Falgout v. Anco Insulations, Inc. (E.D. La., Oct. 28, 2022)

Our plain-English summary of Falgout v. Anco Insulations, Inc. (U.S. District Court, Eastern District of Louisiana, October 28, 2022).

Ruby Falgout sued Avondale (Huntington Ingalls), Hopeman Brothers and others in Louisiana state court in 2021. She alleged she developed mesothelioma from laundering the work clothes of her husband, who worked at Avondale's Bridge City shipyard. Hopeman removed the case to federal court under the federal officer removal statute, and the court denied remand in 2021. Mrs. Falgout died in August 2022, and her husband and daughter continued the case as plaintiffs. The court then ruled that Avondale could not establish its federal contractor defenses, and Hopeman settled. The plaintiffs asked the court to decline supplemental jurisdiction and send the remaining state-law claims back to state court, since no federal questions remained and the parties were not diverse. The court denied the motion. It found no novel or complex state-law issues, and said the later failure of the federal defense did not remove jurisdiction that existed at removal. The case had been pending over a year, and trial was a month away, so judicial economy favored keeping it.

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: October 28, 2022
• Docket: Civil Action No. 21-1443
• Stage: Jurisdiction, venue or removal
• State: Louisiana

Outcome. The court denied the plaintiffs' motion to decline supplemental jurisdiction and remand to state court, keeping the case in federal court against defendant Avondale (Huntington Ingalls).

What the court held. A federal court that properly had federal officer removal jurisdiction at removal keeps that jurisdiction even after the federal contractor defense fails, and may keep exercising supplemental jurisdiction over state-law claims where no novel issues exist, the case is advanced and trial is near.

Issues decided: Government Contractor Defense and Removal, Venue, Removal and Transfer.

The people and their exposure

• Ruby Lee Marie Falgout (family member): mesothelioma; died

Who	Work	Where	When	Products
Ruby Lee Marie Falgout	laundered her husband's work clothes (shipyards and maritime work); dust brought home	Avondale's Bridge City, LA shipyard, Bridge City, Louisiana

The defendants

• Huntington Ingalls, Inc. (Avondale) (employer)
• Hopeman Brothers (contractor)
• Anco Insulations, Inc. (contractor)

Other decisions in this case

Other rulings from the same court in the same case, in our library:

• Falgout v. Anco Insulations, Inc. (October 13, 2022). The court granted the plaintiff's motion for partial summary judgment against Avondale, ruling that Avondale could not use the Boyle or Yearsley government contractor defenses, and denied as moot the motion against Hopeman, which had settled.
• Falgout v. Anco Insulations, Inc. (October 25, 2022). The court granted summary judgment to third-party defendants Foster Wheeler, GE and Amchem and dismissed Avondale's cross-claims against them.

Decisions this opinion cites

Earlier decisions in our library that the court cited:

• Williams v. Lockheed Martin Corporation (U.S. Court of Appeals, Fifth Circuit, 2021). The Fifth Circuit affirmed the district court's judgment for Lockheed Martin, holding that federal officer removal was proper, the discovery orders were not an abuse of discretion, summary judgment was correct, and the $10,000 sanction against plaintiffs' attorney stood.
• Latiolais v. Huntington Ingalls, Incorporated (U.S. Court of Appeals, Fifth Circuit, 2020). The en banc Fifth Circuit vacated the district court's order remanding the case to state court and remanded for further proceedings in federal court, ruling for Avondale (Huntington Ingalls) and against Latiolais on removal.
• Savoie v. Huntington Ingalls, Incorporated (U.S. Court of Appeals, Fifth Circuit, 2016). The Fifth Circuit vacated the district court's order remanding the case to state court, holding the shipyard showed a causal nexus for the survival strict liability claims, and remanded for the district court to decide whether the shipyard has a colorable federal defense; the Savoie family lost on the remand ruling.

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.

RUBY LEE MARIE FALGOUT,

v.

ANCO INSULATIONS, INC., ET AL., Section: "J" (3).

Civil Action No. 21-1443.

October 28, 2022.

United States District Court, E.D. Louisiana.

ORDER & REASONS

CARL J. BARBIER, District Judge.

