Amoco Chemical Co. v. Tex Tin Corp.
Decision Date | 24 October 1995 |
Docket Number | Civ. A. No. G-95-405. |
Parties | AMOCO CHEMICAL COMPANY and Amoco Corporation v. TEX TIN CORPORATION, Associated Metals and Minerals Corporation, Asoma Corporation, Steel Holdings Corporation, Macsteel, Macsteel, Inc., The Estate of Franz A. Lissauer, Diana Fraid Lissauer, Emil Lissauer, Gordon Lissauer, Sharon Drakides, Hannah Hirschfeld, Peter Eliel, Unknown Lissauer Family Members, Colin H. Benjamin, Steve E. Eliel, Donald P. Wefer, and Salvatore Purpura. |
Court | U.S. District Court — Southern District of Texas |
Katherine McIlroy Shoebotham, Weiss & Associates, Theodore F. Weiss, Jr., Attorney at Law, Houston, TX, for Amoco Chemical Company, Amoco Corporation.
Ross Citti, Jackson & Walker, Houston, TX, for Tex Tin Corporation, Associated Metals and Minerals Corporation, Asoma Corporation, Steel Holdings Corporation, Macsteel, Macsteel, Inc., Estate of Franz A. Lissauer, Diana Fraid Lissauer, Emil Lissauer, Gordon Lissauer, Sharon Drakides, Hannah Hirschfeld, Peter Eliel, Unknown Lissauer Family Members, Colin H. Benjamin, Steve E. Eliel, Donald P. Wefer, Salvatore Purpura.
ORDER DENYING MOTION TO REMAND
Plaintiffs, Amoco Chemical Co. ("Amoco") and Amoco Corp., commenced this action in the 56th Judicial District Court of Galveston County, Texas. The gravamen of Plaintiffs' Complaint is the alleged breach of a private contract which obligated Defendant Tex Tin Corp. ("Tex Tin") to reimburse Amoco for expenses incurred under an Administrative Order on Consent involving the United States Environmental Protection Agency ("EPA"). Pursuant to 28 U.S.C.A. § 1446 (West 1994 & Supp 1995), Defendants removed this case to the United States District Court for the Southern District of Texas, Galveston Division, on the basis that the breach of contract cause of action is one "arising under" federal law within the meaning of 28 U.S.C.A. § 1331 (West 1993). Now before the Court is Plaintiffs' Motion to Remand for lack of subject matter jurisdiction pursuant to 28 U.S.C.A. § 1447(c) (West 1994) and Plaintiffs' Motion for Costs and Attorneys Fees for improper removal under that section.1 These Motions are DENIED.
For purposes of Plaintiffs' Motion to Remand, the Court accepts as true all relevant allegations contained in the Complaint. Willy v. Coastal Corp., 855 F.2d 1160 (5th Cir. 1988); see also Kidd v. Southwest Airlines, Co., 891 F.2d 540, 542 (5th Cir.1990) (). Those allegations are as follows:
Amoco and Tex Tin own adjacent lots of real property in Texas City, Texas, which are hereinafter referred to collectively as "the Texas City Site" or "the Site." The EPA, acting on referrals from the Texas Department of Water Resources and the Texas Control Board, concluded that the Texas City Site released or threatened release of hazardous substances, pollutants, or contaminants. This finding prompted the EPA to propose inclusion of the Texas City Site on the National Priorities List ("NPL"), which lists those sites deemed federal priorities for long-term remedial evaluation and response.
Thereafter, at the EPA's initiative, Amoco, Tex Tin, and the EPA entered into an Administrative Order on Consent ("AOC") to settle the EPA's claims against Amoco and Tex Tin under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.A. §§ 9601-75 (West 1995). The AOC directs Amoco and Tex Tin to conduct a remedial investigation/feasibility study ("RI/FS") of the Texas City Site during such time as the Site is listed on the NPL. The AOC specifically includes a court order among those events capable of terminating Amoco and Tex Tin's RI/FS obligations:
The AOC makes Amoco and Tex Tin jointly and severally liable for all expenses incurred in connection with the RI/FS.
