Eckert v. Administrators of the Tulane Educational Fund et al

Filing 26

ORDER granting 9 Motion to Remand to State Court. Signed by Judge Nannette Jolivette Brown. (jrc) (Additional attachment(s) added on 1/14/2016: # 1 Letter) (jrc).

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
DWIGHT WILLIAM ECKERT, SR., et al.

CIVIL ACTION

VERSUS

CASE NO. 15-5546

ADMINISTRATORS OF THE TULANE
EDUCATIONAL FUND, et al.

SECTION: “G”(4)

ORDER
Before the Court is Third-Party Plaintiff Administrators of the Tulane Education Fund’s
(“Tulane”) “Motion to Remand or for Other Appropriate Relief.”1 Having considered the motion,
the memoranda in support and in opposition, the record, and the applicable law, the Court will grant
the motion.
I. Background
The claim currently pending before the Court arises out of a state court proceeding, originally
filed on November 2, 2012, in which Tulane was named as one of seventeen defendants in a civil
action seeking recovery for an injury allegedly suffered by Dwight William Eckert, Sr. (“Eckert”),
as a result of occupational exposure to asbestos.2 After obtaining information regarding insurance
coverage applicable to the period during which Eckert was employed by Tulane, Tulane filed a
third-party complaint against St. Paul Fire and Marine Insurance Co. (“St. Paul”) and U.S. Fire
Insurance Co. (“U.S. Fire”) on October 29, 2014.3 Both insurers were also named as direct action

1

Rec. Doc. 9.

2

Rec. Doc. 9-1 at p. 2. Eckert died five days after the suit was filed, and his son, Dwight William Eckert,
Jr. was substituted as the plaintiff, asserting a survival action and claims for wrongful death. Id.
3

Id.

1

defendants in a second amended petition filed by the plaintiff on October 30, 2014.4 After discovery
revealed additional information regarding relevant insurance coverage, Tulane filed an amended
Third Party Demand on September 25, 2015, naming as additional third-party defendants ACE
Group d/b/a in Louisiana as ACE American Insurance Co. and ACE Property and Casualty
Insurance Co. (“ACE”); Westchester Fire Insurance Co. (“Westchester”); and Crum & Forster
Specialty Insurance Co. (“Crum & Forster”).5 Meanwhile, Tulane reached a settlement with the
plaintiff, and plaintiff’s claims against Tulane were dismissed by order of the state court on October
5, 2015.6 On October 27, 2015, the plaintiff’s direct action claims against St. Paul and U.S. Fire were
dismissed as well.7
St. Paul filed a Notice of Removal on October 29, 2015, seeking to remove what it claimed
to be the only remaining claims in this case, namely those brought by Tulane against St. Paul, U.S.
Fire, ACE, Westchester, and Crum & Forster.8 On November 30, 2015, Tulane filed a “Motion to
Remand or for Other Appropriate Relief.”9 On December 11, 2015, St. Paul requested a status
conference to discuss Tulane’s motion,10 which the Court denied on the basis that St. Paul had not
filed an opposition and that the parties appeared to be seeking an advisory opinion from the Court.11

4

Id.

5

Id. at pp. 2–3.

6

Id. at p. 3.

7

Id.

8

Rec. Doc. 1 at p. 2.

9

Rec. Doc. 9.

10

Rec. Doc. 11.

11

Rec. Doc. 13.

2

On December 24, 2015, St. Paul filed an opposition.12
II. Parties’ Arguments
A.

St. Paul’s Notice of Removal
In its Notice of Removal, St. Paul argues that the only remaining claims in this case are those

brought by Tulane, whom it refers to as Plaintiff, against St. Paul, U.S. Fire, ACE, Westchester, and
Crum & Forster, whom it refers to as “Defendants.”13 St. Paul claims that all of the “Defendants”
consent to St. Paul’s removal of the action, and that removal is appropriate because there is complete
diversity of citizenship and the amount in controversy is met.14 According to St. Paul, Tulane is a
citizen of Louisiana, St. Paul is a citizen of Connecticut, U.S. Fire is a citizen of Delaware and New
Jersey, ACE is composed of two companies, both of which are citizens of Pennsylvania, Westchester
is a citizen of Pennsylvania, and Defendant Crum & Forster was a citizen of Arizona and New
Jersey, and is now a citizen of Delaware and New Jersey.15
St. Paul argues that third-party defendants are allowed to remove a third-party demand to
federal court, on the basis of diversity, after the state trial court has severed or dismissed the main
demand.16 St. Paul relies on the Fifth Circuit case of Central of Georgia Railway Co. v. Riegel
Textile Corp., in which St. Paul claims the Fifth Circuit held that such a removal would not have the
effect of defeating the original plaintiff’s choice of forum, and that, in such a case, the removing

12

Rec. Doc. 15.

13

Rec. Doc. 1 at p. 2.

14

Id. at p. 3, 7.

15

Id. at pp. 3–4.

16

Id. at p. 4.

