Van Horn v. Johnson & Johnson (In re Imerys Talc Am., Inc.), Case No. 19-10289-LSS
| Decision Date | 21 June 2019 |
| Docket Number | Adv. No. 19-01038-JDL,Case No. 19-10289-LSS |
| Parties | In re: Imerys Talc America, Inc., et al., Debtors. Sara Van Horn, Individually and as Next-of-Kin of David Earp, Deceased, Plaintiff, v. Johnson & Johnson and Johnson & Johnson Consumer, Inc., Defendants, and 3M Company a/k/a Minnesota Mining & Manufacturing Company, et al, State Court Defendants. |
| Court | U.S. Bankruptcy Court — Western District of Oklahoma |
The following is ORDERED:
In the United States Bankruptcy Court for the District of Delaware
This adversary proceeding is one of more than 2400 personal injury and wrongful death lawsuits filed against Johnson & Johnson ("J & J") in state courts across the country alleging injury (and death) from mesothelioma or ovarian cancer caused by exposure to asbestos from the talc used in J & J talcum powder products. J & J began removing many of these actions to federal court on the basis that they are related to the pending bankruptcy proceeding in Delaware of its primary talc supplier, Imerys Talc America, Inc. ("Imerys").1 As of this date, more than 300 of the state court cases removed by J & J to the federal courts have been remanded back to the state court. About a dozen other cases have remained in the federal courts awaiting the outcome of the Delaware District Court ruling on whether venue of all the removed cases should be in that court.
On April 11, 2018, David Earp died from malignant mesothelioma. On January 16, 2019, Plaintiff, his daughter and next-of-kin, Sara Van Horn, filed a negligence and strict products liability action in the District Court of Oklahoma County against J & J and numerous other entities (the "State Court Action").2 Plaintiff alleged that Mr. Earp's death from malignant mesothelioma resulted from exposure to asbestos fibers through his use of J & J's talc products, Johnson & Johnson's Baby Powder and Shower-to-Shower. Included as a defendant in the state court action was Imerys Talc America, Inc., one of J & J's talc suppliers.
On February 13, 2019, Imerys filed a petition for bankruptcy under Chapter 11 of the United States Bankruptcy Code in the District of Delaware. On the same date that Imerys filed bankruptcy the Plaintiff dismissed Imerys as a defendant in the State Court Action. On April 18, 2019, J & J filed a Motion to Fix Venue for Claims (the "Venue Motion") in the United States District Court for the District of Delaware ("Delaware District Court") to fix venue in the District of Delaware for all of the nation-wide state court talc actions against it. Within days of J & J filing its motion in Delaware to fix venue for claims related to Imerys, it began removing hundreds, if not thousands, of actions, including the ones before this Court, on the basis that they are "related to" Imerys' bankruptcy proceeding. J & J asserts that Plaintiff's claims against it are related to Imerys because J & J's supply agreements with Imerys contain contractual indemnifications and other liability-sharing provisions, including insurance policies, triggered by the Plaintiff's claims. Plaintiff seeks to have her claims remanded back to the District Court of Oklahoma County for trial.
Before the court for consideration are J & J's Notice of Removal filed April 18, 2019 (the "Notice of Removal") [Doc. 1]; Plaintiff's Motion to Remand filed May 2, 2019 (the "Motion to Remand") [Doc. 4]; Plaintiff's Brief in Support of Motion to Remand filed May 2, 2019 [Doc. 5]; Plaintiff's Statement Pursuant to Fed. R. Bankr. P. 9027(e)(3) filed May 6, 2019 [Doc. 7]; Plaintiff's Supplemental Brief in Support of Motion to Remand filed May 10, 2019 [Doc. 8]; Plaintiff's Second Supplemental Brief in Support of Motion to Remand filed May 13, 2019 [Doc.10]; Defendants Johnson & Johnson and Johnson & Johnson Consumer Inc.'s Opposition to Plaintiff's Motion to Remand filed May 16, 2019 (the"Opposition") [Doc. 14]; and Plaintiff's Reply to Johnson & Johnson's Opposition to Plaintiff's Motion to Remand filed May 22, 2019 (the "Reply") [Doc. 16]. A hearing on the matter was conducted on June 4, 2019, whereupon the Court took the matter under advisement. Having considered the pleadings, the arguments of counsel and the relevant legal authorities, the Court finds it lacks subject matter jurisdiction and therefore grants the Plaintiff's Motion to Remand as more fully discussed below.
