Curtis v. BP America, Inc.

• Decision Date: 25 July 2011
• Docket Number: Civil Action No. H–11–2231.
• Parties: Nyoka CURTIS, et al., Plaintiffs, v. BP AMERICA, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of Texas

808 F.Supp.2d 976

Nyoka CURTIS, et al., Plaintiffs,

v.BP AMERICA, INC., et al., Defendants.

Civil Action No. H–11–2231.

United States District Court,S.D. Texas,Houston Division.

July 25, 2011.

John C. Schwambach, Jr., John Stevenson & Associates, P.C., Houston, TX, for Plaintiffs.

Nancy Curtis, pro se.

Thomas W. Taylor, Andrews and Kurth, Houston, TX, Floyd Richard Hartley, Jr., Godwin Ronquillo P.C., Dallas, TX, for Defendants.

MEMORANDUM AND ORDER

LEE H. ROSENTHAL, District Judge.I. Background

This case arises out of the explosion of the DEEPWATER HORIZON in the Gulf of Mexico on April 20, 2010. Stephen Curtis, an assistant driller, died in the explosion. Wyman Wheeler, a toolpusher, suffered severe injuries. Curtis's estate and family—referred to in this opinion as “Curtis”—and Wheeler sued under the Jones Act, 45 U.S.C. § 51, et seq., and maritime law in state court. The defendants removed, arguing that the Jones Act claims were fraudulently pleaded and that the jurisdictional provision of the Outer Continental Shelf Lands Act (“OCSLA”), 43 U.S.C. § 1349, provided a basis for removal.¹ The defendants also moved to stay the case pending the decision of the Judicial Panel on Multidistrict Litigation (“JPML”) whether to transfer the case to the MDL court in New Orleans, Louisiana. (Docket Entry No. 4). Curtis and Wheeler moved to remand, asserting that their claim to be borrowed employees under the Jones Act precluded removal of all claims; that neither maritime law nor OCSLA provide a basis for removal; and if there is a basis to remove, the forum-defendant rule prevents it. (Docket Entry No. 8). Curtis and Wheeler argued that this court should decide—and grant—the motion to remand before the JPML considers whether to transfer the case. (Docket Entry No. 10). The defendants replied that this case is similar to Meinhart v. Halliburton Energy Services, Inc., Civ. A. No. H–11–0073, 2011 WL 1463600 (S.D.Tex. Apr. 4, 2011), in which this court stayed proceedings pending transfer without addressing the plaintiff's motion to remand. (Docket Entry No. 11).

Based on the record; the motions, response, and reply; and the applicable law, this court grants the motion to stay. The reasons are explained below.

II. The Legal Standard for a Motion to Stay Pending JPML Action

The pendency of a motion to transfer before the JPML does not divest a court of jurisdiction over the case. J.P.M.L.R. 2.1(d); Morales v. Am. Home Prods. Corp., 214 F.Supp.2d 723, 725 (S.D.Tex.2002) (“It is abundantly clear that a conditional transfer order does not affect or suspend any pretrial proceedings in this Court.”).

“[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254, 57 S.Ct. 163, 81 L.Ed. 153 (1936). Whether to stay “calls for the exercise of judgment, which must weigh competing interests and maintain an even balance.” Id. at 254–55, 57 S.Ct. 163. Many courts have followed the three-step procedure set out in Meyers v. Bayer AG, 143 F.Supp.2d 1044 (E.D.Wis.2001), to determine whether to rule on a motion to remand or stay the case. 15 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure § 3866.1 (citing cases). If the remand motion appears not to be “legally or factually difficult” after “preliminary scrutiny,” the court should remand the case to state court. Meyers, 143 F.Supp.2d at 1049. Remand under step one is generally appropriate when “removal was clearly improper.” McClelland v. Merck & Co., Civ. A. No. 06–00543 JMS/BMK, 2007 WL 178293, at *2 (D.Haw. Jan. 19, 2007) (quoting Leeson v. Merck & Co., Inc., No. S–05–2240 WBS PAN, 2006 WL 3230047, at *3 (E.D.Cal. Jan. 27, 2006)). If the motion appears difficult, the court should determine whether similar issues appear in cases consolidated before the MDL court. Meyers, 143 F.Supp.2d at 1049. If not, the court may decide the remand motion. If so, the court should determine whether a stay is appropriate.

Under the Meyers approach, if the motion to remand presents difficult issues that are common to cases that will be transferred in the MDL court, a stay is generally appropriate. See Bd. of Trustees of the Teachers' Retirement Sys. of Ill. v. Worldcom, Inc., 244 F.Supp.2d 900, 903 (N.D.Ill.2002); see also Morales, 214 F.Supp.2d at 725 (“This Court has sometimes deferred to the MDL court when presented with an issue likely to be common among all other cases throughout the nation.”). Three factors are generally relevant to a stay when the JPML will consider transfer: (1) potential prejudice to the nonmovant; (2) hardship and inequity to the movant if the action is not stayed; and (3) the judicial resources to be saved by avoiding duplicative litigation if the cases are consolidated. Trahan v. BP, Civ. A. No. H–10–3198, 2010 WL 4065602, at *1 (S.D.Tex. Oct. 15, 2010) (citing Cajun Offshore Charters v. BP Prods. N. Am., Civ. A. No. 10–1341, 2010 WL 2160292, at *1 (E.D.La. May 25, 2010)).

