Great Northern & Southern Navigation Co LLC French America Line v. Certain Underwriters at Lloyd's, London

Filing 53

ORDER AND REASONS: IT IS ORDERED that the 8 motion to remand is DENIED WITHOUT PREJUDICE, subject to reconsideration upon after limited discovery on diversity of citizenship issues, as set forth in document. Signed by Judge Ivan L.R. Lemelle on 3/29/2019. (jls)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

GREAT NORTHERN & SOUTHERN
NAVIGATION CO. LLC FRENCH
AMERICA LINE

CIVIL ACTION

VERSUS

NO. 18-4665

CERTAIN UNDERWRITERS AT LLOYD’S
LONDON SUBSCRIBING TO POLICY
NUMBER B0621MFALL000216

SECTION: “B”(4)

ORDER & REASONS
Before

the

Court

are

Plaintiff

Great

Northern

&

Southern

Navigation Co. LLC French America Line’s Motion to Remand (Rec. Doc.
8), Defendants Certain Defendant at Lloyd’s Motion in Opposition
(Rec. Doc. 10), Plaintiff’s Reply (Rec. Doc. 17), Defendants’ SurReply (Rec. Doc. 18), Plaintiff’s Supplemental Memorandum in Support
of Motion to Remand (Rec. Doc. 39), and Defendants’ Supplemental
Memorandum in Opposition to Plaintiff’s Motion to Remand (Rec. Doc.
37). For reasons that follow,
IT IS ORDERED that the motion to remand is DENIED WITHOUT
PREJUDICE,

subject

to

reconsideration

upon

after

limited

discovery on diversity of citizenship issues. 1

1
French America made glaring misstatements in its pleadings, particularly
with incomplete, misquotes of various case holdings and facts. For example,
French America supports its waiver of removal contention by misquoting two Fifth
Circuit cases, Southland Oil Co. v. Mississippi Ins. Guar. Ass’n, 182 F. App’x
358 (5th Cir. 2006) and Rose City v. Nutmeg Ins. Co., 931 F.2d 13 (5th Cir.
1991), and also misquotes the holding of Settlement Funding, L.L.C. v. Rapid
Settlements Ltd., 851 F.3d 530 (5th Cir. 2017).

1

FACTS AND PROCEDURAL HISTORY
On

March

23,

2018,

Plaintiff

Great

Northern

&

Southern

Navigation Co. LLC French America Line (“French America”) filed a
petition

for

damages

Lloyd’s,

London

against

Subscribing

Defendant
to

Policy

Certain

Underwriters

at

Number

B0621MFALL000216

(“Defendant”) in the Twenty-Fourth Judicial District Court for the
Parish of Jefferson. See Rec. Doc. 8 at 1.

This marine contract

case arises from “certain alleged failures of the sewage system on
the M/V LOUISIANE that occurred in October 2016.” Rec. Doc. 10 at 1.
French America seeks to recover from a certain Marine Hull and War
insurance policy (“Subject Policy”) for repairs and other losses
that stem from the alleged incident. See id. Specifically, French
America alleges claims for breach of contract and bad faith. See
Rec. Doc. 8-2 at 2. Defendant asserts two counterclaims: Action for
Declaratory Judgment and Payment of a Thing Not Owed. See Rec. Doc.
24 at 14-20.
French America is an LLC organized under the laws of Louisiana.
See Rec. Doc. 1 at 2. According to the notice of removal, French
America is made up of two members who are individuals domiciled in
Jefferson Parish, Louisiana. See id. French America now alleges that
they are made up of several members, including a member that is a
citizen of the United Kingdom and a member that is an Australian
corporation. See Rec. Doc. 8-2 at 2-3. Then, in a supplemental
memorandum, French America asserts that it is made up of another

2

member who is an individual domiciled in Texas. See Rec. Doc. 1 at
2. That assertion came after Defendant corrected the citizenship of
one of its syndicates. Specifcally, Defendant clarified that Houston
Casualty Company is not a citizen of the United Kingdom but of Texas.
See Rec. Doc. 17 at 6. So, based on the notice and that clarification,
Defendant is either a citizen of Luxembourg (only) or Luxembourg,
the United Kingdom, Massachusetts, Norway, Minnesota, New York, and
Texas. 2 See Rec. Doc. 1 at 3-7.
On May 7, 2018, Defendant filed a notice of removal asserting
diversity jurisdiction and admiralty jurisdiction. See id. at 2. On
May 21, 2018, French America filed a motion to remand. See Rec. Doc.
8. On May 29, 2018, Defendant filed a memorandum in opposition. See
Rec. Doc. 10. On June 7, 2018, French American’s reply was added to
the

record.

