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Upton v. Plantation Pipe Line Co.

United States District Court, N.D. Alabama, Southern Division

February 9, 2018

WILLIAM UPTON, et al., Plaintiffs,


          L. Scott Coogler, United States District Judge.

         Plaintiffs, William Upton; Winwood Land, Holdings, LLC; Paul Yeager; Clara Yeager; Paul Yeager, Jr.; Marco Bonilla; and Clara Jill Yeager Bonilla; (collectively referred to as “Plaintiffs”) originally filed this action in the Circuit Court of Shelby County, Alabama. Plaintiffs seek compensatory and punitive damages for: the release of petroleum onto and near their properties, and the failure to accurately evaluate and remediate the release, as well as damages to real property, property rights, and the loss of quiet and peaceful enjoyment. Defendants, Plantation Pipe Line Company (“Plantation”); Kinder Morgan Energy Partners, L.P.; Kinder Morgan Management, LLC; Kinder Morgan, Inc.; Kinder Morgan G.P., Inc.; Kinder Morgan Operating, L.P. “A”; and Kinder Morgan Operating L.P. “B”; (collectively “the Kinder Morgan Entities”) removed the action to this Court on May 10, 2017 asserting diversity jurisdiction pursuant to 28 U.S.C. §§1332, 1441 and 1446. (Doc. 1.) In response, Plaintiffs filed a Motion to Remand on May 19, 2017, claiming resident Defendant Bhate stripped this Court of jurisdiction and warranted remand. (Doc. 7.) For the reasons stated below, the Motion to Remand (doc. 7) is due to be GRANTED.

         I. BACKGROUND[1]

         On August 21, 2014, Defendants' pipeline released thousands of gallons of petroleum onto Plaintiffs' properties. Clean-up efforts began shortly thereafter. However, petroleum continues to contaminate the surface and surface waters. As a result, Plaintiffs have lost business opportunities, as well as the use of their wells; and incurred property damage, diminution of land value, emotional distress, mental anguish, and have suffered a continuous nuisance. Plaintiffs filed this action in state court on March 30, 2017, listing Plantation, the Kinder Morgan Entities, CH2M Hill, CH2M Engineers, Inc., and Bhate Environmental Associates Inc, (“Bhate”), and fictitious defendants A, B, and C, as defendants (collectively “Defendants”). Plantation and Kinder own the pipeline, and CH2M Hill, CH2M Engineers, Inc., and Bhate, were responsible for determining the scope of the contamination, creating remediation protocols, and collecting samples for testing. Plaintiffs claim Defendants are liable for negligence, wanton and willful conduct, gross negligence, trespass, nuisance, and strict liability.


         This Court, like all federal courts, is a court of “limited jurisdiction.” Jackson-Platts v. Gen. Elec. Capital Corp., 727 F.3d 1127, 1134 (11th Cir. 2013). It is authorized to hear only those cases falling within “one of three types of subject matter jurisdiction: (1) jurisdiction under a specific statutory grant; (2) federal question jurisdiction pursuant to 28 U.S.C. § 1331; or (3) diversity jurisdiction pursuant to 28 U.S.C. § 1332(a).” PTA-FLA, Inc. v. ZTE USA, Inc., 844 F.3d 1299, 1305 (11th Cir. 2016). A defendant may remove an action initially filed in state court to federal court if the action is one over which the federal court has original jurisdiction. 28 U.S.C. § 1441(a). “[A] defendant seeking to remove a case to a federal court must file in the federal forum a notice of removal ‘containing a short and plain statement of the grounds for removal.'” Dart Cherokee Basin Operating Co. v. Owens, 135 S.Ct. 547, 553 (2014) (quoting 28 U.S.C. § 1446(a)). For removal to be proper, the court must have subject-matter jurisdiction in the case. See Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). Because they removed this action, Defendants bear the burden of establishing that removal was proper. See Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921). Any doubt about the existence of federal jurisdiction “should be resolved in favor of remand to state court.” City of Vestavia Hills v. Gen. Fid. Ins. Co., 676 F.3d 1310, 1313 (11th Cir. 2012) (internal citations omitted)).