III. Analysis

The DEEPWATER HORIZON's explosion has garnered international attention and resulted in hundreds of lawsuits throughout the country. The JPML consolidated most of the litigation before a court in New Orleans, Louisiana in August 2010. ² In many of these cases, the defendants have moved to stay proceedings pending the JPML's decision whether to transfer the cases. Courts generally have granted the requests, citing such reasons as the need to coordinate discovery in the large number of cases, the burden to the defendants of litigating in so many forums at once, judicial economy, and the need to avoid inconsistent results. ( See Docket Entry No. 4, Ex. E (collecting orders granting a stay in DEEPWATER HORIZON cases)).³ In only a few cases have courts denied motions to stay the litigation.⁴ In Shemper v. BP America, Inc., No. 2:10cv138–KS–MTP, 2010 WL 2867849 (S.D.Miss. July 19, 2010), the court denied a motion for a stay after concluding that it was unnecessary; under the scheduling order, no discovery could take place, so the case was “already stayed for all practical purposes.” Id. at *1. Noting that the defendants would have to file answers regardless whether the case was transferred and that requiring answers would pose no risk of inconsistent verdicts, the court declined to stay the deadline to answer. Id. Another court considering motions filed before the JPML began consolidating cases in New Orleans denied those requests as “premature.” See, e.g., Barber v. BP, PLC, Civ. A. No. 10–0263–WS–B, 2010 WL 2266760, at *2 (S.D.Ala. June 4, 2010). Because the JPML would decide whether to consolidate the DEEPWATER HORIZON cases within months, the court concluded that “the only tangible effect of entering a stay ... would be to allow defendants a three-month reprieve after service of process before being required to answer the allegations brought by plaintiffs.” Id. The court noted that it was too early in the case before it and in cases before other courts for discovery conflicts to emerge and that the transferee court would benefit if the cases coming to it had answers filed and threshold legal issues briefed. Id.⁵ After the JPML consolidated the cases in New Orleans, however, that court decided to stay the case, including the requirement to file answers. Barber v. BP, PLC, Civ. A. No. 10–0263–WS–B, 2010 WL 3270229, at *1 (S.D.Ala. Aug. 16, 2010). The court noted that the transferee court had stayed the deadline for answers and Rule 12(b) motions, indicating that the transferee court did not see the same advantage to having answers and threshold briefing filed before transfer. Id. In Phillips v. BP PLC, No. 4:10cv259–RH/WCS, 2010 WL 3257737 (N.D.Fla. Aug. 17, 2010), the court addressed a remand motion based on a slightly different OCSLA argument—that the court lacked subject-matter jurisdiction ⁶—denied the motion to remand, and stayed further proceedings. Id. at *1. The court concluded that the case was “plainly within the terms of the statute” granting jurisdiction. There was no risk of inconsistent outcomes because the Fifth Circuit has held that OCSLA provides federal jurisdiction. Hufnagel v. Omega Serv. Indus., Inc., 182 F.3d 340, 350–51 (5th Cir.1999).

Among the reasoned and available decisions, only one appears inconsistent with Meyers. In St. Joe Co. v. Transocean Offshore Deepwater Drilling, Inc., 774 F.Supp.2d 596, 600–01 (D.Del.2011), the court denied the stay and granted the motion to remand. The motion to remand involved one of the issues also present here, whether OCSLA provides a basis for removal. The JPML had granted a conditional transfer order, to which the plaintiff had objected. The court believed that the JPML would “fairly quickly deny” the plaintiff's objection and transfer the case to New Orleans. Id. at 599–600. The court found the potential lengthy wait in the transferee court to weigh against a stay. The court conceded that there was “some risk of inconsistency” if it decided the motion to remand, as “[s]ome of the issues presented by [the] motion to remand are difficult and some are novel.” Id. at 601. The court determined that it could reduce that risk by “treat[ing] the Fifth Circuit opinions as highly persuasive authority.” Id. But no Fifth Circuit precedent speaks to the OCSLA removal, and the Fifth Circuit has twice referred to the issue as a “conundrum.” Mendez, 2010 WL 5343181, at *3. The court determined, however, that removal based only on OCSLA conflicted with the forum-defendant rule, noting that “no Fifth Circuit authority compels the conclusion that the forum defendant rule does not apply here.” St. Joe. Co., 774 F.Supp.2d at 612. Because there was no other basis for removal, the court ordered remand.⁷

This court followed the Meyers approach in Meinhart and concluded that a stay was appropriate. As the...