Williams Transport, LLC v. Driver Pipeline Company, Inc. et al

Filing 24

ORDER denying 4 Motion to Remand to State Court; granting in part and denying in part 9 Motion to Strike; granting 17 Motion to Dismiss for the reasons stated in the order. Signed by District Judge Daniel P. Jordan III on December 12, 2013. (SP)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF MISSISSIPPI
JACKSON DIVISION
WILLIAMS TRANSPORT, LLC

PLAINTIFF

VS.

CIVIL ACTION NO. 4:13CV76 DPJ-FKB

DRIVER PIPELINE COMPANY, INC.,
BUCKLEY EQUIPMENT SERVICES, INC., AND
XYZ INDIVIDUALS AND ABC ENTITIES

DEFENDANTS

ORDER
This contract and business-tort case is before the Court on Plaintiff Williams Transport,
LLC’s Motion to Remand [4], Defendant Driver Pipeline Company, Inc.’s Motion to Strike [8],
and Defendant Buckley Equipment Services, Inc.’s Motion to Dismiss [17]. For the reasons that
follow, the motion to remand is denied, the motion to strike is granted in part and denied in part,
and the motion to dismiss is granted.
I.

Facts and Procedural History
In June 2009, Williams and Driver entered into a contract under which Williams was to

clear a 44-mile right-of-way in Jasper County, Mississippi. Driver ultimately terminated its
contract with Williams. Williams alleges that Defendant Buckley Equipment Services, Inc.,
“tort[i]ously, wrongfully and knowingly conspired with and convinced Driver Pipeline to
wrongfully terminate Driver Pipeline’s contract with Plaintiff and assign the remaining portions
of Plaintiff’s work and contract to Buckley.” Compl. [1-4] ¶ 12.
Williams filed suit in Jasper County Circuit Court on November 15, 2010, against Driver,
Buckley, and John Doe Defendants, alleging state-law-contract and tort claims. Williams served
Driver on November 24, 2010, but did not effect service upon Buckley, the only non-diverse
defendant. Driver timely removed the case to this Court on December 22, 2010. See Williams

Transport, LLC v. Driver Pipeline, Inc., No. 4:10cv216-CWR-FKB. In its Notice of Removal,
Driver contended that Williams had no viable cause of action against Buckley, thereby making its
joinder improper and resulting in diversity jurisdiction. Williams moved to remand, arguing that
it could state a claim against Buckley. On January 31, 2011, the Court entered an Agreed Order
of Remand.
Following remand, the parties litigated an arbitration issue that ultimately resulted in an
opinion from the Mississippi Supreme Court that was mandated January 31, 2013. See Driver
Pipeline Co., Inc. v. Williams Transport, LLC, 104 So. 3d 845, 850 (Miss. 2012). Three months
later, on April 2, 2013, Williams filed a motion for scheduling conference in state court, which it
served on Driver but not Buckley. Mot. for Rule 26(c) Conference [1-2]. The motion included a
proposed scheduling order that listed an August 2013 trial date. At that point, Buckley had never
been served with process. Driver viewed the pleading as an indication that Williams had
abandoned its claims against Buckley and re-removed the case on April 23, 2013. Williams then
moved to remand on May 16, 2013.
The final procedural twist began September 27, 2013, when Williams finally issued a
summons for Buckley—more than two years after the time to do so under Mississippi Rule of
Civil Procedure 4(h) and Federal Rule of Civil Procedure 4(m) expired. Buckley moved to
dismiss [17], and that motion has now been fully briefed. Although the matter is set for hearing
December 20, the Court concludes that the record as a whole adequately demonstrates the
Court’s subject-matter jurisdiction eliminating the need for a hearing.

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II.

Analysis
Before addressing Buckley’s motion to dismiss, the Court must determine whether

subject-matter jurisdiction exists. That said, the issues raised in the motion to dismiss are in
some ways relevant to the jurisdictional issue.
A.

