particular state relationship to the parties and the underlying em ploym ent contract, and thus the choice- 36 TEX. LABOR CODE § 61.0 62. TEX. LABOR CODE § 61.0 53. 38 See TEX. LABOR CODE §§ 61.0 51– 61.0 67; Stew art Autom otive Research, LLC v. N olte, 465 S.W.3d 30 7, 30 9– 12 (Tex. App. 20 15) (n oting that “attorneys’ fees are not available to the prevailing party in the absence of an authorizing contract or statute” and concludin g attorney’s fees for unpaid wages claim were not authorized by statute, including TEX. LABOR CODE § 61.0 66(f)); Attorney Fees, 27 BUS. TORTS R EP . 211 (20 15). 39 See TEX. CIV. P RAC. & R EM . CODE § 38.0 0 1(8). 40 See Stutts v . M elton, 130 So.3d 8 0 8 , 814 (La. 20 13) (“Louisiana courts have long held that attorney fees are not allowed except where authorized by statute or contract.”); Hollenshead Oil & Gas, LLC v. Gem ini Explorations, Inc., 44 So.3d 80 9, 817 (La. App. 2 Cir. 20 10 ) (“Attorney fees are n ot allowable in an action for breach of contract unless there is a specific provision therefor in the contract.” (citing Maloney v. Oak Builders, Inc., 235 So.2d 38 6, 390 (La. 1970 ))). 41 See Deep Marine Technology , Inc. v . Conm aco/ Rector, L.P., 515 F. Supp. 2d 760 , 769 (S.D. Tex. 20 0 7) (“While Texas allows recovery of attorney’s fees to a prevailing party on a breach of contract claim , Louisiana law does not perm it recovery of fees unless provided by contract. . . . Thus, a choice of law determ ination is necessary when, as here, the relevan t jurisdictions con flict regarding the availability of attorney's fees in a breach of contract action.”). 37 6 of-law analysis for both issues is the sam e. 42 Accordingly, the interests of Texas and Louisiana with respect to both issues are substantially the sam e, and the Court will engage in only one choice-of-law analysis for both issues. The Court considers several factors in m aking a choice-of-law determ ination, including the relationship of each state to the parties and the transaction, the location of the object of the contract, the nature and purpose of the contract, each state’s interest in the m atter, the justified expectations of the parties, the location of the dom icile, residence, or business of the parties, and the interest of facilitating “orderly planning of transactions, of prom oting m ultistate com m ercial intercourse, and of protecting one party from undue im position by the other.”43 Both Louisiana and Texas have an interest in the issues in this case. Louisiana has a sign ificant and com pelling interest in ensuring the prom pt paym en t of Hudson’s wages, as “prom pt paym ent of wages to em ployees protects the public interest.”44 Texas, on the 42 See, e.g., Berard v. L-3 Com m c'ns Vertex Aerospace, LLC, 35 So. 3d 334, 343 (La. App. 1 Cir. 20 10 ) (noting that relevant factors to the choice-of-law analysis of claim s brought under the Louisiana Wage Paym ent Act include the parties’ dom iciles, the em ploym ent contract, the nature of the work, and the place the em ploym ent was initiated); M endonca v. Tidew ater, Inc., 862 So. 2d 50 5, 510 – 11 (La. App. 4 Cir. 20 0 3) (considerin g the underlying contract, citizen ship of the parties, the location of em ploym ent in m aking a choice-of-law determ ination with regard to the plaintiff’s breach-of-contract claim s). 43 LA. CIV. CODE art. 3537. See also LA. CIV. CODE art. 3515; Petticrew v. ABB Lum m us Global, Inc., 53 F. Supp. 2d 864, 867 (E.D. La. 1999); Muirfield (Delaw are), L.P. v . Pitts, Inc., 17 F. Supp. 2d 60 0 , 60 6 (W.D. La. 1998) (considering the interests of each potentially interested state, including their interest in perform ance of the contract and the citizenship of the relevant parties to determ ine which state’s substantive law should apply); Tolliver v. N aor, No. 99-0 586, 20 0 2 WL 272377, at *4 (E.D. La. Feb. 25, 20 0 2). 