Sheppard v. Liberty Mutual Insurance Company (E.D. La., Oct. 26, 2016)

Our plain-English summary of Sheppard v. Liberty Mutual Insurance Company (U.S. District Court, Eastern District of Louisiana, October 26, 2016).

Jesse Frank Sheppard sued in Louisiana state court, alleging he was exposed to asbestos daily while working for Freeport Sulphur Company, now Mosaic's predecessor. He alleged this caused asbestos-related cancer, lung cancer, or mesothelioma, first diagnosed in October 2015. He also sued makers and sellers of asbestos products and insurers. Mosaic removed the case to federal court, saying the Caminada facility was on the Outer Continental Shelf, so federal jurisdiction was proper under OCSLA. Sheppard then tried to amend his complaint to remove the Caminada allegations. The magistrate judge denied that request as futile and made in bad faith. Sheppard asked the district judge to review that ruling. The district judge applied the deferential clearly-erroneous standard and denied his motion. She reasoned that a party cannot use Rule 15(a) to amend away jurisdiction over a removed case. She also relied on Fifth Circuit authority upholding denial of amendments made to forum shop. Jurisdiction is judged by the claims as they stood at removal.

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 26, 2016
• Docket: Civil Action No. 16-2401
• Stage: Appeal from discovery or evidence ruling
• State: Louisiana

Outcome. The district court denied Sheppard's appeal and let stand the magistrate judge's order refusing him leave to amend his complaint to drop the Caminada facility allegations, finding the amendment futile and made in bad faith.

What the court held. A plaintiff may not use Rule 15(a) to amend a removed complaint in a way that would defeat federal jurisdiction. Denial of leave to amend is proper where the amendment is futile and made in bad faith to forum shop, because jurisdiction is judged on the claims as they stood at removal.

Issues decided: Trial Procedure and Discovery, Venue, Removal and Transfer.

The people and their exposure

• Jesse Frank Sheppard: lung cancer, mesothelioma

Who	Work	Where	When	Products
Jesse Frank Sheppard	employee of Freeport Sulphur Company	Freeport Sulphur Company facilities, including the Caminada facility	1967-1992

The defendants

• Mosaic Global Holdings, Inc. (employer)
• Liberty Mutual Insurance Company (insurer)
• Louisiana Insurance Guaranty Association (insurer)
• McCarty Corporation (manufacturer)
• Reilly-Benton Company, Inc. (supplier)
• Taylor-Seidenbach, Inc. (supplier)
• Bayer CropScience, Inc. (manufacturer)
• Union Carbide Corporation (manufacturer)
• Montello, Inc. (manufacturer)
• OneBeacon America Insurance Company (insurer)
• Pennsylvania General Insurance Company (insurer)
• Riley Power, Inc. (manufacturer)
• General Electric Company (manufacturer)
• Uniroyal Holding, Inc. (manufacturer)
• Chevron Phillips Chemical Company, LP

Other decisions in this case

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

• Sheppard v. Liberty Mutual Insurance Company (November 17, 2016). The court denied plaintiff Jesse Frank Sheppard's motion to remand, holding that federal jurisdiction under the Outer Continental Shelf Lands Act was proper, so defendants including Mosaic kept the case in federal court.
• Sheppard v. Liberty Mutual Insurance Company (November 17, 2016). The court granted Mosaic Global Holdings' motion to dismiss Sheppard's fraud claim against it under Rule 9(b), without prejudice and with leave to amend within twenty-one days.
• Sheppard v. Liberty Mutual Insurance Company (January 24, 2017). The court denied Jesse Frank Sheppard's second motion to remand to Louisiana state court and struck his amendments deleting the Caminada allegations, so Mosaic and the other defendants kept the case in federal court.
• Sheppard v. Liberty Mutual Insurance Company (January 24, 2017). The court granted Mosaic Global Holdings' motion to dismiss Sheppard's amended fraud claim with prejudice for failure to plead fraud with particularity, and denied Mosaic's motion to strike as moot.
• Sheppard v. Liberty Mutual Insurance Company (January 30, 2017). The court granted Liberty Mutual Insurance Company's motion for summary judgment, dismissing plaintiff Sheppard's claims against it in its individual capacity because it owed him no duty.
• Sheppard v. Liberty Mutual Insurance Company (February 2, 2017). The court denied Sheppard's motions to exclude settlement and collateral-source evidence, for in limine relief on undeposed experts, for judicial admission on asbestosis, and to exclude the Dr. Smith consultation note, and denied as moot his motion to strike a witness and the defendants' motion for partial summary judgment on asbestosis.
• Sheppard v. Liberty Mutual Insurance Company (February 2, 2017). The court granted the defendants' motion and excluded plaintiff Sheppard's treating physicians from giving expert opinion testimony, because he did not make the required Rule 26(a)(2)(C) disclosures; the physicians may offer only lay testimony.

