Nolan v. Boeing Co.

• Decision Date: 16 April 1990
• Docket Number: Civ. A. No. 90-221.
• Citation: 736 F. Supp. 120
• Parties: Kenneth NOLAN v. The BOEING COMPANY, et al.
• Court: U.S. District Court — Eastern District of Louisiana

736 F. Supp. 120

Kenneth NOLAN v. The BOEING COMPANY, et al.

Civ. A. No. 90-221.

United States District Court, E.D. Louisiana.

April 16, 1990.

Stephen Barnett Murray, Charles Joseph Murray, Murray Law Firm, New Orleans, La., for Kenneth P. Nolan.

Howard J. Daigle, Jr., Phelps, Dunbar, Marks, Claverie & Sims, New Orleans, La., Keith Gerrard, Richard C. Coyle, Perkins, Coie, Seattle, Wash., for Boeing Co.

Kenneth H. Laborde, Victoria Knight McHenry, Mary E. Garvey, McGlinchey, Stafford, Mintz, Cellini & Lang, New Orleans, La., Randal R. Craft, Jr., Haight, Gardner, Poor & Havens, New York City, for General Elec. Co., CFM Intern., Inc., CFM Intern., S.A.

ORDER AND REASONS

FELDMAN, District Judge.

This case, like the sixteen related cases consolidated with Civil Action No. 89-3657, arises out of the tragic crash of a Boeing model 737-400 aircraft operated by British Midland Airways, Ltd.; the ill-fated flight was enroute from London to Belfast. Kenneth Nolan is the administrator of the estate of Luka Berta Rita Stoker, a victim of the crash.

I.

Under recent amendments to 28 U.S.C. § 1332(c)(2), the legal representative of the estate of a decedent is deemed to be a citizen of the state of the decedent. Because Ms. Stoker was not a citizen of the United States, Mr. Nolan is therefore considered an alien. The exclusive grounds for jurisdiction based on diversity of citizenship are set forth in 28 U.S.C. § 1332(a). The statute provides for suits between a citizen of a state and a citizen of a foreign state, but it does not provide for suits between citizens of foreign states. Accordingly, diversity does not exist if aliens are on both sides of the litigation. Giannakos v. M/V BRAVO TRADER, 762 F.2d 1295, 1298 (5 Cir.1985). In this case, Nolan has sued The Boeing Company, General Electric Company, CFM International, Inc., and CFM International, S.A. The presence of CFMI, S.A., a French corporation whose principal place of business is in France, facially destroys diversity and would seem to deprive this Court of jurisdiction. Nevertheless, Boeing has removed this case from state court. It is Boeing's contention that CFMI, S.A. was fraudulently joined because a Louisiana court could not exercise personal jurisdiction over CFMI, S.A. Now before the Court are plaintiff's motion to remand, CFMI, S.A.'s motion to dismiss for lack of personal jurisdiction, and Boeing's motion to dismiss on the ground of forum non conveniens. Also brought into question by the parties' persistent chess match of tactical moves is the order in which the pending motions should be taken up by the Court.

II.

The doctrine of fraudulent joinder speaks to those situations in which there has been outright fraud in the content of plaintiff's pleading of jurisdictional facts, or in which one can say no possibility exists that the plaintiff would be able to establish a viable cause of action against the alien defendant in state court. Laughlin v. Prudential Ins. Co., 882 F.2d 187, 190 (5 Cir.1989). Boeing urges that there is no possibility that CFMI, S.A. could be held liable to plaintiff.

The fact setting here is somewhat eccentric and confronts the Court with a novel question of analysis. In the typical fraudulent joinder case, a resident plaintiff destroys complete diversity by suing a resident defendant along with nonresident defendants. In such a case, the court must determine whether the law might impose liability on the resident defendant, and the court frequently hears the plaintiff's motion to remand in conjunction with the resident defendant's motion to dismiss. The conceptual inquiry prompted by both such motions ordinarily deals with a kind of substantive guess about the merits of the claim urged against the resident. When a defendant makes a charge of fraudulent joinder, the question, generally framed, is "whether there is arguably a reasonable basis for predicting that the state law might impose liability on the facts involved." Bobby Jones Garden Apartments v. Suleski, 391 F.2d 172, 177 (5 Cir.1968). In other words, is there any possibility that the plaintiff might be able to establish liability against the so-called fraudulently joined defendant? See B. Inc. v. Miller Brewing Co., 663 F.2d 545 (5 Cir.1981). If so, the joinder is not condemned as fraudulent. This inquiry quite usually takes the form of a determination of whether the plaintiff has stated a viable cause of action against the resident defendant.¹

