The St. Joe Co. v. Transocean Offshore Deepwater Drilling Inc.

• Decision Date: 18 March 2011
• Docket Number: C.A. No. 1:10–cv–968–LPS.
• Citation: 774 F.Supp.2d 596
• Parties: The ST. JOE COMPANY, Plaintiff,v.TRANSOCEAN OFFSHORE DEEPWATER DRILLING INC., Transocean Holdings LLC, Transocean Deepwater Inc., and Triton Asset Leasing GmbH, Defendant.
• Court: U.S. District Court — District of Delaware

774 F.Supp.2d 596

The ST. JOE COMPANY, Plaintiff,

v.TRANSOCEAN OFFSHORE DEEPWATER DRILLING INC., Transocean Holdings LLC, Transocean Deepwater Inc., and Triton Asset Leasing GmbH, Defendant.

C.A. No. 1:10–cv–968–LPS.

United States District Court, D. Delaware.

March 15, 2011.Opinion Denying Motion for Stay Pending Appeal March 18, 2011.

Edmond D. Johnson, Esquire, James G. McMillan, Esquire, and James H.S. Levine, Esquire of Pepper Hamilton LLP, Wilmington, DE, William A. Brewer III, Esquire, Michael J. Collins, Esquire, Kenneth N. Hickox, Jr., Esquire, Robert W. Gifford, Esquire, and James S. Renard, Esquire, of Bickel & Brewer, Dallas, TX, for Plaintiff.Andre G. Bouchard, Esquire, and Jeffery M. Gorris, Esquire, of Bouchard Margules & Friedlander, P.A., Wilmington, DE, Champbell E. Wallace, Esquire of Frilot LLC, New Orleans, LA, for Defendants.

MEMORANDUM OPINION

STARK, District Judge:I. INTRODUCTION

The St. Joe Company (“St. Joe” or “Plaintiff”), a Florida corporation, sued Defendants Transocean Offshore Deepwater Drilling, Inc. and Transocean Deepwater, Inc., which are Delaware corporations, Transocean Holdings LLC, a Delaware limited liability company, and Triton Asset Leasing GmbH, a Swiss entity with its principal place of business in Texas (collectively “Transocean” or “Defendants”), in the Delaware Superior Court. Transocean removed the action to this Court. Presently before the Court is Transocean's Motion to Stay Proceedings Pending MDL Panel's Transfer Ruling (D.I. 3) and St. Joe's Motion to Remand (D.I. 5). For the reasons set forth below, the Court will DENY the stay and GRANT the remand.

II. BACKGROUND

St. Joe filed this action on October 12, 2010 in Delaware Superior Court asserting claims for negligence, gross negligence, and strict liability pursuant to Florida law. On November 11, 2010, all Defendants removed the action to this Court.

St. Joe had earlier filed two related actions in Delaware Superior Court: one against Halliburton Energy Services Inc. (“Halliburton”), on August 27, 2010, and another against M–I LLC (“M–I”), on September 23, 2010. Halliburton and M–I removed their cases to this Court and both were assigned to another member of this Court.

All three of St. Joe's actions stem from the British Petroleum (“BP”) oil spill in the Gulf of Mexico, which occurred when the “Deepwater Horizon” oil rig exploded on April 20, 2010. The BP oil spill has spawned hundreds of lawsuits, approximately 400 of which are currently consolidated in multi-district litigation action number 2179 (“MDL 2179” or “the MDL Action”), entitled In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, pending in the Eastern District of Louisiana (“the MDL Court”). The Halliburton and M–I actions have been assigned to the MDL Court pursuant to a Transfer Order issued by the Joint Panel on Multidistrict Litigation (“JPML”) on February 7, 2011.¹

On November 30, 2010, the JPML issued Conditional Transfer Order No. 7 (“CTO 7”), which conditionally transferred the instant action to MDL 2179 as well. On December 21, 2010, St. Joe filed with the JPML a motion to vacate CTO 7.

In the meantime, on November 18, 2010, Transocean filed a motion to stay the instant action pending the JPML's transfer ruling. (D.I. 3) St. Joe opposed a stay and, in turn, filed a motion to remand on December 2, 2010. (D.I. 5; D.I. 8) On January 6, 2011, Transocean requested oral argument on its motion to stay and St. Joe's motion to remand. (D.I. 13) On the same day, St. Joe requested oral argument on the motion to remand. (D.I. 14) On January 18, 2011, the Court issued an Order scheduling oral argument on the motion to remand for February 10, 2011. (D.I. 15) On February 4, 2011, the Court amended its Order and advised the parties that oral argument would be heard on both the remand and stay motions. (D.I. 18)

After the JPML denied St. Joe's motion to vacate CTO 5 on February 7, 2011, Transocean filed an emergency Motion for Continuance of the Hearing Scheduled for February 10, 2011. (D.I. 20) The Court heard the parties by teleconference on Transocean's emergency motion on February 8, 2011. Finding that granting the motion for continuance would be tantamount to granting the motion to stay, and recognizing that the parties (as well as the Court) had expended substantial resources preparing for a hearing that was only days away—and which Transocean had requested—the Court denied the motion for continuance. The Court heard argument on the motion to stay and motion to remand on February 10, 2011. See Transcript (D.I. 28) (“Tr.”).

