Poche et al v. Foster Wheeler LLC et al

Filing 17

ORDER granting 5 Motion to Remand to State Court; Plaintiffs' request for attorneys' fees is DENIED. Signed by Judge Carl Barbier on 11/10/15. (sek)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PAUL C. POCHE, ET AL.

CIVIL ACTION

VERSUS

NO: 15-5436

EAGLE, INC., ET AL.

SECTION: “J”(4)

ORDER AND REASONS
Before the Court is a Motion to Remand (Rec. Doc. 5) filed by
Plaintiffs, Paul C. Poche and Dorothy Poche, and an opposition
thereto (Rec. Doc. 15) filed by Defendant, Foster Wheeler LLC
(“Foster Wheeler”). Plaintiffs also requested $3,000 in attorneys’
fees. Having considered the motion and legal memoranda, the record,
and the applicable law, the Court finds that the motion should be
GRANTED and Plaintiffs’ request for attorneys’ fees should be
DENIED.
FACTS AND PROCEDURAL BACKGROUND
This litigation derives from Plaintiff Paul Poche’s diagnosis
with mesothelioma following his exposure to asbestos-containing
products. (Rec. Doc. 5-2.) On September 2, 2014, Mr. Poche and his
wife,

Dorothy

Poche,

filed

suit

against

four

Louisiana

corporations in Civil District Court for the Parish of Orleans,
alleging that the corporations mined, processed, manufactured,
installed, removed, maintained, sold, or distributed asbestos or
asbestos-containing products to which Mr. Poche was exposed. Id.
The four corporations named as defendants were Anco Insulation,
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Inc., Eagle, Inc. (“Eagle”), The McCarty Corporation (“McCarty”),
and Taylor-Seidenbach, Inc. Id. All defendants were citizens of
Louisiana. Id.
On December 12, 2014, Eagle and McCarty filed third-party
demands against eight companies, including Foster Wheeler, seeking
virile share contribution. (Rec. Doc. 5-3.) At least one of the
third-party defendants was also a Louisiana citizen. Id. at 2. On
May 18, 2015, Plaintiffs filed a supplemental and amending petition
directly suing the eight third-party defendants. (Rec. Doc. 5-4.)
However, Plaintiffs did not receive the court’s leave to file the
amending petition until July 28, 2015. (See Rec. Doc. 1, at 2.)
Foster

Wheeler

filed

declinatory

exceptions,

contesting

Plaintiffs’ service of the amended petition. See id. In the ensuing
months, Plaintiffs and Defendants began settlement negotiations.
Id.

Eventually,

all

Defendants

settled

and

were

voluntarily

dismissed, with the exceptions of Eagle and Foster Wheeler. 1 Id.
On September 22, 2015, Eagle filed for bankruptcy, resulting
in an automatic stay of all actions against it. Id. at 3; see 11
U.S.C. § 362. With the action stayed against Eagle, Foster Wheeler
filed a Notice of Removal in this Court on October 23, alleging
that the federal courts have subject matter jurisdiction based on

1

Defendants General Electric Company and CBS Corporation settled with
Plaintiffs but have not been dismissed from the suit because the settlement has
not been consummated. (Rec. Doc. 1-8.) Neither corporation is a Louisiana
citizen.

2

diversity of citizenship. Id. at 6. On October 26, Plaintiffs filed
a Motion to Remand to state court, which also sought $3,000 in
attorneys’ fees. (Rec. Doc. 5.) The motion was set for submission
on November 18. On October 30, Plaintiffs filed a Motion to
Expedite Consideration of the Motion to Remand, which Foster
Wheeler opposed. (Rec. Doc. 8; Rec. Doc. 9.) This Court granted
the Motion to Expedite on November 2, and Foster Wheeler filed its
opposition to the Motion to Remand on November 9. (Rec. Doc. 10;
Rec. Doc. 15.)
Dorothy Poche passed away on February 13, 2015. While the
Court was considering the instant motion, Paul Poche passed away
on October 29, 2015. Foster Wheeler filed Suggestions of Death for
both Plaintiffs on November 9. (Rec. Doc. 13; Rec. Doc. 14.)
PARTIES’ ARGUMENTS
The

movant

argues

that

this

Court

lacks

subject

matter

jurisdiction and that a remand to state court is proper. According
to Plaintiffs, the parties are not completely diverse because the
Plaintiffs and at least one defendant were citizens of Louisiana
on the relevant date. Plaintiffs argue that complete diversity
must exist when the suit is initially filed in state court in order
for it to be removable. Plaintiffs suggest four potential dates of
filing:

