Case: 23-30112 Document: 00517025287 Page: 1 Date Filed: 01/08/2024
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
____________ FILED
January 8, 2024
No. 23-30112 Lyle W. Cayce
____________ Clerk
In re In the Matter of the Complaint of N&W Marine
Towing, L.L.C., as Owner of M/V Nicholas, its engines,
tackle, appurtenances, furniture, etc., for
Exoneration from or Limitation of Liability
Trey Wooley,
Plaintiff—Appellee—Cross Appellant,
versus
N&W Marine Towing, L.L.C., as Owner of M/V NICHOLAS, its
engines, tackle, appurtenances, furniture, etc., praying for exoneration from or
limitation or liability,
Petitioner—Appellant—Cross Appellee,
versus
Royal Caribbean Cruises, Limited,
Defendant,
______________________________
Case: 23-30112 Document: 00517025287 Page: 2 Date Filed: 01/08/2024
Trey Wooley,
Plaintiff—Appellee—Cross Appellant,
versus
N&W Marine Towing, L.L.C.; Nicholas M/V; Ascot
National Specialty Insurance Company; Starr
Indemnity & Liability Company,
Defendants—Appellants—Cross Appellees.
______________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC Nos. 2:20-CV-2390, 2:21-CV-150
______________________________
ON PETITION FOR REHEARING EN BANC
Before Stewart, Dennis, and Wilson, Circuit Judges.
Cory T. Wilson, Circuit Judge:
Because no member of the panel or judge in regular active service
requested that the court be polled on rehearing en banc, see Fed. R. App.
P. 35; 5th Cir. R. 35, the petition for rehearing en banc is DENIED. Our
prior panel opinion, 83 F.4th 329 (5th Cir. 2023), is WITHDRAWN, and
the following opinion is SUBSTITUTED therefor:
Trey Wooley filed a state court action against N&W Marine Towing
(N&W) and others based on injuries Wooley suffered while serving as a
deckhand on the Mississippi River. Wooley did so despite a district court
stay order entered pursuant to the Limitation of Liability Act of 1851, see 46
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U.S.C. § 30511(c).1 One of the other defendants removed the case, citing
federal diversity and admiralty jurisdiction. Weighing Wooley’s motion to
remand, the district court determined that N&W was improperly joined,
dismissed N&W on that basis, and then, considering the properly joined
parties, concluded that it had diversity jurisdiction and denied remand.
As they did before the district court, the parties on appeal contest
whether this case belongs in state or federal court. N&W contends that,
regardless of whether it was nondiverse from Wooley, and even if it was
improperly joined in Wooley’s state court lawsuit, Wooley’s claims against
N&W should remain in federal court because they arise under that court’s
admiralty jurisdiction, 28 U.S.C. § 1333(1). Wooley cross-appeals, taking the
opposite tack. For the following reasons, we conclude that the district court
properly dismissed N&W from this action, retained the case, and then,
because no other defendants remained, dismissed the case itself.
I.
We detailed much of this case’s voyage in the court’s prior opinion,
In re N&W Marine Towing, LLC, 31 F.4th 968 (5th Cir. 2022) (Wooley I). We
repeat relevant facts and procedural history as necessary.
On August 31, 2020, N&W filed in federal district court a verified
complaint in limitation, Case No. 2:20-cv-2390 (the Limitation Action),
_____________________
1
Effective December 23, 2022, code sections of the Limitation Act were
renumbered. 46 U.S.C. § 30505 was renumbered as 46 U.S.C. § 30523, and 46 U.S.C.
§ 30511 was renumbered as 46 U.S.C. § 30529. For consistency in this case, we use the
prior statutory section numbers; the relevant statutory text did not change.
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pursuant to the Limitation of Liability Act of 1851 (Limitation Act)2 and Rule
F of the Supplemental Rules for Certain Admiralty and Maritime Claims.3
The Limitation Act provides that once a shipowner brings a limitation
action “all claims and proceedings against the owner related to the matter in
question shall cease.” 46 U.S.C. § 30511(c); see Fed. R. Civ. P. Supp.
R. F(3) (similar). The court where such an action is filed “stays all related
claims against the shipowner pending in any forum,” and all claimants must
“timely assert their claims in the limitation court.” Magnolia Marine Transp.
Co. v. Laplace Towing Corp., 964 F.2d 1571, 1575 (5th Cir. 1992).
