Vo et al v. Chevron U.S.A., Inc. et al

Filing 21

ORDER and REASONS - IT IS ORDERED that, Plaintiffs' Motion to Remand 7 is hereby DENIED and Plaintiffs' claims against the following defendants, Citrus Realty, LLC; Paula Landrem; Chalin O Perez; Leander H. Perez, III; Plaquemines Parish; Plaquemines Realty, LLC; River Realty LLC; Catherine Alford and Margaret Barton are DISMISSED, as stated within document. Signed by Judge Kurt D. Engelhardt on 7/31/2013.(cbs) Modified on 7/31/2013 to edit document type (cbs).

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ANH NGOC VO, ET AL

CIVIL ACTION

VERSUS

NO. 13-1794

CHEVRON U.S.A., INC., ET AL

SECTION "N" (3)

ORDER AND REASONS
Before the Court is Plaintiffs’ Motion to Remand (Rec. Doc. 7). The defendants have
filed opposition memoranda. (Rec. Docs. 8 and 10). Plaintiffs have filed a reply (Rec. Doc. 18),
and the Exxon defendants have filed a sur-reply (Rec. Doc. 20).
I. BACKGROUND:
Plaintiffs, Anh Ngoc Vo, Nga Vo, and Kurtis Tinh Vo, commenced this action in the
Twenty-Fifth Judicial District Court for the Parish of Plaquemines, State of Louisiana, seeking
compensatory and punitive damages relating to an allision on April 21, 2009, in which plaintiffs’
commercial fishing vessel (the F/V Miss Kimberly) allegedly struck an unmarked, submerged,
unburied pipeline and sank near the end of Empire Canal in Plaquemines Parish, Louisiana.
Plaintiffs originally named as defendants the State of Louisiana and numerous oil and gas
companies (Chevron U.S.A., Inc., Chevron Pipeline Company, ExxonMobil Oil Corporation,
ExxonMobil Pipeline Company, ExxonMobil Production Company, Shell Oil Company, Shell
Pipeline Company LP, Plains Pipeline, L.P., Plains Marketing, L.P. and Plains All American

