Opinion
Civil Action No. 04-1629.
July 7, 2004
ORDER AND REASONS
Before the Court is a motion, filed on behalf of plaintiff, Eunice Hernandez, to remand this action to the Orleans Parish Civil District Court on the ground that federal question jurisdiction does not exist. Additionally, plaintiff moves the Court to award costs and expenses incurred as a result of the removal. Defendants, SSA Gulf Terminals, Inc. and PO Ports Gulfport, Inc., oppose the motions. For the following reasons, plaintiff's motion to remand is GRANTED. Plaintiff's motion for costs and expenses is DENIED.
Rec. Doc. No. 12.
BACKGROUND
On May 18, 2004, plaintiff filed this action in the Orleans Parish Civil District Court, individually and on behalf of her deceased husband, alleging only state law claims against her husband's former employers and other defendants arising from her husband's on-the-job exposure to asbestos and his death from malignant mesothelioma. Defendants removed the action asserting that plaintiff's state law claims were preempted by the Longshore Harbor Workers Compensation Act, 33 U.S.C. § 901, et seq. ("LHWCA"). Defendants assert that because the LHWCA is plaintiff's sole and exclusive remedy, this Court has original federal question jurisdiction pursuant to 28 U.S.C. § 1331 and, therefore, this action is removable pursuant to 28 U.S.C. § 1441.The sole question raised by plaintiff's motion is whether the LHWCA completely preempts plaintiff's state law causes of action such that this Court has federal question jurisdiction over this action.
LAW AND ANALYSIS
I. The Well-Pleaded Complaint Rule
As the United States Supreme Court has explained:
A civil action filed in a state court may be removed to federal court if the claim is one "arising under" federal law. § 1441(b). To determine whether the claim arises under federal law, we examine the "well pleaded" allegations of the complaint and ignore potential defenses: "a suit arises under the Constitution and laws of the United States only when the plaintiff's statement of his own cause of action shows that it is based upon those laws or that Constitution. It is not enough that the plaintiff alleges some anticipated defense to his cause of action and asserts that the defense is invalidated by some provision of the Constitution of the United States." Louisville Nashville R. Co. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 53 L.Ed. 126 (1908); see Taylor v. Anderson, 234 U.S. 74, 34 S.Ct. 724, 58 L.Ed. 1218 (1914). Thus, a defense that relies on the preclusive effect of a prior federal judgment, Rivet v. Regions Bank of La., 522 U.S. 470, 118 S.Ct. 921, 139 L.Ed.2d 912 (1998), or the pre-emptive effect of a federal statute, Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983), will not provide a basis for removal. As a general rule, absent diversity jurisdiction, a case will not be removable if the complaint does not affirmatively allege a federal claim. Beneficial Nat. Bank v. Anderson, 539 U.S. 1, 6, 123 S.Ct. 2058, 2062, 156 L.Ed.2d 1 (2003).
Neither party contends that diversity jurisdiction exists in this case.
A defendant may not remove a case on the basis of an anticipated or even inevitable federal defense, but instead must show that a federal right is "an element, and an essential one, of the plaintiff's cause of action." Gully v. First Nat'l Bank, 299 U.S. 109, 111, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936). The well-pleaded complaint rule precludes federal question jurisdiction even when "both parties admit that the only question for decision is raised by a federal preemption defense." Franchise Tax Bd. of State of Cal. v. Construction Laborers Vacation Trust for Southern California, 463 U.S. 1, 12, 103 S.Ct. 2841, 2848, 77 L.Ed.2d 420 (1983).
The well-pleaded complaint rule applies with equal force to the original jurisdiction of the district courts pursuant to 28 U.S.C. § 1331 and cases removed from federal court pursuant to 28 U.S.C. § 1441(b). See Chuska Energy Co. v. Mobil Exploration Producing North America, Inc., 854 F.2d 727, 730 (5th Cir. 1988) (citing Franchise Tax Board, 463 U.S. at 12, n. 9, 103 S.Ct. at 2847 n. 9). "Section 1441 of the Judicial Code keys the propriety of removal to the original jurisdiction of the federal district courts. Removal under section 1441(b), the basis of removal here, is appropriate only for those claims within the federal question jurisdiction of the district courts, that is, for those actions `arising under the Constitution, laws, or treaties of the United States.'" Carpenter v. Wichita Falls Independent School Dist., 44 F.3d 362, 366 (5th Cir. 1995) (quoting 28 U.S.C. § 1331).
