Nelson et al v. Crane Company et al

Filing 95

ORDER GRANTING DEFENDANT'S 58 MOTION TO STAY ALL PROCEEDINGS PENDING A DECISION ON TRANSFER BY THE JUDICIAL PANEL ON MULTIDISTRICT LITIGATION: "On the basis of the foregoing, Buffalo's Motion to Stay All Proceedings Pending a Deci sion on Transfer by the Judicial Panel on Multidistrict Litigation, filed July 13, 2011, is HEREBY GRANTED. The entire case, including Plaintiffs' pending Motion to Remand, is HEREBY STAYED until November 8, 2011. If the MDL Panel has not ruled on the transfer of this case by that time, this Court will issue a ruling on Plaintiffs Motion for Remand. IT IS SO ORDERED." Signed by District JUDGE LESLIE E. KOBAYASHI on September 26, 2011. (bbb, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
IN RE: HAWAII STATE ASBESTOS
CASES

)
)
)
)
This Document Applies To:
)
ROGER E. NELSON and ROSALIE
)
)
J. NELSON,
)
)
Plaintiffs,
)
)
vs.
)
CRANE COMPANY, etc., et al., )
)
)
Defendants.
_____________________________ )

CIVIL NO. 11-00400 LEK-RLP

ORDER GRANTING DEFENDANT’S MOTION TO STAY
ALL PROCEEDINGS PENDING A DECISION ON TRANSFER
BY THE JUDICIAL PANEL ON MULTIDISTRICT LITIGATION
Before the Court are: Plaintiffs Roger E. Nelson and
Rosalie J. Nelson’s (“Plaintiffs”) Motion to Remand, filed
June 30, 2011 (dkt. no. 9); and the Motion to Stay All
Proceedings Pending a Decision on Transfer by the Judicial Panel
on Multidistrict Litigation (“Motion to Stay”), filed by
Defendant Air & Liquid Systems Corporation, successor-by-merger
to Buffalo Pumps, Inc. (“Buffalo”), on July 13, 2011 (dkt. no.
58).

On August 8, 2011, Buffalo and Defendant Crane Company

(“Crane”) each filed a memorandum in opposition to the Motion to
Remand (dkt. nos. 79, 81).

Plaintiffs filed their reply on

August 15, 2011 (dkt. no. 85).

Plaintiffs filed their memorandum

in opposition to the Motion to Stay on August 8, 2011 (dkt. no.

78), and Buffalo filed its reply on August 15, 2011 (dkt. no.
84).1
These matters came on for hearing on August 29, 2011.
Appearing on behalf of Plaintiffs were Gary Galiher, Esq., L.
Richard DeRobertis, Esq., Diane Ono, Esq., Ilana Waxman, Esq.,
Todd Eddins, Esq., Michael Ragsdale, Esq., Scott Saiki, Esq., and
Clarisse Kobashigawa, Esq.

Appearing on behalf of Buffalo were

Steven Hisaka, Esq., and James Scadden, Esq.

Appearing on behalf

of Crane were Lee Nakamura, Esq., and Joseph Kotowski, III, Esq.
Appearing on behalf of Ingersoll were John Lacy, Esq., and Corlis
Chang, Esq.

Appearing on behalf of Goulds was Christopher

Goodwin, Esq.2

After careful consideration of the motions,

1

On August 8, 2011 and August 16, 2011, Defendant Ingersoll
Rand Co. (“Ingersoll”) and Defendant Goulds Pumps, Inc.
(“Goulds”), respectively, each filed a statement of no opposition
to the Motion to Stay. [Dkt. nos. 80, 88.]
2

Counsel for the following parties, which did not respond
to either motion, also appeared at the hearing: Ewing Martin,
III, Esq., and Bradford Chun, Esq., for Defendants Aurora Pump
Company (“Aurora”), IMO Industries, Inc., individually and as
successor-in-interest to Delaval Turbine, Inc., and formerly
known as IMO Delaval, Inc., Transamerica Delaval, Inc., and
Delaval Steam Turbine Company (“IMO”), and Warren Pumps, LLC
(“Warren Pumps”); Gail Kang, Esq., for Defendants Bayer
Cropscience, Inc., successor in interest to Rhone-Poulenc AG
Company, formerly known as Amchem Products Inc., formerly known
as Benjamin Foster Products Company (“Bayer”), and Union Carbide
Corporation (“Union”); Craig Kugisaki, Esq., for Defendant
Metropolitan Life Insurance Company (“Met Life”); Michael
O’Connor, Esq., for Defendant the William Powell Company
(“William Powell”); Erica Mullen Chee, Esq., for Defendant
Georgia-Pacific Corporation (“Georgia-Pacific”); Cathy Gee Kong,
Esq., for Defendant Kaiser Gypsum Company, Inc. (“Kaiser
(continued...)
2

supporting and opposing memoranda, and the arguments of counsel,
Buffalo’s Motion to Stay is HEREBY GRANTED for the reasons set
forth below, and the case, including Plaintiffs’ Motion for
Remand is HEREBY STAYED until November 8, 2011.
BACKGROUND
Plaintiffs filed their Complaint on May 17, 2011 in the
Circuit Court of the First Circuit, State of Hawai`i (“the State
Court”).