The complaint filed in N&W’s Limitation Action alleged that on
February 29, 2020, the M/V Nicholas, which is owned by N&W, was towing
six barges up the Mississippi River when the wake of a cruise ship, the Majesty
of the Seas, caused one of the Nicholas’s face wires to break. While the
Nicholas headed towards the riverbank, another face wire broke. The M/V
Assault and its crew came to aid the Nicholas in mending the face wires, at
which time a deckhand on the Assault, Trey Wooley, injured his hand.
_____________________
2
The Limitation Act allows shipowners to “bring a civil action in a district court
of the United States for limitation of liability.” 46 U.S.C. § 30511(a). The law permits
shipowners to limit their liability to “the value of the vessel and pending freight” for a
variety of “claim[s], debt[s], and liabilit[ies]” that might arise from vessels’ activities so
long as the incident giving rise to liability occurred “without the privity or knowledge of
the owner.” 46 U.S.C. § 30505(a)–(b); see Wooley I, 31 F.4th at 970–71 (collecting cases).
3
In pertinent part, Rule F reads:
Upon compliance by the owner with the requirements of subdivision (1) of
this rule all claims and proceedings against the owner or the owner’s
property with respect to the matter in question shall cease. On application
of the plaintiff the court shall enjoin the further prosecution of any action
or proceeding against the plaintiff or the plaintiff’s property with respect
to any claim subject to limitation in the action.
Fed. R. Civ. P. Supp. R. F(3).
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In September 2020, the district court issued the following Stay Order
in accordance with § 30511(c) and Rule F:
The commencement or further prosecution of any action or
proceeding against [N&W], their sureties, their underwriters
and insurers, or any of their property with respect to any claims
for which [N&W] seek[s] limitation of liability herein,
including any claim arising out of or incident to or connected
with personal injury, loss or damage allegedly caused, arising
out of, or resulting from incidents which occurred on the
Mississippi River at approximately mile marker 86-87 on
February 29, 2020, as described in the [Limitation Action]
Complaint, be and the same is hereby stayed and restrained
until the hearing and determination of this proceeding.
Wooley, Turn Services (Wooley’s employer), and Royal Caribbean Cruises
(RCC) (owner of the Majesty of the Seas) all filed claims against N&W in the
Limitation Action. N&W filed counterclaims against Turn Services and
RCC.
On January 8, 2021, the Stay Order in effect, Wooley filed a Petition
for Damages in Orleans Parish, Louisiana, Case No. 2:21-cv-150 (the State
Court Petition). Wooley named N&W, the Nicholas, RCC, the Majesty of the
Seas, and several insurance companies as defendants. Wooley asserted that
the state court had jurisdiction pursuant to the saving to suitors clause, see 28
U.S.C. § 1333(1),4 and alleged that (1) Turn Services was the Jones Act
employer of Wooley while Wooley worked on the Assault; (2) N&W, the
_____________________
4
28 U.S.C. § 1333 provides, in relevant part:
The district courts shall have original jurisdiction, exclusive of the courts
of the States, of:
(1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in
all cases all other remedies to which they are otherwise entitled.
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Nicholas, and RCC negligently caused the accident injuring Wooley; and
(3) N&W and RCC were liable to Wooley under “general maritime law
and/or maintaining unseaworthy vessels.”
RCC removed the State Court Petition to federal district court,
asserting diversity jurisdiction and, in the alternative, “admiralty tort
jurisdiction” pursuant to § 1333(1). The district court consolidated the now-
removed State Court Petition with the Limitation Action. Wooley moved to
bifurcate, which the district court denied. Wooley also moved to remand.
On August 8, 2021, before the district court had ruled on his motion
to remand, Wooley moved to stay the Limitation Action and lift the
injunction against proceeding in state court. Wooley stipulated that he would
not seek to enforce any judgment in excess of the value determined in the
Limitation Action in accordance with § 30511 and Rule F. Wooley further
stipulated that the federal court “ha[d] exclusive jurisdiction and authority
to determine all issues relevant to [N&W’s] claim for limitation of liability.”
