Melissa Berniard v. Dow Chemical Co. , 481 F. App'x 859 ( 2010 )

Case: 10-30497 Document: 00511197254 Page: 1 Date Filed: 08/06/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
August 6, 2010
No. 10-30497 Lyle W. Cayce
Summary Calendar Clerk
MELISSA WILSON BERNIARD,
Plaintiff
v.
DOW CHEMICAL COMPANY,
Defendant
------------------------------------------------------------
CHARLES LANDRY; CHARLES PRESTON; EVA BAILEY; ROY LOVE,
Individually and on Behalf of All Others Similarly Situated,
Plaintiffs - Appellees
v.
DOW CHEMICAL COMPANY; UNION CARBIDE CORPORATION,
Defendants - Appellants
------------------------------------------------------------
CHRISTALYN BROWN; HOPE BLANCO; DESMOND HILAIRE, and His
Minor Son Xavier James Hilaire; GAIL HILAIRE, and Her Minor Son Xavier
James Hilaire,
Plaintiffs - Appellees
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No. 10-30497
v.
DOW CHEMICAL COMPANY; UNION CARBIDE CORPORATION,
Defendants - Appellants
------------------------------------------------------------
MAGAN ENNIS,
Plaintiff - Appellee
v.
DOW CHEMICAL COMPANY; UNION CARBIDE CORPORATION,
Defendants - Appellants
-------------------------------------------------------------
BUDWIN PLACIDE,
Plaintiff - Appellee
v.
DOW CHEMICAL COMPANY; UNION CARBIDE CORPORATION,
Defendants - Appellants
--------------------------------------------------------------
SHEILA GUIDRY, Individually and on Behalf of All Others Similarly
Situated,
Plaintiff - Appellee
v.
2
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No. 10-30497
DOW CHEMICAL COMPANY; UNION CARBIDE CORPORATION,
Defendants - Appellants
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:09-CV-4881
Before WIENER and ELROD, Circuit Judges.*
PER CURIAM:**
This is a consolidated appeal of several orders of the district court
remanding the seven class action cases consolidated therein to the state district
court in St. Charles Parish, Louisiana. Two of the cases thus remanded were
originally filed in the district court pursuant to the Class Action Fairness Act
(“CAFA”);1 the rest were initially filed in that state court and were thereafter
removed to the district court by the common defendants, who asserted federal
jurisdiction based on CAFA and, alternatively, on diversity of citizenship 2 and
supplemental jurisdiction.3
*
This opinion is being entered by a quorum, pursuant to 28 U.S.C. § 46.
**
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.
1
28 U.S.C. §§ 1332(d) and 1453.
2
28 U.S.C. § 1332.
3
28 U.S.C. § 1367.
3
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The orders of the district court appealed herein held that federal
jurisdiction was lacking under both CAFA and diversity jurisdiction. We do not
have jurisdiction to review the district court’s decision to remand for lack of
diversity jurisdiction,4 but we may review its decision to remand for lack of
CAFA jurisdiction.5
CAFA authorizes federal jurisdiction over class actions that allege (1) the
class of plaintiffs would exceed 100 persons, (2) at least one member of the class
is diverse in citizenship from at least one of the defendants, and (3) the
aggregate quantum of damages suffered by members of the plaintiff class
exceeds $5 million (exclusive of interest or costs).6 The parties do not contest the
presence of the first two requirements, but the plaintiffs challenged the
adequacy of the defendants’ showing with regard to the amount-in-controversy
requirement. The district court agreed with the plaintiffs that the requisite
aggregate quantum of damages was lacking and remanded the case to state
court. The defendants appealed. For the reasons outlined below, we affirm the
district court’s remand orders.
I. Facts And Proceedings
Defendant-Appellant Union Carbide Corporation (“UCC”), a wholly owned
corporate subsidiary of The Dow Chemical Company (“Dow”), maintains and
operates a facility in Taft, Louisiana, a few miles West North West of Hahnville,
in St. Charles Parish, Louisiana. On the morning of July 7, 2009, a tank at that
facility experienced a sudden release of ethyl acrylate (“EA”), a potentially
4
28 U.S.C. § 1447(d).
5
28 U.S.C. § 1453(c)(1).
6
28 U.S.C. § 1332(d)(2) and (5)(B).
4
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noxious chemical. Shortly thereafter, the St. Charles Parish Department of
Emergency Preparedness (“DEP”) closed some roads and evacuated residents
and businesses from an area stretching some two miles eastward from the UCC
facility.
The DEP was not the only “first responder” to this sudden, isolated, and
relatively limited chemical release: At least two of plaintiffs’ attorneys or law
firms managed to file class action petitions in state district court on the very day
of the release. (Others of their colleagues were only marginally slower to
respond; they filed their complaints only days or weeks later.) Here, the “race
to the courthouse” cannot be explained by any concern that the claims would be
untimely, given Louisiana’s prescriptive period of one year within which to file
such actions following the incident.
