Mullinex et al v. Air & Liquid Systems Corporation et al

Filing 61

ORDER - The Court, having reviewed the record and making de novo findings regarding the positions of the R&R objected to, ADOPTS AND APPROVES the findings and recommendations set forth in the Reports and Recommendations (ECF Nos. 45 and 46). It is therefore ORDERED that Plaintiffs' Motion for Sanctions (ECF No. 37) is DENIED and Plaintiffs' Motion for Remand (ECF No. 19) is DENIED. Signed by District Judge Arenda L. Wright Allen on 2/20/2019. (dcou, )

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

f EB 2 0 2019

Newport News Division
HERBERT H. MULLINEX,JR.
and PATRICIA E. MULLINEX,

Plaintiffs,
Civil Action No. 4:18cv33

AIR & LIQUID SYSTEMS CORPORATION,

successor by merger to BUFFALO PUMPS,INC., et al
Defendants.

ORDER

The matters before the Court are two Reports and Recommendations by United States

Magistrate Judge Krask following Plaintiffs' Motion for Sanctions and Plaintiffs' Motion for
Remand. The Motions were referred to United States Magistrate Judge Krask pursuant to the

provisions of28 U.S.C. §§ 636(b)(1)(B)and(C), Federal Rule of Civil Procedure 72(b), and Local

Rule 72 for report and recommendation ("R&R"). Both R&Rs were filed on December 6, 2018,

and Plaintiffs subsequently filed objections to both. This Court has reviewed the record and has
considered the objections. After making de novo findings regarding the portions objected to, and
for the reasons stated herein, the Court ADOPTS the Report and Recommendation(ECF No. 45)

to deny Plaintiffs' Motion to Remand (ECF No. 19) and ADOPTS the Report and
Recommendation(ECF No.46)denying Plaintiffs' Motion for Sanctions(ECF No. 37).
L

Motion to Remand

In their Motion to Remand(ECF No. 19), Plaintiffs argue that Defendant John Crane, Inc.

("JCI") removed the case from state court under an improper assertion of a federal contractor

1

defense pursuant to 28 U.S.C. § 1442. ECF No. 45 at 18-21. The Magistrate Judge found that

removal was timely. Id. at 27. He also found that JCI sufficiently asserted a "colorable federal
contractor defense" under § 1442(a)(1).

Id. at 33.

Accordingly, the Magistrate Judge

recommended that Plaintiffs' Motion to Remand be denied. Id. at 45.

Plaintiffs first challenge the standard under which the timeliness of removal was
considered. Id. at 8. The R&R acknowledges that a defendant must remove a case within thirty
days of the case's removability under §§ 1446(b)(1) and 1446(b)(3). ECF No.45 at 27. Plaintiffs
argue that the removal period should have begun before JCI became "unequivocally clear and

certain" that removal was proper. The standard that was applied was derived from a published
decision of this Court. See ECF No. 45 at 29 (citing US Airways, Inc. v. PMA Capital Ins. Co.,

340 F. Supp. 2d 299 (E.D. Va. 2004)). Plaintiffs argue that in absence of any decision by the
United States Court of Appeals for the Fourth Circuit adopting that standard, this Court should

refrain from doing so. They also claim that the Fourth Circuit disapproved of such a standard
when it held that a defendant extensively litigating in the state court had waived its right to

removal. ECF No. 45 at 26 (citing Northrop Grumman Tech. Servs., Inc. v. DynCorp Int'l LLC,
865 F.3d 181 (4th Cir. 2017). The Magistrate Judge addressed the facts presented in Northrop
Grumman, finding that they differ widely from facts here because this Defendant lacked
knowledge about the basis for removal for months and did not conduct a defense in state court for
several months before removal. ECF No.45 at 26-27.

The Court finds Northrop Grumman inapposite. Plaintiffs fail to present any binding

precedent that forbids applying the standard applied in the R&R. The Court OVERRULES this
Objection.

