United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
December 20, 2005
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
No. 04-31073
Louis Britt Guillory and Stanley Milton Gims
Plaintiffs-Appellants,
versus
PPG Industries, Inc., Et al,
Defendants,
Richard Dick Holliday, James Rock,
John Shamburger, and Terry Messenger
Defendants-Appellees.
Appeal from the United States District Court
For the Western District of Louisiana
Before HIGGINBOTHAM, WIENER, and DENNIS, Circuit Judges.
HIGGINBOTHAM, Circuit Judge:
Plaintiffs-Appellants Louis Britt Guillory and Stanley Milton
Gims brought various state-law claims for injuries resulting from
a chemical release of toxic and hazardous materials against PPG
Industries, Inc. and various officers and employees of PPG: Richard
Holliday, Terry Messenger, John Shamburger, and James Rock
(collectively, “the individual defendants”).1 Following removal on
the basis that the individual defendants were improperly joined to
defeat diversity jurisdiction, the district court granted summary
1
Richard Holliday was PPG’s plant manager. Terry Messenger, John
Shamburger, and James Rock were PPG safety managers.
judgment, dismissing with prejudice all claims against the
individual defendants, and denied Appellants’ motion to remand.
Because Appellants have no reasonable possibility of recovery
against the individual defendants, we affirm.
I
This dispute centers around liability for a release of various
toxic and hazardous materials at PPG’s facility in Lake Charles,
Louisiana. For approximately sixteen hours on April 4 and 5, 2002,
various chemicals were released into the air when a rupture disk
failed on the DH Still at PPG’s Waste Treatment Unit. A rupture
disk is a thin plate of material that is designed to break or burst
at a certain pressure. The rupture disk failed at a pressure below
its design rating. The precise cause of the premature rupture
remains unknown.
Appellants, working on the site as contractors for Zachary
Construction Company, contended that they were exposed to the
chemical release and inhaled dangerous levels of toxic and
hazardous materials. On April 16, 2003, Appellants brought the
instant suit against PPG and the individual defendants in the 14th
Judicial District Court for the Parish of Calcasieu, Louisiana.
On May 16, 2003, PPG filed a timely notice of removal on the
basis of diversity jurisdiction, asserting that the individual
defendants were improperly joined.2 Over five months after
2
Appellants are citizens of Louisiana; PPG is a citizen of Pennsylvania;
destroying diversity, the individual defendants are also citizens of Louisiana.
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removal, the Appellants had not moved to remand due to the presence
of the individual, nondiverse defendants. On October 17, 2003,
Magistrate Judge Alonzo P. Wilson noted the presence of the
nondiverse defendants and indicated that he was considering
entering summary judge sua sponte in favor of these defendants,
provided that PPG could show that the Appellants had no reasonable
possibility of recovery against them.
Subsequently, Appellants moved to remand the matter to
Louisiana state court, and over the next ten months, the parties
conducted a variety of discovery. Eventually, the magistrate
judge, on August 20, 2004, recommended that claims against the
individual defendants be dismissed with prejudice and that the
motion to remand be denied. According to the magistrate judge, by
the uncontroverted evidence, Rock, Shamburger, and Messenger had
not been delegated responsibility for preventing the April 2002
chemical release and Holliday––PPG’s plant manager––had not
delegated responsibility for the safety issues without due care.
With the individual defendants out of the case, there was complete
diversity and federal jurisdiction under 28 U.S.C. § 1332.
Appellants did not file written objections to the magistrate
judge’s findings of fact and conclusions of law and, on September
22, 2004, the district court, Judge Trimble, accepted the
recommended findings and conclusions, adding that, after “an
independent review of the record,” the magistrate judge’s findings
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and conclusions were “entirely correct.” Appellants timely filed
a notice of appeal. We have jurisdiction under 28 U.S.C. § 1291.
