Giard et al v. Ouellette et al
Filing
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FINDINGS AND RECOMMENDATIONS. It is recommended 6 MOTION for Judgment on the Pleadings filed by Brett Ouellette be GRANTED; and 8 MOTION to Remand filed by Mary Giard and Homer L. Giard be DENIED. Objections to F&R due by 11/19/2012 Signed by Magistrate Carolyn S Ostby on 11/1/2012. (JDH, ) Modified on 11/1/2012 to change document type to an Opinion (JDH, ).
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
BILLINGS DIVISION
HOMER L. GIARD and MARY
GIARD,
CV- 12-113-BLG-RFC-CSO
FINDINGS AND
RECOMMENDATIONS OF
UNITED STATES
MAGISTRATE JUDGE
Plaintiffs,
vs.
BRETT OUELLETTE and
BURLINGTON NORTHERN
SANTA FE RAILWAY
COMPANY,
Defendants.
Plaintiffs Homer L. Giard and Mary Giard (collectively, “Giard”)
filed this action in state court, naming as defendants Brett Ouellette
(“Ouellette”) and Burlington Northern Santa Fe Railway Company
(“BNSF”). Defendants removed the action to this Court, asserting
federal diversity jurisdiction. Defts’ Notice of Removal (DKT 1).
Pending before the Court are two motions: (1) Giard’s Motion to
Remand (DKT 8); and (2) Defendants’ Motion for Judgment on the
Pleadings as to Ouellette (DKT 6). For the following reasons, the Court
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recommends1 that Giard’s motion to remand be denied and Defendants’
motion for judgment on the pleadings be granted.
I.
BACKGROUND
For purposes of the pending motions, the Court takes as true the
allegations in the complaint. In 2009, while working as an exempt
employee for BNSF, Giard sustained an injury that put him out of work
for a period of time. Cmplt (DKT 4) at ¶ 13. After evaluation, Giard
was qualified to return to work the following year. Id. at ¶¶ 14-15. In
the meantime, BNSF had filled Giard’s position with another employee.
Id. BNSF denied Giard’s subsequent request to return to a non-exempt
position, based on a work restriction that was placed on Giard back in
1997. This caused Giard to be held out of work from August 2010
through April 2012. Id. at ¶ 21.
1
The Ninth Circuit has not ruled whether motions to remand are
dispositive and thus require a magistrate judge to proceed under
findings and recommendations. Dutro v. Hilarides, 2012 WL 1552772,
n. 1 (E.D. Cal. 2012). Other Circuits, however, have concluded that
such motions are dispositive. Id. (citing Williams v. Beemiller, Inc., 527
F.3d 259, 264–266 (2d Cir. 2008); Vogel v. U.S. Office Products Co., 258
F.3d 509, 514–17 (6th Cir. 2001); First Union Mortgage Corp. v. Smith,
229 F.3d 992, 994–97 (10th Cir. 2000); In re U.S. Healthcare, 159 F.3d
142, 145–46 (3d Cir. 1998)). The Court proceeds accordingly.
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Ouellette worked as a field manager in BNSF’s Medical &
Environmental Health department, and “participated with Defendant
BNSF in operating a railroad in Montana.” Id. at ¶ 2. Ouellette was
the manager designated by BNSF to assist Giard in returning to work
following the 2009 injury, and allegedly “neglected his responsibilities
to [Giard] and negligently mismanaged [Giard’s] ability to return to
work as he desired.” Id. at ¶ 20.
The complaint alleges only one claim against Ouellette. It
alleges: “Pursuant to § 39-2-703, MCA, Defendant Ouellette is liable for
all damages sustained by Plaintiff, Homer L. Giard, due to Defendant
Ouellette’s negligent mismanagement of Plaintiff’s medical condition
and Plaintiff’s request to return to work with Defendant BNSF as a
union employee.” Id. at ¶ 23. Mary Giard’s consortium damage claim
is similarly based on “Ouellette’s mismanagement of Plaintiff Homer L.
