Childers et al v. Belcher et al
Filing
9
MEMORANDUM OPINION & ORDER, Motions terminated: (1) The pla motion to remand in Easterling v. State Farm, No. 11-158, R. 4, is GRANTED. This case is REMANDED to the Pike Circuit Court and STRICKEN from the Courts active docket.(2) The plaintiffs motion to remand in Breeding v. State Farm, No. 11-159, R. 4 , is GRANTED. This case is REMANDED to the Pike Circuit Court and STRICKEN from the Courts active docket. Signed by Judge Amul R. Thapar on 12/23/11.(MJY)cc: COR, Pike Circuit Court w/noe
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
SOUTHERN DIVISION
PIKEVILLE
)
)
)
IN RE PIKEVILLE SCHOOL BUS
Civil Nos. 11-158-ART;
)
COLLISION CASES
11-159-ART
)
)
)
MEMORANDUM OPINION
)
& ORDER
)
)
*** *** *** ***
The defendant State Farm Mutual Automobile Insurance Company removed these
two cases to federal court on the basis of diversity jurisdiction. But State Farm waited more
than one year from the commencement of the action to do so.
Therefore, 28 U.S.C.
§ 1446(b) bars removal of these cases, and the Court must remand them back to state court.
BACKGROUND
At one time or another, every driver has faced a sea of red brake lights when traffic
enters a school zone. Usually, these collective slowdowns occur without incident because
the drivers have enough time to brake and avoid a collision. Even if drivers cannot avoid a
collision, minor rear-end collisions are the norm.
Tragically, this case falls outside the norm. Kendall Slusher was driving a three-axle
dump truck on U.S. Highway 460 on March 22, 2010, when he saw traffic slowing down in
front of him. Corr. Resp., No. 11-158, R. 9 at 1; No. 11-159, R. 7 at 1–2. But he did not
know that the reason for the collective slow down was an upcoming school zone. Id. When
he realized that he could not avoid a collision, Slusher did what came naturally: he applied
the emergency brake. Id. at 2. In hindsight, this was not a good idea. It caused him to lose
control of the dump truck. Id. The truck spun clockwise across the center line and into
oncoming traffic, striking a Pike County Board of Education school bus full of children. Id.
As with most accidents of this magnitude, temporary chaos ensues afterward, and the
resulting lawsuits were not immune from this chaos. On September 24, 2010, the school bus
driver, Peggy Childers, and many of the injured children (through next friends) filed a
complaint in Pike Circuit Court against Slusher, his employer Kenny Belcher Trucking
Company, the Pike County Board of Education, and these plaintiffs‘ underinsured motorist
carriers: Princeton Excess and Surplus Lines Insurance Company, West American Insurance
Company, Hartford Accident and Indemnity Company, and Kentucky Farm Bureau Mutual
Insurance Company. See Compl., No. 11-158, R. 5-1; No. 11-159, R. 5-1. Meanwhile, other
children brought another lawsuit in Pike Circuit Court. See Bowling, et al. v. Belcher, et al.,
No. 10-CI-00568 (Pike Cir. Ct.). The Pike Circuit Court consolidated this latter lawsuit with
the first one, and the consolidated suit maintained the same docket number as Childers‘s
lawsuit. Order, No. 11-158, R. 1-3 at 102; No. 11-159, R. 1-3 at 102.
But even this consolidated action did not consist of all the plaintiffs and defendants.
On October 4, 2010, plaintiffs J.E., K.E., L.H., C.H., and C.H. moved to intervene in the
consolidated action and add State Farm—their underinsured motorist carrier—as a defendant
to the consolidated action. Mot. to Intervene, No 11-158, R. 1-3 at 1–3; No. 11-159, R. 1-3
at 1–3. On October 13, 2010, the Pike Circuit Court granted the motion to intervene and
docketed the intervening complaint. Order, No. 11-158, R. 1-3 at 108; No. 11-159, R. 1-3 at
108.
2
After nearly a year in discovery, the parties developed, and the court approved, a
procedure to adjudicate these cases efficiently. Corr. Resp., No. 11-158, R. 9 at 2–3; No. 11159, R. 7 at 2–3. Because Slusher and his employer Belcher Trucking were common
defendants as to all of the plaintiffs‘ claims, but the plaintiffs had different underinsurance
providers, the plaintiffs agreed to binding arbitration of their claims against the common
defendants. Id. at 2–3. The arbitration process would divide up the insurance policy limits
of the common defendants among the plaintiffs according to severity of each plaintiff‘s
injuries. Id. at 3. The payment of this arbitration award would trigger several events. Id.
