Legeaux et al v. Borg-Warner Corporation et al

Filing 45

ORDER AND REASONS re #40 Motion to Remand - IT IS ORDERED that the motion to remand is DENIED. IT IS FURTHER ORDERED that no later than October 31, 2016, plaintiffs shall file a brief with the Court indicating whether they oppose dismissing Western Oceanic Services, Inc. If they do oppose dismissing Western Oceanic, then plaintiffs shallciting appropriate case lawexplain (1) how it is permissible to maintain Western Oceanic as a defendant in spite of Del. Code tit. 8, 278, and (2) whether a trustee must be appointed to maintain Western Oceanic as a defendant. If plaintiffs oppose dismissal, the removing defendants shall file a response by November 4, 2016. After considering the parties arguments, the Court will determine whether Western Oceanic should be dismissed. Signed by Judge Lance M Africk. (bwn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
NOLAN LEGEAUX ET AL.

CIVIL ACTION

VERSUS

No. 16-13773

BORG-WARNER CORPORATION ET AL.

SECTION I

ORDER AND REASONS
Plaintiffs Nolan Legeaux and Susan Legeaux have filed a motion 1 to remand
this asbestos lawsuit. The motion is opposed by defendants Puget Sound Commerce
Center, Inc., Vigor Industrial LLC, and Vigor Shipyards, Inc. (collectively, the
“removing defendants”). For the following reasons, the motion is denied.
STANDARD OF LAW
A defendant may generally remove a civil action filed in state court if the
federal court has original jurisdiction over the action. See 28 U.S.C. § 1441(a). The
removing party bears the burden of showing that federal jurisdiction exists. See Allen
v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995). In assessing whether
removal is 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 statutes should be strictly construed. See, e.g., Manguno v. Prudential Prop.
& Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). Though the Court must remand
the case to state court if at any time before final judgment it appears that it lacks

1

R. Doc. No. 40.

subject matter jurisdiction, the Court’s jurisdiction is fixed as of the time of removal.
See 28 U.S.C. § 1447(c); Doddy v. Oxy USA, Inc., 101 F.3d 448, 456 (5th Cir. 1996).
ANALYSIS
Plaintiffs argue that the removing defendants did not follow the correct
procedure for removal, that there are non-diverse defendants, and that the federal
officer removal statute, 28 U.S.C. § 1442, does not confer jurisdiction under these
facts. Because the Court concludes that diversity jurisdiction exists and that the
removal was not procedurally improper, the Court does not reach the question of
whether removal was appropriate under 28 U.S.C. § 1442. See In re Fema Trailer
Formaldehyde Prod. Liab. Litig., No. 07-1873, 2011 WL 976464, at *1 (E.D. La. Mar.
15, 2011) (“[B]ecause this Court finds that it has diversity jurisdiction over this
matter under section 1332, it need not consider the arguments relative to jurisdiction
under the Federal Officer Removal Statute[.]”).
First, there was nothing procedurally improper about the removal. Only those
defendants who have been properly joined and served at the time of removal must
consent to the removal. See 28 U.S.C. § 1446(b)(2)(A). 2 Plaintiffs attempted to serve
BorgWarner Morse TEC LLC (“Borg-Warner”) by mail using the Louisiana long-arm
statute, Louisiana Revised Statutes 13:3201, et seq. 3 When a plaintiff attempts
service using a state’s long-arm statute, state law governs whether the service is

The statute provides: “When a civil action is removed solely under section 1441(a),
all defendants who have been properly joined and served must join in or consent to
the removal of the action.”
3 R. Doc. No. 42-1.
2

2

proper. Stogner v. Neilsen & Hiebert Sys., Inc., No. 07-4058, 2008 WL 4587304, at *1
(E.D. La. Oct. 15, 2008) (Vance, J.).
Borg-Warner was not properly served prior to removal because plaintiffs first
mistakenly mailed the citation to the wrong address. 4 See Johnson v. Univ. Med. Ctr.
In Lafayette, 968 So. 2d 724, 725 (La. 2007) (“It is well settled that service of process
made on one other than the person authorized to accept such service is illegal and
without effect.”). Plaintiffs do not contest that, after they requested that the Clerk of
Court re-issue the citation to the correct address, Borg-Warner did not receive the
corrected service until August 12, 2016. 5 This lawsuit was removed one day earlier,
on August 11, 2016. 6
“[A] defendant is not ‘properly joined and served’ for the purposes of 28 U.S.C.
§ 1446(b)(2)(A), which governs whether a defendant must ‘join in or consent to the
removal of an action’ by a co-defendant, until it actually receives (or refuses to receive)
formal process sent by registered or certified mail[.]” Baxter v. Anderson, No. 16-142,
2016 WL 3748720, at *5 (M.D. La. June 21, 2016), report and recommendation

Plaintiffs do not rebut the removing defendants’ argument that service was mailed
to the wrong address, nor could they. Plaintiffs mailed the citation to “The
Corporation [sic] Company, 30600 Telegraph Rd, Ste 2345, Birmingham Farms, MI
48025.” R. Doc. No. 42-1, at 2. Attached to the removing defendants’ opposition is a
printout from the Delaware Secretary of State’s website which provides that BorgWarner’s registered agent is “The Corporation Trust Company,” located at
“Corporation Trust Center 1209 Orange St, Wilmington, DE 19801.” R. Doc. No. 422, at 2. The correctness of this information is supported by the fact that plaintiffs
later requested that the Clerk of Court re-issue the citation to the Delaware address.
R. Doc. No. 42-3, at 2.
5 R. Doc. No. 42-5, at 1.
6 R. Doc. No. 1.
4

