Powers v. Beacon C M P Corp.
| Decision Date | 01 July 2019 |
| Docket Number | CASE NO. 6:19-CV-00504 |
| Parties | DANIELLE ANN POWERS v. BEACON C M P CORP ET AL |
| Court | U.S. District Court — Western District of Louisiana |
Before the Court is the Motion to Remand and Abstention filed on behalf of Plaintiff, Danielle Ann Powers (Rec. Doc. 6), filed in response to the removal by Defendants, Johnson & Johnson and Johnson & Johnson Consumer Inc. (collectively "J&J") (Rec. Doc. 1). J&J opposes the Motion (Rec. Doc. 12), and Plaintiff has replied (Rec. Doc. 16). Colgate-Palmolive Company submitted a brief in which it "takes no position on the merits of the removal." (Rec. Doc. 8). The Motion was referred to the undersigned magistrate judge for review, report, and recommendation in accordance with the provisions of 28 U.S.C. §636 and the standing orders of this Court. Considering the evidence, the law, and the arguments of the parties, and for the reasons fully explained below, it is recommended that Plaintiff's Motion be GRANTED.
Plaintiff filed this lawsuit arising out of the death of her mother allegedly caused by talc-containing products distributed by J&J. Among various other defendants, Plaintiff sued J&J and Imerys Talc America, Inc., the alleged manufacturer of the talc contained in J&J products, in Louisiana state court in February 2016. (Rec. Doc. 1-2). This case is one of many such suits for talc-related damages pending around the country in both state and federal courts. (See documents at Rec. Doc. 1-2 to 1-6). According to Plaintiff, the parties were prepared to proceed with trial in January 2019, but for a stay pending appellate proceedings and Imerys's subsequent bankruptcy filing. (Rec. Doc. 6-1 at 8).
On February 13, 2019, Imerys (and affiliated companies) filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. (Case No. 19-10289-LSS). Thereafter, on April 18, 2019, J&J filed a Motion to Fix Venue for Claims Related to Imerys's Bankruptcy Under 28 U.S.C. §§157(b)(5) and 1334(b) in the United State District Court for the District of Delaware. (Rec. Doc. 1-2 to 1-6). In that Motion, J&J seeks to have all pending talc-related claims against it consolidated in the Delaware District Court on the grounds that these lawsuits are related to Imerys's bankruptcy. That Motion remains pending.
In the meantime, upon Imerys's filing of its Chapter 11 Petition, J&J removed this case to this Court, asserting the Court's jurisdiction over civil proceedings arising in or related to cases under Chapter 11. (Rec. Doc. 1). J&J has removed only those claims against it. Plaintiff filed the Motion for Remand and Abstention now before the Court. (Rec. Doc. 6). Plaintiff argues this case is not sufficiently "relatedto" Imerys's Chapter 11 to confer subject matter jurisdiction and that, regardless, the Court should remand on equitable grounds and/or abstain from maintaining jurisdiction in light of the advanced procedural posture of the case, as well as the fact that Plaintiff is no longer proceeding against Imerys in her state law-based claims. (See Rec. Doc. 6-1, fn. 9).
J&J removed this matter pursuant to 28 U.S.C. §1334(b) and §1452:
I. Whether the Court should defer ruling on Plaintiff's Motion to Remand pending a decision to fix venue by the Delaware Court.
Initially, J&J argued in its Notice of Removal that the Court should defer ruling on Plaintiff's Motion to Remand pending resolution of J&J's Motion to Fix Venue for Claims Related to Imerys's Bankruptcy, which J&J filed in the United States District Court in Delaware on April 18, 2019. (Rec. Doc. 1, ¶7). If the Delaware court grants J&J's Motion, all talc claims, including the instant case, would be consolidated in that Court. (See J&J's Motion to Fix Venue at Rec. Doc. 1-2). Therefore, J&J urges the Court to defer ruling on remand until the Delaware court determines the appropriate venue.
