Pennino v. Reilly-Benton Co.

PHYLLIS PENNINO, ET AL v. REILLY-BENTON COMPANY, INC., ET AL

Civil Action No. 21-363

United States District Court, E.D. Louisiana

August 26, 2021

SECTION “B” (5)

ORDER AND REASONS

Before the Court are Defendants Avondale Industries, Inc., F/K/A Northrop Grumman Ship Systems, Inc., N/K/A Huntington Ingalls Incorporated, Albert L. Bossier, Jr., and Lamorak Insurance Company's^[1] (“Defendants”) Notice of Removal, Rec. Doc. 1, Plaintiffs Phyllis Pennino and Sally Pennino's Motion to Remand, Rec. Doc. 18, Defendants' Memorandum in Opposition to Plaintiff' Motion to Remand Rec. Doc. 23, and Defendants' Notice of Supplemental Authority, Rec. Doc. 25.

For the following reasons, IT IS ORDERED that the motion to remand is DENIED.

FACTS AND PROCEDURAL HISTORY

Salvador Pennino died on December 11, 2017 of lung cancer. Rec. Doc 18-1 at 2. Plaintiffs Phyllis Pennino and Sally Pennino are, respectively, the surviving spouse and child of Mr. Pennino. Id. Plaintiffs filed their petition individually and on behalf of

Mr. Pennino against Defendants in the Civil District Court for Orleans Parish, alleging that Mr. Pennino was exposed to asbestos on a daily basis while he was employed by Avondale Shipyards (Avondale) from the “mid 1950s through at least the late 1970s.”^[2]Rec. Doc. 1-1 at 1, 15. Plaintiffs' further allege Mr. Pennino died from asbestos-related lung cancer as a result of his exposure while working at Avondale. Id.

On January 20, 2021, Lee Addison McDaniel, III was deposed. Rec. Doc. 1-2 at 4. Mr. McDaniel testified that he knew Mr. Pennino from when Pennino worked at Avondale as a welder from 1963 to 1967. See Rec. Doc. 1-2 at 2. Mr. McDaniel testified to witnessing Mr. Pennino hanging ductwork on Lykes Lines vessels. See id. at 3.

The United States Maritime Administration (MARAD) contracted with Avondale to build ships through the Merchant Marine Act of 1936, 46 U.S.C. §§ 1101-1294, et seq.; see Rec. Doc. 23 at 3-6. Defendants allege that Lykes Line vessels were built at Avondale as a result of the Merchant Marine Act under the specifications of MARAD and other governmental agencies. Id. at 5.

Defendants received Mr. McDaniel's deposition transcript on January 29, 2021, and subsequently filed a Notice of Removal on February 19, 2021, claiming that the Mr. McDaniel's deposition transcript qualified as an “other paper” for the purposes of 28 U.S.C § 1446(b)(3), and was the basis for removal. See Rec. Doc. 1 at 3. Defendants further assert this Court has subject matter jurisdiction over this case under 28 U.S.C. §§ 1441, 1442, and 1446. See Rec. Doc. 1 at 3.

Plaintiffs filed their Motion to Remand thereafter on March 22, 2021 alleging that the removal was untimely. Id. at 4.

LAW AND ANALYSIS

Federal officer removal allows for a civil action commenced in state court to be removed to federal court if the action is related to an officer, person acting under that officer, or agency of the United States when that entity is acting “for or relating to” the color of such office. 28 U.S.C. § 1442(a)(1). The removing defendant bears the burden of demonstrating federal subject matter jurisdiction exists, and therefore that removal was proper. Breaux v. Gulf Stream Coach, Inc., No. CIV.A.08-893, 2009 WL 152109, at *1 (E.D. La. Jan. 21, 2009) (citing Jernigan v. Ashland Oil Inc., 989 F.2d 812, 815 (5th Cir. 1993). Unlike other forms of removal that are strictly construed in favor of remand, the federal officer removal statute is liberally construed in favor of removal. Neal v. Ameron Int'l Corp., 495 F.Supp.3d 375, 382 (M.D. La. 2020); See Breaux, 2009 WL 152109, at *1.

The Supreme Court has urged courts to refrain from “a narrow, grudging interpretation of § 1442(a)(1).” Willingham v. Morgan, 395 U.S. 402, 407 (1969). The Federal Officer Removal Statute does not require that the district court have original jurisdiction over the plaintiff's claims and may be removed even if a federal question arises as a defense rather than a claim in the plaintiff's complaint. See Latiolais v. Huntington Ingalls, Inc., 951 F.3d 286, 296 (5th Cir. 2020)(citing Mesa v. California, 489 U.S. 121, 126 (1989)); Reulet v. Lamorak Ins. Co., No. CV 20-404-BAJ-EWD, 2021 WL 1151568, at *4 (M.D. La. Mar. 4, 2021), report and recommendation adopted, No. CV 20-00404-BAJ-EWD, 2021 WL 1151517 (M.D. La. Mar. 25, 2021). Therefore, the Fifth Circuit allows federal officers to remove cases to federal court beyond the scope of federal question removal. Reulet, 2021 WL 1151568, at *4 (M.D. La. Mar. 4, 2021).