"A corollary to the well-pleaded complaint doctrine `is that Congress may so completely preempt a particular area that any civil complaint raising this select group of claims is necessarily federal in character.'" Johnson v. Baylor Univ., 214 F.3d 630, 632 (5th Cir. 2000) (quoting Metro Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542 (1987)). "`Complete preemption,' which creates federal removal jurisdiction, differs from more common `ordinary preemption' . . . which does not." Id. Complete preemption is a narrow exception to the well-pleaded complaint rule and exists only where, the federal statute "so forcibly and completely displace[s] state law that the plaintiff's cause of action is either wholly federal or nothing at all." Hoskins v. Bekins Van Lines, 343 F.3d 769, 773 (5th Cir. 2003) (citing Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 366 (5th Cir. 1995)) (alteration in original); see also Avco Corp. v. Aero Lodge No. 735, Int'l Assn. of Machinists, 390 U.S. 557, 559, 88 S.Ct. 1235, 1237, 20 L.Ed.2d 126 (1968). "In sum, to establish federal question jurisdiction through the invocation of a federal preemption defense, the defendant must demonstrate that Congress intended not just to `preempt a state law to some degree,' but to altogether substitute `a federal cause of action for a state cause of action.'" Hart v. Bayer Corp., 199 F.3d 239, 244 (5th Cir. 2000) (quoting Schmeling v. NORDAM, 97 F.3d 1336, 1341 (10th Cir. 1996)).
Another exception to the well-pleaded complaint rule, not relevant here, exists where Congress has expressly provided for removal of actions governed by the federal statute in question. See Beneficial, 539 U.S. at 7, 123 S.Ct. at 2062 (describing the unusual preemption provision of the Price-Anderson Act that provides for removal of tort actions arising out of nuclear accidents even when the state court complaint asserts only state law claims).
In order to demonstrate complete preemption over a plaintiff's otherwise purely state law claims, a defendant must show (1) the statute contains a civil enforcement provision that creates a cause of action that both replaces and protects the analogous area of state law; (2) there is a specific jurisdictional grant to the federal courts for enforcement of the right; and (3) there is a clear Congressional intent that the federal cause of action be exclusive. Hoskins, 343 F.3d at 775-76 (modifying the third prong of the complete preemption analysis set forth in Baylor Univ., 214 F.3d at 632). In undertaking this analysis, "it is the cause of action, and not a remedy, that must be preempted." Carpenter, 44 F.3d at 367 n. 2.
Notwithstanding circuit precedent holding that the LHWCA "does not create federal subject matter jurisdiction supporting removal," Garcia v. Amfels, Inc., 254 F.3d 585, 588 (5th Cir. 2001); see also Aaron v. Nat'l Union Fire Ins. Co of Pittsburgh, Pa., 876 F.2d 1157 (5th Cir. 1989), defendants argue that the analysis used in those cases was "expressly overruled" by the United States Supreme Court in Beneficial Nat'l Bank v. Anderson, 539 U.S. 1 (2003), and "abandoned" by the Fifth Circuit in Hoskins v. Bekins Van Lines, 343 F.3d 769 (5th Cir. 2003).
In Hoskins, the Fifth Circuit explained the effect of the Beneficial decision as follows:
Under this Court's precedent, in order to demonstrate complete preemption over a plaintiffs otherwise purely state law claims, the defendant must show the following:
(1) the statute contains a civil enforcement provision that creates a cause of action that both replaces and protects the analogous area of state law; (2) there is a specific jurisdictional grant to the federal courts for enforcement of the right; and (3) there is a clear Congressional intent that claims brought under the federal law be removable.
Johnson v. Baylor Univ., 214 F.3d 630, 632 (5th Cir. 2000) (quoting Heimann v. Nat. Elevator Ind. Pension Fund, 187 F.3d 493, 500 (5th Cir. 1999)) (emphasis added). In Beers, we found no clearly manifested Congressional intent that state law claims for loss or damage to goods during an interstate shipment by a common carrier be removable — in other words, the third element of the complete preemption analysis was lacking. Similarly, in Beneficial the respondents argued before the Supreme Court that the requisite Congressional intent to make state usury claims against national banks removable was lacking in the National Bank Act. . . . The Supreme Court explained that:
Because the proper inquiry focuses on whether Congress intended the federal cause of action to be exclusive rather than on whether Congress intended that the cause of action be removable, the fact that these sections of the National Bank Act were passed in 1864, 11 years prior to the passage of the statute authorizing removal, is irrelevant, . . .
Id. at 2064 n. 5. We view Beneficial as evidencing a shift in focus from Congress's intent that the claim be removable, to Congress's intent that the federal action be exclusive.
This Court's holding in Beers rested on its finding that "no manifest congressional intent, of the type contemplated in [ Metropolitan Life v.] Taylor, to make this state claim removable to federal court" existed. Beers, 836 F.2d at 913 n. 3. Prior to Beneficial, this finding would have ended our inquiry. Now, however, we must instead determine whether Congress intended the Carmack Amendment to provide the exclusive cause of action for claims arising out of the interstate transportation of goods by a common carrier. See Beneficial, 123 S.Ct. at 2067 ("[T]he analysis in today's opinion implicitly contradicts (by rendering inexplicable) Taylor's discussion of pre-emption and removal.") (Scalia, J., dissenting).Hoskins, 343 F.3d at 775-776. Accordingly, although the Court agrees with defendants that the Beneficial decision, as applied by the Fifth Circuit in Hoskins, modified the third prong of the Fifth Circuit's test for analyzing complete preemption, i.e., the prong focused on congressional intent, the Hoskins Court did not explicitly or implicitly hold that Beneficial effected any change to the first two prongs of the analysis.