Imerys filed its petition for bankruptcy on February 13, 2019. J & J filed its notice of removal sixty-four (64) days later on April 18, 2019. The Plaintiff first asserts that J & J's Notice of Removal was untimely relying upon 28 U.S.C. § 1446(b)(3) which provides that "if the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." The Plaintiff is mistaken as to the applicable statute which governs the timeliness of a case removed because of bankruptcy.
The timing of the removal differs under 11 U.S.C. § 1452 based on whether the removed action was originally filed pre-petition or post-petition. For a civil action initiated pre-petition, as is the case here, and removed under 11 U.S.C. § 1452, the notice of removal must be filed:
within the longest of (A) 90 days after the order for relief in the case under the Code, (B) 30 days after the entry of an orderterminating a stay, if the claim or cause of action in a civil action has been stayed under § 362 of the Code, or (C) 30 days after a trustee qualifies in a Chapter 11 reorganization case but not later than 180 days after the order for relief.
Fed.R.Bankr.P. 9027(a)(3). See, e.g. In re Southern Technical College, Inc., 144 B.R. 421 (Bankr. E.D. Ark. 1992) (); In re Trans-Service Logistics, Inc., 304 B.R. 809, 811 (Bankr. S.D. Ohio 2004) (); Shared Network Users Group, Inc. v. WorldCom Technologies, Inc., 309 B.R. 446, 449 (E.D. Pa. 2004); In re Aztec Industries, Inc., 84 B.R. 464, 469 (Bankr. N.D. Ohio 1987). J & J's Notice of Removal was timely filed.
As an initial matter, both in oral argument and in its Response, J & J urged this Court to defer ruling on the Plaintiff's Motion to Remand until after the Delaware District Court rules on J & J's pending Venue Motion brought pursuant to 28 U.S.C. § 157(b)(5). That statute provides that "[t]he district court shall order that personal injury tort and wrongful death claims shall be tried in the district in which the bankruptcy case is pending, or the district court in the district which the claim arose....". This section, however, is not a jurisdictional statute but only relates to the proper federal trial venue for personal injury and wrongful death tort claims. Stern v. Marshall, 564 U.S. 462, 479-80, 131 S.Ct. 2594 (2011) (). This removal is broughtunder 28 U.S.C. § 1452(a) which requires this Court to first make the threshold determination as to whether this Court has jurisdiction before exercising any prerogatives, including deferring the matter to the Delaware court.
It is well established that Federal Courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Insurance Company of America, 511 U.S. 375, 377, 114 S.Ct. 1673, 1675 (1994); Bender v. Williamsport Area School District, 475 U.S. 534, 541, 106 S.Ct. 1326, 1331 (1986). A "strong presumption" against removal jurisdiction exists. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). Because it is presumed that a cause lies outside this limited jurisdiction, the burden of establishing the contrary rests upon the party asserting jurisdiction. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 182-83, 56 S.Ct. 780, 782 (1936). Thus, although the Plaintiff's Motion to Remand is before the Court, J & J, as defendant in the present case seeking removal, bears the burden of proving subject matter jurisdiction in this Court. Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986).
J & J has removed Plaintiff's claims to this Court pursuant to 28 U.S.C. § 1452(a) which provides, in pertinent part, that "[a] party may remove any claim or cause of action in a civil action ... to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title." (Emphasis added). The federal courts' subject matter jurisdiction regarding bankruptcy matters is governed by 28 U.S.C. § 1334(a), which provides that "the districtcourts shall have original and exclusive jurisdiction of all cases under title 11", and 28 U.S.C. § 1334(b) which provides that "the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11." (Emphasis added). The district courts may, in turn, refer "any or all proceedings arising under title 11 or arising in or related to a case under title 11 . . . to the bankruptcy judges for the district." 28 U.S.C. § 157(a).
Inasmuch as the Plaintiff's claims are neither created or governed by provisions of the Bankruptcy Code, the parties agree, as does this Court, that the claims do not "arise in" or "arise under" the...
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