May v. Texaco Inc ( 2003 )

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT June 19, 2003
____________________
Charles R. Fulbruge III
02-30123 Clerk
____________________
NORMA DIANE MAY; MATTIE SNELL, individually and
on behalf of Robert H. Snell; MARY LOPEZ; MARTIN LOPEZ;
ERIC GESN; ET AL.,
Plaintiffs-Appellants,
versus
TEXACO INC.; BANK ONE LOUISIANA N. A., Executor
& Trustee on behalf of Alexander W. Knight Succession,
on behalf of Alexander W. Knight Testamentary Trust,
Defendants-Appellees.
_______________________________________
JOHN H. MAY; MATTIE SNELL; MARY LOPEZ;
MARTIN LOPEZ; ERIC GESN; ET AL.,
Plaintiffs-Appellants,
versus
TEXACO, INC.
Defendant-Appellee.
_________________________________________________________________
Appeal from the United States District Court
for the Western District of Louisiana
(97-CV-2019)
_________________________________________________________________
Before GARWOOD, SMITH and BARKSDALE, Circuit Judges.
PER CURIAM:*
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
Plaintiffs contest: the denial of remand to state court
(removal based on fraudulent joinder); the FED. R. CIV. P.
12(b)(6)(failure to state claim) dismissal of Bank One; the similar
dismissal of their property claims against Texaco; and the summary
judgment awarded it for their remaining claims. Primarily at issue
is whether, under Louisiana law, a party who sells property it
knows to be polluted owes a perpetual duty to warn all subsequent
purchasers. AFFIRMED.
I.
Beginning in 1929, near Shreveport, Louisiana, Texaco operated
a refinery and tank farm on approximately 200 acres known as
Anderson Island (the property). The refinery operation continued
until 1940. Texaco sold the property in 1941 to Alexander Knight,
a Louisiana resident. The act of conveyance required Texaco to
dismantle the refinery and some of the tanks; pursuant to a lease
with Knight, the remaining tanks were to be used by Texaco. By
1949, Texaco no longer used the tanks; however, it never removed
the attendant subsurface pipelines or certain other items from the
property.
Through ten separate sales, between 1950 and 1959, Knight
conveyed his interest in the property. The purchasers and their
grantees subdivided and developed the property. None of the
purchasers to whom Knight sold the property are plaintiffs in this
action. Instead, plaintiffs acquired portions of the property
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after an indeterminable number of intermediary transactions between
the subdividers’ sales and plaintiffs’ purchases.
Knight died in October 1981. One year later, the
Environmental Protection Agency (EPA) conducted a “potential
hazardous waste site inspection” on the property. It found, inter
alia, arsenic, mercury, benzyne, chromium, and lead; it estimated
that millions of gallons of sludge and oil remained under the
property. Thereafter, the EPA listed it as a potential hazardous
waste site; since 1992, it has listed it as a potential Superfund
site. See 42 U.S.C. § 9601, et seq.
The putative class of more than 5,000 Louisiana residents
includes past and present residents or business owners of the
property. They allege: Texaco caused the pollution; caused them
personal injuries, including, inter alia, cancer and respiratory
disorders; and decreased the value of their property.
Plaintiffs (Louisiana residents) sued Texaco and Bank One (the
trustee of Knight’s estate) in Louisiana state court. Texaco is a
Delaware Corporation; Bank One, a Louisiana bank (hereinafter
referred to as Knight).
The defendants removed this action to federal court, claiming,
as a basis for jurisdiction, inter alia, diversity jurisdiction
because Knight was fraudulently joined. Along this line, Knight
moved to dismiss for failure to state a claim under Louisiana law.
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Plaintiffs sought remand to state court and, in opposition to
Knight’s motion to dismiss, amended their complaint.
Based upon fraudulent joinder, a magistrate judge denied
remand. For the reasons stated by the magistrate judge, the
district court affirmed the remand-denial.
Concerning Knight’s motion to dismiss, the magistrate judge
recommended that the claims in the original petition/complaint be
dismissed with prejudice; those in the amended complaints, without
prejudice. The district court agreed and dismissed the original
claims against Knight, as well as those in the amended complaints.