On August 27, 2021, the district court determined that these
stipulations “adequately protect[ed] N&W’s absolute right to limit its
liability in the federal forum,” and it granted Wooley’s motion to stay the
Limitation Action, allowing him to proceed with the prosecution of his
saving-to-suitors claims. N&W filed an interlocutory appeal, and we
affirmed, noting that “our precedents require district courts hearing
limitation actions to lift a stay against proceedings in other forums when a
claimant makes the appropriate stipulations.” Wooley I, 31 F.4th at 974
(citing Odeco Oil & Gas Co., Drilling Div. v. Bonnette, 74 F.3d 671, 674 (5th
Cir. 1996), In re Two “R” Drilling Co. Inc., 943 F.2d 576, 578 (5th Cir. 1991),
and In re Tetra Applied Techs. L P, 362 F.3d 338, 343 (5th Cir. 2004)). Because
we agreed Wooley’s stipulations passed muster, we concluded that the
district court did not abuse its discretion.
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On February 15, 2023, nearly two years after Wooley filed his motion
to remand, the district court denied it. The court found that “Wooley
blatantly violated [its] Stay Order” by naming N&W in the State Court
Petition, and therefore N&W was “improperly joined.” As a result, the
district court dismissed N&W from the case. Even though Wooley and
N&W were each a citizen of Louisiana, and thus nondiverse, the court
determined that the “state court suit ha[d] no legal effect as to N&W,” and
“removal was proper because there was complete diversity between Wooley
and the properly joined State Court defendants.”5
After dismissing N&W from the case, no claims remained live in the
State Court Petition because Wooley had previously settled his claims against
the other defendants. Therefore, the district court severed Wooley’s State
Court Petition from the Limitation Action and dismissed it without
prejudice. The district court retained jurisdiction over the Limitation Action
but stayed and administratively closed it to allow Wooley to pursue any viable
claims against N&W in Louisiana state court pursuant to the saving to suitors
clause.
N&W and Wooley both appeal. Seeking to remain in federal court,
N&W raises several issues, namely whether: (1) a case is removable if it
contains “general maritime law claims” filed in violation of the district
court’s stay order; (2) the district court abused its discretion in denying
Wooley’s motion to remand; (3) the district court erred in dismissing N&W
and the State Court Petition after lifting the Stay Order; and (4) admiralty
jurisdiction provides an independent basis for removal after the 2011
_____________________
5
Even though RCC initially removed the case based on diversity or, alternatively,
admiralty jurisdiction, the district court appeared to make no finding as to admiralty tort
jurisdiction.
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amendments to 28 U.S.C. § 1441.6 On cross-appeal, Wooley contends that
the outcome of the case was correct, but if this court were to determine that
N&W was properly joined, then Wooley contends the district court erred in
denying his motion to remand.
II.
We review the district court’s finding of improper joinder de novo.
Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392, 401 (5th Cir. 2013) (collecting
cases). Once a court determines that a nondiverse defendant is improperly
joined, that party must be dismissed from the case. Int’l Energy Ventures
Mgmt. LLC v. United Energy Group Ltd., 818 F.3d 193, 209 (5th Cir. 2016).
Thus, we review whether dismissal of N&W was proper in concert with our
review of improper joinder.
Similarly, we review the district court’s denial of Wooley’s motion to
remand and whether the district court should have exercised jurisdiction over
his claims against N&W de novo. Flores v. Garland, 72 F.4th 85, 88 (5th Cir.
2023); Allen v. Walmart Stores, L.L.C., 907 F.3d 170, 182 (5th Cir. 2018).
“To determine whether jurisdiction is present for removal, we consider the
claims in the state court petition as they existed at the time of removal.”
Manguno v. Prudential Prop. and Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir.
2002) (citing Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th
Cir. 1995)).
_____________________
6
N&W frequently uses some form of the phrase “abuse of discretion” in framing
the issues. This is not always correct; for instance, as N&W notes in its briefing, we review
a denial of a motion to remand de novo, not for abuse of discretion.
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A.
The district court found that Wooley improperly joined N&W in the
State Court Petition in violation of its Stay Order and denied Wooley’s
motion to remand as a result. The court did not err in doing so.
“When an action has been brought under [the Limitation Act] and the
[vessel] owner has complied with [§ 30511](b), all claims and proceedings
against the owner related to the matter in question shall cease.” 46 U.S.C.
§ 30511(c). Here, once N&W filed the Limitation Action, all other actions
against N&W related to Wooley’s claims were precluded by § 30511(c).
