Blanchard et al v. BP America Production Company et al

Filing 19

ORDER denying 10 Motion to Remand to State Court; Because Chicory is improperly joined and the claims against it are prescribed, all claims against defendant Chicory are hereby DISMISSED. Signed by Magistrate Judge Joseph C. Wilkinson, Jr. (car, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

CHAD BLANCHARD ET AL.

CIVIL ACTION

VERSUS

NO. 11-1542

BP AMERICA PRODUCTION
COMPANY ET AL.

MAGISTRATE JUDGE
JOSEPH C. WILKINSON, JR.

ORDER AND REASONS ON MOTION
Plaintiffs’ Motion to Remand to State Court, Record Doc. No. 10, is pending
before me. Defendants BP America Production Company and BP Products North
America, Inc. (hereinafter jointly referred to as “BP”) filed timely written opposition to
the motion. Record Doc. No. 16. All parties remaining in this matter have consented to
proceed before a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). Record
Doc. No. 17.
Having considered the written submissions of the parties, the record, and the
applicable law, IT IS ORDERED that plaintiffs’ motion to remand to state court is
DENIED. Because plaintiffs’ claims against the non-diverse defendant1 are barred by
prescription, I find that plaintiffs do not have a reasonable possibility of recovery against
Chicory LLC. Chicory, which – like plaintiff – is a Louisiana citizen for diversity

1

Two non-diverse defendants were named in the original state court petition. However, Chicory
Holdings, LLC (emphasis added) was voluntarily dismissed from the case, Record Doc. No. 15, before
all remaining parties consented under Section 636(c), leaving only a single non-diverse defendant,
Chicory LLC.

jurisdiction purposes, is therefore improperly joined as a party, and must be dismissed
from this case.
I.

BACKGROUND
On May 31, 2011, plaintiffs Chad Blanchard and Charlie’s Restaurant and

Catering L.L.C. filed a petition in the Thirty-Fourth Judicial District Court for the Parish
of St. Bernard, State of Louisiana, against the two BP defendants and the two Chicory
defendants. Record Doc. No. 10-2, p. 1. Plaintiffs assert that they operate a restaurant
and catering business in St. Bernard Parish. They allege that, on or around May 2, 2010,
after the explosion of the Deepwater Horizon offshore drilling platform, BP entered into
a contract with plaintiffs to provide catering services to BP personnel and contractors
engaged in oil spill cleanup work. Id. at p. 3, ¶¶ 10-11. The petition states that BP – not
plaintiffs – subsequently hired Chicory (identified in the petition as “TKO”) to manage
for BP the catering services being provided by plaintiffs and others. Id. at p. 4, ¶ 19.
Plaintiffs allege that BP breached its contract with them by improperly terminating their
catering contract, failing to purchase from them the contractually required “guaranteed
number of meals” and failing to pay the invoiced amounts owed. Id. at pp. 6-7, ¶¶ 28-36.
Plaintiffs seek $1,814,400 in “lost future business under its contract with BP,”
$17,932.80 in “unpaid invoices . . . for meals served but not paid for by BP,” and
“$188,294.40 for two weeks of catering services,” together with attorney’s fees and costs.
Id. at pp. 6-7, ¶¶ 26, 32 and 36.
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It is clear from both the petition and the evidence attached to BP’s opposition
memorandum that plaintiffs never entered into a contract with Chicory. The only causes
of action alleged against Chicory in plaintiffs’ petition are tortious interference with
plaintiffs’ contract with BP and violation of the Louisiana Unfair Trade Practices Act
(“LUTPA”). Id. at pp. 5-6, ¶¶ 20-27.
Defendants removed the action to this court on June 30, 2011, alleging that
Chicory had been improperly joined as a defendant to defeat diversity jurisdiction.
Record Doc. Nos. 1 and 5. Plaintiffs filed a timely motion to remand, arguing that they
assert valid causes of action against Chicory. Record Doc. No. 10.
II.