See

Rec.

Doc.

17.

Subsequently,

on

the

same

day,

Defendant’s sur-reply was added to the record. See Rec. Doc. 18.
Each of the parties later filed supplemental memoranda. See Rec.
Doc. Nos. 37, 39.
LAW AND ANALYSIS
A. WAIVER
“For a contractual clause to prevent a party from exercising
its right of removal, the clause must give a ‘clear and unequivocal’
waiver of that right.” City of New Orleans v. Mun. Admin. Servs.,

2

In the notice, Defendant states its citizenship in two ways. The first being
if only the lead underwriter, Swiss Re International, is being sued. The second
being if each of the Defendants on the Subject Policy are being sued.
3

Inc., 376 F.3d 501, 504 (5th Cir. 2004). “There are three ways in
which a party may clearly and unequivocally waive its removal rights:
[1] by explicitly stating that it is doing so, [2] by allowing the
other party the right to choose venue, or [3] by establishing an
exclusive venue within the contract.” Ensco Int’l Inc. v. Certain
Underwriters at Lloyd’s, 579 F.3d 442, 443 (5th Cir. 2009)(internal
quotations omitted).
To support its argument that Defendant waived its right to
removal, French America points the court to two Fifth Circuit cases.
See Rec. Doc. 8-2 at 5-7. Specifcally, French America argues that
the language of the insurance contracts in those two cases is nearly
identical to the language in the insurance contract here. See id. at
5.

In

this

case,

the

Subject

Policy

states

“Choice

of

Law

&

Jurisdiction: This insurance shall be governed by and construed in
accordance with the laws of the State of Louisiana and each party
agrees to submit to the exclusive jurisdiction of any court of
competent jurisdiction within the United States of America.” Id. The
provision here does not clearly and unequivocally waive Defendant’s
right to removal. Specifcally, the provisions does not contain the
“at your request” language that is present in the provisions in the
two cases that French America relies upon. See City of New Orleans,
376 F.3d at 505 (5th Cir. 2004)(“[The Nutmeg Court’s] decision turned
not on the use of the word ‘jurisdiction,’ and not on venue or forum,
but on the [contract] giving one party the exclusive right to choose

4

the

forum

of

any

proceedings.”).

French

America

argues

that

permitting removal in this instance would render the language of the
provision meaningless and superfluous. See Rec. Doc. 8-2 at 7.
However, in this case, all of the syndicates of Defendant are not
domestic corporations, so it makes sense for a policyholder to
bargain for a clause requiring only that Defendant would submit to
jurisdiction in the United States. Contra Southland Oil Co. v. Miss.
Ins. Guar. Ass’n, 182 F. App’x 358, 362 (5th Cir. 2006); Rose City
v. Nutmeg Ins. Co., 931 F.2d 13, 15-16 (5th Cir. 1991). Therefore,
the Court finds that Defendant has not waived its right to removal.
B. ADMIRALTY AND DIVERSITY JURISDICTION
Federal courts are courts of limited jurisdiction. See Orlean
Shoring, LLC v. Patterson, 2011 U.S. Dist. LEXIS 36105 *1, *6 (E.D.
La. 2011). A federal district court has jurisdiction over a removed
action if it is a “civil action brought in a State court of which
the district courts of the United States have original jurisdiction.”
28 U.S.C. § 1441(a). The removing party has the burden to establish
the existence of jurisdiction. Winters v. Diamond Shamrock Chem.
Co., 149 F.3d 387, 397 (5th Cir. 1998). “To determine whether
jurisdiction is present for removal, [courts] consider the claims in
the state court petition as they existed at the time of removal.”
Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th
Cir. 2002). “Any ambiguities are construed against removal because

5

the removal statute should be strictly construed in favor of remand.”
Id.
Defendant alleges that jurisdiction is present for removal on
the

basis

of

both

admiralty

and

diversity

jurisdiction.