Next, Plaintiffs object to the R&R's finding that JCI did not waive its government
contractor defense in the state court. ECF No. 47 at 22. Plaintiffs claim that JCI's discovery

responses and failure to oppose Plaintiffs' motion to strike should constitute a waiver of the
defense. Id.

The Magistrate Judge determined that JCI's discovery responses were "not

affirmative, intentional and unambiguous statements about facts that constitute judicial
admissions." ECF No.45 at 24. JCI lacked sufficient notice that the Plaintiffs intended to abandon

the disclaimer. The Court agrees that it was reasonable for JCI to believe that"JCI could not waive
a defense that Plaintiffs had already removed from the scope ofthe case" via disclaimer. Id. at 25.
Finally, Plaintiffs object to the R&R's alleged failure to credit their experts' testimony that
federal law compelled JCI to include wamings on its gaskets. ECF No. 47 at 23-24. Plaintiffs
allege that the govemment did not exercise discretion, as is required to present a colorable defense.
The Court need only find a "reasonable probability" that facts support a colorable
contractor defense. Here, JCI provided sufficient evidence that the Navy "dictated or approved

the wamings that the contractor actually provided." ECF No. No. 45 at 36; ECF No. 49 at 10.
'
Therefore, JCI has established a "reasonable probability" of a colorable govemment contractor

defense. The Objection is OVERRULED.
11.

Motion for Sanctions

Plaintiffs seek sanctions(ECF No. 21) against JCI under Federal Rule of Civil Procedure

11 for JCI's assertion of a govemment contractor defense and removal thereunder. Plaintiffs
argued that removal was frivolous, but the Magistrate Judge found that JCI acted reasonably. ECF

'"[I]n specifying some warnings in response to the known dangers of asbestos, the govemment necessarily exercised
discretion in not requiring additional wamings." ECF No.45 at 37(quoting Sawyer v. Foster Wheeler LLC,860 F.3d
249, 257(4th Cir. 2017)).

No.46 at 5-7. Plaintiffs also alleged that JCI asserted the contractor defense in bad faith, but the
Magistrate Judge held that Plaintiffs failed to establish objective evidence of an improper motive.
ECF No.46 at 8-9. Finally, Plaintiffs claimed that JCI misrepresented its knowledge of Plaintiffs'
claims for purposes of meeting the deadline for removal, but the R&R recognized legal and factual
grounds to support the timeliness of JCI's removal. Id. at 10. Accordingly, the Magistrate Judge
recommended that Plaintiffs' Motion for Sanctions be denied. ECF No.45. By copy ofthe report,

each party was advised of the right to file written objections to the findings and recommendations
made by the Magistrate Judge. Id. Plaintiffs timely filed Objections.
Plaintiffs again argue that JCI knew ofPlaintiffs' claims involving warnings on the gaskets

before JCI filed for removal, and that JCI misrepresented its alleged notice of Plaintiffs' claims.
ECF No. 48 at 6. Given JCI's reasonable uncertainty regarding Plaintiffs' claims and Plaintiffs'
failure to cite objective evidence that JCI misled the Court, JCI's conduct does not warrant

sanctions. Plaintiffs also object to the R&R's finding that JCI's removal was made in good faith.
ECF No.48 at 7-8. Plaintiffs' disclaimer, which removed claims that would implicate the federal

contractor defense, provides reasonable grounds for JCI's uncertainty as to Plaintiffs' claims up to
the eve of trial. Therefore, sanctions are not warranted, and the Objections to this portion of the
R&R are OVERRULED.
III.

Conclusion

The Court, having reviewed the record and making de novo findings regarding the positions

ofthe R&R objected to, ADOPTS AND APPROVES the findings and recommendations set forth
in the Reports and Recommendations (ECF Nos. 45 and 46). It is therefore ORDERED that
Plaintiffs' Motion for Sanctions (ECF No. 37) is DENIED and Plaintiffs' Motion for Remand

(ECFNo. 19)is DENIED.
IT IS SO ORDERED.

ArendaX<^right Allen
United States District Judge

orfolk, Virginia
2019