Taylor v. Alcatel-Lucent USA, Inc.
Filing
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MEMORANDUM OF DECISION AND ORDER denying 7 Defendant's Motion to Dismiss. Signed by District Judge Martin Reidinger on 03/26/2014. (thh)
THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
CIVIL CASE NO. 1:13-cv-00056-MR-DLH
RICHARD ERIC TAYLOR, Individually
and as Personal Representative of
the Estate of DIANNE GRUBB TAYLOR,
Deceased,
Plaintiff,
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vs.
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ALCATEL-LUCENT USA, INC.
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Defendant.
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_______________________________ ____ )
MEMORANDUM OF
DECISION AND
ORDER
THIS MATTER is before the Court for resolution of the Defendant’s
Motion to Dismiss [Doc. 7].
I.
PROCEDURAL AND FACTUAL BACKGROUND
The Plaintiff Richard Eric Taylor (“Mr. Taylor”) filed this action on
March 1, 2013 against the Defendant Alcatel-Lucent USA, Inc. (“Lucent”),
for claims of negligence and breach of an implied warranty of
merchantability as a consequence of the alleged asbestos exposure that
caused his wife Diane Grubb Taylor (“Ms. Taylor”) to die from asbestosrelated mesothelioma on April 24, 2011.
Lucent is the successor to
Western Electric Company, Inc. (“Western Electric”), which was part of the
AT&T network along with Southern Bell Telephone Company (“Southern
Bell”), where Ms. Taylor worked. [Doc. 7-1 at 2].
The Taylors were involved in litigation regarding Ms. Taylor’s
asbestos-related mesothelioma even before her death.
They filed a
worker’s compensation claim against Southern Bell in North Carolina.
[Doc. 7-2]. On October 21, 2010, they filed a civil action in South Carolina
state court, in relation to Ms. Taylor’s alleged exposure to asbestos from
her father’s employment. [Docs. 10 at 5, 7-4]. In the South Carolina case,
they named numerous defendants involved in the production and
distribution of asbestos products. [Id.]. Lucent was added as a defendant
in that case in April 2011, and the case was amended to include a wrongful
death claim after Ms. Taylor’s death.1 [Doc. 7-4]. Since Mr. Taylor’s claims
cannot succeed in the South Carolina case due to a state “door closing
statute,” S.C. Code Ann. § 15-5-150, which prevents a non-resident plaintiff
from pursuing an action in South Carolina state court where the cause of
action did not arise in that state, Mr. Taylor has moved to dismiss the South
1
The Taylors filed another civil case on October 28, 2010 in Mecklenburg County
Superior Court, North Carolina, against Norfolk Southern Railway Company in relation
to alleged exposure from Ms. Taylor’s father’s employment. [Doc. 7-12]. This case was
transferred to MDL 875 in the U.S. District Court for the Eastern District of
Pennsylvania. [Id.]. After Ms. Taylor died in April 2011, Mr. Taylor filed an action in
Rowan County Superior Court, re-alleging claims against Norfolk Southern Railway
Company. [Doc. 7-13].
2
Carolina action without prejudice.
Lucent, however, has moved for
summary judgment in the South Carolina case. [Doc. 10-1].
On December 19, 2012, Mr. Taylor filed suit against Lucent in
Delaware state court, in relation to Ms. Taylor’s alleged exposure to
asbestos from her work environment at Southern Bell where she worked as
a telephone operator and through her husband’s work environment at
AT&T where he worked as a technician. [Doc. 7-8]. Lucent obtained a
dismissal without prejudice in the Delaware action on the basis of forum
non conveniens on March 4, 2013, giving Mr. Taylor opportunity to re-file in
an appropriate jurisdiction. [Doc. 7-11 at 2-3].
Thereafter, Mr. Taylor filed this present action in this Court on March
1, 2013, alleging claims related to his wife’s exposure to asbestos through
both his and her work environments. [Doc. 1 at ¶¶ 6, 25]. Mr. Taylor
claims that Western Electric made asbestos-containing products for both of
the employment sites, and that Western Electric employees caused
asbestos to be released into the air by many activities at both the Southern
Bell and AT&T locations. [Id. at ¶¶ 8-25]. Lucent has moved to dismiss
and/or stay this action pursuant to the abstention doctrine outlined in
Colorado River Water Conservation District v. United States, 424 U.S. 800
(1976).