Specifically, as to admiralty jurisdiction, Defendant argues that
the saving suitors clause of § 1333 does not prohibit the removal of
maritime claims. See Rec. Doc. 10 at 10. The new version of § 1441
now permits removal of any claim within original jurisdiction of a
district court, including maritime and admiralty claims. See id. at
9. Defendant is mistaken as several sections of this Court have
disagreed with that proposition. See Gregoire v. Enter. Marine
Servs., LLC, 38 F.Supp.3d 749 (E.D. La. 2014) (Duval, J.); Bisso
Marine Co., Inc. v. Techcrane Int'l, LLC, 2014 U.S. Dist. LEXIS
126478, 2014 WL 4489618 (E.D. La. 2014) (Feldman, J.); Grasshopper
Oysters, Inc. v. Great Lakes Dredge & Dock, LLC, 2014 U.S. Dist.
LEXIS 103284, 2014 WL 3796150 (E.D. La. 2014) (Berrigan, J.); Barry
v. Shell Oil Co., 2014 U.S. Dist. LEXIS 23657, 2014 WL 775662 (E.D.
La. 2014) (Zainey, J.); Perrier v. Shell Oil Co., 2014 U.S. Dist.
LEXIS 70374, 2014 WL 2155258 (E.D. La. 2014) (Zainey, J.). Focusing
on the saving suitors clause in § 1333 and history of maritime
removal

jurisdiction,

those

sections

concluded

that

the

2011

Amendments to § 1441 did not change the traditional non-removability
of

general

maritime

law

claims.

F.Supp.3d at 764:

6

As

specified

in

Gregoire,

38

Under Section 1441(a), removal of civil actions is
permitted where the federal district court has "original
jurisdiction" over the claim. Section 1333 provides
jurisdiction to the federal court exclusively for in rem
actions and concurrently with the state courts for in
personam actions; without more, removal of maritime cases
instituted
in
state
courts
appears
to
apply,
superficially, under Section 1441(a). Yet Congress
carefully wrought Section 1333 to balance interests of
federalism and recognize historical development of
maritime law in state courts by including the saving to
suitors clause. Maritime claims initiated in state court
are, by definition, brought at common law under the saving
to suitors clause as an "exception" to the original
jurisdiction of the federal courts. If state court
maritime cases were removable under Section 1333, the
effect would be tantamount to considering all maritime law
claims as part of federal question jurisdiction under
Section 1331, eviscerating the saving to suitors clause
and undermining the holding and policies discussed at
length in Romero. That the saving to suitors clause does
not guarantee a non-federal forum but only common law
remedy, a rule oft cited by the Fifth Circuit, does not
lead to the conclusion that the suit is invariably
removable. As already established, maritime law claims
brought under the saving to suitors clause in state court
have
traditionally
required
some
other
basis
of
jurisdiction independent of Section 1333 to be removable,
supported by practical reasons and sound policy.
Congress' 2011 amendments to Section 1441 do not alter
this conclusion. Though Dutile determined that "[a]ny
other such action" under Section 1441(b) was an "Act of
Congress" prohibiting removal of saving to suitors clause
cases absent diversity and out-of-state defendants, the
removal of this language in no way modified the longstanding rule that general maritime law claims require
some other non-admiralty source of jurisdiction to be
removable. Congress has not given any indication that it
intended to make substantive changes to removal of
admiralty matters, and the Fifth Circuit has not indicated
otherwise. Despite the present debate over formalistic
administration of admiralty law in the context of removal
jurisdiction versus adherence to traditional admiralty
procedure, this Court is bound to follow the clear
precedent before it. Therefore, this Court finds that
general maritime law claims are not removable under

7

Section 1333 as part of the original jurisdiction of the
court and require an independent basis of jurisdiction.
In determining whether remand is appropriate, the Court
must "scrupulously confine ... jurisdiction to the precise
limits which the statute has defined," and construe doubts
concerning removal in favor of remand.
We join our colleagues by holding that the 2011 Amendments to § 1441
did not change the traditional non-removability of general maritime
law

claims

initiated

in

state

court,

and

such

claims

are

not

removable without an independent basis of subject matter jurisdiction.
Having
suitor

the

established

clause,

this

applicability
could

matter

be

independent basis of jurisdiction exists. We
whether

such

exists.