The case was identified as Nelson v. Crane Co., et al.,

Civil No. 11-1-0998-05 (RAN) (“Nelson”).
The Complaint states that Roger Nelson served in the
United States Navy (“Navy”) from approximately 1960 to 1968
“aboard the following ships: USS Mansfield (DD-728)
[(“Mansfield”)], which was in Pearl Harbor Naval Shipyard during
the times [he] was on board, and USS Cockrell (DD-366)
[(“Cockrell”)] which was homeported at Pearl Harbor in 1962.”
[Complaint at ¶ 6.]

Rosalie Nelson is his wife.

[Id. at ¶ 1.]

The Complaint identified the following defendants:
Crane, Aurora, Bayer, Union, Buffalo, Defendant Certainteed
Corporation (“Certainteed”), Cleaver-Brooks, Goulds, IMO,
Ingersoll, John Crane, Lynch, Met Life, Warren Pumps, William

2

(...continued)
Gypsum”); Aimee Oyasato, Esq., for Defendants John Crane,
Incorporated (“John Crane”), Cleaver-Brooks, Inc. (“CleaverBrooks”), and the Lynch Co., Inc. (“Lynch”); and John Montalbano,
Esq., for Defendant Kelly-Moore Paint Company, Inc. (“KellyMoore”).
3

Powell, Kaiser Gypsum, Kelly-Moore, and Georgia-Pacific (all
collectively “Defendants”).
The Complaint alleges that, inter alia, Bayer, Union,
Certainteed, John Crane, Lynch, Kaiser Gypsum, Kelly-Moore, and
Georgia-Pacific (collectively “General Supplier Defendants”)
manufactured, sold and/or supplied certain
generically similar asbestos products which were
ultimately used by insulators and others, and/or
to which they came in contact, while working in
their trades and occupations in the State of
Hawai`i and other locations. . . . [They] also
manufactured, sold and/or supplied certain
generically similar asbestos products to Pearl
Harbor Naval Shipyard and other shipyards and
ships for use in the general overhaul, building,
refitting and maintenance of ships.
[Id. at ¶ 5.]
The Complaint also alleges that Crane, Aurora, Buffalo,
Cleaver-Brooks, Goulds, IMO, Ingersoll, Met Life, Warren, and
William Powell (collectively “Navy Contractor Defendants”)
sold and supplied certain equipment to the United
States Navy and Pearl Harbor Naval Shipyard and
other shipyards, which contained asbestos gaskets
and/or packing, required asbestos insulation, or
required other asbestos containing parts to
function properly; and also sold replacement
component parts for their equipment, including
asbestos gaskets and packing which were identical
to their commercial counterparts.
[Id.]
Plaintiffs allege that Roger Nelson “was repeatedly
exposed to great quantities of asbestos from Defendants’
asbestos-containing products and equipment” when he worked on the

4

Mansfield and the Cockrell.

[Id. at ¶ 6.]

Plaintiffs also

allege that he “was repeatedly exposed to asbestos from
Defendant’s (sic) asbestos drywall products”, including asbestos
containing joint compound, from approximately 1956 to 1978 while
performing home repair work at his homes in California and
Virginia.

[Id.]

During all of these times, Roger Nelson

allegedly inhaled asbestos dust and fibers from Defendants’
products.

Plaintiffs claim that this exposure directly and

proximately caused him to develop “malignant mesothelioma and
other asbestos-related diseases and injuries to his lungs, chest
cavity, cardiovascular system and other parts of his body[.]”
Plaintiffs did not discover his conditions until about

[Id.]

March 2011.

[Id.]

The Complaint alleges the following claims:
1) negligence (“Count I”);3
2) strict liability (“Count II”);4
3) breach of express and implied warranty against the General
Supplier Defendants (“Count III”);

3

Plaintiffs’ negligence claim against the Navy Contractor
Defendants is based solely upon the “negligent failure to warn of
the dangers of asbestos.” [Complaint at ¶ 9.] Their negligence
claim against the General Supplier Defendants is based upon the
negligent failure to warn, as well as negligent design,
manufacture, selection of materials, assembly, inspection,
testing, maintenance for sale, marketing, distribution, lease,
sale, recommendation and delivery of their products in an unsafe
condition, failure to discover defects, and failure to find
suitable non-asbestos materials. [Id. at ¶ 8.]
4

As with the negligence claim, the only strict liability
claim against the Navy Contractor Defendants is based upon a
failure to warn theory. [Complaint at ¶ 16.]
5

4) a claim against the General Supplier Defendants alleging
liability for Roger Nelson’s injuries in proportion to each
of their shares of the asbestos materials market (“Count
IV”);
5) a claim against the General Supplier Defendants alleging
liability based on a theory of industry-wide or enterprise
liability (“Count V”);
6) a claim against the General Supplier Defendants alleging that
they intentionally caused Roger Nelson’s injuries by
knowingly delivering products in an unsafe and defective
condition (“Count VI”);
7) loss of consortium by Rosalie Nelson (“Count VII”);
8) a claim that Met Life conspired to conceal information about
the hazards that asbestos posed to workers and bystanders in
the industry (“Count VIII”);5 and
9) a claim for punitive damages because Defendants, as early as
1929, possessed medical and scientific data indicating that
asbestos and asbestos-containing products were hazardous to
the health of Roger Nelson and others in similar positions,
but they ignored and disregarded this data (“Count IX”).
Plaintiffs seek: general, special, and punitive damages; costs
incurred; prejudgment interest; and any other appropriate relief.
[Id. at pg. 15.]
I.