Before the Court is an Emergency Motion Seeking the Court to Decline Supplemental Jurisdiction and Remand to State Court (Rec. Doc. 155) filed by Plaintiffs Ronald John Falgout, Individually and as the Independent executor of the Succession of Ruby Lee Marie Falgout, Deceased, and Rami Marie Harcom, Individually and as the Surviving Heir of Ruby Lee Marie Falgout. Defendant Huntington Ingalls, Inc. ("Avondale") opposes the motion. (Rec. Doc. 178). Having considered the motion and legal memoranda, the record, and the applicable law, the Court finds that the motion to remand (Rec. Doc. 155) should be DENIED, and the scheduled oral argument on the motion is cancelled.

FACTS AND PROCEDURAL BACKGROUND

Ruby Lee Marie Falgout originally filed this case against numerous parties in Civil District Court for the Parish of Orleans on March 26, 2021. (Rec. Doc. 1-1). Ms. Falgout alleged that she contracted mesothelioma as a result of asbestos exposure by laundering her husband's work clothes, who worked at Avondale's Bridge City, LA shipyard. On July 29, 2021, Defendant Hopeman Brothers filed for removal asserting jurisdiction under 28 U.S.C. § 1442, asserting two federal defenses. On August 4, 2021, Avondale filed a Notice of Joinder to Hopeman's removal. Ms. Falgout moved to remand on August 27, 2021. This Court denied the motion to remand on October 5, 2021 based on the federal officer removal statute. Ms. Falgout died on August 15, 2022, and her husband Ronald John Falgout was substituted on August 26, 2022. On October 11, 2022, Mr. Falgout amended the complaint to also add Rami Marie Harkcom, Ms. Falgout's daughter, as a plaintiff.

On September 21, 2022, Plaintiffs moved for partial summary judgment on Avondale's and Hopeman Brothers' government contractor defenses. Afterward, Hopeman Brothers settled all claims with the plaintiff on October 7, 2022. This Court granted Plaintiffs' motion for partial summary judgment as to Avondale's federal contractor defenses on October 13, 2022. On October 4, 2022, Avondale moved for partial summary judgment on Plaintiffs' intentional tort and fraud claims, which we granted on October 19, 2022.

Plaintiffs filed the instant motion on October 17, 2022, and Defendants filed the opposition on October 25, 2022. PARTIES' ARGUMENTS

Plaintiffs assert that, because this Court concluded that Avondale cannot establish a federal defense under Boyle v. United Technologies Corp., 487 U.S. 500 (1988) and Yearsley v. W.A. Ross Construction Co., 309 U.S. 18 (1940), all remaining claims and defenses arise under state law between parties that are not diverse. (Rec. Doc. 155, at 2). Thus, they argue, this Court should, at its discretion, decline to exercise supplemental jurisdiction over the remaining claims pursuant to 28 U.S.C. § 1367(c). (Rec. Doc. 155-1, at 3-4).

Avondale argues that this Court should continue to exercise jurisdiction because it satisfied all elements of federal officer jurisdiction at the time of removal. (Rec. Doc. 178, at 1). Further, Avondale argues that this Court should not decline

supplemental jurisdiction because (1) Plaintiffs' claims involve no novel or complex issues of state law, (2) the case has been pending in this course for more than one year, (3) discovery has been completed and multiple dispositive motions have been ruled on, and (4) trial is imminent. Id. at 1-2.

