Guidry v. Dow Chemical Co.

         SECTION “F”

          ORDER AND REASONS

          MARTIN L. C. FELDMAN UNITED STATES DISTRICT JUDGE

         Before the Court is the plaintiffs’ motion to remand. For the reasons that follow, the motion is DENIED without prejudice.

         Background

         This is the second time the defendants have removed this toxic chemical exposure class action lawsuit to federal court, invoking the Court’s jurisdiction under the Class Action Fairness Act.

         On the morning of July 7, 2009, a tank at a Union Carbide facility in Taft, Louisiana released into the air a chemical, Ethyl Acrylate (EA). The St. Charles Parish Department of Emergency Preparedness closed nearby roads and evacuated residents within a two-mile area east of the facility. Some residents and visitors in St. Charles, Jefferson, and Orleans Parishes complained of odors and minor transient physical symptoms such as headaches and vomiting.^[1] Immediately after the EA release, multiple lawsuits were filed, including this one.^[2]

         On July 29, 2009, Sheila Guidry filed this lawsuit in Orleans Parish against Dow Chemical Company and the State of Louisiana through the Department of Environmental Quality. She alleged that on July 7, 2009, she noticed a foul smell, which caused her to suffer headache, dizziness, and burning eyes. The next day, she amended her petition to include class allegations and on August 6, 2009, she amended her petition to name as an additional defendant Union Carbide Corporation.^[3] Dow Chemical removed the case to this Court for the first time on August 12, 2009, invoking the Court’s jurisdiction under jurisdictional theories including the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2); the case was assigned Civil Action Number 09-5506. The defendants argued that Class Action Fairness Act’s $5, 000, 000 amount in controversy prerequisite was facially apparent from the plaintiffs’ state court petition based on the potential size of the class and awards for similar injuries under Louisiana law.^[4] On March 29, 2010, the Court granted the plaintiffs’ motion to remand, rejecting as speculative the defendants’ argument anchored to parish population estimates multiplied by dollar amounts recovered by plaintiffs in other similar cases. See Order and Reasons dtd. 3/29/10. The Fifth Circuit affirmed. See Berniard v. Dow Chemical Co., 481 F.App'x 859, 863-64 (5th Cir. 2010)(holding that the defendants failed to satisfy their burden to show that the $5 million amount in controversy was facially apparent).^[5]

         Back in state court, in mid-May 2011, a class certification hearing was conducted. During the hearing, counsel for defendants submit, class counsel stated that they had been retained by approximately 2, 800 individuals in connection with the July 7, 2009 EA release.^[6] Months later on December 15, 2011, the state court issued a judgment granting the plaintiffs’ motion for class certification, approving three class representatives^[7] for a class defined as:

[T]hose persons living or located in [defined] geographic areas...who were present in these locations for some time, from 4:30 am on July 7, 2009 until 3:30 p.m. on July 8, 2009, and who experienced the physical symptoms which include any or all of the following --eyes, nose, or throat irritation, coughing, choking or gagging, or nausea, or headaches, dizziness, trouble breathing or other respiratory issues, as a result of their exposure to Ethyl Acrylate or other chemical substance released from tank 2310 at Union Carbide Corporation’s Taft, Louisiana Facility. Those persons living or located in these geographic areas and who experienced any of these physical symptoms will constitute the class and will be bound by the decision of this case.

         On June 19, 2014, the state court ordered the plaintiffs to provide notice to the class, including to provide instructions on the process by which a class member could opt out of class membership.^[8] Following class notice, approximately 5, 000 individuals, whom had already retained counsel other than Guidry class counsel, opted out of the Guidry class action. These 5, 000 individuals had filed individual claims in a consolidated mass joinder action in St. Charles Parish entitled Mark Dufour and Pierre Carmouche v. Dow Chemical Company.^[9]

         Meanwhile, discovery was supposedly completed in 2015 and the case plodded along towards a monthlong September 9, 2019 bench trial date in state court. But just a few weeks before the scheduled trial, on August 20, 2019, UCC and Dow removed the case to this Court, invoking the Court’s Class Action Fairness Act jurisdiction for the second time in 10 years. What triggered removal this time? Six days earlier on August 14, 2019, in a letter addressed to defense counsel regarding settlement value, class counsel Ron Austin wrote that “the parameters of a possible settlement can be safely couched in terms of a range from $60 M[ILLION] to $275 M[ILLION].” The plaintiffs now move to remand, arguing not that the $5, 000, 000 amount in controversy requirement is lacking, but, rather, that removal is untimely because the defendants should have known years earlier the “potential class size” and that the plaintiffs’ transient health impacts damages could exceed $5, 000, 000. The plaintiffs identify earlier “other paper, ” which (it is argued) should have indicated to the defendants the size of the class and, therefore, the quantum of damages at stake in this litigation and, thus, triggered the 30-day removal clock, which has since expired.^[10] Significantly, the plaintiffs also suggest that the only “other papers” indicating class size and case value -- including the plaintiffs’ own self-described “musings” in their settlement letter valuing the case between $60 million and $275 million -- are all equally speculative and therefore cannot support removal jurisdiction under the Class Action Fairness Act.^[11]

         I.