3

party would be “as much a ‘defendant’ as if an original action had been brought against him.”17 St.
Paul also quotes an Eastern District of Louisiana case recognizing that allowing third-party removal
after severance or dismissal of a plaintiff’s cause of action merely “permits a third-party defendant
to do what he could have, had the third-party complaint been filed as a separate lawsuit—remove
the matter based on diversity.”18
St. Paul also avers that removal is timely and otherwise proper because Tulane filed its thirdparty demand on October 30, 2014, St. Paul was served through the Louisiana Secretary of State on
November 20, 2014, and the original plaintiff dismissed Tulane from the underlying state court
action on October 5, 2015 and dismissed St. Paul and U.S. Fire on October 27, 2015.19 Thus, St. Paul
contends, the Notice was timely filed on October 29, 2015, within 30 days after receipt, by the
defendant, of a copy of an amended pleading, motion, order or other paper from which it may first
be ascertained that the case had become removable, pursuant to 28 U.S.C. § 1446(b)(3) and within
one year of the commencement of the original third-party demand, according to 28 U.S.C. §
1446(c).20
B.

Tulane’s Arguments in Support of Remand
In its “Motion to Remand or for Other Appropriate Relief,” Tulane asserts that although it

has no objection to litigating in federal court, and it is willing to waive procedural defects in St.
Paul’s removal, it is concerned that the Court nevertheless lacks subject matter jurisdiction over the

17

Id. at pp. 4–5 (quoting 426 F.2d 935, 938 (5th Cir. 1970)).

18

Id. at p. 5 (quoting Johns, Pendleton & Assocs. v. Miranda, Warwick & Milazzo, No. 02-1486, 2002 WL
31001838, at *3–4 (E.D. La. 2002)).
19

Id. at p. 8.

20

Id. at pp. 8–9.

4

claim before it.21 As background, Tulane explains that of the seventeen defendants originally named
by the plaintiff in the original Petition, eight were served, filed responsive pleadings, and were
dismissed from the lawsuit prior to St. Paul’s removal of the case.22 However, Tulane contends, there
remain six defendants who were served, filed responsive pleadings, and had not been dismissed from
the action as of the date that St. Paul filed its notice of removal: Schneider Electric USA, Inc.
(“Schneider”),23 ANCO Insulations, Inc. (“ANCO”), Eagle, Inc. (“Eagle”), The McCarty Corp.
(“McCarty”), Montello, Inc. (“Montello”),24 and Union Carbide Corp. (“Union Carbide”).25 Tulane
contends that St. Paul therefore misrepresented to the Court that the “only remaining claims in this
case are the claims brought by Tulane” against third-party defendant insurers.26 Tulane asserts that
St. Paul purported to revise the caption of the case from Dwight William Eckert, Sr. v. The
Administrators of the Tulane Educational Fund, et al. to one naming Tulane as the plaintiff and St.
Paul and the other insurer third-party defendants as defendants.27
Tulane avers that the Court issued a directive on November 5, 2015 using the original
caption of the action, rather than the new caption used by St. Paul, which directed St. Paul to provide
(a) a list of all parties still remaining in the action, (b) copies of all pleadings filed by those parties

21

Rec. Doc. 9-1 at p. 1.

22

Id. at p. 3.

23

Tulane contends that Schneider filed a joint motion to dismiss the claims against it five days after St. Paul
removed the case. Id. at p. 4.
24

Tulane contends that Montello also filed a still-pending third-party claim against Union Carbide Corp. Id.

25

Id.

26

Id.

27

Id. at p. 5.

5

in state court, and (c) copies of the returns on service of process on those parties filed in state court.28
However, Tulane claims, St. Paul’s Notice of Compliance with Removal Procedure, filed on
November 12, 2015, reverted to St. Paul’s revised caption and provided a “list of all parties
remaining in the action” identifying only Tulane and the third-party defendant insurers.29
Tulane argues that St. Paul has failed to follow the proper procedure for removing a case to
federal court, particularly in purporting to remove only the third-party claims asserted by Tulane
against the third-party defendant insurers rather than the entire action.30 Tulane also argues that St.
Paul also failed to obtain consent of all defendants to the action to removal and failed to remove the
action to federal court within one year of its commencement.31
Tulane avers that its greatest concern is the apparent lack of diversity between one of the
defendants remaining in the action at the time of removal, Union Carbide, and the original plaintiff,
Dwight W. Eckert, Sr., as well as the current plaintiff, Dwight W. Eckert, Jr., all of whom are
citizens of Texas.32 Tulane maintains that although St. Paul purported to remove only Tulane’s thirdparty claims, the propriety of the partial removal was based on the false premise that all claims in
the main demand had been dismissed, and thus any removal necessarily would have effected
removal of the entire action.33
Tulane argues that long-established case law holds that a third-party defendant is not a

28

Id. (citing Rec. Doc. 4).

29

Id.

30

Id.

31

Id.

32

Id. at p. 6.

33

Id. at p. 6. n.19.

