Sheppard v. Liberty Mutual Insurance Company (E.D. La., Jan. 24, 2017, removal or venue)

Our plain-English summary of Sheppard v. Liberty Mutual Insurance Company (U.S. District Court, Eastern District of Louisiana, January 24, 2017).

Jesse Frank Sheppard sued in Louisiana state court, alleging he worked in various positions for Freeport Sulphur Company, Mosaic's predecessor, and was exposed to asbestos daily. He said the exposure caused asbestos-related cancer, lung cancer, and/or mesothelioma, diagnosed in October 2015. He also sued makers and sellers of asbestos products and insurers. Mosaic removed the case to federal court under the Outer Continental Shelf Lands Act, relying on his allegations about exposure at its Caminada facility. The court had already refused to let him delete those allegations and had denied an earlier remand motion. He then amended his complaint anyway and moved again for remand. The court denied the motion and struck the amendments. It held that the amendment violated its earlier order. It also held that jurisdiction is judged by the claims as they stood at removal, and a plaintiff cannot amend away the basis for federal jurisdiction.

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: January 24, 2017
• Docket: Civil Action No. 16-2401
• Stage: Jurisdiction, venue or removal
• State: Louisiana

Outcome. 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.

What the court held. Federal jurisdiction under OCSLA is judged by the claims as they existed at removal, and a plaintiff cannot defeat it by amending away the allegations that support it. Because all his claims arise out of or in connection with operations on the Outer Continental Shelf, the court did not need supplemental jurisdiction.

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	various positions	Freeport Sulphur Company facility (Caminada)	approximately 1967 through 1992

The defendants

• Mosaic Global Holdings Inc. (employer)
• Liberty Mutual Insurance Company (insurer)
• Louisiana Insurance Guaranty Association (insurer)
• Reilly-Benton Company, Inc.
• Taylor-Seidenbach, Inc.
• Union Carbide Corporation
• Montello, Inc.
• Riley Power, Inc.
• General Electric Company
• Uniroyal Holding, Inc.
• 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 (October 26, 2016). 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.
• 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 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.

Civil Action No. 16-2401.

January 24, 2017.

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, Frilot L.L.C., Skylar B. Rudin, 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.

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.

Union Carbide Corporation, Defendant, represented by Deborah DeRoche Kuchler, Kuchler Polk Schell Weiner & Richeson, LLC, McGready Lewis Richeson, 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, 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, Samuel L. Burk, Kuchler Polk Schell Weiner & Richeson, LLC, pro hac vice & Trevor Matthew Cutaiar, Mouledoux, Bland, Legrand & Brackett, LLC.

Montello, Inc., Defendant, represented by McGready Lewis Richeson, 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, Milele N. St. Julien, Kuchler Polk Schell Weiner & Richeson, LLC, Perrey S. Lee, Kuchler Polk Schell Weiner & Richeson, LLC & Samuel L. Burk, Kuchler Polk Schell Weiner & Richeson, LLC, pro hac vice.

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.

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., John Willard Elder, Paine Bickers LLP, pro hac vice, John A. Heller, Sidley Austin, LLP, 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, 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, Alex E. Cosculluela, Adams & Reese, LLP & David M. Stein, 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, Skylar B. Rudin, Kuchler Polk Schell Weiner & Richeson, LLC & Susan Muller Rogge, Barrasso,Usdin, Kupperman, Freeman & Sarver, LLC.

ORDER AND REASONS

SARAH S. VANCE, District Judge.

Plaintiff Jesse Frank Sheppard moves, for the second time, to remand this case to the Civil District Court for the Parish of Orleans. Because jurisdiction in this Court remains proper under the Outer Continental Shelf Lands Act (OCSLA), Sheppard's motion is denied.

I. BACKGROUND

This suit was originally filed in the Civil District Court for the Parish of Orleans.[1] Defendant Mosaic Global Holdings Inc. removed to this Court on March 22, 2016.[2] In his complaint, Sheppard alleges that he worked "in various positions" for Mosaic's predecessor company, Freeport Sulphur Company.[3] During his time at Freeport, Sheppard was allegedly exposed to asbestos "[o]n a daily basis."[4] Sheppard asserts that this exposure caused him to develop asbestos-related cancer, lung cancer, and/or mesothelioma.[5] Although Sheppard stopped working for Freeport in the early- to mid-1990s,[6] Sheppard's asbestos-related ailments were first diagnosed in October 2015.[7]

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.[8] 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.[9]

Sheppard brings claims for "negligence, intentional tort, fraud, and strict liability," and alleges that all defendants are "jointly, severally, and in solidio liable."[10] He seeks damages for, among other things, physical and mental pain, loss of life, loss of income, and medical expenses.[11]

In its notice of removal to this Court, Mosaic invoked the federal Outer Continental Shelf Lands Act ("OCSLA"), 43 U.S.C. § 1331, et seq.[12] OCSLA provides a broad jurisdictional grant over "cases and controversies arising out of, or in connection with. .. any operation conducted on the outer Continental Shelf." 43 U.S.C § 1349(b)(1). To support jurisdiction under this statute, Mosaic pointed to Sheppard's allegations that he was exposed to asbestos at Mosaic's Freeport facility, which is located on the Outer Continental Shelf.[13]

