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Overton v. Chrysler Group LLC

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

February 13, 2018

FRANKIE OVERTON, et al., Plaintiffs,
CHRYSLER GROUP LLC, et al., Defendants.



         This case is before the court on Plaintiffs' Motion to Remand. (Doc. # 14). The Motion to Remand (Doc. # 13) has been fully briefed. (Docs. # 14; 23; 25). Also before the court are Defendant Fiat Chrysler Automobiles U.S. LLC's Motion to Transfer Venue or, Alternatively, to Sever Claims and Transfer Venue (Doc. # 3) and Partial Motion to Dismiss (Doc. # 4). For the reasons outlined below, the court concludes the Motion to Remand (Doc. # 14) is due to be granted, making the other pending motions (Docs. # 3, 4) moot.

         I. Background and Relevant Facts

         Plaintiff Frankie Overton (“Overton”) and Plaintiff Scott Graham (collectively “Plaintiffs”) initiated this lawsuit against Defendants Chrysler Group LLC (“Chrysler”), [1] Fiat Chrysler Automobiles U.S. LLC (“FCA”), Rodericus Obyran Carrington (“Carrington”), TRW Automotive Holdings Corp., TRW Automotive Inc., TRW Automotive U.S. LLC, TRW Vehicle Safety Systems Inc., ZF Friedrichshafen AG, and ZF TRW Automotive Holdings Corp. (collectively “Defendants”) on October 17, 2017 in the Circuit Court of Jefferson County, Alabama. (Doc. # 1-1). On November 27, 2017, FCA filed a Notice of Removal (Doc. # 1) along with a Motion to Transfer Venue (Doc. # 3) and a Partial Motion to Dismiss (Doc. # 4). FCA did not seek the approval of the other defendants in this case before removing it (Doc. # 1 at ¶¶ 10-12); however, Defendant TRW Vehicle Safety Systems Inc.[2] has since consented to the removal. (Doc. # 23-4). Plaintiffs filed a Motion to Remand on December 27, 2017. (Doc. # 14). The underlying lawsuit and the Chrysler bankruptcy proceeding (which is FCA's basis for removal) center on two separate sets of facts, which are discussed below.

         A. The Underlying Lawsuit

         On June 10, 2016, Sue Ann Graham (“Decedent”) and her minor son, J.G., were passengers of a 2002 Jeep Liberty traveling on Interstate 59 in Jefferson County, Alabama. (Doc. # 1-1 at ¶ 24). Carrington was operating another vehicle and struck the 2002 Jeep Liberty, causing it to overturn. (Id.). Sue Ann Graham sustained injuries that ultimately lead to her death, and J.G. was also injured. (Id. at ¶¶ 26-27). Plaintiff Overton is suing Defendants as the administrator of the estate of Decedent. (Id. at ¶ 2). Plaintiff Scott Graham, the legal guardian and father of J.G., is suing Defendants on behalf of J.G. (Id. at ¶ 3).

         In their pleadings, Plaintiffs have alleged negligence, wantonness, and Alabama Extended Manufacturer's Liability Doctrine (“AEMLD”) claims. (Id. at p. 6-15). Overton seeks damages on behalf of Decedent under Alabama's Wrongful Death Act. (Id.). On behalf of J.G., Scott Graham seeks compensatory damages from Chrysler and FCA, punitive damages from FCA for its post-bankruptcy sale conduct, and compensatory and punitive damages from the other defendants. (Id.).

         B. The Bankruptcy Proceeding

         In 2009, FCA purchased substantially all of Chrysler's assets from the bankruptcy estate of Old Carco Liquidation Trust (“Old Carco”) under a Master Transaction Agreement (“MTA”). (Docs. # 1 at ¶ 13; 15 at p. 2; 23 at p. 2). The MTA set forth FCA's assumed liabilities and excluded liabilities resulting from the purchase. (Docs. # 1 at ¶ 15-20; 1-3; 15 at p. 2-3; 23 at p. 2). On June 1, 2009, the United States Bankruptcy Court for the Southern District of New York issued an order (“Sale Order”) approving the transaction under the terms set forth in the MTA. (Docs. # 1 at ¶ 17-18; 1-4; 15 at p. 2-3). The Sale Order permanently enjoined any person from asserting a claim arising from or related to the assets transferred in the transaction against FCA unless FCA expressly assumed liability for the claim in the MTA. (Docs. # 1 at ¶ 18; 1-5 at p. 29-30). It also stated that, “[w]hile the Debtors' bankruptcy cases are pending, this [Bankruptcy] Court shall retain jurisdiction to, among other things, interpret, enforce and implement the terms and provisions of this Sale Order and the [MTA], [and] all amendments therto . . . .” (Doc. # 1-4 at p. 45). The transaction closed on June 10, 2009. (Docs. # 1 at ¶ 21; 15 at p. 3).

         In a later amendment (“Amendment No. 4”) to the MTA (which the Bankruptcy Court approved on November 19, 2009), FCA agreed to assume liability for “all Product Liability Claims arising from the sale on or prior to the Closing of motor vehicles or component parts . . . solely to the extent such Product Liability Claims . . . do not include any claim for exemplary or punitive damages.” (Doc. # 1 at ¶ 22-23; 1-5 at p. 8). In the November 19, 2009 Order approving Amendment No. 4, the Bankruptcy Court stated that it was “retain[ing] jurisdiction over all matters or disputes arising out of or in connection with this Stipulation and Agreed Order.” (Doc. # 1-5 at p. 5). The Old Carco bankruptcy estate closed on March 1, 2016. (Docs. # 1 at ¶ 25; 15 at p. 7).

         II. Standard of Review

         It has long been recognized that federal courts are courts of limited jurisdiction. Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). Indeed, federal courts may only exercise jurisdiction conferred upon them by Congress. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996). Anytime a “federal court acts outside its statutory subject matter jurisdiction, it violates the fundamental constitutional precept of limited federal power.” Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999) (quoting Victory Carriers, Inc. v. Law, 404 U.S. 202, 212 (1971)).

         Generally, any action filed in state court, over which a district court would have original jurisdiction, “may be removed by the defendant or defendants, to the district court of the United States for the district and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a). The burden of establishing subject matter jurisdiction for the purpose of a valid removal to this court is squarely on the removing party. Friedman v. N.Y. Life Ins. Co., 410 F.3d 1350, 1353 (11th Cir. 2005). Federal courts strictly construe removal statutes and resolve all doubts in favor of remand. Miedema v. Maytag Corp., 450 F.3d 1322, 1328-30 (11th Cir. 2006).

         II. Discussion

         FCA's removal of this action was based upon 28 U.S.C. §§ 1334(b), 1441, 1446, and 1452(a). (Doc. # 1 at p. 1). Section 1452(a) allows “a party” to “remove any claim or cause of action in a civil action . . . to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title.” However, under § 1452(b), “[t]he court to which such claim or cause of action is removed may remand such claim or cause of action on any equitable ground.” (emphasis added).

         “[D]istrict courts shall have original and exclusive jurisdiction of all cases under title 11” and “original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.” 28 U.S.C. § 1334(a)-(b) (emphasis added). As the statute indicates, there are four types of matters over which the district court has bankruptcy jurisdiction: (1) “cases under title 11;” (2) “proceeding[s] arising under title 11;” (3) “proceedings arising in a case under title 11;” and (4) “proceedings related to a case under title 11.” In re Royal, 197 B.R. 341, 346-47 (Bankr. N.D. Ala. 1996) (quoting In re ...

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