Case v. Anpac Lousiana Ins. Co.

• Citation: 466 F.Supp.2d 781
• Decision Date: 11 December 2006
• Docket Number: Civil Action No. 05-4182.,Civil Action No. 06-7390.
• Court: U.S. District Court — Eastern District of Louisiana
• Parties: Gordan CASE, et al. v. ANPAC LOUISIANA INSURANCE CO. and In re Katrina Canal Breaches. v. Pertains to Chamberlain (06-5370) — Pending Designation.

466 F.Supp.2d 781

Gordan CASE, et al. v. ANPAC LOUISIANA INSURANCE CO. and In re Katrina Canal Breaches. v. Pertains to Chamberlain (06-5370) — Pending Designation.

Civil Action No. 06-7390.

Civil Action No. 05-4182.

United States District Court, E.D. Louisiana.

December 11, 2006.

Mickey P. Landry, David Ryan Cannella, Frank J. Swarr, Landry & Swarr, LLC, New Orleans, LA, for Gordan S. Case and Tanjha C. Case.

Peirce A. Hammond, II, Jason Rhett Bonnet, Leake & Andersson, LLP, New Orleans, LA, for ANPAC Louisiana Insurance Company.

ORDER AND REASONS

DUVAL, District Judge.

Before the Court are two motions to remand in two separate actions.¹ The first Motion to Remand (Rec.Doc.No.5) is brought by Plaintiffs Gordon and Tanjha Case ("Cases") in their lawsuit against ANPAC Louisiana Insurance Company, ("ANPAC"). Plaintiffs oppose removal claiming that there is no subject matter jurisdiction over the proceeding under 28 U.S.C. §§ 1441(e)(1)(B) and 1369 ("Multi-party, Multiforum, Trial Jurisdiction Act" or "MMTJA").

The second Motion to Remand (Rec.Doc. No.1497) was filed by Plaintiffs Shirley and Robert Chamberlain ("Chamberlains") in their action against Louisiana Farm Bureau Mutual Insurance Company ("Farm Bureau").² Defendant also allege jurisdiction and removal under the MMTJA.³ After reviewing the pleadings, memoranda, and relevant law as well as hearing oral argument, the Court finds that these actions were not properly removed under 28 U.S.C. § 1441(e)(1)(B), and thus, the Court remands these proceedings for the reasons assigned below.

I. BACKGROUND

A. The Cases

The Cases instituted the state court action on August 22, 2006, against ANPAC Louisiana Insurance Company ("ANPAC") in Civil District Court, Parish of Orleans, Louisiana, seeking a declaratory judgment as well as damages in connection with destruction of their home during and in the aftermath of Hurricane Katrina. The parties are both domiciled in Louisiana. Specifically, Plaintiffs aver the following:

The strength and magnitude of Katrina's violent winds leaves little doubt to consider that the high velocity wind force was the "efficient proximate cause" of the damage to petitioners' building and ancillary structures and total destruction/loss of petitioner's building and ancillary structures.

See Notice of Removal, Exhibit C, at ¶ 5 (Rec.Doc.No.1).

In addition to a request for the full value of the policy and other damages, Plaintiffs also request 1) a declaration that damage due to "storm surge" is not excluded by the policy; 2) a declaration that the "flood" exclusion is inapplicable and ambiguous; and 3) a declaration that Louisiana Valued Policy Law⁴ applies to the instant matter. See Notice of Removal, Exhibit C, at ¶ 24 (Rec.Doc.No.1).

Defendants, on the other hand, attribute the loss to the flooding that came as a result of the levee breaches.⁵ See Notice of Removal, ¶ 14 (Rec.Doc.No.1). This risk is allegedly not covered under the policy by virtue of the flood exclusion. Id.

B. The Chamberlains

The Chamberlains also brought this action in Civil District Court in Orleans Parish, Louisiana, against their insurer Farm Bureau. See Notice of Removal (Rec.Doc. No.1).⁶ The parties are both domiciled in Louisiana. Plaintiffs purchased a homeowner's policy from Farm Bureau for, inter alia, hurricane wind coverage, and they allege that State Farm failed to pay damages caused by wind. Id., Petition, at ¶ 15. Plaintiffs also allege that their damages resulted from a covered peril under the State Farm policy,⁷ while State Farm claims that such damages were caused by hurricane driven water, an excluded peril. See Answer (Rec.Doc.No.4).

Plaintiffs specifically allege that:

the cause of the losses which were sustained due to the breaches in the aforementioned flood walls and which were due to the negligent acts of others, or windstorm, and which are standard covered perils in the policy of insurance issued by defendant to plaintiffs.

See Notice of Removal, Petition at ¶ 9 (Rec.Doc.No.1).

