Aynesworth v. Beech Aircraft Corp.

• Decision Date: 11 March 1985
• Docket Number: No. W-84-CA-208.,W-84-CA-208.
• Citation: 604 F. Supp. 630
• Parties: AYNESWORTH, Anne LaGrange, Hambleton, Kimberly Ann, Richards, Penelope Hight, Wood, Barbara, McDonald, Elizabeth Candace, Overton, Carolyn Panter, and Weaver, Mary M., et al., Plaintiffs, v. BEECH AIRCRAFT CORPORATION; Pratt & Whitney Canada, Inc., a subsidiary of United Technologies Corporation; Pratt & Whitney Aircraft of Canada, Ltd.; United Aircraft of Canada, Ltd.; TRW, Inc., d/b/a Hartzell Propeller Products Division: Hartzell Propeller, Inc.; Woodward Governor Co.; Texas-Aero, Inc.; Riteway Radio, Inc.; Rockwell International Corporation; Rockwell-Collins International, Inc.; and Mitchell Industries, Inc., Defendants.
• Court: U.S. District Court — Western District of Texas

604 F. Supp. 630

AYNESWORTH, Anne LaGrange, Hambleton, Kimberly Ann, Richards, Penelope Hight, Wood, Barbara, McDonald, Elizabeth Candace, Overton, Carolyn Panter, and Weaver, Mary M., et al., Plaintiffs, v. BEECH AIRCRAFT CORPORATION; Pratt & Whitney Canada, Inc., a subsidiary of United Technologies Corporation; Pratt & Whitney Aircraft of Canada, Ltd.; United Aircraft of Canada, Ltd.; TRW, Inc., d/b/a Hartzell Propeller Products Division: Hartzell Propeller, Inc.; Woodward Governor Co.; Texas-Aero, Inc.; Riteway Radio, Inc.; Rockwell International Corporation; Rockwell-Collins International, Inc.; and Mitchell Industries, Inc., Defendants.

No. W-84-CA-208.

United States District Court, W.D. Texas, Waco Division.

March 11, 1985.

COPYRIGHT MATERIAL OMITTED

R. Doak Bishop and Kim J. Askew, Hughes & Hill, Dallas, Tex., Wayne Fisher, Fisher, Gallagher, Perrin & Lewis, Joseph D. Jamail, Jamail & Kolius, Houston, Tex., Broadus Spivey, Spivey & Grigg, P.C., Austin, Tex., Lyndon Olson, Olson, Stem, Farr & Buenger, Waco, Tex., for plaintiffs.

Charles McGregor, McGregor & White, Waco, Tex., Richard H. Caldwell, Mayor, Day & Caldwell, Houston, Tex., Jim E. Cowles, Cowels & Thompson, Dallas, Tex., for defendants.

MEMORANDUM OPINION AND ORDER

WALTER S. SMITH, Jr., District Judge.

This matter is before the Court on Plaintiffs' Motion to Remand an action removed to this Court by Defendant Beech Aircraft on January 2, 1985. After reviewing the excellent briefs and responses filed by counsel for both sides, and having heard oral arguments presented on the issue of remand, the Court is of the opinion that the motion to remand should be granted for the reasons set forth below.

I. FACTUAL SUMMARY

The present case is the result of the consolidation of two cases originally filed in the 74th Judicial District Court of McLennan County.¹ These two suits arose from an airplane crash on May 5, 1982, which took the lives of seven men. Both suits involved causes of action based on the negligence and strict liability provisions of the Texas Wrongful Death Statute.²

The original actions named Beech Aircraft Corporation (a Delaware corporation whose principal place of business is Wichita, Kansas) and Texas-Aero, Inc. (a Texas corporation) as defendants. All plaintiffs are Texas citizens and residents. Prior to trial, Defendant Beech filed third-party actions against Riteway Radio, Inc., and Mitchell Industries, Inc., both of which are Texas corporations. Plaintiffs subsequently also added these two corporations as defendants. Trinity Universal Insurance Company (a Texas Corporation) intervened in this action.

Trial commenced on October 2, 1984, in the State District Court. After approximately ten weeks of testimony and evidence, the case was submitted to the jury for its deliberations and verdict. On December 6, 1984, upon motion of Defendant Beech, a mistrial was declared after the jury remained deadlocked for several days.³ On December 18, 1984, Beech filed a petition for removal of the case to this Court. None of the remaining defendants joined in the removal action. Plaintiffs filed a motion to remand this cause on January 2, 1985, challenging the removal action. This Court held a hearing on February 12, 1985, to resolve the question of whether the action was properly removed.

II. REMOVAL

The statute providing for removal on the basis of diversity of citizenship reads, in part as follows:

Any other such action other than that based on federal question shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action was brought.

28 U.S.C. 1441(b).

Removal under this statute must satisfy both the requisites of a $10,000 amount in controversy and diversity of citizenship. The amount in controversy in this cause well exceeds the $10,000 minimum required by the statute. Therefore, the Court must ascertain whether there exists diversity of citizenship for this cause to be properly removed.