[Doc. 7].
Alternatively, Lucent argues that the Court should
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dismiss this action in the exercise of its discretion based on Mr. Taylor’s
abuse of the judicial process.
[Doc. 7].2
In the event that the Court
declines to dismiss this action, Lucent requests an Order to stay the case
pending payment by Mr. Taylor of Lucent’s attorney’s fees and/or costs
incurred in defending Mr. Taylor’s prior litigation pursuant to Fed. R. Civ. P.
41(d), Fed. R. Civ. P. 11, and 28 U.S.C. § 1927. [Id. at 2]. Mr. Taylor
opposes Lucent’s motion. [Doc. 10].
Having been fully briefed, this matter is ripe for review.
II.
ANALYSIS
A.
Colorado River Abstention Doctrine
The Supreme Court has stated that “[a]bstention from the exercise of
federal jurisdiction is the exception, not the rule.” Colorado River Water
Conservation District v. United States, 424 U.S. 800, 813 (1976). “[A]s
between state and federal courts, the rule is [generally] that the pendency
of an action in the state court is no bar to proceedings concerning the same
matter in the Federal court having jurisdiction . . .” Id. at 817 (citations and
2
In its Memorandum in Support of Motion to Dismiss [Doc. 7-1], Lucent also noted that
“Plaintiff’s claims are barred by the exclusivity provision of the Workers Compensation
Act.” This argument was not briefed nor was it a basis for the Motion to Dismiss [Docs.
7, 7-1]. Accordingly, the Court will not address this argument further.
4
internal quotes omitted).
Federal courts have a “virtually unflagging
obligation . . . to exercise the jurisdiction given them.” Id.
There are three main categories of cases in which abstention is
appropriate: (1) “cases presenting a federal constitutional issue which
might be mooted or presented in a different posture by a state court
determination of pertinent state law,” id., at 814 (quoting County of
Allegheny v. Frank Mashuda Co., 360 U.S. 185, 189 (1959)); (2) “difficult
questions of state law bearing on policy problems of substantial public
important whose importance transcends the result in the case then at bar,”
id. at 814 (citing Louisiana Power & Light Co. v. City of Thibodaux, 360
U.S. 25 (1959)); and (3) “where, absent bad faith, harassment, or a patently
invalid state statute, federal jurisdiction has been invoked for the purpose of
restraining state criminal proceedings, state nuisance proceedings
antecedent to a criminal prosecution, which are directed at obtaining the
closure of places exhibiting obscene films, or collection of state taxes.” Id.
at 816 (internal citations omitted).
The present case does not fall within any of these categories.
Nevertheless, “federal courts may abstain from exercising their jurisdiction
in the exceptional circumstances where a federal case duplicates
contemporaneous state proceedings and ‘[w]ise judicial administration,
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giving regard to conservation of judicial resources and comprehensive
disposition of litigation[,]’ clearly favors abstention.’”
Vulcan Chem.
Technologies, Inc. v. Barker, 297 F.3d 332, 340-41 (4th Cir. 2002) (quoting
Colorado River, 424 U.S. at 817).
As a threshold matter, Colorado River abstention is only appropriate
where there are parallel federal and state suits. See Chase Brexton Health
Services, Inc. v. Maryland, 411 F.3d 457, 463 (4th Cir. 2005). “Suits are
parallel if substantially the same parties litigate substantially the same
issues in different forums.” New Beckley Mining Corp. v. Int’l Union, United
Mine Workers of Am., 946 F.2d 1072, 1073 (4th Cir. 1991). For legal issues
to be logically deemed “substantially similar” they must at least share
common factual allegations and applicable law. See Chase Brexton, 411
F.3d at 464-65. “When a district court decides to dismiss or stay under
Colorado River, it presumably concludes that parallel state-court litigation
will be an adequate vehicle for the complete and prompt resolution of the
issues between the parties.”
Moses H. Cone Mem’l Hosp. v. Mercury
Const. Corp., 460 U.S. 1, 28 (1983).
