McDowell v. Burlington Northern Santa Fe Railway Company et al
ORDER ADOPTING FINDINGS AND RECOMMENDATIONS. Plaintiff's Motion to Remand 13 is GRANTED. The Clerk of Court shall remand this case to the Eighth Judicial District of the State of Montana. Signed by Judge Brian Morris on 1/30/2017. (MMS)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
GREAT FALLS DIVISION
TIMOTHY S. McDOWELL, Personal
Representative of the Estate of
SUSAN K. McDOWELL, Deceased,
ORDER ADOPTING MAGISTRATE
JUDGE’S FINDINGS AND
SANTA FE RAILWAY COMPANY,
a Delaware for Profit Corporation;
RAILROAD COMPANY, a
Delaware for Profit Corporation;
GREAT NORTHERN RAILWAY
COMPANY, a Corporation for Profit;
COMPANY, a Montana Corporation;
STATE OF MONTANA, a
Governmental Entity; LIBBY
SCHOOL DISTRICT #4, ASA
WOOD ELEMENTARY SCHOOL;
and DOES A-Z, Inclusive;
Plaintiffs moved to remand this case to the Eighth Judicial District of the
State of Montana, after Defendants removed the case pursuant to 28 U.S.C. §§
1441(a) and 1446. (Doc. 13.) United States Magistrate Judge John Johnston issued
Findings and Recommendations in this matter. (Doc. 29.) Judge Johnston
recommended that the Court grant Plaintiff’s motion to remand because complete
diversity does not exist between the parties and the United States District Court
does not have jurisdiction over this case. Defendant Burlington Northern Santa Fe
Railway Company (“BNSF”) filed objections. (Doc. 30.) The Court reviews de
novo findings and recommendations to which objections are made. 28 U.S.C. §
Plaintiff, Timothy McDowell, is the surviving spouse of Susan McDowell
and acts as personal representative of her estate. Mrs. McDowell lived and
attended school in Libby, Montana. Plaintiff alleges that she was exposed to
hazardous quantities of asbestos-contaminated vermiculite that was discarded from
railcars as BNSF transported the material from a mine near Libby, through the
community, and on to various destinations throughout the United States. (Doc. 5 at
6.) Plaintiff alleges that one of the locations where Mrs. McDowell came into
contact with asbestos-contaminated vermiculite was at her school, Asa Wood
Elementary School. (Doc. 5 at 39.)
Plaintiff alleges that all of the asbestos contaminated vermiculite that Mrs.
McDowell was allegedly exposed to originated from the mine located near Libby.
The State of Montana (“the State”) began conducting inspections of the mine in the
1950's. Plaintiff alleges that in the course of these inspections, the State determined
the vermiculite contained hazardous levels of asbestos yet took no meaningful
action to correct the hazard or warn the townspeople of Libby. (Doc. 5 at 8, 11-17.)
On May 6, 2011, doctors diagnosed Mrs. McDowell with mesothelioma, a rare
cancer most often caused by exposure to asbestos. Eighteen months later, Mrs.
McDowell succumbed to the disease. Plaintiff filed this Complaint against BNSF
and other defendants, including the State and the Libby School District, alleging
each committed torts that led to his wife’s death.
BNSF objects to Judge Johnston’s conclusion that the Montana state court
should decide whether the State was properly joined. (Doc. 30 at 3.) BNSF further
objects to Judge Johnston’s rejection of fraudulent misjoinder as a basis for
removal. Id. BNSF finally objects to Judge Johnston’s finding that the State is
more than a nominal party in this matter. Id. BNSF requests the Court decline to
adopt the Findings and Recommendations, deny Plaintiff’s motion for remand, and
sever and remand or dismiss Plaintiff’s claims against the State. Id.
A. Diversity Jurisdiction
BNSF asserts that this Court has subject matter jurisdiction under U.S.C. §
1332 on the basis of diversity of parties. Plaintiff disputes diversity, noting that the
State remains a party to this action.
A strong presumption exists against federal jurisdiction over cases removed
from state courts. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). The party
seeking removal maintains the burden to establish removal is proper. Id. Courts
must strictly construe the removal statute. Moore-Thomas v. Alaska Airlines, Inc.,
553 F.3d 1241, 1244 (9th Cir. 2009). If any doubt exists that removal is proper,
courts must remand. Id.
Removal in this case is proper only if there is complete diversity of
citizenship–meaning each plaintiff is a citizen of a different state than each
properly joined defendant. 28 U.S.C. § 1332; Morris v. Princess Cruises, Inc., 236
F.3d 1061, 1067 (9th Cir. 2001). “When an action is removed based on diversity,
complete diversity must exist at removal.” Gould v. Mutual Life Ins. Co. of New
York, 790 F.2d 769, 773 (9th Cir. 1986). The State is a party in this action. A state
has no citizenship and therefore cannot have diverse citizenship for purposes of
diversity jurisdiction. Morongo Band of Mission Indians v. California State Board
of Equalization, 858 F.2d 1376, 1381 (9th Cir. 1988).
