Thomas et al v. Exxon Mobil Corporation et al
ORDER AND REASONS re 45 , 47 MOTIONS for APPEAL OF MAGISTRATE JUDGE DECISION to District Court. The ruling of the Magistrate Judge is AFFIRMED. Plaintiffs' 44 Motion to Remand to State Court is granted. This matter is REMANDED to the Civil District Court for the Parish of Orleans. Signed by Judge Jane Triche Milazzo. (Attachments: # 1 Transmittal Letter) (ecm)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
TRAVIS THOMAS, ET AL
EXXON MOBIL CORPORATION, ET AL.
ORDER AND REASONS
Before the Court is Plaintiffs’ Motion to Remand (Doc. 44), Defendants
Shell Oil Company, Exxon Mobil Corporation, Gentilly, LLC, Frontier Merger
Sub LLC, and Cash America, Inc. of Louisiana’s Motion for Review of and
Objections to Magistrate Judge’s Ruling on Plaintiffs’ Motion for Leave to
Amend (Doc. 45), and Defendant Ingram Barge Company’s Motion for Appeal
of the Magistrate Judge’s Order Granting Leave to Amend (Doc 47). For the
following reasons, the ruling of the Magistrate Judge is AFFIRMED and the
Motion to Remand is GRANTED.
Plaintiffs brings this action alleging that exposure to benzene and
benzene-containing products at the hands of various defendants caused him to
develop acute myeloid leukemia. Defendants Shell Oil Company and Exxon
Mobil Corporation removed the action to this Court on grounds of diversity
jurisdiction. The Court denied Plaintiffs’ Motion to Remand, finding that
Jafri’s Faith, Inc. (“Jafri’s”), the only non-diverse defendant, was fraudulently
joined in an effort to defeat this Court’s diversity jurisdiction. Plaintiffs then
sought leave to amend their Complaint to assert more specific factual
allegations against Jafri’s.
The Magistrate Judge granted their Motion.
Plaintiffs now contend that this matter must be remanded due to the joinder
of a non-diverse defendant. Defendants respond in opposition and have filed
their own Motions for review of the Magistrate Judge’s ruling permitting the
filing of the Amended Complaint.
I. Motion for Review of Magistrate Judge’s Ruling
With the consent of the presiding district judge, a magistrate judge may
adjudicate non-dispositive pre-trial motions.1 A magistrate judge is afforded
broad discretion in resolving such motions.2 A party aggrieved by the
magistrate judge’s ruling may appeal to the district judge within fourteen days
after service of the ruling.3 The district judge may reverse only upon a finding
that the ruling is “clearly erroneous or contrary to law.”4 In order to meet this
high standard, the district judge must be “left with a definite and firm
conviction that a mistake has been committed.”5
28 U.S.C. § 636(b)(1)(A).
McCallon v. BP Am. Prod. Co., Nos. 05–0597, C/W 05–0700, 2006 WL 3246886, at
*2 (E.D.La. Nov. 8, 2006).
3 Fed. R. Civ. P. 72(a).
4 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a).
5 Yelton v. PHI, Inc., 284 F.R.D. 374, 376 (E.D. La.2012).
II. Motion to Remand
Generally, a defendant may remove a civil state court action to federal
court if the federal court has original jurisdiction over the action.6 The burden
is on the removing party to show “[t]hat federal jurisdiction exists and that
removal was proper.”7 When determining whether federal jurisdiction exists,
courts consider “[t]he claims in the state court petition as they existed at the
time of removal.”8 “In making a jurisdictional assessment, a federal court is
not limited to the pleadings; it may look to any record evidence, and may
receive affidavits, deposition testimony or live testimony concerning the facts
underlying the citizenship of the parties.”9 Removal statutes should be strictly
construed, and any doubt should be resolved in favor of remand.10
LAW AND ANALYSIS
As noted above, there are three Motions pending before the Court:
Plaintiffs’ Motion to Remand (Doc. 44), Defendants Shell Oil Company, Exxon
Mobil Corporation, Gentilly, LLC, Frontier Merger Sub LLC, and Cash
America, Inc. of Louisiana Motion for Review of and Objections to Magistrate
Judge’s Ruling on Plaintiffs’ Motion for Leave to Amend (Doc. 45), and
Defendant Ingram Barge Company’s Motion for Appeal of the Magistrate
Judge’s Order Granting Leave to Amend (Doc 47). The Court will first address
the Motions for review of the Magistrate Judge’s order granting leave to amend
as those Motions are dispositive of the issues before the Court.
28 U.S.C. § 1441(a).
Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).
9 Coury v. Prot, 85 F.3d 244, 249 (5th Cir. 1996).
I. Whether the Magistrate’s Order Allowing Amendment was “Clearly
Erroneous or Contrary to Law”
Defendants argue that the Magistrate’s ruling was erroneous because (1)
it was improper to consider a post-removal amendment that would deprive the
court of jurisdiction, (2) the amended complaint still fails to state a claim
against Jafri’s, and (3) the Magistrate Judge applied the Hensgens factors
incorrectly. The Court will address these arguments in turn.
A. Whether a Post-Removal Motion to Amend that Deprives the
Court of Jurisdiction May be Considered
The Magistrate correctly noted that the Court’s earlier finding of
fraudulent joinder was tantamount to dismissing Plaintiffs’ claims against
Jafri’s without prejudice.11
Accordingly, Plaintiffs’ Motion to Amend was
properly treated as a motion to add a defendant. Because the addition of Jafri’s
would destroy diversity and mandate remand, the proposed amendment was
properly analyzed under 28 U.S.C. § 1447(e).
