Opinion
Civil Action No. 04-639, SECTION "N".
August 25, 2004
ORDER AND REASONS
Before the Court is a Motion to Remand filed by Plaintiffs. (Rec.Doc. 16). For the reasons that follow, IT IS ORDERED that Plaintiff's motion is GRANTED.
I. BACKGROUND
Plaintiffs, forty-five in number and the majority of whom are citizens and domiciliaries of Louisiana, filed a petition on February 4, 2004, in the Civil District Court for the Parish of Orleans, State of Louisiana, alleging that they own, reside and/or use certain real property located in Terrebonne Parish, Louisiana, which has been contaminated or otherwise damaged by oil and gas exploration and production activities conducted by defendants pursuant to certain oil, gas and mineral leases. Named as defendants are:
1. Shell Oil Company ("Shell"), a Delaware corporation with its principal place of business in Texas;
2. SWEPI LP ("SWEPI"), a Delaware limited partnership with its principal place of business in Texas. The sole partners of SEPI LP are Shell Holding GP, LLC, and Shell Energy Holding, LP, LLC. Shell Holding, GP, LLC and Shell Energy Holding, LP, LLC are limited liability companies formed in the state of Delaware. The sole members of Shell Energy Holding, GP, LLC are Shell US EP Investments, Inc. and Shell Oil Company. The sole members of Shell Energy Holding, LP, LLC are Shell US EP Investments, Inc. and Shell Oil Company. Shell US EP Investments, Inc. is a Delaware corporation with its principal place of business in Delaware. Shell Oil Company is a Delaware corporation with its principal place of business in Texas;
3. The Meridian Resource Exploration LLC ("Meridian"), a Delaware limited liability company with a principal place of business in Texas. Meridian's sole member is The Meridian Resource Corporation, a Texas corporation with its principal place of business in Texas;
4. HEC Petroleum, Inc. ("HEC"), a Delaware corporation with its principal place of business in California;
5. Kerr-McGee Chemical Worldwide LLC ("Kerr-McGee"), a Delaware limited liability company with a principal place of business in Oklahoma. Kerr-McGee's sole member is Kerr-McGee Worldwide Corporation, a Delaware corporation with its principal place of business in Oklahoma;
6. BP America Production Company ("BP"); a Delaware corporation with its principal place of business in Texas;
7. John F. Bricker Co. ("Bricker Co."), a former Texas limited partnership that ceased existence in 1958; and
8. Dixie Rice Agricultural Corporation, Inc. ("Dixie Rice"), a Louisiana corporation authorized to do and doing business in Louisiana.
On March 4, 2004, Meridian and HEC, with the written consent of the remaining defendants, timely removed this action to this court, alleging that the matter in controversy exceeds $75,000 and that there is diversity of citizenship. Defendants contend that the two named Louisiana defendants, Dixie Rice and Bricker Co., were fraudulently joined to defeat removal.
On April 1, 2004, plaintiffs filed the instant Motion for Remand, which was set for hearing, without oral argument, on April 28, 2004. Through their motion, plaintiffs seek remand on the following grounds: (1) Dixie Rice was not fraudulently joined; (2) diversity removal jurisdiction does not exist because one or more of the defendants must be deemed a citizen of Louisiana for diversity purposes; (3) the removal notice is procedurally defective because it does not comply with Fed.R.Civ.P. 9(b); (4) the removal notice is procedurally defective because it fails to allege any facts showing that there is no contaminant plume migrating from Dixie Rice's land to Plaintiffs' land; (5) the removal notice is procedurally defective because it fails to allege any facts showing that Dixie Rice does not have La.C.C. art. 2317 garde of the offending pollution which is migrating from Dixie Rice's land to plaintiffs' land; (6) the removal notice is procedurally defective because it fails to allege any facts showing that Dixie Rice is not liable to plaintiffs under La.C.C. art. 2315; and (7) Bricker Co., Inc., was not fraudulently joined because, under the law and facts, there is a possibility of recovery against Bricker Co, or its successor, Bricker, L.L.C. Two of the defendants, Dixie Rice and Meridian, have filed oppositions to plaintiff's motion. Both Dixie Rice and Meridian argue that plaintiffs have no viable causes of action against non-diverse defendants Dixie Rice and Bricker Co.