III. LEGAL STANDARDS

Whether or not to stay litigation is a matter committed to the discretion of the district court as part of its inherent power to conserve judicial resources by controlling its docket. See Cost Bros., Inc. v. Travelers Indem. Co., 760 F.2d 58, 60 (3d Cir.1985). This is true even in the context of an action that may, in the absence of a stay, eventually be transferred into an MDL action. See Benge v. Eli Lilly & Co., 553 F.Supp.2d 1049, 1050 (N.D.Ind.2008) (“The decision to issue a stay of proceedings when a party submits a motion for transfer to an MDL panel rests within the court's discretion.”).

Pursuant to 28 U.S.C. § 1441(a), “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants, to the district court of the United States for any district ... where such action is pending.” Among other things, district courts have original jurisdiction over “all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331.

After a defendant removes a state case to federal court, the plaintiff may file a motion to remand, and the district court must remand if there is no federal jurisdiction or if there is a defect in the removal procedure. See 28 U.S.C. § 1447(c). The authority to remand a removed case survives a JPML conditional transfer order. See Rio de Janeiro of Federated Republic of Brazil v. Philip Morris Inc., 239 F.3d 714, 715 (5th Cir.2001); see also 28 U.S.C. § 1407; R.P.J.P.M.L. 2.1(d).

IV. DISCUSSIONA. Motion to Stay

The Court first addresses Transocean's motion for a stay. By its motion, Transocean asks the Court not to decide the issues placed before it as a result of Transocean's decision to remove St. Joe's lawsuit from Delaware Superior Court to this Court. Instead, Transocean argues that this Court should exercise its discretion to stay this action and allow the JPML to decide whether this action should be transferred into the MDL Action. If, as all parties assume, the JPML does transfer this action, St. Joe will be able to renew its motion to remand in the MDL Action, where it would be decided by the Honorable Carl J. Barbier of the Eastern District of Louisiana, who is presiding over MDL 2179.

St. Joe opposes a stay. In St. Joe's view, there is no federal jurisdiction to hear this action, a fact that would be as true in the Eastern District of Louisiana as it is in this Court. A stay would prejudice St. Joe by causing further delay in resolution of its motion to remand, requiring St. Joe to continue to litigate in a federal forum, which lacks jurisdiction and which is not the forum in which St. Joe chose to bring its action. St. Joe believes it will take far longer for Judge Barbier to rule on its motion to remand than it will take this Court, given that in this Court the motion is already fully briefed, argued, and submitted for decision.

In determining whether to grant a stay, the Court typically considers three factors: the potential prejudice to the non-moving party, any hardship and inequity to the moving party in the absence of a stay, and judicial economy. See Enhanced Sec. Research, LLC v. Cisco Sys., Inc., 2010 WL 2573925, at *3 (D.Del. June 25, 2010). Here, the Court has determined that two of these three factors, as well as the overall balance, weigh against granting a stay.

Considering the first factor, St. Joe would be unfairly prejudiced by the delay that would necessarily result from a stay. St. Joe's motion to vacate CTO 7 is scheduled to be submitted to the JPML for decision without oral argument on March 30, 2011 (i.e., just over two weeks from the date of issuance of this Opinion). Based on the parties' predictions, the Court assumes that, if this Court were to enter a stay, the JPML would fairly quickly deny St. Joe's motion and transfer this action to the MDL Action. Thus, the Court estimates that, if this case were stayed, St. Joe's lawsuit against Transocean would become part of the MDL Action by the middle of April. Then, under the procedures Judge Barbier has instituted, St. Joe would be able to refile its motion to remand. ( See MDL 2179, Pretrial Order # 5, D.I. 3 Ex. 3) Briefing on the motion would likely follow. Given these circumstances, the Court surmises that, if a stay were entered, St. Joe's motion to remand would not even be ready for decision in the MDL Action until approximately two months from now. By contrast, this Court is prepared to rule on St. Joe's motion—which has been pending here for more than three months—today.

Moreover, if St. Joe is correct (and this Court believes that it is), then this case is currently pending in a court lacking jurisdiction. This jurisdictional defect would not be cured by a transfer to the Eastern District of Louisiana. St. Joe has a right to proceed in a timely manner on its claim and to do so in a court having jurisdiction. Granting Transocean's requested stay would delay further the time at which this will finally occur.

Turning to the second factor, the Court recognizes that there is some hardship to Transocean as a result of the denial of the requested stay, but the Court does not perceive this hardship to be particularly great. Part of the prejudice Transocean cites is that it will have to litigate...