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.

JESSE FRANK SHEPPARD,

v.

LIBERTY MUTUAL INSURANCE COMPANY, ET AL., Section "R" (3).

Civil Action No. 16-2401.

October 26, 2016.

United States District Court, E.D. Louisiana.

Jesse Frank Sheppard, Plaintiff, represented by Gerolyn Petit Roussel, Roussel & Clement.

Jesse Frank Sheppard, Plaintiff, represented by Benjamin Peter Dinehart, Roussel & Clement, Jonathan Brett Clement, Roussel & Clement, Lauren Roussel Clement, Roussel & Clement & Perry Joseph Roussel, Jr., Roussel & Clement. Liberty Mutual Insurance Company, Defendant, represented by Leigh Ann Tschirn Schell, Kuchler Polk Schell Weiner & Richeson, LLC, Joseph Henry Hart, IV, Kuchler Polk Schell Weiner & Richeson, LLC, Lori Allen Waters, Kuchler Polk Schell Weiner & Richeson, LLC, Magali Ann Puente-Martin, Kuchler Polk Schell Weiner & Richeson, LLC & Thomas A. Porteous, Kuchler Polk Schell Weiner & Richeson, LLC.

Louisiana Insurance Guaranty Association, Defendant, represented by Edwin Scott Hackenberg, Henchy, Verbois & Hackenberg LLC.

McCarty Corporation, Defendant, represented by Susan Beth Kohn, Simon, Peragine, Smith & Redfearn, LLP, April Ann McQuillar, Simon, Peragine, Smith & Redfearn, LLP, Douglas Kinler, Simon, Peragine, Smith & Redfearn, LLP, Douglas Watson Redfearn, Simon, Peragine, Smith & Redfearn, LLP, Janice M. Culotta, Simon, Peragine, Smith and Redfearn, LLP, Louis Oliver Oubre, Simon, Peragine, Smith & Redfearn, LLP & Nicole M. Loup, Simon, Peragine, Smith & Redfearn, LLP. Reilly-Benton Company, Inc., Defendant, represented by Thomas L. Cougill, Willingham Fultz & Cougill, Jamie M. Zanovec, Willingham Fultz & Cougill, Jeanette Seraile-Riggins, Manion Gaynor Manning LLP, Jennifer H. McLaughlin, Willingham Fultz & Cougill & Jennifer D. Zajac, Willingham Fultz & Cougill.

Taylor-Seidenbach, Inc., Defendant, represented by Christopher Kelly Lightfoot, Hailey, McNamara, Hall, Larmann & Papale, Edward J. Lassus, Jr., Hailey, McNamara, Hall, Larmann & Papale & Richard J. Garvey, Jr., Hailey, McNamara, Hall, Larmann & Papale.

Bayer CropScience, Inc., Defendant, represented by Deborah DeRoche Kuchler, Kuchler Polk Schell Weiner & Richeson, LLC, Ernest G. Foundas, Kuchler Polk Schell Weiner & Richeson, LLC, Francis Xavier deBlanc, III, Kuchler Polk Schell Weiner & Richeson, LLC, McGready Lewis Richeson, Kuchler Polk Schell Weiner & Richeson, LLC, Melissa M. Desormeaux, Kuchler Polk Schell Weiner & Richeson, LLC, Michael H. Abraham, Kuchler Polk Schell Weiner & Richeson, LLC, Milele N. St. Julien, Kuchler Polk Schell Weiner & Richeson, LLC & Perrey S. Lee, Kuchler Polk Schell Weiner & Richeson, LLC.

Union Carbide Coporation, Defendant, represented by Deborah DeRoche Kuchler, Kuchler Polk Schell Weiner & Richeson, LLC, Ernest G. Foundas, Kuchler Polk Schell Weiner & Richeson, LLC, Francis Xavier deBlanc, III, Kuchler Polk Schell Weiner & Richeson, LLC, McGready Lewis Richeson, Kuchler Polk Schell Weiner & Richeson, LLC, Melissa M. Desormeaux, Kuchler Polk Schell Weiner & Richeson, LLC, Michael H. Abraham, Kuchler Polk Schell Weiner & Richeson, LLC, Milele N. St. Julien, Kuchler Polk Schell Weiner & Richeson, LLC, Perrey S. Lee, Kuchler Polk Schell Weiner & Richeson, LLC & Trevor Matthew Cutaiar, Mouledoux, Bland, Legrand & Brackett, LLC.