Wooley thus improperly sued N&W in the State Court Petition when he
proceeded in derogation of the Limitation Act and, relatedly, Rule F and the
district court’s Stay Order. N&W agrees that it was improperly joined, that
its “citizenship should be ignored for purposes of determining diversity of
citizenship,” and that RCC was a properly joined defendant. In fact, N&W
concedes that at the time of removal “there was no possibility of recovery by
Mr. Wooley from N&W due to the District Court’s Limitation Stay
Order[.]”7 Because N&W does not contest the district court’s finding that
_____________________
7
N&W somewhat backtracks on this argument, later stating that “naming
defendants directly contrary to the federal court’s Limitation Stay [] does not pretermit the
possibility of recovery, possible recovery is only delayed.” This latter position is untenable
because, as N&W itself states, “the district court must examine the plaintiff’s possibility
of recovery against the defendant at the time of removal.” See Turner v. GoAuto Ins. Co., 33
F.4th 214, 215 (5th Cir. 2022) (“When a case is removed from state court to federal court
and the plaintiff seeks to have the case remanded, we evaluate the complaint at the time of
removal.”) (citing Bonin v. Sabine River Auth. Of La., 961 F.3d 381, 385 (5th Cir. 2020));
accord Manguno, 276 F.3d at 723. At the time of removal, the Stay Order was in effect, and
under a Federal Rule of Civil Procedure 12(b)(6) analysis, the state court claims against
N&W therefore failed.
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it was improperly joined, we need not relitigate the issue.8 Further, this
(correct) concession largely controls this case.
We begin with improper joinder in diversity cases. Once a court
determines that a nondiverse defendant was improperly joined, that
defendant’s citizenship may not be considered for purposes of diversity
jurisdiction, and that defendant must be dismissed without prejudice. Int’l
Energy Ventures Mgmt., 818 F.3d at 209. The district court correctly followed
that course: Determining that N&W had been improperly joined, the court
considered only the citizenship of the properly joined State Court Petition
defendants. As they were diverse from Wooley, removal based on diversity
jurisdiction was permitted, and N&W was properly dismissed without
prejudice.
The district court did not address Article III admiralty jurisdiction,
which RCC also invoked to support removal of the State Court Petition, but
the result is the same for N&W. As discussed, N&W was improperly joined
because Wooley’s proceeding against it via the State Court Petition was
barred by operation of the Limitation Act and the district court’s Stay Order
_____________________
8
Our agreement with the district court that N&W was improperly joined is based
on a Rule 12(b)(6) analysis. See Ticer v. Imperium Ins. Co., 20 F.4th 1040, 1046 (5th Cir.
2021) (To determine whether a defendant was improperly joined, courts conduct a “[Rule]
12(b)(6)-type analysis, ‘looking initially at the allegations of the complaint to determine
whether the complaint states a claim under state law against the in-state defendant.’”
(quoting Smallwood v. Illinois Cent. R. Co., 385 F.3d 568, 572 (5th Cir. 2004) (en banc))).
The district court analogized this case to bankruptcy cases to support its conclusion that
N&W was improperly joined in contravention of the Stay Order. To the extent that the
district court reached beyond our precedent, the reach was unwarranted: Applying a Rule
12(b)(6) analysis, Wooley could not state any claim outside the Limitation Action against
N&W by operation of § 30511(c), Rule F, and the Stay Order, leaving a state court no
choice but to dismiss Wooley’s claims against N&W. See Int’l Energy Ventures Mgmt., 818
F.3d at 209 (If “a court determines that a nondiverse party has been improperly joined to
defeat diversity, that party must be dismissed without prejudice.”).
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issued pursuant to the statute and Rule F. N&W invoked—and the district
court exercised—the federal court’s admiralty jurisdiction when it filed the
Limitation Action. More on admiralty jurisdiction later. For purposes of
Wooley’s motion to remand, what matters is that at the time RCC removed
the State Court Petition, there existed no viable claims against N&W outside
of the Limitation Action, admiralty or otherwise. The district court properly
dismissed N&W from the State Court Petition and then denied remand.
B.
Notwithstanding N&W’s agreement that it was improperly joined,
such that no viable claims existed against N&W at the time of removal, N&W
casts several arguments as to why the district court erred in dismissing it from
the case, dismissing the case, and denying N&W immediate passage to
federal court. None are availing.
