Wingard v. GMBH

Full title: WALTER WINGARD, as the Administrator of the Estate of Beverlyn Wingard…

Court: United States District Court, M.D. Alabama, Northern Division

Date published: Sep 23, 2008

CASE NO. 2:08-CV-342-WKW [WO] (M.D. Ala. Sep. 23, 2008)

Opinion

CASE NO. 2:08-CV-342-WKW [WO].

September 23, 2008

MEMORANDUM OPINION AND ORDER

W. WATKINS, District Judge

This case is before the court on two motions: (1) a Motion to Remand (Doc. # 3) filed by Plaintiffs Walter Wingard ("Mr. Wingard"), as the Administrator of the Estate of Beverlyn Wingard ("Beverlyn"), deceased, and Etheleen Wingard ("Ms. Wingard"), individually and as the Next Friend of C.D.B., a minor child and dependent of Beverlyn; and (2) a Motion to Sever (Doc. # 11) filed by Defendant Texo, Inc. ("Texo"). For the reasons set forth below, the court finds that the Motion to Remand (Doc. # 3) is due to be granted and the Motion to Sever (Doc. # 11) is due to be denied.

I. FACTS AND PROCEDURAL HISTORY

On August 8, 2008, Mr. Wingard and Ms. Wingard, Beverlyn's brother and mother, filed this lawsuit for claims arising from Beverlyn's death. (Doc. # 1, Ex. A, Compl. ¶¶ 1, 2 11.) According to their Complaint, the warper Beverlyn was operating as an employee of Albany International, Inc. ("Albany International") pulled her into its rotating parts, resulting in her death. (Compl. ¶ 11.) It is the Wingards' contention that the warper "presented an unreasonable hazard by virtue of exposed nip points." (Compl. ¶¶ 12-13.) The Wingards filed suit in the Circuit Court of Montgomery County, Alabama, against several Defendants: (1) Guillot Textilmaschinen GmbH ("Guillot"), the company that allegedly designed, manufactured, and sold the warper machine to Albany International; (2) Franz Guillot, the owner of Guillot; (3) Texo, a foreign company connected to the machine's production; (4) Albany International; and (5) four fictitious defendants. (Compl. ¶¶ 2-10 15.) The Wingards filed claims under the Alabama Extended Manufacturer's Liability Doctrine and for negligence/wantoness against Guillot, Franz Guillot, and Texo, and a workers' compensation claim against Albany International. (Doc. # 1-3 ¶¶ 14-31.)

Texo removed the case pursuant to 28 U.S.C. § 1441, but without consent from Albany International. (Doc. # 1.) Texo argued that the workers' compensation and wrongful death claims could not be joined in the same action. ( See Doc. # 1 ¶ 10.) In its amended removal notice, Texo added that: (1) joinder of Albany International was improper under Tapscott v. MS Dealer Service Corp., 77 F.3d 1353 (11th Cir. 1996), overruled on other grounds, Cohen v. Office Depot, Inc., 204 F.3d 1069, 1076 (11th Cir. 2000); and (2) Albany International was merely a nominal party.¹ (Doc. # 10.) Texo also moved to sever the products liability and negligence counts from the workers' compensation count because the claims were improperly joined. (Doc. # 11.) The Wingards filed a timely Motion to Remand. (Doc. # 3.)

1 Parties can amend removal notices without leave of court any time within the thirty-day period for filing a removal notice. Watson v. Nuvell Fin. Servs., LLC, No. 2:07-cv-639-WKW, 2008 WL 110923, at *1 (M.D. Ala. Jan. 9, 2008).

II. STANDARD OF REVIEW

Federal courts have a strict duty to exercise the jurisdiction conferred on them by Congress. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). However, "[f]ederal courts are courts of limited jurisdiction." Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). Thus, with respect to cases removed to this court pursuant to 28 U.S.C. § 1441, the law of the Eleventh Circuit favors remand where federal jurisdiction is not absolutely clear. "[R]emoval statutes are construed narrowly; where plaintiff and defendant clash about jurisdiction, uncertainties are resolved in favor of remand." Id.

