Reed v. Fina Oil & Chemical Co.

• Decision Date: 24 February 1998
• Docket Number: No. 1:97-CV-641.,1:97-CV-641.
• Citation: 995 F.Supp. 705
• Parties: Van Larry REED and Wilma E. Reed, Plaintiffs, v. FINA OIL & CHEMICAL COMPANY, Sun Company, Inc. (R & M), Union Oil Company of California, Texas Olefins, and Phillips Petroleum Company, Defendants.
• Court: U.S. District Court — Eastern District of Texas

995 F.Supp. 705

Van Larry REED and Wilma E. Reed, Plaintiffs, v. FINA OIL & CHEMICAL COMPANY, Sun Company, Inc. (R & M), Union Oil Company of California, Texas Olefins, and Phillips Petroleum Company, Defendants.

No. 1:97-CV-641.

United States District Court, E.D. Texas, Beaumont Division.

February 24, 1998.

COPYRIGHT MATERIAL OMITTED

Jeff Robert Branick, John Keith Hyde, Michael A. Havard, Provost & Umphrey, Beaumont, TX, for Van Larry Reed and Wilma E. Reed.

Gail Cucancic Jenkins, Jenkins Grove & Martin, Beaumont, TX, for Fina Oil & Chemical Co.

Michael L. Baker, Strong Pipkin Nelson & Bissell, Beaumont, TX, for Sun Co., Inc, (R & M) and Union Oil Co. of California.

Joe C. Holzer, Butler & Binion, Houston, TX, for Texas Olefins.

Stephen C. Dillard, James R. Wetwiska, Fulbright & Jaworski, Houston, TX, for Phillips Petroleum Co.

ORDER DENYING PLAINTIFFS' MOTION TO REMAND AND GRANTING DEFENDANT'S MOTION TO TRANSFER VENUE

SCHELL, Chief Judge.

Before the court are the following motions and filings:

a) Defendant Phillips Petroleum Company's Motion to Transfer Venue, filed on December 1, 1997. Plaintiffs filed a Response on December 17, 1997. Defendant Phillips Petroleum Company filed a Reply to Plaintiffs' Response on January 5, 1998. b) Plaintiffs' Motion to Remand, filed on December 9, 1997. Defendant Phillips Petroleum Company filed a Motion for Enlargement of Time to Respond to Plaintiffs' Motion to Remand on December 10, 1997, which was granted on December 19, 1997. Phillips filed a Response to Plaintiffs' Motion to Remand on January 23, 1998.

Upon consideration of the motions, responses, reply, and applicable law, the court is of the opinion that the Motion to Remand should be DENIED and Defendant's Motion to Transfer should be GRANTED.

I. BACKGROUND OF THIS LITIGATION

The plaintiffs originally filed this lawsuit in 1995¹ in state district court in Jefferson County, Texas. Plaintiffs claim that the decedent, Van Larry Reed ("Reed"), developed leukemia while he was employed by Defendant Phillips Petroleum Company ("Phillips") at its Borger, Texas, synthetic rubber facility.² Reed allegedly developed the leukemia as a result of exposure to chemicals manufactured or distributed by certain defendants. Phillips was not added as a defendant until October 17, 1997, after he died and his widow, Wilma Reed, amended the petition to include Phillips, her late husband's employer. Subsequently, on November 14, 1997, Phillips removed the case to federal court, alleging federal enclave jurisdiction and federal officer jurisdiction.³

Phillips asks the court to transfer this case under 28 U.S.C. § 1404(a) to the Northern District of Texas, Amarillo Division. Phillips contends that venue is proper in that court because a substantial part of the events or omissions giving rise to Plaintiffs' claims occurred at the Plains Butadiene Plant, which is within the Northern District, Amarillo Division. See 28 U.S.C. § 1391; Def.'s Mot. at 3-4. Phillips also argues that a transfer of venue is proper under § 1404(a).

Plaintiffs dispute Phillips' interpretation of the § 1404(a) factors, and claim that transfer is inappropriate in this case. Meanwhile, Plaintiffs have also filed a Motion to Remand, asking the court to remand the case back to state court. Pls.' Mot. to Remand at 11-12. Plaintiffs argue that this court does not have subject matter jurisdiction over the case since, according to Plaintiffs, the grounds for removal are without merit.

II. SUBJECT MATTER JURISDICTION AND A MOTION TO TRANSFER

It is often stated that a federal court cannot transfer a case if subject matter jurisdiction does not exist. See Coons v. American Horse Show Association, Inc., 533 F.Supp. 398, 400 (S.D.Tex.1982) (citing 15 CHARLES A. WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FED. PRACTICE & PROCEDURE § 3844 at 211). Some authority holds to the contrary, however, and would allow the court to transfer the case without first deciding the threshold question of subject matter jurisdiction. See Nose v. Rementer, 610 F.Supp. 191, 192 n. 1 (D.Del.1985) (holding that 28 U.S.C. § 1631 has the specific legislative intent to allow a court to transfer a case where it lacks subject matter jurisdiction to a court that has such jurisdiction).