6

“defendant” within the meaning of 28 U.S.C. § 1446, which allows a “defendant or defendants” to
remove civil actions to federal court.34 Tulane avers that in Carl Heck Engineers, Inc. v. Lafource
Parish Police Jury, the Fifth Circuit created a very limited exception to the rule prohibiting thirdparty defendant removals, allowing such removals only where the third-party claims were “separate
and independent claims” and the basis for subject matter jurisdiction over the main demand was the
existence of a federal question, rather than diversity of citizenship.35 Moreover, Tulane argues, even
in the cases that fall within the Carl Heck exception, it is the entire action, not simply the third-party
claims, that is removable.36
Tulane argues that St. Paul relies on a Fifth Circuit decision from 1970, as well as a 2002
decision from the Eastern District of Louisiana, as authority supporting this removal.37 According
to Tulane, however, neither case supports removal here.38 First, Tulane claims, in Central of Georgia
Railway Co. v. Riegel Textile Corp., the Fifth Circuit case relied upon by St. Paul, the original
plaintiff filed a FELA claim against Central, and Central filed a third-party complaint against Riegel,
claiming contractual indemnity.39 According to Tulane, Riegel petitioned for removal of the case,
based upon § 1441(c), but the federal court remanded, finding that the third-party complaint did not

34

Id. at p. 7.

Id. (citing 14C Wright, Miller & Cooper, Federal Practice and Procedure, § 3722.2, 2015 Supplement,
p. 203; Carl Heck Engineers, Inc. v. Lafourche Par. Police Jury, 622 F.2d 133 (5th Cir. 1980)).
35

36

Id.

37

Id. at pp. 7–8.

38

Id. at p. 8.

39

Id. (citing 426 F.2d 935 (5th Cir. 1970)).

7

raise a “separate and independent claim.”40 Tulane avers that once the case returned to state court,
the plaintiff moved to strike the third-party complaint on the grounds that it unduly prejudiced his
claim.41 According to Tulane, the trial court then severed the third-party complaint for trial purposes
and set the original action for trial, at which point Riegel again petitioned for removal, relying on
§ 1441(c).42 Tulane avers that the federal district court granted the plaintiff’s motion to remand as
to the FELA action, but denied the remand with respect to the third-party indemnity claim.43
According to Tulane, the Fifth Circuit recognized the authorities holding that third-party
defendants generally are not permitted to remove cases to federal court and noted that a primary
rationale supporting the rule against third-party defendant removal is to avoid interfering with the
plaintiff’s choice of forum.44 Tulane claims that the Fifth Circuit concluded, however, that when a
state court has ordered a severance of the third-party claim from the principal action based upon “a
determination that expediency and the interest of the parties were best served by treating the case
as two lawsuits, . . . [a] federal court may respect that determination” and allow removal of the
severed third-party action alone.45 Tulane argues that it was crucial to the Fifth Circuit’s decision
that, in those circumstances, the plaintiff’s choice of forum was unaffected.46
Tulane acknowledges that although it does not appear that other federal circuits have adopted

40

Id.

41

Id.

42

Id.

43

Id.

44

Id. (citing Central of Georgia Railway Co., 426 F.2d at 938).

45

Id. (quoting Central of Georgia Railway Co., 426 F.2d at 938).

46

Id.

8

the Fifth Circuit’s reasoning in Riegel, the Fifth Circuit has never disavowed it and it presumably
remains good law in this Circuit.47 Moreover, Tulane asserts, another section of the Eastern District
of Louisiana, in Johns, Pendleton & Associates v. Miranda, Warwick & Milazzo, extended the
Riegel rule to a case in which all claims other than the third-party claims at issue had been
dismissed, finding that such a situation was analogous to one in which the third-party claims had
been severed from the principal action by the state court.48 In that case, Tulane contends, Johns,
Pendleton, & Associates (“Johns”), a court reporting service, filed suit on open account in state court
against Miranda Warwick, a law firm, seeking recovery for various court reporting services it had
provided when the law firm had represented Reliance Insurance Co. (“Reliance”).49 According to
Tulane, Miranda Warwick then filed a third-party action against Reliance’s liquidation
administrator, alleging that it was due payment from the liquidator for the amounts sought by Johns,
as well as larger sums for its own services.50 Tulane avers that the liquidator paid Johns for the
original claim it brought against Miranda Warwick, and Johns therefore dismissed its claim against
the firm.51 According to Tulane, the liquidator then removed the case to federal court based on
diversity of citizenship, and the Eastern District of Louisiana denied Miranda Warwick’s motion to
remand, reasoning that allowing a third party to remove a case after the severance or dismissal of
the plaintiff’s cause of action would not destroy an original plaintiff’s choice of forum, as the

47

Id. at p. 9.

48

Id. (citing No. 02-1486, 2002 WL 31001838 (E.D. La. Sept. 4, 2002) (Duval, J.)).

49

Id.

50

Id.

51

Id.

9

original plaintiff no longer had any interest in the matter.52
Tulane argues that the Johns, Pendleton holding and its rationale clearly do not apply to this
action, because still pending at the time of removal were six claims asserted by the plaintiff against
defendants in the principal action.53 Furthermore, Tulane claims, there has been no severance of the
third-party claims from the principal action, nor is there the functional equivalent of such a
severance by virtue of dismissal of all claims in the principal action.54 Thus, Tulane argues, St. Paul
has no statutory or jurisprudential basis for removing one part of the action to federal court, nor does
it have authority to remove the entire case because it is a third-party defendant.55 According to
Tulane, “[i]t is unclear whether St. Paul’s attempted removal of one part of the Action would be
considered a procedural or jurisdictional defect. Removal of some pending claims and not others is
so patently unauthorized by the removal provisions of Title 28 that it might be considered a nullity
that cannot be subject to waiver by an opposing party.”56 Tulane argues that treating such a removal
as a waivable procedural defect would improperly allow the parties to stipulate a severance of their
claims from the rest of an action pending in state court and constitute a troubling affront to comity
and the presiding state court’s authority, in contrast to the rationale underlying the Fifth Circuit’s
decision in Riegel, which favored deference to a state court’s decision to sever the third-party claims
for the rest of the action.57

52

Id. at pp. 9–10 (citing 2002 WL 31001838, at *12).

