Rowell et al v. Shell Chemical LP et al

Filing 24

ORDER & REASONS: denying without prejudice 12 Motion to Remand; FURTHER ORDERED that Plaintiffs are permitted to conduct additional discovery strictly limited to the issue of IMTT's principal place of business. Said discovery must be compl eted within sixty days of the date of this Order. FURTHER ORDERED that following the close of this limited discovery, Plaintiffs may re-urge their Motion to Remand and each party may submit a supplemental memorandum, not to exceed ten (10) pages, in support of their arguments as to whether this matter should be remanded pursuant to the local controversy exception to CAFA. Signed by Judge Carl Barbier on 6/2/15. (sek)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

SHEILA ROWELL, ET AL

CIVIL ACTION

VERSUS

NO: 14-2392

SHELL CHEMICAL LP, ET AL

SECTION: J(3)

ORDER AND REASONS
Before the Court is a Motion to Remand (Rec. Doc. 12) filed
Plaintiffs,

Sheila

Rowell,

et

al

(“Plaintiffs”),

and

an

Opposition thereto (Rec. Doc. 23) by Defendants, Shell Chemical
LP

(“Shell”)

and

International-Matex

Tank

Terminals

(“IMTT”)

(collectively “Defendants”). Having considered the motion, the
parties’ submissions, the record, and the applicable law, the
Court finds, for the reasons expressed below, that the motion
should be DENIED WITHOUT PREJUDICE.
PROCEDURAL AND FACTUAL BACKGROUND
This matter arises out of the alleged emission of noxious
fumes from a chemical refining facility in St. Rose, Louisiana.
Plaintiffs are an unquantifiable group of people who reside,
work,

or

Charles

routinely
Parish,

and

visit

the

in

St.

close

Rose

area,

proximity

to

located
the

in

1,000

St.
acre

chemical refinery facility (“the facility”), which is jointly
1

operated by Defendants, Shell and IMTT. Plaintiffs allege that
as

early

as

June

1,

2014,

Defendants

began

emitting

toxic

substances from the facility, namely sulfur dioxide and asphalt
fumes. Plaintiffs further allege that these fumes carried such a
noxious and pungent odor that they “prevented Plaintiffs from
venturing outside and enjoying the use of their properties with
family and friends.” (Rec. Doc. 12-2, p. 3). Plaintiffs also
claim that exposure to these fumes and emissions caused certain
Plaintiffs
“nausea,

to

suffer

vomiting,

from

physical

headaches,

eye

side

effects,

irritation,

and

such

as

respiratory

difficulties.” (Rec. Doc. 12-2, p. 4).
On

September

11,

2014,

three

named

Plaintiffs,

Sheila

Rowell, Gloria Riley, and Deanna Porter, filed suit against IMTT
and Shell in the Civil District Court for the Parish of Orleans.
In

their

various

original
state

petition

law

claims

for

damages,

alleging

Plaintiffs

negligence,

asserted

trespass,

and

violation of the terms of a servitude. (Rec. Doc. 1-6, p. 5-6).
Plaintiffs

seek

injuries,

loss

expenses,

mental

damages

for,

of

and

use

anguish,

amongst

other

things,

enjoyment

of

property,

and

diminution

of

personal

property

medical
value.

(Rec. Doc. 1-6, p. 6-7). On September 18, 2014, Plaintiffs filed
their First Amended and Supplemental Petition for Damages, in
which they included class action allegations and sought damages
2

on

behalf

of

all

unnamed

parties

similarly

situated

as

Plaintiffs.
On October 17, 2014, Defendants jointly removed Plaintiffs’
lawsuit to this Court, alleging federal jurisdiction pursuant to
the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. §
1332(d). Defendants assert that they have met the requirements
for removal pursuant to CAFA because the putative class exceeds
one hundred persons, minimal diversity under CAFA is satisfied,
and the aggregate damages sought by the class exceed $5 million.
Plaintiffs then filed the instant motion requesting that
the Court remand the matter to the Civil District Court for the
Parish of Orleans, on the basis that this matter lacks federal
jurisdiction.

Plaintiffs

specifically

refute

that

Defendants

have satisfied their burden of proving that the jurisdictional
amount exceeds the requisite $5 million and also assert that the
“local controversy exception” to CAFA mandates remand of this
matter.
LEGAL STANDARD & DISCUSSION
A defendant may remove a civil action filed in state court
if a federal court would have had original jurisdiction over the
action.

See 28 U.S.C. § 1441(a).

