Sheppard v. Liberty Mutual Insurance Company et al

Filing 144

ORDER & REASONS denying 61 Motion to Remand to State Court. Signed by Judge Sarah S. Vance on 11/17/2016. (mmm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JESSE FRANK SHEPPARD
VERSUS

CIVIL ACTION
NO. 16-2401

LIBERTY MUTUAL INSURANCE
COMPANY, ET AL.

SECTION “R” (3)

ORDER AND REASONS
Plaintiff Jesse Frank Sheppard moves to remand this case to the Civil
District Court for the Parish of Orleans. Because jurisdiction in this Court is
is proper under the Outer Continental Shelf Lands Act (OCSLA), Sheppard’s
motion is denied.

I.

BACKGROUND
This suit was originally filed in the Civil District Court for the Parish of

Orleans.1 Defendant Mosaic Global Holdings Inc. removed to this Court on
March 22, 2016. 2 In his complaint, Sheppard alleges that he worked “in
various positions” for Mosaic’s predecessor company, Freeport Sulphur

1
2

R. Doc. 1 at 1.
Id.

Company.3 During his time at Freeport, Sheppard was allegedly exposed to
asbestos “[o]n a daily basis.”4 Sheppard asserts that this exposure caused
him to develop asbestos-related cancer, lung cancer, and/or mesothelioma.5
Although Sheppard stopped working for Freeport in the early- to mid1990s,6 Sheppard’s asbestos-related ailments were first diagnosed in
October 2015.7
In addition to Freeport/Mosaic, Sheppard sues several defendants
involved in the manufacture, distribution, and sale of asbestos-containing
products that Sheppard allegedly encountered in the course of his work.8
Sheppard also brings claims against insurance companies that allegedly
provided coverage to defendants for asbestos-related claims and withheld
information from Sheppard about the danger of asbestos.9
Sheppard brings claims for “negligence, intentional tort, fraud, and
strict liability,” and alleges that all defendants are “jointly, severally, and in

R. Doc. 1-1 at 5.
Id. at 4.
5
Id. at 6.
6
Sheppard’s complaint is inconsistent on this point. Sheppard alleges
variously that his tenure at Freeport, and exposure to asbestos, ran from
“approximately 1967 through 1992,” from “approximately 1967 through
1994,” and “from 1967 through 1976.” R. Doc. 1-1 at 5, 6.
7
R. Doc. 1-1 at 6.
8
Id. at 6, 7.
9
Id. at 3, 4, 8.
2
3

4

solidio liable.” 10 He seeks damages for, among other things, physical and
mental pain, loss of life, loss of income, and medical expenses. 11
Sheppard now moves to remand this suit to state court. 12 Mosaic and
co-defendants Liberty Mutual Insurance Company and General Electric
oppose the motion, and assert that this Court may exercise jurisdiction under
the Outer Continental Shelf Lands Act (OCSLA).13 Defendants argue in the
alternative that the Court has federal question jurisdiction because the Outer
Continental Shelf is a federal enclave.

II.

LEGAL STANDARD
Unless a federal statute expressly provides otherwise, a defendant may

remove a civil action filed in state court to federal court if the federal court
would have had original jurisdiction over the case. 28 U.S.C. § 1441(a). The
removing party “bears the burden of showing that federal jurisdiction exists
and that removal was proper.” Mumfrey v. CVS Pharmacy, Inc., 719 F.3d
392, 397 (5th Cir. 2013) (citing Manguno v. Prudential Prop. & Cas. Ins. Co.,
276 F.3d 720, 723 (5th Cir. 2002)). In assessing whether removal was

10
11
12
13

Id. at 29.
Id.
R. Doc. 61.
R. Doc. 69; R. Doc. 71; R. Doc. 72.
3

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.” Manguno, 276 F.3d at 723 (citing Acuna v. Brown & Root, Inc.,
200 F.3d 335, 339 (5th Cir. 2000)).