Subsequently, Texaco moved under Rule 12(b)(6) for dismissal
of the property claims against it; the district court granted that
motion. Later, it granted Texaco summary judgment for the
remaining claims.
II.
Plaintiffs contend: Knight was not fraudulently joined,
therefore this action should have been remanded to state court and
Knight should not have been dismissed pursuant to Rule 12(b)(6);
such dismissal was improper for their property claims against
Texaco; and summary judgment was improper for their remaining
claims against it.
A.
In determining fraudulent joinder vel non, courts determine
whether there exists a reasonable basis for recovery against the
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party whose joinder is challenged. E.g., Travis v. Irby, 326 F.3d
644, 646-49 (5th Cir. 2003); Great Plains Trust Co. v. Morgan
Stanley Dean Witter & Co., 313 F.3d 305, 312 (5th Cir. 2002);
Burden v. General Dynamics Corp., 60 F.3d 213, 216 (5th Cir. 1995);
Carriere v. Sears, Roebuck & Co., 893 F.2d 98, 100 (5th Cir.),
cert. denied, 498 U.S. 817 (1990). In general, whether there is a
reasonable basis for recovery is determined only in reference to
the complaint at the time of removal. E.g., Cavallini v. State
Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th Cir. 1995). A
district court’s ruling that no such recovery is possible is
reviewed de novo, “evaluat[ing] all of the factual allegations in
the light most favorable to the plaintiff, [and] resolving all
contested issues of substantive fact in favor of the plaintiff”.
Burden, 60 F.3d at 216 (internal quotations omitted).
Plaintiffs contend Knight was negligent in failing to warn
them of the pollution on the property. They do not contend,
however, that Knight failed to warn those to whom he sold the
property; rather, they maintain Knight owed a duty to every
succeeding purchaser to warn of defects in that property.
Plaintiffs offer no authority, however, imposing upon a seller the
duty to so warn all succeeding purchasers, some of whom purchased
the property decades after the seller sold it. Likewise, our
review of Louisiana law reveals no such authority. E.g., David v.
Guidry, 645 So. 2d 1234 (La. Ct. App. 1994) (seller owed no duty to
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warn future inhabitants who he had no reason to know would inhabit
the property), writ denied, 649 So. 2d 393 (1995).
Similarly, plaintiffs contend Knight fraudulently
misrepresented the condition of the property to succeeding
purchasers by failing to notify them of the pollution. Along this
line, plaintiffs contend that, when deciding the fraudulent joinder
issue, the district court erred by failing to consider the
allegations in their amended complaint. As discussed, Louisiana
law does not impose that duty on Knight. Moreover, plaintiffs’
fraud allegation was made by amended complaint, not by their
original, state petition. Again, allegations made only in an
amended complaint are beyond the scope of review for fraudulent
joinder. Cavallini, 44 F.3d at 264.
On the same day as his fraudulent joinder ruling, the
magistrate judge, in his recommendation to dismiss plaintiffs’
original claims against Knight, as well as those in their amended
complaint, did examine the “new” allegations in the amended
complaint. The magistrate judge noted, however, that the amended
complaint offered no new allegations against Knight, except for
“conclusory claims of a conspiracy”.
Plaintiffs claim Knight breached a “warranty of fitness and
peaceful possession”. Because this claim was not raised in
district court, we will not consider it for the first time on
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appeal. E.g., Stewart Glass & Mirror, Inc. v. U.S. Auto Glass
Discount Centers, 200 F.3d 307, 316-17 (5th Cir. 2000).
Finally, plaintiffs maintain summarily that Knight is
“absolutely liable” for injuries caused by virtue of his abnormally
dangerous or ultra-hazardous activities. Their conclusory
statement notwithstanding, Knight is not absolutely liable either
for damages caused when he did not own the property, Schneider v.
United States, 734 F. Supp. 239, 247 (E.D. La. 1990), or for
damages caused to those who were never his “neighbor”, LA. CIV. CODE
art. 667.
