Hammond v. Phillips 66 Company et al

Filing 23

Memorandum Opinion and Order granting Plaintiff's 10 MOTION to Remand. This matter is remanded to the Circuit Court of Marion County, Mississippi. A separate Order of Remand shall be entered. Signed by District Judge Keith Starrett on February 12, 2015 (dsl)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
EASTERN DIVISION
WENDELL HAMMOND
V.

PLAINTIFF
CIVIL ACTION NO. 2:14cv119-KS-MTP

PHILLIPS 66 COMPANY, ET AL.

DEFENDANTS

MEMORANDUM OPINION AND ORDER
This matter is before the Court on the Plaintiff Wendell Hammond’s Motion to
Remand [10]. Having considered the submissions of the parties, the record, and the
applicable law, the Court finds that this action should be remanded to the Circuit Court
of Marion County, Mississippi.
I. BACKGROUND
On November 8, 2013, Wendell Hammond filed suit against Phillips 66 Company
and numerous other Defendants in the Circuit Court of Marion County, alleging injury as
a result of being exposed to asbestos while working in the oil industry from
approximately 1968 until 1979. (See Compl. [10-1].) Hammond alleges that he suffers
from asbestosis and related lung disease because of his frequent and sustained
exposure to drilling mud additives and products containing asbestos that were
negligently and defectively designed, manufactured, marketed, distributed, and sold by
each Defendant. (See Compl. [10-1] at pp. 1, 5-6.) Hammond charges the Defendants
with, inter alia, negligence, defective manufacture, defective design, strict liability, and
negligent infliction of emotional distress under Mississippi law. (See Compl. [1] at p. 7.)
The Complaint also asserts confusing claims against “Jones Act Defendants”
under “general maritime law” and the Jones Act to “the extent Plaintiff was exposed to
asbestos drilling mud and additives . . . while Plaintiff worked on oil rigs in the Gulf of

Mexico . . . .”

(Compl. [1] at pp. 7-8.) The Jones Act authorizes an injured seaman to

bring a civil action against his employer. See 46 U.S.C. § 30104. Hammond does not
claim that he was employed by any named Defendant. In April of 2014, Hammond’s
general maritime claims were dismissed via the state court’s Agreed Order Dismissing
Plaintiff’s General Maritime Law Claims [10-3].
On July 28, 2014, Chevron Phillips Chemical Company LP, as successor in
interest to Defendant Phillips 66 Company (“CPChem”), removed the proceeding to this
Court.1 (See Notice of Removal [1].) Removal is predicated on two grounds: (1) Title
43 U.S.C. § 1349(b)(1) of the Outer Continental Shelf Lands Act (“OCSLA”); and (2)
diversity of citizenship subject matter jurisdiction under 28 U.S.C. § 1332. The Notice of
Removal provides that OCSLA jurisdiction exists because Hammond alleges that he
was exposed to drilling mud products containing asbestos while he worked on KerrMcGee’s semi-submersible, which was engaged in mineral exploration or development
on the Outer Continental Shelf.2 As to diversity jurisdiction, the Notice of Removal
indicates that § 1332(a)’s amount in controversy requirement is met because Hammond
seeks a judgment in an amount exceeding $75,000, exclusive of interest and costs.

1

CPChem fully describes itself as follows: “Chevron Phillips Chemical Company LP,
as successor in interest to Phillips Petroleum Company f/k/a ConocoPhillips and n/k/a
Phillips 66 Company, and Phillips 66 Company f/d/b/a Drilling Specialties Company.”
2

Generally, the Outer Continental Shelf (“OCS”) refers to the seabed bordering the
coastal states at a distance greater than three geographical miles from the coast. See
Barker v. Hercules Offshore, Inc., 713 F.3d 208, 213 n.3 (5th Cir. 2013) (citing 43 U.S.C.
§§ U.S.C. 1301(a), 1331(a)). As to Texas, however, the OCS lies greater than three
marine leagues, approximately nine geographical miles, from the coast. See United
States v. Louisiana, 363 U.S. 1, 9 n.6, 65, 80 S. Ct. 961, 4 L. Ed. 2d 1025 (1960);
Employers Mut. Cas. Co. v. Samuels, 407 S.W.2d 839, 842-43 (Tex. Civ. App. 1966).