THE LEGAL STANDARD
Civil actions originally filed in state court may be removed to a federal court that

would have original jurisdiction. 28 U.S.C. § 1441(a). Actions are removable based on
diversity jurisdiction when 28 U.S.C.§ 1332(a) is satisfied, which requires at least
$75,000 in controversy and complete diversity of citizenship among all properly joined
parties. 28 U.S.C. § 1441(b). Removal requires the consent of all properly joined
defendants. Rico v. Flores, 481 F.3d 234, 239 (5th Cir. 2007) (citing Getty Oil Corp. v.
Ins. Co. of No. Am., 841 F.2d 812, 815 (5th Cir. 1988)).
Disputes over the propriety of removal jurisdiction require strict interpretation of
the removal statute. In the presence of doubt, the court must err on the side of remand.
Gash v. Hartford Accident & Indem. Co.; 491 F.3d 278, 281-82 (5th Cir. 2007) (citing
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Acuna v. Brown & Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000)). The jurisdictional
facts supporting removal must be analyzed as of the time of removal. Gebbia v. Walmart Stores, Inc., 233 F.3d 880, 883 (5th Cir. 2000). Thus, in an analysis of improper
joinder, removal jurisdiction must be supported by the claims alleged in the state court
petition. Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th Cir. 1995).
The test for improper joinder is whether the removing defendants have shown
either “(1) actual fraud in the pleading of jurisdictional facts, or (2) an inability of the
plaintiff to establish a cause of action against the non-diverse party in state court.” Elam
v. Kan. City So. Ry., 635 F.3d 796, 813 (5th Cir. 2011) (quoting Smallwood v. Ill. Cent.
R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004)) (emphasis added). Under the second
inquiry,2 defendants have the heavy burden to demonstrate that there is “no reasonable
basis for the district court to predict that the plaintiff might be able to recover against an
in-state defendant.” Smallwood, 385 F.3d at 573. A mere theoretical possibility of
plaintiff’s recovery against an in-state defendant is insufficient to establish proper
joinder. Kling Realty Co. v. Chevron USA, Inc., 575 F.3d 510, 513 (5th Cir. 2009); see
also Griggs v. State Farm Lloyds, 181 F.3d 694, 701 (5th Cir. 2005) (“While the burden
of demonstrating fraudulent joinder is a heavy one, we have never held that a particular

2

In the instant case, the removing defendants do not allege actual fraud in the pleading of
jurisdictional facts, and there is no indication of actual fraud in this record.

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plaintiff might possibly establish liability by the mere hypothetical possibility that such
an action could exist.”).
It is irrelevant to the improper joinder analysis “whether the plaintiff will actually
or even probably prevail on the merits of the claim” against the non-diverse party.
Guillory v. PPG Indus., Inc., 434 F.3d 303, 308-09 (5th Cir. 2005). Provided that there
is arguably a reasonable possibility of recovery under controlling state law, any valid
cause of action against an in-state defendant may defeat a claim of improper joinder. Id.
at 309. Thus, the allegations in the state court petition, “read leniently in favor of
remand,” are ordinarily sufficient to identify whether the plaintiff has established a
reasonable basis of recovery. Boone v. Citigroup, Inc., 416 F.3d 382, 388 (5th Cir.
2005). However, when the plaintiff has stated a valid claim on the face of the pleadings
but has “misstated or omitted discrete facts,” the court has discretion to look beyond the
pleadings and conduct a summary judgment-type inquiry. Smallwood, 385 F.3d at 573
(emphasis added). The Fifth Circuit has cautioned against widening the scope of the
analysis, stating that “a summary inquiry is appropriate only to identify the presence of
discrete and undisputed facts that would preclude plaintiff’s recovery against the in-state
defendant.” Id. (emphasis added).
All material disputed facts and any ambiguities in controlling state law must be
resolved in favor of the plaintiff. Elam, 635 F.3d at 813. Accordingly, the burden on the
removing defendant to prove improper joinder is heavy and is only met when the
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undisputed facts and uncontested evidence preclude any reasonable possibility for
recovery against the non-diverse defendant. Guillory, 434 F.3d at 308-09. When the
plaintiff states a valid claim against the in-state defendant on the face of the pleadings,
“simply pointing to the plaintiff’s lack of evidence” to support the claim is insufficient
to establish improper joinder. Elam, 635 F.3d at 813; see Travis v. Irby, 326 F. 3d 644,
650-51 (5th Cir. 2003) (removing defendant must put forward evidence to diminish the
possibility that plaintiff’s claim will succeed under controlling state law.)
When determining whether the plaintiff can establish any reasonable possibility
for recovery against the non-diverse party, the court may not consider post-removal
filings that raise new causes of action. Griggs, 181 F.3d at 700; see Cavallini, 44 F.3d
at 263-65 (removal jurisdiction is limited to the claims included in the state court
complaint). Likewise, plaintiff may not present theories of recovery in support of remand
that were not included in the state court petition. Griggs 181 F.3d at 700. Additional
allegations filed by the plaintiff after removal may only be considered to the extent that
they support or explain the claims presented in the state court petition. Id.
III.

