Gregoire et al v. Transocean, Ltd.

Filing 15

RESPONSE/MEMORANDUM in Opposition filed by All Plaintiffs re 5 MOTION to Stay Proceedings Pending Transfer By The Judicial Panel On MultiDistrict Litigation. (Attachments: # 1 Exhibit Exhibits A to I)(Cullens, J.)

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF LOUISIANA WILLIAM D. GREGOIRE, VERONICA G. STELLY AND TOBY J. STELLY VERSUS TRANSOCEAN, LTD., ET AL. CIVIL ACTION NUMBER 2:10-CV-01351 JUDGE KURT D. ENGELHARDT MAGISTRATE JUDGE ALMA CHASEZ

****************************************************************************** PLAINTIFFS' OPPOSITION MEMORANDUM TO MOTION FOR STAY FILED BY BP PRODUCTS NORTH AMERICA, INC. AND BP AMERICA, INC. MAY IT PLEASE THE COURT: Defendants BP Products North America, Inc. and BP America, Inc. (collectively "BP Defendants" or "Defendants") have moved this Court [Rec. Doc. 5] for a stay of these proceedings pending a decision from the Judicial Panel on Multidistrict Litigation ("JPML" or "Panel") regarding whether to centralize this and other similar actions under 28 U.S.C. § 1407. For the reasons set forth herein, Plaintiffs oppose this motion. Plaintiffs respectfully represent that to grant this motion would defeat the goals of justice and judicial economy. I. FACTUAL BACKGROUND As is undoubtedly well-known to this Court, on April 20, 2010, several explosions and a fire occurred aboard the MODU Deepwater Horizon severely damaging the vessel and causing the vessel to sink. In addition to the personal injuries and deaths caused in this accident, millions of gallons of crude oil have filled the Gulf of Mexico doing substantial environmental damage to the waters off the coast of Louisiana and to the Louisiana coast itself. That damage is ongoing. And although the BP Defendants estimated that only 5,000 barrels of oil were polluting the Gulf, we now know that as much as 70,000 barrels a day or more have escaped and continue to escape

each day until this massive leak is plugged.

Continuous efforts involving thousands of

individuals have taken place since April 20, 2010 in an attempt to stem the flow of oil and prevent damage to Louisiana waters and the Louisiana coastline. Despite these efforts,

substantial damage has been done to property, environmental resources and businesses located in Louisiana. And now, despite this massive, ongoing catastrophe, the BP defendants want this Court to simply stay this proceeding for approximately sixty (60) days until the JPML is expected to issue an MDL ruling. II. PROCEDURAL BACKGROUND Currently pending are motions before the JPML to centralize this and other similar cases under 28 U.S.C. § 1407. These motions are scheduled to be heard on July 29, 2010. III. THIS COURT RETAINS JURISDICTION WHILE THE TRANSFER MOTION IS PENDING A pending motion for transfer before the Panel does not deprive this Court, before whom the present case is pending, of jurisdiction. The mere pendency of a motion before the Panel does not affect or suspend orders and discovery proceedings in the transferor district court and does not in any way limit the jurisdiction of the transferor court to rule upon matters properly presented to it for decision. United States ex rel Cosens v. St. Francis Hosp., 241 F. Supp. 2d 223, 225 (E.D.N.Y. 2002) (quoting In Re Four Seasons Secs. Law. Litig., 362 F. Supp. 574, 575 n.2 (J.P.M.L. 1973). This holding is consistent with Rule 1.5 of the Rules of Procedure for the Judicial Panel On Multidistrict Litigation which states: The pendency of a motion, order to show cause, conditional transfer order or conditional remand order before the Panel concerning transfer or remand of an action pursuant to 28 U.S.C. § 1407 does not affect or suspend orders and pretrial 2

proceedings in the district court in which the action is pending and does not in anyway limit the pretrial jurisdiction of the court. Similarly, the Manual for Complex Litigation, Fourth, § 20-131 (2004) states: The transferor court should not automatically stay discovery . . . Nor should the court automatically postpone rulings on pending motions, or generally suspend further proceedings. The Panel in In Re Penn Central Secs. Litig., 333 F.Supp. 382, 384 (J.P.M.L. 1971) stated: The Panel's experience indicates that the use of stay orders by district courts, particularly in the area of discovery, is usually undesirable. Any discovery obtained prior to the Panel decision will benefit the parties to the action if transfer is denied and will presumably be made available to all other parties if transfer is ordered.1 Given this authoritative guidance, as a general rule and absent some compelling reason to do so, a federal court should not stay a pending suit such as this one simply because it may be subjected to an MDL transfer at some later, uncertain date. IV. THE GRANTING OF A STAY WOULD UNFAIRLY AND UNDULY PREJUDICE PLAINTIFFS AND DENYING THE STAY WOULD PROMOTE JUDICIAL ECONOMY WITHOUT PREJUDICE TO THE DEFENDANTS Three factors must be considered in determining whether a stay should be granted: "1) hardship and inequity of the moving party without a stay; 2) prejudice the non-moving party will suffer if a stay is granted; and 3) judicial economy." Falgoust v. Microsoft, Inc., 2000WL 462919, at *2 (E.D. La. 4/19/2000) (citations omitted). When the court considers these three factors in the present case, it is clear that the stay should be denied.