Removal
On June 22, 2011, Buffalo filed its Notice of Removal

of Civil Action Under 28 U.S.C. Sections 1442 and 1446 (“Notice
of Removal”).6

[Dkt. no. 1.]

Buffalo asserted that § 1442

5

Count VIII names “Defendants Met Life, Johns-Manville,
Raybestos-Manhattan and others” as the alleged conspirators.
[Complaint at ¶ 36.] Johns-Manville and Raybestos-Manhattan,
however, are not named defendants.
6

On June 22, 2011, the following Defendants also filed
notices removing Nelson from the state court: Crane; IMO; and
Warren Pumps. Each notice resulted in the opening of a separate
civil docket number. Cf. Savelesky v. Allied Packing & Supply
Inc., No. C 11-01778 SI, 2011 WL 2610179, at *3 (N.D. Cal. July
1, 2011) (“[U]nlike the general removal statues, under section
(continued...)
6

applies because the instant case involves a person, Buffalo,
acting under the authority of either a United States officer or
agency.

[Notice of Removal at ¶ 1 (citation omitted).]

Buffalo

also claims that any equipment that it manufactured for the Navy
to be used aboard Navy vessels or in Navy shipyards “was
manufactured under the direction and control of a federal
officer.”

[Id. at ¶ 6 (citing Exh. 2 (Decl. of Ret. Adm.

Roger Horne); Exh. 3 (Aff. of Martin Kraft)).]

Buffalo claims

that it manufactured and designed equipment for the Navy
according to the Navy’s detailed specifications and that the Navy
enforced those specifications and exerted close control over all
design specifications, including equipment warnings.

[Id.]

Also on June 22, 2011, Buffalo filed its Notice of TagAlong Action.7

[Dkt. no. 5.]

It notifies the Court that the

case is a potential “tag-along action” subject to transfer to the
United States District Court for the Eastern District of
Pennsylvania (“MDL Court”) pursuant to 28 U.S.C. § 1407 under a
July 29, 1991 order by the Judicial Panel on Multidistrict
Litigation (“MDL Panel”).

6

(...continued)
1442, not all defendants need concede to removal. One defendant
in a multi-defendant case can unilaterally remove the entire case
to federal court if it meets the requirements of section 1442.”
(citations omitted)). Those cases numbers are, respectively: CV
11-00402 LEK-KSC; CV 11-00405 LEK-BMK; and CV 11-00406 LEK-RLP.
7

Counsel for Goulds entered an appearance on June 30, 2011,
[dkt. no. 15,] and also filed a tag-along notice [dkt. no. 17].
7

II.

Remand
A.

Plaintiffs’ Motion to Remand
Plaintiffs point out that their negligence and strict

liability claims against Buffalo, Crane, IMO, and Warren
(collectively “Removing Defendants”8) “are based exclusively on
the Removing Defendants’ failure to warn the end users of their
equipment about asbestos.”

[Mem. in Supp. of Motion to Remand at

1; id. at 5-6 (identifying the Removing Defendants).]

Plaintiffs

contend that the Removing Defendants cannot rely on the
government contractor defense set forth in Boyle v. United
Technologies Corp., 487 U.S. 500 (1988), to support federal
officer removal jurisdiction.
Plaintiffs argue that the Ninth Circuit has held that,
as a matter of law, the Boyle defense does not apply in asbestos
failure-to-warn claims if the Navy did not prohibit its
contractors from placing asbestos warnings on their products.
[Id. at 1 (citing In re Hawaii Federal Asbestos Cases, 960 F.2d
806 (9th Cir. 1992)).]

In order to justify removal, the Removing

Defendants must establish that their state law duty to warn
conflicted with their Navy contracts and that they were acting
under a federal officer’s direction when they failed to include a
warning about asbestos.

Plaintiffs argue that the Removing

8

Presumably, the arguments relating to the Removing
Defendants also apply to the other Navy Contractor Defendants,
even if they were not the ones who removed the case.
8

Defendants cannot establish either requirement.
Plaintiffs argue that the dispositive issues associated
with the Motion to Remand are whether the Removing Defendants
have a colorable government contractor defense and whether there
is the required causal connection between Plaintiffs’ claims and
the acts that the Removing Defendants performed under the color
of a federal office.

Plaintiffs acknowledge that federal

authority is split on these issues.

[Id. at 7.]

