Case Remanded to State Court as Defendants Failed to Show Improper Joinder

U.S. District Court for the Eastern District of Louisiana, January 13, 2021

Plaintiff Brent Deaville filed the within action in state court against numerous defendants in January 2020. The plaintiff alleged he contracted mesothelioma as a result of his exposure to asbestos while working as an insulator, plumber/pipefitter and mechanic at several facilities in Louisiana from the 1960s through 1990. On November 12, 2020, defendants Exxon Mobil Corp., Ferguson Enterprises, Inc. and J-M Manufacturing Co., Inc. removed this matter to federal court alleging diversity jurisdiction.

In addition to the defendants, Turner Industries Group, LLC also remained as an active party in this litigation. The plaintiff is a citizen of Louisiana. Turner Industries is likewise a citizen of Louisiana. In their notice of removal, the defendants explain that on October 28, 2020, they received a certified Social Security Administration statement of the plaintiff’s employment history. According to the Social Security records, the plaintiff worked for Turner Industries beginning in the fourth quarter of 1975.  During his deposition, the plaintiff testified that his employment with Turner Industries began in 1974.  Based upon this information, the defendants argued that Turner Industries is an immune employer under the Louisiana’s Workers’ Compensation Act. Therefore, according to the defendants, the non-diverse citizenship of Turner Industries became inconsequential, and removal was proper.

The plaintiff moved to remand the case to state court arguing that Turner Industries is not an immune employer, was not improperly joined, and therefore this court cannot exercise diversity jurisdiction over the case.

Under 28 U.S.C. § 1441(a), a civil action brought in state court over which the federal courts have original subject matter jurisdiction may be removed to federal court by a defendant. Valencia v. Allstate Texas Lloyd’s, 976 F.3d 593, 595 (5th Cir. 2020). The court must presume that a suit lies outside of the limited jurisdiction of a federal court, and the burden of establishing federal jurisdiction rests on the party seeking the federal forum. Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). The burden of proving that the complete diversity of citizenship required for diversity jurisdiction exists rests upon the party who seeks to invoke the court’s jurisdiction. Stafford v. Mobil OilCorp., 945 F.2d 803, 804 (5th Cir. 1991).

To establish that a non-diverse defendant has been improperly joined to defeat diversity jurisdiction, the removing party must prove “(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.” Rico v. Flores, 481 F.3d 234, 238-39 (5th Cir. 2007) (citing Smallwood v. Illinois Central R.R., 385 F.3d 568 (5thCir.2004) (en banc)). This case involves the second prong of improper joinder.

If there is at least one non-diverse defendant, there is no federal diversity jurisdiction. Int’l Energy Ventures Mgmt., L.L.C. v. United Energy Grp., Ltd., 818 F.3d 193, 202 (5th Cir. 2016). Thus, for the case to remain in federal court Defendants must prove that Turner Industries was improperly joined. Defendants contend that Turner Industries was improperly joined because it is an immune employer under the Louisiana’s Workers’ Compensation Act (LWCA). Mesothelioma was not a compensable occupational disease under the pre-1975 version of the LWCA, and therefore illness from exposure to asbestos that occurred prior to September 1, 1975, is not subject to the exclusivity provision of the Act. Rando v. Anco Insulations, Inc., 16 So. 3d 1065, 1080 (La. 2009). Thus, under Louisiana law, the improper joinder analysis pertaining to Turner Industries turns on the date the plaintiff began working for Turner Industries. The defendants’ argument in support of improper joinder is based on the Social Security statement that was obtained after the plaintiff was deposed. The defendants argue the plaintiff failed to admit in his petition that he only worked for Turner Industries after mesothelioma became a covered occupational disease under the LWCA and was improperly joined. 

The plaintiff’s position is that any discrepancy between the plaintiff’s testimony and the Social Security records presented a disputed issue of fact and that it would be inappropriate for this court to resolve it in conjunction with removal. The plaintiff argued that to credit the defendants’ position, the court would have to go beyond the permissible summary-inquiry allowed in the improper joinder analysis. Federal law is clear in that all factual disputes and ambiguities must be resolved in favor of the plaintiff when resolving the propriety of removal.

Accordingly, the court found the defendants failed to prove that Turner Industries was improperly joined. Since complete diversity was lacking, the court did not have original subject matter jurisdiction upon which removal was grounded. Thus, the case was remanded to the state court.