         A.

         “’Federal courts are courts of limited jurisdiction, ’ possessing ‘only that power authorized by’” the United States Constitution and conferred by Congress. Gunn v. Minton, 568 U.S. 251, 256 (2013)(citation omitted). Unless Congress expressly provides otherwise, the general removal statute provides that a federal court may exercise removal jurisdiction over state court actions if the federal court would have original jurisdiction over the case -- that is, if the plaintiff could have brought the action in federal court from the outset. See 28 U.S.C. § 1441(a). In 2005, Congress vested federal district courts with original jurisdiction over certain class actions when it passed the Class Action Fairness Act, 28 U.S.C. § 1332(d), “in response to perceived misuse of the class-action device.” Scott v. Cricket Communications, LLC, 865 F.3d 189, 194 (4th Cir. 2017)(citation omitted). “CAFA gives federal courts [original] jurisdiction over certain class actions...if the class has more than 100 members, the parties are minimally diverse, and the amount in controversy exceeds $5 million.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 135 S.Ct. 547, 552 (2014)(citations omitted).

To “determine whether the matter in controversy” exceeds [$5 million], “the claims of the individual class members shall be aggregated.” § 1332(d)(6). And those “class members” include “persons (named or unnamed) who fall within the definition of the proposed or certified class.” § 1332(d)(1)(D).

Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 592 (2013).^[12] The Supreme Court has instructed that

a defendant’s notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold. Evidence establishing the amount is required by § 1446(c)(2)(B) only when the plaintiff contests, or the court questions, the defendant’s allegation.

Dart Cherokee, 135 S.Ct. at 554.^[13]

         Although the plaintiffs challenge removal in this case, the removing defendants must establish that federal jurisdiction exists at the time of removal and that removal was proper. See Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). Remand is proper if the plaintiff timely identifies a procedural defect in removal; remand is mandated if at any time the Court lacks subject matter jurisdiction. 28 U.S.C. § 1447(c). Given CAFA’s broad objective to “ensure[e] ‘Federal court consideration of interstate cases of national importance[, ]’” the Supreme Court endorsed Congressional intent to read CAFA’s provisions broadly; accordingly, “no antiremoval presumption attends cases invoking CAFA.” Dart Cherokee, 135 S.Ct. at 554.

         B.

         28 U.S.C. § 1446 governs removal procedure.^[14] Subsection (b) pertains to documents that trigger the 30-day time limit for threshold. This provision...clarifies the procedure in order when a defendant’s assertion of the amount in controversy is challenged. In such a case, both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy removal; subparagraphs (1) and (3) provide a two-part test for determining whether a defendant timely removed depending on what sort of document triggered removal. Id.; Bosky v. Kroger Texas, LP, 288 F.3d 208, 209 (5th Cir. 2002); Decatur Hosp. Authority v. Aetna Health, Inc., 854 F.3d 292, 297 (5th Cir. 2017)(citation omitted). 1) If the “initial pleading setting forth the claim for relief upon which such action or proceeding is based” is removable, then the defendant must file its notice of removal within 30 days from receipt of that initial pleading. 28 U.S.C. § 1446(b)(1)(emphasis added). This initial 30-day clock is triggered “only when that pleading affirmatively reveals on its face that” the plaintiff is asserting a cause of action based on federal law. See Bosky, 288 F.3d at 210 (citations omitted, emphasis in original). 2) But, if the initial pleading does not set forth a removable claim, the defendant must file its notice of removal within 30 days after it receives “a copy of an amended pleading, motion, order or” some “other paper from which it may first be ascertained that the case is one which is has become removable.” 28 U.S.C. § 1446(b)(3)(emphasis added). To start the clock under this “other paper” paragraph, the Fifth Circuit has endorsed another bright line rule: the information supporting removal contained in the other paper “must be ‘unequivocally clear and certain[.]’” Bosky, 288 F.3d at 211. Thus, the information supporting removal contained in the “other paper” must state an even clearer case for federal jurisdiction than that required of the complaint.

         Like Bosky, the Court finds the comparison between the first and second paragraphs of § 1446 instructive:

“Setting forth, ” the key language of the first paragraph, encompasses a broader range of information that can trigger a time limit based on notice than would “ascertained, ” the pivotal term in the second paragraph. To “set forth” means to “publish” or “to give an account or statement of.” “Ascertain” means “to make certain, exact, or precise” or “to find out or learn with certainty.” The latter, in contrast to the former, seems to require a greater level of certainty or that the facts supporting removability be stated unequivocally.

Bosky, 288 F.3d at 211 (citations, footnotes omitted).

         II.

         The parties dispute only timeliness of removal, ^[15] not whether CAFA’s amount in controversy requirement is met. See Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392, 398 (5th Cir. 2013)(explaining the distinction between “amount disputes” and ...