Hoschar v. Appalachian Power Co.

• Decision Date: 07 January 2014
• Docket Number: No. 12–2482.,12–2482.
• Parties: Roger HOSCHAR, and Judy Hoschar, Plaintiffs–Appellants, v. APPALACHIAN POWER COMPANY, Defendant–Appellee, and Industrial Contractors, Inc., Defendant.
• Court: U.S. Court of Appeals — Fourth Circuit

739 F.3d 163

Roger HOSCHAR, and Judy Hoschar, Plaintiffs–Appellants,

v.APPALACHIAN POWER COMPANY, Defendant–Appellee,andIndustrial Contractors, Inc., Defendant.

No. 12–2482.

United States Court of Appeals,Fourth Circuit.

Argued: Nov. 6, 2013.

Decided: Jan. 7, 2014.

ARGUED:Alexander Deane McLaughlin, THE CALWELL PRACTICE, PLLC, Charleston, West Virginia, for Appellants. Daniel Rhys Michelmore, JACKSON KELLY PLLC, Pittsburgh, Pennsylvania, for Appellee. ON BRIEF:John Skaggs, THE CALWELL PRACTICE, PLLC, Charleston, West Virginia, for Appellants. Brian R. Swiger, Michael P. Leahey, JACKSON KELLY PLLC, Charleston, West Virginia, for Appellee.

Before GREGORY, DAVIS, and THACKER, Circuit Judges.

Affirmed by published opinion. Judge THACKER wrote the opinion, in which Judge GREGORY and Judge DAVIS joined.

THACKER, Circuit Judge:

Appellants, Roger and Judy Hoschar (collectively “Appellants”), filed this civil action in the Circuit Court of Mason County, West Virginia, against Appellee, Appalachian Power Company (“APCO”), and Defendant, Industrial Contractors, Inc. (“ICI”), seeking damages for an infectious lung disease called histoplasmosis that Roger Hoschar (“Mr. Hoschar”) allegedly contracted while working as a boilermaker at one of APCO's coal-fired power plants. APCO removed the case to the United States District Court for the Southern District of West Virginia on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332. Appellants, West Virginia residents, sought to remand the action to state court, arguing that APCO's principal place of business is in Charleston, West Virginia, and that complete diversity is therefore lacking. The district court denied Appellants' motion, concluding that under the “nerve center” test, APCO's principal place of business is in Columbus, Ohio. After discovery, the district court awarded summary judgment to APCO, holding that, pursuant to West Virginia law, APCO did not owe a duty to Mr. Hoschar.

In this appeal, Appellants challenge both the district court's denial of the motion to remand and the district court's grant of APCO's motion for summary judgment. Because the record amply demonstrates that the location where APCO's officers direct, control, and coordinate APCO's activities is Columbus, Ohio, we conclude that APCO has carried its burden of establishing federal subject matter jurisdiction. With respect to APCO's motion for summary judgment, we hold that APCO did not have actual or constructive knowledge of a potential histoplasmosis risk, and therefore, APCO did not owe Mr. Hoschar a duty to guard against it. Accordingly, we affirm.

I.

A.

APCO owns the Philip Sporn power plant (“Sporn”) near New Haven, West Virginia. Sporn is a coal-fired power plant, generating electricity by burning coal to create steam and then passing the steam through a turbine. The power plant has five “precipitators,” which remove granular ash particles (“fly ash”) from the gasses produced by burning coal. When in operation, a precipitator generates significant heat, which can cause corrosion to its exterior steel siding and result in fly ash leakage.

ICI was hired by APCO to perform general maintenance at Sporn, which included welding metal patches to the exterior of the precipitators to prevent fly ash leakage. Mr. Hoschar was a boilermaker employed by ICI from March 2006 to March 2007. During that time, he worked exclusively at Sporn. His typical maintenance assignment consisted of hanging from a “pick”—that is, a suspended platform like those used by window washers—and welding steel patches over corroded portions of the ducts leading into and out of the Unit 5 precipitator (“Unit 5”). During his time at Sporn, Mr. Hoschar frequently worked in and around Unit 5, spending (by his estimate) at least five months there. Of note, he did not spend five consecutive months working on Unit 5. Rather, according to Mr. Hoschar's work records, he spent a total of 66 days performing elevated welding work on the exterior of Unit 5 over the course of 13 months.

Before welding any steel patches, Mr. Hoschar and other workers had to remove debris that had built up in the steel channels. Because Unit 5 is an outdoor structure, pigeons sometimes perched on its steel channels and left their droppings behind. Therefore, the debris usually consisted of approximately three to four inch accumulations of bird manure and two inch accumulations of fly ash. Mr. Hoschar removed the debris from the steel channels either by hand, with a wire brush, or using compressed air. When removing debris and while welding the steel patches, Mr. Hoschar wore a respirator over his face.