In the light of the foregoing, plaintiffs have no reasonable
basis for recovery against Knight. Therefore, remand was properly
denied; Knight, properly dismissed. (As noted, for the dismissal
of the claims against Knight, although it was with prejudice for
those in the original, state petition, it was without prejudice for
those in the amended complaints.)
B.
We review de novo both the dismissal of plaintiffs’ property
claims against Texaco, e.g., Beanal v. Freeport-McMoran, Inc., 197
F.3d 161, 164 (5th Cir. 1999), and the summary judgment awarded it
against the remaining claims, e.g., Daniels v. City of Arlington,
246 F.3d 500, 502 (5th Cir.), cert. denied, 534 U.S. 951 (2001).
For a Rule 12(b)(6) dismissal, the reviewing court does not look
beyond the pleadings; accepts all well-pleaded facts as true; and
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views the facts “in the light most favorable to the plaintiff”.
Cinel v. Connick, 15 F.3d 1338, 1341 (5th Cir.), cert. denied, 513
U.S. 868 (1994). In a similar vein, summary judgment is proper
only if “there is no genuine issue as to any material fact and ...
the moving party is entitled to a judgment as a matter of law”.
FED. R. CIV. P. 56(c).
In its well-reasoned opinion, the district court held Texaco
had no duty to preserve the property for all future owners.
Plaintiffs maintain the Louisiana Supreme Court’s subsequent
decision in Hopewell, Inc. v. Mobil Oil Co., 784 So. 2d 653 (La.
2001), requires a different result. The plaintiff in Hopewell
purchased property which the vendor’s ancestors had previously
leased to a company for oil and gas operations. The plaintiff
cleared the property of structures built by that prior lessee and
sued its successor (Mobil Oil), including for pollution caused by
the oil and gas operations. A claim pertinent to this action was
based upon a combination of: (1) a statutory requirement that an
owner of a mineral servitude is “obligated, insofar as practicable,
to restore the surface to its original condition....”, LA. REV. STAT.
§ 31:22; and (2) the conveyance of sale to plaintiff, which
conveyed all of the vendor’s rights.
The intermediate court of appeal held: the claim against the
prior lessee was a personal right of the owner of the property when
the lessee failed to restore it; there was no assignment of that
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personal right to plaintiff through the conveyance. Hopewell, Inc.
v. Mobil Oil Co., 770 So. 2d 874, 878 (La. Ct. App. 2000). In
holding the right personal, the court of appeal relied on Prados v.
South Central Bell Telephone Co., 329 So. 2d 744 (La. 1975). In
Prados, a non-mineral lease required the lessee to remove any
improvements it made on the property. When the lease ended,
however, the owner did not require the lessee to do so. The owner
sold the property; the purchaser sued the lessee. The Louisiana
Supreme Court held the claim against the lessee involved a
personal, rather than real, right.
In a nine-line opinion, however, the Louisiana Supreme Court
reversed the court of appeal’s decision in Hopewell and remanded
the action for further proceedings. The court stated: “Prados
..., which the Court of Appeal relied upon, involves rights arising
under a lease and is distinguishable from the instant facts”.
Hopewell, 784 So. 2d at 653. As noted, the rights in Hopewell
arose under a statute concerning the duty imposed upon the owner of
a mineral servitude. That, of course, is not the situation in this
action.
Plaintiffs contend the Louisiana Supreme Court’s extremely
brief Hopewell decision held “the right to sue for damages to the
land is a real (as opposed to personal) right that ‘runs with the
land’”. Needless to say, such a rule of Louisiana property law is
not ascertainable from that opinion.
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Indeed, as discussed by the district court, plaintiffs’
interests are protected through the title search process and
redhibitory actions. Similarly, and as earlier discussed with
respect to Knight, when viewed against the bases claimed by
plaintiffs, Texaco owed no duty to successive purchasers, decades
after it conveyed the property to Knight.
Accordingly, essentially for the reasons stated by the
district court in its opinions of 12 February 1999 (dismissal of
property claims) and 21 December 2001 (adopting reasons underlying
magistrate judge’s recommended summary judgment for the remaining
claims), the Rule 12(b)(6) dismissal and the summary judgment
awarded Texaco were proper.
III.
For the foregoing reasons, the judgment is
AFFIRMED.
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