The Court analyzes these two cases together because both sets of Plaintiffs have allegations asserting coverage in their homeowner's policy for flood damage caused by levee breaches, and both Defendant insurers are attempting to remove these actions to federal court under the federal supplemental or piggy-back jurisdiction provided in Section 1441(e)(1)(B). In particular, both ANPAC and Farm Bureau assert jurisdiction under Section 1441(e)(1)(B) averring that they are both defendants in Abadie et al. v. Aegis Security Ins. Co., et al., No. 06-5164 (E.D. La. filed Aug. 28, 2006), and the instant actions arise out of the same "accident" as in Abadie.

The Court here seeks to answer the question of whether sections 1369 and 1441(e)(1)(B) apply in the context the New Orleans levee breaches, believing the issue is ripe for disposition in light of the high volume of removals asserting MMTJA jurisdiction pending before this Court and other courts of this district.

II. LEGAL STANDARD

A. Removal

"[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the 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)(West 2006). The burden of proof for establishing federal jurisdiction is placed on the party seeking removal. Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir.1988) (citing Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 42 S.Ct. 35, 66 L.Ed. 144, (1921)).

If the right to remove is doubtful, the case should be remanded. Ryan v. Dow Chemical, 781 F.Supp. 934, 939 (E.D.N.Y. Jan.29, 1992). "Statutes conferring removal jurisdiction are strictly construed." Southall v. St. Paul Travelers Ins. Co., 2006 WL 2385365, at *2 (E.D.La. Aug. 16, 2006)(citing Shamrock Oil & Gas v. Sheets, 313 U.S. 100, 109, 61 S.Ct. 868, 85 L.Ed. 1214 (1941); Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir.1988)).

B. Piggy-Back Jurisdiction under 28 U.S.C. § 1441(e)(1)(B)

Defendants contend that the Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1441(e)(1)(B). The statute provides:

(e)(1) Notwithstanding the provisions of subsection (b) of this section, a defendant in a civil action in a State court may remove the action to the district court of the United States for the district and division embracing the place where the action is pending if —

(A) the action could have been brought in a United States district court under section 1369 of this title; or

(B) the defendant is a party to an action which is or could have been brought, in whole or in part, under section 1369 in a United States district court and arises from the same accident as the action in State court, even if the action to be removed could not have been brought in a district court as an original matter.

28 U.S.C. § 1441(e)(1) (West 2006).

Under Section 1441(e)(1)(B), an action is removable if (1) the defendant in the action to be removed is also party to an action pending in a district court that could have been brought under 28 U.S.C. § 1369, and (2) the action to be removed arises from the same accident as that which is pending in the district court. Id.; see also Wallace v. Louisiana Citizens Property Ins. Corp., 444 F.3d 697, 699 (5th Cir.2006). Section 1441(e)(1) expands the scope of subject matter jurisdiction conferred by section 1369 as is illustrated by the following comment:

Specifically, the in-state defendant, previously unable in ordinary diversity cases to remove, is specifically permitted to remove a mass disaster case to federal court. If the defendant is "a party to an action which is or could have been brought" under § 1369, it is removable. If the action involves "the same accident as the action in State court" it is removable, even if the action "could not have been brought in district court as an original matter." (citations omitted).

Peter Adomeit, The Station Nightclub Fire and Federal Jurisdictional Reach: The Multidistrict, Multiparty, Multiforum Jurisdiction Act of 2002, 25 W. New. Eng. L.Rev. 243, 250-251 (2003).

This removal statute is often described by the courts as establishing piggy-back jurisdiction or federal supplemental jurisdiction, acting as a complement to the jurisdiction conferred by section 1369 over mass disaster litigation. Wallace, 444 F.3d at 702 ("[section 1441(e)(1)(B)] establishes supplemental jurisdiction over the [action to be removed], piggybacking jurisdiction on the court's original jurisdiction under § 1369(a)."). These terms are used rather loosely, however, in that section 1441(e)(5) states that jurisdiction established under section 1441(e)(1)(B) will be deemed to be the equivalent of original jurisdiction under section 1369.⁸

Notwithstanding the inexactness of this terminology, it is useful in that it is descriptive of the kinds of actions to which the removal statute applies. Section 1369 and its corresponding removal statute are meant to foster judicial economy in the resolution of actions involving certain mass disasters by circumventing conventional limitations on federal subject matter jurisdiction. Wallace, 444 F.3d at 702. Specifically, the drafters of the MMTJA sought to bypass the complete diversity rule and amount in controversy requirement of 28 U.S.C. § 1332 in order to prevent duplicative litigation in State and federal court, which potentially could lead to inconsistent results. Laura Offenbacher, The Multiparty, Multiforum Trial Jurisdiction Act: Opening the Door to Cass Action Reform, 23 Rev. Litig. 177, 185-187 (2004). On the other hand, sidestepping traditional federal jurisdiction requirements, such as the complete diversity rule, and subsequently consolidating mass disaster litigation can potentially "impose a substantial burden on already overwhelmed courts." Id., at 187.

With this...