First, N&W contends that Wooley’s State Court Petition, once
removed, should remain in federal court because Wooley did not “anchor his
case in state court by requesting a jury or asserting a Jones Act claim against
his employer, Turn Services.” N&W cites Barker v. Hercules Offshore, Inc.,
713 F.3d 208 (5th Cir. 2013), to support this contention. In Barker, this court
noted that the “‘saving to suitors’ clause under general maritime law ‘does
not guarantee [plaintiffs] a nonfederal forum, or limit the right of defendants
to remove such actions to federal court where there exists some basis for
federal jurisdiction other than admiralty.” 713 F.3d at 220 (alterations and
emphasis in original) (quoting Tenn. Gas Pipeline v. Houston Cas. Ins. Co., 87
F.3d 150, 153 (5th Cir. 1996)). N&W seizes on this statement to posit that
even if a plaintiff invokes the saving to suitors clause in a state court action,
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that does not prevent removal of the action to federal court under admiralty
jurisdiction.9
Whatever the removability of a state action brought pursuant the
saving to suitors clause, a question we need not answer in today’s case,
N&W’s argument runs aground because N&W offers no authority for a
district court’s maintaining claims in federal court against an improperly
joined party, despite improper joinder. Put differently, the conundrum in
this case arises not from a question of jurisdiction—the district court
properly denied Wooley’s motion to remand the State Court Petition because
it had jurisdiction, after all—but because Wooley proceeded out of order,
flouting the Limitation Act and the Stay Order in the Limitation Action.
Wooley attempted to elect his “choice of remedies” against N&W under the
saving to suitors clause first, and then eight months later, after RCC had
_____________________
9
Barker also states that “maritime cases which are brought in state court” “are
exempt from removal by the ‘saving-to-suitors’ clause of [§ 1333(1)] . . . and therefore may
only be removed when original jurisdiction is based on another jurisdictional grant, such as
diversity of citizenship.” Id. at 219 (citing Romero v. Int’l Terminal Operating Co., 358 U.S.
354, 377–79 (1959); In re Dutile, 935 F.2d 61, 63 (5th Cir. 1991)). Since Barker, our court
has acknowledged the lack of clarity on this point, particularly considering Congress’s 2011
amendment to 28 U.S.C. § 1441:
[W]hether the saving-to-suitors clause of the federal maritime statute
prohibits removal of general maritime claims absent an independent basis
for federal jurisdiction in light of Congress’s December 2011 amendment
to the federal removal statute—is not clear. The vast majority of district
courts considering this question have maintained that such lawsuits are not
removable . . . . However, because there is no binding precedent from this
circuit, see Riverside Constr. Co., Inc. v. Entergy Miss., Inc., 626 [F. App’x]
443, 447 (5th Cir. 2015) (noting that “[t]he Fifth Circuit has not yet
spoken directly on this issue”), there remains a consequential number of
district courts that have held to the contrary.
Sangha v. Navig8 ShipManagement Private Limited, 882 F.3d 96, 100 (5th Cir. 2018)
(citations omitted). While N&W and amici urge this court to clarify this question en banc,
as discussed above the line, it is not necessary for us to do so in the context of this case.
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removed the State Court Petition, belatedly sought to lift the Stay Order in
the Limitation Action. See Wooley I, 31 F.4th at 971 (discussing “tension
between the Limitation Act and the savings to suitors clause” and the
stipulations necessary for a separate “state court action to proceed” (quoting
Odeco Oil & Gas, 74 F.3d at 674)). As the district court correctly concluded,
this meant that, regardless of whether Wooley asserted a Jones Act claim, or
any other, he could not proceed against N&W either at the time he filed the
State Court Petition or when RCC removed it because there were no viable
claims against N&W outside the Limitation Action. And N&W offers no
authority to support the notion that Wooley’s belated stipulations in the
Limitation Action cured that defect. Cf. Cavallini, 44 F.3d at 264–65
(“[T]he rationale for determining removal jurisdiction on the basis of claims
in the state court complaint as it exists at the time of removal is obvious”;
moreover, “after a fraudulent joinder removal, a plaintiff may [not] amend
the complaint in order to state a claim against the nondiverse defendant, and
thus divest the federal court of jurisdiction”).10
Distilled down, N&W’s other arguments for remaining in federal
court veer off course for the same reason. For instance, N&W contends that
once the district court determined removal was proper as to RCC under
diversity jurisdiction, the court should have exercised jurisdiction over the
claims against N&W as well. This argument flies in the face of our precedent
that, once “a court determines that a nondiverse party has been improperly
joined to defeat diversity, that party must be dismissed without prejudice.”