53

Id. at p. 10.

54

Id.

55

Id.

56

Id.

57

Id.

10

Furthermore, Tulane avers, there are a number of removal defects that are clearly procedural
and which “Tulane should be able to waive.”58 Specifically, Tulane argues that St. Paul’s removal
was not timely because the case was commenced on November 2, 2012, nearly three years before
St. Paul filed its Notice of Removal.59 Tulane asserts that it is irrelevant that St. Paul was not a party
to the lawsuit at the time the one-year limitation expired in November of 2013, as the case law
establishes that the period runs from the filing of the lawsuit, not the joinder of the defendant or the
third-party defendant seeking removal.60 Tulane also argues that St. Paul failed to establish consent
to removal by all defendants, noting that Tulane did not establish that any of the six served,
undismissed defendants joined in the removal and that only the third-party defendant insurers were
shown to have consented to removal.61
More importantly, Tulane argues, the Court lacks subject matter jurisdiction in the current
procedural posture because the decedent, and the surviving plaintiff, are residents of Texas, and
Union Carbide, a defendant in the original matter, is also a citizen of Texas.62 Tulane claims that its
counsel spoke to counsel for Union Carbide, who indicated that the company had reached a
settlement in principle with the plaintiff.63 However, Tulane avers, it was unclear at the time of that
conversation when the parties would be ready to finalize the settlement and file a motion to

58

Id. at p. 11.

59

Id. at p. 12.

60

Id. (citing Hedges v. Hedges Gauging Serv., Inc., 837 F. Supp. 753, 754–55 (M.D. La. 1993); Lytle v.
Lytle, 982 F. Supp. 671 (E.D. Mo. 1997); In re Burns & Wilcox, Ltd., 54 F.3d 475, 476 n.4 (8th Cir. 1995); Perez v.
General Packer, Inc. 790 F. Supp. 1464, 1469 (C.D. Cal. 1992)).
61

Id.

62

Id. at p. 13.

63

Id.

11

dismiss.64
Tulane states that the purpose of its motion is to address the uncertainty regarding which
portion of the case was actually removed and, if necessary, provide means to assure the dismissal
of any claims that must be eliminated to assure that the Court has subject matter jurisdiction over
Tulane’s claims.65 As possible solutions, Tulane suggests that, if the entire action was removed, the
Notice of Compliance with Removal Procedure should be amended to add the remaining defendants
and their counsel to the listing.66 Tulane also urges the settlement between the original plaintiff and
Union Carbide so that the plaintiff’s claim may be dismissed.67 In the alternative, Tulane suggests
that the Court could remand the case to Civil District Court and St. Paul could file a motion to sever
the third-party claims asserted by Tulane from the principal action, after which St. Paul and other
third-party defendants could file a new Notice of Removal.68 Tulane states that it would agree not
to object to the untimely filing of the new Notice.69 In short, Tulane argues, it does not object to
litigating the claims in federal court and is prepared to waive its objections to those procedural
defects that are clearly waivable, but expresses its concerns that the removal, as executed, would
compromise the validity of any judgment by the Court in light of its potential lack of subject matter
jurisdiction.70

64

Id.

65

Id. at pp. 13–14.

66

Id. at p. 14.

67

Id.

68

Id.

69

Id.

70

Id. at pp. 14–15.

12

C.

St. Paul’s Arguments in Opposition to Remand
In opposition, St. Paul argues that the action was properly removed to federal court because

at the time of removal, all of the parties to the third-party demand, including Tulane and the insurers,
were no longer parties to the plaintiff’s main demand.71 According to St. Paul, the original plaintiff’s
claims against the remaining tort defendants are “completely unrelated to Tulane and Tulane’s
claims for insurance coverage against its insurers.”72 St. Paul claims that Tulane filed an amended
third-party demand on September 25, 2015, naming ACE, Westchester, and Crum & Forster as
additional third-party defendants, but that at the time of removal on October 29, 2015, Tulane, St.
Paul and U.S. Fire had all been dismissed from the original plaintiff’s main demand, and none of
the newly added third-party insurer defendants were ever parties to the original plaintiff’s main
demand.73 Thus, St. Paul contends, on the date of removal, there were no claims pending between
the original plaintiff (or any other remaining party to the main demand) and Tulane, St. Paul, U.S.
Fire, ACE, Westchester, or Crum & Forster.74
St. Paul concedes that Tulane has correctly noted that St. Paul only removed a portion of the
state court action.75 St. Paul alleges that such a removal was appropriate based upon the isolated
nature of Tulane’s third-party demand.76 St. Paul states that it captioned its notice of removal The
Administrators of Tulane Education Fund d/b/a/ Tulane University v. St. Paul Fire and Marine

71

Rec. Doc. 15 at pp. 1–2.