II. LAW AND ARGUMENT
A. Fraudulent Joinder
Generally, a defendant may remove a civil action filed in state court if a federal court would have had original jurisdiction. See 28 U.S.C. § 1441(a). The removing party bears the burden of establishing that federal jurisdiction exists at the time of removal. DeAguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir. 1995); see also Allen v. RH Oil Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995). The Court must remand the matter, however, "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c).
Once a case has been removed from state court, the removing party bears the burden of proving that jurisdiction is proper in federal court. Jernigan v. Ashland Oil, Inc., 989 F.2d 812, 815 (5th Cir. 1993). If the removing party alleges jurisdiction on the basis that non-diverse parties have been fraudulently joined, the removing party must prove it. Id. The non-movant carries a heavy burden in establishing fraudulent joinder and must demonstrate it by clear and convincing evidence. Id. at 814. "[T]he question is whether there is arguably a reasonable basis for predicting that the state law might impose liability on the facts involved. If that possibility exists, a good faith assertion of such an expectancy in a state court is not a sham, is not colorable and is not fraudulent in factor in law." Travis v. Irby, 326 F.3d 644, 647 (5th Cir. 2003). See also McKee v. Kansas City Southern Railway Co., 358 F.3d 329, 333 (5th Cir. 2004). This possibility that state law may impose liability, however, must be reasonable, not merely theoretical. Travis, 326 F.3d at 648; Badon v. RJR Nabisco, Inc., 236 F.3d 282, 286, n. 4 (5th Cir. 2000).
Fraudulent joinder claims can be resolved by "piercing the pleadings" and considering summary judgment-type evidence such as affidavits and deposition testimony. Ford v. Elsbury, 32 F.3d 931, 935 (5th Cir. 1994). The Court, however, must take all unchallenged factual allegations, including those alleged in the petition, in the light most favorable to plaintiffs. McKee, 358 F.3d at 334; Travis, 326 F.3d at 648-49. Any contested issues of fact and any ambiguities of state law are to be resolved in Plaintiff's favor. McKee, 358 F.3d at 334; Travis, 326 F.3d at 649. Finally, "[i]f the right to remove is doubtful, the case should be remanded." Sullivan v. Gen-Corp, Inc., 1995 WL 321743, *2 (E.D.La. 1995) (quoting Ryan v. Dow Chemical Co., 781 F.Supp. 934, 939 (E.D.N.Y. 1992).
B. Possibility of Recovery Against Dixie Rice
In paragraphs 52 and 53 of their petition, plaintiffs allege, in relevant part, as follows:
Dixie Rice Agricultural Corporation, Inc., owns property adjacent to the property owned by plaintiffs herein. Contamination resulting from oil and gas operations has migrated onto the property owned by plaintiffs herein. This migration has added to and aggravated and severely worsened the contamination on plaintiffs' property. One of the contributing causes of this continued expansion of the plum is the failure of defendants to properly remediate the environmental damage.
* * * * *
Defendant Dixie Rice Agricultural Corporation, Inc., is liable to plaintiffs herein under the provisions of La.C.C. arts. 667— 669; 2317; and 2315.
The Court's decision today will focus on the possibility of liability on the part of Dixie Rice under Louisiana Civil Code Article 2315.
Plaintiffs argue in their motion that Dixie Rice is liable to them under La.C.C. arts. 667— 669 and 2317, as Dixie Rice has garde, custody and/or control over the alleged migrating plume. The Court finds, however, that, for purposes of liability under Articles 667- 669 and 2317, the proper focus should be on the wells over which the diverse defendants have garde, custody and/or control, and not the resultant plume over which Dixie Rice (or any other party) allegedly has garde, custody and/or control. Additionally, the Court will not address plaintiffs' claims against non-diverse defendant Bricker Co. Having reviewed the material submitted by defendants, the Court finds that plaintiffs do not have a reasonable possibility of recovery against a company, such as Bricker Co., which dissolved in 1958 and which never owned nor operated any of the wells or other facilities at issue in this case. Accordingly, the Court will only address the possibility of recovery against Dixie Rice under La.C.C. art. 2315.