The removing party bears the

burden of establishing that federal jurisdiction exists at the
time of removal. DeAguilar v. Boeing Co., 47 F.3d 1404, 1408
3

(5th Cir. 1995).

Ambiguities are construed against removal and

in favor of remand, because removal statutes are to be strictly
construed. Manguno v. Prudential Prop. & Cas. Ins., 276 F.3d
720, 723 (5th Cir. 2002).
Congress enacted CAFA to provide for the “removal of class
actions involving parties with minimal diversity.” In re Katrina
Canal Litig. Breaches, 524 F.3d 700, 705 (5th Cir. 2008). In
order to justify removal pursuant to CAFA: (1) the class action
must involve an aggregate amount in controversy in excess of $5
million;

(2)

there

must

exist

minimal

diversity

between

the

parties; and (3) the class must include at least one hundred
members.

Rasberry

v.

Capitol

Cnty.

Mut.

Fire

Ins.

Co.,

609

F.Supp.2d 594, 600 (E.D. Tex. 2009). In order to satisfy minimal
diversity, any member of a class of plaintiffs must be a citizen
of

a

state

different

from

any

defendant.

28

U.S.C.

§

1332(d)(2)(A).
Plaintiffs do not challenge that Defendants have satisfied
the requirements for proving minimal diversity and the size of
the putative class, and instead allege only that Defendants have
failed

in

satisfying

their

burden

of

proving

that

the

jurisdictional amount requirement has been satisfied. Plaintiffs
additionally argue that even if the jurisdictional amount is

4

found to be satisfied, remand is mandated pursuant to the local
controversy exception.
A. Jurisdictional Amount
Pursuant

to

CAFA,

in

circumstances

where

the

plaintiff

class fails to allege a specific quantity of damages, the burden
falls to the removing defendant to prove that the amount in
controversy requirement is satisfied by a preponderance of the
evidence. Berniard v. Dow Chem. Co., 481 F.App’x 859, 862 (5th
Cir. 2010) (citing De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th
Cir.

1993)).

Adduc[ing]

The

defendant

summary

controversy,
plaintiff’s

or

may

judgment

(2)

pleadings

satisfy

this

evidence

demonstrat[ing]
alone,

it

is

of

that,
‘facially

burden

by:

“(1)

the

amount

from

the

in

class

apparent’

that

CAFA’s amount in controversy is met.” Id. Once the defendant
“has explained plausibly how the stakes exceed $5 million, then
the

case

belongs

in

federal

court

unless

it

is

legally

impossible for the plaintiff to recover that much.” Id.
Defendants first assert that it is facially apparent from
Plaintiff’s amended complaint that the jurisdictional amount is
satisfied.

(Rec.

requirement,
jurisdictional
demonstrate

23,

p.

defendant

a

Doc.

is

amount

that

the

to
claim

a

6).

In

not

legal
“more
5

order

required
certainty,

likely

than

to

satisfy

this

to

prove

the

and

need

not”

meets

only
the

jurisdictional amount requirement. Nolan v. Exxon Mobil Corp.,
No. 13-439, 2013 WL 6194621, at *2 (M.D. La. Nov. 26, 2013).
Defendants assert that it is more likely than not, judging from
the face of Plaintiffs’ complaint and considering the likely
size of the class, the alleged injuries, and the damages sought
by Plaintiffs, that the jurisdictional amount requirement will
be

satisfied.

In

response,

Plaintiffs

contest

that

the

satisfaction of the jurisdictional amount is facially apparent
and instead assert that Defendants’ allegation of such is based
on

improper

conclusory

allegations

rather

than

the

actual

information contained in the pleadings.
In determining whether a defendant has properly shown from
the face of the plaintiff’s pleadings that the jurisdictional
requirement has been met, courts generally consider “the size of
the class, the type, duration and severity of the harm alleged,
and the types of compensatory damages sought.” Id. (citing In re
1994 Exxon Chem. Fire, 558 F.3d 378, 387-88 (5th Cir. 2009);
Frazier v. Pioneer Americas, LLC, 455 F.3d 542, 545 (5th Cir.
2006); Gordon v. Air Liquide-Big Three Inc., No. 12-396, 2013 WL
3490725 (M.D. La. July 10, 2013)). Defendants first rely on the
expected

size

of

the

plaintiff

class

in

support

of

their

argument that the jurisdictional requirement is facially met.
Defendants note that Plaintiffs’ amended petition for damages
6

defines

its

class

as

“hundreds

of

similarly

situated

individuals” who “live, work and/or visit friends and family
within the area of St. Rose affected by the release.” (Rec. Doc.
23,

p.