Pipeline, L.P.), alleging that each of the defendants owned, operated, or had custody of the
pipeline. The Shell defendants removed the action to this Court on the basis of diversity
jurisdiction, asserting that the two non-diverse defendants, the State of Louisiana and Plains All
American Pipeline, L.P. (“PAALP”), were improperly joined. See Vo v. Chevron USA, Inc., et
al, Civ. Action No. 12-1341 (E.D. La.). The Court agreed with the defendants that there was no
reasonable basis for predicting that the plaintiffs might be able to recover against Plains or the
State on the basis of ownership, custody, or guarde of the pipeline. Id. at Rec. Doc. 48.
However, the Court found that the defendants had failed to carry their burden with respect to
plaintiffs’ claims against the State for negligent failure to enforce rules, regulations and statutes
concerning the abandonment and/or removal of submerged pipelines in the State’s waterways.
Id. On that basis, the Court remanded the case. Id.
Back in state court, the State moved to have the claims against it dismissed on an
exception of no cause of action and/or motion for summary judgment. The plaintiffs did not
oppose the State’s motion, but instead voluntarily dismissed the State with prejudice. See Rec.
Doc. 10-3. Prior to doing so, however, the plaintiffs filed a supplemental petition naming nine
new Louisiana defendants: (1) Citrus Realty, LLC; (2) Plaquemines Realty, LLC; (3) River
Realty, LLC; (4) Leander H. Perez, III; (5) Paula Landrem; (6) Margaret Barton; (7) Catherine
Alford; (8) Chalin O. Perez; and (9) the Parish of Plaquemines (collectively, the “Landowner
Defendants”). See Rec. Doc. 10-2. Plaintiffs allege that the Landowner Defendants, like the
original pipeline defendants, “owned, maintained, put in place and/or [had in their] care, custody,
and control” of the pipeline allegedly involved in the allision. Id.
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After the plaintiffs dismissed their claims against the State, the Exxon defendants again
removed the case on diversity grounds, alleging that the Landowner Defendants were improperly
joined.
II. LAW AND ANALYSIS:
“To remove a case based on diversity, the diverse defendant must demonstrate that all of
the prerequisites of diversity jurisdiction contained in 28 U.S.C. § 1332 are satisfied.”
Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 572 (5th Cir.2004) (en banc). Further, no
properly joined, served defendant may be a “citizen of the State in which such action is brought.”
28 U.S.C. § 1441(b). Here, there is no dispute that the matter in controversy exceeds $75,000.
See 28 U.S.C. § 1332. The sole issue is whether there is complete diversity — i.e., whether the
citizenship of each defendant is diverse from that of each plaintiff. See, e.g., Vela v. Manning,
469 Fed. Appx. 319 (5th Cir. 2012) (citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed.
435 (1806)). In removal cases, as a general rule, “diversity of citizenship must exist both at the
time of filing in state court and at the time of removal to federal court.” Coury v. Prot, 85 F.3d
244, 249 (5th Cir.1996). However, an exception to this rule exists where the non-diverse
defendant is dismissed voluntarily by the plaintiff. In such cases, the matter becomes removable
even though diversity did not exist at the time suit was filed. See Weems v. Louis Dreyfus Corp.,
380 F.2d 545, 548 (5th Cir. 1967); see also, e.g., Mumfrey v. ANCO Insulations, 2011 WL
4745626 (E.D. La. 2011). Therefore, if the defendants are correct that the Landowner
Defendants have been improperly joined, the case became removable when the plaintiffs
dismissed their claims against the State.
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A. The Test for Improper Joinder:
“The doctrine of improper joinder is a ‘narrow exception’ to the rule of complete
diversity, and the burden of persuasion on a party claiming improper joinder is a ‘heavy one.’ ”
Campbell v. Stone Ins., Inc., 509 F.3d 665, 669 (5th Cir. 2007) (quoting McDonal v. Abbott
Labs., 408 F.3d 177, 183 (5th Cir.2005) (internal quotation omitted)). “Improper joinder may be
established by either ‘(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the
plaintiff to establish a cause of action against the non-diverse party in state court.’ ” Menendez v.
Wal-Mart Stores, Inc., 364 Fed. Appx. 62, 68 (5th Cir. 2010) (quoting Smallwood, 385 F.3d at
573). Only the second form of improper joinder is at issue here. Thus, the test is “whether the
defendant has demonstrated that there is no possibility of recovery by the plaintiff against an
in-state defendant, which stated differently means 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. “If there is arguably a reasonable basis for predicting that the
state law might impose liability on the facts involved, then there is no fraudulent joinder. This
possibility, however, must be reasonable, not merely theoretical.” Travis v. Irby, 326 F.3d 644,
648 (5th Cir. 2003) (emphasis in original) (quoting Great Plains Trust Co. v. Morgan Stanley
Dean Witter & Co., 313 F.3d 305, 312 (5th Cir. 2002)).
In “predicting whether a plaintiff has a reasonable basis of recovery under state law,” the
“court may resolve the issue in one of two ways”: (1) “The court may conduct a Rule
12(b)(6)-type analysis, looking initially at the allegations of the complaint to determine whether
the complaint states a claim under state law against the in-state defendant;” or (2) in cases where
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it appears that the “plaintiff has stated a claim, but has misstated or omitted discrete facts that
would determine the propriety of joinder,” the Court “may, in its discretion, pierce the pleadings
and conduct a summary inquiry.” Smallwood, 385 F.3d at 573. Where the Court finds the latter
approach to be warranted, it may “consider summary judgment-type evidence to determine
whether the plaintiff has a basis in fact for the claim.” Campbell, 509 F.3d at 669. However, the
purpose of the summary inquiry is solely “to identify the presence of discrete and undisputed
facts that would preclude plaintiff's recovery against the in-state defendant.” Smallwood, 385
F.3d at 573-74. The focus is on the propriety of joinder, not the merits, and the plaintiffs’ motive
for joining the in-state defendant is irrelevant. Id. Further, “the court must also take into
account all unchallenged factual allegations, including those alleged in the complaint, in the light
most favorable to the plaintiff” and “must resolve all ambiguities of state law in favor of the
non-removing party.” Campbell, 509 F.3d at 669 (internal quotations omitted).
B. Applicable Substantive Law:
In their complaint, the plaintiffs allege that the pipeline in question was “owned,
maintained, put in place and/or in the care, custody and control of” each of the defendants,
including the Landowner Defendants, and that through their negligence, the defendants created
and maintained a hidden obstruction and hazard, which caused the allision and the plaintiffs’
damages. See Rec. Doc. 10-2.