Civil Code Article 2315 provides that "[e]very act whatever of man that causes damage to another obliges him by whose fault it happened to repair it." The Louisiana Supreme Court has adopted a duty-risk analysis to determine whether liability exists under the particular facts and circumstances. See Lazard v. Foti, 2002-2888 (La. 10/21/03), 859 So.2d 656, 659. Under this analysis, plaintiffs must prove that the conduct in question was a cause-in-fact of the resulting harm; that the defendant owed a duty of care to the plaintiffs; that the requisite duty was breached by the defendant; and that the risk of harm was within the scope of protection afforded by the duty breached. Id. Under the duty-risk analysis, all four inquiries must be affirmatively answered for the plaintiffs to recover. Id.
As stated earlier, for purposes of this motion to remand, the Court must view the factual allegations in the light most favorable to plaintiffs, and the Court must resolve contested issues of fact in favor of plaintiffs. See McKee, 358 F.3d at 334; Travis, 326 F.3d at 648-49. A review of the petition reveals that plaintiffs have alleged that Dixie Rice owed it a duty to remediate environmental damage, that Dixie Rice breached its duty, and that such breach or failure has caused damage to plaintiffs' property. The Court therefore finds that plaintiffs have alleged sufficient facts to establish a cause of action against Dixie Rice under La.C.C. art. 2315.
In their opposition memoranda, both Dixie Rice and Meridian correctly point out that plaintiffs have cited no legal authority (beyond Article 2315) supporting plaintiffs' claims against Dixie Rice. Defendants then direct the Court's attention to only one case where a court has dismissed similar claims against a neighboring landowner. See Brister v. Gulf Central Pipeline Co., 684 F.Supp. 1373 (W.D.La. 1988). Defendant Meridian states that the Brister decision stands for the proposition that "one's status as a neighboring landowner from whose lands toxic substances may have originated due to activities of others is — alone and without more — insufficient to establish liability against the neighboring landowner." Meridian's Mem. in Opp'n, p. 9 (Rec.Doc. 24). However, the Brister Court did not make any such statement of law. In fact, the Court cited no legal authority and provided no analysis of the claims against the neighboring landowner. Instead, following a trial on the issue of liability, the Court dismissed the defendant pipeline owner's third party complaint against the landowner, only stating as follows:
In Brister, the owner of a liquid ammonia pipeline struck by a contractor's employee filed a third party complaint against the owner of the land where the accident occurred. Brister, 684 F.Supp. at 1376. The primary litigation was filed by residents and landowners from the area. See id.
Gulf Central [the pipeline owner] has offered no evidence in this matter to prove its third-party claim against Crown-Zellerbach [the landowner]. Nor has it argued that liability should be assessed against Crown-Zellerbach. Crown-Zellerbach has moved for dismissal of Gulf Central's claim for those reasons. Post-Trial Brief of Mitchell Energy and Crown Zellerbach at 2. Therefore, we GRANT Crown-Zellerbach's motion and DISMISS the third-party complaint of Gulf Central with prejudice on the ground that upon the facts and the law Gulf Central has shown no right to relief. Fed.R.Civ.P. 41(b), (c).684 F.Supp. at 1392.
Although this Court too has not found any jurisprudence on point which articulates the duty, or lack of a duty, of a neighboring landowner, such as Dixie Rice, with respect to remediating environmental damage, any ambiguities in state law are to be resolved in plaintiffs' favor. See McKee, 358 F.3d at 334; Travis, 326 F.3d at 649. Resolving such doubts relative to this claim in favor of plaintiffs, the Court concludes that defendants have failed to meet their burden of proving fraudulent joinder. The Court further concludes that plaintiff has established at least a reasonable basis for predicting that state law might impose liability on Dixie Rice, based on general negligence principles. This possibility is sufficient to merit remand See Travis, 326 F.3d at 647.
III. CONCLUSION
Accordingly, for the foregoing reasons, IT IS ORDERED that
1. Plaintiff's Motion to Remand is GRANTED; and
2. Pursuant to 28 U.S.C. § 1447(c), this action is REMANDED to the Civil District Court for the Parish of Orleans, State of Louisiana, for lack of subject matter jurisdiction.