United States District Court, E.D. Louisiana
SHEILA GUIDRY, individually and on behalf of all others similarly situated, ET AL.
v.
DOW CHEMICAL COMPANY, ET AL.
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 ...