When removal is predicated on diversity of citizenship, the diversity must exist both at the time the original action is filed in state court and at the time removal is sought. Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction, § 3723 (1976). When viewing the alignment of parties at the time the original state action was filed, it is obvious that no diversity existed since plaintiffs and all defendants, except Beech Aircraft, are citizens and residents of the State of Texas.

"However, diversity is tested only at the time of removal if such removal is premised on the plaintiff's voluntarily dropping the non-diverse defendant, although diversity did not exist among the parties at the commencement of the state court action." Heniford v. American Motors Sales, Corp., 471 F.Supp. 328, 334 (D.S.C.1979). Therefore, the Texas defendants must have been dropped from the state court action if removal is proper. Beech claims that the Texas defendants were dropped from the suit during closing arguments of the state trial when plaintiffs' counsel abandoned any claim against the Texas defendants and asked the jury to return a verdict solely against Beech. If the plaintiffs did, in fact, abaondon their claims against the Texas defendants, removal could be proper on the basis of diversity of citizenship. See Heniford, supra.

Alternatively, Beech asserts that the resident defendants are merely nominal defendants which must be realigned with the plaintiffs and their formal joinder in the petition for removal is not necessary.

All defendants must join in the removal petition. 28 U.S.C. § 1446(a). However, formal or nominal parties are excluded from this requirement. Tri-Cities Newspapers, Inc., v. Tri-Cities Pressman & Assistants Local 349, 427 F.2d 325, 327 (5th Cir.1970). If the resident defendants are found to be nominal parties, then the petition for removal would be proper on this basis.

A. Realignment

"Before determining removability under Section 1441(b) on the basis of diversity of citizenship, the Court will realign the parties according to their true interest, as it would were the case brought into federal court originally." Heniford v. American Motors Sales, Corp., supra at 328, citing Wright, Miller and Cooper, Federal Practice and Procedure: Jurisdiction, § 3723 (1976). The Supreme Court set forth the test for determining the proper alignment of parties in diversity cases in the case of Indianapolis v. Chase National Bank, 314 U.S. 63, 62 S.Ct. 15, 86 L.Ed. 47 (1941), stating:

To sustain diversity jurisdiction, there must exist an "actual" "substantial" controversy between persons of different states, all of whom on one side of the controversy are citizens of different states from all parties on the other side. Diversity jurisdiction cannot be conferred upon the federal courts by the parties' own determination of who are plaintiffs and who defendants. It is our duty, as it is that of the lower Federal Courts to "look beyond the pleadings and arrange the parties according to their sides in the dispute."

Litigation is the pursuit of practical ends, not a game of chess. Whether the necessary "collision of interest" exist, is therefore, not to be determined by mechanical rules. It must be ascertained from the "principle purpose of the suit" and the "primary and controlling matter in dispute."

314 U.S. 63, 69-70, 62 S.Ct. 15, 16-17, 86 L.Ed. 47.

The principal purpose of this lawsuit is to hold liable the parties whose negligence was responsible for the resulting airplane crash. Plaintiffs alleged the crash was caused by a malfunction in the plane itself from either the propeller or the autopilot systems. The claim that the propeller system malfunctioned was asserted against Defendants Texas-Aero, Inc. (the owner and lessor of the plane) and Beech (the manufacturer of the aircraft). The autopilot system malfunction theory was asserted against Defendants Riteway Radio, Inc., and Mitchell Industries, Inc. (the Texas resident defendants).

Resident defendants are formal or nominal parties only if there is no cause of action or claim for relief stated against them by anyone. Saxe, Bacon & Bolan, P.C. v. Martindale-Hubbell, 521 F.Supp. 1046, 1048 (S.D.N.Y.1981). The Fifth Circuit has declared the test of whether a party is a nominal one to be "if his role in the law suit is that of a depository or stakeholder ...." Tri-Cities, supra at 327, quoting Colman v. Shimer, 163 F.Supp. 347, 350 (W.D.Mich.1958). The determination of whether a named defendant is a nominal party must depend on the facts of each case. Tri-Cities, supra at 327.

The Court finds that the resident defendants are not nominal parties in this cause. Their interests are much greater than that of a "depository" and "stakeholder." Each of the Texas defendants is subject to having a verdict rendered against it, mandating payment of many thousands of dollars to the plaintiffs. To be sure, plaintiff's stronger theory seems to dictate recovery from Beech primarily, but this is not reason enough to classify the other defendants as nominal parties. The fact that one defendant may be entitled to indemnity from another should they be found liable does not justify being termed a nominal party. "That one defendant may benefit should plaintiff prevail against another defendant, does not provide a sufficient basis for realignment." Irving Trust Co. v. Century Export & Import, S.A., 464 F.Supp. 1232 (D.C.N.Y.1979).

For these reasons, this court does not align the parties in a fashion different from that at trial. The Court finds the defendants, the true parties of interest, to be Beech, Texas-Aero, Inc., Riteway Radio, Inc., and Mitchell Industries, Inc. Defendants Texas-Aero, Inc., Mitchell Industries, Inc., and Riteway Radio, Inc. did not join in the petition for removal as required by 28 U.S.C. 1446(a). The Court finds the petition for removal to be improper based on Beech's claims that the...