The five state court lawsuits implicated in this consolidated appeal were
removed to federal court by Defendants-Appellants pursuant to CAFA. They
urged that when the class plaintiffs’ allegations about the numerosity of class
members, the geographical area affected, and the types and extent of the EA-
caused injuries incurred by the members of the class are compared to the range
of damages previously recovered in the similar class actions cited to the court by
Defendants-Appellants, it becomes clear that CAFA’s jurisdictional threshold of
$5 million was likely to be met or exceeded. In three detailed orders, however,
the district court carefully analyzed its jurisdiction over these cases and then
remanded them to state court.7 After considering the allegations in the various
7
The district court dismissed two of the cases in response to the respective plaintiff’s
motion to remand and dismissed the other three cases sua sponte, as is within the district
court’s authority. “It is incumbent on a court of the United States, whether trial or appellate,
to dismiss an action whenever it appears that subject matter jurisdiction is lacking, and the
5
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pleadings as to the geographical reach of the chemicals, the number of persons
affected, the seriousness and extent of injuries suffered, and the potential
monetary value of the damages incurred by the affected class members for
present compensatory damages as well as for pain and suffering, psychological
and longterm future damages, and even punitive damages, the district court
concluded that the Defendants-Appellants had failed to carry their burden of
establishing that it was facially apparent from the allegations in the class
plaintiffs’ petitions that the aggregate recovery by the class members would
likely exceed $5 million. Inasmuch as, on appeal, there is no question about
CAFA’s other threshold requirements, the issue of remand turns solely on the
element of damages.
II. Analysis
A. Standard Of Review
We review de novo the district court’s remand of a state court action
previously removed under CAFA.8 Specific to today’s ruling is our de novo
review of the district court’s holding that CAFA’s threshold amount in
controversy was not met.9
B. CAFA Jurisdictional Amount
court must do so sua sponte if the parties have not brought the issue to the attention of the
court.” Marshall v. Gibson’s Prods., Inc., 584 F.2d 668, 672 (5th Cir. 1978) (citation omitted).
8
Admiral Ins. Co. v. Abshire, 574 F.3d 267, 272 (5th Cir.), cert. denied, 130 S. Ct. 756(2009).
9
Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 722 (5th Cir. 2002).
6
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All recognize that Louisiana law prohibits allegations by tort plaintiffs of
the quantum of the damages to which they are entitled.10 Even though the
removing party (or party resisting remand) has the burden of establishing the
existence of federal jurisdiction,11 we have specified a different standard of proof
when the quantity of damages is not alleged by the plaintiff class: The removing
defendant must prove by a preponderance of the evidence that the amount in
controversy equals or exceeds the jurisdictional amount.12 In proceeding from
that point, a defendant seeking to sustain removal may follow either of two
tracks: (1) Adduce summary judgment evidence of the amount in controversy,
or (2) demonstrate that, from the class plaintiffs’ pleadings alone, it is “facially
apparent” that CAFA’s amount in controversy is met.13
Here, the Defendants-Appellants elected to follow the facially-apparent
path. Doing so requires examination of the petitions and complaints of the
Plaintiffs-Appellees to determine if the resulting amount in controversy is likely
to equal or exceed the jurisdictional amount.14 We agree with Defendants-
Appellants that the proper test for facial apparency is the one recently
articulated by the Seventh Circuit in Spivey v. Vertrue, Inc.:
10
La. Code Civ. Proc. Ann. art. 893.
11
Gaitor v. Peninsular & Occidental S.S. Co., 287 F.2d 252, 253-54 (5th Cir. 1961).
12
De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir. 1993).
13
Id. at 57-58; Simon v. Wal-Mart Stores, Inc., 193 F.3d 848, 850 (5th Cir. 1999).
14
Allen v. R&H Oil & Gas Co., 63 F.3d 1326, 1336 (5th Cir. 1995).
7
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The removing party, as the proponent of federal jurisdiction, bears
the burden of describing how the controversy exceeds $5 million.
This is a pleading requirement, not a demand for proof. Discovery
and trial come later. A removing defendant need not confess
liability in order to show that the controversy exceeds the threshold.
The removing party’s burden is to show not only what the stakes of
the litigation could be, but also what they are given the plaintiff’s
actual demands. . . . The demonstration concerns what the plaintiff
is claiming (and thus the amount in controversy between the
parties), not whether the plaintiff is likely to win or be awarded
everything he seeks. Once the proponent of federal jurisdiction has
explained plausibly how the stakes exceed $5 million, then the case
belongs in federal court unless it is legally impossible for the
plaintiff to recover that much.15
Moreover, as the district court aptly noted, even under the facial-apparency test
“[r]emoval . . . cannot be based simply upon conclusory allegations,” 16 and
“doubts regarding whether removal jurisdiction is proper should be resolved
against federal jurisdiction.” 17
15
528 F.3d 982, 986 (7th Cir. 2008) (internal quotations and citations omitted).
16
Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995) (citation omitted).
17
Acuna v. Brown & Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000).