72

Id. at p. 2.

73

Id. at pp. 2–3.

74

Id. at p. 3.

75

Id.

76

Id.

13

Insurance Co. et al. to make clear that it was removing only Tulane’s third-party demand against
St. Paul, U.S. Fire, ACE, Westchester, and Crum & Forster, and not to mislead the Court.77
Furthermore, St. Paul claims that it agrees with Tulane that the Fifth Circuit’s limited
exception for “separate and independent claims” under Carl Heck Engineers, Inc. v. Lafourche
Parish Police Jury does not apply to the facts of this case.78 Instead, St. Paul argues, it removed the
case pursuant to 28 U.S.C. § 1441(a), which allows the removal of any civil action brought in a state
court of which the district courts of the United States have original jurisdiction.79 St. Paul claims that
although generally, third-party demands are not removable, the Fifth Circuit and the Eastern District
of Louisiana have recognized an exception wherein third-party defendants may remove third-party
demands to federal court, on the basis of diversity jurisdiction, after the state trial court has severed
or dismissed the main demand.80 St. Paul argues that although Tulane has claimed that “[r]emoval
of some pending claims and not others is so patently unauthorized by the removal provisions of Title
28 that it might be considered a nullity that cannot be subject to waiver by an opposing party,”
Tulane cites no authority for the proposition, and in fact the Eastern District of Louisiana allowed
precisely that situation in Johns, Pendleton & Associates v. Miranda, Warwick & Milazzo.81 St. Paul
rejects Tulane’s argument that Johns, Pendleton does not apply to this case because there was no
severance of the third-party claims from the main demand, nor a functional equivalent of such a
severance by virtue of dismissal of all claims in the principal action, arguing that Johns, Pendleton
77

Id. at pp. 3–4, 4 n.10.

78

Id. at p. 5 (citing 622 F.2d 133 (5th Cir. 1980)).

79

Id.

80

Id. at p. 6 (citing Central of Ga. Ry. Co. v. Reigel Textile Corp., 426 F.2d 935, 937 (5th Cir. 1970)).

81

Id. at p. 7 (citing 02-1486, 2002 WL 31001838 (E.D. La. Sept. 4, 2002)).

14

does not require that all claims in the main demand be dismissed, but only that “the main demand
was resolved separate and apart from the third-party complaint.”82
Here, St. Paul argues, the original plaintiff dismissed his claims against Tulane, St. Paul, and
U.S. Fire, and never brought claims against ACE, Westchester, or Crum & Forster.83 Furthermore,
St. Paul claims, the main demand against Tulane and its insurers, including St. Paul and U.S. Fire,
is completely resolved and the original plaintiff’s remaining claims against other tort defendants are
irrelevant.84 St. Paul argues that Tulane’s third-party demand is now “essentially a separate lawsuit,”
and as in Johns, Pendleton, allowing St. Paul to remove the third-party demand does not run afoul
of policy concerns that a third-party defendant should not be permitted to destroy an original
plaintiff’s choice of forum.85
Next, St. Paul avers that the insurer obtained the consent of all defendants to Tulane’s thirdparty demand.86 According to St. Paul, because it only removed a portion of the case, the Court need
only consider whether the defendants to Tulane’s claims provided consent to removal, which they
did.87 Similarly, St. Paul argues that the Court does not lack jurisdiction due to the “apparent lack
of diversity” between Union Carbide, an original defendant, and the original plaintiff, because
neither is a party in the removed portion of the action.88

82

Id. (quoting Johns, Pendleton & Assocs., 2002 WL 31001838, at *3).

83

Id. at p. 8.

84

Id.

85

Id.

86

Id.

87

Id. at pp. 8–9.

88

Id. at p. 10.

15

St. Paul argues that removal of the case on October 29, 2015 was timely because Tulane’s
third-party demand “is the initial pleading in its third-party action against St. Paul,” and that demand
was filed, via a motion for leave to file, on October 29, 2014.89 In fact, St. Paul argues, one of the
reasons that it did not seek to first sever the third-party demand was that the original plaintiff did
not dismiss St. Paul and U.S. Fire from the underlying state court action until October 27, 2015,
leaving just two days for St. Paul to remove the action within the one-year statutory window.90 St.
Paul avers that its Notice of Removal was timely filed within thirty days of the case first becoming
removable and within one year of the commencement of the original third-party demand, in
accordance with 28 U.S.C. § 1446(c)(1).91
Finally, St. Paul states that although it maintains that its removal was proper under the law,
it does not object to Tulane’s suggested “remedies” to any alleged deficiencies.92 St. Paul asserts,
however, that Tulane’s request to remand the action to state court for a severance, only to have the
matter removed again after severance, would be unnecessary and a waste of judicial resources.93
III. Law and Analysis
A.

Legal Standard on a Motion to Remand
A defendant may remove a state civil court action to federal court if the federal court has

original jurisdiction over the action.94 A federal court has subject matter jurisdiction over an action

89

Id. at p. 11.

90

Id. at pp. 11–12.

91

Id. at p. 12.

92

Id.

93

Id.