Plaintiffs assert that the United States Supreme Court
and the Ninth Circuit require more than a mere assertion of
federal immunity to establish a colorable defense.

A colorable

defense must be supported by plausible facts establishing the
essential elements of the defense, even if the facts are
disputed.

[Id. at 7-8 (citing Mesa v. California, 489 U.S. 121,

133 (1989); Thomas v. Anchorage Equal Rights Commission, 165 F.3d
692, 705 (9th Cir. 1999)).9]

Plaintiffs note that numerous

9

Plaintiffs state that in Thomas:
[T]he Ninth Circuit explained that “[t]he term
‘colorable’ certainly is not meaningless.”
Rather, the legal term “colorable” means
“seemingly valid and genuine.” [Thomas v.
Anchorage Equal Rights Comm’n, 165 F.3d 692, 705
(9th Cir. 1999).] Thus, the Thomas Court
described “a consensus among courts of appeals
that the colorable-basis standard ‘requires some
evidence tending to show the existence of the
essential elements of the defense.’” Id.
(citations omitted) . . . .
[Mem. in Supp. of Motion to Remand at 8 (some alterations and
emphases in Mem. in Supp.).] The Ninth Circuit, however, granted
(continued...)
9

district courts within the Ninth Circuit have found that there
was no colorable Boyle defense in failure to warn claims against
asbestos manufacturers.

[Id. at 9 (citing cases).]

Plaintiffs also argue that the Removing Defendants
cannot establish that the Navy caused them to omit asbestos
warnings, which Plaintiffs contend state law required them to
provide.

If the government simply remained silent in the face of

a decision the contractor made of its own accord, that is not
sufficient to justify federal officer removal.

[Id. at 53-54

(quoting Holdren v. Buffalo Pumps, 614 F. Supp. 2d 129, 142, 150
(D. Mass 2009)).]
Plaintiffs therefore urge the Court to remand Nelson
back to the State Court.
B.

Buffalo’s Opposition to the Motion to Remand
Buffalo argues that the Court should deny the Motion to

Remand because federal officer jurisdiction pursuant to § 1442
applies in this case.

Buffalo argues that, all that is required

to establish a colorable defense for purposes of removal based on
federal officer jurisdiction is a showing of good faith removal
and that removal was not without foundation.

[Mem. in Opp. to

Motion to Remand at 3 (citing Colorado v. Symes, 286 U.S. 510,

9

(...continued)
rehearing, and withdrew this opinion. 192 F.3d 1208 (1999). The
en banc opinion withdrew the original opinion. 220 F.3d 1134
(2000) (en banc). The en banc opinion does not discuss the issue
of what constitutes a colorable claim.
10

519 (1932)).]

Even assuming, arguendo, that a finding of a

colorable defense requires proof that all the elements of the
defense exist, Buffalo asserts that there is evidence, much of it
undisputed, to support each element of the defense.
Buffalo next argues that the Ninth Circuit has recently
rejected the argument that, in order to establish the government
contractor defense, a defendant must prove the government either
specifically prohibited all warnings or explicitly dictated the
content of a warning.

[Id. at 4 (quoting Getz v. The Boeing Co.,

No. 10-15284, – F.3d –, 2011 WL 3275957, at *11 (9th Cir. Aug. 2,
2011)).]

Buffalo notes that Plaintiffs do not contest the

evidence that the Navy approved the warnings for Buffalo’s pumps.
Buffalo therefore argues that it has a colorable government
contractor defense and that removal was proper.

[Id. at 4 & 24-

26 (listing cases).]
Buffalo argues that Plaintiffs erroneously assert
Buffalo must present some admissible evidence that it was acting
under a federal officer’s direction when it failed to include
asbestos warnings on its products.

Even if Plaintiffs are

correct, Buffalo argues that it provided such evidence with its
Notice of Removal and with its memorandum in opposition to the
Motion to Remand, including declarations which establish that the
Navy exercised stringent control over production and warnings.
Buffalo contends that these declarations show that: the Navy

11

provided precise specifications for Buffalo’s pumps, including
warnings; Buffalo complied with those specifications; the Navy
strictly controlled Buffalo’s written materials, including
warnings; and, during the period in question, the Navy was more
knowledgeable about asbestos than Buffalo was.
Buffalo argues that the Court should not rely on
Plaintiffs’ speculative evidence.

Further, Plaintiffs’ evidence,

at best, creates an issue of fact as to the Navy’s control over
warnings.

Buffalo argues that, in the context of the colorable

defense requirement for federal officer removal, the facts must
be viewed in the light most favorable to the removing party.
[Id. at 28-29 (citing Hagen v. Benjamin Foster Co., 739 F. Supp.
2d 770, 778 (E.D. Pa. 2010)).]

Buffalo therefore urges the Court

to deny the Motion for Remand.
In its memorandum in opposition, Crane also urges the
Court to deny the Motion to Remand, based the same analysis set
forth in Crane’s memorandum in opposition to the motion to remand
in CV 11-00402.
C.

Plaintiffs’ Reply
In their reply, Plaintiffs argue that Buffalo misstates

controlling Supreme Court and Ninth Circuit case law.