Giard’s medical restrictions and request to return to work....” Id. at ¶
25. Giard’s brief in support of the motion to remand acknowledges that
“Plaintiffs’ legal claim against both Defendants in this case is brought
under § 39-2-703, MCA.” DKT 9 at 14.
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II.
MOTION TO REMAND
Because the Court must determine whether it has jurisdiction to
proceed, the Court turns first to Giard’s motion to remand. See Steel
Co. v. Citizens for a Better Environment, 523 U.S. 83, 94 (1998)
(“Without jurisdiction the court cannot proceed at all in any cause”).
A. Parties’ Arguments
Giard argues that this Court lacks jurisdiction under 28 U.S.C. §
1332 because complete diversity of citizenship among the named
parties does not exist – both Giard and Ouellette are Montana citizens.
Pltfs’ Br. in Support of Mot. to Remand (DKT 9) at 5-6. In support of
his motion to remand, Giard argues that (1) his motivation for joining
Ouellette is immaterial, id. at 9; (2) Ouellette is not immune from
liability for his own tortious conduct, id. at 10; and (3) Giard has stated
a valid cause of action against Ouellette because he is subject to
individual liability under M.C.A. § 39-2-703. Id. at 14. Giard concludes
that remand is required because Ouellette is a non-diverse defendant.
Defendants acknowledge that Ouellette is a Montana citizen, as
are both Plaintiffs. Deft’s Notice of Removal (DKT 1) at ¶¶ 3, 5. But
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Defendants argue that Ouellette was fraudulently joined and thus his
presence should not defeat diversity jurisdiction. Defts’ Br. in
Opposition to Pltfs’ Mot. to Remand (DKT 14) at 8. Defendants argue
that § 39-2-703 only imposes liability on a “person or corporation
operating a railroad,” and Ouellette does not fit within the reach of the
statute. Id. at 14. Defendants argue that because Giard has failed to
state a claim against Ouellette, complete diversity exists and removal
was proper. Id. at 21.
B. Legal Standard
Diversity jurisdiction requires that each of the plaintiffs must be
citizens of different states than each of the defendants. Morris v.
Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001). To protect
the jurisdiction of state courts, removal jurisdiction is strictly construed
in favor of remand. Harris v. Bankers Life and Cas. Co., 425 F.3d 689,
698 (9th Cir. 2005). There is a strong presumption against removal,
and the defendant bears the burden of establishing that removal is
proper. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). Doubt
arising from inartful, ambiguous, or technically defective pleadings
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must be resolved in favor of remand. Charlin v. Allstate Ins. Co., 19 F.
Supp. 2d 1137, 1140 (C.D. Cal. 1998).
Removal is proper despite the presence of a non-diverse defendant
only if that defendant is “fraudulently joined.” Nasrawi v. Buck
Consultants, LLC, 713 F. Supp. 2d 1080, 1084 (E.D. Cal. 2010); see also
Morris, 236 F.3d at 1067. Fraudulent joinder is a “term of art.”
Ritchey v. Upjohn Drug Company, 139 F.3d 1313, 1318 (9th Cir. 1998).
Use of the term is not intended to impugn the integrity of plaintiff or
counsel, and does not refer to an intent to deceive. DaCosta v. Novartis
AG, 180 F. Supp. 2d 1178, 1181 (D. Or. 2001). Fraudulent joinder is
present when “a plaintiff fails to state a cause of action against a
resident defendant, and the failure is obvious according to the settled
rules of the state.” McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339
(9th Cir. 1987). “The Ninth Circuit has compared the test for
fraudulent joinder to a Federal Rule of Civil Procedure 12(b)(6)
analysis, stating: ‘inasmuch as appellant’s case against the individual
defendants [is] sufficient to withstand a dismissal motion ..., the joinder
of claims against them is not fraudulent.’” Anderson v. BNSF Ry. Co.,
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2008 WL 5412454 (D. Mont. 2008) (quoting Sessions v. Chrysler Corp.,
517 F.2d 759, 761 (9th Cir. 1975)). If the joinder of a non-diverse
defendant is deemed fraudulent, that defendant’s “presence in the
lawsuit is ignored for purposes of determining diversity.” Morris, 236
F.3d at 1067.
