558 F.3d 378 (5th Cir. 2009), 07-30530, In re 1994 Exxon Chemical Fire

Docket Nº:07-30530.
Citation:558 F.3d 378
Party Name:In re: 1994 EXXON CHEMICAL FIRE. Vivian Adam; Annette Addison; Bridget Akins; Rita Alet; Clay Alexander; et al., Plaintiffs-Appellants, v. Thomas Berry; Allen Hill; Exxon Chemical HDPE, Inc.; Exxon Corporation, also known as Exxon Chemical; William Senn; Yuti Lee; A.R. Devall; David Lockhart; M.T. Miesch; Howard C. Paul, also known as Woody; Troy D
Case Date:February 04, 2009
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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558 F.3d 378 (5th Cir. 2009)

In re: 1994 EXXON CHEMICAL FIRE.

Vivian Adam; Annette Addison; Bridget Akins; Rita Alet; Clay Alexander; et al., Plaintiffs-Appellants,

v.

Thomas Berry; Allen Hill; Exxon Chemical HDPE, Inc.; Exxon Corporation, also known as Exxon Chemical; William Senn; Yuti Lee; A.R. Devall; David Lockhart; M.T. Miesch; Howard C. Paul, also known as Woody; Troy Duplessis; Ronald C. Evans; Phillip W. Hicks; Exxon Risk Management Services, Inc., Defendants-Appellees.

No. 07-30530.

United States Court of Appeals, Fifth Circuit.

February 4, 2009

Page 379

[Copyrighted Material Omitted]

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         Donald Wayne Price, Due', Price, Guidty, Piedrahita & Andrews, Baton Rouge, LA, David W. Robertson (argued), Austin, TX, Joseph M. Bruno, Bruno & Bruno, New Orleans, LA, Calvin Clifford Fayard, Jr., Denham Springs, LA, for Plaintiffs-Appellants.

          Michael Patrick Cash (argued), Justin Joseph Presnal, Wade Thomas Howard, Winstead PC, Houston, TX, for Defendants-Appellees.

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          Appeal from the United States District Court for the Middle District of Louisiana.

          Before JOLLY, BARKSDALE and HAYNES, Circuit Judges.

          RHESA HAWKINS BARKSDALE, Circuit Judge:

         In this long-pending litigation arising out of a chemical fire in 1994 at Exxon Corporation's chemical plant at Baton Rouge, Louisiana, Plaintiffs-Appellants number over 16,000 persons, consolidated into 25 separate actions, and all involving actions removed from state court. Following five jury trials, and only on the basis of a removal issue, Appellants contest a 2007 take-nothing judgment against their personal-injury claims, allegedly resulting from the fire. All but one of the removed actions were filed in Louisiana state court; that one action, in Texas state court. That Texas action, after remand-denial in 1995, was transferred to the Louisiana district court and then consolidated with the Louisiana removed actions.

         The sole issue on appeal is whether, on several bases, the district court lacked subject-matter jurisdiction and, therefore, should have remanded the actions to state court. The issues for the actions filed in Louisiana state court are: (1) whether the Louisiana defendants were improperly joined; and (2) whether the amount in controversy satisfied the jurisdictional requirement necessary to remove to federal court, based on diversity jurisdiction. For the action filed in Texas state court, at issue is whether, notwithstanding the extensive federal-court litigation in Louisiana from 1995 to 2007, the action should be remanded to Texas state court because the action was removed in violation of 28 U.S.C. § 1441(b) (an action may not be removed on the basis of diversity if any defendant is a citizen of the forum state). AFFIRMED.

         I.

         On 8 August 1994, a three-day fire occurred at Exxon's Baton Rouge chemical plant. An Exxon investigation team determined the origins of the fire, as follows.

         An eight-inch control valve, through which oil flowed to the upper section of a tower, proved to be unstable. Five days before the fire, and in order to allow higher oil-flow, a group of Exxon employees, called the " SAFE" team, had installed the eight-inch valve to replace a six-inch valve. The nameplate information on the six-inch valve read " full trim" ; and, based on this information, the SAFE team put into motion a change management request for a full-trim, eight-inch valve. The information on the six-inch valve's nameplate was incorrect, however; it was a " reduced trim" valve.

         On the afternoon of 8 August 1994, cool outside temperature contributed to lower oil rates in the valve, causing the pressure to drop across it. The inappropriate replacement of the six-inch valve with a full, rather than reduced, trim, eight-inch valve contributed to increasing instability in the valve. It ultimately failed, allowing hydrocarbon to spray from the tower and ignite.

         All but one of the numerous actions, claiming personal injuries resulting from the fire, were filed in Louisiana state court. That one action was filed in Texas state court. The procedural history for these actions, including the trials in Louisiana district court, follows.

         A.

