Hercules and the Lernaean Hydra: The Hercules Removal Jurisprudence Sprouts Yet Another Head

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In yet another twist in the tortured labors of the Hercules jurisprudence regarding removal of general maritime law claims under 28 U.S.C. §1441(a), the Eastern District of Louisiana has generated a new, divergent “head” on the body of prior decisions that have attempted to resolve the developing law on this issue. 

As detailed in numerous prior posts (most recently regarding the Barry decision), a series of decisions allowing removal of general maritime law (GML) claims by seamen, even when combined with otherwise statutorily non-removable Jones Act claims, has been developing among the district courts within the Fifth Circuit. Barry and Coronel provided the initial backlash to this trend, but the Eastern District of Louisiana’s decision in Freeman v. Philips 66 Co, Case No. 14-311, Rec. Doc. 48 (E.D. La. Apr. 8, 2014) has added a new angle to the issues.

Freeman involved claims by numerous plaintiffs regarding alleged exposure to asbestos-containing drilling mud additives during their employment with various offshore oil and gas operators.  These plaintiffs filed suit in state court against their employers – asserting Jones Act claims and unseaworthiness – and against non-employer manufacturer defendants who had produced the additives.  Three years into the state court litigation, the plaintiffs amended to add general maritime law (GML) claims against the manufacturer defendants, and to add certain insurer defendants under the Louisiana direct action statute.

The manufacturer defendants – citing the newly added GML negligence claims – removed the case to federal court under the Hercules jurisprudence regarding removal of GML claims under §1441(a). In turn, the insurer defendants – citing their newly added party status – removed the case to federal court based on both GML removal under §1441(a) and federal question removal pursuant to the Outer Continental Shelf Lands Act (OCSLA) , insofar as the plaintiffs’ claims related to their work on OCS rigs/platforms.

As an initial matter, with respect to the insurer defendants’ alleged OCSLA-federal question basis for removal, the court held that although OCSLA does now provide a federal question basis for removal (under Barker v. Hercules Offshore, Inc., 713 F.3d 208 (5th Cir. 2013), there was insufficient evidence to determine whether the plaintiff’s alleged exposures happened on the OCS as opposed to on state waters within the three-mile limit (for Louisiana waters).  Accordingly, the court rejected any independent, federal question basis for removal under OCSLA.

The Freeman court then moved on to the Hercules issue – i.e. whether the GML claims allowed for removal of the entire action (together with the Jones Act claims) to federal court under §1441(a) on the basis of the court’s original jurisdiction over admiralty claims, and subject to severance and remand (barring plaintiff’s acquiescence in federal jurisdiction) of the statutorily non-removable Jones Act claims.  The court noted the sea change effected by the Hercules decision and the recent amendments to §1441, but also recognized the fraught status of the law in this area:

Several district courts in this Circuit have agreed with [the Hercules] rationale. This Court, too, has once followed the course set by [Hercules]. Subsequent district court opinions [namely Barry and Coronel] have raised serious questions as to whether other bars might exist to the removability of claims on the basis of admiralty jurisdiction, independent of the changes made to the in-state-defendant provision in section 1441(b).

Ultimately, however, the Freeman court held that it “need not answer these questions today” because “the claims [were held to] be nonremovable pursuant to the Jones Act.”

Specifically, Jones Act claims are expressly non-removable by statute.  Accordingly, §1441(c) applies to removal of other claims together with Jones Act claims:

(1) If a civil action includes–

     (A) a claim arising under the Constitution, laws, or treaties of the United States (within the meaning of section 1331 of this title), and

     (B) a claim not within the original or supplemental jurisdiction of the district court or a claim that has been made nonremovable by statute, the entire action may be removed if the action would be removable without the inclusion of the claim described in subparagraph (B).

(2) Upon removal of an action described in paragraph (1), the district court shall sever from the action all claims described in paragraph (1)(B) and shall remand the severed claims to the State court from which the action was removed. Only defendants against whom a claim described in paragraph (1)(A) has been asserted are required to join in or consent to the removal under paragraph (1).

Critically, the language of §1441(c)(A) is essentially the same language that previously appeared in the pre-amendment version of §1441(b) – i.e. the former §1441(b) on which the former Dutile rule of non-removability of GML claims was based. As a result, because §1441(c)(A) uses the same language as the former §1441(b) that underlay the Dutile rule, Dutile still applies vis-à-vis removal of GML claims when combined with otherwise non-removable claims:

The Court agrees that where section 1441(c) applies, it does permit the removal of suits that otherwise would be nonremovable due to the inclusion of a Jones Act claim. However, section 1441(c), by its very terms, does not apply in this case. Although section 1441(c) has been modified substantially, it still applies only where the nonremovable claim is joined with a claim “arising under the Constitution, laws, or treaties of the United States” or, in the terms of the earlier text, a claim “within the jurisdiction conferred by section 1331.” 28 U.S.C. § 1441(c) (2013); 28 U.S.C. §1441(c) (2006). In other words, both versions of section 1441(c) apply only where the otherwise removable claim is one that falls within the federal question jurisdiction conferred by 28 U.S.C. § 1331. “Emphatically, claims in admiralty, whether designated in rem or in personam, do not fall within this category.” Dutile, 935 F.2d at 63 (citing Romero, 358 U.S. at 378). Because admiralty jurisdiction provides the only basis for removal in this case, section 1441(c) does not apply. Thus, even if the claims are otherwise removable on the basis of admiralty jurisdiction. . . the defendants cannot overcome the statutory bar to removal in 28 U.S.C. § 1445(a) [vis-à-vis the statutory bar to removal of Jones Action claims in] 46 U.S.C. § 30104.

In short, the Freeman court held that whenever a GML claim has been joined with a Jones Act claim in state court – and if there is no independent basis for federal question removal (i.e. under OCSLA) – §1441(c) bars removal of the entire action notwithstanding the free removability of GML claims under §1441(a) and the the original admiralty jurisdiction. Moreover, the Freeman court took pains to point out that other cases in the Hercules jurisprudence are not inconsistent with this result, insofar as those cases did not involve the combination of GML claims with pure Jones Act claims:

This issue was not controlling in any of the Southern District of Texas cases relied upon by the defendants. In [Hercules], the plaintiff was a Sieracki seaman, not a Jones Act seaman. In Carrigan, the Court found the plaintiff’s Jones Act claims to be fraudulently pleaded and thus no bar to removal. 2014 WL 358353 at *2. And, in Wells, the Court found OCSLA jurisdiction to be supported, thus properly triggering the application of section 1441(c). 2013 WL 3110322 at *3-4.

Accordingly, in the wake of Freeman, the concept that a Jones Act claim could effectively be removed if combined with other GML claims (like unseaworthiness or GML negligence) appears to have been definitively nipped in the bud. Nonetheless, as the labors of Hercules go on toward what is likely an inevitable final reckoning in the Fifth Circuit or Supreme Court, it is unclear whether a different head will sprout from this jurisprudential Hydra.

Topics:  Asbestos, Complex Litigation, Employer Liability Issues, Insurers, Jones Act, Negligence, Outer Continental Shelf

Published In: Civil Procedure Updates, Labor & Employment Updates, Maritime Updates, Toxic Torts Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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