In Morris, the Ninth Circuit applied a two-part analysis in
determining whether fraudulent joinder had occurred. First, the court
looked to the elements of the claim asserted – there, negligent
misrepresentation – against the allegedly fraudulently joined
defendant. Morris, 236 F.3d at 1067. Second, the court compared the
elements of the claim to the allegations made in the complaint. Morris,
236 F.3d at 1067-68. Comparing the allegations of the complaint to the
elements of negligent misrepresentation, the court found that the
complaint failed “to state a claim for negligent misrepresentation...and
the failure is obvious according to settled law.” Id.
C. Discussion
Giard is correct that his motivation for naming Ouellette as a
defendant is immaterial to the determination of Giard’s motion to
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remand. Mecom v. Fitzsimmons Drilling Co., 284 U.S. 183, 189, 52 S.
Ct. 84, 87 (1931). The issue, then, as the parties agree, is whether
Giard has stated a valid claim for relief against Ouellette under
Montana law. For the following reasons, the Court concludes that he
has not.
Following the framework in Morris, the Court first considers the
elements of the claim against Ouellette under M.C.A.§ 39-2-703, which
provides:
A person or corporation operating a railway or railroad in this
state is liable for all damages sustained by any employee of the
person or corporation in consequence of the neglect of any other
employee of the person or corporation or by the mismanagement
of any other employee and in consequence of the willful wrongs,
whether of commission or omission, of any other employee of the
person or corporation when the neglect, mismanagement, or
wrongs are in any manner connected with the use and operation
of a railway or railroad on or about which the employee is
employed. A contract that restricts the liability is not legal or
binding.
The Montana Supreme Court long ago stated that the “manifest
purpose of the whole act is to enable an employé of a railroad company
to recover damages from the company for injuries inflicted upon him by
reason of the negligence of a fellow servant...” Dillon v. Great N. Ry.
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Co., 100 P. 960, 963 (Mont. 1909). Much more recently, in a case
wherein a railroad company was the sole defendant, the supreme court
held that M.C.A. § 39-2-703 “does more than merely eliminate the
fellow-servant defense to common-law causes of action....” Haux v.
Montana Rail Link, Inc., 97 P.3d 540, 543 (Mont. 2004). The court
there held that the statute also created a cause of action against the
railroad company for mismanagement. Interpreting its prior decision
in Winslow v. Montana Rail Link, 16 P.3d 992 (Mont. 2000), the court
ruled that “the railroad may be held liable for mismanagement.” Haux,
97 P.3d at 544.
In arguing that the cause of action for mismanagement lies
against a railroad employee as well as the railroad, Giard relies on
Moyse v. N. Pac. Ry. Co., 108 P. 1062 (Mont. 1910) and Shane v. Butte
Electric Ry. Co., 150 F. 801 (D. Mont. 1906). In those early twentiethcentury actions, individual railroad employees were named as
defendants along with their employer railroad companies. But neither
Moyse nor Shane held that the individual defendants could be held
liable for mismanagement under the statute. No such causes of action
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were there asserted.
In Moyse the plaintiff alleged common-law negligence claims
against the individual employee defendants. As the court stated:
The complaint is framed upon the theory that the defendant
company is liable to the plaintiff, as one of its employés, for
injuries received while engaged in the discharge of his duties,
through the negligence of other employés, and that the other
defendants are liable because they were personally guilty of the
acts of negligence which caused the injury.
Moyse, 108 P. at 1065 (emphasis added). The existence of the commonlaw negligence claims is a critical distinction between Moyse and this
case. In Moyse, with multiple charges of negligence against all parties
involved, the court addressed whether the verdict, which found all
defendants liable, was supported by sufficient evidence. On this point,
the court concluded that the jury’s “finding that there was negligence in
the handling of cars is sufficient to sustain the verdict.” Id. at 1068.
