Guillory v. Ppg Industries, Inc.

Citation434 F.3d 303
Decision Date20 December 2005
Docket NumberNo. 04-31073.,04-31073.
PartiesLouis Britt GUILLORY and Stanley Milton Gims, Plaintiffs-Appellants, v. PPG INDUSTRIES, INC., et al., Defendants, Richard Dick Holliday, James Rock, John Shamburger, and Terry Messenger, Defendants-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

J. Arthur Smith, III (argued), Rebecca Eileen May-Ricks, Baton Rouge, LA, for Plaintiffs-Appellants.

Paul Leonard Veazey, Jr. (argued), Stockwell, Sievert, Viccellio, Clements & Shaddock, Lake Charles, LA, for Defendants-Appellees.

Appeal from the United States District Court for the Western District of Louisiana.

Before HIGGINBOTHAM, WIENER, and DENNIS, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Plaintiffs-Appellants Louis Britt Guillory and Stanley Milton Gims brought various state-law claims for injuries resulting from a chemical release of toxic and hazardous materials against PPG Industries, Inc. and various officers and employees of PPG: Richard Holliday, Terry Messenger, John Shamburger, and James Rock (collectively, "the individual defendants").1 Following removal on the basis that the individual defendants were improperly joined to defeat diversity jurisdiction, the district court granted summary judgment, dismissing with prejudice all claims against the individual defendants, and denied Appellants' motion to remand. Because Appellants have no reasonable possibility of recovery against the individual defendants, we affirm.

I

This dispute centers around liability for a release of various toxic and hazardous materials at PPG's facility in Lake Charles, Louisiana. For approximately sixteen hours on April 4 and 5, 2002, various chemicals were released into the air when a rupture disk failed on the DH Still at PPG's Waste Treatment Unit. A rupture disk is a thin plate of material that is designed to break or burst at a certain pressure. The rupture disk failed at a pressure below its design rating. The precise cause of the premature rupture remains unknown.

Appellants, working on the site as contractors for Zachary Construction Company, contended that they were exposed to the chemical release and inhaled dangerous levels of toxic and hazardous materials. On April 16, 2003, Appellants brought the instant suit against PPG and the individual defendants in the 14th Judicial District Court for the Parish of Calcasieu, Louisiana.

On May 16, 2003, PPG filed a timely notice of removal on the basis of diversity jurisdiction, asserting that the individual defendants were improperly joined.2 Over five months after removal, the Appellants had not moved to remand due to the presence of the individual, nondiverse defendants. On October 17, 2003, Magistrate Judge Alonzo P. Wilson noted the presence of the nondiverse defendants and indicated that he was considering entering summary judge sua sponte in favor of these defendants, provided that PPG could show that the Appellants had no reasonable possibility of recovery against them.

Subsequently, Appellants moved to remand the matter to Louisiana state court, and over the next ten months, the parties conducted a variety of discovery. Eventually, the magistrate judge, on August 20, 2004, recommended that claims against the individual defendants be dismissed with prejudice and that the motion to remand be denied. According to the magistrate judge, by the uncontroverted evidence, Rock, Shamburger, and Messenger had not been delegated responsibility for preventing the April 2002 chemical release and Holliday — PPG's plant manager — had not delegated responsibility for the safety issues without due care. With the individual defendants out of the case, there was complete diversity and federal jurisdiction under 28 U.S.C. § 1332.

Appellants did not file written objections to the magistrate judge's findings of fact and conclusions of law and, on September 22, 2004, the district court, Judge Trimble, accepted the recommended findings and conclusions, adding that, after "an independent review of the record," the magistrate judge's findings and conclusions were "entirely correct." Appellants timely filed a notice of appeal. We have jurisdiction under 28 U.S.C. § 1291.