September

2,

2014

(date

of

filing

of

the

original

petition), December 12, 2014 (date of filing the third-party
demand), May 18, 2015 (date of filing the amended petition), and
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July 28, 2015 (date of the state court’s grant of leave to file
the amended petition). Because the parties were not completely
diverse on those dates, Plaintiffs argue that removal is improper.
Plaintiffs

also

take

issue

with

Foster

Wheeler’s

characterization of Eagle as a “nominal” party. According to
Plaintiffs, Foster Wheeler’s argument that the bankruptcy court’s
automatic stay rendered Eagle a nominal party lacks support.
Because of Mr. Poche’s advanced age and medical condition, the
state court scheduled an expedited trial on November 30, 2015.
Plaintiffs ask that this case be remanded so the trial can proceed
as scheduled.
In its opposition, Foster Wheeler first argues that the case
became removable when it received notice that Taylor-Seidenbach,
Inc. had settled with Plaintiffs. Besides Eagle, Taylor-Seidenbach
was the last Louisiana defendant. Foster Wheeler filed its Notice
of

Removal

within

thirty

days

of

receiving

the

notice

of

settlement. Second, Foster Wheeler argues that Eagle is a nominal
party because no court can render a judgment against Eagle after
the bankruptcy court automatically stayed all actions against it.
Finally, Foster Wheeler asserts that its removal was reasonable,
and thus Plaintiffs are not entitled to attorneys’ fees.
LEGAL STANDARD
A defendant may remove a civil action filed in state court if
a federal court would have had original jurisdiction over the
4

action. See 28 U.S.C. § 1441(a). The district courts have original
jurisdiction over cases involving citizens of different states in
which the amount in controversy exceeds $75,000, exclusive of
interest or costs. 28 U.S.C. § 1332(a)(1). The removing party bears
the burden of proving by a preponderance of the evidence that
federal jurisdiction exists at the time of removal. DeAguilar v.
Boeing Co., 47 F.3d 1404, 1408 (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).
The procedure for removal of civil actions derives from United
States Code Title 28, Section 1446. Section 1446(b) provides that
the notice of removal "shall be filed within [thirty] days after
receipt by the defendant, through service or otherwise, of a copy
of the initial pleading" if such initial pleading indicates that
the civil action is removable. 28 U.S.C. § 1446(b)(1). If it only
becomes clear that the action is removable after receipt of "an
amended pleading, motion, order or other paper," then the notice
of removal "may be filed within [thirty] days [of] receipt" of
that document. Id. § 1446(b)(3).
The jurisdictional facts supporting removal are examined as
of the time of removal. Gebbia v. Wal-Mart Stores, Inc., 233 F.3d
880,

883

(5th

Cir.

2000).

When

a

case

is

removed

based

on

diversity, the case must have been removable at the time it was
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filed in state court, meaning that post-filing changes in a party’s
citizenship will not convert a nonremovable case into a removable
one. Gibson v. Bruce, 108 U.S. 561, 563 (1883). However, even when
a case is initially nonremovable, it may later become removable
through

the

dismissal

of

all

nondiverse

parties.

Estate

of

Martineau v. ARCO Chem. Co., 203 F.3d 904, 910 (5th Cir. 2000);
Walk Haydel & Assocs., Inc. v. Coastal Power Prod. Co., 934 F.
Supp. 209, 212 (E.D. La. 1996). The dismissal of the nondiverse
parties must be certain, but it need not be formal and final.
Vasquez v. Alto Bonito Gravel Plant Corp., 56 F.3d 689, 694 (5th
Cir. 1995), abrogated on other grounds by Padilla v. LaFrance, 907
S.W.2d 454, 460 (Tex. 1995). A settlement is certain when it is
enforceable according to the applicable state law. Vasquez, 56
F.3d at 694.
Further, the power to remove a previously nonremovable action
is

curtailed

by

the

jurisprudential

“voluntary-involuntary”

distinction, which "provides that a case that is non-removable on
its initial pleadings can only become removable pursuant to a
voluntary act of the plaintiff." Ratcliff v. Fibreboard Corp., 819
F. Supp. 584, 586 (W.D. Tex. 1992). A plaintiff's decision to enter
into a settlement is considered voluntary. Id. at 587. Therefore,
the

voluntary-involuntary

nondiverse

parties

are

rule

dismissed

does
as

not
the

bar
result

removal
of

after

voluntary

settlements. Id. If the nondiverse party is dismissed by means
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involuntary to the plaintiff, such as by a motion for summary
judgment, the case does not become removable. Id. The Fifth Circuit
has