44 Brister v . Schlinger Found., No. 0 4-3247, 20 0 5 WL 20 36733, at *5 (E.D. La. J uly 28, 20 0 5); Berard, 35 So. 3d at 342. 7 other hand, has a legitim ate interest “in regulating the businesses that are organized under its laws”45 and en suring the legal rights of Texas com panies are protected. 46 SEISCO is a Texas corporation with its principal place of business in Texas. 47 SEISCO m anufactures its products in Texas and Mexico. 48 Hudson testified that SEISCO has no offices in Louisiana and no com ponent of SEISCO’s business is located in Louisiana except for Hudson him self. 49 Hudson resides in Louisiana 50 and paid Louisian a incom e taxes during the relevant tim e period in this case. 51 Although all of Hudson’s work was done “out of [his] house [in Louisiana],”52 he had to travel to Texas for m eetings on several occasions. 53 He also testified that he was a national sales m anager, traveling out of state “extensively.”54 There is, however, conflicting eviden ce on the record as to whether Texas was part of Hudson’s sales territory, 55 although the parties agree Louisian a was part of his sales territory. 56 “[T]he policies of upholding the justified expectations of parties and of m inim izing the adverse consequen ces that m ight follow from subjecting a party to the law of m ore than one state”57 weigh in favor of applying Texas law. Because SEISCO is a Texas 45 Brister, 20 0 5 WL 20 36733, at *5. See also Liberty Mut. Ins. Co. v. Transit Mix Concrete & Materials Co., No. 0 6-12-0 0 117-CV, 20 13 WL 33290 26, at *7 (Tex. App. J une 28, 20 13), review denied (Oct. 18 , 20 13) (“While Texas has an interest in protectin g foreign corporations with places of business in Texas, such an interest m ay not be as inten se as the desire to provide protection to native Texas corporations. . . .”). 46 Friedrich Air Conditionin g Co. ex rel. FAC Mgm t., LLC v . Genie Air Conditioning & Heating, Inc., No. SA-0 8-CA-541-XR, 20 0 8 WL 3852644, at *4 (W.D. Tex. Aug. 15, 20 0 8). 47 R. Doc. 8 at ¶ II; R. Doc. 13-5 at 19. The parties do not dispute this. See R. Doc. 15 at ¶ 1; R. Doc. 16-2 at ¶ A.1. 48 R. Doc. 13-5 at 19– 20 . The parties do not dispute this. See R. Doc. 15 at ¶ 5; R. Doc. 16-2 at ¶ A.5. 49 R. Doc. 13-5 at 20 . 50 R. Doc. 1-1 at ¶ 1. 51 R. Doc. 16-1 at 6– 25. 52 R. Doc. 13-5 at 20 . 53 See, e.g., R. Doc. 13-5 at 10 – 11, 17– 18, 22. 54 R. Doc. 13-5 at 9, 21. 55 See R. Doc. 16-1 at 27; R. Doc. 13-5 at 19. 56 R. Doc. 13-5 at 19; R. Doc. 15 at ¶ 4; R. Doc. 16-2 at ¶ A.4. 57 LA. CIV. CODE art. 3515. 8 corporation with its principal place of busin ess in Texas, it has a justified expectation that Texas law would apply to its em ploym ent contracts. Subjecting it to the laws of the states in which each em ployee resides could result in varying interpretations and applications of the sam e em ploym ent contract and yield inconsistent results in m atters involving com m on issues against SEISCO. Hudson traveled to Texas for m eetings on several occasions 58 and, as a national sales m anager, traveled out of state “extensively.”59 The purpose of Hudson’s em ploym ent agreem ent with SEISCO was to facilitate the Texas corporation’s sales. 60 Further, Hudson filed for and received unem ploym ent benefits from the Texas Departm ent of Labor after his em ploym ent with SEISCO was term inated, 61 suggesting he had at least som e expectation that Texas law was applicable to his em ploym ent. The parties dispute when and where the em ploym ent contract was negotiated, form ed, and executed. 62 Hudson argues that although he m et with SEISCO’s chief executive officer David Seitz in Texas in the sum m er of 20 10 , he did not accept em ploym ent at that meeting. 