First, the parties agreed that payment of the arbitration award would result in the dismissal of
Slusher and Belcher Trucking from the consolidated action, leaving only the plaintiffs‘
underinsurance carriers as defendants. Id. Second, the consolidated action would be severed
into separate actions with each group of plaintiffs having a cause of action against his or her
underinsured motorist carrier. Id. For example, one of the severed cases would involve the
intervening plaintiffs J.E. and K.E against State Farm and another case would involve the
intervening plaintiffs C.H. and C.H. against State Farm.
With this procedure established, the Pikeville Circuit Court ordered the consolidated
action to arbitration on August 8, 2011. Order, R. 11-158, R. 1-3 at 43; R. 11-159, R. 1-3 at
43. The arbitrator filed her recommendations on September 16, 2011, which she amended
eleven days later. R. 11-158, R. 9-3; R. 11-159, R. 7-3. For its part, State Farm then
informed the plaintiffs that it would not pursue its subrogation rights with respect to the
arbitration award, leaving the plaintiffs free to collect the amounts due under the arbitration
award. Corr. Resp., No. 11-158, R. 9 at 3–4; No. 11-159, R. 7 at 3–4.
3
Although the Pikeville Circuit Court had not yet dismissed the common defendants or
severed the consolidated cases, State Farm wanted to remove two of the soon-to-be-separate
cases to federal court. So it did exactly that. On October 12, 2011, it filed two notices of
removal: one with respect to plaintiffs J.E. and K.E., No. 11-158, R. 1, and another with
respect to plaintiffs C.H. and K.H., No. 11-159, R. 1. Less than thirty days later, the
plaintiffs in each removed case, who are represented by the same attorney, filed motions to
remand these cases back to state court. No. 11-158, R. 5; No. 11-159, R. 4. Because these
two removed actions stem from the same consolidated state court action, the notices of
removal were filed on the same day, and the pleadings are identical except for the parties‘
identities, the Court will address both cases in this Order.
DISCUSSION
I.
These cases must be remanded because State Farm did not remove them within
one year of the commencement of the state court action.
Because the state court action was commenced on September 24, 2010, and State
Farm waited over one year to file its notices of removal on October 12, 2011, the Court must
remand these cases. In a case that is not initially removable, the case may not be removed on
the basis of diversity jurisdiction ―more than 1 year after commencement of the action.‖
Brierly v. Alusuisse Flexible Packaging, Inc., 184 F.3d 527, 534 (6th Cir. 1999) (quoting
28 U.S.C. § 1446(b)). Here, it is clear that the state court case was not initially removable.
At the time, the parties were not completely diverse because defendants Slusher, Belcher
Trucking, and Kentucky Farm Bureau, as well as most of the plaintiffs, were citizens of
Kentucky. Compl., No. 11-158, R. 5-1 ¶¶ 1–7, 12; No. 11-159, R. 5-1 ¶¶ 1–7, 12. In
addition, because defendants Slusher, Belcher Trucking, and Kentucky Farm Bureau were
4
―citizen[s] of the State in which [the] action is brought,‖ the resident defendant exception
prohibited the case from being removed. 28 U.S.C. § 1441(b). Therefore, the one-year limit
applies and the Court must remand these cases if more than one year has passed between
―commencement of the action‖ and October 12, 2011, the date State Farm filed its notice of
removal. 28 U.S.C. § 1446(b).
The Sixth Circuit has not yet interpreted the phrase ―commencement of the action.‖
But it has suggested, as a threshold matter, that the phrase derives its meaning from federal,
not state, law. See Brierly, 184 F.3d at 534 (applying the definition of ―commencement of
the action‖ found in Fed. R. Civ. P. 3 to determine when the one-year clock began in a
diversity action); accord Norman v. Sundance Spas, Inc., 844 F. Supp. 355, 357 (W.D. Ky.
1994) (referring to federal law as the source for the definition of ―commencement of the
action‖). But see Smith v. Nationwide Prop. & Cas. Ins. Co., 505 F.3d 401, 405 (6th Cir.
