Opinion
23-CV-00009-DC-RCG
06-27-2023
SEAN MARBLE, Plaintiff, and EUGENE DURST, Intervenor, v. CROWNQUEST OPERATING, LLC, SEMINOLE PIPELINE COMPANY, LLC, LINE LOCATORS LP, and ENTERPRISE PRODUCTS OPERATING, LLC, Defendants.
REPORT AND RECOMMENDATION OF THE U.S. MAGISTRATE JUDGE
RONALD C. GRIFFIN UNITED STATES MAGISTRATE JUDGE
BEFORE THE COURT is Plaintiff Sean Marble's Motion to Remand to State Court. (Doc. 32). This matter is before the undersigned United States Magistrate Judge through a standing order of referral pursuant to 28 U.S.C. § 636 and Appendix C of the Local Court Rules for the Assignment of Duties to United States Magistrate Judges. After due consideration of the Parties' briefing, the relevant law, and the Parties' arguments at an April 5, 2023 hearing on the record, the Court RECOMMENDS that Plaintiff's Motion to Remand be GRANTED. (Doc. 32).
All citations are to CM/ECF generated pagination, unless otherwise noted.
I. Background
On September 20, 2020 Plaintiff filed his Original Petition in the 441st Judicial District Court of Midland County, Texas with the cause number CV57006. (Doc. 32 at 2). Plaintiff Sean Marble's personal injury suit stems from an incident that occurred on or about July 28, 2020 in Big Springs, Texas when, while working on a pipeline construction project, a trencher struck an underground, unmarked gas line causing catastrophic burns to Plaintiff Sean Marble and Intervenor Eugene Durst. (Docs. 1-3 at 2; 32 at 2). Plaintiff's Original Petition alleged claims against the company constructing the pipeline, CrownQuest Operating, LLC. Id. Plaintiff's First and Second Amended Petitions added claims against pipeline owners and operators, Enterprise Products Operating, LP (“Enterprise”) and Seminole Pipeline Company, LLC (“Seminole”). (Doc. 32 at 3). Plaintiff's Third Amended Petition, filed on April 4, 2022, is now the active pleading in this case. (Doc. 38-2). Plaintiff alleges “state law claims for negligence and gross negligence, contending that the defendants were negligent for failures in enacting safety policies, managing the hazardous condition, and ensuring underground pipelines were adequately marked.” (Doc. 32 at 3). On July 25, 2022, Eugene Durst intervened in the current lawsuit, bringing his own claims for personal injuries against all Defendants. (Doc. 1 at 3).
Then, on December 15, 2022, Plaintiff served an expert report from his expert, Edward Lihan, on Defendants. Mr. Lihan “is a mechanical engineer and expert in natural gas distribution operations and industry standards. He has over thirty-five years of experience in engineering, operation, maintenance and safety code compliance in the energy industry.” (Doc. 32 at 2) (internal citations omitted). Now Enterprise and Seminole (together, the “Removing Defendants”) allege that Mr. Lihan's report identifies “for the first time, federal regulations that purportedly establish a duty owed by Defendants under his state law negligence action. That expert report made clear that Plaintiff's claims involve a substantial question of federal law in that they require a resolution of 49 C.F.R. §§ 195.410 and 195.412, which purportedly require[s] pipeline operators to place permanent, visible line markers over their pipelines and to inspect the surface condition near its pipelines.” (Doc. 1 at 1-2).
Based on that rationale, the Removing Defendants removed the case to this Court on January 13, 2023. Id. Plaintiff filed his Motion to Remand on February 10, 2023, and the Removing Defendants filed their Response in Opposition on February 24, 2023. (Docs. 32, 38). On February 24, 2023, the Removing Defendants filed an unopposed motion for a hearing, which the Court granted, and then subsequently held said hearing on April 5, 2023. Consequently, this matter is ripe for disposition.