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CPChem argues that complete diversity exists between Hammond and all properly
joined Defendants, and that the apparent Mississippi citizenship of Defendants Oilfield
Service and Supply Company, Inc. (“OSS”) and GEO Drilling Fluids, Inc., individually
and as successor by merger with Mississippi Mud, Inc. (“Mississippi Mud”), should be
disregarded because these Defendants have been improperly joined. CPChem
contends that it timely removed the case within thirty (30) days of its receipt of
Hammond’s deposition transcript, which enabled CPChem to ascertain that the case
was removable.
On August 23, 2014, Hammond filed his Motion to Remand [10]. Hammond does
not allege any procedural defects in removal in support of his remand request. Instead,
Hammond challenges the existence of federal jurisdiction under OCSLA and 28 U.S.C.
§ 1332.
II. DISCUSSION
A.

General Removal Standards

“A district court has removal jurisdiction in any case where it has original
jurisdiction.” Gutierrez v. Flores, 543 F.3d 248, 251 (5th Cir. 2008) (citing 28 U.S.C. §
1441(a)). “The removing party bears the burden of establishing that federal jurisdiction
exists.” De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995) (citing Gaitor v.
Peninsular & Occidental S.S. Co., 287 F.2d 252, 253-54 (5th Cir. 1961)). A motion to
remand alleging a procedural defect in removal must be brought within thirty (30) days
of the filing of the notice of removal, but “the case shall be remanded” at any time before
final judgment if it appears that subject matter jurisdiction is lacking. 28 U.S.C. §
1447(c). Since federal courts are of limited jurisdiction and removal raises significant

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federalism concerns, the “removal statutes are to be construed strictly against removal
and for remand.” Eastus v. Blue Bell Creameries, L.P., 97 F.3d 100, 106 (5th Cir. 1996)
(citations omitted). Courts are to consider “jurisdictional facts as they existed at the time
of removal” in ruling on a motion to remand. Cavallini v. State Farm Mut. Auto Ins. Co.,
44 F.3d 256, 265 (5th Cir. 1995).
B.

OCSLA Jurisdiction, 43 U.S.C. § 1349(b)(1)

Section 1349 states in pertinent part:
[T]he district courts of the United States shall have jurisdiction of cases and
controversies arising out of, or in connection with (A) 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 . . . .
43 U.S.C. § 1349(b)(1). The United States Court of Appeals for the Fifth Circuit broadly
interprets this statutory text. See, e.g., In re Deepwater Horizon, 745 F.3d 157, 163 (5th
Cir. 2014), cert. denied, 135 S. Ct. 401 (2014); Barker, 713 F.3d at 213. In Barker, the
Fifth Circuit articulated “a but-for test” for determining the existence of OCSLA
jurisdiction, “asking whether: (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.” 713 F.3d
at 213 (citations omitted). In Deepwater Horizon, the Fifth Circuit articulated the
jurisdictional inquiry in slightly different terms, but still noted that § 1349 only requires “a
‘but-for’ connection.” 745 F.3d at 163 (citations omitted). “Courts typically assess
jurisdiction under this provision in terms of whether (1) the activities that caused the
injury constituted an operation conducted on the outer Continental Shelf that involved
the exploration and production of minerals, and (2) the case arises out of, or in

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connection with the operation.” Id. (citation and internal quotation marks omitted).
Hammond relies on the well-pleaded complaint rule in support of remand and
argues that federal jurisdiction is lacking because, following the dismissal of his maritime
claims, he only seeks to impose liability against the Defendants under Mississippi state
law. Hammond’s reliance on the well-pleaded complaint rule is misplaced because a
“plaintiff does not need to expressly invoke OCSLA in order for it to apply.” Barker, 713
F.3d at 213 (citing Amoco Prod. Co. v. Sea Robin Pipeline Co., 844 F.2d 1202, 1205
(5th Cir. 1988)); see also Deepwater Horizon, 745 F.3d at 163 n.4 (finding that removal
jurisdiction existed under OCSLA even though no federal claims appeared on the face of
the pleadings). Furthermore, the substantive law applicable to Hammond’s claims does
not determine the propriety of removal under OCSLA. See Deepwater Horizon, 745
F.3d at 164 (rejecting the plaintiffs’ attempt to intertwine the jurisdictional inquiry under §
1349 with the choice of law question); Barker, 713 F.3d at 220 (“Because OCSLA’s
jurisdictional provisions are independent from the sections outlining the applicable law,
the application of the law selected by the choice-of-law analysis [was not intended to]
affect the independent basis for federal jurisdiction conferred by the OCSLA.”) (citations
and internal quotation marks omitted). Hammond foregoing “federal law or maritime
law” and solely proceeding “under Mississippi state law[]” fails to require remand. (Pl.’s
Mem. of Law in Supp. of Mot. to Remand [11] at p. 5.)
Hammond also argues that remand is warranted under the Supreme Court’s
decision in Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 101 S. Ct. 2870, 69 L.
Ed. 2d 784 (1981). In Gulf Offshore, the Court considered “whether federal courts have
exclusive subject-matter jurisdiction over suits arising under OCSLA . . . .” 453 U.S. at