2007) (joining other courts of appeals in concluding that state law determines when an action
is ―commenced‖ under the Class Action Fairness Act); Cannon v. Kroger Co., 837 F.2d 660,
664 (4th Cir. 1988) (―It is clear that a federal court must honor state court rules governing
commencement of civil actions when an action is first brought in state court and then
removed to federal court . . . .‖). Ultimately, it does not matter whether the Court relies on
federal or state law to interpret ―commencement of the action‖ because applying the Federal
Rules of Civil Procedure and Kentucky Rules of Civil Procedure yield the same result in this
case. Compare Fed. R. Civ. P. 3 (―A civil action is commenced by filing a complaint with
the court.‖) with Ky. R. Civ. P. 3.01 (―A civil action is commenced by the filing of a
complaint with the court and the issuance of a summons or warning order thereon in good
faith.‖). The parties do not contend otherwise.
5
The question before the Court is whether, by intervening in an existing civil action
and adding a new defendant, plaintiffs ―commence‖ a new civil action for purposes of a
jurisdictional statute. They do not. Consequently, the one-year clock in § 1446(b) starts to
tick when the original complaint is filed, and this time limit does not reset for later-added
defendants.
As with any legal text, interpretation begins with the plain language of the statute.
The removal statutes use the term ―action‖ interchangeably with ―civil action,‖ but do not
define either term. Historical usage indicates that ―action‖ and ―suit‖ both referred to entire
proceedings or cases. See, e.g., Black‘s Law Dictionary (9th ed. 2009) (third definition of
―claim‖) (―A demand for money, property, or a legal remedy to which one asserts a right;
esp., the part of a complaint in a civil action specifying what relief the plaintiff asks for.‖)
(emphasis added). The only difference was their context: ―action‖ referred to proceedings in
courts of law and ―suit‖ referred to proceedings in courts of equity. Black‘s Law Dictionary
(9th ed. 2009) (fourth definition of ―action‖) (citing Edwin E. Bryant, The Law of Pleading
Under the Codes of Civil Procedure 3 (2d ed. 1899)); see also Fed. R. Civ. P. 1, Notes of
Advisory Committee on Rules—1966 Amendment (referring to the ―elimination of a
distinction between actions at law and suits in equity‖). The removal statutes employ this
same understanding of the term ―civil action.‖ The removal statutes only permit removal of
entire ―civil actions‖ that are based on diversity jurisdiction; defendants are not allowed to
remove pieces of a state court case or abandon un-consenting defendants in state court. See
generally 28 U.S.C. § 1441. So it stands to reason that a subset of claims between an
intervening plaintiff and one of many defendants cannot qualify as an ―action‖ because these
claims are only a piece of the entire state court proceeding.
6
If it were otherwise—if an intervening plaintiff‘s claims against a later-added
defendant qualified as a new ―civil action‖—then the plain language of § 1441 would permit
the defendant to remove only the intervening plaintiff‘s claims and leave the rest of the
claims, defendants, and plaintiffs behind in state court. But this possibility would contradict
the longstanding prohibition on piecemeal removal of cases. See Wright & Miller, Federal
Practice & Procedure § 3722.3 (4th ed. 2011) (explaining how Congress previously endorsed
piecemeal removal under the 1866 Separable Controversy Act, but the ensuing ―confusion
and embarrassment, as well as increase in cost of litigation‖ led Congress to ―put an end‖ to
piecemeal removal by adopting § 1441(c), which governed both diversity and federal
question cases until 1990); see also Wilson v. Lowe’s Home Ctr., Inc., 401 F. Supp. 2d 186,
19697 (D. Conn. 2005) (same); Loftis v. United Parcel Serv., Inc., 342 F.3d 509, 516 (6th
Cir. 2009) (explaining the rule that all defendants must consent to removal, thus prohibiting a
single defendant from removing only part of a case).
The same interpretation of ―commencement of an action‖ can be reached by
examining the procedural mechanism of intervention.
By intervening in an existing
proceeding, a party does not create a new action, but only ―voluntarily enters a pending
lawsuit because of a personal stake in it.‖ Black‘s Law Dictionary (9th ed. 2009) (definition
of ―intervenor‖) (emphasis added).
Judicial practice confirms this relationship between
intervention and the commencement of an action. Indeed, one need only look at the docket
sheet for the consolidated state action below to come to this conclusion. When the Pike
Circuit Court permitted J.E., K.E., C.H., and C.H. to intervene, the court did not issue a new
civil action number for the case. The intervening plaintiffs were simply added to existing
civil action number 10-CI-01494. Accord U.S. Airways, Inc. v. PMA Capital Ins. Co., 340 F.