          Within days of the fire, the plaintiffs-thousands of residents of Baton Rouge-began filing actions in Louisiana state court, seeking compensatory and punitive

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damages for, inter alia, physical injuries and emotional distress, and presenting claims against Texas-based Exxon, Louisiana-based Harmony Corporation, Louisiana-based Desselle-Maggard Corporation (named in only some of the actions), and Louisiana citizens who held positions of responsibility at the plant. Although a large number of these individual defendants were named in the actions, the only ones subject to Appellants' issues on appeal are: Howard Paul, William Senn, Tomas Berry, and Allen Hill (" Individual Defendants" ).

         Some actions were filed as " mass joinder" actions; others, as class actions. As the actions were filed, Exxon removed them to federal district court, pursuant to 28 U.S.C. § 1441, on the basis of diversity jurisdiction, asserting: complete diversity of citizenship existed because the Louisiana defendants were improperly joined; and the amount in controversy exceeded the 28 U.S.C. § 1332 jurisdictional amount (then $50,000). On 22 December 1994, the actions were consolidated in a master docket in the Middle District of Louisiana, No. 3:94-MS-3, In re 1994 Chemical Plant Fire Litigation.

         Appellants responded with remand motions. Accordingly, in March 1997, Exxon filed a consolidated opposition to remand, again claiming: the Louisiana corporations and Individual Defendants had been improperly joined; and, the amount-in-controversy requirement for diversity jurisdiction had been satisfied.

         That April, Appellants filed a remand motion for all actions, claiming lack of federal subject-matter jurisdiction. Appellants maintained it was lacking because: the Louisiana defendants were properly joined, thus, complete diversity was lacking; and, moreover, the plaintiffs in most actions did not plead damages greater than $50,000, thus, the amount in controversy was not satisfied.

         Pursuant to 28 U.S.C. § 636(b)(1)(A), the remand issue was referred to a magistrate judge. On 28 October 1997, the district court denied the remand motion on the amount-in-controversy issue for the reasons stated in the magistrate judge's 16 October 1997 ruling and order in In re 1993 Exxon Coker Fire Litigation, MD 93-MS-2-A-M2 (M.D.La.), which addressed the same jurisdictional issues asserted in the instant appeal. The magistrate judge also ruled that attorney's fees may apply to representatives of a putative class action for purposes of establishing the amount in controversy.

         And, on 4 November 1997, the district court issued a corrected ruling, including a decision in favor of Exxon on the complete-diversity issue, omitted from its 28 October order. In that regard, the district court held the Louisiana defendants (Harmony and Desselle-Maggard Corporations, and the Individual Defendants) had been improperly joined. The only Louisiana defendants named on appeal, however, are the Individual Defendants; the Louisiana corporations are no longer parties to the litigation.

         On 19 February 2001, the plaintiffs in 16 of the consolidated cases renewed their remand motions. They reasserted that the non-diverse Individual Defendants were properly joined; and, on the authority of rulings from this court since the initial remand motion had been denied ( Ard v. Transcon. Gas Pipe Line Corp., 138 F.3d 596 (5th Cir.1998), and H& D Tire and Auto.-Hardware, Inc. v. Pitney Bowes Inc., 227 F.3d 326 (5th Cir.2000)), asserted that punitive damages could not be aggregated as part of the amount-in-controversy calculation-thus, the jurisdictional amount was not met.

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          Through a 19 April 2001 ruling, the magistrate judge denied the remand motion in 15 of the 16 cases. (The magistrate judge ruled the sixteenth action had been removed improperly because of procedural removal defects and remanded it to state court; its facts are distinguishable from those for which remand was denied.) In so doing, the magistrate judge: reaffirmed the previous ruling that the Individual Defendants were improperly joined; and, while agreeing that punitive damages could not be aggregated to reach the amount in controversy, nevertheless reaffirmed the earlier amount-in-controversy holding on the ground that it was facially apparent that the claims of each individual plaintiff were for more than $50,000. Pursuant to 28 U.S.C. § 636(b)(1)(A), and finding no clear error, the district court affirmed this ruling on 13 June 2001.

         B.

         As noted, one of the actions on appeal has a unique procedural background, requiring a separate analysis. In Joe Goins, et al. v. Exxon Corp., No. 95-1898 (M.D.La. May 10, 2007), the plaintiffs were-as in all the other actions-residents of Baton Rouge, Louisiana. Unlike the other actions, however, which were filed in Louisiana state court, the 1,564 plaintiffs in this action (Goins plaintiffs) filed their state-court action in Harris County, Texas, in August 1995, one year after the fire. Notably, some were already plaintiffs in the pending litigation in federal district court in Louisiana. The defendants included Texas-based Exxon, Dresser Industries and Masonelian International (two Delaware corporations with their principal places of business in Texas), and Desselle-Maggard Corporation, one of the Louisiana parties later found to be improperly joined.

         Exxon removed the...

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