Montello, Inc., Defendant, represented by Ernest G. Foundas, Kuchler Polk Schell Weiner & Richeson, LLC, McGready Lewis Richeson, Kuchler Polk Schell Weiner & Richeson, LLC & Perrey S. Lee, Kuchler Polk Schell Weiner & Richeson, LLC.

OneBeacon America Insurance Company, Defendant, represented by Adam Devlin deMahy, Taylor, Wellons, Politz & Duhe, APLC, Angela J. O'Brien, Taylor, Wellons, Politz & Duhe, APLC, Samuel Milton Rosamond, III, Taylor, Wellons, Politz &

Duhe, APLC & Susan Beth Kohn, Simon, Peragine, Smith & Redfearn, LLP.

Pennsylvania General Insurance Company, Defendant, represented by Adam Devlin deMahy, Taylor, Wellons, Politz & Duhe, APLC, Angela J. O'Brien, Taylor, Wellons, Politz & Duhe, APLC, Samuel Milton Rosamond, III, Taylor, Wellons, Politz & Duhe, APLC & Susan Beth Kohn, Simon, Peragine, Smith & Redfearn, LLP.

Riley Power, Inc., Defendant, represented by Jennifer E. Adams, Deutsch Kerrigan LLP, Arthur Wendel Stout, III, Deutsch Kerrigan LLP, Barbara Bourgeois Ormsby, Deutsch Kerrigan LLP, Marc John Bitner, Deutsch Kerrigan LLP & William Claudy Harrison, Jr., Deutsch Kerrigan LLP.

Mosaic Global Holdings, Inc., Defendant, represented by Charles B. Wilmore, Liskow & Lewis, Devin C. Reid, Liskow & Lewis, Patrick B. Reagin, Liskow & Lewis, Scott C. Seiler, Liskow & Lewis & Sherman Gene Fendler, Liskow & Lewis. General Electric Company, Defendant, represented by John Joseph Hainkel, III, Frilot L.L.C., Angela M. Bowlin, Frilot L.L.C., James H. Brown, Jr., Frilot L.L.C., Kelsey A. Eagan, Frilot L.L.C., Meredith K. Keenan, Frilot L.L.C. & Peter R. Tafaro, Frilot L.L.C..

Uniroyal Holding, Inc., Defendant, represented by Mary Reeves Arthur, Forman, Perry, Watkins, Krutz, LLP, Jason K. Elam, Forman, Watkins & Kurtz LLP & Katherine Weatherly Emma Trotter, Forman, Watkins & Krutz LLP.

Chevron Phillips Chemical Company, LP, Defendant, represented by Diana Cole Surprenant, Adams & Reese, LLP & Kathleen F. Drew, Adams & Reese, LLP.

Liberty Mutual Insurance Company, Defendant, represented by H. Minor Pipes, III, Barrasso,Usdin, Kupperman, Freeman & Sarver, LLC, Joseph Henry Hart, IV, Kuchler Polk Schell Weiner & Richeson, LLC, Kimberly R. Silas, Barrasso,Usdin, Kupperman, Freeman & Sarver, LLC & Susan Muller Rogge, Barrasso,Usdin, Kupperman, Freeman & Sarver, LLC. ORDER AND REASONS

SARAH S. VANCE, District Judge.

Before the Court is plaintiff Jesse Frank Sheppard's motion for appeal and review[1] of Magistrate Judge Knowles' order[2] denying Sheppard's motion to file a First Amended Complaint.[3] The Court denies Sheppard's motion because Sheppard has failed to show that Magistrate Judge Knowles' order is clearly erroneous or contrary to law.