II
The primary issue in this case is whether the district court
erred in concluding that the individual defendants were improperly
joined to defeat diversity jurisdiction. Before turning to the
merits, we first determine the proper standard of review and then
determine whether the magistrate judge’s improper joinder inquiry
in this case comports with our recent en banc decision in Smallwood
v. Illinois Central Railroad Co.3
A
To start, the parties dispute the standard of review. As PPG
contends, when a party fails to file timely written objections to
a magistrate judge’s findings-of-fact and conclusions-of-law, our
review is for plain error.4 However, when the district court
engages in an independent evaluation of the record, as here,5 the
standard of review depends upon the issue on appeal.6
3
385 F.3d 568 (5th Cir. 2004) (en banc).
4
See Douglass v. United Servs. Automobile Ass’n, 79 F.3d 1415, 1430 (5th
Cir. 1996) (en banc).
5
Here, the district court stated: “Alternatively, an independent review of
the record has led this court to conclude that the proposed findings and
conclusions are entirely correct.” Partial Final Judgment (Sept. 22, 2004), at
1. Although this may be judicial boilerplate, we take it as indication that the
district court conducted its own review of the record, sufficient to avoid
Douglass’s plain-error review standard for unobjected-to magistrate reports.
6
See, e.g., Meister v. Texas Adjutant General’s Dept., 233 F.3d 332, 335
(5th Cir. 2000) (applying de novo review to all issues even though only a few
were actually objected to); Jasso v. Barnhart, 102 Fed. Appx. 877 (5th Cir. 2004)
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Thus, we review the district court’s decision to deny
Appellants’ motion to remand de novo.7 There are two ways to
establish improper joinder: “(1) actual fraud in the pleading of
jurisdictional facts, or (2) the inability of the plaintiff to
establish a cause of action against the non-diverse party in state
court.”8 The first––actual fraud––is not at issue in this case.
With the second, we must determine “whether the defendant has
demonstrated that there is no possibility of recovery by the
plaintiff against the in-state defendant, which stated differently
means that there is no reasonable basis for the district court to
predict that the plaintiff might be able to recover against an in-
state defendant.”9
The burden of proof is on the removing party.10 To determine
the validity of an improper joinder claim, we “must evaluate all of
the factual allegations in the light most favorable to the
(“Although the failure to object to a magistrate judge’s findings and conclusions
generally subjects appellate arguments to plain-error review, because the
district court undertook an independent examination of the record despite the
lack of objections in the instant case, the plain-error standard does not
apply.”); see also Douglass, 79 F.3d at 1429 (“[I]t is often the case, especially
in pro se cases, that, even though objections are not filed to all of the
magistrate judge’s proposed findings and conclusions, the district judge engages
in de novo review of all of the proposals, because he is not certain which ones
are challenged, or on what basis. For issues, fact or law, so reviewed de novo,
we ordinarily will not impose our new rule.”).
7
Burden v. Gen. Dynamics Corp., 60 F.3d 213, 216 (5th Cir. 1995).
8
Smallwood v. Illinois Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004)
(en banc).
9
Id. at 573.
10
B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir. 1981).
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plaintiff, resolving all contested issues of substantive fact in
favor of the plaintiff.”11 In addition, we must resolve all
ambiguities in the controlling state law in the plaintiff’s favor.12
We do not determine whether the plaintiff will actually or even
probably prevail on the merits of the claim, but look only for a
possibility that the plaintiff might do so.13
In reviewing a grant of summary judgment, we apply the same
standards that govern the district court.14 Summary judgment is
appropriate if the court, viewing the facts in the light most
favorable to the nonmoving party, determines “that there is no
genuine issue of material fact and that the moving party is
entitled to judgment as a matter of law.”15 The burden rests
initially on the moving party to establish by competent evidence
that no issue of material fact exists.16 Only then must the
nonmoving party assume the burden of showing the existence of a
specific, disputed factual issue.17
11
Id.
12
See Griggs v. State Farm Lloyds, 181 F.3d 694, 699 (5th Cir. 1999);
Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42 (5th Cir. 1992); B., Inc., 663
F.2d at 549.
13
Dodson, 951 F.2d at 42-43; B., Inc., 663 F.2d at 549.
14
See Lavespere v. Niagra Mach. & Tool Works, Inc., 910 F.2d 167, 177 (5th
Cir. 1990).
15
FED. R. CIV. P. 56(c).
16
See Norman v. Apache Corp., 19 F.3d 1017, 1023 (5th Cir. 1994); Lodge
Hall Music, Inc. v. Waco Wrangler Club, Inc., 831 F.2d 77, 79 (5th Cir. 1987).