Because the fraudulently joined defendant is usually a resident of the state in which suit is brought, the question of the court's personal jurisdiction over the resident defendant does not arise. The pivotal inquiry goes directly to subject matter jurisdiction. Not so, here. In this case, because the plaintiff is a foreign citizen, it is the naming of a foreign defendant, and not a resident defendant, that destroys diversity. It is the Court's personal jurisdiction over the alien which becomes the focus of inquiry. Thus, this case differs from the better-known fraudulent joinder cases because Boeing says here that there is no possibility that plaintiff can establish liability against CFMI, S.A.—not because plaintiff is impeded from invoking a serious cause of action against CFMI, S.A.—but, rather, because plaintiff could not establish that CFMI, S.A. is subject to personal jurisdiction in Louisiana. Thus, the usual case focuses directly and only on subject matter jurisdiction in the remand context. Here, however, personal jurisdiction begins to directly implicate the Court's remand authority.

Plaintiff urges the Court to reach its motion to remand first. According to plaintiff, what the Court must determine is whether there is any reasonable basis for predicting that plaintiff could succeed in establishing jurisdiction over CFMI, S.A. under Louisiana law. See B., Inc., 663 F.2d at 550. Plaintiff says that the removing party bears the burden of establishing federal jurisdiction. That is generally true. "Where there are allegations of fraudulent joinder, the removing party has the burden of proving the fraud." Laughlin, 882 F.2d at 190. The burden on Boeing to show fraud is "a heavy one." Id. In determining whether remand is appropriate, this Court must evaluate all factual allegations in the light most favorable to the plaintiff, and resolve all uncertainties in controlling substantive law in favor of the plaintiff. Bobby Jones Garden Apartments v. Suleski, 391 F.2d 172 (5 Cir.1968). Although plaintiff bears the ultimate burden of proving that CFMI, S.A. is subject to personal jurisdiction in Louisiana, plaintiff suggests that it is Boeing, as the removing party, who bears the burden of proving that there is no possibility that plaintiff could recover from CFMI, S.A. If there is any possibility that plaintiff could establish personal jurisdiction over CFMI, S.A. in state court, this case is not cognizable in federal court. Thus, the argument tracks traditional fraudulent joinder doctrine.

Plaintiff's argument is compelling. Were the Court to address his motion first, the Court's inquiry would be as plaintiff wishes. However, when presented with both a motion to remand and a motion to dismiss for lack of personal jurisdiction, it is within the Court's discretion as to which motion it will decide first. Walker v. Savell, 335 F.2d 536 (5 Cir.1964). See also Schwegmann Bros. Giant Supermarkets, Inc. v. Pharmacy Reports, Inc., 486 F.Supp. 606 (E.D.La.1980). These cases seem to pay a heavy respect to judicial economy. In Walker, the court held that the district court had a right to decide questions of personal jurisdiction before it took any action on the plaintiff's motion to remand. 335 F.2d at 538. The court invoked economy considerations to support the decision because:

it was proper for the trial court to examine into this question immediately and not subject the defendant, so protesting, to a further hearing on the motion to remand and possibly to a further hearing in a state court where it would then have to raise once again the question of personal jurisdiction. Once appellee lodged in the district court its challenge to the jurisdiction in personam, it was entirely appropriate for that court to inquire into, and resolve, that issue.

335 F.2d at 539.

CFMI, S.A. would no doubt raise the question of personal jurisdiction in state court should the Court not reach it here, and remand instead. Because the parties have conducted discovery on and fully briefed the question of personal jurisdiction, which this Court is well equipped to decide, the Court finds it more convenient to deal here and first with the motion to dismiss.²

In Allen v. Ferguson, 791 F.2d 611 (7 Cir.1986), the Seventh Circuit also discussed the question of whether the district court has the discretion to determine whether a motion to remand discretion to determine whether a motion to remand or a motion to dismiss for lack of personal jurisdiction should be taken up first. The Allen court declined to express an opinion on the soundness of reading Walker as authorizing the district court to decide the more convenient motion; the Seventh Circuit limited the application of Walker to only those cases in which personal jurisdiction cannot be obtained. 791 F.2d at 615. Though this Court is sympathetic to the notions of judicial restraint expressed in Allen and hesitates to reach out to decide controversial questions, it finds that even under the more restrained approach of Allen it is appropriate in this case to reach the motion to dismiss first. This is a case in which it is alleged that personal jurisdiction cannot be obtained; unlike Allen, this is not a case in which a defective service of process could have been cured under 28 U.S.C. § 1448.

III.

A federal court may exercise personal jurisdiction over the defendants only to the extent which the state long-arm statute permits. Pedelahore v. Astropark, Inc., 745 F.2d 346 (5 Cir.1984). In 1987, the...