94

28 U.S.C. § 1441(a); Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 34 (2002).

16

“where the matter in controversy exceeds the sum or value of $75,000” and the action “is between
citizens of different states.”95 “When removal is based on diversity of citizenship, diversity must
exist at the time of removal.”96 The removing party bears the burden of demonstrating that federal
jurisdiction exists.97 In assessing whether removal was appropriate, the Court is guided by the
principle, grounded in notions of comity and the recognition that federal courts are courts of limited
jurisdiction, that “removal statute[s] should be strictly construed in favor of remand.”98 Remand is
appropriate if the Court lacks subject matter jurisdiction, and “doubts regarding whether removal
jurisdiction is proper should be resolved against federal jurisdiction.”99
As a “party may neither consent to nor waive federal subject matter jurisdiction,”100 it
follows that “the right to secure a remand in the absence of federal jurisdictional subject matter
cannot be waived.”101 However, certain procedural defects in removal, such as timeliness of removal,
may be waived, so long as such defects do not threaten a federal court’s subject matter
jurisdiction.102
95

28 U.S.C. § 1332(a)(1).

96

Texas Beef Grp. v. Winfrey, 201 F.3d 680, 686 (5th Cir. 2000).

97

See Allen v. R&H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995).

98

Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).

99

Acuna v. Brown & Root Inc., 200 F.3d 335, 339 (5th Cir. 2000) (citing Willy v. Coastal Corp., 855 F.2d
1160, 1164 (5th Cir. 1988)).
100

Simon v. Wal-Mart Stores, Inc., 193 F.3d 848, 850 (5th Cir. 1999).

101

Jones v. Gen. Tire & Rubber Co., 541 F.2d 660, 662 (7th Cir. 1976) (citing 14 Charles Alan Wright,
Arthur R. Miller, & Edward H. Cooper, Federal Practice and Procedure § 3739 (2d. ed. 1976)); see also McKee v.
Kansas City S. Ry. Co., 358 F.3d 329 (5th Cir. 2004) (remanding case to state court after plaintiff objected to subject
matter jurisdiction for first time on appeal).
102

See Baris v. Sulpicio Lines, Inc., 932 F.2d 1540, 1543 (5th Cir. 1991) (“The plaintiffs have confused
improper removal (i.e., lack of removal jurisdiction) with lack of original subject matter jurisdiction. The former is
waivable . . .; the latter is not . . . . ”) (citations omitted); id. at 1544 (“[A] ‘procedural’ defect is any defect that does

17

B.

Analysis
Tulane and St. Paul primarily contest two related issues: (1) whether the removal statute

allows for a party to remove just a portion of, rather than an entire, case; and (2) whether St. Paul,
as a third-party defendant, was capable of removing any portion of the case pursuant to the Fifth
Circuit’s decision in Central of Georgia Railway Co. v. Riegel Textile Corp.,103 as expanded by the
non-binding Eastern District of Louisiana case, Johns, Pendleton & Associates v. Miranda, Warwick
& Milazzo, P.C.104
St. Paul concedes that some of the alleged defects raised by Tulane would raise issues if the
entire case had been removed, but argues that it removed only a portion of the state court action.105
Citing limited authority, St. Paul alleges that such a removal was appropriate based upon the isolated
nature of Tulane’s third-party demand.106 Specifically, St. Paul contends that Tulane has cited no
authority for its proposition that “[r]emoval of some pending claims and not others is so patently
unauthorized by the removal provisions of Title 28 that it might be considered a nullity that cannot
be subject to waiver by an opposing party.”107 In fact, St. Paul contends, the Eastern District of
Louisiana allowed precisely that situation in Johns, Pendleton & Associates v. Miranda, Warwick
& Milazzo, where St. Paul contends that the court held that, in order for a third-party defendant to
remove a case, “the main demand [must be] resolved separate and apart from the third-party

not go to the question of whether the case originally could have been brought in federal district court . . . .”).
103

426 F.2d 935 (5th Cir. 1970).

104

No. 02-1486, 2002 WL 31001838 (E.D. La. Sept. 4, 2002) (Duval, J.).

105

Rec. Doc. 15 at p. 3.

106

Id.

107

Id. at p. 7.

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complaint,” but all claims in the main demand need not be dismissed.108
St. Paul is mistaken in two respects. First, the removing party—in this case, St. Paul—bears
the burden of demonstrating that federal jurisdiction exists.109 Therefore, it is St. Paul’s failure to
cite case law authorizing the removal of a portion of a case rather than an entire action, more so than
Tulane’s proposition that such a removal might be considered a nullity, that troubles the Court.
Second, and more importantly, St. Paul’s reliance on Johns, Pendleton is misplaced. Although this
Court is not bound to follow the holding of Johns, Pendleton, even if it chose to do so, the case does
not involve the factual scenario that St. Paul claims it does. St. Paul argues that Johns, Pendleton
allows “precisely” the situation St. Paul seeks to create here—the removal of some third-party
claims while other portions of the case remain pending in state court.110 In Johns, Pendleton,
however, the direct action that would have otherwise prohibited removal had been entirely
resolved.111 In fact, the District Court in Johns, Pendleton explained that the reason that the case was
analogous to the Fifth Circuit’s decision in Riegel, which involved a severed claim, was that the
main demand in the instant case had been dismissed with prejudice and the original plaintiff was no
longer a party to the case, creating the same result as a severance.112 In Johns, Pendleton, once the
third-party demand was removed, no portion of the case remained ongoing in state court.113 That is
108

Id. at p. 7 (citing 02-1486, 2002 WL 31001838 (E.D. La. Sept. 4, 2002)).

