Hernandez v. Central Rock Corporation et al

Filing 17

ORDER AND REASONS granting 8 Motion to Remand to State Court. Signed by Judge Ivan L.R. Lemelle on 1/15/2016. (ijg) (Additional attachment(s) added on 1/19/2016: # 1 Remand Letter) (ijg).

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
MARIA A. HERNANDEZ

CIVIL ACTION

VERSUS

NO. 15-6066

CENTRAL ROCK CORPORATION, ET AL.

SECTION "B"(5)

ORDER AND REASONS
Before

the

Court

is

Maria

Hernandez’s

(hereinafter

“Hernandez” or “Plaintiff”) motion to remand the above-captioned
matter back to Civil District Court for the Parish of Orleans.
(Rec.

Doc.

No.

8).

Defendant,

Lippmann-Milwaukee,

Inc.

(“Lippmann”), removed the action to federal court on November 18,
2015 and has now filed a memorandum in opposition to the motion to
remand. (Rec. Doc. No. 9). For the reasons outlined below,
IT IS ORDERED that the Motion is GRANTED.
I.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY
This case arises out of a horrific incident in which the

Plaintiff’s son, Milton Hernandez, was working at a concrete
crushing operation when he was pulled into a concrete crushing
machine and killed. Plaintiff, a Louisiana citizen, filed suit in
Civil District Court in Orleans Parish on numerous Louisiana tort
law grounds, including, but not limited to, negligence, products
liability,
Hernandez’s

and

wrongful

Supplemental

death.

(Rec.

Doc.

and

Amending

No.

Petition

1-2

at

3-6).

named

five

defendants: Central Rock Corporation (“Central Rock”), a Louisiana

corporation;

Scott

Materials,

Inc.

(“Scott

Materials”),

a

Louisiana corporation; Lippmann, a Wisconsin corporation; Superior
Industries,

Inc.

(“Superior”),

a

Minnesota

corporation;

and

McCourt & Sons Equipment, Inc. (“McCourt”), a Texas corporation.
On November 18, 2015, Lippmann filed a Notice of Removal, alleging
that this Court’s diversity jurisdiction supports removal because
the only Louisiana defendants, Central Rock and Scott Materials,
were improperly joined. (Rec. Doc. No. 1 at 5). Thereafter,
Plaintiff filed the instant motion to remand, contending that the
following facts (laid out in the original and amended petitions)
support the joinder of both Central Rock and Scott Materials.
Milton Hernandez worked as a laborer for South East Personnel
Leasing, Inc. (“South East”). (Rec. Doc. No. 1-4 at 2). South East
provided professional employer services to Southwinds Express
Construction, LLC (“Southwinds”). (Rec. Doc. No. 1-4 at 2). At the
time of the accident, Milton Hernandez was working for Southwinds
and/or South East at a concrete crushing operation located in
Scott, Louisiana. (Rec. Doc. No. 1-4 at 2). The concrete crushing
operation was allegedly operated by Central Rock and/or Scott
Materials, and Scott Materials allegedly owned or leased the
property on which the crushing occurred. (Rec. Doc. No. 1-4 at 23). The ambiguity in the petition over which entities own and
control each aspect of the business seems to arise from the fact
that a number of the business entities are closely related to

others. Michael Flahrety seemingly runs much of the business
through a number of different LLCs, each of which he owns to some
extent.

In

his

affidavit

supporting

Lippmann’s

opposition,

Flahrety reveals that he is a director of Scott Materials, that he
is the president and director of Central Rock (which has no
employees other than Flahrety), and that he owns some unspecified
stake in Southwinds. (Rec. Doc. No. 9-1 at 1).
The crushing operation consisted of a crushing plant that
used concrete crushing units and a conveyor system. (Rec. Doc. No.
1-4 at 3). The crushing units and the conveyor systems were
allegedly manufactured by Lippmann and/or Superior before being
sold to McCourt. (Rec. Doc. No. 1-4 at 3). Apparently McCourt then
sold the machinery to Scott Materials and/or Central Rock. (Rec.
Doc. No. 1-4 at 3). On October 28, 2014, Milton Hernandez was
working to remove debris from a jammed conveyor when another
employee mistakenly “energized” the machine. (Rec. Doc. No. 1-4 at
3). As a result, Milton Hernandez was pulled into the concrete
crushing unit where he was crushed to death. (Rec. Doc. No. 1-4 at
3).
II.

