Opinion
Civil Action No. 00-2262, Section "R" (4)
May 3, 2001
ORDER AND REASONS
Before the Court is plaintiff's motion to remand to state court. For the following reasons, the Court denies the motion to remand.
I. BACKGROUND
On July 12, 2000, plaintiff, a Louisiana resident, filed this suit in state court to recover damages allegedly resulting from his use of tobacco products. Plaintiff was diagnosed with throat cancer on February 12, 1993 and soon thereafter underwent a laryngectomy. In his complaint, plaintiff named several out-of-state manufacturers of tobacco products and several Louisiana wholesale distributors of tobacco products as defendants. Defendants removed the suit to this Court on August 1, 2000, on the basis of diversity jurisdiction. Plaintiff now moves for remand, asserting that his redhibition claims against the Louisiana distributors destroy diversity jurisdiction. Defendants oppose the motion for remand on the grounds that plaintiff has fraudulently joined the distributors and that their citizenship must therefore be disregarded for the purposes of determining diversity jurisdiction.
Louisiana Civil Code Article 2520 provides:
The seller warrants the buyer against redhibitory defects, or vices, in the thing sold. A defect is redhibitory when it renders the thing useless, or its use so inconvenient that it must be presumed that a buyer would not have bought the thing had he known of the defect. The existence of such a defect gives a buyer the right to obtain rescission of the sale. A defect is redhibitory also when, without rendering the thing totally useless, it diminishes its usefulness or its value so that it must be presumed that a buyer would still have bought it but for a lesser price. The existence of such a defect limits the right of a buyer to a reduction of the price.
II. DISCUSSION
A defendant may generally remove a civil action filed in state court if the federal court would have had original jurisdiction. See 28 U.S.C. § 1441(a). Here, defendants asserted federal subject matter jurisdiction and removed this case on the basis of diversity of citizenship and an amount in controversy in excess of $75,000. See 28 U.S.C. § 1441(b); 1332.
The removing party bears the burden of establishing the existence of federal jurisdiction. See Allen v. R H Oil Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995). The jurisdictional facts supporting removal must be examined as of the time of removal. See Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Columbia ("ANPAC") v. Dow Quimica de Columbia, S.A., 988 F.2d 559, 565 (5th Cir. 1993), abrogated on other grounds by Marathon Oil Co. v. Ruhrgas, 145 F.3d 211 (5th Cir. 1998), rev'd on other grounds, 119 S.Ct. 1563 (1999). Furthermore, the district court must strictly construe removal jurisdiction. See Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir. 1988) ( citing Shamrock Oil Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 872 (1941)) (additional citations omitted). A case must be remanded to state court "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c).
A. Fraudulent Joinder
The issue in this motion to remand is whether the non-diverse defendants were fraudulently joined and therefore should not be considered for purposes of diversity jurisdiction. The standard for determining when a defendant has been fraudulently joined is well established in the Fifth Circuit: "[T]he removing party must show either that there is no possibility that the plaintiff would be able to establish a cause of action against the in-state defendant in state court; or that there has been outright fraud in the plaintiff's pleadings of jurisdictional facts." B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir. 1981). The burden upon the party claiming fraudulent joinder is indeed a heavy one:
The district court must . . . evaluate all of the factual allegations in the light most favorable to the plaintiff, resolving all contested issues of substantive fact in favor of the plaintiff. Moreover, the district court must resolve any uncertainties as to the current state of controlling substantive law in favor of the plaintiff.Id. The Fifth Circuit has also stated that "[i]f the plaintiff has any possibility of recovery under state law against the party whose joinder is questioned, then the joinder is not fraudulent in fact or law." Burden v. General Dynamics Corp., 60 F.3d 213, 216 (5th Cir. 1995). Further, the district court "do[es] not determine whether the plaintiff will actually or even probably prevail on the merits of the claim, but look[s] only for a possibility that the plaintiff might do so." Id. Dismissal is appropriate only if it is clear that the plaintiff can recover under no viable theory.
