United States District Court, W.D. Louisiana, Monroe Division
JAMES E. LOWRY, ET AL.
TOTAL PETROCHEMICALS & REFINING USA, INC., ET AL.
A. DOUGHTY JUDGE
REPORT AND RECOMMENDATION
L. HAYES UNITED STATES MAGISTRATE JUDGE
the undersigned Magistrate Judge, on reference from the
District Court, is a motion to remand [doc. # 9] filed by
plaintiffs James E. Lowry, et al. The motion is opposed. For
reasons explained below, it is recommended that the motion to
remand be DENIED, and that plaintiffs' claims brought as
relators on behalf of the State of Louisiana and the
Commissioner of Conservation be dismissed, without prejudice,
and that plaintiffs' individual capacity claims against
Bethlan Production Corporation; Capital Gas, Inc.; J.B.X.
Royalties, Inc.; NEPCO, Inc.; Big Creek Operating, Inc.; and
Cisco Petroleum, Inc. be dismissed, without prejudice.
February 9, 2018, James E. Lowry, Charles M. Johnson, Jimmy
R. Smith, Donald W. Smith, and Leslie H. Smith (collectively,
“Lowry” or “plaintiffs”), filed the
instant oilfield contamination suit individually, and as
relators on behalf of the State of Louisiana and the
Commissioner of Conservation, in the 5th Judicial
District Court for the Parish of Richland, State of Louisiana
against eight defendants arising out of decades-long oil and
gas exploration and production activities conducted on the
plaintiffs' properties by the defendants and/or their
predecessors in title. Made defendants were: Total
Petrochemicals & Refining USA, Inc.
(“Total”); ConocoPhillips Company
(“ConocoPhillips”); Bethlan Production
Corporation (“Bethlan”); Capital Gas, Inc.
(“Capital Gas”); J.B.X. Royalties, Inc.
(“J.B.X.”); NEPCO, Inc. (“NEPCO”);
Big Creek Operating, Inc. (“Big Creek”); and
Cisco Petroleum, Inc. (“Cisco”).
29, 2018, defendant, ConocoPhillips, removed the suit to
federal court on the sole basis of diversity jurisdiction, 28
U.S.C. § 1332. (Notice of Removal). Plaintiffs, James
Lowry and Charles Johnson, are domiciled in Louisiana,
whereas, plaintiffs, Jimmy Smith, Donald Smith, and Leslie
Smith, are Mississippi domiciliaries. Id., §
II(B)(1). ConocoPhillips and Total are both Delaware
corporations, with their principal places of business in
Texas. Id., §§ 2(C)(1) & (2). The
remaining six defendant-corporations (Bethlan, Capital Gas,
J.B.X., NEPCO, Big Creek, and Cisco) all were incorporated in
Louisiana. Id., §§ II(C)(3). To overcome
the patent lack of diversity between the six Louisiana
corporations and the two Louisiana plaintiffs, ConocoPhillips
argued in its notice of removal that plaintiffs have no
reasonable possibility of recovery against the non-diverse,
forum-domiciled defendants, and therefore, they were
improperly joined in an attempt to defeat federal subject
matter and removal jurisdiction. See Notice of
disagree with ConocoPhillips' assessment of their claims
against the Louisiana corporations, and on July 27, 2018,
filed the instant motion to remand the case to state court on
the following grounds: 1) removal was procedurally defective
because it did not include the consent of a properly joined
and served defendant (Bethlan); 2) the notice of removal was
procedurally defective because it did not properly allege
citizenship for six of the eight defendants (the Louisiana
corporations); and 3) the court lacked subject matter
jurisdiction because the parties were not completely diverse.
August 20, 2018, ConocoPhillips filed its opposition to the
motion to remand in which it maintained that the non-diverse,
in-state defendants were improperly joined, and therefore,
their presence must be disregarded for purposes of diversity
and removal jurisdiction. [doc. # 11]. Plaintiffs filed a
reply brief in support of remand on August 28, 2018. [doc. #
14]. Removing defendant filed a sur-reply on September 6,
2018. [doc. # 17]. The matter is ripe.
defendant may remove an action from state court to federal
court, provided the action is one in which the federal court
may exercise original jurisdiction. Manguno v. Prudential
Property and Cas. Ins. Co., 276 F.3d 720, 723
(5th Cir. 2002) (citing 28 U.S.C. § 1441(a)).
The removing defendant bears the burden of establishing
federal subject matter jurisdiction and ensuring compliance
with the procedural requirements of removal. Id.
Because federal courts are courts of limited jurisdiction, a
suit is presumed to lie outside this limited jurisdiction
unless and until the party invoking federal jurisdiction
establishes to the contrary. Howery v. Allstate Ins.