Moyse did not hold that either of the defendant employees could be held
personally liable under the statutory cause of action for
mismanagement. And Haux made clear that negligence claims do not
arise under the statute. Relying on its prior cases, the court noted that
“claims for negligence were not the creation of the statute but were
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recognized at common law. ... Unlike common law claims for
negligence, mismanagement is a cause of action newly created by § 392-703, MCA.” Haux, 97 P.3d at 545.
Shane is also distinguishable. The plaintiff in Shane was a
passenger on a railcar, not an employee of the railroad company.
Consequently, the predecessor statute to § 39-2-703 was neither raised
by the plaintiff nor addressed by the court. Instead, the plaintiff
brought a negligence action against the railroad company and the
motorman operating the railcar in which the plaintiff was injured. The
plaintiff alleged that the railroad company and the motorman were
“jointly running and operating the car upon which plaintiff was riding.”
Shane, 150 F. at 802. The defendants argued that the motorman was
fraudulently joined, in part because the plaintiff “knew that the
[railroad] and [motorman] did not jointly operate the car...” Shane, 150
F. at 808. The court refused to resolve the issue of whether the railroad
and the motorman jointly operated the railcar on the motion to remand.
Id. at 809 (“I hold that it is not for the federal court to try the question
of negligence on a motion to remand”). The court did not hold, as Giard
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suggests, that whether an individual railroad employee is operating a
railroad, in connection with statutory liability under § 39-2-703, is a
fact question that is not to be determined by the court on a motion to
remand. Shane is inapposite.
Giard cites no Montana case that has held, since the statute was
enacted over 100 years ago, that an employee of a railroad may be held
individually liable for mismanagement under § 39-2-703.
In the absence of Montana case law on this issue, the Court must
turn to rules of statutory construction. In construing a statute, a court
must first examine the plain language of the statute. See State v.
Boulton, 140 P.3d 482, 485 (Mont. 2006). In Boulton, the court
explained:
When interpreting and applying a statute, the role of the courts is
to “ascertain the intent of the Legislature.” If possible, the intent
of the Legislature is to be determined from the plain language of
the statute. If the intent can be determined from the plain
language of a statute, a court “may not go further and apply any
other means of interpretation.”
Id. (citations omitted).
Under M.C.A. § 39-2-703, the first element that a plaintiff must
allege and prove is that the defendant is a “person or corporation
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operating a railroad.” Therefore, to state a claim against Ouellette,
Giard’s Complaint must allege that Ouellette was a “person or
corporation operating a railroad.”2
Giard’s Complaint alleges that Ouellette “participated with
Defendant BNSF in operating a railroad in Montana...” Cmplt (DKT 4)
at ¶ 2. The complaint then alleges that BNSF “operated a railroad in
the state of Montana.” Id. at ¶ 3. The complaint thus distinguishes
between BNSF as an operator of a railroad, and Ouellette as a
participant in operating a railroad. The complaint does not allege that
Ouellette, like BNSF, “operated a railroad in the state of Montana.”
Nor do other allegations in the Complaint suggest that Ouellette,
like BNSF, “operated a railroad.” To the contrary, the Complaint
alleges that Ouellette was a BNSF Field Manager, in a BNSF medical
and environment health office, and that he was designated to assist
2
Giard is correct that Ouellette can be held liable for his own
tortious actions (see Castro v. ExxonMobil Oil Corp., 2012 WL 523635
(D. Mont. 2012) (citing Ammondson v. Northwestern Corp., 220 P.3d 1,
21 (Mont. 2009)), but negligence is not at issue because, as earlier
noted, Giard alleged only a cause of action under the statute and not a
common-law negligence action.