III. DISCUSSION
Defendants argue that this Court may exercise jurisdiction based on
Sheppard’s allegation that a portion of his asbestos exposure occurred at
Freeport’s Caminada Facility, which is located on the Outer Continental
Shelf (OCS). Specifically, Sheppard alleges that:
From approximately 1967 through 1992, Jesse Frank Sheppard
was employed by and on the premises of Freeport’s Port Sulphur
Facility, Grand Isle Facility, Garden Island Bay facility,
Caminada Facility, as well as various other drilling rigs. On a
daily basis during this employment, he was exposed to
dangerously high levels of asbestos in the normal routine course
of his work. 14
The complaint further alleges that “[a]s a result of his exposure to asbestos
fibers, Jesse Frank Sheppard contracted asbestos-related cancer, lung

14

R. Doc. 1-1 at 5 (emphasis added).
4

cancer, and/or mesothelioma, which was first diagnosed on or around
October 21, 2015.” 15
In response, Sheppard argues that: (1) removal is inappropriate
because at various times in his complaint he alleges that his injury was
caused by exposure from 1967 to 1976, rather than through 1994; (2) new
evidence suggests that Sheppard was not, in fact, exposed to asbestos at the
Caminada Facility; and (3) even if Sheppard was exposed at Caminada, that
exposure was not a “but-for” cause of his injury because the bulk of
Sheppard’s alleged exposure occurred at other Freeport facilities not on the
OCS.
OCSLA contains an independent grant of federal jurisdiction. The
pertinent provision, 43 U.S.C § 1349(b)(1), states:
[T]he district courts of the United States shall have jurisdiction
of cases and controversies arising out of, or in connection with
. . . any operation conducted on the outer Continental Shelf which
involves exploration, development, or production of the
minerals, of the subsoil and seabed of the outer Continental
Shelf, or which involves rights to such minerals . . . .
The Fifth Circuit has described this language as “straightforward and broad.”
See Petrobras Am., Inc. v. Vicinay Cadenas, S.A., 815 F.3d 211, 215 (5th Cir.
2016); see also EP Operating Ltd. P’ship v. Placid Oil Co., 26 F.3d 563, 569

15

Id. at 6.
5

(5th Cir. 1994) (“[A] broad reading of the jurisdictional grant of section 1349
is supported by the expansive substantive reach of the OCSLA.”). Under
Fifth Circuit precedent, a district court has jurisdiction under OCSLA if “(1)
the facts underlying the complaint occurred on the proper situs; (2) the
plaintiff’s employment furthered mineral development on the OCS; and (3)
the plaintiff’s injury would not have occurred but for his employment.”
Barker v. Hercules Offshore, Inc., 713 F.3d 208, 213 (5th Cir. 2013). “A
plaintiff need not expressly invoke OCSLA in order for it to apply.” Id.
Sheppard does not meaningfully contest that the first two prongs of the test
are satisfied: Sheppard worked at Caminada, which is located on the OCS,
from mid-1991 through 1993, and Sheppard’s work there furthered mineral
development.16
Sheppard’s first argument is quickly disposed of. He contends that
removal is inappropriate because at various times in his complaint he alleges
that his injury was caused by exposure running from 1967 to 1976, rather
than through 1994.17 Sheppard’s inconsistencies, however, do not erase his
allegation that he was exposed to asbestos at Caminada, 18 and that he
“contracted asbestos related cancer, lung cancer, and/or mesothelioma as a

16
17
18

R. Doc. 71-1 at 2.
R. Doc. 1-1 at 5, 6.
Id. at 4.
6

result” of exposure lasting “[f]rom approximately 1967 through 1994.” 19 The
Court therefore finds that Sheppard’s compliant plainly alleges that
Sheppard was exposed to asbestos while working at the Freeport’s Caminada
facility.
Sheppard’s second argument is based on his own testimony, in a
deposition noticed by his own attorney, that he was not in fact exposed to
asbestos on Caminada.

It is true, as defendants emphasize, that

“jurisdictional facts are determined at the time of removal, and consequently
post-removal events do not affect that properly established jurisdiction.”
Louisiana v. Am. Nat. Prop. Cas. Co., 746 F.3d 633, 636 (5th Cir. 2014); see
also Spear Mktg., Inc. v. BancorpSouth Bank, 791 F.3d 586, 592 (5th Cir.
2015) (“[W]hen a defendant seeks to remove a case, the question of whether
jurisdiction exists is resolved by looking at the complaint at the time the
petition for removal is filed.” (emphasis in the original)). Nevertheless, the
Court may consider new evidence concerning facts as they existed at the time
of removal even though that evidence is not yet in the record. See Am. Nat.
Prop. Cas. Co., 746 F.3d at 637 n.2 (“[W]hen subsequent discovery reveals
that alleged jurisdictional facts were untrue at the time of removal a court
may hold that jurisdiction was lacking at the time of removal.” (emphasis in

