Lane v. Champion Intern. Corp., Civ. A. No. 93-0914-BH-M.

• Decision Date: 02 February 1994
• Docket Number: Civ. A. No. 93-0914-BH-M.
• Citation: 844 F. Supp. 724
• Parties: James H. LANE, Jacqueline M. Lane, and Robert C. Donnenwirth, on behalf of themselves and others similarly situated, Plaintiffs, v. CHAMPION INTERNATIONAL CORP., et al., Defendants.
• Court: U.S. District Court — Southern District of Alabama

844 F. Supp. 724

James H. LANE, Jacqueline M. Lane, and Robert C. Donnenwirth, on behalf of themselves and others similarly situated, Plaintiffs, v. CHAMPION INTERNATIONAL CORP., et al., Defendants.

Civ. A. No. 93-0914-BH-M.

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

February 2, 1994.

Bayless E. Biles, Bay Minette, AL, Mary E. Murchison, Foley, AL, Richard A. Freese, Burr & Forman, Birmingham, AL, J. Alan Cox, Tallahassee, FL, for plaintiffs.

G. Sage Lyons, Mobile, AL, Katherine Armstrong, Skadden, Arps, Slate, Meagher and Flom, New York City, Louis C. Woolf, Knoxville, TN, for defendants.

ORDER

HAND, Senior District Judge.

On November 8, 1993, defendant Champion International Corporation filed a notice of removal of this action from state court to the United States District Court for the Southern District of Alabama (tab 1). Now before this court are the plaintiffs' motion (tab 5) to transfer this action to the Honorable Richard W. Vollmer, United States District Judge for the Southern District of Alabama, a defendant's motion (tab 2) to strike the plaintiffs' amendment to second amended complaint, and the plaintiffs' motion to remand (tab 14).

1. Background

Plaintiffs James H. and Jacqueline M. Lane, and Eugenia H. Elebash filed this action in the state Circuit Court of Baldwin County, Alabama, on November 9, 1992, on behalf of themselves and others who own real property on Perdido Bay in Baldwin County, Alabama, and Escambia County, Florida.¹ The original defendants included Champion International Corporation (Champion), which has a paper mill in Cantonment, Escambia County, Florida; Doug Owenby, a citizen and resident of Florida who manages Champion's Cantonment plant; and several fictitious defendants. The plaintiffs' claims arise from their allegations that the fictitious defendants improperly released toxins and other pollutants into Eleven Mile Creek, which flows into Perdido Bay, and into Perdido Bay itself.

These allegations were previously before this court when defendant Champion filed another notice of removal² based on diversity jurisdiction under 28 U.S.C. § 1332. Although plaintiffs James H. and Jacqueline M. Lane and defendant Owenby were Florida domiciliaries, which would ordinarily prohibit diversity jurisdiction,³ defendant Champion contended diversity jurisdiction was possible because the plaintiffs had fraudulently joined Owenby. Judge Vollmer held that Owenby was not fraudulently joined and remanded the action to Baldwin County Circuit Court. Lane v. Champion Int'l Corp., 827 F.Supp. 701, 706-10 (S.D.Ala.1993) (hereinafter Order of June 14).

Since then there have been several occurrences. On October 19, 1993, the plaintiffs amended their second amended complaint to state "each class member is individually seeking damages, including compensatory and punitive damages, in an amount less than $50,000." Plaintiffs' Amendment to the Second Amended Complaint (hereinafter the Amendment).⁴ In so doing, the plaintiffs reduced their ad damnum considerably but did not otherwise change their allegations. Their original complaint claimed actual, compensatory, and punitive damages of $250 million for negligence and $500 million for each of the following: wantonness; breach of duty to warn; fraud, misrepresentation and deceit; nuisance; trespass; battery; assault; negligent infliction of emotional distress; intentional infliction of emotional distress; outrage; and strict liability. The plaintiffs also sought interest, costs, and attorneys fees, but interests and costs are irrelevant in computing the amount in controversy under 28 U.S.C. § 1332(a).

In another astonishing move, the plaintiffs' Amendment dropped all the requests for injunctive relief which the plaintiffs had made in their complaint. They had requested preliminary and permanent injunctions to stop the defendants from using, producing, creating, manufacturing, and releasing into Eleven Mile Creek and Perdido Bay, any toxic substances or other pollutants. They had also requested injunctions to force the defendants to clean up and remove from Eleven Mile Creek and Perdido Bay all toxins and other pollutants they had released there.