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Giard to return to work. Id. at ¶¶ 2, 20. Thus, the Court must
conclude, consistent with the Complaint, that he was involved in
aspects of certain offices within the railroad company, but nothing in
the Complaint suggests that he was operating a railway or railroad as
the statute requires.3
The Court concludes therefore that the complaint does not state a
cause of action against Ouellette. The allegation that Ouellette
“participated with Defendant BNSF in operating a railroad” is
insufficient to trigger statutory liability under § 39-2-703, which only
applies to a “person or corporation operating a railway or railroad.” See
Kelly v. Northern Pac. Ry. Co., 88 P. 1009, 1012 (Mont. 1907) (“where a
party relies for recovery upon a special statute creating a liability
where none existed before [referring to § 39-2-703’s predecessor], he
must set forth in ordinary and concise language a statement of facts
3
The Court need not reach the question as to how or whether an
individual railroad employee may qualify as a person “operating a
railway or a railroad” so as to trigger statutory liability for
mismanagement. Giard has not alleged, directly or otherwise, that
Ouellette, like BNSF, operated a railroad in Montana. Instead, Giard
only alleges Ouellette “participated” in operation. As the above
analysis indicates, this allegation simply does not bring Ouellette
within the reach of § 39-2-703.
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showing his right to recover under that statute”). To hold otherwise
would, in effect, require the Court to insert the word “participated” into
the language of the statute, which the Court may not do. See Mont.
Code Ann. § 1-2-101 (“In the construction of a statute, the office of the
judge is simply to ascertain and declare what is in terms or in
substance contained therein, not to insert what has been omitted or to
omit what has been inserted”).
The Court concludes that the complaint fails to state a claim
against Ouellette. The Court further concludes that this failure is
obvious under Montana law. The claim against Ouellette meets the
Ninth Circuit standard for fraudulent joinder, and Ouellette’s presence
in this lawsuit is properly ignored for determining diversity
jurisdiction. In Ouellette’s absence, complete diversity of citizenship
exists, and the amount in controversy exceeds $75,000. Removal was
therefore proper and Giard’s motion to remand should be denied.
III. MOTION FOR JUDGMENT ON THE PLEADINGS
The Court now turns to Defendants’ motion for judgment on the
pleadings as to the claims against Ouellette. The standard for
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assessing a Rule 12(c) motion for judgment on the pleadings is the same
as the standard for a Rule 12(b)(6) motion to dismiss. United States v.
In re Seizure of One Blue Nissan Skyline Auto., & One Red Nissan
Skyline, 683 F. Supp. 2d 1087, 1089 (C.D. Cal. 2010) (citing Enron Oil
Trading & Trans. Co. v. Walbrook Ins. Co., Ltd., 132 F.3d 526, 529 (9th
Cir. 1997).
In considering a motion for judgment on the pleadings, a court
must accept as true all material allegations in the complaint and must
construe those allegations in the light most favorable to the non-moving
party. Pillsbury, Madison & Sutro v. Lerner, 31 F.3d 924, 928 (9th Cir.
1994). A motion for judgment on the pleadings is properly granted
when the moving party is entitled to judgment as a matter of law.
Fajardo v. County of Los Angeles, 179 F.3d 698, 699 (9th Cir. 1999).
The Court above determined that, taking all allegations in the
complaint as true, Giard has failed to state a cognizable cause of action
under § 39-2-703 against Ouellette. This finding satisfies the standard
for judgment on the pleadings under Fed. R. Civ. P. 12(c). Because a
spouse’s loss of consortium claim is derivative as to liability, Mary
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Giard’s loss of consortium claim against Ouellette also is subject to
dismissal. See Mickelson v. Montana Rail Link, Inc., 999 P.2d 985,
1003 (Mont. 2000). Defendants’ motion for judgment on the pleadings
should be granted.
IV.
CONCLUSION
Based on the foregoing,
IT IS RECOMMENDED that Giard’s motion to remand (DKT 8)
be DENIED, and Defendants’ motion for judgment on the pleadings as
to claims against Ouellette (DKT 6) be GRANTED.
NOW, THEREFORE, IT IS ORDERED that the Clerk shall
serve a copy of the Findings and Recommendations of United States
Magistrate Judge upon the parties. The parties are advised that
pursuant to 28 U.S.C. § 636, any objections to the findings and
recommendations must be filed with the Clerk of Court and copies
served on opposing counsel within fourteen (14) days after service
hereof, or objection is waived.
DATED this 1st day of November, 2012.
/s/ Carolyn S. Ostby
United States Magistrate Judge
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