Emphasis added. See also, The Mechanics of Motion Practice Before the Judicial Panel on Multidistrict Litigation, 175 F.R.D. 589 (1988): "District courts will commonly refuse to grant a motion to stay discovery

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The Panel will hear and rule on the motion to transfer no sooner than July 29, 2010, some two months from now. Depending upon the time taken by the Panel in rendering a decision, the delay could be substantially longer. In the meantime, the damage being done from the explosion and release of oil is ongoing. Staying the case would unduly prejudice the ability of Plaintiffs to collect evidence as it develops or seek emergency relief through the Court should that need arise. For example, issues surrounding the preservation of evidence seem to arise on a daily basis. If Plaintiffs are subjected to a stay order for the next two months, they may be rendered powerless to address these potentially important issues. The prejudice caused by a stay order to Plaintiffs is clear and obvious. Defendants, on the other hand, have not established any undue hardship that they would suffer if their motion is denied. Clearly Defendants will need to undertake many of the same actions with respect to all cases pending against them, such as preserving discovery. Considerations of inconsistent pretrial rulings on discovery is clearly outweighed by the prejudice that would result to Plaintiffs should cases suddenly be stayed for the next several months. Although the BP Defendants reference and attach a number of prior court rulings that have granted their motions to stay filed in other proceedings, other federal courts that have considered the same motions have correctly DENIED the same. An essentially identical Motion to Stay [1:10-CV-00195 Rec. Doc. 6] now before your Honor filed by the BP Defendants in the United States District Court for the Southern District of Alabama in the Burke v. BP Corporation North America, Inc, et al., case, was denied on May 25, 2010. In correctly denying the BP
pending the outcome of a Panel transfer motion."

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Defendants' Motion to Stay (see Exhibit A [1:10-CV-00215, Rec. Doc. 41] attached hereto), Chief District Court Judge William Steele observed: [T]he MDL Panel will take up the motions to transfer in MDL No. 2179, approximately 60 days from now. There is no reason why this action cannot move forward with preliminary steps in the interim. Regardless of whether and where the MDL Panel ultimately transfers this action for consolidated and coordinated pretrial proceedings, defendants will need to file answers or responsive pleadings. Should any of those defendants see fit to file Rule 12(b) motions, those motions will need to be briefed. Entering a stay at this juncture and under these circumstances would not rescue defendants from material hardship or the risk of inconsistent adjudications; afterall, they must answer the Complaint anyway, and the likelihood of adjudication of any merits issues prior to late July (when the MDL Panel will hear the motions to transfer) appears quite slim, simply because of the nascent status of this litigation. By all appearances, the only tangible effect of entering a stay at this time would be to allow defendants a threemonth reprieve after service of process before being required to answer the allegations brought by plaintiff in the Complaint. Such a protracted delay appears both unnecessary and unwarranted. By contrast, it would benefit both the parties and the transferee court (assuming there is one) to have a clear picture of the issues joined and the defenses raised, with briefing of any threshold legal issues already completed, at the time of any transfer order by the MDL Panel. For all of the foregoing reasons, the Court in its discretion denies the Motion for Stay of Proceedings Pending Transfer by the Judicial Panel on Multidistrict Litigation. Exhibit A, p.2-3.
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The reasoning of Judge Steele is compelling, and plaintiffs respectfully

request Your Honor to rule accordingly. Hon. Judge Kristi DuBose, also in the Southern District of Alabama, has DENIED at least six (6) similar BP motions to stay such proceedings through reference to Judge Steele's ruling; see attached Exhibit C [1:10-CV-00223, Rec. Doc. 40]; Exhibit D [1:10-CV-00202, Rec. Doc. 39]; Exhibit E [1:10-CV-00201, Rec. Doc. 40]; Exhibit F [1:10-CV-00206, Rec. Doc. 36]; Exhibit G [1:10-CV-00252, Rec. Doc. 8]; and Exhibit H [1:10CV-00235, Rec. Doc. 24].

