139 F.3d 1368 (11th Cir. 1998), 96-8792, Pacheco de Perez v. AT & T Co.
|Citation:||139 F.3d 1368|
|Party Name:||Ligia PACHECO DE PEREZ, individually, et al., Plaintiffs-Appellants, v. AT&T COMPANY, et al., Defendants-Appellees. Cruz SIGALA, and Norma Sofia De Sigala, individually and on behalf of the Estate of Cruz Fernando Sigala and Monica Huornug, as Succession Representative of Corma Sofia De Sigala, Plaintiffs-Appellants, v. AT&T COMPANY, et al., Defend|
|Case Date:||April 29, 1998|
|Court:||United States Courts of Appeals, Court of Appeals for the Eleventh Circuit|
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Frank C. Dudenhefer, Jr., Richard M. Martin, Jr., Cummings, Cummings & Dudenhefer, New Orleans, LA, for Plaintiffs-Appellants.
William N. Withrow, Jr., Troutman Sanders, Atlanta, GA, Mark A. Cohen, Fred O. Goldberg, Miami, FL, for Defendants-Appellees.
Appeal from the United States District Court for the Northern District of Georgia.
Before BLACK and BARKETT, Circuit Judges, and PROPST [*], Senior District Judge.
BARKETT, Circuit Judge:
In these two consolidated cases, plaintiffs-appellants, individuals injured in a 1993 gas pipeline explosion in Venezuela, appeal from the district court's order denying their motion to remand the case to the Georgia state courts and dismissing the action under the doctrine of forum non conveniens.
The explosion, which killed fifty people and injured many others, occurred during the laying of fiber-optic cable in the town of Tejerias, Venezuela, when a machine used to dig a trench for the cable struck a gas pipeline. Plaintiffs allege that defendants-appellees AT&T Company ("AT&T"), 1 a New York corporation, and several citizens of Georgia who worked for AT&T, participated in the acts or omissions that caused the explosion. 2
Before filing the present actions, many of the plaintiffs in this case filed and dismissed actions based on the same claims against the same or similar defendants in other federal district courts. Specifically, most of the plaintiffs brought two diversity tort actions in the United States District Court for the Eastern District of California, which they voluntarily dismissed, and later filed two similar suits in the United States District Court for the District of New Jersey, which they also voluntarily dismissed. The several suits named AT&T, AT&T International, and AT&T Andinos, among others, as potentially liable defendants. 3
Thereafter, plaintiffs filed two separate actions in Georgia state court, asserting various state law claims against AT&T and the individual employees of AT&T. Defendants removed the cases to the United States District Court for the Northern District of Georgia. The district court consolidated the two actions, denied the plaintiffs' motion to remand, and dismissed the consolidated actions under the doctrine of forum non conveniens.
The threshold question on appeal is whether, as the plaintiffs argue, the district court should have remanded the case back to the Georgia state court for lack of federal jurisdiction. Although there is complete diversity among the parties, removal of a case on diversity grounds is not permitted if one or more of the defendants is a citizen of the state in which the suit was originally filed. 28 U.S.C. § 1441(b). Accordingly, because the individual defendants in this case are Georgia citizens, removal would not ordinarily be permitted on diversity grounds. The defendants argue, however, that the presence of the Georgia defendants should not prevent removal of the plaintiffs' lawsuits because the Georgia defendants were fraudulently joined in order to defeat original diversity jurisdiction.
