Melissa Berniard, et al v. Dow Chemical Co., et al
Filing
Case: 10-30497
Document: 00511197254
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Date Filed: 08/06/2010
IN THE UNITED STATES COURT OF APPEALS United States Court of Appeals FOR THE FIFTH CIRCUIT Fifth Circuit FILED
August 6, 2010 N o . 10-30497 S u m m a r y Calendar Lyle W. Cayce Clerk
M E L I S S A WILSON BERNIARD, Plaintiff v. D O W CHEMICAL COMPANY, Defendant -----------------------------------------------------------C H A R L E S LANDRY; CHARLES PRESTON; EVA BAILEY; ROY LOVE, I n d iv id u a lly and on Behalf of All Others Similarly Situated, Plaintiffs - Appellees v. D O W CHEMICAL COMPANY; UNION CARBIDE CORPORATION, Defendants - Appellants -----------------------------------------------------------C H R I S T A L Y N BROWN; HOPE BLANCO; DESMOND HILAIRE, and His M in o r Son Xavier James Hilaire; GAIL HILAIRE, and Her Minor Son Xavier J a m e s Hilaire, Plaintiffs - Appellees
Case: 10-30497
Document: 00511197254
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No. 10-30497 v. D O W CHEMICAL COMPANY; UNION CARBIDE CORPORATION, Defendants - Appellants -----------------------------------------------------------M A G A N ENNIS, Plaintiff - Appellee v. D O W CHEMICAL COMPANY; UNION CARBIDE CORPORATION, Defendants - Appellants ------------------------------------------------------------B U D W I N PLACIDE, Plaintiff - Appellee v. D O W CHEMICAL COMPANY; UNION CARBIDE CORPORATION, Defendants - Appellants -------------------------------------------------------------S H E I L A GUIDRY, Individually and on Behalf of All Others Similarly S itu a te d , Plaintiff - Appellee v. 2
Case: 10-30497
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No. 10-30497 D O W CHEMICAL COMPANY; UNION CARBIDE CORPORATION, Defendants - Appellants
A p p e a l from the United States District Court fo r the Eastern District of Louisiana U S D C No. 2:09-CV-4881
B e fo r e WIENER and ELROD, Circuit Judges.* P E R CURIAM:* * T h is is a consolidated appeal of several orders of the district court r e m a n d in g the seven class action cases consolidated therein to the state district c o u r t in St. Charles Parish, Louisiana. Two of the cases thus remanded were o r ig in a lly filed in the district court pursuant to the Class Action Fairness Act (" C A F A " );1 the rest were initially filed in that state court and were thereafter r e m o v e d to the district court by the common defendants, who asserted federal ju r is d ic t io n based on CAFA and, alternatively, on diversity of citizenship 2 and s u p p le m e n t a l jurisdiction.3
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This opinion is being entered by a quorum, pursuant to 28 U.S.C. § 46.
Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5th Cir. R. 47.5.4.
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28 U.S.C. §§ 1332(d) and 1453. 28 U.S.C. § 1332. 28 U.S.C. § 1367.
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No. 10-30497 T h e orders of the district court appealed herein held that federal ju r is d ic t io n was lacking under both CAFA and diversity jurisdiction. We do not h a v e jurisdiction to review the district court's decision to remand for lack of diversity jurisdiction,4 but we may review its decision to remand for lack of C A F A jurisdiction.5 C A F A authorizes federal jurisdiction over class actions that allege (1) the c la s s of plaintiffs would exceed 100 persons, (2) at least one member of the class is diverse in citizenship from at least one of the defendants, and (3) the a g g r e g a t e quantum of damages suffered by members of the plaintiff class e x c e e d s $5 million (exclusive of interest or costs).6 The parties do not contest the p r e s e n c e of the first two requirements, but the plaintiffs challenged the a d e q u a c y of the defendants' showing with regard to the amount-in-controversy r e q u ir e m e n t . The district court agreed with the plaintiffs that the requisite a g g r e g a t e quantum of damages was lacking and remanded the case to state c o u r t. The defendants appealed. For the reasons outlined below, we affirm the d is t r ic t court's remand orders. I . Facts And Proceedings D efen d a n t-A p p e lla n t Union Carbide Corporation ("UCC"), a wholly owned c o r p o r a t e subsidiary of The Dow Chemical Company ("Dow"), maintains and o p e r a t e s a facility in Taft, Louisiana, a few miles West North West of Hahnville, in St. Charles Parish, Louisiana. On the morning of July 7, 2009, a tank at that fa c ilit y experienced a sudden release of ethyl acrylate ("EA"), a potentially
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28 U.S.C. § 1447(d). 28 U.S.C. § 1453(c)(1). 28 U.S.C. § 1332(d)(2) and (5)(B).