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adopted, No. CV 16-142, 2016 WL 3747614 (M.D. La. July 11, 2016). Because BorgWarner had not been served as of August 11, 2016, Borg-Warner’s consent was not
required for removal.
Furthermore, there was no need for Western Oceanic Services, Inc. to consent
to removal because it is a nominal party. See In re Beazley Ins. Co., No. 09-20005,
2009 WL 7361370, at *4 (5th Cir. May 4, 2009) (no need for nominal parties to consent
to removal). In determining whether a party is nominal, “a court asks whether, in
the absence of the party, the Court can enter a final judgment consistent with equity
and good conscience, which would not be in any way unfair or inequitable.” Id.
Nominal parties are generally those without a real interest in the litigation. Wolff v.
Wolff, 768 F.2d 642, 645 (5th Cir. 1985).
“In making such a determination, courts may pierce the pleadings and, even
though the petition may state a claim against the nonremoving defendant, the case
may be removed if the defendants show by evidence outside the pleadings that there
is no reasonable basis to predict that plaintiffs could establish a claim against the
nominal defendant.”

Jacob v. Greyhound Lines, Inc., No. 02-2199, 2002 WL

31375612, at *4 (E.D. La. Oct. 21, 2002) (Vance, J.). “In so doing, courts may examine
‘summary judgment type evidence,’ [but must also] consider all of the factual
allegations in the light most favorable to plaintiffs and resolve all of the contested
issues of fact in favor of plaintiffs.” Id. (citation omitted). “Furthermore, the Court
must resolve any uncertainties as to the current state of controlling substantive law
in favor of plaintiffs.” Id. (citation omitted). Thus, defendants “must show, as a

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matter of law, that there is no reasonable basis for predicting that the plaintiffs might
establish liability on their claim against [Western Oceanic].” Id. (citation omitted).
A corporation’s capacity to sue or be sued in federal court is determined by the
law of the state in which it is incorporated. Fed. R. Civ. P. 17(b). Under Delaware
law, a dissolved corporation can neither sue nor be sued more than three years after
dissolution. Del. Code tit. 8, § 278. Both parties agree that Western Oceanic was a
Delaware corporation that was dissolved in 1996. 7 However, plaintiffs argue that
Western Oceanic remains amenable to suit because it is listed as an “active” company
on the Louisiana Secretary of State’s website. 8 Plaintiffs’ allegation, even if correct,
is not relevant.
When “deciding whether a dissolved corporation can be sued, federal courts
applying Louisiana law have held that Louisiana will apply the law of the
corporation’s state of incorporation.” Bisso Marine Co. v. Conmaco, Inc., No. 99-227,
1999 WL 804072, at *3 (E.D. La. Oct. 7, 1999) (Vance, J.); see also Lone Star
Industries, Inc. v. Redwine, 757 F.2d 1544, 1548, 1548 n.3 (5th Cir. 1985) (applying
Delaware law to determine viability of Delaware corporation after dissolution).
Because Western Oceanic was dissolved in Delaware more than three years ago,
plaintiffs could not maintain an action against it under Delaware law. Accordingly,
Western Oceanic’s consent to removal was not required. 9

R. Doc. No. 42-6, at 2.
R. Doc. No. 40-6, at 2.
9 The Court expresses no view on the removing defendants’ representation that “[t]he
only way Western Oceanic could become amenable to suit is through the appointment
7
8

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Second, complete diversity exists between the parties. “Removal is improper
when the action against a nondiverse defendant is automatically stayed [due to
bankruptcy] after the plaintiff files suit in state court, but removal is proper if the
bankruptcy court stays all actions against the nondiverse party before the plaintiff
files suit.” Bourke v. Exxon Mobil Corp., No. 15-5347, 2016 WL 836872, at *5 (E.D.
La. Mar. 4, 2016) (Morgan, J.) (citation omitted).

Eagle, Inc. does not destroy

diversity because Eagle declared bankruptcy before this lawsuit was filed in state
court. 10
Finally, the citizenship of Taylor-Seidenbach, Inc. is irrelevant.

U.S.

Magistrate Judge Roby recently denied 11 plaintiffs’ motion to add Taylor-Seidenbach
as a defendant.
CONCLUSION
For the foregoing reasons,
IT IS ORDERED that the motion to remand is DENIED.
IT IS FURTHER ORDERED that no later than October 31, 2016, plaintiffs
shall file a brief with the Court indicating whether they oppose dismissing Western
Oceanic Services, Inc. If they do oppose dismissing Western Oceanic, then plaintiffs
shall—citing appropriate case law—explain (1) how it is permissible to maintain

of a trustee.” R. Doc. No. 42, at 7 (citing In re Krafft-Murphy Co., Inc., 82 A.3d 696,
710 (Del. 2013)).
10 In Bourke v. Exxon Mobil Corp., another case involving Eagle, Judge Morgan
recognized that Eagle filed for bankruptcy on September 22, 2015. No. 15-5347, 2016
WL 836872, at *5.
11 R. Doc. No. 44.
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Western Oceanic as a defendant in spite of Del. Code tit. 8, § 278, and (2) whether a
trustee must be appointed to maintain Western Oceanic as a defendant. If plaintiffs
oppose dismissal, the removing defendants shall file a response by November 4,
2016. After considering the parties’ arguments, the Court will determine whether
Western Oceanic should be dismissed.

New Orleans, Louisiana, October 24, 2016.

_______________________________________
LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE

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