I. BACKGROUND

This suit was originally filed in the Civil District Court for the Parish of Orleans.[4] Defendant Mosaic Global Holding Inc. removed to this Court on March 22, 2016.[5] In his complaint, Sheppard alleges that he was exposed to asbestos "[o]n a daily basis" as an employee of Mosaic's predecessor company, Freeport Sulphur Company.[6] This exposure allegedly caused Sheppard to develop asbestos-related cancer, lung cancer, and/or mesothelioma.[7] Although Sheppard stopped working for Freeport in the early- to mid-1990s,[8] Sheppard's asbestos-related ailments were first diagnosed in October 2015.[9]

In addition to Freeport/Mosaic, Sheppard sues several defendants involved in the manufacture, distribution, and sale of asbestos-containing products that Sheppard allegedly encountered in the course of his work.[10] Sheppard also brings claims against insurance companies that allegedly provided coverage to defendants for asbestos-related claims and withheld information from Sheppard about the danger of asbestos.[11]

Sheppard brings claims for "negligence, intentional tort, fraud, and strict liability," and alleges that all defendants are "jointly, severally, and in solidio liable."[12] He seeks damages for, among other things, physical and mental pain, loss of life, loss of income, and medical expenses.[13]

According to his complaint, Sheppard worked at several Freeport facilities, including Freeport's Caminada facility.[14] In its notice of removal, Mosaic asserts that the Caminada facility was located on the Outer Continental Shelf, and that jurisdiction

in this Court is therefore proper under the Outer Continental Shelf Act (OCSLA).[15] Shortly after removal, Sheppard moved to amend his complaint to remove any allegations regarding the Caminada facility.[16] Magistrate Judge Knowles denied Sheppard's motion, and found that Sheppard's proposed amendments are both futile and sought in bad faith.[17] Sheppard now seeks appellate review of the Magistrate Judge's order.[18]

II. LEGAL STANDARD

A magistrate judge's ruling on a non-dispositive civil motion may be appealed to the district court. Fed. R. Civ. P. 72(a). When a timely objection is raised, the district judge must review the Magistrate Judge's ruling and "modify or set aside any part of the order that is clearly erroneous or contrary to law." Id. Under this highly deferential standard, a magistrate judge's ruling "should not be rejected merely because the court would have decided the matter differently." Ordemann v. Unidentified Party, No. 06-4796, 2008 WL 695253, at [*1] (E.D. La. Mar. 12, 2008) (internal quotations omitted). Instead, the decision must be affirmed unless "on the entire record [the court] is left with a definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948) (discussing the "clearly erroneous" standard).

III. DISCUSSION

After reviewing the applicable law, the Magistrate Judge's order, and the parties' arguments, the Court finds no error in Magistrate Judge Knowles' order. Sheppard's attempt to amend under Rule 15(a) is unavailing because "[a] party may not employ Rule 15(a) to interpose an amendment that would deprive the district court of jurisdiction over a removed action." Whitworth v. TNT Bestway Transp. Inc., 914 F. Supp. 1434, 1435 (E.D. Tex. 1996) (quoting 6 Wright, Miller & Kane, Federal Practice & Procedure, § 1447 at 562 (2d ed. 1990).

Furthermore, as noted by the Magistrate Judge, the Fifth Circuit has specifically upheld denial of a motion for leave to amend when the district court found: (1) "bad faith on the part of [plaintiff] for forum shopping, noting that [plaintiff's] intention was to defeat federal jurisdiction," and (2) "that the amendment would be futile because a court looks at the claims in the state court petition as they existed at the time of removal when determining whether federal jurisdiction is present for purposes of removal." Bouie v. Equistar Chemicals LP, 188 F. App'x 233, 238-39 (5th Cir. 2006). The Court finds no mistake in the Magistrate's finding that the amendment at issue here is both futile and made in bad faith.

IV. CONCLUSION

For the foregoing reasons, Jesse Franks Sheppard's Motion to Review and Objections to Magistrate's Ruling on Plaintiff's Motion for Leave of Court to File First Amending Complaint as a Matter of Course Pursuant to Federal Rule of Civil Procedure 15(A)(1) is DENIED.

[1] R. Doc. 68.

[2] R. Doc. 60.

[3] R. Doc. 5.

[4] R. Doc. 1 at 1.

[5] Id.

[6] R. Doc. 1-1 at 5.

[7] Id. at 6.

[8] Sheppard's complaint is inconsistent on this point. Sheppard alleges variously that his tenure at Freeport, and exposure to asbestos, ran from "approximately 1967 through 1992," from "approximately 1967 through 1994," and "from 1967 through 1976." R. Doc. 1-1 at 5, 6. [9] R. Doc. 1-1 at 6.

[10] Id. at 6, 7.

[11] Id. at 3, 4, 8.

[12] Id. at 29.

[13] Id.

[14] R. Doc. 1-1 at 5.

[15] R. Doc. 1 at 2.

[16] R. Doc. 5.

[17] R. Doc. 60 at 5.

[18] R. Doc. 68.

Sources

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