7).

conservative

Defendants
number,

in

assert
light

that
of

this

the

is

fact

that

an

extremely

census

data

indicates that 8,122 people reside in the area of St. Rose, and
that the number of actual plaintiffs in the class can reasonably
be estimated to be in the thousands. In response, Plaintiffs
assert that Defendants cannot facially indicate that the class
is composed of thousands of people when Plaintiffs’ complaint
asserts a class of only “hundreds.” Moreover, Plaintiffs contend
that Defendants’ reliance on census data is purely speculative
and unreliable and “does not take into account those who were
actually injured by the chemical release.” (Rec. Doc. 12-2, p.
9).
Defendants next note that the Court should consider the
severity of the injuries alleged by Plaintiffs in determining
whether the jurisdictional amount has been satisfied. In their
amended

petition,

Plaintiffs

assert

medical

injuries

ranging

from nausea to headaches to respiratory difficulties, as well as
other

injuries

treatment,

including

medical

“loss

expenses,

of

mental

wages

to

anguish,

seek

medical

trespass

to

property, loss of use and enjoyment of property, and diminution
7

of property values.” (Rec. Doc. 1-6, p. 4). Plaintiffs dispute
that these injuries should be considered “severe,” and instead
argue that they are seeking only “usual and customary damages
set

forth

by

other

plaintiffs

in

similar

nuisance

actions.”

(Rec. Doc. 12-2, p. 6).
Despite Plaintiffs’ contentions, the face of their amended
petition
million

makes
has

clear

been

that

the

satisfied.

jurisdictional

First,

amount

regardless

of

of

the

$5

exact

number of individuals in the class, the class size will likely
be

substantial,

ranging

from

either

hundreds,

as

stated

by

Plaintiffs, to thousands, as estimated by Defendants. Moreover,
despite not specifically alleging injuries attributable to any
one Plaintiff, the injuries set forth in Plaintiffs’ amended
petition

are

severe.

Plaintiffs

first

note

in

their

amended

complaint that exposure to the toxic fumes which they allege
have

been

released

by

Defendants

have

been

known

to

cause

“serious health problems,” including respiratory difficulties as
well as “increased risks for lung, stomach, [and] skin cancers
and leukemia.” (Rec. Doc. 1-6, p. 12). Plaintiffs go on to state
that

they

have

respiratory

actually

problems,

suffered

and

medical

substantial

injuries,

property

including

damage

from

continued exposure to the fumes. Plaintiffs also seek a variety
of

damages,

not

limited

to

medical
8

expenses,

diminution

of

property value, mental anguish, and loss of use and enjoyment of
property. (Rec. Doc. 1-6, p. 6).
Prevalent jurisprudence within the Fifth Circuit supports
Defendants’ argument that the pleadings facially reflect that
the jurisdictional amount has been met. In Frazier v. Pioneer
Americas, LLC, a class of approximately 500 plaintiffs alleged
injuries resulting from exposure to mercury by the defendants
for a two month period. 455 F.3d 542, 546 (5th Cir. 2006). The
Court found it to be facially apparent from the pleadings that
the jurisdictional amount had been met, despite the fact that
the plaintiffs failed to allege specific injuries or request a
specific amount of damages in their complaint. Id. The facts in
Frazier are analogous to the present circumstances. The size of
the class is potentially comparable, as Plaintiffs admit the
class is at least composed of “several hundred” individuals.
Moreover, similarly to Frazier, the fact that Plaintiffs did not
allege specific injuries does not make them immune from removal.
Instead,
complaint

the
are

severe

injuries

sufficient

listed

to

support

in
a

Plaintiffs’
finding

alleged

that

the

jurisdictional amount has been met.
Because the Defendants have met their burden of proving by
a preponderance of the evidence that the jurisdictional amount
has been met, the burden now shifts to Plaintiffs to demonstrate
9

with legal certainty that they could not recover more than $5
million.

In

re

1994

Exxon

Chem.

Fire,

558

F.3d

at

387.

