Fuller v. Exxon Corp.

• Decision Date: 09 December 1999
• Docket Number: No. 99-0774-RV-S.,99-0774-RV-S.
• Citation: 78 F.Supp.2d 1289
• Parties: Alonzo FULLER, Sr., and Charles Fuller, Plaintiffs, v. EXXON CORPORATION, New PPC, Inc., Union Pacific Oil and Gas Company, and Latex Petroleum Corporation,<SMALL><SUP>1</SUP></SMALL> Defendants.
• Court: U.S. District Court — Southern District of Alabama

Page 1289

78 F.Supp.2d 1289

Alonzo FULLER, Sr., and Charles Fuller, Plaintiffs, v. EXXON CORPORATION, New PPC, Inc., Union Pacific Oil and Gas Company, and Latex Petroleum Corporation,¹ Defendants.

No. 99-0774-RV-S.

United States District Court, S.D. Alabama, Southern Division.

December 9, 1999.

James David Mills, Mobile, AL, Wyman O. Gilmore, Jr., Grove Hill, AL, for Plaintiffs.

Alan C. Christian, Johnstone, Adams, Bailey, Gordon & Harris, Mobile, AL, W. Alexander Mosely, Hand Arendall, L.L.C., Mobile, AL, John F. Tyra, Hamilton, AL, for Defendants.

MEMORANDUM OPINION AND ORDER

VOLLMER, District Judge.

This matter comes before the court on a motion by plaintiffs Alonzo Fuller, Sr., and Charles Fuller to remand this action to the Circuit Court of Clarke County, Alabama. The court heard oral argument on this matter on December 9, 1999. After carefully reviewing the law and considering the arguments of the parties,² the court concludes that the motion will be denied.

I. BACKGROUND

The Fullers originally filed this putative class action in Clarke County Circuit Court on July 22, 1999. They assert that in 1949, the Williams Family leased forty-six acres of land in Clarke County, Alabama, to the Humble Oil & Refining Company ("Humble"). Under the terms of that lease, Humble was allegedly permitted to recover oil, gas and minerals from the property in exchange for royalties representing a certain percentage of the sale proceeds of all deposits removed from the property. Shortly thereafter, defendant Exxon Corporation ("Exxon") merged with Humble and assumed Humble's duties and obligations under the lease. Then, over the next several years, various portions of the lease were assigned to defendants New PPC, Inc. ("PPC"), Union Pacific Oil And Gas Company ("Union Pacific"),³ and Latex Petroleum Corporation ("Latex Petroleum").

The complaint alleges that these defendants wrongfully reduced the recognized surface area associated with the lease, such that the lessors were paid royalties for only fifteen acres of land, despite the fact that the defendants continued to remove deposits from the entire forty-six acres. The Fullers bring the complaint on behalf of themselves, as lawful heirs of the Williams Family, and "all persons or entities" who are current or former lessors under the lease, as well as the successors, assigns or lawful heirs of those lessors. The complaint seeks declaratory and injunctive relief, equitable accounting, an unspecified amount of compensatory and punitive damages, the establishment of a constructive trust, and attorneys' fees.

Exxon removed this action on August 25, 1999. Although Union Pacific and Latex Petroleum filed joinders in the notice of removal, PPC did not. Exxon acknowledged that PPC had not joined in the removal, but it explained that this was due to the fact that PPC had not yet been served with process. Apparently unbeknownst to Exxon, however, PPC was served on August 24, 1999 — the day before Exxon filed its notice of removal.⁴ PPC has not since joined or otherwise consented to the removal.

In the notice of removal, Exxon invoked 28 U.S.C. § 1332, asserting complete diversity of citizenship and an amount in controversy greater than $75,000. Exxon acknowledged that the Fullers' complaint seeks unspecified compensatory and punitive damages, but it argued that the claims of all putative class members for punitive damages satisfied the federal jurisdictional minimum when considered in the aggregate. In support of its amount-in-controversy argument, Exxon submitted an affidavit from its attorney, Alan Christian, who stated:

As local counsel for Exxon, it appears in good faith that the amount in controversy exceeds $75,000.00, exclusive of interest and costs. I have practiced law in Mobile, Alabama[,] for over nineteen years and am familiar with verdicts against oil companies in cases where facts are proved such as those which are alleged in this case. Exxon denies the operative facts alleged by Plaintiffs and the purported class; but, it is my opinion that it would be more likely than not that a judgment in excess of $75,000.00, in aggregated punitive damages, exclusive of interest and costs, would be entered in this case, if Plaintiffs and the purported class prove those facts which Exxon denies.

Christian Aff. ¶ 3.