Co., 243 F.3d 912, 916 (5th Cir. 2001) (citation
omitted). The removal statutes are strictly construed in
favor of remand. Manguno, supra.
long been the rule in the Fifth Circuit, that all properly
joined and served defendants must join in the notice of
removal or otherwise consent to removal within the 30 day
period set forth in 28 U.S.C. § 1446(b). Jones v.
Scogin, 929 F.Supp. 987, 988 (W.D. La. 1996) (citing
Getty Oil, Div. Of Texaco v. Ins. Co. of North
America, 841 F.2d 1254, 1263 (5th Cir. 1988)).
Failure to do so, renders the removal defective. Getty
Oil, 841 F.2d at 1263. While each defendant need not
sign the notice of removal, there must be “some timely
filed written indication from each served defendant, or from
some person or entity purporting to formally act on its
behalf in this respect and to have the authority to do so,
that it has actually consented to such action.”
Gillis v. Louisiana, 294 F.3d 755, 759
(5th Cir. 2002) (quoting, Getty, supra).
Federal Courts Jurisdiction and Venue Clarification Act of
2011 (“JVCA”), codified the foregoing principles,
as follows, “[w]hen a civil action is removed solely
under section 1441(a), all defendants who have been properly
joined and served must join in or consent to the removal of
the action.” 28 U.S.C. § 1446(b)(2)(A). Here,
ConocoPhillips plainly effected removal solely under §
1441(a). (Notice of Removal, § I(A)). Therefore, all
properly served and joined defendants were required to timely
consent to removal herein.
contend that remand is required because defendant, Bethlan,
was served on May 15, 2018, but failed to join in or timely
consent to removal. However, a removing party need not obtain
the consent of a co-defendant that the removing party
contends is improperly joined. Rico v. Flores, 481
F.3d 234, 239 (5th Cir.2007) (citing Jernigan v. Ashland
Oil Inc., 989 F.2d 812, 815 (5th Cir.1993)). Moreover,
the removing defendant need not even explain the absence of
consent in its notice of removal when it contends that the
other defendant(s) is improperly joined. Jernigan,
of course, ConocoPhillips maintains that the six Louisiana
corporate defendants (Bethlan included) were improperly
joined such that their presence may be disregarded - not only
for purposes of diversity jurisdiction, but also for purposes
of complying with the procedural requirements of removal,
including unanimity. Therefore, plaintiffs' argument(s)
directed towards the alleged defect in the removal process,
in effect, is subsumed within the court's improper
joinder analysis below.
Subject Matter Jurisdiction
invoked this court's subject matter jurisdiction via
diversity, which requires an amount in controversy greater
than $75, 000, and complete diversity of citizenship between
plaintiffs and defendants, 28 U.S.C. § 1332(a). In their
motion to remand, plaintiffs stipulated that the amount in
controversy exceeded $75, 000. More importantly, however, the
court finds that it is facially apparent that the claimed
damages exceeded $75, 000 at the time of removal.
See Notice of Removal, § II(A). Therefore, the
sole jurisdictional issue is whether the parties are
diversity jurisdiction statute presupposes a civil action
between “citizens of different states, ” where
all plaintiffs are diverse from all defendants. 28 U.S.C.
§ 1332; Farrell Const. Co. v. Jefferson Parish,
La., 896 F.2d 136, 139-140 (5th Cir. 1990).
Removing defendant contends that the court need not consider
the citizenship for the six Louisiana defendants, Bethlan,
Capital Gas, J.B.X., NEPCO, Big Creek, and Cisco, because
they were not properly served and/or joined as defendants.
The court emphasizes, however, that the fact that a defendant
was not served does not mean that its citizenship may be
ignored. New York Life Ins. Co. v. Deshotel, 142
F.3d 873, 883 (5th Cir.1998). Rather, “[w]henever
federal jurisdiction in a removal case depends upon complete
diversity, the existence of diversity is determined from the
fact of citizenship of the parties named and not from the
fact of service.” Id. (citations omitted).
Thus, the sole inquiry, at least for purposes of subject
matter jurisdiction, is whether the non-diverse defendants
were properly joined.
disregard the citizenship of the six non-diverse defendants,
ConocoPhillips must establish that they were but nominal
defendants/improperly joined. “The improper joinder
doctrine constitutes a narrow exception to the rule of
complete diversity.” McDonal v. Abbott Labs.,
408 F.3d 177, 183 (5th Cir.2005). Moreover, the burden of
persuasion on a party claiming improper joinder is a
“heavy one.” Campbell v. Stone Ins.,
Inc., 509 F.3d 665, 669 (5th Cir.2007) (citation
omitted). The focus of the improper joinder inquiry must be