Aaron v. Bancroft Bag, Inc. (2021)

Our plain-English summary of Aaron v. Bancroft Bag, Inc. (U.S. District Court, Eastern District of Louisiana, June 10, 2021).

Steven Aaron, Sr. was diagnosed with terminal mesothelioma in May 2020, which he alleged came from occupational exposure to asbestos-containing products sold or distributed by various defendants. He sued thirteen defendants in Orleans Parish state court, three of them non-diverse, and obtained a preferential trial date of June 14, 2021. On June 3, 2021, Ford Motor Company removed the case to federal court. Ford argued that a June 1 settlement with Monroe Spring & Brake (MSBI), a dismissal of Bancroft, and improper joinder of Taylor-Seidenbach made the case removable. Aaron moved to remand. The court held that Ford had to prove a binding settlement under Louisiana law, which requires a recitation in open court or a signed writing. Ford offered only a statement in a court filing that a settlement had been reached. The court found this insufficient, so MSBI remained a party and complete diversity was lacking. It also noted MSBI had not consented to removal. The court granted the motion and remanded the case to state court.

We wrote this summary from the court's opinion with the help of AI. It is not the court's wording, and it is not legal advice. The full opinion is below.

The decision

• Court: U.S. District Court, Eastern District of Louisiana
• Decided: June 10, 2021
• Docket: Civil Action No. 21-1082
• Stage: Jurisdiction, venue or removal
• State: Louisiana

Outcome. The district court granted plaintiff Steven Aaron's motion to remand and sent the case back to Orleans Parish Civil District Court, because removing defendant Ford Motor Company did not prove an enforceable settlement with non-diverse defendant MSBI.

What the court held. A case with a non-diverse defendant becomes removable only when that defendant is clearly out of the case, and a settlement with it counts only if it is binding and enforceable under state law; the removing defendant bears the burden of proving this.

Issues decided: Settlements and Releases, Venue, Removal and Transfer.

The people and their exposure

• Steven Aaron, Sr.: mesothelioma

Who	Work	Where	When	Products
Steven Aaron, Sr.

The defendants

• Ford Motor Company (manufacturer)
• Bancroft Bag, Inc.
• Monroe Spring & Brake, Inc.
• Taylor-Seidenbach, Inc.

Decisions this opinion cites

Earlier decisions in our library that the court cited:

• Landry v. Eagle, Inc. (U.S. District Court, Eastern District of Louisiana, 2012). The court granted the Landrys' motion to remand and sent the case back to Orleans Parish Civil District Court, because removing defendant J.A. Sexauer did not show complete diversity.

The court's opinion

The text below is Google Scholar's copy of the court's opinion, a public record. Numbers in brackets, such as [*921], mark where each page of the printed reporter begins.

STEVEN AARON, SR.,

v.

BANCROFT BAG, INC., ET AL. SECTION: "S" (1).

Civil Action No. 21-1082.

June 10, 2021.

United States District Court, E.D. Louisiana.

ORDER AND REASONS

MARY ANN VIAL LEMMON, District Judge.

IT IS HEREBY ORDERED that plaintiff's Emergency Motion to Remand (Rec. Doc. 6) is GRANTED, and this matter is hereby REMANDED to the Civil District Court for the Parish of Orleans.

I. BACKGROUND

Plaintiff, Steven Aaron, Sr., was diagnosed with terminal mesothelioma in May 2020, allegedly due to occupational exposure to asbestos-containing products sold or distributed by various defendants. Aaron filed the instant lawsuit in state court against thirteen defendants, three of which are non-diverse: Bancroft Bag, Inc. ("Bancroft"), Monroe Spring & Brake, Inc. ("MSBI"), and Taylor-Seidenbach, Inc. ("TSC"). Due to his terminal condition, Aaron obtained a preferential trial setting in state court, and trial was set for Monday, June 14, 2021 in Civil District Court for the Parish of Orleans. On June 3, 2021, defendant Ford Motor Company ("Ford") removed the matter to this court, arguing that when plaintiff announced the settlement of his claims against MBSI on June 1, 2021, the matter became removable, because plaintiff voluntarily released his claims against MSBI, Bancroft was previously dismissed on summary judgment unopposed by plaintiff, and the only remaining non-diverse defendant, TSI, is improperly joined because, with discovery closed and all trial evidence submitted, plaintiff has no reasonable basis to recover against TSI.