Sheppard responded by moving to amend his complaint to remove any allegations regarding the Caminada facility.[14] Magistrate Judge Knowles denied Sheppard's motion, and found that Sheppard's proposed amendments were both futile and sought in bad faith.[15] The Court later denied Sheppard's appeal of Magistrate Judge Knowles' decision.[16] The Court also denied Sheppard's motion to remand to state court. In doing so, the Court found that "Sheppard's allegation that he suffered daily exposure to asbestos while working at Caminada, and that this exposure led to his illness, is sufficient to invoke federal jurisdiction under OCSLA."[17]

On the same day that it denied Sheppard's motion to remand, the Court granted Mosaic's motion to dismiss certain of Sheppard's claims for failure to plead fraud with particularity as required by Federal Rule of Civil Procedure 9(b). In doing so, the Court found that Sheppard's failure to meet the requirements of Rule 9(b) may have reflected a mere pleading defect, rather than a more fundamental problem with his claims.[18] Accordingly, the Court dismissed Sheppard's fraud claim without prejudice, and gave Sheppard leave to amend the facts supporting this claim.[19]

Sheppard filed an amended complaint on December 9, 2016.[20] Undaunted by the Court's earlier order on this exact issue, Sheppard amended his complaint to remove the Caminada allegations.[21] Sheppard now moves, once again, for remand. [22] II. LEGAL STANDARD Unless a federal statute expressly provides otherwise, a defendant may remove a civil action filed in state court to federal court if the federal court would have had original jurisdiction over the case. 28 U.S.C. § 1441(a). The removing party "bears the burden of showing that federal jurisdiction exists and that removal was proper." Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392, 397 (5th Cir. 2013) (citing Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002)). In assessing whether removal was 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 statute[s] should be strictly construed in favor of remand." Manguno, 276 F.3d at 723 (citing Acuna v. Brown & Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000)). III. DISCUSSION

Sheppard's motion to remand fails for two reasons. First, the amendment that supports Sheppard's motion was made in direct contravention of a previous order of this Court, and the amendment is therefore properly struck. Second, even if the Court did permit the amendment, removing the Caminada allegations does nothing to disturb the Court's earlier finding of jurisdiction.

As noted, the Court previously upheld the Magistrate Judge's denial of Sheppard's motion for leave delete his allegations concerning Caminada. The Court's later grant of leave to amend was for the limited purpose of supplementing Sheppard's factual allegations to support a fraud claim. This was not a freewheeling grant of leave to make any and all amendments. See, e.g., Giron v. Wells Fargo Bank, N.A., No. 14-02437, 2014 WL 3434127, at [*2] (C.D. Cal. July 11, 2014) (rejecting plaintiff's amendments that went beyond scope of issues considered on motion to dismiss). And it was certainly not leave to ignore the Court's previous orders. Sheppard's amendments concerning Caminada are therefore properly struck. Even if Sheppard's amendment were proper, it would have no effect on the Court's earlier finding of jurisdiction under OCSLA. "[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); see also In re Carter, 618 F.2d 1093, 1101 (5th Cir. 1980) ("[I]t has often been stated that the plaintiff cannot rob the district court of subject matter jurisdiction by electing to amend away the grounds for federal jurisdiction."). Deleting the Caminada allegations therefore has no effect.

In his motion, Sheppard portrays the Court as asserting supplemental jurisdiction over state law claims under 28 U.S.C. § 1367(c). Sheppard argues that the factors in that statute militate against exercise of jurisdiction in this case. As the Court has already explained,[23] section 1367(c) is irrelevant here. Sheppard does not have a mix of state and federal claims. Rather, all of Sheppard's claims "aris[e] out of, or in connection with" operations on the OCS. 43 U.S.C § 1349(b)(1). The Court therefore maintains federal question jurisdiction over all of his claims, and need not exercise supplemental jurisdiction over any of them.

IV. CONCLUSION

For the foregoing reasons, Jesse Frank Sheppard's second Motion for Remand is DENIED. Furthermore, Sheppard's amendments concerning the Caminada facility are struck.

[1] R. Doc. 1 at 1.

[2] Id.

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

[4] Id. at 4.

[5] Id. at 6.

[6] 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. [7] R. Doc. 1-1 at 6.

[8] Id. at 6, 7.

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

[10] Id. at 29.

[11] Id.

[12] R. Doc. 1.

[13] See R. Doc. 1-1 at 5.

[14] R. Doc. 5.

[15] R. Doc. 60 at 5.

[16] R. Doc. 108.

[17] R. Doc. 144 at 12.

[18] Id. at 9.

[19] Id.

[20] R. Doc. 166.

[21] Id.

[22] R. Doc. 183.

[23] R. Doc. 144 at 14.

Sources

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