Abandonment of Claims Alleging Asbestos Exposure at Government Facilities Eliminated Federal Jurisdiction U.S. District Court for the Southern District of New York, May 31, 2017

Defendant Crane Co. appealed the remand ordered by the district court to New York State Court. Crane had removed based upon the federal officer removal statute. The appellate court affirmed the remand without a summary of the underlying facts.

First, Crane argued remand was erroneous because the federal courts had original subject matter jurisdiction. The district court had concluded that the plaintiffs had abandoned any claims arising from asbestos exposure occurring at a government facility; thus, the basis on which this action was originally removed was extinguished. Crane argued that the claims giving rise to original jurisdiction must be formally dismissed, not abandoned, for a properly removed case to be remanded to state court. However, the case law was contrary to this argument. Clearly, the federal claims were abandoned, and the district court explicitly recognized that the claims were no longer in the case. “Hence, federal question jurisdiction no longer existed.” Crane also failed to establish diversity jurisdiction, as this must exist at the time of filing the complaint and at the time of removal. At the time of filing, diversity jurisdiction did not exist due to the presence of one New York defendant.

Second, Crane argued that even if the court lacked original jurisdiction, the district court abused its discretion in declining to exercise supplemental jurisdiction. Under 28 U.S.C. § 1367(a): “district courts shall have supplemental jurisdiction over state-law claims ‘that are so related to claims in the action within [the court’s] original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.'” Further, section 1367(c) provides that: “a district court may decline to exercise supplemental jurisdiction if ‘(1) the claim raises a novel or complex issue of State law, (2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction, (3) the district court has dismissed all claims over which it has original jurisdiction, or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.’” Thus district courts may refuse to exercise supplemental jurisdiction on any one of these four grounds. Here, the district court declined to exercise supplemental jurisdiction because plaintiffs abandoned their claims giving rise to original jurisdiction. Case law held that district courts abuse their discretion when they retain jurisdiction over state-law claims which raise unsettled questions of law after dismissal of original-jurisdiction claims.

Read the full decision here.


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