Hart v. Bayer Corp.

• Decision Date: 06 January 2000
• Docket Number: N,CIBA-GEIGY,RHONE-POULENC,No. 98-60496,98-60496
• Citation: 199 F.3d 239
• Parties: (5th Cir. 1999) RODALTON HART, ET AL., Plaintiffs, RODALTON HART; JOSEPH BURRELL; EDWARD MURTAGH; CARL PEPPER; RICHARD PERRY; GEORGE T. WYNNE; WALTER L. UPCHURCH; TOM SLACK; SHARPE PLANTING COMPANY II, a Partnership; L&L PLANTING CO., a Partnership, Plaintiffs-Appellants, v. BAYER CORPORATION; FMC CORPORATION; ZENECA INC.; AMERICAN CYANAMID COMPANY;INCORPORATED; E.I. DUPONT DE NEMOURS AND COMPANY; VALENT U.S.A. CORPORATION;CORPORATION; AND LARRY MAKAMSON, Defendants-Appellees. o. 98-60811 Summary Calendar
• Court: U.S. Court of Appeals — Fifth Circuit

Page 239

199 F.3d 239 (5th Cir. 1999)

RODALTON HART, ET AL., Plaintiffs, RODALTON HART; JOSEPH BURRELL; EDWARD MURTAGH; CARL PEPPER; RICHARD PERRY; GEORGE T. WYNNE; WALTER L. UPCHURCH; TOM SLACK; SHARPE PLANTING COMPANY II, a Partnership; L&L PLANTING CO., a Partnership, Plaintiffs-Appellants, v. BAYER CORPORATION; FMC CORPORATION; ZENECA INC.; AMERICAN CYANAMID COMPANY; RHONE-POULENC INCORPORATED; E.I. DUPONT DE NEMOURS AND COMPANY; VALENT U.S.A. CORPORATION; CIBA-GEIGY CORPORATION; AND LARRY MAKAMSON, Defendants-Appellees.

No. 98-60496, No. 98-60811

Summary Calendar

UNITED STATES COURT OF APPEALS, FIFTH CIRCUIT

January 6, 2000

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Appeals from the United States District Court For the Southern District of Mississippi

Before DAVIS, DUHE, and PARKER, Circuit Judges:

ROBERT M. PARKER, Circuit Judge:

Plaintiffs brought state-law claims alleging that various pesticides manufactured and marketed by the corporate defendants, and one pesticide promoted by individual defendant, corporate agent Larry Makamson, failed to control or prevent tobacco budworm infestation of their crops ultimately resulting in substantial damage to their crops. Plaintiffs appeal dismissal of their case by the United States District Court for the Southern District of Mississippi, Jackson Division. Specifically, plaintiffs appeal from the grant of judgment on the pleadings in favor of defendants. While this order constituted the final adjudication of the case, the order incorporated earlier district court rulings on preemption and fraudulent joinder. Since, these rulings formed the legal basis for the district court's dismissal, they are the substantive decisions we must review on appeal. We REVERSE and REMAND to the district court with instructions to remand the case to state court.

I. FACTS AND PROCEDURAL HISTORY A.Background

Rodalton Hart ("Hart"); Joseph Burrell; Edward Murtagh; Carl Pepper; Richard Perry; George T. Wynne; Walter L. Upchurch;¹ Tom Slack; Sharpe Planting Company II, a Partnership; and L&L Planting Company, a Partnership, brought suit against pesticide manufacturers Bayer Corp., FMC Corp., Zeneca Incorporated, American Cyanamid, Rhone-Poulenc Incorporated, E.I. Dupont De Nemours and Company, Valent U.S.A. Corp., Ciba-Geigy Corporation, and agent Larry Makamson. Plaintiffs are cotton farmers who applied defendants' chemicals to enhance production by controlling crop diseases and infestations. During the 1995 cotton season, despite application of defendants' chemicals, Plaintiffs were unable to successfully control or prevent budworm infestation of their crops. Nevertheless, the corporate defendants and their agents, such as Makamson, allegedly continued touting the effectiveness of their chemicals. The alleged failure of the chemicals to perform, the alleged misrepresentations by defendants concerning the effectiveness of the chemicals, and the resulting losses suffered by plaintiffs prompted this lawsuit.

B.Procedural History

Plaintiffs filed their complaint in Mississippi state court asserting four state common-law causes of action: breach of the implied warranty of merchantability (actually a breach of implied warranty of fitness for a particular purpose claim), breach of good faith and fair dealing, intentional infliction of emotional distress, and negligence. Plaintiffs did not assert any federal causes of action. On June 3, 1996, defendants removed to federal district court claiming that there was both federal question and diversity jurisdiction. Defendants claimed federal question jurisdiction existed based on the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), 7 U.S.C. 136 et seq., which defendants raised as a defense to plaintiffs' claims. Diversity jurisdiction purportedly was proper because plaintiffs were Mississippi citizens, all corporate Defendants were citizens of other jurisdictions, and the sole in-state defendant, Larry Makamson, was fraudulently joined. The district court denied plaintiffs' motion to remand on the grounds that it had subject matter jurisdiction upon the dual theories advanced by Defendants.