Motion to Remand

Driver premises federal jurisdiction on diversity of citizenship. District courts have
jurisdiction over civil actions between “citizens of different States.” 28 U.S.C. § 1332(a)(1).
The diversity statute requires complete diversity between all named plaintiffs and all named
defendants. See Lincoln Prop. Co. v. Roche, 546 U.S. 81, 84 (2005). However, “a narrow
exception to the rule” exists where the non-diverse defendant was improperly joined. Smallwood
v. Ill. Cent. R.R. Co., 352 F.3d 220, 222 (5th Cir. 2003). “The burden of demonstrating improper
joinder is a heavy one and is placed upon the party seeking removal.” Lorenz v. Tex. Workforce
Comm’n, 211 F. App’x 242, 245 (5th Cir. 2006) (citing McDonal v. Abbott Labs., 408 F.3d 177,
183 (5th Cir. 2005)). The test for improper joinder is “whether there is any reasonable basis for
predicting the plaintiff[] might be able to recover against . . . the in-state defendant.” Jones v.
Gen. Motors Corp., No. 3:06cv608–DPJ–JCS, 2007 WL 1610478, at *1 (S.D. Miss. June 1,
2007) (quoting Love v. Ford Motor Co., 212 F. App’x 292, 294 (5th Cir. 2006)).
A district court should ordinarily resolve an improper joinder claim by conducting a Rule
12(b)(6)-type analysis. Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004). The
Court “must then evaluate all of the factual allegations in the light most favorable to the plaintiff,
resolving all contested issues of substantive fact in favor of the plaintiff.” B., Inc. v. Miller
Brewing Co., 663 F.2d 545, 549 (5th Cir. 1981). Similarly, the Court must resolve all
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ambiguities in controlling state law in the plaintiff’s favor. Travis v. Irby, 326 F.3d 644, 648 (5th
Cir. 2003) (citations omitted). Finally, “there are cases, hopefully few in number, in which the
plaintiff has stated a claim, but has misstated or omitted discrete facts that would determine the
propriety of joinder.” Smallwood, 385 F.3d at 573. In such cases, the district court has the
discretion to “pierce the pleadings” and conduct a summary inquiry. Id. The Court concludes
that a summary inquiry is appropriate given the procedural history of this case.
1.

Successive Removals

Williams contends that Driver may not again seek removal on the same basis as its earlier
removal. While that argument may be true with respect to the Driver’s argument that Williams
cannot state a factual claim against Buckley, it is not true with respect to the arguments that
Williams never served Buckley and the claims are now time barred. See S.W.S. Erectors, Inc. v.
Infax, Inc., 72 F.3d 489, 494 (5th Cir. 1996) (“We have already established that section 1446(b)
allows Infax to file successive removals based on different factual basis.”); Jamison v. KerrMcGee Corp., 151 F. Supp. 2d 742, 744–45 (S.D. Miss. 2001) (“The same theory of federal
jurisdiction may be pled in the second notice, provided only that different facts support it.”).
2.

Substantive Arguments
a.

Statute of Limitations

Although the parties raised several issues, the Court focuses on whether there is a
reasonable basis for predicting that Williams could recover against Buckley. And that question
turns first to the statute of limitations.1 Driver contends—and Williams does not dispute—that
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Because there is no basis for predicting recovery from Buckley, the Court does not
address Driver’s contention that Williams essentially committed a fraud on the court by using
Buckley to destroy diversity and abandoning the claim just before trial in state court.
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Williams’s claims against Buckley accrued on or before October 14, 2009, and that the statute of
limitations for those claims is three years. Miss. Code Ann. § 15-1-49. Under Mississippi law,
the filing of the Complaint tolls the statute of limitations for the 120 days allowed to effect
service of process, after which the statute begins to run again. See Ball v. Wal-Mart Stores, Inc.,
34 F. Supp. 2d 424, 427 (S.D. Miss. 1998) (Lee, J.). So when Williams failed to serve Buckley
within 120 days of the filing of the lawsuit, the statutory clock on Williams’s claims resumed,
ultimately expiring on or about February 12, 2013, which was before Buckley was ever served
with process and before the case was removed.
Williams argues that this issue is of no moment because the claims were timely when
filed, relying on Seafoam, Inc. v. Barrier Sys., Inc., 830 F.2d 62, 66 (5th Cir. 1987) (“It is well
established law that the jurisdiction of a federal court sitting in diversity is determined as of the
time of filing of the complaint.”). But the plaintiff in Seafoam filed suit in federal court. Id. at
64. When a case is removed from state court, the operative time for determining whether a
viable claim exists is the time of removal. See Howery v. Allstate Ins. Co., 243 F.3d 912, 916
(5th Cir. 2001) (holding that defendant “must prove that federal jurisdiction existed at the time of
removal”). The claims against Buckley were time-barred when the case was removed and are
therefore improperly joined. See Boone v. Citigroup, Inc., 416 F.3d 382, 392 (5th Cir. 2005)
(finding improper joinder where claims against non-diverse defendant were time-barred).
b.