Plaintiffs

also emphasize that Buffalo’s primary expert witness previously
testified that he would have expected the Navy to allow asbestos
warnings in technical manuals once the Navy was aware of the

12

dangers of asbestos.

Plaintiffs argue that “[t]his eviscerates

Buffalo’s entire removal petition.”

[Remand Reply at 1.]

Plaintiffs note that Hagen is not binding precedent on
other district courts merely because it is from the MDL district.
Further, it is contrary to Supreme Court and Ninth Circuit law.
[Id. at 1-2, 4 (citing Correctional Services v. Malesko, 534 U.S.
61, 74 n.6 (2001); Mesa v. California, 489 U.S. 121, 133 (1989);
Thomas v. Anchorage Equal Rights Commission, 165 F.3d 692, 705
(9th Cir. 1999)).]
Although Plaintiffs acknowledge that § 1442 must be
liberally construed, they argue that there is no Supreme Court or
Ninth Circuit case requiring the Court to resolve all doubts in
favor of removal or to presume all factual allegations in support
of removal to be true for purposes of a motion to remand.

In

fact, all of the applicable cases hold that there are limits to
the broad construction of § 1442.

[Id. at 3-4 (some citations

omitted) (citing Colorado v. Symes, 286 U.S. at 519, 521; Watson
v. Phillip Morris, 127 S. Ct. 2301, 2305 (2007)).]
Plaintiffs argue that Getz, 2011 WL 3275957, supports
their position.

That case involved a helicopter crash in bad

weather, and one of the plaintiffs’ claims was based on the
failure to warn.

The Ninth Circuit held that the government

exercised control over the content of the warnings because the
Army wrote the helicopter’s entire technical manual, including

13

warnings regarding engine failure in bad weather.

In contrast,

in the present case, Buffalo drafted its own technical manuals,
which were required to include safety precautions.

Further,

Defendants included warnings about other hazardous products in
their technical manuals from the 1940s to the 1970s, but Buffalo
did not begin warning about asbestos until the 1980s.

Moreover,

Getz is an inadequate warning case, unlike the instant case which
involves the absence of any warning.
Finally, Plaintiffs emphasize that Buffalo has no
documents showing that the Navy exercised discretion regarding
warning end users about asbestos.

Plaintiffs argue that “‘a

federal court may not hypothesize subject matter jurisdiction.’”
[Id. at 20 (some citations omitted) (quoting Ruhrgas A.G. v.
Marathon Oil Co., 526 U.S. 574, 577 (1999)).]
III. Stay
A.

Buffalo’s Motion to Stay
Buffalo seeks a stay of all proceedings, including any

consideration of the Motion to Remand, pending the MDL Panel’s
decision on transfer of this case to MDL No. 875.
Buffalo notes that MDL No. 875 was established in the
MDL Court “for co-ordination of all pretrial proceedings in
federal product liability actions involving claims of injury from
asbestos exposure.”

[Mem. in Supp. of Motion to Stay at 2

(citing In re Asbestos Products Liability Litigation (No. VI),
14

771 F. Supp. 415 (J.P.M.L. 1991)).]

Buffalo notes that, by the

time of the filing of the Motion to Stay, 85,778 cases had been
transferred to the MDL Court.

[Id. at 3 (citing Exh. 3

(Conditional Transfer Order (CTO 418))).]

Buffalo contends that

Nelson “is no different from those [cases] previously transferred
to MDL 875,” because it involves common questions of law and fact
regarding liability for injuries allegedly caused by exposure to
asbestos or asbestos containing products.

[Id. at 4.]

Buffalo argues that courts consider three factors when
determining whether to grant a stay: “(1) the judicial resources
that would be saved by avoiding duplicative litigation if the
cases are in fact consolidated; (2) the hardship and inequity to
the moving party if the action is not stayed; and (3) the
potential for prejudice to the non-moving party.”
(citation omitted).]

[Id. at 6

Buffalo argues that all of these factors

favor a stay in this case.
Buffalo asserts that it will suffer prejudice absent a
stay because it could face “duplicative proceedings and
needlessly duplicative costs” if it must engage in “discovery,
case management, motion practice and other pretrial proceedings
in this Court, when there is a strong likelihood that this case
will be transferred to the MDL for just such purposes.”
8.]

[Id. at

Buffalo asserts that, even if the Court rules on the Motion

to Remand, there may be a renewed motion to remand before the MDL

15

Court.

[Id. (citing Exh. 12 (MDL No. 875 Admin. Order No. 18

(providing procedures for seeking remand))).]
Buffalo argues that any prejudice Plaintiffs will
suffer from a stay would be minimal.

Buffalo notes that the MDL

Panel consolidated the handling of asbestos cases to benefit
plaintiffs as a whole.

Further, any stay would likely be brief

in light of the schedule associated with the motion to vacate the
conditional transfer order.
Buffalo argues that the Court should consider the
Motion to Stay before addressing the Motion to Remand.