recognized

two

situations

in

which

the

plaintiff’s

voluntariness is irrelevant: (1) when the court dismisses a claim
against a nondiverse defendant based on fraudulent joinder and (2)
when the state court severs the claims against improperly joined
nondiverse defendants, rendering the action against the diverse
defendant removable. Crockett v. R.J. Reynolds Tobacco Co., 436
F.3d 529, 533 (5th Cir. 2006).
Only the citizenship of real parties in interest is relevant
for diversity jurisdiction. See Navarro Sav. Ass’n v. Lee, 446
U.S. 458, 461 (1980). The joinder of nondiverse formal, nominal,
or unnecessary parties cannot prevent removal to federal court.
Nunn v. Feltinton, 294 F.2d 450, 453 (5th Cir. 1961). To establish
that a nondiverse defendant is a mere nominal party, the removing
defendant must demonstrate that “there is no possibility that the
plaintiff would be able to establish a cause of action” against
the nondiverse defendant. See Farias v. Bexar Cnty. Bd. of Trustees
for Mental Health Mental Retardation Servs., 925 F.2d 866, 871
(5th Cir. 1991) (quoting B., Inc. v. Miller Brewing Co., 663 F.2d
545, 549 (5th Cir. 1981)).
When a district court remands a case to state court, the judge
has the discretion to award to the non-removing party attorneys’
fees incurred as a result of removal. 28 U.S.C. § 1447(c); Miranti
7

v. Lee, 3 F.3d 925, 929 (5th Cir. 1993). However, the court should
decline to award fees when the removing party has “an objectively
reasonable basis for removal.” Martin v. Franklin Capital Corp.,
546 U.S. 132, 136 (2005). To determine whether the removing party
had an objectively reasonable basis for removal, the court will
consider the “objective merits of removal at the time of removal.”
Omega Hosp., L.L.C. v. La. Health Serv. & Indem. Co., 592 F. App'x
268, 270 (5th Cir. 2014); Valdes v. Wal-Mart Stores, Inc., 199
F.3d 290, 293 (5th Cir. 2000).
DISCUSSION
A. Motion to Remand
First, Plaintiffs argue that removal is only proper if complete
diversity existed at the time they filed their state court suit.
Plaintiffs are incorrect. A case that is initially nonremovable
may become removable through the voluntary dismissal of nondiverse
defendants. Here, all but one of the nondiverse defendants entered
into settlements, and Plaintiffs voluntarily dismissed them. At
the time of removal, Eagle was the sole remaining nondiverse
defendant. Thus, the propriety of removal turns on Eagle’s status
at the time of removal.
The parties do not contest that Eagle is a Louisiana citizen
because it is organized under Louisiana law and has its principal
place of business in Louisiana. However, Foster Wheeler contends
that Eagle’s citizenship is irrelevant because Eagle was a nominal
8

party at the time of the removal due to the automatic stay issued
by the bankruptcy court. Assuming without deciding that Foster
Wheeler’s characterization of Eagle as a nominal party is correct,
its removal was still improper because the automatic stay did not
result in a certain, voluntary dismissal of Eagle. An automatic
stay is merely a temporary suspension of the proceedings; it does
not

amount

to

a

certain

and

final

dismissal.

Reichley

v.

Abercrombie & Fitch Stores, Inc., No. 09-838, 2009 WL 5196140, at
*2 (W.D. Mich. Dec. 22, 2009); Sutton Woodworking, 328 F. Supp. 2d
at 605. Moreover, the automatic stay was not the result of a
voluntary act of the Plaintiffs.
The few district courts that have confronted this issue have
decided

that

removal

is

improper

when

the

action

against

a

nondiverse defendant is automatically stayed after the plaintiff
files suit in state court. Reichley, 2009 WL 5196140, at *2; Sutton
Woodworking, 328 F. Supp. 2d at 607. However, removal is proper if
bankruptcy court stays all actions against the nondiverse party
before the plaintiff files suit. Myers v. All. for Affordable
Servs., 318 F. Supp. 2d 1055, 1057 (D.Colo. 2004); 26 No. 5 Don
Zupanec, Federal Litigator § 7 (2011). Finally, Foster Wheeler
also failed to show that the voluntary-involuntary distinction
does not apply because Eagle is a fraudulently or improperly joined
party. Because Plaintiffs did not voluntarily dismiss Eagle, its

9

citizenship is still relevant for determining whether diversity
jurisdiction exists.
The presence of Eagle, a citizen of Louisiana, in the lawsuit
at its inception and at the time of removal destroys complete
diversity. Thus, this Court lacks subject matter jurisdiction, and
Plaintiffs’ Motion to Remand must be granted.
B. Request for Attorneys’ Fees
Plaintiffs requested $3,000 in attorneys’ fees incurred because
of

the

removal.

However,

Foster

Wheeler

had

an

objectively

reasonable basis for seeking removal due to the novelty of the
issues. Therefore, Plaintiffs are not entitled to an award of
attorneys’ fees.
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Plaintiffs’ Motion to Remand (Rec.
Doc. 5) is GRANTED, and Plaintiffs’ request for attorneys’ fees is
DENIED.
New Orleans, Louisiana this 10th day of November, 2015.

____________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE

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