Butler et al v. RLB Contracting, Inc.
Filing
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MEMORANDUM AND ORDER granting 3 MOTION to Remand. Case is remanded to the 253rd Judicial District Court of Chambers County, TX. Case terminated on 4/24/14.(Signed by Judge Gregg Costa) Parties notified.(arrivera, 3)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
GALVESTON DIVISION
MARK BUTLER, et al,
Plaintiffs,
VS.
RLB CONTRACTING, INC.,
Defendant.
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CIVIL ACTION NO. 3:14-CV-112
MEMORANDUM AND ORDER
This case arises from a tragic circumstance—the death of Plaintiff Mark
Butler’s daughter, which allegedly resulted after a collision on the Anahuac
Channel between his boat and a pipe line attached to a dredge owned by Defendant
RLB Contracting, Inc. Butler initially filed suit against RLB in Chambers County
state court in June 2012, asserting several claims, including negligence, wrongful
death, and loss of consortium. RLB then filed a limitation of liability action in this
Court in December 2012, which the Court dismissed on limitation grounds in
February 2014. Exactly 30 days after that denial, RLB filed its notice of removal
of the state court action. Butler now asserts that RLB’s removal was untimely and
that this case should therefore be remanded.
I.
WAS THE REMOVAL TIMELY?
Butler initially argued that this case should be remanded for lack of subject-
matter jurisdiction. Docket Entry No. 3 ¶ 10. However, after the Court instructed
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RLB to address whether the removal to federal court was timely, Butler has made
that issue—the timeliness of the removal—the focal point of his remand motion.
See Plf’s Reply to Response to Motion to Remand, Docket Entry No. 7 at 5
(concluding, without addressing the existence or absence of subject-matter
jurisdiction, that “[d]ue to RLB’s untimely removal, this case should be
remanded.”).
The Court unquestionably has subject-matter jurisdiction under general
maritime law; the events that gave rise to Butler’s claims occurred on navigable
waters and have a substantial relationship to traditional maritime activity. See Roth
v. Kiewit Offshore Servs., Ltd., 625 F. Supp. 2d 376, 383 (S.D. Tex. 2008) (citing
Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 531–32
(1995)).
Butler’s subject-matter jurisdiction argument—to the extent he still
asserts it—is more properly characterized as a question of whether the case was
removable.
Resolving that issue would require the Court to interpret recent
amendments to the federal removal statute. See Federal Courts Jurisdiction and
Venue Clarification Act of 2011, § 105, Pub. L. No. 112–63, 125 Stat. 758. Prior
to those modifications, which became effective in January 2012, the proposition
that maritime claims were not removable was universally accepted. See Romero v.
International Terminal Operating Co., 358 U.S. 354 (1959). That certainty is
gone; in its place is a hotly contested issue in maritime law. A federal district court
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in this District was the first to hold that admiralty-only cases can now be removed
to federal court. See Ryan v. Hercules Offshore, Inc., 945 F. Supp. 2d 772 (S.D.
Tex. 2013); see also Bridges v. Phillips 66 Co., 2013 WL 6092803, at *4–5 (E.D.
La. Nov. 19, 2013) (agreeing with Ryan that general maritime claims can be
removed to federal court). But Ryan has been considered, and rejected, by a
district court outside of this Circuit. See Coronel v. AK Victory, --- F. Supp. 2d ---, 2014 WL 820270, at *3 (W.D. Wash. 2014) (holding that court did not have
original jurisdiction over plaintiff’s general maritime claims); see also David W.
Robertson & Michael F. Sturley, Recent Developments in Admiralty and Maritime
Law at the National Level and in the Fifth and Eleventh Circuits, -- TUL. MAR. L.J.
--, Admiralty and Maritime Law Conference, at 51 (Oct. 18, 2013) (predicting that
Ryan will not be accepted by the Fifth Circuit). Though this case presents the
same unresolved question addressed by those courts—whether a maritime case
initially brought in state court is removable—the Court need not decide it here.