109

See Allen v. R&H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995).

110

Rec. Doc. 15 at p. 7.

111

Johns, Pendleton & Assocs. v. Miranda, Warwick & Milazzo, No. 02-1486, 2002 WL 31001838, at *3
(E.D. La. Sept. 4, 2002).
112

Id. (“Allowing [the third-party defendant] to remove the third-party cause of action between it and [the
third-party plaintiff] does not threaten Johns, Pendleton's forum selection—as it no longer has any interest in the
matter.”).
113

See id. at *1.

19

not the situation presented here, where the original plaintiff’s claims against at least six defendants
remain pending.114
Although St. Paul is correct that the original plaintiff’s direct action against it and the other
third-party defendants has resolved, it cites no other authority for the proposition that the resolution
of any direct action between a plaintiff and third-party defendants automatically severs the claims
such that a third-party defendant may remove “its” portion of the case without implicating any other
claims that remain in the action. Instead, St. Paul urges the Court to find that “[o]riginal plaintiff’s
claims against the other remaining tort defendants are completely unrelated to Tulane and Tulane’s
claims for insurance coverage against its insurers.”115 St. Paul may be correct in a broad sense
regarding the legal issues, but it incorrectly encourages the Court to treat claims filed in the same
lawsuit as if they were automatically severed solely by St. Paul’s adamant insistence that the thirdparty claims are unrelated and therefore can be independently removed to federal court as per Johns,
Pendleton. Such an expansive reading of Johns, Pendleton—which the Court reiterates is an
unpublished, district court opinion whose reasoning has not been adopted by the Fifth Circuit—is
wholly unsupported by the removing party.116
Neither party adequately briefs the Court regarding the central issue of whether a party may
remove only a portion of a state court proceeding, thereby essentially severing claims of its own

114

Rec. Docs. 9-1 at p. 4.

115

Rec. Doc. 15 at p. 2.

116

In fact, although similarly not binding on this Court, a decision by a magistrate judge in the Middle
District of Louisiana held that removal is inappropriate in an analogous situation in which a third-party defendant
prematurely sought to remove a case where the main demand had settled, but had yet to be formally dismissed by the
state court. Scheurich v. Agrico Chem. Co., No. 08-151, 2008 WL 4298449, at *3 (M.D. La. Sept. 16, 2008).

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accord and without court action. Section 1441(a), invoked by St. Paul as the basis of its removal of
the third-party claims, states that:
Except as otherwise expressly provided by Act of Congress, any civil action brought
in a State court of which the district courts of the United States have original
jurisdiction, may be removed by the defendant or the defendants, to the district court
of the United States for the district and division embracing the place where such
action is pending.
Interpreting the statute, numerous courts have found that the term “any civil action” in § 1441(a)
encompasses an entire case, and not merely certain claims.117 In examining the issue, a Northern
District of Texas court explained that the legislative history of the statute bolsters this interpretation,
as “[t]he Revision Notes from 1948 state that ‘[p]hrases such as “in suits of a civil nature, at law or
in equity,” the words “case,” “cause,” “suit,” and the like have been omitted and the words “civil
action” substituted in harmony with Rules 2 and 81(c) of the Federal Rules of Civil Procedure.’”118
Removal is automatic; once a case is removed to federal court, a state court is without power
to proceed in a case.119 Once a case has been removed, the entire case is removed, and portions
thereof may be subject to remand.120 Therefore, although Tulane may be able to waive any of St.

117

See, e.g., Carey v. Bank of Am., N.A., 904 F. Supp. 2d 617, 620 (N.D. Tex. 2012); Horn v. Kmart Corp.,
No. 1:06-493, 2007 WL 1138473, at *4 (S.D. Ohio Apr. 16, 2007); Wilson v. Lowe's Home Ctr., Inc., 401 F. Supp.
2d 186, 192 (D. Conn. 2005).
118
Jackson v. Wal-Mart Stores Tex., LLC, 925 F. Supp. 2d 810, 813 (N.D. Tex. 2013) (quoting 28 U.S.C. §
1441(a) (Revision Note 1948)).
119

See Butler v. King, 781 F.2d 486, 488 (5th Cir. 1986); Karl Oakes, 29A Federal Procedure, Lawyers
Edition § 69:99 (“Upon filing a copy of the notice of removal in state court, removal is automatic and the state court
may proceed no further unless and until the case is remanded. The jurisdiction of the federal court is complete and
the further actions, if any, of the state court are void. The state court's jurisdiction over the action is suspended from
the moment of removal.”) (footnotes omitted);
120

Cf., e.g., 28 U.S.C. § 1441(c) (stating that, upon removal of an action containing both claims arising
under 28 U.S.C. § 1331 and claims that are not within the original or supplemental jurisdiction of the district court,
the entire case may be removed, after which a “district court shall sever from the action” any claims over which the
federal court lacks jurisdiction and “shall remand the severed claims to the State court from which the action was
removed”) (emphasis added).