III. DISCUSSION

A district court must have original jurisdiction over a state court civil action for a defendant to remove it to federal court. 28 U.S.C. § 1441(a); Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). Texo removed this case on the basis of diversity jurisdiction. (Doc. # 1.) For a case to be removed on diversity jurisdiction, there must be complete diversity of citizenship — no plaintiff in the case may be a citizen of the same state as any defendant, Palmer v. Hosp. Auth. of Randolph County, 22 F.3d 1559, 1564 (11th Cir. 1994) (citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806)), and the amount in controversy, exclusive of interest and costs, must exceed $75,000, 28 U.S.C. § 1332. According to Texo's Notice of Removal, the amount in controversy exceeds $75,000 (Doc. # 1 ¶ 11), and citizenship is completely diverse — the Wingards are citizens of Alabama, Texo is a citizen of South Carolina (its state of incorporation and principal place of business), Albany International is a citizen of Alabama but fraudulently joined, and the remaining Defendants have not yet been served with a complaint and summons². (Doc. # 1 ¶¶ 1 6-9.)³

For purposes of determining complete diversity, courts will ignore any non-diverse party that was fraudulently joined, Tedder v. F.M.C. Corp., 590 F.2d 115, 117 (5th Cir. 1979), ⁴ but the removing party has the "heavy" burden of proving fraudulent joinder, Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir. 1997). The Eleventh Circuit recognizes three forms of fraudulent joinder:

4 In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) ( en banc), the Eleventh Circuit adopted as binding precedent all decisions handed down by the former Fifth Circuit prior to October 1, 1981.

The first is when there is no possibility that the plaintiff can prove a cause of action against the resident (non-diverse) defendant. Coker v. Amoco Oil Co., 709 F.2d 1433, 1440 (11th Cir. 1983), superceded by statute on other grounds as stated in Georgetown Manor, Inc. v. Ethan Allen, Inc., 991 F.2d 1533 (11th Cir. 1993). The second is when there is outright fraud in the plaintiff's pleading of jurisdictional facts. Coker, 709 F.2d at 1440. In Tapscott, 77 F.3d at 1355 . . ., a third situation of fraudulent joinder was identified — i.e., where a diverse defendant is joined with a nondiverse defendant as to whom there is no joint, several or alternative liability and where the claim against the diverse defendant has no real connection to the claim against the nondiverse defendant. Id. at 1360.

Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998). Texo is asserting the third form of fraudulent joinder — that Albany International has no joint, several, or alternative liability, and that the workers' compensation claim has no real connection with the case ( see Doc. # 10 ¶ 1) — and has moved to sever the workers' compensation claim as improperly joined (Doc. # 11). Texo must make arguments for fraudulent joinder and severing the workers' compensation claim because 28 U.S.C. § 1445(c) prohibits a defendant from removing a workers' compensation claim arising out of state law to federal court. A federal court must either sever and remand a workers' compensation claim or remand the entire case. Brooks v. Paulk Cope, Inc., 176 F. Supp. 2d 1270, 1274 (M.D. Ala. 2001) (Albritton, J.).

As the Wingards' Brief in Support of Motion to Remand (Doc. # 3-2) demonstrates, case law in this district leans overwhelmingly in the Wingards' favor. Judge Albritton's opinion in Brooks addressed this very issue of fraudulent joinder. Brooks relied on the language of Rule 20 of the Federal Rules of Civil Procedure describing proper joinder to determine whether a joinder was fraudulent. The court found that, in an action with a workers' compensation claim and other tort claims seeking several liability for damages in a work-related incident, joinder was proper because the claims involved (1) several liability, and (2) common questions of fact. Brooks, 176 F. Supp. 2d at 1276; see Fed.R.Civ.P. 20(a)(2) ("Person . . . may be joined in one action as defendants if: (A) any right to relief is asserted against them . . . severally . . .; and (B) any question of . . . fact common to all defendants will arise in the action."). As Judge Fuller reiterated in a later opinion in this district, claims arising from "the same incident" that "necessarily have several common questions of fact[,] . . . cannot be said to have no real connection." Williams v. CNH Am., LLC, 542 F. Supp. 2d 1261, 1265 (M.D. Ala. 2008) (citing Baker v. Tri Nations Express, Inc., 531 F. Supp. 2d 1307, 1313 n. 6 (M.D. Ala. 2008) (Watkins, J.) for a real connection between two separate negligence claims because "they both relate to the same car accident and its underlying causes") (finding that there was a real connection between a claim against an employer for a work-related accident and claims against the manufacturer for design defects and negligence); see also Bryan v. Wausau Underwriters Ins. Co., No. 2:06-cv-1002-MEF, 2008 WL 1808325, at *1 (M.D. Ala. Apr. 21, 2008) (summarizing the finding in Williams). The claims in this case have sufficient connection and are properly joined.