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No. 10-30497 n o x io u s chemical. Shortly thereafter, the St. Charles Parish Department of E m e r g e n c y Preparedness ("DEP") closed some roads and evacuated residents a n d businesses from an area stretching some two miles eastward from the UCC fa c ility . The DEP was not the only "first responder" to this sudden, isolated, and r e la t iv e ly limited chemical release: At least two of plaintiffs' attorneys or law fir m s managed to file class action petitions in state district court on the very day o f the release. (Others of their colleagues were only marginally slower to
r e s p o n d ; they filed their complaints only days or weeks later.) Here, the "race t o the courthouse" cannot be explained by any concern that the claims would be u n t im e ly , given Louisiana's prescriptive period of one year within which to file s u c h actions following the incident. T h e five state court lawsuits implicated in this consolidated appeal were r e m o v e d to federal court by Defendants-Appellants pursuant to CAFA. They u r g e d that when the class plaintiffs' allegations about the numerosity of class m e m b e r s , the geographical area affected, and the types and extent of the EAc a u s e d injuries incurred by the members of the class are compared to the range o f damages previously recovered in the similar class actions cited to the court by D e fe n d a n t s -A p p e lla n t s , it becomes clear that CAFA's jurisdictional threshold of $ 5 million was likely to be met or exceeded. In three detailed orders, however, t h e district court carefully analyzed its jurisdiction over these cases and then r e m a n d e d them to state court.7 After considering the allegations in the various
The district court dismissed two of the cases in response to the respective plaintiff's motion to remand and dismissed the other three cases sua sponte, as is within the district court's authority. "It is incumbent on a court of the United States, whether trial or appellate, to dismiss an action whenever it appears that subject matter jurisdiction is lacking, and the
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No. 10-30497 p le a d in g s as to the geographical reach of the chemicals, the number of persons a ffe c t e d , the seriousness and extent of injuries suffered, and the potential m o n e ta r y value of the damages incurred by the affected class members for p r e s e n t compensatory damages as well as for pain and suffering, psychological a n d longterm future damages, and even punitive damages, the district court c o n c lu d e d that the Defendants-Appellants had failed to carry their burden of e s t a b lis h in g that it was facially apparent from the allegations in the class p la in t iffs ' petitions that the aggregate recovery by the class members would lik e l y exceed $5 million. Inasmuch as, on appeal, there is no question about C A F A 's other threshold requirements, the issue of remand turns solely on the e le m e n t of damages. I I . Analysis A . Standard Of Review W e review de novo the district court's remand of a state court action p r e v io u s ly removed under CAFA.8 Specific to today's ruling is our de novo
r e v ie w of the district court's holding that CAFA's threshold amount in c o n t r o v e r s y was not met.9 B. C A F A Jurisdictional Amount
court must do so sua sponte if the parties have not brought the issue to the attention of the court." Marshall v. Gibson's Prods., Inc., 584 F.2d 668, 672 (5th Cir. 1978) (citation omitted).
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Admiral Ins. Co. v. Abshire, 574 F.3d 267, 272 (5th Cir.), cert. denied, 130 S. Ct. 756
(2009).
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Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 722 (5th Cir. 2002).