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477. The Court answered the inquiry in the negative. See id. at 484. Therefore, Texas
courts were found to have jurisdiction over a personal injury action arising under
OCSLA. See id.
The Court finds Gulf Offshore inapplicable to the subject dispute. Neither the
propriety of removal nor any remand-related issue was before the Supreme Court.
Further, it is well established that unless “there is an express declaration by Congress to
the contrary, all types of civil actions, in which there is concurrent original jurisdiction in
both federal and state courts, are removable.” Baldwin v. Sears, Roebuck & Co., 667
F.2d 458, 460 (5th Cir. 1982). Causes of action arising under OCSLA are clearly
removable to federal court. See Deepwater Horizon, 745 F.3d at 164; Barker, 713 F.3d
at 212-13. Consequently, the Supreme Court’s recognition of concurrent jurisdiction
between state and federal courts over OCSLA cases does not require the remand of this
action.
More pertinent to the merits of OCSLA jurisdiction, Hammond asserts that the
majority of his “exposure to asbestos-containing drilling mud products manufactured and
sold by the defendants in this case occurred while Plaintiff was employed on land-based
rigs.” (Pl.’s Mem. of Law in Supp. of Mot. to Remand [11] at p. 7.) Hammond claims
that out of the ten (10) years he worked in the oil industry, he only spent approximately
nine (9) months working offshore. The remainder of Hammond’s oil industry
employment was confined to land rigs in Louisiana and Oklahoma. CPChem does not
contest Hammond’s representations regarding the amount of time he worked offshore
versus on land.
The Court is unable to conclude that “a ‘but-for’ connection” exists between

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Hammond’s claimed injury, asbestosis, and his nine-month period of offshore
employment. Deepwater Horizon, 745 F.3d at 163. “Asbestosis is a cumulative and
progressive disease.” Porter v. Am. Optical Corp., 641 F.2d 1128, 1133 (5th Cir. 1981).
Ordinarily, the disease results from the inhalation of asbestos fibers over a prolonged
period of time. See id. (Asbestosis “is a culmination of body reaction to the particles
inhaled during years of exposure.”); Ins. Co. of N. Am. v. Forty-Eight Insulations, Inc.,
633 F.2d 1212, 1214 (6th Cir. 1980) (“It ordinarily takes years of breathing asbestos
fibers for asbestosis to occur.”) CPChem, as the party invoking federal jurisdiction,
offers no facts, arguments, or evidence enabling the Court to conclude that Hammond
would have developed asbestosis from the nine months he worked offshore regardless
of the approximate nine years he worked on land-based oil rigs. As a result, resolving
all doubts regarding the propriety of removal in favor of remand,3 the Court determines
that CPChem has failed to show that Hammond’s “injury would not have occurred but for
his [offshore] employment.” Barker, 713 F.3d at 213.4
The Fifth Circuit’s retention of jurisdiction in Barker and Deepwater Horizon does
not compel a different result. In Barker, the plaintiff filed suit alleging emotional distress
and resulting physical injuries after watching a co-worker fall to his death from a jack-up

3

See In re Hot-Hed Inc., 477 F.3d 320, 323 (5th Cir. 2007) (citing Carpenter v.
Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 366 (5th Cir. 1995); Acuna v. Brown & Root
Inc., 200 F.3d 335, 339 (5th Cir. 2000)).
4

The Court need not decide whether Hammond’s offshore employment “constituted
an ‘operation’ ‘conducted on the outer Continental Shelf’ that involved the exploration
and production of minerals” via Deepwater Horizon, 745 F.3d at 163, or whether the
employment occurred on “a proper OCSLA situs” under Barker, 713 F.3d at 213, in light
of this determination.

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rig attached to the OCS. See 713 F.3d at 211-12. The Fifth Circuit found it to be “clear
that but for his employment, Barker would not have been involved in the incident forming
the basis of this suit.” Id. at 213. In Deepwater Horizon, the requisite jurisdictional
connection existed because it was “undeniable that the oil and other contaminants
would not have entered into the State of Louisiana’s territorial waters but for [Appellees’]
drilling and exploration operation.” 745 F.3d at 163-64 (citation and internal quotation
marks omitted). Conversely, this action is “a challenging case for asserting original
federal jurisdiction” given the uncertainty regarding whether Hammond working offshore
for less than one year could have caused him to develop asbestosis. Id. at 164.
CPChem has failed to meet its challenge of establishing the existence of OCSLA
jurisdiction in light of this uncertainty.
C.