17
Celotex Corp. v. Catrett, 477 U.S. 317, 321-25 (1986).
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B
Appellants challenge the procedure followed by the magistrate
judge in deciding the improper joinder issue. In Smallwood v.
Illinois Railroad Co., we summarized the two avenues for deciding
the improper joinder issue:
There has been some uncertainty over the proper
means for predicting whether a plaintiff has a reasonable
basis of recovery under state law. A court may resolve
the issue in one of two ways. The court may 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. Ordinarily, if a plaintiff can survive
a Rule 12(b)(6)-type challenge, there is no improper
joinder. That said, there are cases, hopefully few in
number, in which a plaintiff has stated a claim, but has
misstated or omitted discrete facts that would determine
the propriety of joinder. In such cases, the district
court may, in its discretion, pierce the pleadings and
conduct a summary inquiry.18
Here, it is undisputed that Appellants can satisfy a Rule 12(b)(6)-
type inquiry; Appellants’ petition ties the actions of the
individual defendants to various safety responsibilities concerning
the April 2002 chemical release.19 The magistrate judge, however,
decided to pierce Appellants’ pleadings, conducting a summary
inquiry into whether Appellants had any reasonable basis of
18
Smallwood v. Illinois Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004)
(en banc).
19
See, e.g., Hawthorne Land Co. v. Occidental Chem. Corp., ___ F.3d ___,
2005 WL 3047260, at *2 (5th Cir. Nov. 15, 2005) (conducting Rule 12(b)(6)-type
analysis and determining that plaintiffs’ petition failed to state a claim
against the instate defendants).
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recovery against the individual defendants. Appellants contend
this inquiry exceeded the boundaries contemplated by Smallwood.
To start, we review both the magistrate judge’s decision to
pierce the pleadings20 and his procedure for determining improper
joinder for an abuse of discretion.21 We recognize, however, “that
a summary inquiry is appropriate only to identify the presence of
discrete and undisputed facts that would preclude plaintiff’s
recovery against the in-state defendant.”22 In addition, Smallwood
cautioned that “the inability to make the requisite decision in a
summary manner itself points to an inability of the removing party
to carry its burden.”23
In considering whether the magistrate judge’s pierce-the-
pleading procedure was an abuse of discretion, the length of time
necessary to determine improper joinder is a relevant
20
Id.; Badon v. RJR Nabisco Inc., 224 F.3d 382, 390 n.10 (5th Cir. 2000);
Burden v. Gen. Dynamics Corp., 60 F.3d 213, 217 (5th Cir. 1995).
21
Smallwood, 385 F.3d at 573-74 (“[T]he decision regarding the procedure
necessary in a given case must lie with the discretion of the trial court.”).
22
Id. at 574. In Smallwood, we provided several examples of the type of
inquiry appropriate under a pierce-the-pleadings inquiry: “For example, the in-
state doctor defendant did not treat the plaintiff, the in-state pharmacist
defendant did not fill a prescription for the plaintiff patient, a party’s
residence was not as alleged, or any other fact that can easily be disproved if
not true.” Id. at 574 n.12 (citing Travis v. Irby, 326 F.3d 644, 648-49 (5th
Cir. 2003)). Here, we consider the magistrate judge’s determination to fall
right in line with the examples provided in Smallwood, at least with respect to
three of the instate defendants: Rock, Shamburger, and Messenger. The magistrate
judge determined that they had no connection to the particular DH Still from
which the chemical explosion occurred, a finding that is analogous to saying the
in-state doctor did not fill a prescription for the plaintiff patient.
23
Smallwood, 385 F.3d at 574.