On October 18, 1999, the Fullers filed a motion to remand. Rather than raise the obvious argument that Exxon's removal was procedurally defective due to PPC's failure to join in the removal, the Fullers instead argued that this court lacks subject matter jurisdiction because the value of each plaintiff's and putative class member's claim is less than $75,000. To buttress this assertion, plaintiffs' counsel filed his own affidavit stating that, based upon his research, no single plaintiff or potential class member had a compensatory damages claim for an amount greater than $75,000. He also expressly waived, on behalf of the Fullers and the putative class, any claim to punitive damages:

notwithstanding allegations contained in Plaintiffs' complaint to the contrary, Plaintiffs and class members in the class seeking certification in association with this action waive any claim for punitive damages, and those claimants wishing to pursue punitive damages or damages in an amount greater than $75,000.00 may elect not to become a class member of the class this action seeks to certify.

Mills Aff. ¶ 9. Noting that Exxon's sole amount-in-controversy argument relied upon the complaint's original request for punitive damages, the Fullers asserted that their post-removal disclaimer of any such damages demonstrates that this court lacks subject matter jurisdiction over this action.

Exxon and Union Pacific filed separate briefs opposing remand. Union Pacific conceded that the punitive damage waiver, if valid, "may demonstrate that federal jurisdiction does not exist." However, both Union Pacific and Exxon argued that the disclaimer is neither binding nor effective because it amounts to a breach of the Fullers' fiduciary duty as class representatives. Alternatively, Union Pacific urged the court to hold, in the event the case is remanded, that the waiver is binding on every putative class member in the state court proceeding.

II. DISCUSSION

Removal of a civil case from state to federal court is proper only if the case could have originally been brought in federal court. See 28 U.S.C. § 1441(a). Exxon asserts that removal was proper here because this case could have originally been filed in this court pursuant to 28 U.S.C. § 1332. Section 1332 grants federal subject matter jurisdiction over actions between citizens of different states in which the amount in controversy is greater than $75,000. Before addressing this jurisdictional question, however, the court must first resolve the procedural issue of whether this case must be remanded due to PPC's failure to join in the removal.

While none of the parties have raised this procedural defect, the court addresses the issue sua sponte because it has a duty to remand any case that was improvidently removed from state court. See Paz v. Bonita Tomato Growers, Inc., 920 F.Supp. 174, 175 (M.D.Fla.1996); East v. Long, 785 F.Supp. 941, 944-45 (N.D.Ala. 1992). See also University of S. Ala. v. American Tobacco Co., 168 F.3d 405, 411 (11th Cir.1999) (removal statutes must be strictly construed in favor of remand). In analyzing this issue, the court notes that significant federalism concerns are raised whenever a case is removed from state to federal court, see Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941), and that the removing defendant therefore bears the burden of establishing that removal was proper. See Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1356 (11th Cir.1996). Accordingly, unresolved doubts concerning the propriety of the removal must be resolved by remanding the action to state court. See Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir.1994).

The proper procedure for removing a case from state to federal court is set forth at 28 U.S.C. § 1446. Under that statute, a defendant seeking to remove a civil case must file a notice of removal containing a short and plain statement of the grounds for removal, along with a copy of all process, pleadings and orders served upon the defendant, in the federal district court for the district and division within which the action is pending. See 28 U.S.C. § 1446(a). The defendant must do so within thirty days of the receipt of the complaint,⁵ or within thirty days after service of the summons if the complaint has already been filed in state court and need not be served on the defendant, whichever period is shorter. See 28 U.S.C. § 1446(b).

While not expressly stated in section 1446, it is well-established that all defendants in a multi-defendant case must join in the removal.⁶ See Chicago, R.I. & P. Ry. Co. v. Martin, 178 U.S. 245, 247-48, 20 S.Ct. 854, 855, 44 L.Ed. 1055 (1900); Tri-Cities Newspapers, Inc. v. Tri-Cities Printing Pressmen & Assistants' Local 349, 427 F.2d 325, 326-27 (5th Cir.1970);⁷ In re Federal Savings and Loan Ins. Corp., 837 F.2d 432, 434 n. 2 (11th Cir. 1988). The failure of any defendant to join in the removal within thirty days after the case became removable as required by sections 1446(a) and (b) constitutes a defect in the removal process. See In re Ocean Marine Mut. Protection and Indem. Assoc., Ltd., 3 F.3d 353, 355-56 (11th Cir. 1993).

A party seeking remand based on a procedural defect has thirty days "after the filing of the notice of removal under section 1446(a)" within which to file a remand motion. See 28 U.S.C. § 1447(c). However, the mere fact that a party has failed to file such a motion does not preclude remand. Federal district courts have the authority to remand an action sua sponte due to procedural defects in the removal process. See Mize v. Amercraft Corp., 874 F.Supp....