The issue here is whether there is any possibility that plaintiff could assert a viable claim against the Louisiana distributors in state court. In his motion for remand, plaintiff relies on the Fifth Circuit's opinion in Badon v. R.J.R. Nabisco, Inc., et al., 236 F.3d 282 (5th Cir. 2000). In Badon, the Fifth Circuit held that instate cigarette wholesalers were not fraudulently joined in a suit against nonresident cigarette manufacturers because there was arguably a reasonable basis for predicting that plaintiffs might establish redhibition under Louisiana Civil Code Article 2520 and breach of warranty under Article 2524. See id. at 286. Defendants do not contest the import of this ruling, but they instead argue that plaintiff's redhibition claims against the distributors are prescribed or preempted.
B. Prescription
In a diversity action, the prescriptive period of the forum state applies. See Orleans Parish School Board v. Asbestos Corp. Ltd., 114 F.3d 66, 68 (5th Cir. 1997). Plaintiff relies on his redhibition claim against the instate defendants in seeking remand. Redhibition is the avoidance of a sale on account of some defect in the product that would render the item useless or so inconvenient to use that it would be presumed that a buyer would not have bought the thing had he known of the defect. LA. CIV. CODE art. 2520; Grenier v. Medical Engineering Corp., et al., 243 F.3d 200, 206 (5th Cir. March 8, 2001). In 1995, the Louisiana legislature changed the prescriptive period on redhibitory claims from one year to ten years. See id. (citing LA. Civ. CODE Art. 3499; LA. CIV. CODE Ann. art. 2534, Revision Comment (b)). In Grenier, the Fifth Circuit found that the 1995 change in the prescriptive period for redhibition did not apply retroactively. See id. Plaintiff and defendants agree that plaintiff did not purchase tobacco products after February of 1993, well before the change in the prescriptive period. The Court will therefore apply the one-year prescriptive period to plaintiff's redhibition claims, and the period begins to run from the discovery of the vice in the product. See Palmisano v. American Medical Engineering, 1999 WL 1138526, *1 (E.D. La. 1999) (applying former version of LA. Civ. CODE art. 2546).
In order to determine whether plaintiff's redhibition claims have prescribed, the Court must determine when the claims accrued. Defendants assert that plaintiff's claims accrued on February 12, 1993, the date plaintiff was diagnosed with cancer. Plaintiff relies on the doctrines of contra non valentum and class action tolling to establish the timeliness of his claims.
Under Louisiana law, contra non valentum prevents the running of liberative prescription in four factual situations: (1) when a legal cause prevented the courts from taking cognizance of the claim; (2) when some condition prevented the plaintiff from suing; (3) when a debtor does something to prevent a creditor from suing; or (4) when the cause of action is not known or reasonably knowable by the plaintiff. See Richardson v. Penzoil Prod. Co., 896 F.2d 919, 922 (5th Cir. 1990) ( citing Matthews v. Sun Exploration Production Co., 521 So.2d 1192 (La.Ct.App. 1988)). "As a judicial exception to the statutory rule of prescription, Louisiana courts strictly construe this doctrine and extend only its benefits up to `the time that the plaintiff has actual or constructive knowledge of the tortious act.'" Eldredge v. Martin Marietta Corp., 207 F.3d 737, 743 (5th Cir. March 22, 2000) ( quoting Bergeron v. Pan American Assurance Co., 731 So.2d 1037, 1042 (La.Ct.App. 1999)).
In his complaint, plaintiff alleges that he did not know of, and could not have reasonably discovered, defendants' alleged wrongdoing until the filing of the class action Castano v. The American Tobacco Co., et al., 94-1044 (E.D. La. 1994) on March 29, 1994. (See Compl. at ¶ 30.) Plaintiff also claims that the prescriptive period was tolled by the filing in 1996 of the class action, Scott v. The American Tobacco Co., et al., 96-8461 (Civ. Dist. Ct. Orleans Par. 1996), in which he was a class member until he opted out on June 12, 2000. ( See Compl. at ¶ 30). By his own admission, plaintiff discovered defendants' tortious conduct when the Castano class action was filed in March of 1994. The prescriptive period on his claim was tolled by the filing of the Castano class action. See Smith, et al. v. Texaco, Inc., et al., 88 F. Supp.2d 663, 670 (E.D. Tex. March 7, 2000) ( citing Crown Cork Seal Co. v. Parker, 462 U.S. 345, 353-54, 103 S.Ct. 2392, 2397-98 (1983); American Pipe Constr. Co. v. Utah, 414 U.S. 538, 552-53, 94 S.Ct. 756, 766 (1974)). However, the Fifth Circuit decertified the Castano class on May 23, 1996. See Castano, et al. v. The American Tobacco Co., et al., 84 F.3d 734 (5th Cir. 1996). Therefore, the prescriptive period began to run on that date. See Smith, 88 F. Supp.2d at 670. Plaintiff alleges that prescription was interrupted again by the Scott class action in 1996 until he opted out in June of 2000. The Court disagrees.