LAW

Although federal courts are courts of limited jurisdiction, "federal officer removal under 28 U.S.C. § 1442 is unlike other removal doctrines: it is not narrow or limited." State v. Kleinert, 855 F.3d 305, 311 (5th Cir. 2017); Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). Although the principle of limited federal court jurisdiction ordinarily compels federal courts to resolve any doubt about removal in favor of remand, courts should analyze removal under § 1442(a)(1) "without a thumb on the remand side of the scale." Savoie v. Huntington Ingalls, Inc., 817 F. 3d 457, 462 (5th Cir. 2016); see also Williams v. Lockheed Martin Corp., 990 F.3d 852, 859 (5th Cir. 2021) ("unlike the general removal statute, the federal officer removal statute is to be `broadly construed' in favor of a federal forum"). Nevertheless, it remains the removing party's burden of showing that federal jurisdiction exists. Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). Under 28 U.S.C. § 1442(a)(1), the federal officer removal statute, a federal court has subject matter jurisdiction if the defendant is "any person acting under [an officer] of the United States or of any agency thereof. . . . for or relating to any act under color of such office." 28 U.S.C. § 1442(a)(1). To qualify for removal under § 1442(a)(1), a defendant must show: (1) it has asserted a colorable federal defense, (2) it is a "person" within the meaning of the statute, (3) that has acted pursuant to a federal officer's directions, and (4) the charged conduct is connected or associated with an act pursuant to a federal officer's directions. Latiolais v. Huntington Ingalls, Inc., 951 F.3d 286, 296 (5th Cir. 2020).

Although the "general rule" in the Fifth Circuit is to "decline to exercise jurisdiction over pendent state-law claims when all federal claims are dismissed or otherwise eliminated from a case prior to trial, this rule is neither mandatory nor absolute." Batiste v. Island Recs. Inc., 179 F.3d 217, 227 (5th Cir. 1999) (holding that district court abused its discretion in dismissing state law claims in a case that had been pending in federal court for three years and lacked any novel or difficult issues of state law). Instead, the Court may, at its discretion, decline to exercise subject matter jurisdiction over claims for which there would be no original subject matter jurisdiction if:

(1) The claim raises a novel or complex issue of State law

(2) The claim substantially predominates over the claim or claims over which the district court has original jurisdiction

(3) The district court has dismissed all claims over which it has original jurisdiction, or

(4) In exceptional circumstances, there are other compelling reasons for declining jurisdiction.

28 U.S.C. § 1367(c).

DISCUSSION

In this case, the statutory factors above do not weigh in favor of this Court remanding the case back to State Court. First, although Plaintiffs argue that their negligence claims are more frequently litigated in state court, the asbestos exposure and failure to warn claims do not raise any novel or complex issues of Louisiana law. Further, this Court has already granted Defendants summary judgment on some of Plaintiffs' state law claims, which further weighs toward the conclusion that this Court should retain jurisdiction over the remaining claims.

Second, although Plaintiffs accurately submit there are no federal questions remaining in this case, a federal court does not lose jurisdiction "if the facts later indicate the federal defense fails." Williams v. Lockheed Martin Corp., 990 F.3d 852, 863 (5th Cir. 2021) (citing Rockwell Int'l Corp. v. United States, 549 U.S. 457, 474 n.6 (2007) ("[W]hen a defendant removes a case to federal court based on the presence of a federal claim, an amendment eliminating the original basis for federal jurisdiction generally does not defeat jurisdiction.")). If, at the time of removal, the record indicates the federal contractor defense was not "insubstantial on its face or obviously frivolous," the exercise of supplemental jurisdiction over the remaining state law claims is also proper. Id. Thus, our October 13, 2022 Order dismissing Avondale's federal defenses does not affect this Court's jurisdiction over this case.

Finally, this case has been pending in this court since August 2021, and trial is set for one month from now. Defendants have spent substantial time and effort preparing for trial, and if the case is remanded to state court, the trial date would be continued for multiple additional months. The Court is familiar with this case and has spent substantial time and resources considering the case. Thus, "the continued exercise of supplemental jurisdiction is warranted to serve judicial economy and provide a fair and timely administration of justice to the litigants." Roussell v. Huntington Ingalls, Inc., 20-2857, 2022 WL 110498, at [*3] (E.D. La. Jan. 12, 2022). This Court will therefore continue to exercise its supplemental jurisdiction over Plaintiffs' remaining state law claims.

Accordingly,

CONCLUSION

IT IS HEREBY ORDERED that the motion to remand (Rec. Doc. 155) is DENIED.

IT IS FURTHER ORDERED that oral argument scheduled for November 2, 2022 is CANCELLED.

IT IS FURTHER ORDERED that Plaintiffs' motion leave to file a reply memorandum in support of the motion to remand (Rec. Doc. 183) is GRANTED. The Clerk may file Plaintiffs' reply memorandum into the record.

Sources

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