7
Supp. 2d 699, 706 (E.D. Va. 2004) (Ellis, J.) (―When additional defendants are joined, no
second action is commenced and no new case number is assigned; rather, the action is then
pending as to the joined defendants in addition to those parties already defendants. In sum,
. . . an action commences only once.‖).
Furthermore, the time limit in § 1446(b) does not distinguish between defendants
named in the original complaint and later-added defendants. It would have been easy for
Congress to do so: § 1446(b) could have said that ―a case may not be removed on the basis of
[diversity jurisdiction] more than 1 year after the commencement of the action against that
party.‖ Sasser v. Ford Motor Co., 126 F. Supp. 2d 1333, 1336 (M.D. Ala. 2001); accord
U.S. Airways, Inc., 340 F. Supp. 2d at 706 n.8 (―If Congress had intended that a separate and
distinct one year removal limit would commence to run upon the joining of any additional
defendant, it would have written the statute to read that diversity cases are barred from
removal more than one year after commencement of the action against each defendant.‖).
Congress‘s decision not to make such a distinction strongly suggests that the one-year time
limit starts at the same time for both originally named defendants and later-added defendants.
And State Farm does not offer any reason to support performing judicial surgery on the clear
language in § 1446(b).
Unsurprisingly, nearly every other court to interpret this phrase in § 1446(b) has also
come to the same conclusion regardless of whether the courts ultimately based their
decisions on state or federal law. See, e.g., First Merchants Trust Co. v. Wal-Mart Stores
East, LP, 630 F. Supp. 2d 964, 969–70 (S.D. Ind. 2008) (holding that the plain meaning of
§ 1446(b) does not give later-added defendants their own one-year time limit); U.S. Airways,
Inc., 340 F. Supp. 2d at 704–07 (rejecting argument that one-year time limit does not begin
8
to run against later-added defendant until that defendant is joined); Ardoin v. Stine Lumber
Co., 298 F. Supp. 2d 422, 425 (W.D. La. 2003) (holding that the addition of a new plaintiff
did not restart the one-year limit for removal); Sasser, 126 F. Supp. 2d at 1335–37 (same);
Howell v. St. Paul Fire & Marine Ins. Co., 955 F. Supp. 660, 662–63 (M.D. La. 1997)
(same); Lytle v. Lytle, 982 F. Supp. 671, 674 (E.D. Mo. 1997) (holding that the one-year limit
prohibited third-party defendants from removing the case even though the third-party
defendants were brought into the action more than one year after the filing of the original
complaint); Norman v. Sundance Spas, Inc., 844 F. Supp. 355, 357 (W.D. Ky. 1994)
(applying federal law and concluding that a later-amended complaint that adds a new
defendant does not commence a new action); accord Weber v. Mobil Oil Corp., 506 F.3d
1311, 1316 (10th Cir. 2007) (―[I]ntervening plaintiffs asserting identical causes of action
against the same defendants as named in the original complaint [does not] change the
commencement date of the suit for purposes of CAFA or any other jurisdictional statute‖).
Courts interpreting identical or similar phrases in other jurisdictional contexts have likewise
come to similar conclusions. For example, the First Circuit interpreted the phrase ―[n]o
action may be commenced‖ in the Clean Water Act to conclude that an intervening party
―did not ‗commence‘ [an] action,‖ but only ―intervened in an existing action.‖ Dubois v.
U.S. Dep’t of Agric., 102 F.3d 1273, 1296 n.27 (1st Cir. 1996). Likewise, in interpreting the
phrase ―any civil action commenced‖ on or after the effective date of the Class Action
Fairness Act, the Tenth Circuit concluded that a federal plaintiffs‘ intervention did not
commence a new ―action.‖ Weber, 506 F.3d at 1316.
There is no doubt that the text is clear in this case. But for those readers who find
congressional purpose and legislative history to be persuasive supplements to a textual
9
interpretation, these sources of information also support the Court‘s interpretation of
§ 1446(b). Before Congress added the one-year time limit in 1988, the addition, substitution,
and elimination of parties as a state court action progressed towards trial could create
diversity and thus permit removal ―late in the proceedings.‖ H.R. Rep. No. 100-889, at 72
(1988), reprinted in 1988 U.S.C.C.A.N. 5982, 6032–33. For example, if a plaintiff settled
with the only non-diverse defendant on the night before trial, the remaining defendants could
remove the case even if the action had been pending for years. Id. To avoid this ―substantial
delay and disruption,‖ Congress added the one-year time limit as a ―modest curtailment‖ of
removal based on diversity jurisdiction. Id.; see also Court Reform and Access to Justice
Act: Hearings Before the Subcomm. on Courts, Civil Liberties, and the Admin. of Justice of
the H. Comm. on the Judiciary, 100th Cong. 97 (1987) (prepared testimony of Hon. Elmo B.