19

Id. at 6.
7

original)); see also Patlan v. Apache Corp., No. 09-926, 2010 WL 2293272,
at *4 (E.D. Tex. May 11, 2010) report and recommendation adopted, No. 09926, 2010 WL 2293275 (E.D. Tex. June 3, 2010) (considering affidavit
submitted with defendant’s response to motion to remand). The Court
therefore considers Sheppard’s new evidence as it relates to OCSLA
jurisdiction.
After removal to this Court, in a deposition noticed by his attorney,
Sheppard testified that he was not, in fact, exposed to asbestos while working
at Caminada:
Q

Where did you work after Garden Island Bay?

A

Caminada

Q

Did you have any exposure to asbestos at Caminada?

A

No, ma’am.20

Sheppard, however, reversed himself on cross examination:
Q
. . . [Y]ou can’t tell us one way or the other whether any of
the insulation at Caminada did or did not contain asbestos?
A

Then, no. Now, yes.

Q
Okay. You believe it to have contained asbestos as you sit
here today?
A

20

Yeah

R. Doc. 61-6 at 3.
8

[Plaintiff’s counsel objects to form.]
Q

I’m sorry. Yes?

A

Yes 21

Furthermore, to the extent Sheppard did or does believe that he was not
exposed to asbestos at Caminada, this belief is based on unattributed
assurances from third parties:
Q
You mentioned earlier that you didn’t think that you were
exposed to asbestos at Caminada. Why do you believe that?
A

They said they had moved it all. 22

Sheppard also made clear that his job duties did not change when he moved
to Caminada23—he still worked with insulation. 24 Finally, Sheppard stated
that he doesn’t know the difference between asbestos and non-asbestos
insulation, and cannot tell whether insulation has asbestos in it by looking at
it. 25
The Court finds that Sheppard’s nebulous deposition is insufficient to
overcome the clear allegations in his pleadings that a portion of his exposure
occurred at Caminada. Sheppard’s new testimony regarding Caminada is
self-serving and self-contradictory, and it provides little foundation for

21
22
23
24
25

R. Doc. 69-2 at 1-2.
R. Doc. 69-1 at 29.
R. Doc. 69-1 at 28, 29.
R. Doc. 69-2 at 1.
R. Doc. 69-1 at 29.
9

Sheppard’s purported knowledge.

It therefore does not convincingly

“reveal[],” Am. Nat. Prop. Cas. Co., 746 F.3d at 637 n.2, that Sheppard’s
exposure was limited to his pre-Caminada work. Accordingly, the Court
finds that Mosaic has met its burden to show (1) that Sheppard worked on
the OCS in furtherance of mineral development, and (2) that, accepting as
true Sheppard’s allegations that he was exposed to asbestos while working at
Freeport, Sheppard was exposed to asbestos while on the OCS. To require
any more of Mosaic at this time would put defendants in the absurd position
of being forced to prove plaintiff’s case as a prerequisite to asserting federal
jurisdiction. Sheppard’s suggestion that this showing is insufficient—and
that defendants must prove that Sheppard was, in fact, exposed to asbestos
on Caminada—is therefore rejected.
In his third and final argument, Sheppard contends that even
discounting his deposition, the facts as alleged do not meet the third prong
of the Fifth Circuit’s test for OCSLA jurisdiction—the but-for causation
requirement. Given that he has alleged decades-long daily exposure to
asbestos, Sheppard argues that the roughly two years he spent at Caminada
cannot be a but-for cause of his illness.
Sheppard is wrong as a matter of law. Courts have long recognized that
when a plaintiff is subjected to multiple tortious events, and each is
10