The removing defendants argue that the plaintiffs have no

possibility of recovering from the Landowner Defendants because none of them ever owned,
operated, or had custody, care, or control over any pipeline in or near the area in question.
Therefore, the defendants argue, there is no basis for finding a duty owed by any of the
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Landowner Defendants with respect to the pipeline and thus no possibility of recovery from
these nine defendants.1 In support of their position, the removing defendants have submitted
affidavits executed by each of the individual Landowner Defendants and representatives of each
of the entities, attesting that they have never owned, built, maintained or had care, custody or
control of any pipeline, either in the area of the alleged allision or elsewhere. See Rec. Doc. 104.
Plaintiffs have devised several arguments in an effort to demonstrate a reasonable
possibility of recovery against the Landowner Defendants. Because the plaintiffs have no
evidence that any of the Landowner Defendants ever had guarde over any pipeline in the area,
the plaintiffs have attempted to trigger a presumption of guarde by establishing ownership of the
pipeline in question. Although each of the Landowner Defendants has disavowed ever owning a
pipeline and although plaintiffs have presented no evidence to the contrary, the plaintiffs argue
that the Landowner Defendants became owners of the submerged pipeline by operation of law.
Plaintiffs argue that the Landowner Defendants own the water bottoms2 to which the pipeline is

1

Although the allision allegedly occurred in navigable waters, both sides cite Louisiana
law on the issue of whether the Landowner Defendants owe a duty that could support liability.
This is consistent with the Louisiana Supreme Court’s analysis in Giorgio v. Alliance Operating
Corporation, 921 So. 2d 58 (La. 2006), looking to Louisiana law as a source of duty in applying
the general maritime law.
2

Defendants argue that the Landowner Defendants cannot own the water bottoms in
question because, as “bottoms of natural navigable water bodies,” they are public things which
belong to the State. La. Civ. Code art. 450. Plaintiff argues that the allision occurred in a manmade canal made on private land owned by the Landowner Defendants. Because defendants
have presented no evidence to the contrary, the Court is required for purposes of this motion to
accept the plaintiffs’ assertion in this regard. Campbell, 509 F.3d at 669. “Artificial waterways
located on private property for private purposes may...be private things....” La. Civ. Code art.
450, comment (f). Thus, for purposes of this motion, the Court will assume that the Landowner
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permanently attached3 and that they acquired ownership of the pipeline pursuant to Louisiana
Civil Code article 493.
Article 493 provides that constructions permanently attached to the ground “made on the
land of another with his consent belong to him who made them.” La. Civ. Code art. 493. “They
belong to the owner of the ground when they are made without his consent.” Id.

The article

goes on to prescribe rules governing what happens in the former case when the constructor “no
longer has the right to keep them on the land of another.” Id. If he does not remove them
within ninety days “after written demand” by the landowner, then the landowner may acquire
ownership of the improvements by sending an additional written notice after the ninety days
have expired. Id. “Until such time as the owner of the land appropriates the improvements, the
improvements shall remain the property of he who made them and he shall be solely responsible
for any harm caused by the improvements.” Id.
Here, all of the Landowner Defendants have attested that they have never made written
demand or sent written notice regarding the removal of any pipeline or other improvement on
any land in the area in question. See Rec. Doc. 10-4. Plaintiffs have presented no evidence
suggesting otherwise. However, plaintiffs argue that the Landowner Defendants nevertheless
could own the pipeline by virtue of its having been made without their consent. See La. Civ.

Defendants own the water bottoms at the site of the allision.
3

There is no evidence establishing which particular pipeline was involved in the allision,
much less that such pipeline was “permanently attached to the ground” so as to trigger article
493. However, since the defendants have presented no evidence to the contrary, the Court is
required for purposes of this motion to accept these facts as alleged by the plaintiffs. Campbell,
509 F.3d at 669.
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Code art. 493 (“Improvements “belong to the owner of the ground when they are made without
his consent.”). In support of this argument, plaintiffs point to the statement in the Landowner
Defendants’ affidavits, wherein they state: “I am unaware of any pipeline being on my land.”
See Rec. Doc. 10-4. According to plaintiff’s argument, since the Landowner Defendants were
not aware of any pipeline on their property, it must have been made without their consent, and if
it was made without their consent, then they own it by pure operation of law, without the need
for the appropriation procedure that would have been required had the improvements been made
with the landowners’ consent.
Defendants argue that the second paragraph of article 493 (establishing the appropriation
procedure required to transfer ownership of improvements) should apply even in cases of
improvements made on the land of another without consent.4 The Court need not decide this
issue of statutory interpretation, for the plaintiffs’ argument fails for more fundamental reasons.
First, plaintiffs’ argument of liability-by-ignorance ignores the fact that liability based on guarde
is no longer strict liability in Louisiana. To the contrary, an “owner or custodian of a thing is
answerable for damage occasioned by its ruin, vice, or defect, only upon a showing that he knew
or, in the exercise of reasonable care, should have known of the ruin, vice, or defect which
caused the damage, that the damage could have been prevented by the exercise of reasonable
care, and that he failed to exercise such reasonable care.” La. Civ. Code art. 2317.1. Plaintiffs’
4