8
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Defendants-Appellants insist on appeal that they established, to a
“reasonable probability,”18 that the several class pleadings make it facially
apparent that CAFA’s required amount in controversy is satisfied. In the
district court, Defendants-Appellants relied on census data of the various
geographical areas referred to in the several pleadings and complaints, and
compared the quantum of recovery in previously reported cases that involved
occurrences and injuries similar to the kinds about which the instant class
plaintiffs complain.19
As the Defendants-Appellants assert, the district court might have
misspoken when it stated that neither party claimed that the jurisdictional
minimum was apparent from the faces of the petitions. Nevertheless, after
conducting our de novo review, we are satisfied that the district court reached
the correct result despite any error that might have been contained in that
statement. This becomes evident, we conclude, when Defendants-Appellants’
proffered analysis of the pleadings is tested for whether it is facially apparent
therefrom that the jurisdictional minimum is satisfied. Here, Defendants-
Appellants’ bald exposure extrapolations are insufficient to establish the likely
number of persons affected by the release or, for those affected, the severity of
18
The “reasonable probability” standard is the same as the “preponderance standard”
(more-likely-than-not test). See Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir.
2006).
19
Defendants-Appellants further note that, in the Killen and Cochran cases, which
were initially filed in federal court, the plaintiffs expressly alleged that their claims would
exceed $5 million, and that one of the state court plaintiffs did not dispute that the amount
in controversy was more than $5 million. The mere recitation of jurisdictional facts, however,
is not enough to establish subject-matter jurisdiction, see St. Paul Reinsurance Co., Ltd. v.
Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998), and the language on which Defendants-
Appellants rely in the state court action can hardly be construed as a judicial admission.
9
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their harm. When we examine the several pleadings here at issue under that
standard, we conclude, as did the district court, that, even when properly
aggregated, the nature, timing, geographical extent, numerosity of the affected
population, and nature of damage allegedly caused by this isolated, quickly
controlled, and geographically limited EA escape, as pleaded in the several state
court petitions, does not make it facially apparent that the stakes plausibly
exceed $5 million.
Given the generalized and conclusional nature of the allegations of the
several petitions and complaints (not surprising considering the fact that they
were filed within hours or, at the most, within days following the release), we
cannot say that, under the Seventh Circuit’s Spivey standard, the Defendants-
Appellants carried their burden of showing not only what the stakes of the
litigation could be, but what they are in light of the plaintiffs’ demands. Like the
district court, we conclude that the Defendants-Appellants have failed to present
a plausible explanation of how the claims of the class plaintiffs could equal or
exceed $5 million. The Defendants-Appellants’ methodology is speculative and
unconvincing. They overstate the reach of the plaintiffs’ petitions by improperly
equating the geographic areas in which potential plaintiffs might reside with the
population of the plaintiff class itself. Further, the comparisons that the
Defendants-Appellants make to damage recovery in similar cases is too
attenuated to satisfy their burden.
In our de novo review, we have aggregated the allegations of all seven
consolidated cases, taking care, however, to avoid double counting and repetition
in our effort to discern the alleged geographic and temporal reach of the EA
release, the likely population of the affected class, and the effect of the release
10
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on the limited number of potentially affected plaintiffs. As a result, we cannot
say that Defendants-Appellants have satisfied their burden under their chosen
path of facial apparency.
In so concluding, we acknowledge that the state court petitions of the class
plaintiffs that were so hastily filed in St. Charles Parish present an oxymoronic
picture. On the one hand, the pleadings of the class plaintiffs present an
expansive view of the geographical reach of the chemicals, the number of persons
likely affected, the seriousness and extent of the injuries caused by contact with
the rapidly diluting EA, and the potential monetary value of the damages
incurred by the affected parties, including not just compensatory damages but
also those for pain and suffering, psychological and longterm future damages,
and even punitive or exemplary damages. On the other hand, those pleadings
also contain minimizing allegations, such as the fact that the road closure and
evacuation of residents implemented by the DEP covered only a two mile stretch
to the east of the Taft facility, as well as implications and deductions that in
reality the release was quickly contained, atmospherically diluted, and relatively
minor and temporary in its deleterious effects, and that the incident was short
lived, with normalcy being restored in short order.
III. CONCLUSION
For the foregoing reasons, we are convinced that the district court’s CAFA-
based remand of the consolidated cases should be affirmed. From the factual
allegations contained in the pleadings under examination, we conclude that
Defendants-Appellants have not met their burden of demonstrating plausibly
that the $5 million amount in controversy is apparent. Neither shall we
succumb to the siren song of CAFA’s legislative history to err in favor of federal
11
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jurisdiction, especially when, as here, we do not see the answer to the question
of threshold quantum as an uncertain one. We need not address the issue of the
local-controversy exception, and the district court’s rulings on diversity
jurisdiction and fraudulent joinder are not implicated in this interlocutory
appeal under CAFA. Therefore, we neither address them nor imply either the
propriety or impropriety of their handling in the district court. Rather, our
judgment is limited to the rulings over which we have appellate jurisdiction, viz,
remand of the subject cases to state court for failure of the proponents of CAFA
jurisdiction to demonstrate that statute’s amount-in-controversy requirement is
met. Those orders are, in all respects,
AFFIRMED.
12