Finding that Texo's claim for fraudulently joinder fails, the court can only permit removal if it grants Texo's motion to sever on other grounds.⁵ Rule 21 of the Federal Rules of Civil Procedure permits federal courts to "sever any claim against a party," even for the purpose of retaining jurisdiction, Ingram v. CSX Transp., Inc., 146 F.3d 858, 862 (11th Cir. 1998) (noting district courts' authority under Rule 21 to "dismiss dispensable nondiverse parties to cure defects in diversity jurisdiction.").⁶ The trial court has "broad discretion," however, in determining whether to sever claims. Anderson v. Moorer, 372 F.2d 750 n. 4 (5th Cir. 1967) ("Normally, the District Court has discretion under [Rule 21] in deciding whether to allow the dropping of parties."); Tillis v. Cameron, No. 1:07-cv-0078-WKW, 2007 WL 2806770, at *5 (M.D. Ala. Sept. 25, 2007) ("The determination of whether to grant a motion to sever is left to the discretion of the trial court." (internal quotation marks and citation omitted)); see also Brunet v. United Gas Pipeline Co., 15 F.3d 500, 505 (5th Cir. 1994) ("The trial court has broad discretion to sever issues to be tried before it."). "Whether severance would facilitate . . . judicial economy is among the factors a court may examine while determining whether to sever claims." Tillis, 2007 WL 2806770, at *5; see, e.g., Otis Clapp Son, Inc. v. Filmore Vitamin Co., 754 F.2d 738, 743 (7th Cir. 1985) ("Rule 21 gives the court discretion to sever any claim . . . if doing so will increase judicial economy." (internal quotation marks and citation omitted)); Baker, 531 F. Supp. 2d at 1318 (considering judicial economy in a severance determination); 6A Charles Alan Wright, Arthur R. Miller Mary Kay Kane § 1591 (2d ed. 1990) ("Rule 21 gives the court discretion to sever any claim and proceed with it separately if doing so will increase judicial economy. . . .").

5 Texo's other claim that removal is proper because Albany International is a nominal party (Doc. # 10) ties in with the severance argument. A nominal party can be ignored for purposes of determining complete removal, see Nunn v. Feltinton, 294 F.2d 450, 453 (5th Cir. 1961) ("It has been established from an early date that the joinder of formal or unnecessary parties cannot prevent the removal of an action to a federal court."), but § 1445(c) prohibits the removal of workers' compensation claims regardless of whether the claims are against nominal parties. Thus, the issue of whether Albany International is a nominal party translates into a question of whether the court should sever the Defendant.

6 This discussion in Ingram relied on an earlier version of Rule 21 that stated "[p]arties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just." Ingram, 146 F.3d at 862 n. 4. Rule 21 has since been amended in relevant part to: "On motion or on its own, the court may at any time, on just terms, add or drop a party." The language conveys the same point, and the changes are merely stylistic, see Fed.R.Civ.P. 21 advisory committee's notes.

The issue whether to sever workers' compensation claims does not exist in a vacuum. The court must be mindful of the practical effects in terms of judicial efficiency of severing or refusing to sever claims. It would be inefficient for the court to remand the entire case if the state court severs the Wingards' workers' compensation claim. This district has already addressed at length the practice in Alabama state courts with respect to severing workers' compensation claims. For example, the Williams court concluded that "there appears to be significant discretion left to trial judges in Alabama as to whether to sever a workers' compensation claim from common law claims against third parties," and that it is "far from being the `recognized practice'" for Alabama judges to sever these claims. 542 F. Supp. 2d at 1265; see Brooks, 176 F. Supp. 2d at 1276 (discussing district court cases from Alabama finding support for Alabama state judges that do not sever workers' compensation and tort claims). Both Williams and Brooks remanded the entire cases to state court. Williams, 542 F. Supp. 2d at 1267; Brooks, 176 F. Supp. 2d at 1277. This court in its discretion similarly finds that severing the workers' compensation claim against Albany International would not promote judicial economy.

