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Freeman v. Phillips 66 Co.

United States District Court, E.D. Louisiana

December 18, 2014

DAN FREEMAN,
v.
PHILLIPS 66 COMPANY, et al., SECTION

ORDER & REASONS

KURT D. ENGELHARDT, District Judge.

Now before the Court is Plaintiff's, Dan Freeman ("Freeman"), "Motion to Remand" (Rec. Doc. 9). Defendant, Chevron Phillips Chemical Company LP, as successor in interest to Phillips Petroleum Company f/k/a Cononoco Phillips and n/k/a Phillips 66 Company formerly d/b/a Drilling Specialties Company, ("CPCC"), filed a response in opposition (Rec. Doc. 10). Freeman filed a reply. (Rec. Doc. 15). For the reasons stated herein,

IT IS ORDERED that Freeman's "Motion to Remand" (Rec. Doc. 9) is GRANTED, and the matter is hereby REMANDED to the Civil District Court for the Parish of Orleans, State of Louisiana.

I. Background

Freeman filed his original petition in the Civil District Court for the Parish of Orleans, State of Louisiana against four Jones Act defendants and several non-Jones Act defendants, alleging damages resulting from exposure to asbestos through contact with drilling mud additives. (Rec. Doc. 1). Approximately three years into this litigation, Freeman filed his First Supplemental and Amending Petition for Damages, which added general maritime claims and a new defendant, North River Insurance Company. CPCC and North River each filed separate notices of removal in response to the amended petition. North River, but not CPCC, asserted that the Outer Continental Shelf Lands Act ("OCSLA") applied as its basis for removal. The two matters were consolidated before this Court, and Freeman filed a Motion to Remand. The Court granted the motion finding, in particular, that North River had not shown, by a preponderance of the evidence, that the OCSLA applied. (Rec. Doc. 48 Civ. Action No. 14-CV-311). Since then, the parties have conducted discovery, which included taking deposition testimony, pursuing the action in state court. On September 30, 2014, based on the receipt of Greg Perkin's, plaintiff's expert, deposition testimony, CPCC filed its second notice of removal alleging that the testimony conferred federal jurisdiction under the OCSLA. (Rec. Doc. 1). Specifically, CPCC argues that the testimony is "other paper" for purposes of 28 U.S.C. 1446(b)(3). Now before the Court is Freeman's Motion to Remand. (Rec. Doc. 9).

II. Law and Analysis

Federal courts are courts of limited jurisdiction, and removal statutes are to be strictly construed. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941). The removing party bears the burden of establishing federal jurisdiction over the controversy at issue. Winters v. Diamond Shamrock Chem. Co., 149 F.3d 387, 397 (5th Cir. 1998). And, the removing party must prove that federal jurisdiction exists by a preponderance of the evidence. Young v. United States, 727 F.3d 444, 446 (5th Cir. 2013). All ambiguities are construed against removal. Butler v. Polk, 592 F.2d 1160, 1164 (5th Cir. 1979). Furthermore, all ambiguities are to be interpreted in favor of the non-removing party. Travis v. Irby, 326 F.3d 644, 648 (5th Cir. 2003). Section 1446(b)(3) of the United States Code Title 28 provides: "[e]xcept as provided in subsection (c), 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." 28 U.S.C. § 1446.

CPCC relies on federal question jurisdiction under the OCSLA as the basis for its second notice of removal. Federal question jurisdiction is generally governed by the well-pleaded-complaint rule, which provides that "federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). It does not suffice that the facts alleged in support of an asserted state-law claim would also support a federal claim. Beneficial Nat. Bank v. Anderson, 539 U.S. 1, 12, 123 S.Ct. 2058, 2065, 156 L.Ed.2d 1 (2003) (emphasis added). In most removal cases brought pursuant to 1446(b)(3) based on the "other paper" exception, courts are determining if diversity jurisdiction has been established. Eggert v. Britton, 223 F.Appx. 394, 397 (5th Cir. 2007). Only in rare circumstances have courts looked to "other paper" to establish federal question jurisdiction. Id . For instance, "other paper" may serve to show a plaintiff's state law claim that is preempted by federal law. Id . However, the "other paper" cannot be used to establish a new federal cause of action, but only to clarify the ambiguous nature of an existing claim. Id.

To constitute "other paper" under 1446(b)(3), the defendant must show that (1) the paper was a result of a voluntary act by the plaintiff and (2) it is sufficient to give the defendant notice of the changed circumstances that now support federal jurisdiction. S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 494 (5th Cir. 1996). Significantly, the parties do not cite, nor has this Court found through its own research, any Fifth Circuit precedent establishing that a plaintiff's expert witness's testimony, responding to defense counsel's questioning, is the result of a voluntary act of the plaintiff for purposes of establishing federal question jurisdiction under 1446(b)(3).[1] The Court has doubts as to whether the circumstances as alleged here, i.e. the statements of Greg Perkin, are properly considered the result of a "voluntary act" of the plaintiff, even though he is an expert offered by the plaintiff. Primarily, the statements relied upon by CPCC came only in response to questions posed by counsel for the defendant and, in one instance, resulted after defense counsel presented Mr. Perkin with documents that CPCC previously created and produced to him for the first time during the deposition. While these facts raise the Court's concern, the Court finds that it can decide this motion on other grounds and declines to rule on the parties' "voluntary act" arguments.[2]

Assuming arguendo that the testimony of Mr. Perkin establishes a voluntary act of the plaintiff, CPCC is still required to show that the testimony gave CPCC notice of the changed circumstances now giving rise to federal jurisdiction. Id . As previously stated, CPCC relies on the OCSLA to provide federal jurisdiction. "Congress enacted [the] OCSLA to provide a federal body of law to govern operations on the outer Continental Shelf." Hufnagel v. Omega Serv. Indus., Inc., 182 F.3d 340, 349 (5th Cir. 1999). To establish OCSLA jurisdiction, a party must show, among other elements, that the facts underlying the complaint occurred on an OCSLA situs. Barker v. Hercules Offshore, Inc., 713 F.3d 208, 213 (5th Cir. 2013). A situs may include a device "permanently or temporarily attached to the seabed [of the OCS]... for the purpose of exploring for, developing, or producing resources therefrom.'" Id . (citing 43 U.S.C. § 1333(a)(1)). Therefore, under the standards set forth above with regard to 1446(b)(3), CPCC must demonstrate that Mr. Perkin's testimony clarifies Freeman's claims such that the Court may determine that the facts giving rise to the complaint occurred on an OCSLA situs.

The two statements upon which CPCC relies to establish federal question jurisdiction are as follows:

Q. Okay. Let's go to the conclusion section entitled the first reports, opinions and conclusions. Let me see if I can capture the central sentiment here. Citing 33 CFR 142, which pertains to the Outer Continental Shelf, it's your opinion because the oilfield operator authorized the use of asbestos drilling mud additives, the operator had a duty and responsibility to ensure that operations were in compliance with workplace safety and health regulations and to ensure the workplace was free from recognized hazards. Did I read that fairly?
A. You did.
Q.... Okay. Does it remain your ...

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