In March 2007, Mr. Hoschar was terminated from his employment with ICI. In 2009, as part of a routine preoperative test before Mr. Hoschar underwent knee surgery, which was unrelated to his work at Sporn, a chest x-ray revealed the presence of a mass on his right lung. Mr. Hoschar's physician feared the mass was cancerous and recommended he undergo a lobectomy to remove the portion of his lung containing the mass. After a portion of Mr. Hoschar's lung was removed, a biopsy revealed that the mass was not cancer, but instead was a disease called histoplasmosis.

Histoplasmosis is an infectious disease caused by inhaling the spores of a naturally occurring soil-based fungus called histoplasma capsulatum. The histoplasma capsulatum fungus is endemic in the Ohio Valley region, in which Sporn is located, because it grows best in soils with high nitrogen content. Once an individual inhales the fungus, it colonizes the lungs. However, the vast majority of people infected by histoplasmosis do not experience any symptoms of infection or suffer any ill effects.

While Mr. Hoschar was working at Sporn, the Occupational Safety and Health Administration (“OSHA”) website maintained a page entitled, “Respiratory Protection: Hazard Recognition.” One of the reference documents found on that page was a publication by the National Institute for Occupational Safety and Health (“NIOSH”) called, “Histoplasmosis: Protecting Workers at Risk” (the “NIOSH Publication”). The NIOSH Publication explained that the histoplasma capsulatum fungus “seems to grow best in soils having a high nitrogen content, especially those enriched with bird manure or bat droppings.” J.A. at 1052. ¹ It further noted that the fungus “can be carried on the wings, feet, and beaks of birds and infect soil under roosting sites or manure accumulations inside or outside buildings.” Id.

B.

On January 31, 2011, Appellants sued APCO and ICI for negligence in the Circuit Court for Mason County, West Virginia, seeking damages for Mr. Hoschar's histoplasmosis infection. Appellants allege Mr. Hoschar contracted histoplasmosis while working at Sporn as a result of inhaling contaminated dust when he swept out the mixtures of bird manure and fly ash that had accumulated in Unit 5's steel channels. Appellants also allege APCO did not provide any written or verbal warnings concerning the presence of aged bird manure around Unit 5 or of the health risks associated with accumulations of bird manure, such as histoplasmosis.

On March, 9, 2011, APCO removed this action to the United States District Court for the Southern District of West Virginia pursuant to 28 U.S.C. § 1332, explaining that APCO's principal place of business is in Columbus, Ohio, and complete diversity therefore exists between Appellants and APCO and ICI.² Appellants filed a motion to remand the case to state court on March 14, 2011, arguing that APCO's principal place of business is in Charleston, West Virginia, and complete diversity is thus lacking.

C.

Prior to the initiation of this lawsuit, Appellants' counsel—representing other clients (also West Virginia residents) in a different case also pending in the Southern District of West Virginia against APCO—took the deposition of Mark Dempsey, APCO's Vice President of External Affairs. The deposition was conducted pursuant to Federal Rule of Civil Procedure 30(b)(6), which required APCO to designate a representative to testify about topics relating to APCO's principal place of business. After taking the deposition, plaintiff's counsel in that case filed a motion to remand the action to West Virginia state court. That case settled, however, before a decision on the motion to remand was issued. Because the same jurisdictionalissue arises in this litigation, Appellants attached Dempsey's Rule 30(b)(6) deposition taken in the other case to his motion to remand in this case. In opposing Appellants' motion, APCO submitted an affidavit from Dempsey. The following description of the facts relevant to APCO's principal place of business is based on Dempsey's deposition testimony and his affidavit.

APCO—a subsidiary of American Electric Power Company (“AEP”)—is incorporated in Virginia and maintains offices in Charleston, West Virginia and Columbus, Ohio.

In his deposition, Dempsey testified that the Charleston office is an “administrative office,” but “[they] refer to it as headquarters.” J.A. 86. In fact, APCO's website lists Charleston as its headquarters. With respect to APCO's Charleston office being referred to as APCO's “headquarters,” Dempsey testified, “headquarters is probably a misnomer when applied to APCO.” Id. at 107. He explained that it became known as the headquarters simply because APCO's former president, Dana Waldo, lived in Charleston. Waldo is no longer employed by APCO.

According to Dempsey, of APCO's 27 officers, only the following five officers work in the Charleston office. Charles Patton, APCO's President and Chief Operating Officer, oversees and directs all aspects of APCO's day-to-day operations from Charleston. He coordinates the allocation of APCO's resources as well as APCO's communication with employees and the public. With respect to the employees who report directly to him, Patton performs a number of administrative tasks, including evaluating job performance and...