Plaintiffs have failed to meet this burden. Despite Plaintiffs’
effort

to

distinguish

mainly

for

relatively

every

case

minute

relied

factual

upon

by

Defendants,

differences,

Plaintiffs

have failed to provide the Court with any case to support their
contention that the damages they seek are “usual and customary”
and

thus

do

not

jurisdictional

rise

to

amount

the

level

required

requirement.

to

satisfy

Accordingly,

the
the

jurisdictional amount requirement of CAFA has been satisfied.
B. Local Controversy Exception
Plaintiffs

assert

jurisdictional

that

amount

even

if

requirement

the
to

Court
be

met,

determines
CAFA

the

does

not

supply federal jurisdiction to the matter at hand, because of
the

“local

controversy

controversy
exception,

exception.”
a

Court

Pursuant

shall

decline

to

the
to

local

exercise

jurisdiction:
(i) Over a class action in which -(I)
Greater than two-thirds of the members of all
proposed plaintiff classes in the aggregate are
citizens of the State in which the action was
originally filed;
(II) At least 1 defendant is a defendant –
(aa) from whom significant relief is sought by members
of the plaintiff class;
(bb) whose alleged conduct forms a significant basis
for
the
claims
asserted
by
the
proposed
plaintiff class; and
10

(cc) who is a citizen of the State in which the
action was originally filed; and
(III) Principal injuries resulting from the alleged conduct
or any related conduct of each defendant were incurred
in the State in which the action was originally filed;
and
(ii) During the 3-year period preceding the filing of that
class action, no other class action has been filed
asserting the same or similar factual allegations against
any of the defendants on behalf of the same or other
persons.
28

U.S.C.

§

controversy
whether

one

1332(d)(4)(A).

exception

which

defendant,

The
is

in

IMTT,

is

only

factor

dispute
a

by

citizen

of
the
of

the

local

parties

is

Louisiana.

Plaintiffs bear the burden of proving that the local controversy
exception to CAFA applies. 1 Opelousas Gen. Hosp. Auth. v. FairPay
Solutions, Inc., 655 F.3d 358, 361 (5th Cir. 2011). The Fifth
Circuit has recognized that the local controversy exception is
intended to be a narrow one, “with all doubts resolved in favor

1

In their Motion, Plaintiffs submit that the burden falls to Defendants to
show that the local controversy exception does not apply, because “the burden
of proof is on the party invoking federal jurisdiction if diversity is
challenged.” (Rec. Doc. 12-2, p. 13). However, in support of this, Plaintiffs
rely solely on cases in which removal is based on traditional diversity
jurisdiction pursuant to 28 USC § 1332(a). See Cabiran v. Baer, No. 09-7694,
2010 WL 2360606 (E.D. La. June 7, 2010) (Lemelle, J.) (Recognizing that the
burden falls to the removing party to defend diversity jurisdiction when such
is challenged in a case removed on the basis of traditional diversity
jurisdiction). Contrary to Plaintiffs’ assertions, the Fifth Circuit has
clearly and repeatedly recognized that the burden falls to the party seeking
remand to establish that an exception to CAFA applies. Preston v. Tenet
Healthsystem Mem’l Med. Ctr., Inc., 485 F.3d 793, 797 (5th Cir. 2007)
(“[P]arties moving to remand the class action to state court must prove that
the CAFA exceptions to federal jurisdiction divest the district court of
subject matter jurisdiction” and “the party moving for remand must prove the
statutory citizenship requirement by a preponderance of the evidence.”);
Frazier, 455 F.3d at 546 (Finding that the “longstanding § 1441(a) doctrine
placing the burden on plaintiffs to show exceptions to jurisdiction
buttresses the clear congressional intent to do the same with CAFA.”).
11

of exercising jurisdiction over the case.” Id. (citing Evans v.
Walter

Indus.

Inc.,

449

F.3d

1159,

1163

(11th

Cir.

2006);

Westerfield Indep. Processing, LLC, 621 F.3d 819, 822 (8th Cir.
2010)).
In

considering

whether

the

local

controversy

exception

applies, “the jurisdictional facts that support removal must be
judged at the time of removal.” Broyles v. Cantor Fitzgerald &
Co., No. 10-854-JJB-SCR, 2011 WL 4737197, at *2 (M.D. La. Sept.
14, 2011). For purposes of traditional diversity jurisdiction,
the citizenship of a general partnership is determined by the
citizenship
Paper

Co.

of
v.

the

partnership’s

Denkmann

Assocs.,

constituent
116

F.3d

partners.

134,

137

(5th

Int’l
Cir.