Diversity of Citizenship (Improper Joinder)

An exercise of diversity jurisdiction under § 1332 depends upon two basic
requirements: (1) the amount in controversy, exclusive of interest and costs, must
exceed the sum or value of $75,000; and (2) the action must be between citizens of
different states. 28 U.S.C. § 1332. The Court finds that the first requirement is clearly
met since Hammond demands a judgment “in a sum and amount to exceed $75,000,”
exclusive of interest and costs. (Compl. [10-1] at p. 12.) However, the second
requirement is lacking.
Hammond argues that complete diversity of citizenship between the parties does
not exist because both OSS and Mississippi Mud are non-diverse Defendants.
CPChem contends that OSS and Mississippi Mud have been improperly joined since
Hammond has no possibility of recovery against them under Mississippi law. The

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doctrine of improper joinder presents a narrow exception to the requirement of complete
diversity, and the party invoking the doctrine bears a heavy burden. McDonal v. Abbot
Labs., 408 F.3d 177, 183 (5th Cir. 2005) (citation omitted). The removing party must
show either of the following: “(1) actual fraud in the pleading of jurisdictional facts, or (2)
inability of the plaintiff to establish a cause of action against the non-diverse party in
state court.” Id. (quoting Travis v. Irby, 326 F.3d 644, 647 (5th Cir. 2003)). The first
method for establishing improper joinder is not at issue here. Under the second method,
“the test for fraudulent joinder is whether the defendant has demonstrated 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.” African Methodist
Episcopal Church v. Lucien, 756 F.3d 788, 793 (5th Cir. 2014) (quoting Smallwood v. Ill.
Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004)).5 A mere theoretical—as opposed to
a reasonable—possibility of recovery will not defeat a claim of improper joinder. See
Smallwood, 385 F.3d at 573 n.9 (citation omitted). Nonetheless, “the focus of the inquiry
must be on the joinder, not the merits of the plaintiff’s case.” Id. at 573.
A court has discretion to employ one of two standards to determine whether a
plaintiff has a reasonable basis for recovery against a non-diverse defendant under state
law. First, the court may conduct a Rule 12(b)(6)-type inquiry, looking at the wellpleaded allegations of the complaint to decide if they adequately state a claim for relief.
Id. (citations omitted). Second, “there are cases, hopefully few in number, in which a

5

The terms “fraudulent joinder” and “improper joinder” are interchangeable, although
the Fifth Circuit prefers the use of the latter. Smallwood, 385 F.3d at 571 n.1.

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plaintiff has stated a claim, but has misstated or omitted discrete facts that would
determine the propriety of joinder. In such cases, the district court may, in its discretion,
pierce the pleadings and conduct a summary inquiry.” Id. (citing Badon v. RJR Nabisco,
Inc., 224 F.3d 382, 389 n.10 (5th Cir. 2000)). A “court should ordinarily resolve a [claim
of] improper joinder by conducting a Rule 12(b)(6)-type analysis.” McDonal, 408 F.3d at
183 n.6. “[A]ny contested issues of facts and any ambiguities of state law must be
resolved in favor of remand.” Lucien, 756 F.3d at 793 (citation and internal quotation
marks omitted).
Both Hammond and CPChem invite the Court to pierce the pleadings in
considering the propriety of OSS’s joinder by citing to Hammond’s deposition testimony.
Hammond testified as follows regarding OSS:
Q.

You don't have any recollection of Oil Field Service & Supply Company out
of Laurel, Mississippi ever bringing mud to any of your rigs, do you?

A.

That would be a long way up to Louisiana for y'all to come. And I'm not
saying you wouldn't if you got the contract, but I'm -- you know --

MS. HARRIS: Answer his question.
Q.

(By Mr. Fortenberry) Let me ask you this: Do you have any recollection --

A.

I don't have any recollection, no.

Q.

-- of Oil Field Services & Supply Company ever bringing mud where you
were?

A.

No, sir.

(Hammond Dep. [22] 7-20.) This testimony would seem to negate any claim by
Hammond against OSS if one presumes that he was always present at the subject
drilling rigs and had knowledge of every shipment of mud received by each rig.