THE PARTIES’ CONTENTIONS

Plaintiff

contends

that

the

burden

for

showing

improper

joinder is on the removing party (in this case, Lippmann) to prove
that “there is absolutely no possibility that the plaintiff will
be able to establish a cause of action against the in-state

defendant in state court.” (Rec. Doc. No. 8-1 at 2) (quoting Green
v. Amareda Hess Corp., 707 F. 2d 201, 205 (5th Cir. 1983)). She
maintains that her original and supplemental petition “clearly and
succinctly

set

forth

claims

against

Central

Rock

and

Scott

Materials,” creating a “reasonable connection between the incident
at issue and the non-diverse Defendants.” (Rec. Doc. No. 8-1 at
3).

Further,

Plaintiff

cites

to

records

compiled

by

the

Occupational Safety and Health Administration (“OSHA”) during its
investigation of the incident. Particularly, Plaintiff points to
the fact that OSHA cited both Central Rock and Scott Materials for
violations as a result of the incident. (Rec. Doc. No. 8-1 at 46). She also cites to a number of other records obtained through
discovery

which

allegedly

support

remand,

including

leases,

permits, witness statements, and insurance policies. (Rec. Doc.
No. 8-1 at 6-7). Hernandez contends that Lippmann’s removal of
this

action

is

a

waste

of

this

Court’s

time

and

resources,

bordering on a violation of Rule 11 of the Federal Rules of Civil
Procedure. (Rec. Doc. No. 8-1 at 1).
Lippmann maintains that the “pertinent inquiry is whether
‘there is . . . [a] reasonable basis for the district court to
predict that the plaintiff might be able to recover against [the]
in-state defendant.’” (Rec. Doc. No. 9 at 6) (quoting Smallwood v.
Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004)). Further,
Lippmann contends that the Court should “pierce the pleadings” and

consider “summary-judgment type evidence” in making this inquiry.
(Rec. Doc. No. 9 at 8-9). Relying on the affidavit of Michael
Flaherty, Lippmann contends that there is no reasonable basis to
believe that Plaintiff will be able to recover against Central
Rock or Scott Materials because neither entity “owned, operated,
or maintained any of the rock crushing equipment and never had any
employees involved in the rock crushing operations.” (Rec. Doc.
No. 9 at 6-7). Moreover, Lippmann asserts that Plaintiff has failed
to counter that evidence because the OSHA records are inadmissible
hearsay and should not be considered by the Court. (Rec. Doc. No.
9 at 9-10).

For those reasons, Lippmann maintains that joinder

was improper and urges the Court to deny the motion to remand.
III. LAW AND ANALYSIS
The federal removal statute provides that “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.” 28 U.S.C. § 1441. Here, Lippmann removed the
action on the basis of diversity jurisdiction. Lippmann claims
that complete diversity exists because the Plaintiff is a Louisiana
citizen and the only defendants residing in Louisiana, Central
Rock and Scott Materials, were improperly joined.
The United States Court of Appeals for the Fifth Circuit has
recognized “two ways to establish improper joinder: (1) actual
fraud in the pleading of jurisdictional facts, or (2) inability of

the plaintiff to establish a cause of action against the nondiverse party in state court.” Smallwood v. Ill. Cent. R.R. Co.,
385 F.3d 568, 573 (5th Cir. 2004) (en banc) (internal quotation
marks and citation omitted). It is the latter of the two at issue
here; in particular, whether Hernandez has established a cause of
action against Central Rock and Scott Materials. The burden rests
with the removing party, Lippmann, to show by clear and convincing
evidence “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.” Int’l Energy Ventures Mgmt., L.L.C. v. United Energy
Grp., Ltd., 800 F.3d 143, 149 (5th Cir. 2015) (quoting Smallwood,
385 F.3d at 573). To evaluate Plaintiff’s chances of recovery
against Central Rock and Scott Materials, this 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.”
Smallwood, 385 F.3d at 574. “Ordinarily, if a plaintiff can survive
a

Rule

12(b)(6)

challenge,

there

is

no

improper

joinder.”

Smallwood, 385 F. 3d at 573.
When evaluating the sufficiency of the complaint in this
context, courts “must apply the applicable state-law pleading
standard.” Masonry Solutions Int’l, Inc. v. DWG & Associates, Inc.,

2015 WL 6696790, No. 15-2450, at *3 (E.D. La. Nov. 2, 2015) (citing
Int’l Energy Ventures, 800 F.3d at 149). Under Louisiana law, the
“pertinent inquiry is whether, in the light most favorable to the
plaintiff, and with every doubt resolved in the plaintiff’s favor,
the

petition

states

any

valid

cause

of

action

for

relief.”

