Breakell v. 3M Co.

ADAM M. BREAKELL, Plaintiff, v. 3M COMPANY, et. al., Defendant.

No. 3:19-cv-583 (VAB)

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT

July 16, 2019

RULING AND ORDER ON MOTION TO REMAND

Adam Breakell has brought claims for products liability, fraud, and premises liability in Connecticut Superior Court for monetary and punitive damages, costs, and attorney's fees from injuries allegedly suffered through exposure to certain asbestos products. Third Amended Complaint, ECF No. 1-1 ("Underlying Compl.").

Johnson & Johnson and Johnson & Johnson Consumer Inc. (collectively "Johnson & Johnson"), defendants in Mr. Breakell's case, removed the case from Connecticut Superior Court after another defendant, Imerys Talc America, Inc. and two affiliates (collectively "Imerys"), filed a voluntary Chapter 11 Bankruptcy petition in the United States District Court for the District of Delaware. Johnson & Johnson also filed a motion to fix venue in that court for any asbestos-related personal injury claims. Notice of Removal, ECF No. 1 ("Notice of Removal"), at ¶¶ 1, 7. Johnson & Johnson alleges that Mr. Breakell's claims are related to the pending bankruptcy action. Id. at ¶¶ 18, 28.

Mr. Breakell has filed a motion for an emergency remand in order to have the case returned to Connecticut Superior Court. Emergency Motion to Remand, ECF No. 11 ("Mot. to Remand").

For the following reasons, Mr. Breakell's motion to remand is GRANTED.

I. FACTUAL AND PROCEDURAL BACKGROUND

On September 26, 2017, Adam Breakell sued numerous defendants for products liability, fraud, and premises liability for allegedly exposing him to asbestos, while he lived in Connecticut during periods from May 17, 1975 until 1997, approximately 2003 until approximately 2005, and approximately 2016 until November 2017. Complaint, ECF No. 11-5; Underlying Compl. at ¶ 1. Discovery has been ongoing, and the case is set for trial on September 17, 2019 in Connecticut Superior Court. Mot. to Remand at 1.

On February 13, 2019, Imerys began Chapter 11 bankruptcy proceedings in the United States Bankruptcy Court for the District of Delaware. Id. at 2.

On April 18, 2019, Johnson & Johnson removed this case under 28 U.S.C. § 1334(b) and 28 U.S.C.§ 1452(b), alleging that Mr. Breakell's action is related to the Imerys bankruptcy because of contractual indemnity obligations between Johnson & Johnson and Imerys, shared insurance policies between the companies, and the fact that each Johnson & Johnson contained talc produced by Imerys. Notice of Removal at ¶¶ 7, 8, 20.

That same day, Johnson & Johnson "filed a Motion to Fix Venue with the United States District Court for the District of Delaware, petitioning the court to transfer all talc-related state and federal actions to Delaware for resolution." In re Johnson & Johnson, Nos. 19-cv-3531(KPF), 2019 WL 2497856, at *1 (S.D.N.Y. June 4, 2019) (citing Motion to Fix Venue for Claims, In re: Imerys Talc America, Inc. et al., No. 19-mc-00103 (D. Del. Apr. 18, 2019), Dkt No. 1)).

On April 30, 2019, Johnson & Johnson "filed an Emergency Motion for Provisional Transfer Under 28 U.S.C. § 157(b)(5), asking the court in the District of Delaware to enter an order provisionally transferring to it all identified personal injury and wrongful death talc claimsagainst [Johnson & Johnson], prior to ruling on [Johnson & Johnson]'s April 18 motion." Id.

On May 2, 2019, Mr. Breakell moved to remand the case back to state court. Mot. to Remand.

On May 8, 2019, Johnson & Johnson filed a memorandum in opposition to Mr. Breakell's motion to remand. Memorandum in Opposition re Motion to Remand to State Court, ECF No. 19 ("Mem. in Opp. to Remand").

On May 9, 2019, the court in the District of Delaware denied Johnson & Johnson's Emergency Motion for Provisional Transfer. In re: Imerys Talc America, Inc. et al., No. 19-mc-00103 (D. Del. May 9, 2019), Dkt No. 34. The court found that "that J&J has not shown that it would be irreparably harmed," id. at 6, noting that J & J "was not a Debtor and has not established financial distress." Id.

Significantly, the court also noted that, "as J & J concedes," id., the cases could be transferred "under § 157(b) regardless of the decisions reached by state courts on transfer and remand issues, and therefore the Court is not persuaded that these proceedings should be characterized as causing an emergency." Id. Indeed, in that court's view, J & J "created the purported emergency that it claims requires ex parte relief." Id.

On May 22, 2019, Mr. Breakell filed a reply to Johnson & Johnson's opposition. Reply to Response to Motion to Remand to State Court, ECF No. 21 ("Reply").

On July 11, 2019, the Court held a hearing regarding the pending motion to remand.