As

previously

of

the

savings

to

remanded

unless

an

must

now

determine

mentioned, Defendant alleges

that diversity jurisdiction exists. See Rec. Doc. 10 at 12. For
diversity jurisdiction to exist, the amount in

controversy

exceed

diversity between

$75,000,

and

there

must

be

complete

must

plaintiff and defendant. See Plaquemines Parish v. BEPCO, L.P., 2015
U.S. Dist. LEXIS 87880 *1, *29 (E.D. La. 2015). There is no dispute
here as to the amount in controversy. The dispute here is whether
there is complete diversity between French American and Defendant.3
Defendant, being the party that is seeking to invoke the
jurisdiction,

must

distinctively

3

and

affirmatively

Court’s

allege

Parties also dispute whether diversity jurisdiction is defeated by §1332. The
citizenship of the parties but be established before the Court can further analyze
this dispute.
8

each party’s citizenship. See Orlean Shoring, LLC, 2011 U.S. Dist.
LEXIS 36105 at *7.
Defendant contends that it alleged French America’s citizenship
on the notice of removal based on the documents filed with the
Louisiana Secretary of State which states that French America is
made up of two members who are individuals domiciled in Jefferson
Parish, Louisiana. See Rec. Doc. 1 at 2; Rec. Doc. 10 at 12.

It is

well-established in this nation that the citizenship of a limited
liability company is determined by the citizenship of all of its
members. See Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1089
(5th Cir. 2008)(stating that all federal appellate courts have held
that citizenship of a limited liability company is determined by the
citizenship of all of its members). In their Motion to Remand, French
America contends that their LLC is made up of several members,
including a member that is a citizen of the United Kingdom and a
member that is an Australian corporation. See Rec. Doc. 8-2 at 2-3.
Then, sometime later, in a supplemental memorandum, French America
asserts that it is made up of another member who is an individual
domiciled in Texas. See Rec. Doc. 1 at 2. That assertion came after
Defendant corrected the citizenship of one of its syndicates from
United Kingdom to Texas. See Rec. Doc. 17 at 6. Defendant argues
that

this

late

assertion

is

“factually

suspect”

and

does

not

conclusively establish that the individual was a member at the time

9

of removal. See Rec. Doc. 37 at 2. French America’s refusal to allege
its citizenship should not defeat removal. See Rec. Doc. 10 at 12.
With that, the Court is persuaded that Defendant shall be given
the opportunity to conduct jurisdictional discovery. See CG & JS
Enters., LLC v. H&R Block, Inc., 2014 U.S. Dist. LEXIS 154780 *1, *4
(E.D.

La.

2014)(“The

decision

whether

to

allow

jurisdictional

discovery rests within the sound discretion of the district court.”);
see also Garbin v. Gulf South Pipeline Co. LP, 2001 U.S. Dist. Lexis
18578 *1, *4 (E.D. La. (ordering limited discovery to establish
whether complete diversity exists). It would be unfair for the Court
to allow French America to have this case remanded without giving
Defendant

the

opportunity

Defendant

cannot

to

reasonably

conduct
be

jurisdictional

expected

to

have

discovery.
accurately

identified each of French America’s members and their citizenship
without the benefit of jurisdictional discovery. Therefore, the
Court will not remand the instant matter at this juncture. Parties
are

directed

to

engage

in

limited

jurisdictional

discovery

to

investigate the members of French American and citizenship of French
America’s members at the time of removal and related issues.
New Orleans, Louisiana, this 29th day of March, 2019.

___________________________________
SENIOR UNITED STATES DISTRICT JUDGE

10