independently sufficient to cause plaintiff’s injury, the but-for causation test
will not work to excuse any single causative factor. See Fowler V. Harper, et
al., 4 Harper, James and Gray on Torts § 20.2, at 100-101 (3d ed. 2016); W.
Page Keeton, et al., Prosser and Keeton on Torts § 41, at 265-67 (5th ed.
1984). Different courts have reached this result in different ways. Some find
that multiple sufficient causes may each serve as a but-for cause. See, e.g.,
Zann Kwan v. Andalex Grp. LLC, 737 F.3d 834, 846 (2d Cir. 2013) (“[A]
plaintiff's injury can have multiple ‘but-for’ causes, each one of which may be
sufficient to support liability.”). Others simply maintain that the but-for test
is inapplicable to independent, sufficient causes. Petes v. Hayes, 664 F.2d
523, 524-25 (5th Cir. 1981) (“The trial judge correctly instructed the jury as
to the meaning of proximate cause under Louisiana law, and he correctly
charged that the finding of more than one proximate cause does not
necessarily preclude recovery.”) The Fifth Circuit has explicitly applied the
latter approach to progressive illness caused by asbestos exposure. See In re
Manguno, 961 F.2d 533, 535 (5th Cir. 1992) (“We have abjured but for
causation in the context of lung cancer injuries alleged to have been caused
by asbestos.”). No matter which analytical approach is favored, the result is
clear: one sufficient cause is not excused by the presence of another.

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Given that the but-for test would not excuse Freeport from liability for
its OCS-based actions, it makes little sense to apply the same test to deny
Freeport OCSLA jurisdiction. This conclusion is supported by the context in
which the Fifth Circuit adopted the test in the first place. The but-for test is
designed to give effect to OCSLA’s broad reach over “cases ‘arising out of or
in connection with any operation conducted on the Outer Continental Shelf
which involves . . . production of the minerals . . . .” Recar v. CNG Producing
Co., 853 F.2d 367, 369 (5th Cir. 1988) (quoting 43 U.S.C. § 1349(b)(1)); see
also Tennessee Gas Pipeline v. Houston Cas. Ins. Co., 87 F.3d 150, 155 (5th
Cir. 1996) (“Use of the but-for test implies a broad jurisdictional grant under
§ 1349 . . . .”). Adopting Sheppard’s proposed interpretation would turn the
Fifth Circuit’s intent on its head, and allow a strained, technical application
of the but-for test to constrain the statutory language.
Accordingly, the Court finds that Sheppard’s allegation that he suffered
daily exposure to asbestos while working at Caminada, and that this
exposure led to his illness, is sufficient to invoke federal jurisdiction under
OCSLA. Sheppard’s allegations raise no distinction between his exposure at
Caminada and his exposure at the other Freeport facilities. Instead, the
complaint states simply that “[f]rom approximately 1967 through 1994, Jesse
Frank Sheppard was exposed to asbestos on a daily basis, and contracted
12

asbestos-related cancer, lung cancer, and/or mesothelioma as a result
thereof . . . .” Although Sheppard’s alleged non-Caminada exposure is no
doubt sufficient to cause illness, a fair reading of Sheppard’s complaint
suggests that his years at Caminada are an independently sufficient cause as
well. Exercising jurisdiction in this case is therefore appropriate under
OCSLA’s “broad” jurisdictional grant over cases “arising out of or in
connection with” mineral operations on the OCS. See Ronquille v. Aminoil
Inc., No. 14-164, 2014 WL 4387337, at *2 (E.D. La. Sept. 4, 2014) (denying
remand where “it appear[ed] that at least part of the work that Plaintiff
allege[d] caused his exposure to asbestos arose out of or in connection with
Shell’s OCS operations”).
To resist this conclusion, Sheppard cites a single Mississippi district
court case, Hammond v. Phillips 66 Co., No. 14-119, 2015 WL 630918, at *1
(S.D. Miss. Feb. 12, 2015). That case is neither binding, nor on point. In
Hammond, the district court found that the plaintiff’s alleged nine-month
exposure on the OCS was insufficient to cause asbestosis, a disease which
“results from the inhalation of asbestos fibers over a prolonged period of
time” Id at *4. Here, by contrast, there is no evidence to suggest that
Sheppard’s particular alleged illnesses require more than daily exposure for
two years.
13

Finally, Sheppard argues that this court should decline to exercise
supplemental jurisdiction over Sheppard’s state law claims under 28 U.S.C.
§ 1367(c). This request misunderstands the issue. Sheppard does not have
a mix of state and federal claims.

Rather, as explained above, all of

Sheppard’s claims “aris[e] out of, or in connection with” operations on the
OCS. 43 U.S.C § 1349(b)(1). The Court therefore maintains federal question
jurisdiction over all of his claims, and need not exercise supplemental
jurisdiction over any of them.

IV.

CONCLUSION

For the foregoing reasons, Jesse Frank Sheppard’s motion to remand
is DENIED.

17th
New Orleans, Louisiana, this _____ day of November, 2016.

_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

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