Florence v. Crescent Resources, LLC
| Decision Date | 18 April 2007 |
| Docket Number | No. 06-13588.,No. 06-13589.,No. 06-13587.,No. 06-14206.,06-13587.,06-13588.,06-13589.,06-14206. |
| Citation | 484 F.3d 1293 |
| Parties | Annette FLORENCE, Plaintiff-Appellant, v. CRESCENT RESOURCES, LLC, a foreign corporation, Rinehart Development & Investment Group, LLC, a Florida corporation, Defendants-Appellees. William Burke, Plaintiff-Appellant, v. Crescent Resources, LLC, a foreign corporation, Rinehart Development & Investment Group, LLC, a Florida corporation, Defendants-Appellees. Lethesa Reliford, as Personal Representative for the Estate of Ceola Reliford, Plaintiff-Appellant, v. Crescent Resources, LLC, a foreign corporation, Rinehart Development & Investment Group, LLC, a Florida corporation, Defendants-Appellees. Robert Burns, Plaintiff-Appellant, v. Crescent Resources, LLC, a foreign corporation, Rinehart Development & Investment Group, LLC, a Florida corporation, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Overchuck, Paul G. Byron, Overchuck, De Marco, Byron & Overchuck, P.A., Winter Park, FL, for Plaintiffs-Appellants.
David A. Shontz, Michael L. Gore, Alfred J. Bennington, Jr., Shutts & Bowen, LLP, Orlando, FL, Sylvia H. Walbolt, Carlton Fields, P.A., Tampa, FL, for Defendants-Appellees.
Jonathan L. Gaines, Russo App. Firm, P.A., South Miami, FL, for Burns.
Appeals from the United States District Court for the Middle District of Florida.
Before DUBINA and COX, Circuit Judges, and SCHLESINGER,* District Judge.
We address in these appeals the question of fraudulent joinder of a resident defendant in the context of removal jurisdiction. Applying the rule that any ambiguity or doubt about whether state law might impose liability on a resident defendant favors remand, we conclude that the district court should have remanded these cases to state court.
Plaintiffs Annette Florence, William Burke, Robert Burns, and Lethesa Reliford as personal representative of the estate of Ceola Reliford filed individual lawsuits against Crescent Resources, LLC ("Crescent") and Rinehart Development & Investment Group, LLC ("Rinehart") in Florida state court. The complaint in each case alleged that: (1) land owned by Crescent and Rinehart at the time the lawsuits were filed had been used by its previous owners as a manufacturing facility and waste water treatment plant; (2) each Plaintiff had sustained personal injury or death caused by exposure to hazardous substances that were stored on the land prior to Crescent's and Rinehart's ownership of it; and (3) Crescent and Rinehart were liable pursuant to § 376.313 Florida Statutes, a statute that creates a strict liability cause of action against owners of real property in Florida for damages caused by surface or ground water contaminants on the property.
Crescent removed the cases to federal court, alleging that jurisdiction existed over each case, pursuant to 28 U.S.C. § 1441, as the amount in controversy exceeded $75,000; Crescent was diverse from each Plaintiff; and Rinehart, a citizen of Florida, had been fraudulently joined in the lawsuits. In its notices of removal, Crescent stated (and Rinehart joined the argument) that Plaintiffs could not state causes of action under the Florida statute against Rinehart because, as a matter of law, Plaintiffs could prove no causal connection between Plaintiffs' exposure to hazardous substances, pollutants, and chemicals and Rinehart's use of the land, which it acquired years later.
Each Plaintiff moved to remand to state court, arguing that § 376.313, Fla. Stat. imposes strict liability on the owners of contaminated land and does not require Plaintiffs to prove any causal connection between their exposure to hazardous substances and the current owners' use of the land. At the very least, Plaintiffs argued, there was a possibility that their complaints stated causes of action under Florida law. Therefore, Plaintiffs concluded, Rinehart had not been fraudulently joined, its Florida citizenship destroyed diversity jurisdiction, and remand was proper.
Crescent opposed Plaintiffs' motions to remand. While the motions to remand were pending, Crescent filed motions to dismiss Plaintiffs' complaints with prejudice or, in the alternative, for summary judgment. In these filings, Crescent again argued that the Florida statute does not impose liability on property owners who acquire the property after a plaintiff's exposure to pollution on the property. It also argued that the Florida statute: (1) does not create a cause of action for personal injury, and (2) provides an affirmative defense — the Third Party Defense — that applied to bar Plaintiffs' claims against both Rinehart and Crescent. According to Crescent, the Third Party Defense, found at § 376.308(2)(d), Fla. Stat., required dismissal of Rinehart (as a fraudulently joined non-diverse Defendant) and judgment in favor of Crescent.