Buffalo

notes that, in McClelland v. Merck & Co., 2007 WL 178293 (D. Haw.
Jan. 19, 2007), this district court identified a three-step
analysis for the consideration of simultaneous motions to remand
and stay.

First, the court preliminarily assesses whether

removal was clearly improper.
the motion to remand.

If so, the court should rule on

If, however, the remand presents difficult

factual or legal issues, the court should next consider whether
similar issues have been raised in other cases involving
potential transfer to the MDL proceeding.

If so, the court

should proceed to the third step and consider the merits of the
motion to stay.

Buffalo argues that, under this analysis, a stay

is warranted in the instant case.
Finally, Buffalo notes that numerous courts within the
Ninth Circuit have ruled that In re Hawaii Federal Asbestos Cases

16

does not foreclose federal officer removal by manufacturers of
equipment installed on Navy vessels.

Buffalo therefore urges the

Court to grant its Motion to Stay without ruling on the Motion to
Remand.
B.

Plaintiffs’ Memorandum in Opposition
Plaintiffs argue that allowing the MDL Court to rule on

a motion to remand is not efficient.

According to Plaintiffs,

there are remand motions pending there that are over a year old,
and at least one case was transferred back for trial without a
ruling on the motion for remand, even though the case was with
the MDL Court for over five years.

[Mem. in Opp. to Motion to

Stay at 1 (citing Exh. D (docket sheet for Hays, et al. v. Foster
Wheeler Energy Corp., et al., No. 2:09-cv-93728-ER); Cardaro v.
Aerojet Gen. Corp., Civil Action No. 05-2684, 2010 WL 3488207
(E.D. La. Aug. 27, 2010)).]
Plaintiffs emphasize that the MDL Court has expressly
stated that local district courts wishing to address
jurisdictional issues in motions to remand may do so while the
MDL Court considers the plaintiffs’ objections to the conditional
transfer orders.

[Id. at 6 (citing In re Asbestos Prods.

Liability Litig. (No. VI), No. 875, 1996 WL 143826, at *1 n.2
(Jud. Pan. Mult. Lit. Feb. 16, 1996)).10]

10

Plaintiffs reiterate

Plaintiff attached a copy of 1996 WL 143826 to their
memorandum in opposition to the Motion to Stay as Exhibit A to
(continued...)
17

that numerous courts have granted motions to remand in cases with
the same procedural posture and based on the same evidence as in
this case.

Plaintiffs also argue that this Court must determine

its jurisdiction as a threshold matter before considering a stay.
[Id. at 7 (citing Ruhrgas A.G. v. Marathon Oil Company, 526 U.S.
574, 577 (1999); Libhart v. Santa Monica Dairy Co., 592 F.2d
1062, 1064 (9th Cir. 1979)).]
Plaintiffs emphasize that:
Roger Nelson is alive, but dying of mesothelioma.
He is not expected to survive much longer. If
this case is remanded back to State court in
August 2011, then this Nelson case can be included
in the August 2011 state court trial setting
conference and can be set for trial in May 2012 in
Hawai`i State Court.
[Id. at 8 (citations omitted).]
Plaintiffs argue that neither the factual nor legal
issues in the Motion to Remand are difficult and that a stay
would be contrary to Ortiz v. Menu Foods, Inc., 525 F. Supp. 2d
1220 (D. Hawai`i 2007).

Finally, Plaintiffs emphasize that Ninth

Circuit case law applies to this case and that transfer to the
MDL Court is only for pretrial proceedings.

When the case is

transferred back for trial in eighteen to twenty-four months,
Ninth Circuit case law will still apply.

Plaintiffs therefore

argue that this Court should rule on the jurisdictional issues

10

(...continued)
the Declaration of Counsel.
18

under Ninth Circuit case law now.
C.

Buffalo’s Reply
Buffalo argues that the instant case is factually

similar to McClelland and factually distinguishable from Ortiz.
Buffalo claims that Plaintiffs did not address McClelland because
they cannot dispute that it applies.

Buffalo otherwise

reiterates arguments from its Motion to Stay.
DISCUSSION
This district court has stated that:
When considering a motion to stay, district
courts in the Ninth Circuit consider the following
factors: “(1) potential prejudice to the
non-moving party; (2) hardship and inequity to the
moving party if the action is not stayed; and (3)
the judicial resources that would be saved by
avoiding duplicative litigation if the cases are
in fact consolidated.”[11]
Ortiz v. Menu Foods, Inc., 525 F. Supp. 2d 1220, 1232 (D. Hawai`i
2007) (some citations omitted) (quoting Rivers v. Walt Disney
Co., 980 F. Supp. 1358, 1360 (C.D. Cal. 1997)).