IV. CONCLUSION

For the foregoing reasons, it is ORDERED that:

1. The Wingards' Motion to Remand (Doc. # 3) is GRANTED;

2. Texo's Motion to Sever (Doc. # 11) is DENIED;

3. This case is REMANDED to the Circuit Court for Montgomery County, Alabama;

4. The Clerk of Court is DIRECTED to take appropriate steps to effect the remand.

A copy of this checklist is available at the website for the USCA, 11th Circuit at www.ca11.uscourts.gov Effective on April 9, 2006, the new fee to file an appeal will increase from $255.00 to $455.00. CIVIL APPEALS JURISDICTION CHECKLIST 1. Appealable Orders : Appeals from final orders pursuant to 28 U.S.C. § 1291: 28 U.S.C. § 158Pitney Bowes, Inc. v. Mestre 701 F.2d 1365 1368 28 U.S.C. § 636 In cases involving multiple parties or multiple claims, 54Williams v. Bishop 732 F.2d 885 885-86 Budinich v. Becton Dickinson Co. 486 U.S. 196 201 108 S.Ct. 1717 1721-22 100 L.Ed.2d 178LaChance v. Duffy's Draft House, Inc. 146 F.3d 832 837 Appeals pursuant to 28 U.S.C. § 1292(a): Appeals pursuant to 28 U.S.C. § 1292(b) and Fed.R.App.P. 5: 28 U.S.C. § 1292 Appeals pursuant to judicially created exceptions to the finality rule: Cohen v. Beneficial Indus. Loan Corp. 337 U.S. 541 546 93 L.Ed. 1528Atlantic Fed. Sav. Loan Ass'n v. Blythe Eastman Paine Webber, Inc. 890 F.2d 371 376 Gillespie v. United States Steel Corp. 379 U.S. 148 157 85 S.Ct. 308 312 13 L.Ed.2d 199 2. Time for Filing Rinaldo v. Corbett 256 F.3d 1276 1278 4 Fed.R.App.P. 4(a)(1): 3 THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD — no additional days are provided for mailing. Fed.R.App.P. 4(a)(3): Fed.R.App.P. 4(a)(4): Fed.R.App.P. 4(a)(5) and 4(a)(6): Fed.R.App.P. 4(c): 28 U.S.C. § 1746 3. Format of the notice of appeal : See also 3pro se 4. Effect of a notice of appeal : 4 Courts of Appeals have jurisdiction conferred and strictly limited by statute: (a) Only final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under , generally are appealable. A final decision is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." , , (11th Cir. 1983). A magistrate judge's report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. (c). (b) a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. (b). , , (11th Cir. 1984). A judg ment which resolves all issues except matters, such as attorneys' fees and costs, that are collateral to the merits, is immediately appealable. , , , , , (1988); , , (11th Cir. 1998). (c) Appeals are permitted from orders "granting, continuing, modifying, refusing or dissolving injunctions or refusing to dissolve or modify injunctions . . ." and from "[i]nterlocutory decrees . . . determining the rights and liabilities of parties to admiralty cases in which appeals from final decrees are allowed." Interlocutory appeals from orders denying temporary restraining orders are not permitted. (d) The certification specified in (b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court's denial of a motion for certification is not itself appealable. (e) Limited exceptions are discussed in cases including, but not limited to: , , , 69S.Ct. 1221, 1225-26, (1949); , , (11th Cir. 1989); , , , , , (1964). Rev.: 4/04 : The timely filing of a notice of appeal is mandatory and jurisdictional. , , (11th Cir. 2001). In civil cases, Fed.R.App.P. (a) and (c) set the following time limits: (a) A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. must be filed in the district court within 30 days after the entry of the order or judgment appealed from. However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. Special filing provisions for inmates are discussed below. (b) "If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later." (c) If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion. (d) Under certain limited circumstances, the district court may extend the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time may be extended if the district court finds upon motion that a party did not timely receive notice of the entry of the judgment or order, and that no party would be prejudiced by an extension. (e) If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution's internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid. Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. Fed.R.App.P. (c). A notice of appeal must be signed by the appellant. A district court loses jurisdiction (authority) to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. (a)(4).