Hunter, Chairperson of the Comm. on Court Admin. of the Judicial Conference). If lateradded defendants got their own one-year time limit for removal, this would ―effectively
extend the opportunity for removal to months, indeed even years, later when new parties
might be added or subtracted.‖ U.S. Airways, Inc., 340 F. Supp. 2d at 706. This conclusion
would contradict Congress‘s intent in creating the one-year removal limit as a rule-like
means of ―reducing the opportunity for removal after substantial progress has been made in
state court.‖ H.R. Rep. No. 889, at 72.
Lastly, statutes conferring removal jurisdiction must be ―construed strictly because
removal jurisdiction encroaches on a state court‘s jurisdiction.‖ Brierly, 184 F.3d at 534
(citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108–09 (1941)). And there is a
presumption against federal jurisdiction that the party invoking jurisdiction—here, State
Farm—has the burden to overcome. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
10
375, 377 (1994). Therefore, strict construction of § 1446(b) as well as the presumption
against this Court‘s jurisdiction erases any lingering doubts as to whether intervening
commences a new civil action.
State Farm does not discuss or cite § 1446(b), let alone any cases interpreting the
phrase ―commencement of the action.‖ Instead, State Farm quickly proclaims, without any
supporting authority, that it ―cannot be bound under a one year period for which [it] was
completely unaware of any action arising from the bus accident.‖ Corr. Resp., No. 11-158,
R. 9 at 11; No. 11-159, R. 7 at 11. In essence, State Farm argues that starting the one-year
clock when State Farm was not yet a party to the action is unfair. But, fair or not, Congress
chose an administratively clear rule to curtail ―the opportunity for removal after substantial
progress has been made in state court.‖ Staggs v. Union Pac. R.R. Co., No. 1:10CV00096,
2011 WL 335671, at *3 (E.D. Ark. Jan. 28, 2011) (quoting H.R. Rep. No. 100-889, at 72).
And if Congress wants to remedy any injustices created by this clear rule, it has already
demonstrated that it has the capacity to do so. See Federal Courts Jurisdiction and Venue
Clarification Act of 2011, Pub. L. No. 112-63, 125 Stat. 758 § 103 (Dec. 7, 2011) (creating
an exception to § 1446(b)‘s one-year limit, effective for cases removed or commenced after
January 6, 2012, if ―the district court finds that the plaintiff has acted in bad faith in order to
prevent a defendant from removing the action‖).
Having concluded that the phrase ―commencement of the action‖ refers to the filing
of the original complaint, it is clear that State Farm waited too long to file its notices of
removal. The original complaint was filed in Pike Circuit Court on September 24, 2010.
State Farm removed these cases on October 12, 2011—nearly three weeks too late.
Therefore, State Farm must defend itself in state court.
11
II. The plaintiffs’ other arguments for remand
In their motions to remand, the plaintiffs make several other arguments. First, they
argue that State Farm removed these cases more than thirty days after the cases first became
removable, and thus removal is procedurally barred by § 1446(b). Second, the plaintiffs
argue that there is no complete diversity because the non-diverse defendants Slusher and
Belcher Trucking have not yet been formally dismissed by the state court. See Mot. to
Remand, No. 11-158, R. 5 at 2–5; No. 11-159, R. 5 at 2–5. Because the one-year time limit
in § 1446(b) mandates remand of these cases, however, the Court will not opine on the merits
of the plaintiffs‘ other arguments.
CONCLUSION
Accordingly, it is ORDERED as follows:
(1)
The plaintiffs‘ motion to remand in Easterling v. State Farm, No. 11-158,
R. 4, is GRANTED. This case is REMANDED to the Pike Circuit Court and
STRICKEN from the Court‘s active docket.
(2)
The plaintiffs‘ motion to remand in Breeding v. State Farm, No. 11-159, R. 4,
is GRANTED. This case is REMANDED to the Pike Circuit Court and
STRICKEN from the Court‘s active docket.
This the 23rd day of December, 2011.
12
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?