“If parallel suits exist, then a district court must carefully balance
several factors, ‘with the balance heavily weighted in favor of the exercise
of jurisdiction.’” Chase Brexton, 411 F.3d at 463 (quoting Moses H. Cone
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Mem’l Hosp., 460 U.S. at 16). Six factors have been identified to guide the
analysis of Colorado River abstention: (1) whether the subject matter of the
litigation involves property where the first court may assume in rem
jurisdiction to the exclusion of others; (2) whether the federal forum is an
inconvenient one; (3) the desirability of avoiding piecemeal litigation; (4) the
relevant order in which the courts obtained jurisdiction and the progress
achieved in each action; (5) whether state law or federal law provides the
rule of decision on the merits; and (6) the adequacy of the state proceeding
to protect the parties’ rights. Chase Brexton, 411 F.3d at 463-64; Gannett
Co., Inc. v. Clark Const. Grp., Inc., 286 F.3d 737, 741 (4th Cir. 2002). The
task of this Court “is not to find some substantial reason for the exercise of
federal jurisdiction . . .; rather, our task is to ascertain whether there exist
exceptional circumstances, the clearest of justifications . . . to justify the
surrender of that jurisdiction.” Ackerman v. ExxonMobil Corp., 734 F.3d
237, 249 (4th Cir. 2013) (quoting Moses H. Cone Mem’l Hosp., 460 U.S. at
25-26).
While the present action involves some of the same parties as the
South Carolina action and both actions contain claims for negligence,
breach of warranty, and Mr. Taylor’s loss of consortium, the causes of
action are based on entirely distinct factual allegations. [Docs. 1, 7-4]. The
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factual allegations in the South Carolina action all pertain to Ms. Taylor’s
asbestos exposure resulting from her father’s employment as a plant
worker.
[Doc. 7-4].
By contrast, the action filed in this Court alleges
asbestos exposure resulting from Ms. Taylor’s employment at Southern
Bell and Mr. Taylor’s employment with a division of AT&T. [Doc. 1]. The
two cases are not parallel because the claims themselves are not the
same, and the overlap that the two cases may share is merely incidental to
the coincidence of the same defendant Lucent, the successor of an
asbestos manufacturer.3 While there are doubtless certain questions of
fact that could have arisen in Mr. Taylor’s South Carolina suit which might
also need to be addressed in this case, “‘the Colorado River doctrine does
not give federal courts carte blanche to decline to hear cases within their
jurisdiction merely because issues or factual disputes in those cases may
be addressed in past or pending proceedings before state tribunals.’” New
3
The cases that Lucent cites to support its premise that, for Colorado River purposes,
“the issues need only be substantially similar, not identical,” do not support the
argument that claims arising from completely separate factual allegations are logically
capable of constituting parallel actions. See Baseline Sports, Inc. v. Third Base Sports,
341 F. Supp. 2d 605, 608 (E.D. Va. 2004) (federal suit found parallel where claims were
a “mirror image” of state suit counterclaims, but for addition of parties); E. Associated
Coal Corp. v. Skaggs, 272 F. Supp. 2d 595, 599 (S.D. W.Va. 2003) (where there was
no contention that the federal and state suits were not parallel); Automated Sys. &
Programming, Inc. v. Cross, 176 F. Supp. 2d 458, 462-63 (D. Md. 2001) (where the
court abstained, sua sponte, from exercising jurisdiction over a fraud claim, filed in
federal court, that directly related to a breach of contract claim pending in state court).
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Beckley Min. Corp., 946 F.2d at 1073 (quoting United States v. SCM Corp.,
615 F. Supp. 411, 417 (D. Md. 1985)).
Further, the balance of relevant factors counsels that this is not the
exceptional case anticipated by Colorado River. The first factor, regarding
the involvement of property, is not applicable to this case. Chase Brexton,
411 F.3d at 463-64. The second factor relates to whether the federal forum
is inconvenient. Id. Here, Lucent will not have to continue litigating in
South Carolina once the current dispositive motions are addressed there,
and Lucent may well incorporate discovery materials from the South
Carolina action into this action. Further, Mr. Taylor lives in North Carolina,
Ms. Taylor worked in North Carolina, and many documents and witnesses
will still likely be in North Carolina. Thus, the present federal forum is not
inconvenient.