63 Hudson testified that he m et with Seitz in San Antonio in 20 10 to discuss a “job opportunity” but does not recall discussing the capacity or salary of the job. 64 Hudson acknowledged that the m eeting was “[v]ery vague and very gen eral.”65 He testified that on October 20 , 20 10 , he signed a draft em ploym ent agreem ent that was 58 See, e.g., R. Doc. 13-5 at 10 – 11, 17– 18, 22. R. Doc. 13-5 at 9, 21. 60 See R. Doc. 13-5 at 22– 23; LA. CIV. CODE art. 3537 (nam in g “the location of the object of the contract” a relevant factor in the choice-of-law determ ination). 61 R. Doc. 13-5 at 12. The parties do not dispute this. See R. Doc. 15 at ¶ 7; R. Doc. 16-2 at ¶ A.7. 62 See LA. CIV. CODE art. 3537; Tolliver, 20 0 2 WL 272377, at *4 (findin g relevant the state in which the contract at issue was “n egotiated, form ed, and perform ed”). 63 R. Doc. 16-2 at ¶ B.1; R. Doc. 16-1 at 63. 64 R. Doc. 16-1 at 63. 65 Id. 59 9 em ailed to him and he returned it by m ail to SEISCO. 66 There is no evidence as to where Hudson was when he signed the contract. SEISCO, however, argues that Hudson “agreed to em ploym ent by SEISCO at a m eeting in Houston,” citing Hudson’s deposition in which he testified he and Seitz “discussed and agreed upon a contract docum ent” on Septem ber 3, 20 13, in Houston, Texas. 67 Because it is unclear where the negotiations and form ation of the contract took place, this factor m ay be considered but is not determ inative. In light of foregoing considerations—including that SEISCO is a Texas corporation with its principal place of business in Texas, that SEISCO has no operations in Louisian a, that at least som e negotiations took place in Texas, that Hudson applied for unem ploym ent in Texas, the expectations of both parties, and the potential problem s that would arise for a corporation if its em ploym ent contract were interpreted by the laws of different states—the Court finds that Texas has a greater interest in the issues raised in this case and Texas’s policies would be m ore seriously im paired if its law were not applied to this m atter. 68 CON CLU SION For the foregoing reasons; IT IS ORD ERED that SEISCO’s m otion for partial sum m ary judgm ent is GRAN TED . Texas law shall apply to this m atter. 66 R. Doc. 13-5 at 15– 16. R. Doc. 13-5 at 2. 68 See LA. CIV. CODE art. 3515; Muirfield, 17 F. Supp. 2d at 60 6 (considering the interests of each potentially interested state, including their interest in perform ance of the contract and the citizenship of the relevant parties to determ ine which state’s substantive law should apply); Petticrew , 53 F. Supp. 2d at 867 (noting these factors as relevant to the choice-of-law determ in ation); Tolliver, 20 0 2 WL 272377, at *4. 67 10 IT IS FU RTH ER ORD ERED that Hudson be given until N o ve m be r 3 0 , 2 0 15, to file an am ended com plaint to assert his claim s under applicable Texas law. 69 N e w Orle a n s , Lo u is ian a, th is 4 th d ay o f N o ve m be r, 2 0 15 . _____ _ __ ___________________ SU SIE MORGAN U N ITED STATES D ISTRICT J U D GE 69 See Fed. R. Civ. P. 15(a)(2) (“The court should freely give leave when justice so requires.”); Vargas v. Kiew it Louisiana Co., No. H-0 9-2521, 20 12 WL 10 29517, at *7 (S.D. Tex. Mar. 26, 20 12) (findin g that Louisiana, not Texas, law applied to a dispute and granting Plaintiffs leave to am end their com plaint to assert their claim s under the applicable Louisiana statutory provisions); Sortium USA, LLC v. Hunger, No. 3:11-CV-1656-M, 20 14 WL 10 80 765, at *1 (N.D. Tex. Mar. 18, 20 14) (quotin g an order in which the court granted plaintiff leave to am end “[b]ecause the Court has decided Georgia law applies to Plaintiff’s claim s”). 11

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