After addressing jurisdiction, the parties turned to the question of whether FIFRA preempted Plaintiffs' state-law claims. Ultimately, the district court agreed with defendants' arguments that FIFRA completely precluded all of plaintiffs' state-law claims. Nevertheless, defendants did not immediately seek dismissal of the case. Shortly thereafter, the district court entered an order staying discovery. Some four months later, the parties agreed that the case was ripe for dismissal based upon the court's earlier rulings on preemption and fraudulent joinder. Defendants then moved for judgment on the pleadings and the district court dismissed plaintiffs' claims but only as to defendant Makamson. Plaintiffs appealed that ruling and sought permission to ask the district court for an order dismissing the case as to the remaining defendants. We granted permission, and on November, 23, 1998, the district court issued the requested order. Plaintiffs then filed a notice of appeal on December 2, 1998, and they are now before us appealing the district court's rulings.

II. DISCUSSION

Plaintiffs raise three issues on appeal. First, plaintiffs maintain that FIFRA does not provide a basis for federal jurisdiction in this case because it is not a complete preemption statute. Second, plaintiffs contend that the lower court erred in finding that the in-state defendant was fraudulently joined since plaintiffs have properly asserted claims against Makamson for which he could be found independently liable. Third, plaintiffs argue that while FIFRA may preempt some state-law damage actions, it does not bar state common-law claims that are not based upon inadequacies in labeling or packaging. Since we hold that the district court erred in concluding that (1) a "FIFRA defense" is sufficient to establish federal question jurisdiction, and (2) corporate agent Makamson was fraudulently joined, neither we nor the district court have jurisdiction to reach the issue of whether FIFRA bars plaintiffs' state-law claims.

A. Standard of Review

We begin by establishing the appropriate standard of review. This court reviews de novo a district court's conclusions on questions of law. Voest-Alpine Trading USA Corp. v. Bank of China, 142 F.3d 887, 891 (5th Cir. 1998). The district court's fraudulent joinder analysis turned solely upon such a question, namely the proper interpretation of Mississippi tort law. Judgment for defendants also was premised upon the district court's ruling on federal preemption. The district court's preemption ruling is a determination of original jurisdiction, and therefore, is also subject to de novo review. See Hook v. Morrison Milling Co., 38 F.3d 776, 780 (5th Cir. 1994).

B. Absence of Federal Question Jurisdiction

Federal question jurisdiction arises when a plaintiffs' set forth allegations "founded on a claim or right arising under the Constitution, treaties or laws of the United States." See 28 U.S.C. 1441(b), 1331. In general, questions concerning federal question jurisdiction are resolved by application of the "well-pleaded complaint" rule. Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 152-53 (1908). The rule provides that the plaintiff's properly pleaded complaint governs the jurisdictional inquiry. If, on its face, the plaintiff's complaint raises no issue of federal law, federal question jurisdiction is lacking. See Franchise Tax Bd. v. Laborers Vacation Trust, 463 U.S. 1, 10 (1983).

Since, on its face, plaintiffs' complaint sets forth only state-law claims, defendants relied upon the "complete preemption" exception to the well-pleaded-complaint rule in their efforts to establish jurisdiction. Under this exception, if a federal law is found to "completely preempt" a field of state law, the state-law claims in the plaintiff's complaint will be "recharacterized" as stating a federal cause of action. See Caterpillar, Inc. v. Williams, 482 U.S. 386, 393 (1987)("Once an area of state law has been completely pre-empted, any claim purportedly based on that pre-empted state law is considered, from its inception, a federal claim, and therefore arises under federal law."). The recharacterization of a plaintiff's state-law claim will also make removal proper on the basis of federal question jurisdiction. See Heimann v. National Elevator Indus. Pension Fund, 187 F.3d 493, 499 (5th Cir. 1999).

Yet the mere fact that a given federal law might "apply" or even provide a federal defense to a state-law cause of action, is insufficient alone to establish federal question jurisdiction. To give rise to federal question jurisdiction, a court must find complete preemption. See Franchise Tax Bd., 463 U.S. at 23-24. "In complete preemption a federal court finds that Congress desired to control the adjudication of the federal cause of action to such an extent that it did not just provide a federal defense to the application of state law; rather, it replaced the state law with federal law and made it clear that the defendant has the ability to seek adjudication of the federal claim in a federal forum." 14B CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE 3722.1 (3d ed. 1998). In sum, to establish federal question jurisdiction through the invocation of a federal preemption defense, the defendant must demonstrate that Congress intended not just to "preempt a state law to some degree," but to altogether substitute "a federal cause of action for a state cause of action." Schmeling v. NORDAM, 97 F.3d 1336, 1341 (10th Cir. 1996).

Here, defendants argue that all of plaintiffs' state common law claims asserted against them are, in reality, federal claims. Defendants contend that FIFRA,² by its express prohibition on state-imposed labeling or packaging requirements, so throughly preempts all state common law claims in the...