The district court denied Plaintiffs' motions to remand, dismissed Rinehart, and entered judgment for Crescent in each of the cases. In its orders, the district court adopted by reference the reasoning it expressed in a related case that alleged the same cause of action against Defendants, Brottem v. Crescent Resources, LLC, No. 6:06-cv-306-Orl-31KRS, 2006 WL 1529327 . In Brottem, the district court said that there was a "distinct possibility that a Florida court could find that a private cause of action exists under Florida law for the personal injury damages suffered by the Plaintiffs." Id. at *4. And, the court rejected Defendants' argument that Plaintiffs must prove that the pollution that caused their injuries was created by Defendants. Id. However, in Brottem and the cases now on appeal, the district court found that the statutory Third Party Defense barred the claims against Defendants.1
Plaintiffs appeal the denial of their motions to remand and the judgments in favor of Crescent. We consolidated the four cases on appeal.
Plaintiffs argue that their complaints state viable claims under the Florida statute against both Rinehart and Crescent, claims that are not barred by the statutory Third Party Defense. At the very least, they argue, the complaints present colorable claims under Florida law. Thus, they argue that their cases should have been remanded to state court because Rinehart (the non-diverse Defendant) was not fraudulently joined, there was not complete diversity between the parties, and the district court lacked subject matter jurisdiction. For the same reasons, Plaintiffs also argue that the district court erred in granting summary judgment to Crescent.
Rinehart and Crescent argue that the district court properly concluded that Plaintiffs could not maintain a cause of action against them pursuant to § 376.313, Fla. Stat. They argue that the Florida statute does not impose liability on owners of real property for personal injuries caused by a plaintiff's exposure to hazardous waste or toxic chemicals prior to the defendant's ownership of the property. And, they argue that the statutory Third Party Defense bars the Plaintiffs' claims against them. Therefore, they conclude, the district court did not err in dismissing Rinehart, denying the motions to remand, and granting summary judgment for Crescent.
Concluding that the court erred in denying Plaintiffs' motions to remand, we address only the jurisdictional issues in this case.
We review denial of a plaintiff's motion to remand de novo. See Henderson v. Washington Nat. Ins. Co., 454 F.3d 1278, 1281 (11th Cir.2006) (citing Pacheco de Perez v. AT&T Co., 139 F.3d 1368, 1373 (11th Cir.1998)).
Henderson, 454 F.3d at 1281 (citing Lincoln Prop. Co. v. Roche, 546 U.S. 81, 126 S.Ct. 606, 613, 163 L.Ed.2d 415 (2005); 28 U.S.C. § 1441(b)). However, if a defendant shows that "there is no possibility the plaintiff can establish a cause of action against the resident defendant," then the plaintiff is said to have fraudulently joined the non-diverse defendant. Id. (quoting Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir.1997)).2 In that situation, the federal court must dismiss the non-diverse defendant and deny any motion to remand the matter back to state court. Id.
Crescent removed these cases to federal court based solely on its allegation that diversity jurisdiction exists in the federal court. Thus, in the face of Plaintiffs' motions to remand, Crescent had to demonstrate that Rinehart (a citizen of Florida) was fraudulently joined in the cases. As we stated in Henderson, "the district court was correct to deny the motion to remand only if there was no possibility that [the Plaintiffs] could have maintained a cause of action against [the resident defendant] in . . . state court." 454 F.3d at 1281-82.
We turn now to consideration of the cause of action asserted in Plaintiffs' complaints. Section 376.313, Fla. Stat. states, in pertinent part:
(3) . . . [N]othing contained in [sections] 376.30-376.319 prohibits any person from bringing a cause of action in a court of competent jurisdiction for all damages resulting from a discharge or other condition of pollution covered by [sections] 376.30-376.319. Nothing in this chapter shall prohibit or diminish a party's right to contribution from other parties jointly or severally liable for a prohibited discharge of pollutants or hazardous substances or other pollution conditions. Except as otherwise provided in subsection (4) or subsection (5), in any such...
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