Fifth Circuit precedent previously interpreted the “for or relating to” clause in the federal removal statute as requiring defendants to show “that a causal nexus exists between the defendants' actions under color of federal office and the plaintiff's claims;” more recent decisions by the Fifth Circuit have moved away from this approach, and instead, considered whether there is a “direct causal nexus” between the removing defendant's conduct and a federal officer's instructions. See St. Charles Surgical Hosp., L.L.C. v. Louisiana Health Serv. & Indem. Co., 990 F.3d 447, 452-53 (5th Cir. 2021); Neal v. Ameron Int'l Corp., 495 F.Supp.3d 375, 379 (M.D. La. 2020). Under this approach, the defendant must show (1) it has asserted a colorable federal 4 defense, (2) it is a “person” within the meaning of the statute, (3) it 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.^[3] Latiolais, 951 F.3d at 296.

A. Removal Was Timely

Defendants' removal was timely. There are two ways to remove an action under §1442. First, you may remove the case after receiving an initial pleading that qualifies for removal. 28 U.S.C. § 1446(b)(1). The removing party has 30 days to remove the action upon receiving an initial pleading that “affirmatively reveals on its face that” the case is removable. Hutchins v. Anco Insulations, Inc., No. CV 19-11326, 2021 WL 1961664, at *1 (E.D. La. May 17, 2021) (citing Chapman v. Powermatic, Inc., 969 F.2d 160 (5^th Cir. 1992)).

When the initial pleading is not removable under § 1446(b)(1), the second way a defendant may file a Notice of Removal is if they receive “a copy of an amended pleading, motion, order or other paper” from which it may first be ascertained that the case is or has become removable. 28 U.S.C. § 1446(b)(3). Much like § 1446(b)(1), the removing party has 30 days to file their Notice of Removal upon receiving a copy of the satisfactory “amended pleading, motion, order or other paper.” Id.

The Fifth Circuit's standard of review for whether something qualifies as an “other paper” under § 1446(b)(3) must be “unequivocally clear and certain” to start the 30-day time limit for a Notice of Removal and “should not be one which may have a double design.” Bosky v. Kroger Texas, LP, 288 F.3d 208, 211-212 (5th Cir. 2002).

Evidence such as oral testimony is not considered an “other paper” under § 1446(b)(3). Morgan v. Huntington Ingalls, Inc., 879 F.3d 602, 608 (5th Cir. 2018) (“plain meaning of, purpose of, and policy considerations behind § 1446(b) all support the conclusion that oral testimony at a deposition does not constitute ‘other paper.'). However, the Fifth Circuit and this Court have found that the transcript of a deposition can constitute an “other paper” for the purposes of § 1446(b). Morgan, 879 F.3d at 612 (“We adopt a bright-line rule today: Section 1446(b)(3)'s removal clock begins ticking upon receipt of the deposition transcript.”). Accordingly, a defendant who fails to file a timely Notice of Removal waives that right. Brown v. Demco, Inc., 792 F.2d 478, 481 (5th Cir. 1986).

The deposition transcript of Lee McDaniel III was the first “other paper” to satisfy the standard for removal set forth in § 1446(b)(3), because the Plaintiff's Petition did not indicate what ships the plaintiff had worked on while employed at Avondale and therefore could not have been the basis of removal. See Rec. Doc. 1-1; See Chapman v. Powermatic, Inc., 969 F.2d at 163 (1992); See also Bosky v. Kroger Texas, LP., 288 F.3d at 211 (5th Cir. 2002).

Mr. McDaniel's deposition transcript “affirmatively reveals on its face that” the case is removable. Mr. McDaniel confirmed he knew Mr. Pennino and observed him working on Lykes Line vessels. See Rec. Doc. 1-2 at 5-6.

Plaintiffs assert that the social security earning statements provided to the Defendants in 2019 were considered “other papers, ” and therefore Defendants waived their rights to remove years ago. See Rec. Doc. 18-1 at 6.

However, this argument is unpersuasive because the social security statements slips established that Mr. Pennino worked for Avondale during the period of 1964 to 1967, See Doc. Rec. 18-4 at 6, but failed to “affirmatively reveals on its face that” Mr. Pennino's work at Avondale included working on Lykes Line vessels.

Plaintiffs assert that the Defendants “should have readily ascertained” Mr. Pennino had worked on Lykes Line vessels during his time at Avondale because the period in which Defendants knew Lykes Line ships were built at Avondale overlapped with the period of time indicated by Mr. Pennino's social security slips.

Apart from this information, the social security slips contain no indication of Pennino's occupational responsibilities at the shipyard. The slips fail to “affirmatively reveals on [their] face” the removability of the case and are inapposite of the Fifth Circuit's precedent regarding defendants' subjective knowledge. Assuming that Defendants subjectively knew Mr. Pennino worked on Lykes Lines vessels when the document itself only provides a date that overlaps with potential periods when federal contracts were worked on...