Defendants first argue that granting leave to amend is improper because
post-removal amendments typically do not divest a district court of the power
to hear a cases.12 This general principle is, however, in tension with the plain
language of 28 U.S.C. § 1447(e), which dictates that the post-removal addition
of a non-diverse defendant mandates remand.
Defendants appear to be
advocating for a rule that a Plaintiffs can never amend his complaint to
successfully state a claim against a defendant after that defendant has been
found to be fraudulently joined in the state court petition. The Court finds no
Int'l Energy Ventures Mgmt., L.L.C. v. United Energy Grp., Ltd., 818 F.3d 193, 210
(5th Cir. 2016)
12 Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th Cir. 1995).
jurisprudential support for this position,13 and indeed the same is counter to
the interests of judicial efficiency. As the Magistrate correctly noted, Plaintiffs
have an interest in litigating all claims arising from the same factual
occurrences in the same court. Accordingly, it was not error for the Magistrate
to consider Plaintiffs’ Motion to Amend.
B. Whether the Amended Complaint States a Claim Against
Defendants next argue that the Magistrate Judge improperly found that
the amended complaint states a claim against Jafri’s. Plaintiffs again raises
claims of negligence against Jafri’s as the seller of hazardous benzenecontaining gasoline.
Defendants argue that Plaintiffs still fails to allege
sufficient factual allegations against Jafri’s. Again, the Court notes that in
considering the sufficiency of a claim, a plaintiff must plead enough facts “to
state a claim to relief that is plausible on its face.”14 A claim is “plausible on
its face” when the pleaded facts allow the court to “[d]raw the reasonable
inference that the defendant is liable for the misconduct alleged.” 15 A court
must accept the complaint’s factual allegations as true and must “draw all
reasonable inferences in the plaintiff’s favor.”16 The Court need not, however,
accept as true legal conclusions couched as factual allegations.17”
See LC Farms, Inc. v. McGuffee, No. 2:12-CV-165-SA-JMV, 2012 WL 5879433, at *2
(N.D. Miss. Nov. 21, 2012) (“Notably, Defendants have been unable to point the Court toward
any cases in which the complete diversity of the parties has been destroyed by similar
circumstances and yet the court has retained jurisdiction. Nor, in this Court's own course of
review, has it been able to find authority to disregard an amendment made as a matter of
course, which rehabilitated a previously deficient claim against a party present in the state
14 Ashcroft v. Iqbal, 556 U.S. 662, 667 (2009) (quoting Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 547 (2007)).
16 Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232 (5th Cir. 2009).
17 Iqbal, 556 U.S. at 667.
[A] non-manufacturing seller of a defective product can be held liable
outside of the provisions of the LPLA, ‘but only if he knew or should have
known that the product sold is defective.’”18 In the original state court petition,
Plaintiffs’ sole factual allegation specific to Jafri’s was that it sold gasoline to
Plaintiff. Plaintiffs proposed amendment now specifically alleges that Jafri’s
either failed to investigate benzene-related defects in the products it sold or
that it actively concealed the potentially toxic effects of the same. Read in the
light most favorable to Plaintiffs, this is sufficient to state a negligence claim
against Jafri’s. Accordingly, amendment was proper on this ground.
Whether the Magistrate Correctly Applied the Hensgens
Defendants finally argue that the Magistrate incorrectly applied the
Hensgens factors in allowing amendment. In Hensgens v. Deere & Co., the Fifth
Circuit set out the following factors that must be considered when an
amendment seeks to add a non-diverse defendant that would destroy
jurisdiction: (1) the extent to which the purpose of the amendment is to destroy
diversity, (2) whether the plaintiff has been dilatory in asking for amendment,
(3) whether plaintiff will be significantly injured if amendment is not allowed,
and (4) any other factors bearing on the equities.19
As the Magistrate correctly noted, it is clear from Plaintiffs’ pleadings
that they would prefer to litigate this matter in state court. Upon examination
of the record and in consideration of the equities, however, he concluded that
there was insufficient evidence to indicate that this was their principal
motivation. The Magistrate correctly found that it is in Plaintiffs’ best interest
Wornner v. Christian Home Health Care, Inc., No. 13-6416, 2014 WL 130331, at *4
(E.D. La. Jan. 14, 2014).
19 833 F.2d 1179 (5th Cir. 1987).
to pursue litigation against all alleged wrongdoers in the same court. The
record contains no allegation of undue delay on the part of the Plaintiffs.
Furthermore, Plaintiffs would be presented with undue hardship if they were
forced to litigate their claims in two courts. Accordingly, the Magistrate’s
finding that the Hensgens factors favor amendment is not clearly erroneous.
II. Plaintiffs’ Motion to Remand
Having found that Plaintiff’s amendment to allege sufficient claims
against Jafri’s was appropriate, the court is without discretion to retain
jurisdiction over this matter.20 Because Plaintiff alleges facts and asserts
claims against a non-diverse defendant, this action must be remanded
pursuant to 28 U.S.C. § 1447(e) for lack of subject matter jurisdiction.
For the foregoing reasons, the ruling of the Magistrate Judge is
AFFIRMED and Plaintiffs’ Motion to Remand is GRANTED. This matter is
REMANDED to the Civil District Court for the Parish of Orleans.
New Orleans, Louisiana this 31st day of July, 2017.
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE
Mills Grp. Ltd. v. Oceanografia, S.A. de C.V., No. CIV.A. H-08-3449, 2009 WL
3756931, at *2 (S.D. Tex. Nov. 6, 2009).
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