The defendants further assert that federal question jurisdiction exists in this case under four alternative theories. First, the defendants maintain that the plaintiffs' attempt to "artfully plead" their state-law complaint so as to avoid the preclusive effect of the voluntary dismissals of their prior federal lawsuits presents a substantial federal question sufficient to support federal jurisdiction. Second, they argue that the plaintiffs' complaint presents a substantial federal question because the plaintiffs must rely on a federal treaty to prove that they have standing to proceed in the Georgia state courts. Third, the defendants argue that the lawsuit involves the federal common law of foreign relations because the litigation implicates the national interests of Venezuela. Fourth, the defendants assert that the district court had the authority to exercise supplemental jurisdiction over this case under the All Writs Act, 28 U.S.C. § 1651, to prevent frustration of orders made in related lawsuits pending before the same district court judge. 4
We conclude that federal question jurisdiction does not exist under any of the defendants' theories. We further conclude that the record does not support the defendants' assertion of fraudulent joinder of the Georgia resident defendants. Because federal jurisdiction is lacking in this case, the district court should have granted the plaintiffs' motion to remand. 5
I. Background Principles
We review the district court's denial of the plaintiffs' motion to remand, which involves questions of federal subject matter jurisdiction, de novo. See BIW Deceived v. Local S6, Ind. Union of Marine and Shipbuilding Workers of America, 132 F.3d 824 (1st Cir.1997) (subjecting denial of motion to remand to de novo review); Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1356 (11th Cir.1996) (holding that subject matter jurisdiction determinations are subject to de novo review). In a motion to remand, the removing party bears the burden of showing the existence of federal jurisdiction. Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir.1996). We construe removal jurisdiction narrowly and resolve any doubts regarding the existence of federal jurisdiction in favor of the non-removing party, in this case the plaintiffs, Diaz, 85 F.3d at 1505.
An action filed in state court may be removed to federal court based upon diversity or federal question jurisdiction. 28 U.S.C. § 1441(a), (b). Diversity will not support removal jurisdiction, however, if any of the properly joined defendants are citizens of the state in which the suit was originally filed. See id. § 1441(b). The citizenship of the parties does not matter if there is federal question jurisdiction. Id. Federal question jurisdiction exists if the plaintiffs' suit "arises under" the "Constitution, treaties or laws of the United States." Id.; 28 U.S.C. § 1331. In general, a case "arises under" federal law if federal law creates the cause of action, or if a substantial disputed issue of federal law is a necessary element of a state law claim. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 9-10, 13, 103 S.Ct. 2841, 2846, 2848, 77 L.Ed.2d 420 (1983). The determination of whether federal question jurisdiction exists must be made on the face of the plaintiff's well-pleaded complaint; an anticipated or even inevitable federal defense generally will not support removal based upon federal question jurisdiction. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392-93, 107 S.Ct. 2425, 2429-30, 96 L.Ed.2d 318 (1987).
II. Four Alternative Theories of Federal Question Jurisdiction
A. Res Judicata
The defendants first argue that the plaintiffs' attempt to avoid the preclusive effect of their prior federal lawsuits by "artfully pleading" their complaint to contain only state law claims creates a federal issue sufficient to support federal jurisdiction in this case. The district court accepted this argument, holding that the doctrine of res judicata provides one alternative ground for federal subject matter jurisdiction over the plaintiffs' suit. Specifically, the district court found that those plaintiffs who had twice filed and twice dismissed the prior actions in other federal courts could not avoid the preclusive effect of the "two dismissal" rule of Federal Rule of Civil Procedure 41(a)(1). 6 Under Rule 41(a)(1), a second voluntary dismissal of a complaint operates as an adjudication on the merits that has a preclusive effect in subsequent litigation. While noting that the prior suits were brought against AT&T International and its Venezuelan subsidiary--and not AT&T Corp.--the district court concluded that AT&T Corp. and AT&T International were in "privity" with one another so as to permit AT&T Corp. to assert the preclusive effect of Rule 41(a)(1) in this litigation. Construing the plaintiffs' current suit as an attempt to make an "end run" around the prior federal adjudication, the district court determined that it had removal jurisdiction in order to prevent this type of forum shopping, and exercised supplemental jurisdiction over those parties and claims who were not bound by the two dismissal rule.
On appeal, the plaintiffs argue that the district court committed clear error in finding AT&T Corp. in privity with AT&T International on the sole basis that AT&T International is a wholly owned subsidiary of AT&T Corp. See Hart v. Yamaha-Parts Distrib., Inc., 787 F.2d 1468, 1472-73 (11th Cir.1986)
(holding that the determination of whether a parent company and its subsidiary are in privity for res judicata purposes must be based upon specific facts showing that the two entities are "alter egos" of each other). Plaintiffs further argue that, even if the two corporations are in privity, a defense of res judicata will not support federal question jurisdiction.
We need not address the privity question, as the recent Supreme Court decision in Rivet v. Regions Bank of Louisiana, --- U.S. ----, 118 S.Ct. 921, 139 L.Ed.2d 912 (1998), explicitly holds that "claim preclusion by reason of a prior federal judgment is a defensive plea...
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