Ortiz, however,

also recognizes that:
Courts have held that when jurisdictional issues
are in dispute, a motion to remand should be
resolved prior to the determination of whether a
stay is appropriate. Smith v. Mail Boxes, Etc.,
191 F. Supp. 2d 1155, 1157 (E.D. Cal. 2002)
(citing Good v. Prudential Ins. Co. of Am., 5 F.
Supp. 2d 804, 809 (N.D. Cal. 1998) (granting stay
pending MDL transfer decision after considering
jurisdictional issues in remand motion); Tortola
11

The Court will refer to these three factors as the “Ortiz
Factors”.
19

Rest., L.P. v. Kimberly-Clark Corp., 987 F. Supp.
1186, 1188-89 (N.D. Cal. 1997) (denying stay
motion and addressing merits of motion to remand);
Kohl v. Am. Home Products Corp., 78 F. Supp. 2d
885, 888 (W.D. Ark. 1999) (granting stay following
determination that removal was proper and denial
of remand was warranted); Aetna U.S. Healthcare,
Inc. v. Hoechst Aktiengesellschaft, 54 F. Supp. 2d
1042, 1047 (D. Kan. 1999) (reasoning that
preliminary jurisdictional issue should be
determined on motion to remand before court
considers staying the action)). “However, the
calculus changes somewhat when deference to a MDL
court will further ‘the uniformity, consistency,
and predictability in litigation that underlies
the MDL system.’” McClelland v. Merck & Co., CIV.
No. 06-00543 JMS/BMK, 2007 WL 178293, *2 (D. Haw.
Jan. 19, 2007) (quoting Leeson v. Merck & Co.,
Inc., No. S-05-2240 WBS PAN, 2006 WL 3230047 (E.D.
Ca. Jan. 27, 2006)) (citation omitted).
When considering simultaneous motions to
remand and motions to stay the proceedings,
district courts employ a three-step methodology.
First, “a court should . . . give preliminary
scrutiny to the merits of the motion to remand.
If this preliminary assessment suggests that
removal was improper, the court should promptly
complete its consideration and remand the case to
state court.” Id. (quoting Meyers v. Bayer AG,
143 F. Supp. 2d 1044, 1049 (E.D. Wis. 2001));
Conroy v. Fresh Del Monte Produce, Inc., 325 F.
Supp. 2d 1049, 1053 (N.D. Cal. 2004). If “the
jurisdictional issue appears factually or legally
difficult, [however,] the court’s second step
should be to determine whether identical or
similar jurisdictional issues have been raised in
other cases that have been or may be transferred
to the MDL proceeding.” Id. (quoting Meyers, 143
F. Supp. 2d at 1049); Conroy, 325 F. Supp. 2d at
1053. A court should only proceed to the third
step and consider the motion to stay “if the
jurisdictional issue is both difficult and similar
or identical to those in cases transferred or
likely to be transferred.” Meyers, 143 F. Supp.
2d at 1049; McClelland, 2007 WL 178293, at *2;
Conroy, 325 F. Supp. 2d at 1053.
Id. at 1232-33 (alterations in Ortiz) (footnote omitted).
20

Thus,

before considering the Ortiz Factors, this Court must apply the
McClelland three-step analysis to determine whether it should
rule upon the Motion to Remand before considering whether a stay
is appropriate.
I.

McClelland Analysis
In the first step, this Court must conduct a

preliminary review of the merits of Plaintiffs’ Motion to Remand.
Both Plaintiffs and the Removing Defendants argue that there are
numerous cases supporting their respective positions in cases
involving a motion to remand with a similar procedural posture
and based on similar evidence as in the instant case.

[Mem. in

Opp. to Motion to Stay at 7, 19-26; CV 11-00402 LEK-KSC, Crane’s
Mem. in Opp. to Motion to Remand, filed 8/8/11 (dkt. no. 51), at
16-17.]

Further, Plaintiffs have acknowledged that there is

conflicting federal case law on the critical legal issues in the
Motion to Remand.

[Mem. in Supp. of Motion to Remand at 7 (“The

dispositive issues before the court are whether Defendants have a
colorable government contract defense to their admitted failure
to warn of asbestos hazards as required by state law, and whether
Defendants have established the requisite causal connection.
Federal authority is split.”).]

Thus, after a preliminary

assessment of the Motion to Remand, the Court cannot find that
the removal was improper.

The Court emphasizes that its analysis

of the first McClelland step is only for purposes of the this

21

Order; and it is not necessarily an indication of how this Court
will rule on the Motion to Remand.
The Court therefore proceeds to the second step of the
McClelland analysis and considers whether courts in other cases
subject to transfer to the MDL Court have considered similar
jurisdictional issues.

The purpose of the second step is

“because it is only for the purpose of furthering judicial
economy and consistency that the transferee court should decide
the jurisdictional issue.”

Ortiz, 525 F. Supp. 2d at 1232 n.2

(citing Meyers, 143 F. Supp. 2d at 1049).

In this Court’s view,

there is no dispute that this step supports consideration of the
Motion to Stay because both Plaintiffs and the Removing
Defendants have argued extensively that this Court should be
persuaded by how other courts have ruled on similar legal issues
and on similar evidence.

Thus, allowing the MDL Court to decide

the remand issue would further judicial economy and consistency.
The Court therefore finds that the jurisdictional
issues in this case are “both difficult and similar or identical
to those in cases transferred or likely to be transferred.”
id. at 1233.