Int’l Energy Ventures Mgmt., 818 F.3d at 209.
_____________________
10
Another complicating factor in this case is that the district court’s ruling on
Wooley’s motion to remand came two years after Wooley filed the motion and a year-and-
a-half after the court granted his motion for relief from the Stay Order, which allowed
claims against N&W to proceed—just not in the prematurely-filed State Court Petition.
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Our holding in Flagg v. Stryker Corp., 819 F.3d 132 (5th Cir. 2016) (en
banc), is instructive. In Flagg, a patient alleged that his toe surgery was
unsuccessful and filed a complaint in Louisiana state court against his doctor
and the medical center, as well as the manufacturers of the toe implant. 819
F.3d at 134–35. The manufacturers removed the case based on diversity
jurisdiction. Id. at 135. They asserted they were completely diverse from the
patient and that the medical defendants, who were not diverse, were
improperly joined because the patient had failed to exhaust malpractice
claims administratively prior to filing the state court petition, as required by
Louisiana state law. Id. We agreed, holding that the patient’s failure to
exhaust his claims against the medical defendants meant those claims would
fail under a Rule 12(b)(6)-type analysis. Id. at 138. Thus, those defendants
were improperly joined, and the “state court would have been required to
dismiss [them] from the case.” Id.
The same logic obtains here. As discussed previously, the Louisiana
state court would have had no choice but to dismiss Wooley’s claims against
N&W by operation of § 30511(c), Rule F, and the district court’s Stay Order.
And while N&W offers authority for the proposition that “[o]nce the court
establishes jurisdiction exists, it has a duty to exercise that jurisdiction,”
N&W nowhere explains, much less cites support for, how the district court
could extend jurisdiction over Wooley’s claims against N&W despite its
conclusion that N&W was not a proper party to the State Court Petition.11
This argument sinks of its own weight.
_____________________
11
N&W argues that because complete diversity existed when RCC removed the
State Court Petition in view of N&W’s improper joinder, the district court was allowed to
exercise jurisdiction over N&W’s claims as well. N&W cites to Richey v. Walmart Stores,
Inc., 390 F. App’x. 375 (5th Cir. 2010), where this court affirmed a district court’s denial
of remand. Richey is easily distinguishable. There, Richey sued Walmart in state court and
14
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N&W next lodges several arguments that Wooley’s claims had an
independent basis for federal jurisdiction aside from diversity jurisdiction.
None provides safe harbor. First, N&W argues, somewhat convolutedly,
that once the district court determined removal was proper, Wooley’s
“general maritime claim against N&W” could act as a jurisdictional hook.
N&W similarly argues that the 2011 Amendments to 28 U.S.C. § 1441
“made a substantive change in removal jurisdiction over maritime cases”
and, specifically, that changes to § 1441(b) “may provide an alternative basis
for removal and retention of th[is] case in federal court.” N&W contends
that because Wooley named the Nicholas in the State Court Petition and
because federal courts have exclusive jurisdiction over in rem admiralty
actions, the entire case should have remained in federal court.
To the extent N&W argues that federal courts’ admiralty jurisdiction
dictates that claims asserted pursuant to the saving to suitors clause are
removable based on admiralty jurisdiction alone, N&W prematurely offers an
answer to the wrong question, as Wooley has yet to assert any cognizable
claims against N&W pursuant to § 1333(1). To the extent N&W’s arguments
are of a theme with its contention that so long as the district court had
jurisdiction over some party, then the district court could extend that
_____________________
Walmart removed. At the time of removal, there was complete diversity. After, Richey
attempted to file an amended complaint naming Walmart Stores Texas LLC as a co-
defendant, and Richey moved to remand, arguing that she and Walmart Stores Texas LLC
were nondiverse. We emphasized that courts must examine “whether diversity ‘existed at
the time of removal.’” Id. at 378 (quoting Texas Beef Group v. Winfrey, 201 F.3d 680, 686
(5th Cir. 2000). And “subsequently added defendants cannot divest the district court of
the original jurisdiction it had at the time of removal.” Id. at 378 n.2. Here, N&W was
improperly joined in the State Court Petition from the outset.