Lack of Timely Service of Process

Williams’s claims against Driver would fail from a related yet separate reason—there is
no good cause for the delayed service. Williams had 120 days to perfect service. Miss. R. Civ.
P. 4(h). Yet service was not perfected on Buckley until October 3, 2013, more than two years
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after the 120-day window closed. A Mississippi court could excuse the late service if Williams
was able to “show good cause why such service was not made within [the 120-day] period.”
Miss. R. Civ. P. 4(h).
“[A] plaintiff attempting to establish good cause must show at least as much as would be
required to show excusable neglect, as to which simple inadvertence or mistake of counsel or
ignorance of the rules usually does not suffice.” Welch Roofing & Constr., Inc. v. Farina, 99 So.
3d 274, 277 (Miss. Ct. App. 2012) (quotation marks omitted). The Mississippi Supreme Court
has explained that
good cause is likely (but not always) to be found when the plaintiff’s failure to
complete service in timely fashion is a result of the conduct of a third person,
typically the process server, the defendant has evaded service of the process or
engaged in misleading conduct, the plaintiff has acted diligently in trying to effect
service, or there are understandable mitigating circumstances, or the plaintiff is
proceeding pro se or in forma pauperis.
Holmes v. Coast Transit Auth., 815 So. 2d 1183, 1186 (Miss. 2002) (quoting 4B Charles Alan
Wright & Arthur R. Miller, Federal Practice & Procedure § 1137, at 342 (3d ed. 2000)). “In
demonstrating good cause and diligence, a plaintiff must show that he or she has been unable to
serve process because the defendant evaded process or engaged in misleading conduct, or for
some other acceptable reason . . . .” Montgomery v. SmithKline Beecham Corp., 910 So. 2d 541,
545 (Miss. 2005). “‘Good cause’ can never be demonstrated where plaintiff has not been diligent
in attempting to serve process.” Id. (citing Bang v. Pittman, 749 So. 2d 47, 52 (Miss. 1999)).
And though not required, a motion for leave to serve beyond the 120-day period would
demonstrate diligence and support a good-cause finding. Webster v. Webster, 834 So. 2d 26, 29
(Miss. 2002).

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Good cause is not apparent on this record. Upon service, Buckley moved for dismissal
citing federal Rule 4(m) and the applicable statute of limitations. Its motion gave Williams an
opportunity to demonstrate good cause, which Williams attempted to do. According to Williams,
it did not sit idle and then seek indulgence. Pl.’s Mem. [21] at 7. Williams explains that it has
fought Driver for three years on mostly jurisdictional issues, including two removals and one trip
to the Mississippi Supreme Court. Id.
But as noted above, “‘[g]ood cause’ can never be demonstrated where plaintiff has not
been diligent in attempting to serve process.” Montgomery, 910 So. 2d at 545 (emphasis added).
While Williams demonstrated its diligence with respect to Driver, it has offered no evidence that
it ever attempted service on Buckley and has not identified any impediments it faced in doing so.
See Holmes, 815 So. 2d at 1186. Williams never sought leave for out-of-time service, Webster,
834 So. 2d at 29, and professes that it eventually served Buckley in October 2013, “[o]ut of an
abundance of caution . . . ”2 Pl.’s Mem. [21] at 3.
Given (1) the substantial length of delay; (2) the fact that Williams was apparently ready
to proceed to trial without Buckely; (3) the absence of diligence in attempting to serve Buckely;
and (4) the apparent ease with which Williams served Buckley when the lack of service was
raised as a basis for federal jurisdiction, there is no reasonable basis to predict recovery from
Buckley. See Montgomery, 910 So. 2d at 548 (affirming dismissal where Plaintiffs failed to
demonstrate they acted diligently in attempting to perfect service); Stutts v. Miller, 37 So. 3d 1, 6
(Miss. 2010) (affirming dismissal for failure to serve within 120 days where Plaintiff did not
establish good cause).
2

This statement begs the question whether Williams ever intended to serve Buckley.
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Williams claims, however, that dismissal of Buckley under Rule 4(h) would be “without
prejudice and would not affect the remand issue.” While Rule 4(h) does require dismissal
without prejudice, that is not the case with respect to claims for which the statute of limitations
has already run. Copiah Cnty. Sch. Dist. v. Buckner, 61 So. 3d 162, 168 (Miss. 2011) (“[I]f the
statute of limitations has run, then dismissal with prejudice is appropriate.”). Again, there is no
reasonable basis for predicting recovery.
B.

Motion to Strike

Williams did not file a rebuttal within the time provided by Local Rule 7(b)(4), and on
August 1, 2013, the Court directed Williams to do so. Williams complied, but its rebuttal raised
new issues, and Driver filed its motion to strike [9] on August 13, 2013. Driver is correct that
Williams’s rebuttal raised new issues. But because the matter is before the Court on the question
of its subject-matter jurisdiction, the Court prefers to consider all of the parties’ arguments.
Therefore, the motion to strike is denied, but the alternative motion for leave to file a surrebuttal
is granted. The Court treats Driver’s Surrebuttal [9-1] as having been separately docketed, and it
considered the arguments raised therein.
C.

Motion to Dismiss Buckley

Having established that subject-matter jurisdiction exists, the Court may now consider
Defendant Buckley’s motion to dismiss. For the reasons stated above, that motion is granted,
and the claims against Buckley are dismissed with prejudice.
IV.

Conclusion
The Court has considered all of the parties’ arguments. Those not specifically addressed

would not have changed the outcome. For the foregoing reasons, Plaintiff Williams Transport,
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LLC’s Motion to Remand [4] is denied, Defendant Driver Pipeline Company, Inc.’s Motion to
Strike [8] is granted in part and denied in part, and Defendant Buckley Equipment Services,
Inc.’s Motion to Dismiss [17] is granted.
SO ORDERED AND ADJUDGED this the 12th day of December, 2013.
s/ Daniel P. Jordan III
UNITED STATES DISTRICT JUDGE

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