FEDERAL DISTRICT COURT IN DALLAS DENIES REMAND IN COVID-19 BUSINESS INTERRUPTION DISPUTE

A federal district court in Dallas recently denied an insured’s motion for remand in a case alleging lost-business income at its restaurants during the COVID-19 pandemic. In Boomerjacks Grill & Bar v. The Members, et al, No. 3:21-CV-01022-X, 2022 WL 326620, (N.D. Tex.—Dallas, February 3, 2022) Boomerjacks is seeking coverage for alleged lost-business income at its restaurants during the COVID-19 pandemic. The plaintiff originally sued the defendants in the 95th Judicial District of Dallas, Texas. Subsequently, the defendants removed the case to federal court, asserting diversity jurisdiction.  Plaintiff filed a motion to remand.

Plaintiff argued that the Court should remand the case for three reasons. First, that the defendants fail to satisfy amount-in-controversy requirement. Second, that the defendants failed to obtain the consent of an allegedly properly joined and served defendant. Third, the Court should remand under its discretionary authority to decline to hear declaratory-judgment cases involving issues of state law.  On the first issue, although finding that that the initial-pleading amount under Texas Rule of Civil Procedure 47 should not govern in this case, the case clearly met the amount in controversy requirement based on the policy limits and value of the plaintiff’s claim. On the second issue, the Court found that the party whose consent was at issue had not been properly served so their consent was unnecessary prior to removal. On the final issue, the Court found that Plaintiff’s arguments for discretionary abstention were unpersuasive and did not meet the factors set out by the Fifth Circuit governing when a district court should decline to hear a declaratory-judgment case. The motion for remand was denied.