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No. 10-30497 A ll recognize that Louisiana law prohibits allegations by tort plaintiffs of t h e quantum of the damages to which they are entitled.1 0 Even though the r e m o v in g party (or party resisting remand) has the burden of establishing the e x is t e n c e of federal jurisdiction,1 1 we have specified a different standard of proof w h e n the quantity of damages is not alleged by the plaintiff class: The removing d e fe n d a n t must prove by a preponderance of the evidence that the amount in c o n t r o v e r s y equals or exceeds the jurisdictional amount.1 2 In proceeding from t h a t point, a defendant seeking to sustain removal may follow either of two t r a c k s : (1) Adduce summary judgment evidence of the amount in controversy,
o r (2) demonstrate that, from the class plaintiffs' pleadings alone, it is "facially a p p a r e n t " that CAFA's amount in controversy is met.13 H e r e , the Defendants-Appellants elected to follow the facially-apparent p a t h . Doing so requires examination of the petitions and complaints of the P la in t iffs -A p p e lle e s to determine if the resulting amount in controversy is likely t o equal or exceed the jurisdictional amount.1 4 We agree with DefendantsA p p e lla n t s that the proper test for facial apparency is the one recently a r t ic u la t e d by the Seventh Circuit in Spivey v. Vertrue, Inc.:
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La. Code Civ. Proc. Ann. art. 893. Gaitor v. Peninsular & Occidental S.S. Co., 287 F.2d 252, 253-54 (5th Cir. 1961). De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir. 1993). Id. at 57-58; Simon v. Wal-Mart Stores, Inc., 193 F.3d 848, 850 (5th Cir. 1999). Allen v. R&H Oil & Gas Co., 63 F.3d 1326, 1336 (5th Cir. 1995).
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No. 10-30497 T h e removing party, as the proponent of federal jurisdiction, bears t h e burden of describing how the controversy exceeds $5 million. This is a pleading requirement, not a demand for proof. Discovery and trial come later. A removing defendant need not confess
lia b ilit y in order to show that the controversy exceeds the threshold. The removing party's burden is to show not only what the stakes of t h e litigation could be, but also what they are given the plaintiff's a c t u a l demands. . . . The demonstration concerns what the plaintiff is claiming (and thus the amount in controversy between the p a r t ie s ), not whether the plaintiff is likely to win or be awarded e v e r y t h in g he seeks. Once the proponent of federal jurisdiction has e x p la in e d plausibly how the stakes exceed $5 million, then the case b e l o n g s in federal court unless it is legally impossible for the p la in t iff to recover that much.1 5
M o r e o v e r , as the district court aptly noted, even under the facial-apparency test " [r ]e m o v a l . . . cannot be based simply upon conclusory allegations," 1 6 and " d o u b t s regarding whether removal jurisdiction is proper should be resolved a g a in s t federal jurisdiction." 1 7
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528 F.3d 982, 986 (7th Cir. 2008) (internal quotations and citations omitted). Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995) (citation omitted). Acuna v. Brown & Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000).
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No. 10-30497 D e fe n d a n t s -A p p e lla n t s insist on appeal that they established, to a " r e a s o n a b le probability,"1 8 that the several class pleadings make it facially a p p a r e n t that CAFA's required amount in controversy is satisfied. In the
d is t r ic t court, Defendants-Appellants relied on census data of the various g e o g r a p h ic a l areas referred to in the several pleadings and complaints, and compared the quantum of recovery in previously reported cases that involved o c c u r r e n c e s and injuries similar to the kinds about which the instant class p la in t iffs complain.1 9 A s the Defendants-Appellants assert, the district court might have m is s p o k e n when it stated that neither party claimed that the jurisdictional m in im u m was apparent from the faces of the petitions. Nevertheless, after c o n d u c t in g our de novo review, we are satisfied that the district court reached t h e correct result despite any error that might have been contained in that s t a t e m e n t . This becomes evident, we conclude, when Defendants-Appellants' p r o ffe r e d analysis of the pleadings is tested for whether it is facially apparent t h e r e fr o m that the jurisdictional minimum is satisfied. Here, Defendants-
A p p e lla n t s ' bald exposure extrapolations are insufficient to establish the likely n u m b e r of persons affected by the release or, for those affected, the severity of
The "reasonable probability" standard is the same as the "preponderance standard" (more-likely-than-not test). See Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir. 2006). Defendants-Appellants further note that, in the Killen and Cochran cases, which were initially filed in federal court, the plaintiffs expressly alleged that their claims would exceed $5 million, and that one of the state court plaintiffs did not dispute that the amount in controversy was more than $5 million. The mere recitation of jurisdictional facts, however, is not enough to establish subject-matter jurisdiction, see St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998), and the language on which DefendantsAppellants rely in the state court action can hardly be construed as a judicial admission.