A threshold question is whether venue or jurisdiction should be decided first, since J&J essentially asks the Court to maintain jurisdiction, yet to defer to the Delaware District Court for a determination on venue. Although this is not the first court to face the issue, the Fifth Circuit has not before considered it. This Court is persuaded by the analysis in Briese v. Conoco-Philips Co., wherein the court determined that a "situation-specific" approach should be taken in determining whether to consider venue or jurisdiction first. Briese v. Conoco-Phillips Co., No. 2:08-CV-1884, 2009 WL 256591, at *3 (W.D. La. Feb. 3, 2009).
In a procedurally similar case, Marquette Transport Co. v. Trinity Marine, the court held that transfer to the bankruptcy court was proper for a decision as to jurisdiction (i.e. that transfer should occur before the jurisdiction determination).Marquette Transport Co. v. Trinity Marine Products, Inc., 2006 WL 2349461 (E.D.La. Aug. 11, 2006). In that case one of the defendants in a consolidated products liability action filed for bankruptcy in Illinois. Shortly thereafter, two defendants removed the cases to the Eastern District of Louisiana pursuant to 28 U.S.C. §§1334 and 1452. Id. The plaintiffs moved for remand arguing that federal jurisdiction was lacking or, alternatively, that the court should abstain from considering the matter. Id. at *2. Subsequently, another defendant filed motions to transfer the consolidated actions to Illinois. Id. In determining that transfer trumped a jurisdictional finding, the court reasoned that "because the jurisdictional question in this matter is necessarily intertwined with the pending bankruptcy proceedings, the Court finds that first considering defendants' transfer motions will serve the interest of judicial economy and that the bankruptcy court is best suited to resolve the issue of section 1334 jurisdiction." Id. at *2. Contrast Briese, wherein the bankruptcy proceedings had concluded long before removal, such that there was no reason to transfer to the bankruptcy court prior to considering jurisdiction. Briese, supra, at *3.
An alternative approach was taken by the court in Jackson v. Johnson & Johnson, an identical talc-related case against J&J and Imerys, recently decided by the Eastern District of Louisiana. Jackson v. Johnson & Johnson, No. CV 19-9983, 2019 WL 2537837 (E.D. La. June 20, 2019). In that case, the court declined toconsider the existence of J&J's pending Motion to Fix Venue (the same Motion J&J urges this Court to consider in deference), finding that "the possibility that this case may be transferred to Delaware at some undefined time justifie[d] neither the denial of plaintiff's motion to remand, nor deferring ruling on the motion." Id. at *4.
The Court agrees with the approach taken by the court in Jackson, supra. A finding by the Delaware District Court to consolidate the related cases and fix venue in that Court would have the same effect regardless of whether this Court were to maintain jurisdiction or remand to State Court. Thus, the Court finds it would be inequitable to hinge this Court's jurisdiction on an anticipated decision by the Delaware District Court.
II. Whether the Court has subject matter jurisdiction under 28 U.S.C. §1334(b).
Having determined to proceed with a jurisdictional analysis, the Court next considers the merits of Plaintiff's Motion to Remand. Plaintiff first argues that this Court does not have subject matter jurisdiction, because her claims are not "related to" the Debtors' Chapter 11 bankruptcy, as required by 28 U.S.C. 1334. "For the purpose of determining whether a particular matter falls within bankruptcy jurisdiction...it is necessary only to determine whether a matter is at least 'related to' the bankruptcy." Matter of Wood, 825 F.2d 90, 93 (5th Cir.1987). In adopting the test enunciated by the Third Circuit in Pacor, Inc. v. Higgins, the Fifth Circuitdefined the "related" inquiry as "whether the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy." Id., quoting Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir.1984). (Emphasis in original.)
J&J posits three reasons in support of its removal based upon "related to" jurisdiction: 1) the triggering of rights and obligations arising under supply agreements between J&J and the Debtors; 2) the Debtors' demand for coverage under J&J's insurance policies; and 3) an identity of interest between the Debtors and J&J. Plaintiff disputes all three grounds.
The Court declines to engage in a detailed analysis of whether the case is sufficiently "related to" the Debtors' bankruptcy, not only because of the Delaware District Court's pending decision on whether to consolidate all talc cases in that court, but also...
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