II. Legal Standard
It is widely recognized that federal courts are courts of limited jurisdiction, as “[t]hey possess only that power authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (citing Willy v. Coastal Corp., 503 U.S. 131, 136-37 (1992)). “Removal of an action to a federal court is proper when a civil action brought in state court would otherwise be within the original jurisdiction of the federal courts.” Blazejewski v. Allstate Fire & Cas. Ins. Co., No. SA-21-CV-00700-JKP, 2021 WL 4173429, at *1 (W.D. Tex. Sept. 13, 2021) (citing 28 U.S.C. § 1441). Following removal to a proper federal court, an opposing party may move to remand the action to state court. Blazejewski, 2021 WL 4173429, at *1. When considering a motion to remand, any doubts or ambiguities should be resolved in favor of remanding to state court and the removing party bears the burden of showing federal jurisdiction exists and removal was proper. See Mumfrey v. CVS Pharm., Inc., 719 F.3d 392, 397 (5th Cir. 2007).
28 U.S.C. § 1331 gives federal district courts “original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” Rivera v. Orion Marine Grp. Inc., 509 F.Supp.3d 926, 940 (S.D. Tex. 2020). Typically, under the well-pleaded complaint rule, “arising under” jurisdiction appears on the face of a well-pleaded complaint. Id. However, “[u]nder 28 U.S.C. § 1446(b), where the original complaint presents no grounds for removal, a defendant may later remove the case to federal court after receipt of ‘an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.' ” Eggert v. Britton, 223 Fed.Appx. 394, 396 (5th Cir. 2007) (per curiam). Here the Removing Defendants assert, and Plaintiff does not dispute, that Mr. Lihan's report constitutes an “other paper,” which the Court can look at to see if it establishes federal question jurisdiction. However, “[o]nly in rare circumstances have courts looked to ‘other paper' to establish federal question jurisdiction.” Freeman v. Phillips 66 Co., No. 14-2257, 2014 WL 7330620, at *2 (E.D. La. Dec. 18, 2014) (citing Eggert, 223 Fed.Appx. at 397). And even when courts have done so, “courts are determining if diversity jurisdiction has been established.” Id. (citing Eggert, 223 Fed.Appx. at 397).
Additionally, arising under jurisdiction ordinarily exists “when federal law creates the cause of action asserted.” Gunn v. Minton, 568 U.S. 251, 257 (2013). “However, under the Grable doctrine, there is a ‘special and small category' of cases where state law creates the cause of action but ‘arising under jurisdiction still lies.' ” Rivera, 509 F.Supp.3d at 940 (quoting Gunn, 568 U.S. at 258; citing Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 312 (2005)). “Under the Grable doctrine, ‘federal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.' ”Id. (quoting Gunn, 568 U.S. at 258). “If any one of these four prongs is not satisfied, a court should not exercise federal-question jurisdiction.” Maher v. Vaughn, Silverberg & Assocs., LLP, 95 F.Supp.3d 999, 1009 (W.D. Tex. 2015) (quoting Marren v. Stout, 930 F.Supp.2d 675, 681 (W.D. Tex. 2013)); see also Gunn, 568 U.S. at 258 (“Where all four of these requirements are met, we held, jurisdiction is proper because there is a ‘serious federal interest in claiming the advantages thought to be inherent in a federal forum,' which can be vindicated without disrupting Congress's intended division of labor between state and federal courts.”) (citing Grable, 545 U.S. at 313-14).
III. Discussion
Plaintiff seeks remand on the grounds that the Removing Defendants cannot meet elements one, three, and four of the Grable doctrine.
Plaintiff references the “Singh test,” which originates from the Fifth Circuit case Singh v. Duane Morris LLP; however, some case law references the same four elements as the “Grable doctrine,” which originates from the U.S. Supreme Court case Grable & Sons Metal Prods., Inc. v. Darue Eng 'g & Mfg. See Singh v. Duane Morris LLP, 538 F.3d 334, 337-38 (5th Cir. 2008); Grable, 545 U.S. at 312. For clarity's sake, the Court will refer to the four elements as the “Grable doctrine,” but recognizes that the terms are interchangeable.