It is true that if class certification is denied, the period between the beginning of the proposed class action and the denial is tolled for all putative class members and any subsequent individual lawsuits they may bring. See Smith, 88 F. Supp.2d at 670 ( citing Crown Cork Seal Co. v. Parker, 462 U.S. 345, 353-54, 103 S.Ct. 2392, 2397-98 (1983); American Pipe Constr. Co. v. Utah, 414 U.S. 538, 552-53, 94 S.Ct. 756, 766 (1974)). However, courts apply a "no piggyback rule", which prevents tolling by a later class action. See Salazar-Calderon v. Presidio Valley Farmers Ass'n, 765 F.2d 1334, 1351 (5th Cir. 1985); see also, Basch v. Ground Round, Inc., 139 F.3d 6, 10-11 (1st Cir. 1998); Griffin v. Singletary, 17 F.3d 356, 359-60 (11th Cir. 1994); Andrews v. Orr, 851 F.2d 146, 149-50 (6th Cir. 1988); Korwek v. Hunt, 827 F.2d 874, 879 (2d Cir. 1987); Robbin v. Fluor Corp., 835 F.2d 213, 214 (9th Cir. 1987). Courts have noted that "the tolling rule [in class actions] is a generous one, inviting abuse;" therefore, courts apply the "no piggyback" rule to prevent putative class members from tolling the statute of limitations indefinitely. See Salazar-Calderon, 765 F.2d at 1351 ( citing Crown Cork Seal Co., 462 U.S. at 354, 103 S.Ct. at 2398; American Pipe Constr. Co. v. Utah, 414 U.S. at 561, 94 S. Ct. at 770 (Blackmun, J., concurring)). Therefore, the Court finds that only the Castano case served to toll the prescriptive period on plaintiff's claims. Plaintiff had one year from decertification, or until May 23, 1997, to file his lawsuit. Plaintiff filed this lawsuit on July 11, 2000. His redhibition claims therefore are prescribed.
Because the Court finds that the redhibition claims are prescribed, it need not address whether they are preempted by federal law.
In his motion to remand, plaintiff only claimed that he had a valid redhibition claim against the instate defendants and failed to address whether he had any other valid claims against them. Besides redhibition, his complaint alleges claims under the Louisiana Products Liability Act, breach of implied and express warranty, fraud, negligent misrepresentation, negligence, intentional infliction of emotional distress, and negligent infliction of emotional distress. Plaintiff's complaint against defendants lists twenty-nine paragraphs of factual allegations. The same alleged "wrongdoing" is the basis for each of his alleged causes of action. Plaintiff states that it was not until Castano that he knew of or reasonably could have discovered this "wrongdoing." Accordingly, since the same "wrongdoing" is the basis for all of his claims, the Court finds that plaintiff's other claims are also barred by the prescription of one-year. Plaintiff's claims for express and implied warranty are governed by Louisiana's redhibition statute and the one-year prescriptive period applicable to redhibition claims. See In re Ford Motor Co. Vehicle Paint Litigation, 1996 WL 426548 (E.D. La. 1996) ( citing Manning v. Scott-Hixson-Hopkins, Inc., 605 So.2d 233, 235 (La.App. 2 Cir. 1992). Further, delictual actions are likewise covered by a one-year prescriptive period. See Hunter v. Tensas Nursing Home, et al., 743 So.2d 839, 842 (La.App. 2 Cir. 10/27/99); LA. Civ. CODE art. 3492. Therefore, plaintiff's tort claims for products liability, fraud, negligent misrepresentation, negligence, intentional infliction of emotional distress, and negligent infliction of emotional distress are all prescribed. Accordingly, all of plaintiff's claims against the instate defendants are prescribed, and plaintiff has no possibility of establishing a cause of action against them. Thus, diversity exists, and the Court has jurisdiction over plaintiff's lawsuit.
III. CONCLUSION
For the foregoing reasons, plaintiff's motion to remand the case to the Civil District Court for the Parish of Orleans, State of Louisiana, is DENIED.