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Davis v. Omega Refining, LLC

United States District Court, E.D. Louisiana

June 11, 2015

STACY DAVIS, BECKY VALLEE & JAMES A. BLOCK
v.
OMEGA REFINING, LLC; OMEGA REFINING, INC.; VERTEX REFINING LA, LLC & STACEY LUCAS SECTION:

ORDER AND REASONS

MARY ANN VIAL LEMMON, District Judge.

IT IS HEREBY ORDERED that Stacey Lucas' Motion to Dismiss (Doc. #6) is DENIED.

IT IS FURTHER ORDERED that Plaintiffs' Motion to Remand (Doc. #10) is GRANTED, and this matter is REMANDED to the Twenty-Fourth Judicial District Court, Parish of Jefferson, State of Louisiana

BACKGROUND

This matter is before the court on plaintiffs' motion to remand. Plaintiffs argue that this court lacks diversity subject-matter jurisdiction under 28 U.S.C. § 1332(a) because they and defendant, Stacey Lucas, are all citizens of Louisiana. Plaintiffs also argue that this court should decline to exercise diversity subject-matter jurisdiction under the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d), because the local controversy exception, 28 U.S.C. § 1332(d)(4), applies. Also before the court is a motion to dismiss filed by Lucas. She argues that plaintiffs cannot state a claim against her, and improperly joined her as a defendant to defeat diversity subject-matter jurisdiction.

Plaintiffs filed this putative class action[1] on January 16, 2015, in the Twenty-Fourth Judicial District Court, Parish of Jefferson, State of Louisiana against defendants, Omega Refining, LLC, Omega Refining, Inc. (collectively "Omega"), Vertex Refining LA, LLC, and Lucas, alleging toxic tort claims related to the operation of an oil recycling plant in Marrero, Louisiana. Omega owned the facility until May 2014, when it sold the facility to Vertex. Lucas, a Vertex employee, has been the plant manager since August 25, 2014. Plaintiffs allege that:

14. From 2012 to date and continuing, the Facility continuously failed to prevent frequent, foreseeable, and preventable breakdowns, and along with the improper functioning of refinery equipment, violated its hourly permit emission limits for Hydrochloric Acid (HCL), Nitrogen Oxide/Dioxide (NOx), Sulfur Dioxide (SO2) and Hydrogen Sulfide (H2S).
15. The Facility concealed and misrepresented information to the Louisiana Department of Environmental Quality when submitting "Notice of Unauthorized Discharge" documents.
16. The Facility neglected to disclose a new un-permitted pointsource altogether - inevitably resulting in the direct emissions of harmful pollutants without any measure of protection for the surrounding community.
17. During all relevant times, the Facility caused the unpermitted discharge of chemicals onto its land and inside the Facility, as well as the property and water near the Jefferson Parish water works intake system. Upon information and belief these improper discharges and spills were not reported to the proper[] authorities as required by Louisiana law.

Plaintiffs also allege specific acts and omissions that occurred from 2012 through 2014 and the present day. As to Lucas, plaintiffs allege that as "the plant manager, [she] had a duty to prevent the release and ultimate exposure of the plaintiffs."

On February 18, 2015, defendants removed this action to the United States District Court for the Eastern District of Louisiana alleging diversity subject-matter jurisdiction under § 1332(a), and CAFA, § 1332(d). Defendants contend that Omega and Vertex have diverse citizenship from that of plaintiffs, and that Lucas' Louisiana citizenship should be disregarded because she was improperly joined to defeat diversity subject-matter jurisdiction. They also contend that the requirements of CAFA are satisfied.

Plaintiffs filed a motion to remand this action to the Twenty-Fourth Judicial District Court, Parish of Jefferson, State of Louisiana, arguing that Lucas was not improperly joined and that the local controversy exception to CAFA applies. Defendants filed a motion to dismiss arguing that plaintiffs cannot sustain a claim against Lucas under Louisiana law, and thus, she was improperly joined and plaintiffs' claims against her should be dismissed.

ANALYSIS

A. Remand Standard

Motions to remand to state court are governed by 28 U.S.C. 1447(c), which provides that "[i]f at any time before the final judgment it appears that the district court lacks subject-matter jurisdiction, the case shall be remanded." The removing defendant bears the burden of demonstrating that federal jurisdiction exists and therefore that removal was proper. Jernigan v. Ashland Oil, Inc., 989 F.2d 812, 815 (5th Cir. 1993).

In assessing whether removal is appropriate, the court is guided by the principle, grounded in notions of comity and the recognition that federal courts are courts of limited jurisdiction, that removal statutes should be strictly construed. See Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). Doubts regarding whether federal jurisdiction is proper should be resolved against federal jurisdiction. Acuna v. Brown & Root, 200 F.3d 335, 339 (5th Cir. 2000).

B. Diversity Subject-Matter Jurisdiction under § 1332(a)

Defendants removed this action alleging that this court has diversity subject-matter jurisdiction under 28 U.S.C. § 1332(a)(1), which provides that district courts have original jurisdiction over civil actions where the amount in controversy exceeds $75, 000, exclusive of interest and costs, and are between citizens of different States. Defendants contend that plaintiffs are all Louisiana citizens, and the properly joined defendants, Omega and Vertex, are not. They argue that Lucas, who is a Louisiana citizen, was improperly joined to defeat diversity subjectmatter jurisdiction.

a. Improper Joinder

Defendants argue that Lucas' citizenship should be disregarded for the purposes of establishing subject-matter jurisdiction because plaintiffs cannot maintain a claim against her under Louisiana law, and she is improperly joined. Lucas also argues that plaintiffs' claims against her should be dismissed for those same reasons.

There are two ways to establish improper joinder: (1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the allegedly improperly joined party in state court. Smallwood v. Ill. Cent. R.R., 385 F.3d 568, 573 (5th Cir. 2004) (en banc). The United States Court of Appeals for the Fifth Circuit has stated:

The test for fraudulent joinder is whether the defendant has demonstrated that there is no possibility of recovery by the plaintiff against an in-state defendant, which stated differently means that there is no reasonable basis for the district court to predict that ...

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