A. Is Resolving a Federal Issue Necessary to the Case?
Under this first element of the Grable doctrine, a federal issue is necessary to resolution of a state law claim if a federal law or regulation is alleged as an exclusive basis for holding defendants liable. See Bd. of Comm'rs of Se. La. Flood Prot. Auth.-E. v. Tenn. Gas Piepline Co., L.L.C., 850 F.3d 714, 722 (2017). “When a claim can be supported by alternative and independent theories of recovery, one based on state law and the other on federal law, that claim may not form the basis for federal question jurisdiction because federal law is not a ‘necessary' element of the claim.” Maher, 95 F.Supp.3d at 1009 (quoting Goffney v. Bank of Am., N.A., 897 F.Supp.2d 520, 526 (S.D. Tex. 2012)).
Here, Plaintiff argues that the Removing Defendants “raise no federal issue necessary to resolve Plaintiff's state law negligence claims.” (Doc. 32 at 9). Plaintiff alleges this is because, although the Removing Defendants contend violations of 49 C.F.R. §§ 195.410 and 195.412 are necessary to establish the Removing Defendants' duty, Plaintiff asserts that his expert, Mr. Lihan, “cites the regulations as one of several sources, each able enough to show what a reasonable pipeline owner and operator would do. For example, Mr. Lihan noted relies [sic] on his own knowledge and experience with industry practices and standards, the CGA's ‘Best Practices Guide,' and Defendants' ‘Damage Prevention Program.' ” Id.
To counter, the Removing Defendants argue that Mr. Lihan's report “confirms that Plaintiff's claim that Enterprise was negligent in failing to place a sufficient number of permanent pipeline markers requires the application and resolution of federal regulations that Plaintiff claims establish a legal duty.” (Doc. 38 at 8). Further, “Plaintiff attempts to hold Seminole liable via his assertion that Defendants violated 49 C.F.R. § 195.410 and § 195.412 because those regulations impose a nondelegable duty on pipeline owners to ensure that a sufficient number of permanent line markers are placed over their pipelines and to inspect the surface over their pipelines. As such, Plaintiff utilizes federal law to establish that Seminole owes a duty Plaintiff [sic].” Id. at 13-14 (internal citations omitted). Thus, the Removing Defendants' argument boils down to asserting that Plaintiff's sole path for establishing that Enterprise and Seminole owed him a duty to mark and inspect the pipeline is via Mr. Lihan's reference to §§ 195.410 and 195.412, which in-turn means federal regulations control an essential element of Plaintiff's negligence claim.
The much-discussed case in both Plaintiff's Motion to Remand and Defendants' Response is Tenn. Gas Pipeline, a Fifth Circuit decision from 2017. In Tenn. Gas Pipeline, the plaintiff pleaded individual claims under Louisiana state law, however “[t]he complaint described ‘a longstanding and extensive regulatory framework under both federal and state law' that protects against the effects of dredging activities and establishes the legal duties by which Defendants purportedly are bound.” 850 F.3d at 720. None of the plaintiffs' claims relied on causes of action created under federal law. Id. at 721. The defendants removed the case to federal court and the plaintiffs filed a motion to remand, which the district court denied, and the Fifth Circuit affirmed that denial.
The Fifth Circuit found that plaintiffs' “complaint draws on federal law as the exclusive basis for holding Defendants liable for some of their actions” and that “the Louisiana Supreme Court has explicitly rejected the prospect that a statutory obligation of “reasonably prudent conduct” could require oil and gas lessees to restore the surface of dredged land.” Tenn. Gas Pipeline, 850 F.3d at 722, 723. The Fifth Circuit also considered that plaintiffs sought a remedy that could not be attained “under any state law-based conception of negligence.” Id. at 722. Therefore, the Fifth Circuit concluded that plaintiffs' negligence and nuisance claims necessarily raised federal issues since the claims could not be resolved “without a determination whether multiple federal statutes create a duty of care that does not otherwise exist under state law.” Id. at 723.
Another case relevant to the current discussion is Rivera v. Orion Marine Group Inc., a Southern District of Texas case from 2020 that involved semi-similar facts. Rivera stems from the death of a seaman that occurred when “Enterprise's pipeline was struck during the dredging work Orion was performing for EPIC, resulting in an explosion that engulfed the Vessel.” 509 F.Supp.3d at 932. The deceased's next of kin sued Orion, EPIC, and Enterprise for negligence, gross negligence, negligence per se, and recklessness, as well as pleading a strict liability claim against Enterprise. Id. The case was then removed to federal court based on the assertion that federal question jurisdiction existed. Id.