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No. 10-30497 t h e ir harm. When we examine the several pleadings here at issue under that s t a n d a r d , we conclude, as did the district court, that, even when properly a g g r e g a t e d , the nature, timing, geographical extent, numerosity of the affected p o p u la tio n , and nature of damage allegedly caused by this isolated, quickly c o n t r o lle d , and geographically limited EA escape, as pleaded in the several state c o u r t petitions, does not make it facially apparent that the stakes plausibly e x c e e d $5 million. Given the generalized and conclusional nature of the allegations of the s e v e r a l petitions and complaints (not surprising considering the fact that they w e r e filed within hours or, at the most, within days following the release), we c a n n o t say that, under the Seventh Circuit's Spivey standard, the DefendantsA p p e lla n t s carried their burden of showing not only what the stakes of the lit ig a t io n could be, but what they are in light of the plaintiffs' demands. Like the d is trict court, we conclude that the Defendants-Appellants have failed to present a plausible explanation of how the claims of the class plaintiffs could equal or e x c e e d $5 million. The Defendants-Appellants' methodology is speculative and u n c o n v in c in g . They overstate the reach of the plaintiffs' petitions by improperly e q u a t in g the geographic areas in which potential plaintiffs might reside with the p o p u la tio n of the plaintiff class itself. Further, the comparisons that the
D e fe n d a n t s -A p p e lla n t s make to damage recovery in similar cases is too a t t e n u a t e d to satisfy their burden. In our de novo review, we have aggregated the allegations of all seven c o n s o lid a t e d cases, taking care, however, to avoid double counting and repetition in our effort to discern the alleged geographic and temporal reach of the EA r e le a s e , the likely population of the affected class, and the effect of the release
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No. 10-30497 o n the limited number of potentially affected plaintiffs. As a result, we cannot s a y that Defendants-Appellants have satisfied their burden under their chosen p a t h of facial apparency. I n so concluding, we acknowledge that the state court petitions of the class p la in t iffs that were so hastily filed in St. Charles Parish present an oxymoronic p ic tu r e . On the one hand, the pleadings of the class plaintiffs present an
e x p a n s iv e view of the geographical reach of the chemicals, the number of persons lik e ly affected, the seriousness and extent of the injuries caused by contact with t h e rapidly diluting EA, and the potential monetary value of the damages in c u r r e d by the affected parties, including not just compensatory damages but a ls o those for pain and suffering, psychological and longterm future damages, a n d even punitive or exemplary damages. On the other hand, those pleadings a ls o contain minimizing allegations, such as the fact that the road closure and e v a c u a t io n of residents implemented by the DEP covered only a two mile stretch t o the east of the Taft facility, as well as implications and deductions that in r e a lit y the release was quickly contained, atmospherically diluted, and relatively m in o r and temporary in its deleterious effects, and that the incident was short liv e d , with normalcy being restored in short order. III. CONCLUSION F o r the foregoing reasons, we are convinced that the district court's CAFAb a s e d remand of the consolidated cases should be affirmed. From the factual a lle g a t io n s contained in the pleadings under examination, we conclude that D e fe n d a n t s -A p p e lla n t s have not met their burden of demonstrating plausibly t h a t the $5 million amount in controversy is apparent. Neither shall we
s u c c u m b to the siren song of CAFA's legislative history to err in favor of federal
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No. 10-30497 ju r is d ic t io n , especially when, as here, we do not see the answer to the question o f threshold quantum as an uncertain one. We need not address the issue of the l o c a l-c o n t r o v e r s y exception, and the district court's rulings on diversity ju r is d ic t io n and fraudulent joinder are not implicated in this interlocutory a p p e a l under CAFA. Therefore, we neither address them nor imply either the p r o p r ie t y or impropriety of their handling in the district court. Rather, our ju d g m e n t is limited to the rulings over which we have appellate jurisdiction, viz, r e m a n d of the subject cases to state court for failure of the proponents of CAFA ju r is d ic t io n to demonstrate that statute's amount-in-controversy requirement is m e t . Those orders are, in all respects, A F F IR M E D .
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