RLB’s removal was untimely, and the case can thus be resolved on that basis.
Defendants normally must file a removal notice within 30 days after
receiving “a copy of the initial pleading setting forth the claim for relief upon
which such action or proceeding is based.” 28 U.S.C. § 1446(a). The most salient
exception to this 30-day deadline, which like other removal statutes is “subject to
strict construction,” see Frank v. Bear Stearns & Co., 128 F.3d 919, 922 (5th Cir.
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1997), is that defendants have 30 days to remove after receiving “a copy of an
amended pleading, motion, order or other paper from which it may first be
ascertained that the case is one which is or has become removable.”
1446(b)(3).
Id. §
The typical case in which section 1446(b)(3) applies is when it
becomes apparent only later in a case that the amount-in-controversy exceeds
$75,000 or when the plaintiff amends state court pleadings to assert a federal
claim. See, e.g., Elmer v. Northland Ins. Co., 2013 WL 3356881, at *3–4 (E.D.
La. July 3, 2013) (restarting removal clock because defendant was unaware that
plaintiff’s potential damages exceeded jurisdictional limits until it received
plaintiff’s discovery responses); Simmons v. Sabine River Authority of Louisiana,
823 F. Supp. 2d 420, 426 (W.D. La. 2011) (stating that section 1446(b)’s thirty-day
removal clock started when plaintiffs filed their first state petition to “explicitly
assert federal claims”).
In this case, there was no new pleading or other court filing that alerted RLB
to the fact that this case implicated maritime jurisdiction; that was obvious from
the time suit was filed in Texas state court in June 2012. What changed, according
to RLB, was the case law—that is, the issuance of Ryan. RLB did not even file its
removal within 30 days of the issuance of that decision, a delay that RLB attributes
to the federal limitations action staying the state court proceedings until February
2014. Though the Court has doubts concerning whether the federal limitations suit
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barred RLB from removing this case, it has a more fundamental concern with
RLB’s argument: this case was first removable in June 2012, when it was initially
filed and long before the stay, not in May 2013, when Ryan was issued.
RLB’s argument that Ryan gave them a new 30-day clock is at odds with
section 1446(b)(3)’s text and the overwhelming majority of decisions interpreting
it. Section 1446(b)(3) provides that: “If the case stated by the initial pleading is
not removable, a notice of removal may be filed within 30 days after receipt by the
defendant, through service or otherwise, of a copy of an amended pleading,
motion, order or other paper from which it may first be ascertained that the case is
one which is or has become removable.” Multiple terms in this statute demonstrate
that documents triggering this rule are ones filed in the lawsuit being removed.
“Receipt by the defendant” and “through service or otherwise” indicate a document
that will be served on the defendant in the lawsuit, which court opinions in other
cases are not. And, under the canon of ejusdem generis (that general words
following specific ones should be interpreted to be of the same kind or class as the
specific ones), “other paper” following “amended pleading,” “motion,” and
“order” means those papers are ones that are part of the particular lawsuit.
This language has led courts to conclude that “court decisions in unrelated
cases [do] not constitute ‘orders’ or ‘other papers’ under § 1446(b) and [are] not []
grounds for removal.” Green v. R.J. Reynolds Tobacco Co., 274 F.3d 263, 266–67
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(5th Cir. 2001) (citing with approval eight district court cases, including Lozano v.
GPE Controls, 859 F. Supp. 1036, 1038 (S.D. Tex. 1994), in which courts rejected
the argument that new case law presented a new ground for removal). The Fifth
Circuit has only recognized one exception to this general rule, and it does not apply
here: a separate case that involves the same defendant, a similar factual situation,
and a question of removal can constitute an “order” under section 1446(b). Id. at
268.
