Calhoun v. BNSF Railway Company et al

Filing 53

ORDER: IT IS ORDERED that Judge Johnston's 49 Findings and Recommendations, are ADOPTED IN FULL. IT IS ORDERED that Plaintiff William Calhoun's 12 Motion to Remand, is GRANTED. IT IS FURTHER ORDERED that Plaintiff William Calhoun's request for attorney's fees and costs is DENIED. Signed by Judge Brian Morris on 2/1/2018. (MMS)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
GREAT FALLS DIVISION

FILED
FEB: I 2018
CleJt. !.I.S Distoct Court

CV 17-74-GF-BMMct Of Montana
Great F",:!:s

WILLIAM CALHOUN,
Plaintiff,

ORDER
vs.
BNSF RAILWAY COMPANY, a
Delaware Corporation; ROBINSON
INSULATION COMPANY, a
Montana Corporation for profit; JOHN
SWING; MARYLAND CASUALTY
COMPANY; and DOES A-Z,
Defendants.

Plaintiff William Calhoun originally filed suit in the Montana Eighth
Judicial District of Cascade County. (Doc. 6.) Defendant BNSF Railway Co.
("BNSF") removed the case to this Court on diversity of citizenship grounds.
BNSF alleges that complete diversity exists as Calhoun fraudulently joined John
Swing as a defendant. Calhoun filed a Motion to Remand. (Doc. 12.)
United States Magistrate Judge John Johnston conducted a hearing in this
matter on November 1,2017. (Doc. 46.) Judge Johnston entered Findings and
Recommendations on January 3, 2018. (Doc. 49.) The Court granted BNSF and
Swing until January 24,2018 to file any objections to Judge Johnston's Findings

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and Recommendations. (Doc. 51.) BNSF and Swing timely filed an objection on
January 24, 2017.1 (Doc. 52.) The Court reviews de novo Findings and
Recommendations to which a party timely objects. 28 U.S.C. § 636(b)(l). The
Court reviews for clear error those portions of Judge Johnston's Findings and
Recommendations to which the parties did not specifically object. McDonnell

Douglas Corp. v. Commodore Bus. Mach., Inc., 656 F.2d 1309, 1313 (9th Cir.
1981).
This matter stems from Calhoun's alleged exposure to asbestos in Libby,
Montana. (Doc. 6 at 2.) The Court can exercise subject matter jurisdiction over a
state law claim only when the amount-in-controversy exceeds $75,000.00, and
complete diversity exists between the parties. Complete diversity requires that no
party be a citizen of the same state as another party. 28 U.S.C. §§ 1332(a), 1441(b).
The action may not be removed if any properly joined and served defendant
remains "a citizen of the State in which the action is brought" ("forum defendant
rule"). 28 U.S.C. § 1441(b)(2).
Judge Johnston determined that BNSF established diversity of citizenship in
this action. (Doc. 49 at 3.) Judge Johnston determined that BNSF exists as a citizen
of Delaware and Texas. Id. Calhoun is a citizen of Arizona. Id. Swing, the

I Defendants' repeatedly refer to "Magistrate Johnson." The Court will assume that the Defendants intend to refer to
United States Magistrate Judge John T. Johnston who drafted the Findings and Reconunendations in this matter.

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managing agent for BNSF, remains a citizen of Montana. Id. Judge Johnston, as a
result, determined that complete diversity exists. Id. at 4. The presence of Swing
and his corresponding Montana citizenship requires, however, remand to Montana
state court pursuant to the forum defendant rule. Id.
BNSF and Swing raise four objections to Judge Johnston's findings and
recommendations. BNSF and Swing argue that Judge Johnston failed to analyze
properly the following issues: 1) that Swing cannot be held personally liable in this
case because Calhoun did not allege any specific facts or claims against Swing in
the Complaint; 2) that Swing's actions were not independently tortious in nature;
3) that even if the allegations in the Complaint were sufficient, piercing the
pleadings reveals a lack of genuine dispute that Swing served merely as a manager
of depot clerks and did not playa role in the alleged negligence; and 4) that Swing
does not owe a legal duty to protect the public from the acts of others. (Doc. 52 at

3.)

I.

Allegations in Complaint

BNSF and Swing argue that the only reference to Swing in the Complaint
constitutes a two-sentence allegation regarding his role at BNSF. Id. at 6. BNSF
and Swing argue this allegation does not constitute a sufficient pleading as
Calhoun has not shown that he possesses an entitlement to relief against Swing.
The Court disagrees.

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Calhoun's Complaint alleges all the same conduct against Swing as Calhoun
alleges against BNSF, by incorporation of reference. The Complaint alleges
negligence by Swing personally for failing to inquire, study, and evaluate the dust
hazard to human health. The Complaint alleges that Swing negligently failed to
take measures to prevent toxic dust from collecting upon and escaping BNSF's
property. Finally, the Complaint alleges that Swing negligently failed to warn
Calhoun of the true nature of the hazardous effects of the dust.

II.