II. STANDARD OF REVIEW

A court will remand a case, "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c). "[T]he party asserting jurisdiction bear the burden of proving that the case is properly in federal court[.]" United Food& Commercial Workers Union, Local 919, AFL-CIO v. CenterMark Properties Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir. 1994). The party asserting jurisdiction "must support its asserted jurisdictional facts with 'competent proof' and 'justify its allegations by a preponderance of the evidence.'" S. Air, Inc. v. Chartis Aerospace Adjustment Servs., Inc., 3:11-cv-1495 (JBA), 2012 WL 162369, at *1 (D. Conn. 2012) (quoting United Food & Commercial Workers Union, 30 F.3d at 305)). "In light of the congressional intent to restrict federal court jurisdiction, as well as the importance of preserving the independence of state governments, federal courts construe the removal statute narrowly, resolving any doubts against removability." Lupo v. Human Affairs Int'l, Inc., 28 F.3d 269, 274 (2d Cir. 1994).

Even if there is subject matter jurisdiction, and a case has been timely removed, a court may remand "such claim or cause of action on any equitable ground." 28 U.S.C. § 1452(b).

III. DISCUSSION

Federal courts are "courts of limited jurisdiction," with power to decide a case confined to statutorily and constitutionally granted authority. Exxon Mobile Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005). Federal courts have "original but not exclusive jurisdiction of all civil proceedings arising under title 11 or arising in or related to cases under title 11." 28 U.S.C. § 1334(b). Litigation is "related to" "a pending bankruptcy proceeding [if] its outcome might have any 'conceivable effect' on the bankrupt estate." In re Cuyahoga Equip. Corp., 980 F.2d 110, 114 (2d Cir. 1992).

In removal cases, the defendant bears the burden of showing that federal subject-matter jurisdiction applies to a removed action." Blockbuster, Inc. v. Galeno, 472 F.3d 53, 58 (2d Cir. 2006) (holding that in removal actions "defendant bears the burden of establishing federal subject matter jurisdiction"). "[O]ut of respect for the limited jurisdiction of the federal courtsand the rights of states, [courts] 'resolv[e] any doubts against removability.'" In re Methyl Tertiary Butyl Ether ("MTBE") Prod. Liab. Litig., 488 F.3d 112, 124 (2d Cir. 2007) (quoting Somlyo v. J. Lu-Rob Enters., Inc., 932 F.2d 1043, 1045-46 (2d Cir. 1991)). And the Supreme Court has held that "statutory procedures for removal are to be strictly construed." Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 32 (2002).

Here, Johnson & Johnson bases their removal on federal question jurisdiction under 28 U.S.C. § 1334(b) and 28 U.S.C. § 1452(a) and alleges that Mr. Breakell's claims are related to Imerys' bankruptcy proceedings. Notice of Removal at ¶¶ 16, 17. In response, Mr. Breakell argues that Johnson & Johnson's removal of the state court action was inadequate, that this Court does not have jurisdiction over his claims, and that, if the Court does have jurisdiction, it should abstain and remand the claims. Mot. to Remand.

The Court therefore will address first the adequacy of Johnson & Johnson's removal and then whether this case should be remanded.

A. Adequacy of Removal

The threshold issue is whether Rule 9027 of the Federal Rules of Bankruptcy Procedure or 28 U.S.C. § 1446(b) governs the time period for filing a notice of removal under 28 U.S.C. § 1452(a).

Under the former, Johnson & Johnson needed to file its notice of removal within ninety-days of the filing of Imerys' bankruptcy petition on February 13, 2019: May 14, 2019. See Fed. R. Bankr. P. 9027(a)(2) (providing that a "notice of removal may be filed only within the longest of (A) 90 days after the order for relief in the case under the Code . . . "). Under the latter, the notice of removal would have to have been filed win a thirty-day period. See 28 U.S.C. § 1446(b) (providing for the notice of removal to "be filed within 30 days after receipt by thedefendant . . . of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based . . . .").

In addition to the issue of timeliness, Mr. Breakell argues that removal was defective because Johnson & Johnson did not provide all proceedings and pleadings with its notice of removal; rather, it only attached Mr. Breakell's complaint and its own responsive pleadings. Memorandum of Law in Support of Plaintiff's Emergency Motion to Remand, ECF No. 11-1 ("Mem. in Supp. of Mot. to Remand"), at 5. With respect to the issue of timeliness, Mr. Breakell argues that Johnson & Johnson failed to serve its notice of removal within thirty days of Imerys' bankruptcy petition, which does not comport with 28 U.S.C. § 1446's removal requirement for bankruptcy actions. Id. at 5-6. Finally, Mr. Breakell argues that Johnson & Johnson waived the right to remove the case because it "demonstrated an unequivocal intent to litigate the claims against it in state court after the bankruptcy petition and, therefore, waived any 'right' to remove plaintiff's claims" and further waived any opportunity to...