Plaintiffs’ Dismissal with Prejudice of Claims Against Defendant Rendered Third-Party Demand for Contribution Void

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Third-party defendant Industrial Development Corporation of South Africa, Limited (IDC) filed a motion to dismiss defendant Cooper/T. Smith Stevedoring Company, Inc.’s (Cooper) third party complaint. The court granted IDC’s motion and remanded the case to state court.

The plaintiffs filed suit on behalf of decedent Earl Lindsay, who died of lung cancer. The plaintiffs alleged the decedent worked as a longshoreman for several Cooper companies in the Port of New Orleans from 1954-1979, and during this time was exposed to asbestos. As against IDC, the plaintiffs asserted claims under the Jones Act; one day after filing suit the plaintiffs filed a motion to dismiss all claims against IDC with prejudice. Prior to the court ruling on this motion, Cooper filed a third-party demand seeking contribution and/or indemnification from IDC for any damages Cooper owed to the plaintiffs. On March 9, 2010, the court granted the plaintiffs’ motion to dismiss its claims against IDC with prejudice. On March 11, an IDC representative received the third-party demand. On April 13, IDC removed the entire case to federal court on the basis of 28 U.S.C. Section 1441(d) and the Foreign Sovereign Immunities Act (FSIA), alleging it was an agency or instrumentality of South Africa. The court ordered IDC to file a motion to dismiss Cooper’s third-party claims and Cooper filed a memorandum in opposition asking the court to convert IDC’s motion into a motion for summary judgment.

First, although Cooper argued that IDC’s motion was a summary judgment because it relied on matters outside the pleadings in the form of unpublished and unreported decisions attached to the motion, this argument was without merit. The court could take judicial notice of these decisions and therefore they were not outside the pleadings.

Second, the court examined the motion to dismiss. IDC argued that the plaintiffs’ dismissal with prejudice rendered Cooper’s claims void under both Louisiana and maritime law. Although Cooper argued this rule did not apply to dismissals with prejudice, both the Fifth Circuit and Louisiana law held that it did. “Therefore, it is clear that under Louisiana law, plaintiffs’ dismissal of claims against IDC with prejudice deprives Cooper of any right to contribution or indemnity. The same is true under general maritime law.” The Supreme Court has held that the proportionate share approach should apply in maritime tort suits against joint tortfeasors; this rule has been extended to dismissals with prejudice.

Cooper also argued its claim for indemnity might be contractual; however, the third-party complaint made no mention of any contract between IDC and Cooper, or of a specific indemnity clause. Further, the dismissal of Cooper’s claims against IDC did not harm Cooper’s ability to defend itself.

Regarding remand, IDC’s status as an agency or instrumentality of South Africa was the only basis for federal jurisdiction. The court weighed the factors to determine whether to exercise supplemental jurisdiction, and declined to do so. The remainder of the plaintiffs’ state law claims were remanded back to the Parish of Orleans.

Read the full decision here.