Opinion
Civil Action No. SA-18-CV-1218-XR
02-14-2019
TROY STEVE, Plaintiff, v. FCA US LLC, et al., Defendants.
REMAND ORDER
On this date, the Court considered Plaintiff's Motion to Remand (docket no. 7). After careful consideration, the Court concludes that it has jurisdiction over this removed case but that equitable remand pursuant to 28 U.S.C. § 1452(b) is appropriate
Background
Plaintiff Troy Steve filed this action in state court on October 2, 2018 based on a motor vehicle accident that occurred February 23, 2018. Plaintiff alleges that he was driving a 2007 Chrysler Aspen, while wearing his seatbelt, on IH-37 in Atascosa County, when a truck with trailer owned by Defendant Gonzalez and operated by Gonzalez's employee collided with Plaintiff's vehicle. The collision allegedly forced Plaintiff's vehicle off the road and into a ditch, where it rolled over several times, and Plaintiff was injured.
As to Defendant FCA, Steve alleges that FCA manufactured and designed the subject vehicle and placed it into the stream of commerce. Steve further alleges that FCA engaged in certain conduct from 2006 to 2018, including marketing, advertising, and warranting its vehicles. Steve alleges that FCA marketed and sold the subject vehicle. Steve asserts negligence claims against FCA, including negligent design of the seatbelt restraint system and roof structure. Steve also asserts negligence and vicarious liability claims against Orlando Gonzalez and Gonzalez Trucking Corporation.
On November 21, Defendant FCA removed the case to this Court pursuant to 28 U.S.C. § 1452, which provides that "[a] party may remove any claim or cause of action in a civil action . . . to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim under section 1334 of this title." FCA contends that it did not exist until April 2009, and that it did not design, develop, manufacture, assemble, market, or sell the 2007 Chrysler Aspen, nor is it a successor of any entity that did. Rather, FCA purchased the assets of Chrysler LLC, a bankrupt entity, which was the successor in interest to the manufacturer of the 2007 Chrysler Aspen. As part of its purchase in the Chrysler bankruptcy, FCA did agree to assume certain limited liabilities, and thus it asserts that its liability for claims relating to the 2007 Chrysler Aspen, if any, would arise solely out of the asset purchase agreement approved by the Bankruptcy Court for the Southern District of New York in 2009. FCA contends that this Court has jurisdiction because the proceedings arise under Title 11 insofar as the claims against FCA arise under and relate to the bankruptcy case and the orders entered therein.
On December 13, Plaintiff moved to remand, asserting that FCA improperly removed the entire case instead of just the claims that were arguably within the scope of § 1334 and that, in any event, abstention and remand are appropriate. Plaintiff notes that the Bankruptcy Estate was closed on March 1, 2016 and that this case involves only state-law issues and no parties that were debtors in the bankruptcy case.
FCA responded in opposition to the motion to remand, asserting that federal district courts have uniformly found jurisdiction exists, and that abstention is disfavored such that the Court should exercise jurisdiction.
Analysis
I. Jurisdiction
Title 28 U.S.C. § 1334(a) provides that "the district courts shall have original and exclusive jurisdiction of all cases under title 11." Additionally, "[n]otwithstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district courts, the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under Title 11, or arising in or related to cases under title 11." 28 U.S.C. § 1334(b). A party may remove any claim or cause of action if the district court has jurisdiction of the claim or cause of action under § 1334. 28 U.S.C. § 1452(a).
FCA contends that this case both arises under and relates to a case under Title 11 because the claims against FCA would not exist but for the bankruptcy proceedings in which it purchased the assets and certain liabilities of former Chrysler. FCA emphasizes that it is not a general successor to Chrysler, but agreed to assume certain of its liabilities. Those liabilities are limited, and FCA contends that any possible liability is created solely by the Master Transaction Agreement ("MTA") approved by the bankruptcy court. Thus, whether a plaintiff can recover is defined by the MTA and requires construction and application of the MTA. FCA contends that federal courts have almost uniformly concluded that jurisdiction exists in these circumstances. FCA notes that, while Plaintiff characterizes the claim as one of strict products liability in the motion to remand, the allegations in the current pleading are all predicated on the alleged negligence of Old Chrysler and thus directly implicate the MTA and Sale Order. In response, Plaintiff asserts that he will dismiss the claims outside the scope of the MTA in the appropriate court once the motion to remand is resolved.
In Zlotucha v. Chrysler Group, LLC, No. SA-13-CV-915-XR, 2013 WL 6493552 (W.D. Tex. Dec. 9, 2013), this Court previously considered whether a DTPA claim fell within § 1334 and found that the MTA affected FCA's (then Chrysler Group's) liability, but did not create the substantive right at issue, and thus the case was "related to" but not "arising in" a Title 11 case. This Court also found that the claim was non-core. Based on its prior decision and reasoning, this Court also finds that it has jurisdiction over this case such that removal was proper, but that the claim is non-core.
II. Abstention
In Zlotucha, this Court also found that mandatory abstention applied because the case was related to a case under Title 11, but did not arise under Title 11 or arise in a case under Title 11, and an action was commenced and could be timely adjudicated in a state forum. Id. at *3. Thus, all four requirements for mandatory abstention under § 1334(c) were met. The same is true here: (1) there is no independent basis for federal jurisdiction other than § 1334; (2) the claims are non-core; (3) an action has been commenced in state court; and (4) the action can be adjudicated timely in state court.
However, even if abstention is not mandatory, the Court agrees with Plaintiff that equitable abstention applies. Section 1452(b) provides that the Court "may remand such claim or cause of action on any equitable ground," and "[a]n order entered under this subsection remanding a claim or cause of action, or a decision to not remand, is not reviewable by appeal or otherwise . . . ." 28 U.S.C. § 1452(b). All of the claims at issue in this case are state-law claims. In addition, there are non-diverse negligence claims against Gonzalez Trucking that are also being pulled into federal court, and Plaintiff contends that severance would make trying the claims difficult because accident reconstruction would be necessary for both sets of claims, and severance could result in conflicting findings.
Moreover, the Bankruptcy Estate is closed, and Plaintiff notes that all but one of the cases cited by FCA were brought and removed while the bankruptcy was still open. The Northern District of Alabama recently remanded a case, noting that the cases relied upon by FCA for retaining jurisdiction were decided before the Bankruptcy Estate closed in 2016, and finding that equitable abstention and remand were appropriate. Overton v. Chrysler Group, No. 2:17-cv-01983, 2018 WL 847772 (N.D. Ala. Feb. 13, 2018).
Though the Bankruptcy Court may retain jurisdiction to interpret and enforce its own orders, FCA has not sought a transfer to the Bankruptcy Court, and thus presumably intends for this Court to retain jurisdiction and construe the MTA. The state court is certainly equally as capable as this Court of interpreting and applying the MTA to Plaintiff's claims. Moreover, as noted, Plaintiff indicates that upon remand he will nonsuit any claims outside the scope of liability under the MTA. Thus, construction and application of the MTA do not appear to be disputed issues, or at least will not be dominant issues.
Considering all of the equities, the Court finds that equitable remand pursuant to 28 U.S.C. § 1452(b) is appropriate.
Conclusion
This Court has jurisdiction over this removed case. However, it grants Plaintiff's motion to remand (docket no. 7) on the basis of equitable abstention and remand. The Court therefore REMANDS this case to state court pursuant to 28 U.S.C. § 1452(b).
It is so ORDERED.
SIGNED this 14th day of February, 2019.
/s/_________
XAVIER RODRIGUEZ
UNITED STATES DISTRICT JUDGE