The third factor, which relates to avoiding piecemeal litigation, does
not weigh in favor of abstention. Id. Any concerns Lucent may have about
being subject to piecemeal litigation will likely be rendered moot by the
resolution of the current motions, which will dispose of the South Carolina
action. In any event, the South Carolina “door closing statute,” S.C. Code
Ann. § 15-5-150, prevents Mr. Taylor from litigating any asbestos claims in
that state based on injuries incurred in North Carolina. As such, the claims
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presented in the present action could not have been presented in the South
Carolina action. Finally, to the extent that any factual or legal issues have
already been litigated, the doctrines of collateral estoppel and res judicata
will prevent any prejudice to Lucent arising from the multiple actions
maintained by Mr. Taylor against it.
The fourth factor considers the order in which the courts obtained
jurisdiction and the progress achieved in each action. Id. Although Lucent
argues that substantial proceedings have progressed in state court
including discovery, the grant of Mr. Taylor’s motion for an expedited trial,
and Lucent’s presence in the case since April 2011, [Doc. 7-1 at 9-10], this
factor is not solely determinative and must be considered in conjunction
with the other factors.
The fifth factor relates to whether state or federal law provides the
rule of decision for the case. Chase Brexton, 411 F.3d at 463-64. In this
case, no federal law is implicated. Rather, North Carolina state law serves
as the governing law, since the claims asserted in the present action all
arose from alleged asbestos exposure in North Carolina. As previously
noted, these North Carolina claims are not and indeed cannot be asserted
in the South Carolina action. Accordingly, this factor does not weigh in
favor of abstention.
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The sixth factor considers the protection of the parties’ rights in the
state action. Id. As previously noted, abstention in this case would not
protect the parties’ rights, due to the South Carolina “door closing statute,”
S.C. Code Ann. § 15-5-150, which prevents Mr. Taylor from obtaining relief
in South Carolina with regard to his claims based on North Carolina
injuries.
Regardless of how the South Carolina case is disposed, Mr.
Taylor’s claims in this Court are unlikely to be resolved by that outcome
since they are based on distinct factual allegations.
Thus, for the reasons stated above, this Court will not abstain from
exercising its jurisdiction over this case.
B.
Abuse of Process
As defined in Stanback v. Stanback, 297 N.C. 181, 200-01, 254 S.E.
2d 611, 624 (1979), “abuse of process” is:
the misuse of legal process for an ulterior purpose.
It consists in the malicious misuse or misapplication
of that process after issuance to accomplish some
purpose not warranted or commanded by the writ.
It is the malicious perversion of a legally issued
process whereby a result not lawfully or properly
obtainable under it is [intended] to be secured. See
Barnette v. Woody, 242 N.C. 424, 88 S.E.2d 223
(1955); Finance Corp. v. Lane, 221 N.C. 189, 19
S.E.2d 849 (1942); Wright v. Harris, 160 N.C. 542,
76 S.E. 489 (1912). . . . [A]buse of process “requires
both an ulterior motive and an act in the use of the
legal process not proper in the regular proceeding .
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. . [and] [b]oth requirements relate to the
defendant’s purpose to achieve through the use of
the process some end foreign to those it was
designed to effect.” R. Byrd, Malicious Prosecution
in North Carolina, 47 N.C.L. Rev. 285, 288 (1969).
Thus, the “gist of an action for abuse of process is the improper use of the
process after it has been issued.” Manufacturers & Jobbers Finance Corp.
v. Lane, 221 N.C. 189, 196, 19 S.E.2d 849, 853 (1942) (citing Glidewell v.
Murray-Lacy & Co., 124 Va. 563, 98 S.E. 665 (1919) and 1 Am. Jur. Abuse
of Process § 34 (1936)). “There is no abuse of process where it is confined
to its regular and legitimate function in relation to the cause of action stated
in the complaint.”
Id., 221 N.C. at 196-97, 19 S.E.2d at 853 (citations
omitted).
Contrary to Lucent’s assertion, Mr. Taylor has not “filed and re-filed
cases up and down the Eastern seaboard” [Doc. 7-1 at 11] in a manner that
would constitute an abuse of process.
While Mr. Taylor has brought
multiple actions in relation to Ms. Taylor’s asbestos exposure, these actions
involve various factual allegations against various defendants. Mr. Taylor
initially brought the South Carolina case against other defendants, and only
added Lucent as a defendant after it conducted discovery and learned of
Lucent’s involvement. [Doc. 10 at 5]. Due to the South Carolina “door
closing statute,” S.C. Code Ann. § 15-5-150, Mr. Taylor filed suit against
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Lucent in Delaware and planned to litigate there until Lucent moved for
dismissal based on forum non conveniens. [Doc. 10 at 8]. The dismissal
order in Delaware specifically noted that the case was “dismissed without
prejudice to refiling in another appropriate jurisdiction.” [Doc. 7-11 at 2-3].
