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Gross v. Baltimore Aircoil Company, Inc.

United States District Court, S.D. Mississippi, Northern Division

March 21, 2014

NANETTE GROSS, et al., Plaintiffs,
v.
BALTIMORE AIRCOIL COMPANY, INC., et al., Defendants.

ORDER

DANIEL P. JORDAN, III, District Judge.

This product-liability case is before the Court on Plaintiffs' Motion to Remand [15], Plaintiffs' Motion to Abstain [17], Defendant Dickerson Thermal Solutions, Inc.'s Motion to Dismiss [5], Defendants' Joint Motion to Strike Witherell Affidavit [35], and Defendant Chem-Aqua, Inc.'s Motion to Dismiss [24]. The Court has considered the memoranda and submissions of the parties and finds that Dickerson Thermal Solutions was improperly joined. Federal diversity jurisdiction therefore exists. The remaining motions are resolved as follows:

I. Facts and Procedural History

Plaintiffs were guests at the Hotel Chester in Starkville, Mississippi. The Hortons stayed at the hotel in May 2010. They were subsequently diagnosed with Legionnaire's disease, and Bobby Horton eventually died. Nanette Gross and her husband Terry Gross stayed there in June 2010. On July 6, 2010, Terry Gross was found dead from acute pneumonia. Nanette Gross was diagnosed with severe sepsis with respiratory failure and legionella pnuemonia.

Plaintiffs allege that they became sick due to exposure to Legionella bacteria from a defective water-cooling tower at the hotel. They filed a complaint in state court under the Mississippi Products Liability Act (MPLA) against Baltimore Aircoil Company, Inc., the manufacturer of the tower; Dickerson Thermal Solutions, Inc., which sold the tower to the hotel; NCH Corporation, which serviced the tower; and Chem-Aqua, Inc., which also serviced the tower. Baltimore Aircoil removed this case to federal court arguing diversity jurisdiction and jurisdiction over the case as a proceeding "related to" a bankruptcy action. Plaintiffs filed a Motion to Remand [15] arguing that a valid claim exists against nondiverse Defendant Dickerson Thermal Solutions, which destroys this Court's jurisdiction. Defendants counter that Dickerson Thermal Solutions was improperly joined, and Dickerson Thermal Solutions filed a Motion to Dismiss [5] arguing that Plaintiffs fail to state a claim against it. Chem-Aqua also filed a motion to dismiss [24].

II. Standard of Review

A. Improper Joinder

Under 28 U.S.C. § 1441, "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant" to federal district court. 28 U.S.C. § 1441(a). Defendants premise federal jurisdiction on 28 U.S.C. § 1332, under which the district courts have jurisdiction over civil actions between "citizens of different States." 28 U.S.C. § 1332(a)(1). The diversity statute requires complete diversity between all named plaintiffs and all named defendants. E.g., Lincoln Prop. Co. v. Roche, 546 U.S. 81, 84 (2005).

The improper joinder rule "is a narrow exception to the rule that diversity jurisdiction requires complete diversity." Smallwood v. Ill. Cent. R.R. Co., 352 F.3d 220, 222 (5th Cir. 2003). To that end, "[t]he burden is on the removing party; and the burden of demonstrating improper joinder is a heavy one." Cuevas v. BAC Home Loans Servicing, LP, 648 F.3d 242, 249 (5th Cir. 2011). In evaluating a claim of improper joinder, "we examine if there is arguably a reasonable basis for predicting that the state law might impose liability on the facts involved." Smallwood, 352 F.3d at 223 (citation omitted and punctuation altered). But "[a] mere theoretical possibility of recovery under local law' will not preclude a finding of improper joinder." Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 n.9 (5th Cir. 2004) (en banc) (quoting Badon v. RJR Nabisco, Inc., 236 F.3d 282, 286 n.4 (5th Cir. 2000)).

"Whether the case was properly removed is determined by reference to the allegations in a plaintiff's state court pleading." Tedder v. F.M.C. Corp., 590 F.2d 115, 116 (5th Cir. 1979) (citing Pullman Co. v. Jenkins, 305 U.S. 534, 537 (1939)); see also Gardner v. Cooksey, 2:11-cv-255-KS-MTP, 2012 WL 968026, at *2 (S.D.Miss. Mar. 21, 2012) ("This court must refer to the allegations made in the original pleading to determine whether the plaintiff can make out a viable claim against the resident defendant.") (citations omitted).

A district court should ordinarily resolve an improper joinder claim by conducting Rule 12(b)(6)-type analysis. Smallwood, 385 F.3d at 573. The Court "must then evaluate all of the factual allegations in the light most favorable to the plaintiff, resolving all contested issues of substantive fact in favor of the plaintiff." B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir. 1981). Similarly, the Court must resolve all ambiguities in controlling state law in the plaintiff's favor. Travis v. Irby, 326 F.3d 644, 649 (5th Cir. 2003) (citations omitted). But the plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "Conclusory or generic allegations of wrongdoing on the part of the non-diverse defendant are not sufficient to show that the defendant was not improperly joined." Randle v. Smithkline Beecham Corp., 338 F.Supp.2d 704, 708 (S.D.Miss. 2004) (citing Badon, 224 F.3d at 392-93). Finally, "there are cases, hopefully few in number, in which the plaintiff has stated a claim, but has misstated or omitted discrete facts that would determine the propriety of joinder." Smallwood, 385 F.3d at 573. In such cases, the district court has the discretion to "pierce the pleadings" and conduct a summary inquiry. Id.

B. Motion to Dismiss

In considering a motion under Rule 12(b)(6), the "court accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.'" Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004) (quoting Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999)). To overcome a Rule 12(b)(6) motion, Plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. "Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Id. at 555 (citations and footnote omitted). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). It follows that "where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not show[n]'-that the pleader is entitled to relief.'" Id. at 1950 (quoting Fed.R.Civ.P. 8(a)(2)). "This standard simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of' the necessary claims or elements." In re S. Scrap Material Co., LLC, 541 F.3d 584, 587 (5th Cir. 2008) (citing Twombly, 550 U.S. at 556).

III. Analysis

A. Motion to Remand and Dickerson Thermal Solutions's Motion to Dismiss

Defendants argue that there is no reasonable basis to predict that state law would impose liability on Dickerson Thermal Solutions because it is an "innocent seller" under the MPLA. Under Mississippi law, "[i]n any action alleging that a product is defective... the seller of a product other than the manufacturer shall not be liable unless the seller... had actual or constructive knowledge of the defective condition of the product at the time he supplied the product." Miss. Code. Ann. § 11-1-63(h). The stated intent ...


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