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However, resolving all ambiguities in Hammond’s favor, the testimony leaves open the
possibility that Hammond used OSS mud after it was brought to a drilling rig at a time
when he was not present. Even if Hammond’s deposition could be construed to
preclude any recovery against OSS, the Court must still consider the joinder of
Mississippi Mud.
CPChem does not submit any summary judgment-type evidence pertaining to
Hammond’s claims against Mississippi Mud. Instead, CPChem argues that Hammond
does not contest its “assertion that he also has no possibility of recovery against the
other in-state Defendant, Mississippi Mud, Inc.” (CPChem’s Resp. in Opp. to Mot. to
Remand [14] at p. 5.) The Court views Hammond’s request for remand differently.
“There are two defendants who are citizens of the state of Mississippi, neither of which
are improperly joined parties.” (Pl.’s Mem. of Law in Supp. of Mot. to Remand [11] at p.
7.) “There has been no fraudulent joinder of either O[SS or] . . . Mississippi Mud.” (Pl.’s
Mem. of Law in Supp. of Mot. to Remand [11] at p. 8.) That Hammond failed to present
any evidence or cite any testimony in support of his claims against Mississippi Mud does
not doom his remand request. It is CPChem, as the removing party, who bears the
“heavy burden of proving that” Hammond has “no possibility of recovery . . . against an
in-state defendant . . . .” Smallwood, 385 F.3d at 573, 574. The Court finds that
CPChem has not met that burden since the allegations of the Complaint adequately
state a claim for relief against Mississippi Mud under the Mississippi Products Liability
Act.6 Mississippi Mud is properly before the Court and diversity jurisdiction is absent

6

It is unnecessary for the Court to address the viability of each and every claim
asserted by Hammond. See Burrell v. Ford Motor Co., 304 F. Supp. 2d 883, 888 (S.D.

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based on the Fifth Circuit’s preferred method for resolving a claim of improper joinder.
See Smallwood, 385 F.3d at 573 (“Ordinarily, if a plaintiff can survive a Rule 12(b)(6)
challenge, there is no improper joinder.”).
Even overlooking the non-diverse citizenship of OSS and Mississippi Mud, the
Court finds that CPChem has failed to establish the existence of diversity jurisdiction.
The Fifth Circuit has “stated repeatedly that when jurisdiction depends on citizenship,
citizenship must be ‘distinctly and affirmatively alleged.’” Getty Oil Corp. v. Ins. Co. of N.
Am., 841 F.2d 1254, 1259 (5th Cir. 1988) (quoting McGovern v. Am. Airlines, Inc., 511
F.2d 653, 654 (5th Cir. 1975)). The citizenship of a limited partnership, such as
CPChem, is determined by the citizenship of its members, both limited and general.
See Bankston v. Burch, 27 F.3d 164, 168 (5th Cir. 1994) (citation omitted). CPChem’s
Notice of Removal [1] identifies neither its partners nor their respective citizenship. Like
a limited partnership, “the citizenship of a LLC is determined by the citizenship of all of
its members.” Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008);
see also Lawson v. Chrysler LLC, No. 4:08cv19, 2009 WL 961226, at *2 (S.D. Miss. Apr.
7, 2009) (citing cases finding that citizenship must be traced through the various
organizational levels of a LLC or LP). The Notice of Removal says nothing about the
members of Defendant Drilling Specialities Company, L.L.C. A corporation is
considered to be a citizen of the state where it was incorporated and the state where it
maintains its principal place of business for purposes of diversity. See 28 U.S.C. §
1332(c)(1). The states where Defendants Montello, Inc. and Dow Chemical Company

Miss. 2004) (rejecting the defendants’ fraudulent joinder arguments since the complaint
stated at least one claim).

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maintain their principal places of business are not identified in the Notice of Removal.
CPChem’s blanket assertion that no properly joined defendant “is a citizen of
Mississippi”7 falls short of the Fifth Circuit’s requirement “of clear, distinct, and precise
affirmative jurisdictional allegations.” Getty Oil Corp., 841 F.2d at 1259; cf. Harrell v.
Yokohoma Tire Corp., No. 3:08cv565, 2011 WL 1812785, at *6 (S.D. Miss. May 4, 2011)
(finding, sua sponte, averments indicating that defendants did not maintain their
principal places of business in Mississippi and were incorporated “in states other than
the State of Mississippi” to be insufficient under Getty Oil). The Court is prohibited from
merely assuming that diversity of citizenship exists between Hammond and any
Defendant. See Getty Oil Corp., 841 F.2d at 1260.
III. CONCLUSION
For the foregoing reasons, Hammond’s Motion to Remand [10] will be granted.
IT IS THEREFORE ORDERED AND ADJUDGED that the Motion to Remand [10]
is granted. A separate order remanding this cause to the Circuit Court of Marion
County, Mississippi shall follow.
SO ORDERED AND ADJUDGED this the 12th day of February, 2015.
s/Keith Starrett
UNITED STATES DISTRICT JUDGE

7

(Notice of Removal [1] at ¶ 14.)

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