RLB relies on a case out of this Division, Landry v. Cross Country Bank,
431 F. Supp. 2d 682, 686 (S.D. Tex. 2003), for the proposition that under section
1446(b), a “clear statement of new law”—which in Landry was a recent Supreme
Court case—makes a case removable.1 But this “clear statement of new law”
approach ignored Green and has not been adopted by other courts within or outside
the Fifth Circuit. There are also sound policy reasons why new case law does not
trigger a new period for removal. Allowing an unrelated judicial decision to make
a pending case removable—regardless of how long it has been alive in state
court—would undermine one of the main purposes of the 30-day limitation
window: preventing a waste of resources. See 14C Charles A. Wright & Arthur R.
1
RLB asserts that it is not arguing that Ryan is an “other paper” for purposes of removal under
section 1446(b). Docket Entry No. 8 at 1. But what RLB therefore appears to be arguing—that
there is a “clear statement of new law” exception to the general removal statute—lacks any
support from the text of that statute. Furthermore, Landry explicitly held that the recent Supreme
Court case at issue was an “other paper” that the defendant had received under section 1446(b).
Thus, despite RLB’s statement to the contrary, RLB’s only plausible argument for the timeliness
of its removal is that Ryan was an “other paper” under section 1446(b).
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Miller, Fed. Prac. & Proc. Juris. § 3731 (4th ed.) (“The goal [of the 30-day removal
window] is early resolution of the court system in which the case will be heard.”).
And it would provide improper cover for defendants who could have made timely
and reasonable legal arguments in support of removal at the outset of the litigation.
See Lozano, 859 F. Supp. at 838 (noting that even though a statute was not
“judicially recognized as a basis for federal question jurisdiction at the time of
defendants’ original removal,” the defendants “could still have ascertain[ed] the
possible removability of this case.”). Despite the dearth of case law interpreting
the new removal statute’s effect on maritime cases, the defendants in Ryan timely
removed. See Critchfield Physical Therapy, P.C. v. Taranto Grp., Inc., 2012 WL
1298361, at *3 (D. Kans. 2012) (noting that a recently issued, on-point Supreme
Court decision did not make the pending case removable and that “[t]his defendant
could have pursued removal on the basis that the defendant in [the Supreme Court
decision] did, but chose not to.”).
For these reasons, Ryan does not constitute a “paper” RLB received later in
the case that would restart the removal clock. See 28 U.S.C. § 1446(b)(3).
II.
COSTS
Butler has also moved for costs under 28 U.S.C. § 1447(c), which gives
district courts discretion to “require payment of just costs and any actual expenses,
including attorney fees, incurred as a result of removal.” The Supreme Court has
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held that “courts may award attorney’s fees under § 1447(c) only where the
removing party lacked an objectively reasonable basis for seeking removal.
Conversely, when an objectively reasonable basis exists, fees should be denied.”
Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005); see also Del Carmen
Esparza v. Jozwiak, 391 F. Supp. 2d 504, 508 (E.D. Tex. 2005) (“Courts do not . . .
award costs simply because removal was improper.”).
Given that (1) the law is unsettled regarding whether maritime claims are
now removable; and (2) RLB supported its timeliness argument with Landry, a
case out of this Division (even though the Court disagrees with its holding), the
motion to remand was not objectively unreasonable. Exercising the considerable
discretion courts have to award or deny costs—including attorney’s fees—in these
circumstances, the Court declines to award Butler’s costs here. See Hornbuckle v.
State Farm Lloyds, 385 F.3d 538, 541, 541 n.5 (5th Cir. 2004) (stating that both
award of attorney’s fees and costs under § 1447(c) are subject to abuse of
discretion standard and that award of costs are subject to particularly narrow
appellate review).
III.
CONCLUSION
For the reasons explained above, Butler’s Motion to Remand (Docket Entry
No. 3) is GRANTED and this case is REMANDED to the 253rd Judicial District
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Court of Chambers County, Texas. However, Butler’s request for reasonable and
necessary fees, expenses, and costs is DENIED.
SIGNED this 24th day of April, 2014.
______________________________
Gregg Costa
United States District Judge
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