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Paul’s procedural defects or failure to abide by the removal statute, the parties cannot simply agree,
after-the-fact, to remove only a single portion of a case. Indeed, a finding to the contrary would
render unnecessary the holdings in Riegel and Johns, Pendleton; discussions of neither severance
nor dismissal of claims would appear to be warranted if a third-party defendant could simply
unilaterally sever any third-party claims against it that would otherwise meet the criteria of 28
U.S.C. § 1332. In Riegel, the Fifth Circuit reasoned that third-party defendants may remove cases
to federal court in the limited circumstances in which a plaintiff’s main demand had been severed,
on the basis that such a removal “would not have the effect of defeating [a] plaintiff’s choice of
forum,” because the plaintiff’s action would, by virtue of the severance, be unaffected.121 Such a
decision implies that, without a formal severance, the entire case would be subject to removal.
Moreover, the Fifth Circuit explicitly considered the possibility that a state court may refuse to sever
a case in order “to promote settlements by keeping in one court actions growing out of the same
transaction,” and encouraged state trial courts to consider such a possibility “in making its decision
whether or not to sever.”122 The Fifth Circuit therefore implicitly recognized that some court action,
and not the mere agreement of certain parties, is required to effect the kind of severance that St. Paul
argues occurred here.123
As noted above, the removing party bears the burden of demonstrating that federal

121

Central of Ga. Ry. Co. v. Riegel Textile Corp., 426 F.2d 935, 938 (5th Cir. 1970).

122

Id.

123

St. Paul appears to implicitly recognize the need for such state action as well, as evidenced by its
admission that one of the reasons that it did not seek to first sever the third-party demand was that the original
plaintiff did not dismiss St. Paul and U.S. Fire from the underlying state court action until October 27, 2015, leaving
just two days for St. Paul to remove the action within the one-year statutory window. Rec. Doc. 15 at pp. 11–12.

22

jurisdiction exists.124 Furthermore, in assessing whether removal was appropriate, the Court is
guided by the principle, grounded in notions of comity and the recognition that federal courts are
courts of limited jurisdiction, that “removal statute[s] should be strictly construed in favor of
remand.”125 Remand is appropriate if the Court lacks subject matter jurisdiction, and “doubts
regarding whether removal jurisdiction is proper should be resolved against federal jurisdiction.”126
Therefore, the Court finds that, despite its protestations to the contrary, St. Paul is mistaken in its
claim that it removed only a portion of the case. Instead, St. Paul effectively removed the entire case.
It is undisputed by the parties that the original plaintiff and Union Carbide, a defendant in the case,
are both citizens of Texas, and no federal cause of action has been asserted. The Court therefore
lacks subject matter jurisdiction over the case, and must remand.
The parties also dispute whether St. Paul’s removal was timely.127 Timeliness is clearly a
procedural defect subject to waiver.128 Although it is unclear why Tulane chose to brief the Court
on the timeliness of St. Paul’s removal given its clear indication that it would be willing to waive
any objection to the alleged procedural defect, because Tulane appears only to express concerns
regarding jurisdictional flaws of removal, the Court need not address the issue of timeliness.
As a final matter, presuming the state court grants St. Paul’s request for a severance, St. Paul

124

See Allen v. R&H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995).

125

Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).

126

Acuna v. Brown & Root Inc., 200 F.3d 335, 339 (5th Cir. 2000) (citing Willy v. Coastal Corp., 855 F.2d
1160, 1164 (5th Cir. 1988)).
127

Rec. Docs. 9-1 at pp. 11–12; 15 at pp. 10–12.

128

Leininger v. Leininger, 705 F.2d 727, 729 (5th Cir. 1983) (“It is undisputed that the suit was not timely
removed. But the time limitation for removal is not jurisdictional; it is merely modal and formal and may be
waived.”).

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correctly notes that remanding the action “to state court for a severance only to have this matter
removed again after a severance is . . . a waste of judicial resources and efficiency.”129 The flaw in
removal, however, was jurisdictional rather than procedural and may not be remedied by this Court,
which is duty-bound to examine the basis of subject matter jurisdiction sua sponte,130 and to
determine that complete diversity existed at the time of removal,131 even if all parties wish
desperately to remain in federal court. To the extent that judicial resources are wasted in resolving
the jurisdictional defaults herein, the fault lies with St. Paul’s failure to abide by the requirements,
procedural and otherwise, of § 1441(a), rather than with the Court.
IV. Conclusion
For the reasons stated above,
IT IS HEREBY ORDERED that Tulane’s motion to remand132 is GRANTED.

14th
NEW ORLEANS, LOUISIANA, this ______ day of January, 2016.

________________________________
NANNETTE JOLIVETTE BROWN
UNITED STATES DISTRICT JUDGE

129

Rec. Doc. 15.

130

See H&D Tire & Auto. Hardware, Inc. v. Pitney Bowes Inc., 227 F.3d 326, 328 (5th Cir. 2000).

131

Texas Beef Grp. v. Winfrey, 201 F.3d 680, 686 (5th Cir. 2000).

132

Rec. Doc. 9.

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