Scheffler v. Adams and Reese, LLP, 950 So. 2d 641, 647 (La. 2007).
“[M]ere conclusions of the plaintiff unsupported by facts will not
set forth a cause or right of action.” Id. at 646-47.
Here, Hernandez’s petition clearly states valid causes of
action against both Central Rock and Scott Materials. Hernandez
alleges that Central Rock and/or Scott Materials operated the
concrete crushing operation where her son worked. (Rec. Doc. No.
1-4 at 3). Further, she claims that the concrete crushing unit and
the conveyor were owned by Scott Materials and/or Central Rock
and/or Southwinds. (Rec. Doc. No. 1-4 at 3). She also contends
that Scott Materials and/or Central Rock owned or leased the land,
buildings, and appurtenances making up the crushing plant. (Rec.
Doc. No. 1-4 at 3). Based on their ownership and/or control,
Plaintiff asserts that their negligence led to the death of her
son.
More specifically, she alleges that Central Rock and/or Scott
Materials owed a duty to Milton Hernandez to: “keep the Plant in
good working condition, free of defects and fit for its intended
purpose; maintain proper Lockout/Tagout procedures for the Plant,

such that the equipment could be energized safely; and maintain
proper

guards

around

the

Plant.”

(Rec.

Doc.

No.

1-4

at

5).

Hernandez then alleges that Central Rock and/or Scott Materials
breached those duties, leading to the death of Milton Hernandez.
Plaintiff’s petition provides facts that support each element of
negligence under Louisiana law, including duty, breach, causation,
and damages. Long v. State ex rel. Dept. of Transp. And Dev., 916
So. 2d 87, 101 (La. 2005). ((Rec. Doc. No. 1-4 at 5). Taking all
of

Plaintiff’s

allegations

as

true,

she

has

established

a

reasonable basis for this Court to believe that she may be able to
recover on her negligence claim. Thus, under the Rule 12(b)(6)type standard, joinder does not appear improper.
While
district

such

court

a
to

conclusion
remand

the

is

ordinarily

case

to

state

sufficient
court,

for

a

Lippmann

maintains that this Court should take the further step of piercing
the pleadings and conducting a summary-judgment-type inquiry. In
cases where the plaintiff has adequately stated a claim but
“misstated or omitted discrete facts” relevant to the joinder
inquiry, “the district court may, in its discretion, pierce the
pleadings and conduct a summary inquiry.” Smallwood, 385 F. 3d at
573. If a district court chooses to conduct such an analysis, it
should avoid “moving beyond jurisdiction and into a resolution of
the merits.” Id.

In opposition to the motion to remand, Lippmann contends that
Hernandez has misstated facts regarding Central Rock and Scott
Materials’

ownership

operation.

(Rec.

Doc.

and

control

No.

9

at

of

the

6-7).

concrete

crushing

Accordingly,

Lippmann

maintains that the Court should consider summary judgment type
evidence and relies on the affidavit of Michael Flahrety to support
its fraudulent joinder claim. (Rec. Doc. No. 9 at 7). Flahrety’s
affidavit maintains that neither Scott Materials nor Central Rock
“had any involvement with: (a) supervision of the workers at the
site; (b)safety programs and training of workers at the site; (c)
financing of rock crushing operations and profit therefrom; [or]
(d)reporting the death of Hernandez.” (Rec. Doc. No. 9-1 at 2).
Moreover, Flaherty claims that neither Central Rock nor Scott
Materials were involved with the rock crushing operations on the
property in question. (Rec. Doc. No. 1-3 at 10-12). Lippmann claims
that this evidence sufficiently supports the improper joinder
claim because Hernandez has not provided any admissible evidence
to counter it.
However, Plaintiff’s motion to remand points to a commercial
general

liability

policy

insuring

Scott

Materials

for

“stone

crushing operation[s]” occurring at the same property where Milton
Hernandez was killed in Scott, Louisiana. (Rec. Doc. Nos. 8-1 at

6; 8-11).1

Based upon these conflicting pieces of evidence, this

Court must conclude that it is a disputed fact whether either
company had control of or engaged in the rock crushing operation.
Accordingly, Lippmann has not carried its burden of demonstrating
that there is no possibility of recovery by plaintiff against the
in-state defendants, meaning joinder of the in-state defendants
was not improper and complete diversity does not exist.
IV.

CONCLUSION

In light of the foregoing,
IT IS ORDERED that the motion is GRANTED. This Court concludes
that there is a reasonable basis to predict that the plaintiff
might be able to recover against the in-state defendants. As such,
Lippmann, the removing party, has failed to satisfy the heavy
burden

of

proving

improper

joinder.

Consequently,

the

above-

captioned matter is REMANDED to the Civil District Court for the
Parish of Orleans.
New Orleans, Louisiana, this 15th day of January, 2016.

____________________________
UNITED STATES DISTRICT JUDGE

While liability insurance is not admissible to prove negligence or other
wrongful conduct, it is admissible to prove agency, ownership, or control.
FED. R. EVID. 411.
1