Outokumpu Stainless USA, LLC v. Converteam SAS

Filing 29

ORDER denying 15 the motion to stay briefing and consideration of the Defendants pending motions. The Court will extend to plaintiffs the opportunity to file replies to the defendants responses in opposition to the motions to remand/replies in support of the pending motions due by 9/7/2016. Signed by Magistrate Judge William E. Cassady on 8/10/2016. (srd)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
OUTOKUMPU STAINLESS USA,
LLC, et al.,

:
:

Plaintiffs,
vs.

:

CA 16-0378-KD-C

:
CONVERTEAM SAS, a foreign
corporation now known as GE
ENERGY POWER CONVERSION
FRANCE SAS, CORP,

:
:

Defendant.
ORDER
This cause is back before the undersigned on the plaintiffs’ motion to stay
briefing and consideration of the defendant’s motion to compel arbitration and to
dismiss and separate motion to dismiss pending resolution of all jurisdictional issues
(Doc. 15), the defendant’s response in opposition (Doc. 23), and the plaintiffs’ reply
(Doc. 26). Through their motion to stay briefing, the plaintiffs have confirmed the
Court’s impression that in response to the motion to dismiss (see Doc. 7) and the motion
to compel arbitration and to dismiss (see Doc. 6), they will be filing motions to remand
directed to the notice of removal (Doc. 15, at ¶ 1). Because the anticipated motions to
remand will be directed to this Court’s subject-matter jurisdiction (id. at ¶ 2), plaintiffs
contend that “only after jurisdiction has been determined should the substance of the
arguments raised in GE Energy’s Motion to Compel Arbitration and Motion to Dismiss
be addressed, be it in this federal district court or in the Alabama state court.” (Id. at ¶ 3;
see also Doc. 26, at 1-2 (stated somewhat differently, but making the same point).)

While the Court agrees with plaintiffs that determination of subject-matter
jurisdiction in this case is of paramount importance, it cannot agree with the implicit
suggestion that this determination can be made in a vacuum without any impact on (or
consideration of) the defendant’s motion to dismiss (Doc. 7) and motion to compel
arbitration and to dismiss (Doc. 6). Indeed, for those reasons outlined in the defendant’s
response in opposition to plaintiffs’ motion to stay (Doc. 23), the undersigned agrees
that any and all motions to remand filed by plaintiffs, to at least some degree, will be
inextricably intertwined with the substance of the defendant’s pending motions (see
Doc. 6, at 1-2 (“Defendant . . . moves this Court, pursuant to the Federal Arbitration Act
and the New York Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, 9 U.S.C. § 201 et seq., to compel Plaintiff Outokumpu Stainless USA, LLC . . .
and its insurer, Plaintiff Sompo Japan Insurance Company of America . . ., to arbitrate
their claims against GE Energy and to dismiss those claims without prejudice.
Arbitration of those claims is mandatory pursuant to the contracts under which GE
Energy supplied the allegedly defective motors described in the complaint.”); Doc. 7, at
1-2 (“Defendant GE Energy . . . moves the Court to dismiss the Complaint as to
Plaintiffs Pohjola Insurance Limited, AIG Europe Limited, Tapiola General Mutual
Insurance Company, Axa Corporate Solutions Assurance SA UK Branch, HDI Gerling
UK Branch, MSI Corporate Capital Ltd as sole Corporate Member of Syndicate 3210,
and Royal & Sun Alliance plc [] because they fail to state a plausible claim against GE
Energy. Indeed, as set out in the Notice of Removal[], the OTK Oyj Subrogees have
failed to state even the possibility of a claim against GE Energy.”)), given the following
separate and independent jurisdictional grounds for removal set forth by defendant: (1)
federal question jurisdiction based upon the relationship between this action and an
arbitration agreement falling under the ambit of the Convention on the Recognition and
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Enforcement of Foreign Arbitral Awards, 9 U.S.C. § 201 et seq. (Doc. 1, at ¶¶6-7 & 9-19);
and (2) diversity jurisdiction based upon the fraudulent joinder of plaintiffs Pohjola
Insurance Limited, AIG Europe Limited, Tapiola General Mutual Insurance Company,
Axa Corporate Solutions Assurance SA UK Branch, HDI Gerling UK Branch, MSI
Corporate Capital Ltd as sole Corporate Member of Syndicate 3210, and Royal & Sun
Alliance plc (id. at ¶¶ 8 & 20-44).1 Accordingly, the motion to STAY briefing and
consideration of the defendant’s pending motions (Doc. 15) is DENIED to the extent
that the substance of these motions are inextricably intertwined with the motions to
remand that will be filed by the plaintiffs. The plaintiffs need not file separate responses
directed to defendant’s motion to compel arbitration and dismiss (Doc. 6) and separate
motion to dismiss the claims of the OTK Oyj subrogees (Doc. 7); instead, they may
simply incorporate into their motions to remand all such relevant arguments. And
while the undersigned declines to stay briefing, as requested by plaintiffs, the Court
will extend to plaintiffs the opportunity to file replies to the defendant’s responses in
opposition to the motions to remand/replies in support of the pending motions, so long
as those replies are filed not later than September 7, 2016. Briefing with respect to all

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For instance, if the Court disagrees with the contention of the plaintiffs that
fraudulent joinder does not apply to the joinder of plaintiffs, it will necessarily have to
determine whether the subrogee plaintiffs have any possibility of stating a claim against the
defendant (which is the sum and substance of the defendant’s motion to dismiss (Doc. 7)).
Therefore, the plaintiffs should include such relevant fraudulent joinder analysis in the
appropriate motion to remand. In addition, the undersigned simply suggests to the plaintiffs
that this Court would not expect them to raise “additional substantive arguments, beyond the
jurisdictional requirements, directed to why the alleged arbitration agreements should not be
enforced[]” (Doc. 26, at 3) since the defendant’s motion to compel arbitration and to dismiss is
“founded” on its argument that the four jurisdictional prerequisites are met (Doc. 6, at 5-9), a
topic which plaintiffs will admittedly address in another motion to remand (see Doc. 26, at 3
(“Whether those four jurisdictional requirements are satisfied will be addressed in Plaintiffs’
Motion to Remand[.]”)).

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motions will be CLOSED on September 8, 2016.
DONE and ORDERED this the 10th day of August, 2016.
s/WILLIAM E. CASSADY
UNITED STATES MAGISTRATE JUDGE

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