ANALYSIS
One of plaintiffs’ asserted grounds for remand to state court must be rejected.

Their argument that Louisiana procedural law (specifically, La. Code Civ. Proc. art. 463)
provides the applicable joinder standard is without merit. While Louisiana substantive
law provides the rules of decision as to the merits of plaintiffs’ state law causes of action,
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federal law as outlined above, not Louisiana procedural law, applies to the question of
improper joinder in this context.
Plaintiffs’ additional argument in support of remand – that they have not
improperly joined a non-diverse defendant because they have stated valid, cognizable
claims against Chicory – also lacks merit. I find that plaintiffs have not established any
reasonable basis of recovery against Chicory because both their tortious interference and
LUTPA claims against Chicory are barred by Louisiana law of prescription.3
As to prescription, it is clear that plaintiffs’ state court petition “omitted discrete
facts” concerning their possibility of recovery against Chicory, specifically the date of
the termination of the specific contract on which plaintiffs’ suit is based, which
necessarily must also be the last date of any possible tortious interference or unfair trade
practice committed by Chicory. Smallwood, 385 F. 3d at 573.
Louisiana law is clear that LUTPA claims are subject to a one-year limitations
period, La. Rev. Stat. § 51:1409(E); Tubos de Acero de Mexico, S.A. v. Am. Int’l Inv.
Corp., 292 F.3d 471, 481 n.3 (5th Cir. 2002); Abene v. Jaybar, LLC, No. 11-143, 2011
WL 2847436, at *5 (E.D. La. July 14, 2011) (Fallon, J.); Miller v. Conagra, Inc., 991 So.
2d 445, 455-56 (La. 2008), and that a tortious interference claim is subject to a one-year

3

BP asserts two additional arguments in opposition to plaintiffs’ motion to remand: (1) plaintiffs
cannot state a valid claim for tortious interference with contractual relations under 9 to 5 Fashions v.
Spurney, 538 So. 2d 228, 234 (La. 1989), and (2) plaintiffs cannot state a valid claim under the LUTPA.
Because I am convinced by BP’s prescription argument, I find it unnecessary to address either of these
additional arguments against remand at this time.

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prescriptive period. La. Civ. Code arts. 3454, 3492; K.P.’s Auto Sales Inc. v. General
Motors Corp., No. 07-30906, 2008 WL 4580087, at *3 (5th Cir. Oct 15, 2008). All of
the affidavits attached to BP’s opposition memorandum establish that BP terminated the
contract upon which plaintiffs base their suit on May 30, 2010. Record Doc. Nos. 16-1
at ¶¶ 9 and 10, 16-2 at ¶ 9, 16-3 at ¶ 9. BP’s evidence is uncontested. Although the
evidence indicates that plaintiffs were subsequently “given another chance,” their later
catering services were pursuant to a different agreement with BP that was much limited
when compared to the different and distinct broad-ranging contract upon which plaintiffs
base the instant suit, and their subsequent, limited work for BP is not the basis of their
claims against Chicory.
Thus, May 30, 2010 is the last possible date on which Chicory could conceivably
have tortiously interfered with plaintiffs’ contract with BP or engaged in unfair trade
practices. Plaintiffs filed their petition on May 31, 2010, Record Doc. No. 10-2 at p. 1,
one day late. Even only one day late is too late under the applicable Louisiana
prescription law. See Bourg v. Woods, 31 So. 3d 1123, 1125 (La. App. 5th Cir. 2010)
(trial court did not err in granting exception of prescription when accident occurred on
October 1, 2006, but suit was not filed until October 2, 2007); Delahoussaye v.
Thibodeaux, 498 So. 2d 1137, 1138 (La. App. 3d Cir. 1986) (suit filed on February 22,
1985 was untimely when accident in which plaintiff was injured occurred on February
21, 1984).
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CONCLUSION
For the foregoing reasons, IT IS ORDERED that plaintiffs’ motion to remand to
state court is hereby DENIED. Chicory is improperly joined because plaintiffs’ claims
against it are prescribed. Plaintiffs therefore have no reasonable possibility of recovery
against Chicory. Because Chicory is improperly joined and the claims against it are
prescribed, all claims against defendant Chicory are hereby DISMISSED. See Kling, 575
F.3d at 513 (affirming dismissal of improperly joined defendant).

6th
New Orleans, Louisiana, this _________ day of October, 2011.

JOSEPH C. WILKINSON, JR.
UNITED STATES MAGISTRATE JUDGE

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