It is curious that the plaintiffs filed the Amendment one week after defendant Champion revealed to them its belief that if defendant Owenby were dismissed, the voluntary/involuntary rule would not prohibit Champion from again removing the action to federal court. See Letter of Chason and Chason, P.C., attorneys for defendant Champion, to the Honorable Charles C. Partin, Circuit Court Judge, Baldwin County (Oct. 12, 1993) (copy sent to the plaintiffs). It is curious because an affidavit submitted by the defense and unrefuted by the plaintiffs suggests that on October 1, 1993, before the plaintiffs reduced the ad damnum, the plaintiffs believed the voluntary/involuntary rule would bar removal of this action if defendant Owenby were dismissed. See Affidavit of Katherine Armstrong, attorney for defendant Champion (Nov. 8, 1993). Then on October 19, 1993, after receiving a copy of the letter to Judge Partin, the plaintiffs filed the Amendment, reducing the ad damnum considerably and dropping all requests for injunctive relief. They now vigorously assert the Amendment bars removal.

It is also curious that the Amendment appears not to have been the first amendment which the plaintiffs considered filing. On October 18, 1993, the plaintiffs served on defendant Champion, but did not file in Baldwin County Circuit Court, an amendment (not the Amendment) reducing the ad damnum to less than $50,000 per class member but not mentioning injunctive relief. Letter of Richard A. Freese to G. Sage Lyons, John Earle Chason, Barbara Wrubel, and Louis C. Woolf (Oct. 19, 1993). Enclosed with the October 19th letter was a copy of the Amendment, the one actually filed, which in addition to reducing the ad damnum, dropped the plaintiffs' requests for injunctive relief. This is curious because, in computing the amount in controversy in diversity actions seeking injunctive relief, some courts have considered the cost to the defendant of complying with injunctions. See Justice v. Atchison, Topeka & Santa Fe Ry. Co., 927 F.2d 503, 505 (10th Cir.1991); but see Indianer v. Franklin Life Ins. Co., 113 F.R.D. 595, 605 (S.D.Fla.1986). It appears the plaintiffs reasoned that if this court were inclined to use the so-called "defendant's viewpoint," the amount in controversy might exceed the diversity-jurisdiction requirement of 28 U.S.C. § 1332(a). By their Amendment, the plaintiffs eliminated any consideration of injunctive relief.

Another curiosity has more recently presented itself. One of the named plaintiffs has expressed goals for this lawsuit⁵ which can be achieved with certainty only through injunctions, despite the fact that the plaintiffs, via the Amendment, dropped their requests for injunctive relief, requests which, again, might have conferred the subject-matter jurisdiction of this court. The plaintiffs contend that a massive monetary award alone, with no injunctions, would force Champion to clean up Perdido Bay. That is not necessarily true. If Champion lost or settled such a lawsuit, it could pay the plaintiffs and then not choose to spend the additional sums on the bay.

Since the Circuit Court of Baldwin County dismissed defendant Owenby from this action on November 4, 1993, there has been complete diversity. The named plaintiffs are citizens of Florida and Alabama, and defendant Champion is a citizen of New York and Connecticut.⁶ Champion then filed its November 8, 1993, notice of removal (tab 1), which has brought this state-court action to federal court a second time.

2. Transfer

The first motion before the court is the plaintiffs' motion to transfer this action to Judge Vollmer. The plaintiffs contend that since Judge Vollmer is already familiar with the complex facts and procedural history of this action from having entered the Order of June 14, it should be transferred to him. The defendant counterargues that the issues now presented are different from those presented to Judge Vollmer. Although the issues do overlap to some extent, the issues are not so similar that they justify transfer in these particular circumstances.

3. Removal

3(a). The Voluntary/Involuntary Rule

The second motion before the court is the plaintiffs' motion to strike the Amendment, which could affect diversity jurisdiction. Also tied to the diversity-jurisdiction issue is the voluntary/involuntary rule.

The court notes that the right of removal is statutory and must be construed "to limit federal jurisdiction and prevent encroachment on the state court's right to decide cases properly brought before it, especially in diversity cases. The removing defendant or defendants bear the burden of establishing the right to invoke federal jurisdiction." Harris v. Huffco Petroleum Corp., 633 F.Supp. 250, 253 (S.D.Ala.1986) (citations omitted).

The court will first consider the voluntary/involuntary rule. In objecting to this court's diversity jurisdiction, the plaintiffs assert that on June 14, 1993, it was "held that `this court is aware that Champion would be unable to remove this action if the state court, on remand, were to grant Owenby's motion to dismiss.'" Plaintiffs' Motion to Transfer at 2, quoting Order of June 14 at 705, citing Weems v. Louis Dreyfus Corp., 380 F.2d 545, 545-49 (5th Cir.1967) (discussing the voluntary/involuntary rule) (emphasis added).⁷ The defendant, by contrast, asserts that this sentence from the Order of June 14 is dictum, not a holding, and that the question of what would happen if Owenby were dismissed was not before the court then.

A reading of the entire Order of June 14 reveals that the court did not decide what would happen if Owenby were dismissed.⁸ In remanding the action, the court considered only whether Owenby had been fraudulently joined. Concluding he had not been, the court remanded...