Due to the State’s presence as a defendant, complete diversity did not exist
at the time this case was removed. BNSF asserts that this Court can find diversity
in this case because the State was improperly joined, is a nominal party, or was
B. Improper Joinder
BNSF asserts that Plaintiff’s claims against the State and against BNSF fail
the permissive joinder test under Fed. R. Civ. P. 20. (Doc. 30 at 9.) A plaintiff may
properly join multiple defendants in a single action if the plaintiff’s claims against
them arise from the “same transaction, occurrence, or series of transactions or
occurrences” or share a common question of law or fact. Fed. R. Civ. P. 20. This
liberal joinder standard promotes trial convenience and judicial economy without
affecting the substantive rights of the parties. Wheat v. Safeway Stores, Inc., 404
P.2d 317, 321 (Mont. 1965).
Plaintiff’s claims relate to the consequences of the mining and hauling of
vermiculite with hazardous levels of asbestos which Plaintiff alleges both BNSF
and the State had roles in. Plaintiff alleges that the State conducted inspections of
the local vermiculite mine and determined that the vermiculite contained hazardous
levels of asbestos. “Despite learning of the health hazard through its inspections,
the State took no meaningful action to correct the hazard or to warn individuals
exposed to the asbestos-contaminated vermiculite of the hazard.” (Doc. 31 at 3,
citing Doc. 5 at 8, 11-17.)
Plaintiff alleges that BNSF “carelessly hauled and spread the same asbestos
into the community where Susan McDowell lived, and neither the State nor BNSF
warned residents of the danger their actions combined to create.” (Doc. 31 at 3,
citing Doc. 5 at 18, 26.) Plaintiff alleges the activities of both the State and BNSF
contributed to the mesothelioma and ultimate death of Susan McDowell.
Plaintiff’s choice to combine all defendants in this case streamlines the
litigation process. Plaintiff’s claims as presented share common questions of law
and fact, and meet the liberal joinder standard of Fed. R. Civ. P. 20.
C. Nominal Party
BNSF asserts that the Court may exercise its discretion under Rule 21 to
sever the State as a nominal party. (Doc. 30 at 24-25.) Courts must ignore
“nominal or formal parties and rest jurisdiction only upon the citizenship of real
parties to the controversy.” Navarro Sav. Ass’n v. Lee, 446 U.S. 458, 461 (1980). If
a party has a substantial stake in the outcome of a case, the party is a “real party in
interest,” and the nominal defendant rule does not apply. Bates v. Mortgage Elec.
Reg. Sys., Inc., 694 F.3d 1076, 1080 (9th Cir. 2012). When a state’s only interest in
a matter is enforcing compliance with its laws, the state is a nominal party.
Reinhardt v. Montana Human Rights Bureau, No. CV-10-27-H-CCL, 2010 WL
5391280, at *2 (D. Mont. Dec. 17, 2010).
Plaintiffs allege that the State committed torts that, along with the conduct of
the co-defendants, caused Mrs. McDowell’s death. The State has a substantial
interest in the outcome of this litigation because the State, along with its codefendants, faces potential liability. The State, therefore, is not nominal defendant
that may be ignored for diversity purposes.
D. Fraudulent Misjoinder
BNSF argues that because the Ninth Circuit has not rejected “fraudulent
misjoinder” as a basis for removing an otherwise diverse case, this Court should
adopt the concept to sever Plaintiff’s claims against the State and remand those,
while maintaining jurisdiction over the rest of the case. (Doc. 30 at 21.)
BNSF asserts that the doctrine of removal based on fraudulent misjoinder
was articulated by the Eleventh Circuit in Tapscott v. MS Dealer Service Corp., 77
F.3d 1353 (11th Cir. 1996), abrogated on other grounds by Cohen v. Office Depot,
Inc., 204 F.3d 1069 (11th Cir. 2000). The district court severed a non-diverse
defendant that was not properly permissively joined and denied remand under Fed.
R. Civ. P. 21. Id. at 1355-56. Under Rule 21, a court may use its discretion to add
or drop a party, or to sever any claim against a party. In Tapscott, the Eleventh
Circuit agreed that the defendants had not been properly joined under Rule 20. Id.
at 1360. The court also approved of using Rule 21 in the removal context where
misjoinder prevented the exercise of federal jurisdiction over an otherwise properly
removable case. Id. at 1360.
The Tapscott court likened fraudulent misjoinder to fraudulent joinder. Id.
Fraudulent joinder requires defendants to show that the plaintiff has failed to state
a valid claim against a resident defendant. “A defendant’s right of removal cannot
be defeated by a fraudulent joinder of a resident defendant having no real
connection with the controversy.” Id. Judge Johnston found that the State was not
fraudulently joined because BNSF did not assert that the negligence claim against
the State was invalid on its face. (Doc. 29 at 8-9.) The Court agrees and finds the
State is not fraudulently joined in this matter. The Court further declines to adopt
“fraudulent misjoinder” in this case.
III. CONCLUSION AND ORDER
BNSF has failed to show that the State is not a party to this action. Plaintiff
did not improperly join the State. Exceptions for nominal party and fraudulent
misjoinder do not apply here. Diversity in this case does not exist. This Court,
therefore, does not have subject matter jurisdiction.
Accordingly, IT IS ORDERED that Magistrate Judge Johnston’s Findings
and Recommendations (Doc. 29) is ADOPTED IN FULL. Plaintiff’s Motion to
Remand (Doc. 13) is GRANTED. The Clerk of Court shall remand this case to the
Eighth Judicial District of the State of Montana.
DATED this 30th day of January, 2017.
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