Independently Tortious Conduct

BNSF and Swing argue that Calhoun fraudulently joined Swing. This
fraudulent joinder, according to BNSF and Swing, requires this Court to ignore
Swing's presence in the action under application of the forum defendant rule. A
corporate agent under Montana law may be held personally liable if the agent can
be deemed personally negligent, or if the agent's actions can be deemed tortious in
nature. Crystal Springs Trout Co. v. First State Bank ofFroid, 732 P .2d 819, 823
(Mont. 1987) (citations omitted). Judge Johnston determined that the Montana
Supreme Court has allowed an employee to be named as a defendant when the
allegations exist against the employee personally. (Doc. 49 at 5.)
BNSF and Swing argue that any alleged negligence committed by Swing
occurred within the course and the scope of his employment. (Doc. 52 at 5.) BNSF
and Swing argue that Swing cannot be held personally liable for conduct occurring
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within the course and scope of his employment. Id. Judge Johnston determined that
courts within this District have deemed it sufficient to hold the agent personally
liable if the agent either ignored warnings, or participated in the principal's tortious
conduct. See Castro v. ExxonMobil Oil Corp., 2012 WL 523635 at 3 (D. Mont.
2012); Staley v. BNSF Railway Co. & Lynn Ludwig, 2015 WL 860802 (D. Mont.

2015).
BNSF and Swing attempt to distinguish Castro and Staley based on the
defendant's knowledge in each case. This distinction proves unpersuasive. Calhoun
alleges in his Complaint that Swing acted as the managing agent for BNSF in
Libby, Montana, and as "such is separately responsible for acts wrongful in this
nature."

III.

Piercing the Pleadings

BNSF and Swing argue that the Judge Johnston did not "pierce the
pleadings" and evaluate the factual merits of Calhoun's allegations. (Doc. 52 at
10.) Removal statutes should be construed strictly against removal jurisdiction.

Lovell v. Bad Ass Coffee Co. ofHawaii, Inc., 103 F. Supp. 2d 1233, 1236 (D. Haw.
2000). A party will be considered fraudulently joined and removal will be
permitted only when the plaintiff has not, or cannot, state a claim for relief against
the non-diverse individual under the applicable state substantive law. Id. at 1237
(citation omitted).
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BNSF and Swing, in their objection, point to specific evidence that they
believe fails to substantiate Calhoun's allegations against Swing. (Doc. 52 at lO­
11.) Calhoun, in the motion to remand, points to similar evidence that he argues
will establish his claims. (Doc. 13 at 7-12). Federal jurisdiction must be rejected if
any doubt exists as to the right of removal in the first instance.
The defendant seeking removal to federal court may present facts, however,
showing the joinder to be fraudulent. Ritchey v. Upjohn Drug Co., 139 F 3d 1313,
1319 (9th Cir. 1998). The Court must look at whether the plaintiff truly possesses a
cause of action against the alleged fraudulent defendant, as opposed to evaluating
whether the alleged fraudulent defendant could propound a defense to an otherwise
valid cause of action.ld. The Court agrees with Judge Johnston's determination
that removal remains proper in this instance. Calhoun alleges a sufficient claim for
relief against Swing at this juncture. It would exceed the Court's proper role to
evaluate any defenses that BNSF and Swing possess against that claim in assessing
remand. ld. As the Ninth Circuit noted in Ritchey when "the defense is exogenous
to the cause of action itself, it will not turn a state action into a federal one."

IV.

Legal Duty

BNSF and Swing argue that Swing did not owe a duty to warn or protect the
general public. (Doc. 52 at 8.) BNSF and Swing argue instead that the State of
Montana possessed the duty to act and correct, or prevent, conditions known to be
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hazardous to the health of W.R. Grace employees, Libby community members, and
even Swing himself. Id. at 9. Judge Johnston determined, and the Court agrees, that
the Complaint alleges negligence by Swing.
The Complaint alleges that Swing failed to inquire, study, and evaluate the
dust hazard to human health, failed to take measures to prevent toxic dust from
collecting upon and escaping from BNSF's property, and failed to warn Calhoun of
the true nature of the hazardous effects of the dust. Swing acted as the supervisory
agent in Libby, Montana, from 1973 to 1984. Safety played a role in his job
including identifying risks of injury, warning others of those risks, and preventing
harm by eliminating risks. These allegations prove sufficient to state a negligence
claim against Swing personally at this juncture.

v.

Conclusion

Judge Johnston concluded that BNSF did not establish that Swing has been
fraudulently joined. (Doc. 49 at 6.) The forum defendant rule renders improper
BNSF's removal. Id. at 7. This matter shall be remanded back to Montana's Eighth
Judicial District in Cascade County, Montana.
Calhoun requested an award of the "just costs and reasonable attorney fees
in securing remand" pursuant to 28 U.S.C. § 1447(c). Judge Johnston determined
that BNSF possessed an objectively reasonable basis for seeking removal. (Doc. 49
at 8.) Calhoun will not be awarded attorney's fees and costs.

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The Court has reviewed Judge Johnston's Findings and Recommendations

de novo. The Court finds no error in Judge Johnston's Findings and
Recommendations, and adopts them in full.
IT IS ORDERED that Judge Johnston's Findings and Recommendations
(Doc. 49), are ADOPTED IN FULL.
IT IS ORDERED that Plaintiff William Calhoun's Motion to Remand
(Doc. 12), is GRANTED.
IT IS FURTHER ORDERED that Plaintiff William Calhoun's request for
attorney's fees and costs is DENIED.
DATED this 1st day of February, 2018.

Brian Morris
United States District Court Judge

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