See

The Court will consider whether a stay is

appropriate in this case prior to ruling on the merits of the
Motion to Remand.
II.

Ortiz Factors
First, the Court must consider the prejudice to

22

Plaintiffs if the Court grants a stay.

The Court acknowledges

that Mr. Nelson is “dying of mesothelioma” and “is not expected
to survive much longer.”
(citation omitted).]

[Mem. in Opp. to Motion to Stay at 8

Thus, it is clearly in Plaintiffs’

interests to have the case as a whole resolved as expeditiously
as possible.

At the hearing on the motions, Plaintiffs’ counsel

argued extensively about the disadvantages to Plaintiffs and the
potential delay if the case is transferred to the MDL Court.

The

issue currently before this Court, however, is not whether the
case should be transferred, but whether the case should be stayed
until the MDL Panel renders a final transfer decision.

In the

context of the first Ortiz Factor, the Court must consider
whether Plaintiffs will suffer prejudice if the Court grants a
stay pending the MDL Panel’s decision, not whether Plaintiffs
will suffer prejudice if the case is transferred.

The hearing on

Plaintiffs’ objections to the MDL Panel’s conditional transfer
order is scheduled for the week of September 26, 2011.

Counsel’s

representations at the hearing on the motions indicated that the
MDL Panel may render a final decision on the transfer of this
case at the hearing or shortly thereafter.

Thus, a stay in this

case until the MDL Panel renders its decision would likely be
brief.

Without diminishing the significance of Plaintiffs’

concerns for the seriousness of Mr. Nelson’s health, the Court
finds that Plaintiffs have not established that they will be

23

unduly prejudiced by a brief stay of this case pending the MDL
Panel’s final transfer decision.
Second, the Court considers the hardship and inequity
to Buffalo if the Court denies the Motion to Stay.

Buffalo

asserts that it will suffer prejudice because it could face
“duplicative proceedings and needlessly duplicative costs” if
this case moves forward in this district court while the MDL
Panel’s final decision is still pending.
Motion to Stay at 8.]

[Mem. in Supp. of

Buffalo notes that it faces multiple

similar actions across the country and, without transfer to the
MDL Court, it must litigate the same issues based on the same
evidence in multiple courts and it must risk inconsistent rulings
on the same pretrial matters.

As in the first factor, the Court

emphasizes that a stay pending the MDL Panel’s decision will
likely be brief and therefore it is unlikely that Buffalo will
face significant “discovery, case management, motion practice and
other pretrial proceedings in this Court” during that time.
[Id.]

The only significant development in this case that is

likely to occur during the period in question is a ruling on the
Motion to Remand.

Even if the Court ruled on the Motion to

Remand, the dissatisfied party could file a motion for
reconsideration, and that motion would likely be pending when the
MDL Panel renders its transfer decision.

Further, Buffalo has

noted that, regardless of this Court’s ruling on the Motion to

24

Remand, it may be forced to re-litigate the issue in a renewed
motion before the MDL Court.

[Id. (citing Exh. 12 (MDL No. 875

Admin. Order No. 18 (providing procedures for seeking remand))).]
Buffalo has faced, and will face, similar remand issues in other
cases before the MDL Court.

Thus, although the Court emphasizes

that it is not a substantial consideration in this case, the
Court finds the denial of a stay would impose some hardship and
inequity upon Buffalo.
Finally, in light of the possible lack of a final
resolution on the Motion to Remand and the possible re-litigation
of the issues before the MDL Court, a stay pending the MDL
Panel’s final transfer decision would save this Court’s judicial
resources by avoiding duplicative litigation if the case is
transferred.
Having considered all of the Ortiz Factors, the Court
FINDS that a brief stay of this case, including Plaintiffs’
Motion to Remand, is appropriate to allow the MDL Panel to render
a final decision on whether to transfer the instant case to the
MDL Court.

The Court emphasizes that, in light of the scheduled

hearing before the MDL Panel next week, the stay will be brief.
Further, if the MDL Panel does not issue a decision within a
reasonable amount of time after its hearing, this Court will
issue a ruling on the Motion to Remand.

25

CONCLUSION
On the basis of the foregoing, Buffalo’s Motion to Stay
All Proceedings Pending a Decision on Transfer by the Judicial
Panel on Multidistrict Litigation, filed July 13, 2011, is HEREBY
GRANTED.

The entire case, including Plaintiffs’ pending Motion

to Remand, is HEREBY STAYED until November 8, 2011.

If the MDL

Panel has not ruled on the transfer of this case by that time,
this Court will issue a ruling on Plaintiffs’ Motion for Remand.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, September 26, 2011.

/S/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge

IN RE: HAWAII STATE ASBESTOS CASES ROGER E. NELSON, ET AL. VS.
CRANE COMPANY, ETC., ET AL; CIVIL NO. 11-00400 LEK-KSC; ORDER
GRANTING DEFENDANT’S MOTION TO STAY ALL PROCEEDINGS PENDING A
DECISION ON TRANSFER BY THE JUDICIAL PANEL ON MULTIDISTRICT
LITIGATION

26