To provide for joint administration of the RI/FS and to allocate the cost of performing their AOC obligations, Amoco and Tex Tin, along with one guarantor for each, entered into a separate, private contract ("Funding Agreement"). The Funding Agreement requires the parties to hire a consultant to perform the RI/FS. While obligations are owing under the AOC, Amoco must pay ten percent and Tex Tin ninety percent of all amounts due to the hired consultant and the EPA. Once AOC obligations cease, the Funding Agreement directs reallocation of expended funds according to the relative RI/FS cost attributable to the parties' respective lots of property.
Five months after the AOC and the Funding Agreement were executed, the Texas City Site was listed on the NPL. Tex Tin then challenged this listing by filing a petition for review in the United States Court of Appeals for the District of Columbia Circuit. While Tex Tin's action was pending, Amoco and Tex Tin uneventfully abided by the terms of the Funding Agreement. But, once the Court rendered its decision in Tex Tin Corp. v. U.S. Envtl. Protection Agency ("Tex Tin I"), 935 F.2d 1321 (D.C.Cir.1991), Tex Tin notified the EPA and Amoco that the parties' obligations under the AOC had been terminated. Despite the EPA's threat to penalize Tex Tin for discontinuation of the RI/FS, Tex Tin refused to proceed as before. Amoco, aware that the EPA disagreed with Tex Tin's view of Tex Tin I, maintained the RI/FS without Tex Tin's continued financial contributions. Only after Amoco expended an additional $ 8.1 million conducting the RI/FS was the Texas City Site unequivocally removed from the NPL in Tex Tin Corp. v. U.S. Envtl. Protection Agency ("Tex Tin II"), 992 F.2d 353 (D.C.Cir.1993).
Amoco has made repeated requests for money allegedly owed by Tex Tin under the Funding Agreement for the $ 8.1 million in expenditures. Acting consistently with its previously stated position, Tex Tin has refused to fund any of Amoco's post-Tex Tin I efforts. Amoco now seeks damages, declaratory relief, and attorneys fees for breach of contract, fraud, and related wrongs.
An independent jurisdictional basis must exist for each claim adjudicated by this Court. See United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966) ( ). As the defendant, Tex Tin bears the burden of proving subject matter jurisdiction. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 37, 66 L.Ed. 144 (1921) ( ); Willy, 855 F.2d at 1164 (same). Tex Tin contends that section 1331 confers subject matter jurisdiction over Amoco's breach of contract claim and implicitly relies upon section 1367 for all remaining claims. The Court's analysis proceeds accordingly. See Willy, 855 F.2d at 1164 ( ).
Section 1331 provides: "The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C.A. § 1331; see also 28 U.S.C.A. § 1447(b) (West 1994) ( ). Despite its strong resemblance to section 2 of Article III, Section 1331 is narrower in scope. E.g., Verlinden B.V. v. Central Bank of Nig., 461 U.S. 480, 495, 103 S.Ct. 1962, 1972, 76 L.Ed.2d 81 (1983) (); see also U.S. Const. art III., § 2 (). A simple but precise statement of the statute's meaning has not yet been devised: "No one formulation of section 1331 captures all of the nuances involved in determining which cases fall within the federal court's original jurisdiction." Kidd, 891 F.2d at 542. The United States Supreme Court has specifically declined to recognize an "automatic test" for federal question jurisdiction. Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 814, 106 S.Ct. 3229, 3235, 92 L.Ed.2d 650 (1986); see also Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for S. Cal, 463 U.S. 1, 8, 103 S.Ct. 2841, 2845, 77 L.Ed.2d 420 (1983). Instead, the Court has consistently emphasized "the need for careful judgments about the exercise of federal judicial power in an area of uncertain jurisdiction." Merrell Dow, 478 U.S. at 814, 106 S.Ct. at 3235; see also id. at 808, 106 S.Ct. at 3232 at ("There is no `single, precise definition' of federal question jurisdiction; rather, `the phrase `arising under' masks a welter of issues....'" (quoting Franchise Tax Bd., 463 U.S. at 8, 103 S.Ct. at 2846)); Franchise Tax Bd., 463 U.S. at 8, 103 S.Ct. at 2846 (); Gully v. First Nat'l Bank, 299 U.S. 109, 117, 57 S.Ct. 96, 100, 81 L.Ed. 70 (1936) ( ).
As a starting point, the jurisdictional analysis centers on the plaintiff's well-pleaded complaint. E.g., Metropolitan Life Ins. Co. v. Taylor, 481 U.S....
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