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jurisdiction even to an improperly joined one, they run into the shoals of our
improper joinder precedent as well.12
Finally, N&W argues that the district court abused its discretion by
dismissing the case because dismissal is countenanced by neither Rule F nor
the “analogous Fifth Circuit Bankruptcy decisions.” N&W asserts that
under the terms of Rule F(3), a district court may not dismiss a state court
lawsuit once it is properly removed, and a stay order is no longer in effect—
essentially, that Rule F permits a court merely to “pause” other proceedings
pending a Limitation Act stay. This line of reasoning misapprehends the
rationale supporting dismissal of the State Court Petition: The district court
did not conclude that the State Court Petition was without legal effect from
its filing; instead, the court determined that Wooley’s action was “‘void and
without legal effect’ as to N&W . . . .” Given that determination, because all
the other defendants had been dismissed from the State Court Petition, no
case remained before the district court. To accept N&W’s argument would
be to conclude that the district court should have retained jurisdiction over a
case with no defendants, all to resurrect the claims against an improperly
joined one. This cannot be so.13
_____________________
12
N&W seeks to analogize to Williams v. M/V Sonora, 985 F.2d 808, 812 (5th Cir.
1993). In Williams, a case was removed from Texas state court pursuant to the Foreign
Sovereign Immunities Act (FSIA), 28 U.S.C. § 1441(d), because a defendant, Pemex,
qualified as a “foreign sovereign.” 985 F.2d at 810. When Pemex was eventually
dismissed, plaintiffs argued that the case should have been remanded because the only
other basis for federal jurisdiction was admiralty law, and pursuant to the saving to suitors
clause, “admiralty claims . . . are non-removable.” Id. at 812. The district court declined
to remand, and we affirmed, noting that though the case would not have been removable in
the first instance without FSIA jurisdiction, at the time of removal Pemex was a proper
party. Id. Here, by contrast, N&W was not a proper party at the time of removal.
13
N&W’s analogies to bankruptcy proceedings, which are governed by bankruptcy
rules, are unpersuasive for the same reasons as its attempted reading of Rule F. We
therefore decline to address them further.
16
Case: 23-30112 Document: 00517025287 Page: 17 Date Filed: 01/08/2024
No. 23-30112
III.
In his cross appeal, Wooley asserts that the district court erred in
denying his motion to remand. Wooley makes three arguments. We need
not plumb the depths of these contentions, but we will briefly discuss why
each fails.
First, he contends that N&W was not improperly joined and there was
a lack of complete diversity at the time of removal. For the reasons stated
above, we disagree with Wooley and find that the district court did not err in
determining N&W was improperly joined.
Next, Wooley asserts that the State Court Petition was not removable
pursuant to the saving to suitors clause because N&W failed to “identify an
independent basis [for] federal subject matter jurisdiction (other than
admiralty).” Regardless of the merits of Wooley’s argument on this point, it
seeks to answer the wrong question in this case. As thoroughly addressed
already, at the time of removal, no valid claims could be asserted against N&W
in a forum other than the Limitation Action; because Wooley had “blatantly
violated [the district court’s] Stay Order” by naming N&W in the State
Court Petition, N&W was not a proper party, whatever the underpinning for
federal jurisdiction. Besides, the “‘saving to suitors’ clause under general
maritime law ‘does not guarantee [plaintiffs] a nonfederal forum,” Barker,
713 F.3d at 220, though that is an issue for another day.
Finally, Wooley contends the district court lost jurisdiction after it
lifted the Stay Order, and therefore the district court should have granted its
motion to remand. This point is mooted by our conclusion that N&W was
improperly joined, and thus properly dismissed, and by the subsequent
dismissal of the remaining defendants from the State Court Petition.
17
Case: 23-30112 Document: 00517025287 Page: 18 Date Filed: 01/08/2024
No. 23-30112
IV.
N&W was improperly joined as a defendant in the State Court
Petition. When RCC removed the case to federal court, the district court
therefore properly disregarded N&W’s citizenship and dismissed it from the
case. The court likewise properly denied Wooley’s motion to remand. And
once N&W was dismissed, leaving no defendants in the case, the district
court properly severed and dismissed without prejudice the State Court
Petition.
AFFIRMED.
18