Without deciding the issue, the Court notes that the plain language of the statutory text
as well as the comments would appear to support the plaintiffs’ interpretation of the article. It is
unclear why the legislature would amend the article to protect consenting landowners from
liability, while leaving non-consenting landowners vulnerable. Perhaps it was an oversight, or
perhaps the legislators reasoned that non-consenting owners were already protected from
liability under the existing law of guarde and custodial liability, as the Court finds these
Landowner Defendants to be, as discussed herein below.
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liability-by-ignorance argument hinges on the fact that the Landowner Defendants were unaware
of any pipeline constructed on their property. (Without this fact, the second paragraph of article
493 would apply, and the plaintiffs’ one foothold for establishing ownership of the pipeline
would disappear.). Moreover, the pleadings and record are devoid of any facts that would
support a reasonable inference that the Landowner Defendants “should have known” of a vice in
the pipeline of which they were unaware. Indeed, plaintiffs’ own allegations state that the
pipeline was “hidden, submerged, [and] unmarked.” Rec. Doc. 10-2 at 2.
Second, the ignorance on which plaintiffs’ ownership argument depends precludes any
finding of guarde. Things as to which a person has custody or guarde “are those things to
which one bears such a relationship as [1] to have the right of direction and control over them,
and [2] to draw some kind of benefit from them.” King v. Louviere, 543 So.2d 1327, 1329
(La.1989). Thus, the inquiry is two-fold. To determine whether a person has guarde, the court
must look to “(1) whether the person bears such a relationship as to have the right of direction
and control over the thing; and (2) what, if any, kind of benefit the person derives from the
thing.” Dupree v. City of New Orleans, 765 So.2d 1002, 1009 (La.2000); see also Giorgio v.
Alliance Operating Corp., 921 So.2d 58, 73 (La.2006). Both factors must be met. Here, one
cannot reasonably infer that the Landowner Defendants derived a benefit from an abandoned
pipeline on their property of which they were unaware and to which they did not consent. Thus,
even if the plaintiffs could establish ownership of the pipeline, the very facts on which they rely
to impute this ownership (i.e., ignorance and lack of consent) necessarily preclude a finding that
there is a reasonable basis for predicting that plaintiffs will be able to recover on the basis of
guarde.
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To find that the Landowner defendants were properly joined, there must be “a reasonable
basis for predicting that the state law might impose liability on the facts involved.” Travis, 326
F.3d at 648 (emphasis in original) (citation omitted). As the Fifth Circuit has emphasized, this
possibility “must be reasonable, not merely theoretical.” Id. (emphasis in original) (citation
omitted). Here, the defendants have presented evidence that the Landowner Defendants did not
have custody or guarde over any pipeline in the vicinity of the alleged allision. The plaintiffs
have offered nothing to refute the defendants’ evidence and their liability-by-ignorance argument
fails on the law. Nor have the plaintiffs alleged facts that would support imposing a legal duty
on the Landowner Defendants on any other basis. Therefore, the Court finds that the defendants
have carried their burden of demonstrating that there is no reasonable basis for predicting that
the plaintiffs might be able to recover against the Landowner Defendants.
Accordingly, having determined that all non-diverse defendants are improperly joined;
IT IS ORDERED that:
1)

Plaintiffs’ Motion to Remand (Rec. Doc. 7) is hereby DENIED; and

2)

Plaintiffs’ claims against the following defendants are DISMISSED: (1)
Citrus Realty, LLC; (2) Plaquemines Realty, LLC; (3) River Realty, LLC;
(4) Leander H. Perez, III; (5) Paula Landrem; (6) Margaret Barton; (7)
Catherine Alford; (8) Chalin O. Perez; and (9) the Parish of Plaquemines.

New Orleans, Louisiana, this 31st day of July, 2013.

___________________________________
KURT D. ENGELHARDT
United States District Judge

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