Thus, Mr. Taylor properly initiated suit against Lucent in this Court. Under
these circumstances, Mr. Taylor’s actions do not constitute abuse of
process. Lucent’s request for a dismissal on this basis is therefore denied.
C.
Attorney Fees and Costs
Finally, Lucent requests an Order to stay the case pending payment
by Mr. Taylor of attorney’s fees and/or costs incurred in defending Mr.
Taylor’s prior litigation pursuant to Fed. R. Civ. P. 41(d), Fed. R. Civ. P. 11,
and 28 U.S.C. § 1927. [Doc. 7 at 2]. Rule 41(d) of the Federal Rules of
Civil Procedure provides that “[i]f a plaintiff who previously dismissed an
action in any court based on or including the same claim against the same
defendant, the court (1) may order the plaintiff to pay all or part of the costs
of that previous action; and (2) may stay the proceedings until the plaintiff
has complied.” Fed. R. Civ. P. 41(d). Additionally, “reasonable attorney’s
fees and other expenses directly resulting from” a violation of Fed. R. Civ.
P. 11(b) can be imposed as a sanction.
Further, an attorney “who so
multiplies proceedings in any case unreasonably and vexatiously may be
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required by the court to satisfy personally the excess costs, expenses, and
attorneys’ fees reasonably incurred because of such conduct.” 28 U.S.C. §
1927.
Lucent is not entitled to relief under Rule 41(d) in this action. As
discussed previously, Mr. Taylor’s present action in this Court is not “based
on or including the same claim against the same defendant” as his South
Carolina case since his factual allegations are distinct with regard to the
sources of Ms. Taylor’s asbestos exposure. [Docs. 1, 7-4]. In any event,
Mr. Taylor’s South Carolina action against Lucent is still pending.
Additionally, Mr. Taylor did not dismiss the Delaware action.
Rather,
Lucent moved for that action to be dismissed and the court allowed the
dismissal “without prejudice to [Mr. Taylor] re-filing in another appropriate
jurisdiction” and without requiring Mr. Taylor to pay Lucent’s costs or
attorney’s fees. [Doc. 7-11 at 2-3].
Further, Lucent is not entitled to sanctions under Rule 11. Lucent
failed to make a “motion for sanctions . . . separately from any other motion
. . . describ[ing] the specific conduct that allegedly violates Rule 11(b)” or to
properly serve Mr. Taylor with a Rule 11 motion 21 days prior to its filing, as
required by Fed. R. Civ. P. 11(c)(2).
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Finally, Lucent is not entitled to an award of fees or costs under 28
U.S.C. § 1927. A “finding of counsel’s bad faith” is “a precondition to the
imposition of fees” under 28 U.S.C. § 1927. Brubaker v. City of Richmond,
943 F.2d 1363, 1382 n. 25 (4th Cir. 1991) (citing Blair v. Shenandoah
Women’s Center, Inc., 757 F.2d 1435, 1438 (4th Cir. 1985)). Mr. Taylor’s
counsel for the South Carolina action properly added Lucent as a
defendant after discovery, and Mr. Taylor’s counsel filed the Delaware
action reasonably, due to the South Carolina “door closing statute,” S.C.
Code Ann. § 15-5-150. Thus, the Court finds that there is no evidence of
bad faith on the part of either of Mr. Taylor’s counsel in the South Carolina
and Delaware actions.
III.
CONCLUSION
Upon careful consideration of the arguments of both parties in this
case, the Court concludes that it retains jurisdiction of this case, that there
was no judicial abuse of process by the Plaintiff in this case, and that the
Plaintiff should not be required to pay the expenses incurred by the
Defendant in the prior litigation. Accordingly, the Defendant’s Motion to
Dismiss [Doc. 7] is denied.
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ORDER
IT IS, THEREFORE ORDERED that the Defendant’s Motion to
Dismiss [Doc. 7] is DENIED.
IT IS SO ORDERED.
Signed: March 26, 2014
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