The defendants focus their argument on whether the third prong of the Fifth Circuit's complete preemption test is satisfied, i.e., whether the LHWCA evinces a congressional intent to provide the exclusive cause of action for claims by a stevedore against his employers. However, the Court need not and does not reach that issue because defendants cannot satisfy the first two prongs of the compete preemption analysis. In Aaron, the Fifth Circuit applied the well-pleaded complaint rule and held that the LHWCA did not provide a basis for removal of a plaintiff's purely state law claims. 876 F.2d at 1166. The Court noted that when the exclusive remedial provisions of the LHWCA are raised by a defendant in response to a plaintiff's purely state law claims, the LHWCA "is nothing more than a statutory defense to a state-court cause of action — the classic circumstance of non-removability." Id.
Relevant to the first two prongs of the Fifth Circuit's complete preemption analysis, the Aaron court specifically found that (1) the LHWCA contains no civil enforcement provision that creates a federal cause of action that could be litigated in either federal or state court; and (2) the LHWCA does not contain a specific jurisdictional grant to the federal courts for the enforcement of a right created by the LHWCA. See id. at 1164-65. Contrary to defendants' assertion, the Aaron court did not rest its decision solely on an analysis of congressional intent to make claims pursuant to the LHWCA removable to federal court. Therefore, even if some portion of the Aaron decision pertaining to congressional intent to make LHWCA claims removable is arguably undermined by Hoskins, a question on which this Court expresses no opinion, the Aaron court's statements bearing on the first two prongs of the complete preemption analysis remain binding on this Court and preclude removal of this action.
The other Fifth Circuit cases cited by defendants do not support its claim that the LHWCA provides a basis for federal question jurisdiction. Citing the panel decision in Texas Employers' Insurance Assoc. v. Jackson, 820 F.2d 1406 (5th Cir. 1987), defendants contend that the Fifth Circuit has held that the preemptive force of the LHWCA creates federal question jurisdiction. However, as the Aaron court noted, the en banc court subsequently vacated the Texas Employers' panel decision and then pretermitted the jurisdictional question. Aaron, 876 F.2d at 1166 n. 16. Therefore, the Texas Employers' decision is no longer binding circuit precedent. Id. The defendants' reliance on Atkinson v. Gates, McDonald Co., 838 F.2d 808 (5th Cir. 1988), is also misplaced. In Garcia, the Fifth Circuit unequivocally stated that Atkinson did not undermine Aaron because it did not address the same issue, i.e., whether the LHWCA provided a basis for federal jurisdiction when raised as a defense. 254 F.3d at 587.
Accordingly, because the LHWCA has been raised as a defense to plaintiff's state law causes of action and because defendants cannot demonstrate that the LHWCA satisfies the Fifth Circuit's three-prong complete preemption analysis as modified in Hoskins, this Court does not have subject matter jurisdiction over this action. "The LHWCA is a preemption defense that needs to be raised in state court." Garcia, 254 F.3d at 588.
II. Motion for Costs and Expenses 28 U.S.C. § 1447(c) authorizes the Court to "require payment of just costs and any actual expenses, including attorney fees incurred as a result of removal." In applying § 1447(c), "[t]he matter is left to the court's discretion, to be exercised based on the nature of the removal and the nature of the remand" Garcia, 254 F.3d at 587 n. 2 (citing David D. Siegel, Commentary on 1988 Revision to 28 U.S.C. § 1447 (West Supp. 1993)).
In Garcia, the Fifth Circuit affirmed an award of costs and fees imposed by the district court on the ground that removal based upon the LHWCA was frivolous. 254 F.3d at 587. The Fifth Circuit noted that the defendant was "unable to city any Fifth Circuit case, nor any persuasive authority from another circuit, supporting removal." Id. at 588. Accordingly, the Fifth Circuit found that the district court did not abuse its discretion by imposing costs and fees upon the defendant because, in 2001, there was "no question that the LHWCA does not create federal subject matter jurisdiction supporting removal." Id.
Although the Court ultimately disagrees with defendants' broad reading of the Beneficial and Hoskins decisions and their effect on existing Fifth Circuit precedent, the Court concludes that defendants removal of this action was neither frivolous or without legal support. The defendants removed this action based upon a bona fide change in the Fifth Circuit's preemption analysis. Relying on their understanding of the change in the law, defendants supported their argument with numerous citations to caselaw discussing the exclusivity of the remedial scheme set forth in the LHWCA. Additionally, plaintiff concedes that the effect of Beneficial and Hoskins on Fifth Circuit cases involving the removal of cases based upon the preemptive force of the LHWCA has not heretofore been addressed by any published decision. Considering all of these factors, the Court finds that this is not an appropriate case in which to exercise its discretion to award costs and fees incurred as a result of defendant's decision to remove this action.
Accordingly, for the above and foregoing reasons,
IT IS ORDERED that the motion of plaintiff, Eunice Hernandez, to remand this action to the Orleans Parish Civil District Court is GRANTED and, pursuant to 28 U.S.C. § 1447(c), this action is REMANDED to the Orleans Parish Civil District Court for lack of subject matter jurisdiction.
IT IS FURTHER ORDERED that plaintiff's motion for costs and expenses pursuant to 28 U.S.C. § 1447(c) is DENIED.