In an effort to preserve the current trial date, plaintiff filed the instant emergency motion, arguing that despite defendants' assertions, diversity is lacking, and remand is required. Plaintiff argues that it has not executed a settlement with MSBI, and that TSI is properly joined, and thus both of these non-diverse defendants are parties to this litigation. II. DISCUSSION

A. Legal Standard for Motions to Remand

Motions to remand to state court are governed by 28 U.S.C. 1447(c), which provides that "[i]f at any time before the final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." The removing defendant bears the burden of demonstrating that federal jurisdiction exists and therefore that removal was proper. Jernigan v. Ashland Oil. Inc., 989 F.2d 812, 815 (5th Cir. 1993). In assessing whether removal is appropriate, the court is guided by the principle, grounded in notions of comity and the recognition that federal courts are courts of limited jurisdiction, that removal statutes should be strictly construed. See Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). Doubts regarding whether federal jurisdiction is proper should be resolved against federal jurisdiction. Acuna v. Brown & Root, 200 F.3d 335, 339 (5th Cir. 2000).

B. Diversity Subject Matter Jurisdiction under § 1332(a)

Defendants removed this action alleging that this court has diversity subject matter jurisdiction under 28 U.S.C. § 1332(a) (1), which provides that district courts have original jurisdiction over civil actions where the amount in controversy exceeds $75,000, exclusive of interest and costs, and are between citizens of different States.

"[A] case that was not originally removable under our diversity jurisdiction because of the presence of a nondiverse defendant may be removed only after it is clear under applicable state law that the nondiverse defendant has been taken out of the case, leaving a controversy wholly between the plaintiff and the diverse defendant," Vasquez v. Alto Bonito Gravel Plant Corp., 56 F.3d 689, 694 (5th Cir. 1995). State law governs the question whether removal is proper because the nondiverse defendant is no longer effectively a party to the case. Est. of Martineau v. ARCO Chem. Co., 203 F.3d 904, 910 (5th Cir. 2000). A plaintiff's settlement with all nondiverse defendants makes a case removable, if the settlement is irrevocable, binding, and enforceable under state law. Landry v. Eagle, Inc. 2012 WL 2338736, at [*34] (E.D. La. June 19, 2012) (collecting cases) (citing Vasquez, 56 F.3d at 693-694).

In Louisiana, a settlement agreement is known as a compromise. La. Civ. Code art. 3071. "Mo be valid and enforceable, it must either be recited in open court and capable of being transcribed from the record of the proceeding, ... or it must be reduced to writing and signed by the parties or their agents." Sullivan v. Sullivan 671 So. 2d 315, 317-18 (La. 1996); see also, La. Civ. Code art. 3072.

C. Analysis

In the present case, defendant, who bears the burden of proof, has provided no evidence of a binding settlement agreement meeting the requirements of Louisiana law. The only evidence offered is a motion to dismiss a writ application previously pending in the Louisiana Supreme Court, in which counsel for plaintiff and MBSI recited that they had reached a settlement agreement. Notwithstanding that this statement was made in a pleading filed before a court, this alone does not establish the existence of a valid and enforceable settlement under Louisiana law. The statement, even in a court filing, is not "irrevocable, binding and enforceable [as a settlement] under state law." See Bush v. Waterman Steamship Corp., 2000 WL 913812, at [*2] (E.D. La. July 5, 2000) (quoting Vasquez, 56 F.3d at 693-694). It is entirely feasible that the representation was made in good faith because the parties had reached an agreement in principle and thus did not want to unnecessarily burden the Supreme Court with review of a likely unnecessary writ application, without having confected a binding agreement. Further, there is no evidence that plaintiff has moved to dismiss MSBI from the state court action, and MSBI remains an active defendant in the removed action pending in this court.[1]