The Rivera Court undertook the Grable doctrine analysis to determine whether the plaintiffs' tort claims arose under federal law. Regarding plaintiffs' negligence, negligence per se, gross negligence, and recklessness claims, the Court found those claims did not meet the first element of the Grable doctrine “[b]ecause it is not apparent on the face of the state-court petition or notice of removal, and because Defendants offer no plausible allegations in support, Defendants have not met their burden to show a federal issue is necessarily raised.” Id. at 941. However, the Rivera Court held that the plaintiffs' strict liability claim against Enterprise did “necessarily raise a federal issue that is apparent on the face of the petition.” Id. (citation omitted). As to the strict liability claim, the plaintiffs alleged “Enterprise had the non-delegable duty to follow federal pipeline regulations.” Rivera, 509 F.Supp.3d at 941 (citation omitted). Therefore, the Rivera Court found that “federal regulations do control an essential element of the claim, satisfying this element.” Id.
The Rivera Court ultimately determined it did not have arising under jurisdiction under the Grable doctrine because the federal issue raised in the plaintiffs' strict liability claim against Enterprise was not substantial. Rivera, 509 F.Supp.3d at 941 (“Here, at stake is whether Enterprise violated federal pipeline regulations. Disposition of this issue will predominantly involve applying the facts to the relevant federal pipeline regulations. Such a fact-bound, situation specific federal issue is not substantial for it will not have the impact on the federal system that the Grable doctrine requires.”) (citing Grable, 545 U.S. at 314-15; Gunn, 568 U.S. at 260; Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 700-01 (2006)).
Here, it is clear that Mr. Lihan's report does state and conclude that:
It is also my opinion that Enterprise failed to provide the aboveground line markers over their pipeline in their right-of-way traversing through the lease agreements obtained by CrownQuest for the known excavation work being performed by Platinum. The line markers are required by the 49 CFR Part 195 pipeline regulations, and are also included as a precautionary measure in the Common Ground Alliance Best Practices.
Enterprise also failed to follow its own procedures for the prevention of damage to their pipelines. Their patrols for
inspection of construction activity failed to result in any “line-ofsight” line markers or other actions to prevent damage to their pipeline. The line markers are a basic and effective means and would have alerted the trenching machine operator of the hazard lying beneath the ground before excavating there.(Doc. 32-4 at 24).
Although Mr. Lihan's report only mentions Seminole by name once, the Removing Defendants address this in their Response by providing, “Plaintiff defined Enterprise and Seminole collectively as “Enterprise” in his Petition. As such, while Plaintiff's expert's opinion does not mention Seminole by name, Defendants assume, based on the definition propounded in Plaintiff's Petition, that Plaintiff's expert refers to Enterprise and Seminole collectively in his opinion when he refers to Enterprise.” (Doc. 38 at 14 n.36). In his Motion to Remand, Plaintiff collectively refers to Seminole and Enterprise as “Defendants” and does not contest the Removing Defendants' characterization in their Notice of Removal of “Enterprise” in Mr. Lihan's report as referring to both Seminole and Enterprise. (Doc. 32 at 1). As such, the Court assumes Mr. Lihan's references to “Enterprise” include Seminole.
However, unlike in Grable, Rivera, and Tenn. Gas Pipeline, the Removing Defendants seek to prove that Plaintiff's claims necessarily raise a federal issue via an expert report rather than via the allegations in Plaintiff's Third Amended Petition. See also Ibarra ConsultingEng'rs Inc. v. Jacobs Eng'g Grp. Inc., 579 F.Supp.3d 850, 855 (N.D. Tex. 2022) (“We start with the text of the plaintiffs' complaint, which repeatedly alleges that [defendant] failed to fulfill its duties under the Program.”) (citation omitted).