Hon. Judge Steele DENIED the BP Defendants' motion to stay using this same language in the case of Billy' Seafood, Inc. v. Transocean Holdings, Inc., et al. on May 25, 2010 (see attached Exhibit B [1:10-CV-00215, Rec. Doc. 33] attached hereto).

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Similarly, at least one other federal court facing this substantially identical motion to stay urged by the BP Defendants has also DENIED the same; see, e.g., the BP Defendants' similar motion to stay [4:10-CV-01607 Rec. Doc. 5] filed in the United States District Court for the Southern District of Texas in the case entitled the National Vietnamese American Fishermen Emergency Association, et al. v. BP, PLC, et al., Case Number 4:10-CV-01607, which was correctly denied on May 13, 2010 (see Exhibit I [4:10-CV-01607 Rec. Doc. 12], attached hereto). V. THE CASES CITED BY DEFENDANTS ARE DISTINGUISHABLE There are fundamental and important differences distinguishing the present case from those cited by the Defendants. The explosions aboard the Deepwater Horizon and consequent release of oil into the Gulf of Mexico is one of the largest man-made environmental catastrophes in the history of this country. The extraordinary damages caused by this disaster are continuing and expanding every day. None of the cases cited by Defendants involve comparable facts. Tench v. Jackson Nat'l Life Ins. Co., No. 99-5182, 1999 WL 1044923 (N.D. Ill. 11/12/99) involved deceptive marketing of life insurance policies. Similar cases had previously been centralized before a different judge who had been handling them for approximately three years. At the time the motion for stay was granted in Tench, the Panel was scheduled to hear arguments on transfer within a week. Thus, wholly unlike this case, plaintiffs in Tench were not prejudiced by the stay. Good v. Prudential Life Ins. Co., 5 F. Supp. 2d 804 (N.D. Cal. 1998), involved alleged misrepresentations in the sale of life insurance. Unlike the present case, an MDL action had already been centralized and plaintiffs' case had been related for transfer to the court handling 6

the ongoing action. Id. at 806. In addition, in Good, the Court indicated its belief that the stay would be brief. Id. at 809. In the present case, if granted, the stay will last no less than two and half months from now. Given the ongoing nature of the catastrophe, such a stay will severely prejudice Plaintiffs. Such prejudice did not exist in Good. Similarly, in Kennedy v. Novartis Pharmas. Corp., No. 02-2331, 2002 WL 31051601 (E.D. La. 9/12/02), an MDL had already been established, the case was subject to a conditional transfer order, and a decision on transfer was anticipated within as little as three but no more than four weeks. Id. at *1. The case was a product liability tort action involving an ingredient in over-the-counter nasal decongestant. The situation in the present case is substantially different. Louisiana Stadium & Exposition Dist. V. Fin. Guaranty Ins. Co., No. 09-235, 2009 WL 926982 (E.D. La. 4/2/09) was a bond dispute in which the court determined a stay would not create prejudice because submissions to the Panel were due the same month, and a ruling was expected "shortly thereafter." Id. at *1. In addition, the court considered the fact that the case would likely be transferred and expressed concern that judicial resources of the court would be wasted in familiarizing itself with complex financial transactions that, ultimately, it would not rule on. Falgoust v. Microsoft, Inc., 2000WL 462919, at *2 (E.D. La. 4/19/2000) and Aikens v. Microsoft Corp., No. 00-0242, 2000 WL 310391 (E.D. La. 3/24/00) both involved alleged antitrust violations. In both cases, the plaintiffs failed to establish any substantial prejudice from the granting of the stay. In this case, however, Plaintiffs would suffer substantial and unjustified prejudice if the stay were granted depriving them of the ability to make progress during this time where events continue to unfold. In Rivers v. The Walt Disney Co., 980 F. Supp. 1358, 1360 7

(C.D. Cal. 1997), the plaintiffs simply made no argument that a stay would cause them any prejudice. Id. at 1360. And, in the following cases cited by the BP Defendants, either the stay motions were unopposed, an existing MDL proceeding was already pending, and/or there was some other compelling reason to grant the stay request at issue. See, Maiben v. CSX Transportation, Inc., 2009 WL 1211186 (S.D.Ala. 5/1/09)(court granted an unopposed motion to stay); Boudin v. Residential Essentials, LLC, 2007 WL 2609510 (S.D.Ala. 9/6/07)(court did not formally issue a stay order pending transfer to the MDL Panel; rather, the district court simply declined to rule upon defendant's motion to dismiss before the conditional transfer to the MDL Panel became effective, and presumably allowed discovery to proceed prior to transfer); Thomas v. Ameriquest Mortgage Co., 2007 WL 3287842 (S.D.Ala. 11/5/07)(because defendants failed to identify any "prejudice to itself from a delayed ruling" in this commercial case, federal court issued a stay);3 Ayers v. Conagra Foods, Inc., 2009 WL 982472 (S.D.Tex. 4/9/09)(court granted an unopposed motion to stay); Morales v. Merck & Co., Inc., 2007 WL 655714 (S.D.Tex. 2/28/07)(plaintiff's remand motion based upon the absence of diversity jurisdiction was stayed pending transfer to the pending Vioxx MDL proceeding); Gonzalez v. American Home Products Corp., 223 F.Supp.2d 803 (S.D.Tex. 9/12/02)(in a consumer action against the manufacturers and distributors of phenylpropanolamine removed from state court, on balance, stay motion was granted pending a determination of whether this particular suit would or would not be included in the pending MDL); Gavitt v. Merck & Company, Inc., 2008 WL 4642782 (M.D.Fla.