         In order for the Court to exercise diversity jurisdiction, two requirements must be met: (1) the matter in controversy must exceed $75, 000, and (2) there must be complete diversity among the parties. 28 U.S.C. § 1332(a); see, e.g., Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998). The Defendants removed this case on the basis of diversity jurisdiction, despite Bhate's citizenship, claiming fraudulent joinder. Plaintiffs argue that viable state law tort claims were asserted against Bhate as a private corporation having its principal place of business in Birmingham, Alabama, and thus diversity jurisdiction under 28 U.S.C. § 1332(a) does not exist. Here, the amount in controversy is alleged to be over $75, 000 and is not in dispute. (Doc. 7-1 at 2.) Therefore, the only issue in Plaintiffs' Motion to Remand is whether Bhate was fraudulently joined.

         Fraudulent joinder provides an exception to the complete diversity requirement. Triggs, 154 F.3d at 1287. When a non-diverse defendant is joined solely to defeat diversity jurisdiction, the presence of the non-diverse defendant must be ignored when determining jurisdiction. Henderson v. Washington Nat'l Ins. Co., 454 F.3d 1278, 1281 (11th Cir. 2006). A defendant may show fraudulent joinder by demonstrating by clear and convincing evidence among other things that: “‘there is no possibility the plaintiff can establish a cause of action against the resident defendant . . . .'” Id. (quoting Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir. 1997)). A defendant who seeks to prove a non-diverse defendant was fraudulently joined has a heavy burden. Crowe, 113 F.3d at 1538.

         Fraudulent joinder determination “must be based upon the plaintiff's pleadings at the time of removal, supplemented by any affidavits and deposition transcripts submitted by the parties.” Pacheco de Perez v. AT&T Co., 139 F.3d 1368, 1380 (11th Cir. 1998). Here, Defendants do not claim Plaintiffs alleged fraudulent facts, instead only that it is not possible for the Plaintiffs to state a cause of action. The “no cause of action” theory of fraudulent joinder requires Defendants to prove that there is “[no] possibility that a state court would find that the complaint states a cause of action against . . . the [non-diverse] defendant[ ] [Bhate].” Crowe, 113 F.3d at 1538 (quotation marks omitted).

         Whether a possible cause of action has been asserted is determined by the state pleading standards, rather than the federal ones. Stillwell v. Allstate Ins. Co., 633 F.3d 1329, 1334 (11th Cir. 2011). Under Rule 8, Ala. R. Civ. P., a complaint that “puts the defendant on notice of the claims against him” is sufficiently pled. Bethel v. Thorn, 757 So.2d 1154, 1158 (Ala. 1999). Plaintiffs simply must demonstrate that “[t]he potential for liability [is] reasonable and not merely theoretical.” Legg v. Wyeth, 428 F.3d 1317, 1325 n.5 (11th Cir. 2005) (internal citations and quotations omitted)). A claim is not proper where “it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief.” Norfolk S. Rail Co. v. Goldthwaite, 176 So.3d 1209, 1212 (Ala. 2015) (internal quotations and citations omitted). If there is a possibility the complaint states an arguable or colorable cause of action against the resident defendant, the Court must find joinder was proper. Id.; see also Pacheco de Perez, 139 F.3d at 1380.

         When assessing an assertion of fraudulent joinder, factual allegations and uncertainties about the applicable law must be evaluated in the light most favorable to the plaintiff. Legg, 428 F.3d at 1322. Here, Plaintiffs brought six claims in their Complaint: negligence, willful and wanton conduct, gross negligence, trespass, nuisance, and strict liability[2]. (Doc. 1-1.) If Plaintiffs have possibly stated a claim under any one of these theories of liability as against Bhate, remand is warranted.

         A. Negligence and Gross Negligence

         Plaintiffs allege that Defendants, including Bhate, breached a duty owed to them to properly sample, test, cleanup, monitor, and otherwise remediate the gasoline contamination to prevent it from spreading onto and under Plaintiffs' properties. Under Alabama law, a negligence claim is sufficiently pled when it demonstrates that the defendant breached a duty[3] to a foreseeable ...

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