Thus, the Court must decide whether Mr. Lihan's expert report alone is enough to carry the Removing Defendants' burden of showing a federal issue is necessary to resolution of Plaintiff's state law claims. The Court finds it is not, especially considering the allegations present in Plaintiff's Third Amended Petition. (Doc. 38-2 at 5-6). The Removing Defendants do not cite a single case where a Court has exclusively or even partially relied on an expert report to establish that a federal issue is necessarily raised, or to establish “arising under” federal question jurisdiction as a whole. As Fifth Circuit precedent counsels, the Removing Defendants bear the burden of showing federal question jurisdiction exists and that any ambiguities should be construed against removal, thus, the Court finds the Removing Defendants have not established that Plaintiff's claims necessarily raise a federal issue.
B. Is the Federal Issue Actually Disputed?
Having found the Removing Defendants did not meet element one, the Court has also established that the Grable doctrine does not support federal question jurisdiction in this case, however, in the interest of thoroughness for the District Court, the Court will continue with a discussion of the other three elements of the Grable doctrine.
As addressed above, Plaintiff does not contest that the Removing Defendants satisfy this element.
C. Is the Federal Issue in this Case Substantial?
. See text accompanying note 4.
The third element of the Grable doctrine is whether the federal issue-application of 49 C.F.R. §§ 195.410 and 195.412 to set Defendants' duty and standard of care-is substantial. Gunn, 568 U.S. at 260. “For a federal issue to give rise to federal jurisdiction, ‘it is not enough that the federal issue be significant to the particular parties in the immediate suit. . . . The substantiality inquiry under Grable looks instead to the importance of the issue to the federal system as a whole.' ” Tenn. Gas Pipeline, 850 F.3d at 723 (quoting Gunn, 568 U.S. at 260). The Supreme Court has suggested that an issue can be substantial for many reasons: “because state adjudication would ‘undermine the development of a uniform body of [federal] law'; because the case presents ‘a nearly pure issue of law' that would have applications to other federal cases; or because resolution of the issue has ‘broad[ ] significance' for the federal government.” Id. at 724. (quoting Gunn, 568 U.S. at 260, 261; Empire, 547 U.S. at 700).
Conversely, “Grable and its progeny also offer guidance as to when a federal issue is not substantial. For example, when ‘the federal issue is predominantly one of fact,' the federal issue will generally not be considered substantial.” Rivera, 509 F.Supp.3d at 942 (citing Empire, 547 U.S. at 700-01; Singh, 538 F.3d at 339; Delgado v. M. Lipsitz & Co., Ltd., No. 3:13-CV-4324-N, 2014 WL 11456820, at *2 (N.D. Tex. Jan. 28, 2014)). The Court notes that in Delgado, the plaintiff appears to have only sought to employ a federal pipeline regulation to set the standard of care, not to create a duty. Delgado, 2014 WL 11456820, at *2 (“The [plaintiffs] rely on 49 C.F.R. § 192.625 to supply a standard of care for their state law negligence and negligence per se claims.”).
But in Rivera, the federal regulation supplied a non-delegable duty and the Rivera Court still found the federal issue to not be substantial. 509 F.Supp.3d at 941 (“Plaintiffs allege that Enterprise had the non-delegable duty to follow federal pipeline regulations.”). The Rivera Court reasoned that “at stake is whether Enterprise violated federal pipeline regulations. Disposition of this issue will predominantly involve applying the facts to the relevant federal pipeline regulations. Such a fact-bound, situation specific federal issue is not substantial for it will not have the impact on the federal system that the Grable doctrine requires.” Id. at 942 (citing Grable, 545 U.S. at 314-15; Gunn, 568 U.S. at 260; Empire, 547 U.S. at 700-01).
This is consistent with the Supreme Court's statements in Merrell Dow Pharms. Inc. v. Thompson that “[g]iven the significance of the assumed congressional determination to preclude federal private remedies, the presence of the federal issue as an element of the state tort is not the kind of adjudication for which jurisdiction would serve congressional purposes and the federal system.” 478 U.S. 804, 814 (1986).
As in Rivera and contemplated in Merrell Dow, even if the federal issue were necessary here, it does not present substantial issues for the federal system as a whole. Thus, the Removing Defendants do not satisfy the third element of the Grable doctrine.