Nevertheless, by filing a Motion to Remand the plaintiff has brought the question of subject matter jurisdiction to the attention of the court and the parties. The court believes that the threshold issue of federal question jurisdiction, based on the doctrines of federal officer jurisdiction and federal enclave jurisdiction, can be decided in this court. The parties have already submitted their arguments and briefs in support thereof, and Phillips has submitted lengthy and voluminous materials supporting subject matter jurisdiction.

The court finds that, in the interests of judicial economy, the Motion to Remand and the issue of subject matter jurisdiction should be addressed before the § 1404(a) Motion to Transfer. Deciding subject matter jurisdiction at this time will limit any delays in pursuing this litigation. If subject matter jurisdiction is in fact present in this court, the court can then decide the Motion to Transfer. Once the Motion to Transfer is decided, either this court (if the Motion to Transfer is denied) or the transferee court (if the Motion to Transfer is granted) will be able to quickly move forward with the litigation.

III. PLAINTIFF'S MOTION TO REMAND

A. Background of the Synthetic Rubber Industry

Certain historical facts submitted to the court by Phillips are germane to the Motion to Remand. Specifically, Phillips has claimed that federal officer removal and federal enclave removal are appropriate. To that end, Phillips has submitted materials explaining the nature of the synthetic rubber industry that was begun during World War II and continued in the years thereafter. Since this history is directly relevant to the Plains Butadiene Plant that is the subject of this litigation, a brief review of the history is appropriate.

In the years just prior to and during World War II, the synthetic rubber industry was overseen by the federal government because 90% of the nation's supply of natural rubber was threatened by the war. Def.'s Opp., Ex. D (Harry A. McDonald, Administrator of Reconstruction Finance Corporation, Report, "Program for Disposal to Private Industry of Government-Owned Rubber Producing Facilities" at 1-3 (1953)). With the backing and strict control of the federal government, a synthetic rubber manufacturing process was developed in the United States. Id. Previous attempts at developing commercially viable synthetic rubber had fallen short, but a concerted effort by the national government and private industry succeeded where private industry alone had failed. Id. Synthetic rubber filled the gap in the natural rubber supply, thus allowing the continued production and distribution of tires and other necessary materials for war production. Def.'s Opp., Ex. A (John W. Frey and H. Chandler Ide, eds., A HISTORY OF THE PETROLEUM ADMINISTRATION FOR WAR 1941-1945, at 191 (1946)). Portions of the synthetic rubber industry were controlled by various agencies of the federal government, including the War Production Board, the Reconstruction Finance Corporation, the Rubber Reserve Company, and the Defense Plant Corporation, among others. Id., Ex. A at 223, Ex. D at 1-2.

In order to manufacture a sufficient amount of synthetic rubber for the war effort, the Defense Plant Corporation acquired land for and contracted for the construction of 51 manufacturing plants that would provide both the necessary materials for the production of synthetic rubber and the finished product. Id., Ex. D at 2; see also id., Ex. E at 1 (May 11, 1942, Agreement of Lease between Defense Plant Corporation and Phillips Petroleum Company). Throughout World War II, the Defense Plant Corporation maintained ownership and control of all 51 facilities. The private companies that operated the plants were subject to the control of the federal government in various ways, as the companies were lessees of the plants and the production processes. Def.'s Opp., Ex. E. Further, the lessees' manufacturing processes were subject to the control of the Rubber Reserve Company and its successor, the Office of Rubber Reserve.⁴ The Rubber Reserve's specifications determined both the quantity and quality of output from the different facilities. Id., Ex. E at 2 (specifying output and requiring government approval throughout several phases of production).

One of the plants that was owned by the federal government and leased to a private company was the synthetic rubber complex in Borger, Texas, that is the subject of this litigation. The complex consisted of both a butadiene and copolymer plant. Id., Ex. E at App. B-IV. It began operations in 1943. Id. at 2.

After the termination of World War II and the Korean conflict, when the "war effort" had run its course, there was no longer a need for a government-controlled synthetic rubber process. Thus, Congress passed the Rubber Producing Facilities Disposal Act of 1953, which authorized the sale of the 51 synthetic rubber facilities to private industry. Id., Ex. F at 2 (citing P.L. 205, 83rd Cong., 67 Stat. 408 (1953) as authority for the sale of the Plains Butadiene Plant). Pursuant to this Act, Phillips purchased both the butadiene and copolymer plants located in Borger, Texas, in 1955. Id., Ex. F. Defendants have provided the court with both the general warranty deed conveying the Plains Butadiene Plant to Phillips and the bill of sale, dated April 27, 1955. Id., Exs. F-G.

B. Alleged Grounds for Removal

Phillips removed this case on November 14, 1997. Def.'s Notice of Removal at 1. In Defendant's Notice of Removal and in Defendant's Opposition to Plaintiff's Motion to Remand, Phillips claims that removal is appropriate on two grounds: federal officer jurisdiction under 28 U.S.C. §...