1997); Temple Drilling Co. v. La. Ins. Guar. Ass’n, 946 F.2d
390, 393 (5th Cir. 1991). However, for purposes of the local
controversy

exception,

CAFA

instructs

that

“an

unincorporated

association shall be deemed to be a citizen of the State where
it has its principal place of business and the State under whose
laws it is organized.” 28 U.S.C. § 1332. Neither party disputes
that as a general partnership, IMTT is a citizen of Delaware,
having been organized under the laws of Delaware. (Rec. Doc. 122, p. 12; Rec. Doc. 23, p. 18). Thus, the determination of
IMTT’s citizenship, and the application of the local controversy

12

exception, turns on the location of IMTT’s principal place of
business.
The

test

principal
Friend,

for

place
in

determining

of

which

business
the

the

was

Supreme

location

developed
Court

of

of

in
the

a

company’s

Hertz

Corp.

United

v.

States

determined that the term “principal place of business” “is best
read as referring to the place where a corporation’s officers
direct, control, and coordinate the corporation’s activities,”
also known as the company’s “nerve center.” 559 U.S. 77, 92-93
(2010). The Supreme Court further recognized that this should be
the place “where the corporation maintains its headquarters –
provided

that

the

headquarters

is

the

actual

center

of

direction, control, and coordination, i.e., the ‘nerve center,’
and not simply an office where the corporation holds its board
meetings.” Id. at 93.
Plaintiffs contend that IMTT is a citizen of the state of
Louisiana, because its principal place of business is located in
New

Orleans.

heavily

on

In

support

IMTT’s

of

company

this

contention,

website,

which

Plaintiffs

declares

that

rely
the

company is “headquartered in New Orleans,” and which allegedly
advises

that

three

out

of

five

of

its

listed

corporate

executives live and work in New Orleans. Plaintiffs also request
that the Court allow for additional limited discovery on the
13

issue of IMTT’s citizenship before definitively ruling on its
Motion to Remand. Plaintiffs submit that they have not yet been
afforded the opportunity to conduct discovery on this issue and
denying them the opportunity to do so would “essentially strip
Plaintiffs

of

their

chance

to

prove

the

‘local

controversy

exception.’” (Rec. Doc. 12-2).
In response, Defendants do not address Plaintiffs’ request
for additional discovery, however, they submit that Plaintiffs
have failed to satisfy their burden of proving that IMTT is a
citizen of Louisiana. Defendants maintain that IMTT’s principal
place of business is New York. Defendants advise the Court that
in July 2014, shortly prior to the removal of this matter in
October 2014, the Macquarie Infrastructure Company, LLC (“MIC”),
which is headquartered in New York City, acquired full ownership
of IMTT. (Rec. Doc. 23, p. 19). In support of this contention,
Defendants have provided the Court with several of MIC’s filings
with the Securities and Exchange Commission, which they allege
show

that

MIC

began

exercising

full

direction,

control,

and

coordination of IMTT as early as September 2014. (Rec. Doc. 23,
p.

20).

Because

controlled

and

at

the

operated

time

of

by

removal,

MIC,

who

IMTT

was

entirely

Defendants

claim

undisputedly has its principal place of business in New York,

14

Defendants argue that it logically follows that IMTT’s principal
place of business is also New York.
Because at this stage in the proceedings the Court lacks
sufficient

evidence

classified

as

a

to

determine

citizen

of

whether

Louisiana,

IMTT

should

Plaintiffs

be

will

be

permitted to engage in additional discovery, strictly limited to
the issue of the location of IMTT’s principal place of business.
Said discovery must be completed within sixty days of the date
of

this

Motion

Order.
to

memorandum
matter

Following

Remand
in

should

and

support
be

this,

the

Plaintiffs

parties

of

their

remanded

may

submit

arguments

pursuant

to

may

as

the

re-urge
a

to

their

supplemental
whether

local

this

controversy

exception to CAFA.
CONCLUSION
Accordingly,
IT

IS

HEREBY

ORDERED

that

Plaintiffs’

Motion

to

Remand

(Rec. Doc. 12) is DENIED WITOUT PREJUDICE.
IT

IS

FURTHER

ORDERED

that

Plaintiffs

are

permitted

to

conduct additional discovery strictly limited to the issue of
IMTT’s

principal

place

of

business.

Said

discovery

must

be

completed within sixty days of the date of this Order.
IT

IS

FURTHER

ORDERED

that

following

the

close

of

this

limited discovery, Plaintiffs may re-urge their Motion to Remand
15

and each
exceed

party

ten

(10)

may

submit

pages,

in

a

supplemental

support

of

memorandum,

their

arguments

not

to

as

to

whether this matter should be remanded pursuant to the local
controversy exception to CAFA.
New Orleans, Louisiana this 2nd day of June, 2015.

________________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE

16