D. Would Federal Jurisdiction Disturb the Balance of Federal and State Judicial Responsibilities?6
“In [ Grable ], the Supreme Court explicitly rejected ‘[a] general rule of exercising federal jurisdiction over state claims resting on federal . . . statutory violations,' and it also rejected the 5. The Court has already found that the Removing Defendants failed to meet their burden under elements one and three of the Grable doctrine, however, in the interest of thoroughness the Court will discuss the last element as well. proposition that ‘any . . . federal standard without a federal cause of action' is enough to support federal jurisdiction over a lawsuit.” Tenn. Gas Pipeline, 850 F.3d at 725 (quoting Grable, 545 U.S. at 318-19) (second alteration in original). In fact, Grable recognized “that state tort proceedings regularly involve the violation of federal statutes and regulations and that exercising federal jurisdiction in this context would result in an ‘enormous shift of traditionally state cases into federal courts.' ” Rivera, 509 F.Supp.3d at 942 (quoting Grable, 545 U.S. at 318-19; citing Delgado, 2014 WL 11456820, at *2). Further, the Fifth Circuit recognized in Tenn. Gas Pipeline that “If the federal statutes at issue in this case do create duties and obligations under the laws of various states, then it might be inappropriate for federal question jurisdiction to obtain every time a state-law claim is made on that basis.” 850 F.3d at 725. That concern expressed in Grable, recognized by the Fifth Circuit in Tenn. Gas Pipeline, and applied in Rivera, exists here. Plaintiff's claims against the Removing Defendants are born of state law.
This case is distinguishable from Tenn. Gas Pipeline where the district court held that no enormous shift of traditionally state cases into federal courts would arise; it is further distinguishable as the Fifth Circuit stated that the federal and state dockets would not become unbalanced as “one of the primary subjects of dispute between the parties is whether the federal laws in question may properly be interpreted to do that at all, the implications for the federal docket are less severe.” Tenn. Gas Pipeline, 850 F.3d at 725 (citing Grable, 545 U.S. at 318-19). Further, the Fifth Circuit stated that in Tenn. Gas Pipeline, “the scope and limitations of a complex federal regulatory framework are at stake in this case, and disposition of the question whether that framework may give rise to state law claims as an initial matter will ultimately have implications for the federal docket one way or the other.” Tenn. Gas Pipeline, 850 F.3d at 725.
Thus, the considerations in this case are more similar to those in Rivera and distinguishable from those in Tenn. Gas Pipeline. Exercising federal jurisdiction over these state law claims “would considerably intrude on state authority.” Singh, 538 F.3d at 340.
* * *
In summation, after applying Grable's inquiry to the case at hand, it is clear Plaintiff's state law claims do not arise under federal law. As discussed above, the Court concludes that although negligence cases may raise disputed issues of federal law, the case at hand is more similar to those that “are by their nature unlikely to have the sort of significance for the federal system necessary to establish jurisdiction.” Gunn, 568 U.S. at 259.
IV. Recommendation
In accordance with the above discussion, the Court RECOMMENDS Plaintiff's Motion to Remand be GRANTED. (Doc. 32).
SIGNED this 27th day of June, 2023.
Instructions for Service and Notice of Right to Appeal/Object
In the event that a party has not been served by the Clerk with this Report and Recommendation electronically, pursuant to the CM/ECF procedures of this District, the Clerk is ORDERED to mail such party a copy of this Report and Recommendation by certified mail. Pursuant to 28 U.S.C. § 636(b)(1), any party who desires to object to this report must serve and file written objections within fourteen (14) days after being served with a copy. A party filing objections must specifically identify those findings, conclusions, or recommendations to which objections are being made; the District Judge need not consider frivolous, conclusive, or general objections. Such party shall file the objections with the Clerk of the Court and serve the objections on all other parties. A party's failure to file such objections to the proposed findings, conclusions, and recommendations contained in this report shall bar the party from a de novo determination by the District Judge. Additionally, a party's failure to file written objections to the proposed findings, conclusions, and recommendations contained in this report within fourteen (14) days after being served with a copy shall bar that party, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions accepted by the District Judge. Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1428-29 (5th Cir. 1996).