The same Judge William Steele who recently DENIED the BP Defendants' motions to stay in Alabama (see attached Exhibits A & B), also issued the rulings in the Maiben, Boudin, and Thomas cases. Judge Steele is

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10/20/08)(plaintiff's remand motion based upon the absence of diversity jurisdiction was stayed pending transfer to the pending Vioxx MDL proceeding). Here, unlike in most of the cases cited by defendants, there is no pending MDL proceeding--only a request to form an MDL proceeding. If no MDL is formed at or following the July 29, 2010, hearing before the Panel, a sixty (60) day stay will have effectively stalled this proceeding unnecessarily. Despite the many inapposite cases cited by the BP Defendants, in at least one case decided by this Court, Ochoa v. Brsitol-Myers Squib Co., 2003 WL 446821 (E.D. La. 2/19/03), the district court denied defendant's stay motion and correctly remanded plaintiff's suit to state court--despite the existence of a pending MDL proceeding. In the final analysis, this Court enjoys great discretion to deny the BP Defendants' motion to stay pending the MDL Panel's consideration of this matter in late July 2010. For all of the forgoing reasons, rather than force the parties to do nothing for the next two months or so, the interests of justice and judicial economy are advanced by allowing this case to proceed without interruption. As explained above, whether this matter is ultimately transferred to a MDL

proceeding or not, the BP Defendants will not be prejudiced by engaging in the typical, premotion activities that are common place in every proceeding. Simply stated, there is no

compelling reason to delay this proceeding for sixty (60) days pending the July 2010 hearing before the MDL Panel.

obviously familiar with motions to stay in the MDL context, and his recent, well-reasoned DENIAL should be afforded appropriate consideration.

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VI.

CONCLUSION In summary, the cases cited by Defendants are factually inapposite. The prejudice to

Plaintiffs in granting the stay would be substantial. By contrast, no significant prejudice would be caused to the Defendants by denying the stay. Accordingly, Plaintiffs respectfully urge the Court to deny Defendants' Motion to Stay. Respectfully submitted: s/Michael C. Palmintier MICHAEL C. PALMINTIER (LA 10288) JOHN W. deGRAVELLES (LA 04808) C. FRANK HOLTHAUS ( LA 06976) SCOTT H. FRUGE (LA 21599) JOSHUA M. PALMINTIER (LA 28712) deGravelles, Palmintier, Holthaus & Frugé, L.L.P. 618 Main Street Baton Rouge, Louisiana 70801-1910 225/344-3735 / Fax: [phone] [e-mail] [e-mail] [e-mail] [e-mail] [e-mail] KENNETH H. HOOKS, III (LA 4982) RICHARD J. DODSON (LA 25097) H. PRICE MOUNGER (LA 19077) Dodson, Hooks & Fredericks (APLC) 445 North Boulevard, Suite 850 Baton Rouge LA 70802 [phone] / [phone] (fax) [e-mail] [e-mail] [e-mail]

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EDWARD J. WALTERS, JR. (LA 13214) DARREL J. PAPILLION (LA 23243) DAVID ABBOUD THOMAS (LA 22701) J.E. CULLENS, JR. (LA 23011) Walters, Papillion, Thomas, Cullens, LLC 12345 Perkins Road, Building One Baton Rouge LA 70810 [phone] / [phone] (fax) [e-mail] [e-mail] [e-mail] [e-mail] GARY P. KOEDERITZ (LA 07768) Koederitz Law Firm, LLC 4607 Bluebonnet Blvd, Suite B Baton Rouge LA 70809 [phone] / [phone] (fax) [e-mail]

CERTIFICATE I HEREBY CERTIFY that on this 1st day of June, 2010, the foregoing document was filed electronically with the Clerk of Court using the CM/ECF system. Notice of this filing will be sent to all counsel of record by operation of the court's electronic filing system. s/J.E.Cullens, Jr. J.E.Cullens, Jr.