II

The primary issue in this case is whether the district court erred in concluding that the individual defendants were improperly joined to defeat diversity jurisdiction. Before turning to the merits, we first determine the proper standard of review and then determine whether the magistrate judge's improper joinder inquiry in this case comports with our recent en banc decision in Smallwood v. Illinois Central Railroad Co.3

A

To start, the parties dispute the standard of review. As PPG contends, when a party fails to file timely written objections to a magistrate judge's findings-of-fact and conclusions-of-law, our review is for plain error.4 However, when the district court engages in an independent evaluation of the record, as here,5 the standard of review depends upon the issue on appeal.6

Thus, we review the district court's decision to deny Appellants' motion to remand de novo.7 There are two ways to establish improper joinder: "(1) actual fraud in the pleading of jurisdictional facts, or (2) the inability of the plaintiff to establish a cause of action against the non-diverse party in state court."8 The first — actual fraud — is not at issue in this case. With the second, we must determine "whether the defendant has demonstrated that there is no possibility of recovery by the plaintiff against the in-state defendant, which stated differently means that there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against an in-state defendant."9

The burden of proof is on the removing party.10 To determine the validity of an improper joinder claim, we "must evaluate all of the factual allegations in the light most favorable to the plaintiff, resolving all contested issues of substantive fact in favor of the plaintiff."11 In addition, we must resolve all ambiguities in the controlling state law in the plaintiff's favor.12 We do not determine whether the plaintiff will actually or even probably prevail on the merits of the claim, but look only for a possibility that the plaintiff might do so.13

In reviewing a grant of summary judgment, we apply the same standards that govern the district court.14 Summary judgment is appropriate if the court, viewing the facts in the light most favorable to the nonmoving party, determines "that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law."15 The burden rests initially on the moving party to establish by competent evidence that no issue of material fact exists.16 Only then must the nonmoving party assume the burden of showing the existence of a specific, disputed factual issue.17

B

Appellants challenge the procedure followed by the magistrate judge in deciding the improper joinder issue. In Smallwood v. Illinois Railroad Co., we summarized the two avenues for deciding the improper joinder issue:

There has been some uncertainty over the proper means for predicting whether a plaintiff has a reasonable basis of recovery under state law. A court may resolve the issue in one of two ways. The court may conduct a Rule 12(b)(6)-type analysis, looking initially at the allegations of the complaint to determine whether the complaint states a claim under state law against the in-state defendant. Ordinarily, if a plaintiff can survive a Rule 12(b)(6)-type challenge, there is no improper joinder. That said, there are cases, hopefully few in number, in which a plaintiff has stated a claim, but has misstated or omitted discrete facts that would determine the propriety of joinder. In such cases, the district court may, in its discretion, pierce the pleadings and conduct a summary inquiry.18

Here, it is undisputed that Appellants can satisfy a Rule 12(b)(6)-type inquiry; Appellants' petition ties the actions of the individual defendants to various safety responsibilities concerning the April 2002 chemical release.19 The magistrate judge, however, decided to pierce Appellants' pleadings, conducting a summary inquiry into whether Appellants had any reasonable basis of recovery against the individual defendants. Appellants contend this inquiry exceeded the boundaries contemplated by Smallwood.

To start, we review both the magistrate judge's decision to pierce the pleadings20 and his procedure for determining improper joinder for an abuse of discretion.21 We recognize, however, "that a summary inquiry is appropriate only to identify the presence of discrete and undisputed facts that would preclude plaintiff's recovery against the in-state defendant."22 In addition, Smallwood cautioned that "the inability to make the requisite decision in a summary manner itself points to an inability of the removing party to carry its burden."23

In considering whether the magistrate judge's pierce-the-pleading procedure was an abuse of discretion, the length of time necessary to determine improper joinder is a relevant consideration.24 Removal deprives the plaintiff of his chosen forum, and every day litigating in federal court is a day spent not litigating in state court. It is imperative that a motion to remand be resolved as swiftly as possible so that the plaintiff maintains his right to choose the forum in which to litigate.25

Here, PPG removed this case in May 2003, arguing that the individual defendants were improperly joined. For five months, Appellants made no effort to raise this issue with the district court. In October 2003, the magistrate judge recognized the absence of complete diversity due to the presence of the individual defendants and indicated that the joinder issue needed to be resolved. For purposes of determining whether the magistrate judge's pierce-the-pleading inquiry was an abuse of...

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