Other courts in this district reviewing analogous factual scenarios have likeWise remanded such cases. For example, in Cella v. Allstate Prop. & Gas. Ins. Co. (ED. La. Oct. 13, 2010 (Vance, J.), the removing defendant argued that proof of a settlement releasing the nondiverse defendant existed because defense counsel sent a letter to plaintiffs counsel stating: "I am pleased that we have been able to settle this claim in an amicable manner. You will find enclosed the release agreement for your client's signature." at [*2]. Defense counsel also pointed to a check sent to plaintiff's attorney in "[f]ull and final settlement of any and all claims for bodily injury arising from loss of 10/5/2009." Id. Notwithstanding this indicia that the parties had at some point reached a tentative agreement, the court found that "[t]o determine whether a binding settlement agreement existed.... on ... the date of removal, the Court must examine the alleged settlement agreement under Louisiana law." Id. (citing Est. of Martineau, 203 F.3d at 910). No binding settlement agreement or evidence thereof having been submitted, the court remanded the matter.

Similarly, in Landry v. Eagle. Inc., 2012 WL 2338736 (ED. La. June 19, 2012) (Barbier, J.), the removing defendant argued that diversity was defeated by a settlement between plaintiff and a non-diverse party. The court disagreed, noting that the only evidence put forward to prove the settlement was a joint pre-trial outline referencing plaintiffs' claims against one of the defendants, and a docket sheet from the Civil District Court website stating that the case had been settled. Id. at 4. The court found that this evidence "[s]tanding alone, ... does not establish that the settlement agreement constitutes a valid and enforceable compromise under Louisiana law." Id. Concluding that the removing defendant "failed to demonstrate by a preponderance of the evidence that Plaintiffs have settled their claims against [the non-diverse defendant], or that any settlement the parties may have theoretically reached constitutes a valid compromise under Louisiana law," the court remanded the case. Id.

Like these analagous scenarios, in the present case, defendant's evidence fails to establish an enforceable settlement agreement under Louisiana law. As in Cella, no settlement agreement has been presented to the court to examine. As in

CAROL L. MICHEL 500 POYDRAS ST. ROOM C-151 CLERK NEW ORLEANS, LA 70130 June 10, 2021 Clerk Civil District Court Parish of Orleans 421 Loyola Ave., Room 402 New Orleans, LA XXXXX-XXXX RE: Steven Aaron, Sr. v. Bancroft Bag, Inc., etal Civil Action No. 21-1082 S (1) Your No. 20-6964 "N-8"

Very truly yours, CAROL L. MICHEL By: ________ Deputy Clerk Enclosure

Landry, a reference to a settlement agreement in a court-filed document, without more, does not establish the existence of an enforceable agreement. Based on the record before it, the court finds that Ford has failed to meet its burden of proving an enforceable settlement agreement. Without such proof, MSBI is still a party to this litigation, and complete diversity is lacking. Accordingly,

IT IS HEREBY ORDERED that plaintiffs Emergency Motion to Remand (Rec. Doc. 6) is GRANTED, and this matter is hereby REMANDED to the Civil District Court for the Parish of Orleans.

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

OFFICE OF THE CLERK

Dear Sir:

I am enclosing herewith a certified copy of an order entered by this court on 6/10/2021 remanding the above-entitled case to your court.

[1] The court also notes that MSBI did not consent to removal. "When a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action." 28 U.S.C. § 1446(b)(2)(A). Accordingly, in the notice of removal is defective on this ground as well.

Sources

• The opinion on Google Scholar
• Louisiana asbestos laws
• Louisiana asbestos exposure sites