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consideration.24 Removal deprives the plaintiff of his chosen
forum, and every day litigating in federal court is a day spent not
litigating in state court. It is imperative that a motion to
remand be resolved as swiftly as possible so that the plaintiff
maintains his right to choose the forum in which to litigate.25
Here, PPG removed this case in May 2003, arguing that the
individual defendants were improperly joined. For five months,
Appellants made no effort to raise this issue with the district
court. In October 2003, the magistrate judge recognized the
absence of complete diversity due to the presence of the individual
defendants and indicated that the joinder issue needed to be
resolved. For purposes of determining whether the magistrate
judge’s pierce-the-pleading inquiry was an abuse of discretion,
this period of time is irrelevant. Appellants were charged with at
least some of the burden of raising the jurisdictional issue after
PPG asserted improper joinder. Appellants cannot bolster their
case by delay. Rather, the delay weighs against a finding that the
procedure adopted by the magistrate judge was an abuse of
discretion. If Appellants wanted the case remanded to state court,
24
Id. at 574 (“Attempting to proceed beyond [a] summary process carries a
heavy risk of moving the court beyond jurisdiction and into a resolution of the
merits, as distinguished from an analysis of the court’s diversity jurisdiction
by a simple and quick exposure of the chances of the claim against the in-state
defendant alleged to be improperly joined.” (emphasis added)). In addition,
Smallwood instructs that “the motive or purpose” of the joinder of instate
defendants is not relevant. Id.
25
See, e.g., Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) (noting
that the plaintiff is “the master of the claim; he or she may avoid federal
jurisdiction by exclusive reliance on state law”).
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they should have promptly raised the issue. Their failure to do so
cuts against their contention that the magistrate judge exceeded
Smallwood’s boundaries by piercing the pleadings in this case.
After the magistrate judge recognized the absence of complete
diversity, the parties engaged in discovery over the course of ten
months before the magistrate judge resolved the improper joinder
issue. While under some circumstances this may be too long, the
delay here was largely of the parties’ own making. On four
occasions, joint or unopposed motions were granted by the
magistrate judge extending time for briefing and discovery. Stated
directly, that the parties proceeded at a slow pace with the
pierce-the-pleading inquiry, which did little more than put of
record uncontroverted facts, does not, by that single circumstance,
mean that it was not a “summary procedure” under Smallwood.
Moreover, neither the scope or the amount of discovery allowed
by the magistrate judge was an abuse of discretion.26 As we noted
in B. Inc. v. Miller Brewing Co., “the defendants may submit
affidavits and deposition transcripts; and in support of their
motion to remand, the plaintiffs may submit affidavits and
deposition transcripts along with the factual allegations contained
26
See McKee v. Kansas City Southern Ry. Co., 358 F.3d 329, 334 (5th Cir.
2004) (requiring district court’s to take into account the “status of discovery”
and to “consider what opportunity plaintiff has had to develop its claims against
the non-diverse defendants”); Travis, 326 F.3d at 649.
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in the verified complaint.”27 In Smallwood, we cautioned that
“[d]iscovery by the parties should not be allowed except on a tight
judicial tether, sharply tailored to the question at hand, and only
after a showing of its necessity.”28 This language sharply limits,
but does not eliminate, discovery. To do so would deny all
substance to the pierce-the-pleading option that we have repeatedly
sanctioned.29
Within the confines of the limited discovery in this case, we
cannot find an abuse of discretion. While six depositions were
taken, they were confined to determining the connection of the
primary players to the issues underlying this litigation. In
addition, there was limited document production, and Appellants
themselves described the extent of discovery in this case as being
“pretty truncated.” We reject Appellants challenge to the pierce-
the-pleading procedure followed by the magistrate judge and now
turn to whether Appellants had any reasonable basis of recovery
against the individual defendants.
C
27
663 F.2d 545, 549 (5th Cir. 1981); see also Carriere v. Sears, Roebuck
and Co., 893 F.2d 98, 100 (5th Cir. 1990) (“When determining fraudulent joinder,
the district court may look to the facts established by summary judgment evidence
as well as the controlling state law. Hence, the trial court properly considered
affidavits and depositions in ruling on the plaintiffs’ motion to remand.”).
28
Smallwood, 385 F.3d at 574.
29
See, e.g., id. at 573; Travis, 326 F.3d at 648-49; Carriere, 893 F.2d at
100; Griggs, 181 F.3d at 699-702.
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Appellants advanced two theories of recovery against the
individual defendants. First, as officers and employees of PPG,
the individual defendants breached a duty, established by Louisiana
law, to protect Appellants that was not delegated with due care to
others. Second, Appellants argue that PPG and the individual
defendants were engaged in inherently dangerous activities for
which Louisiana law precludes any delegation of safety
responsibilities. We address each in turn.
1
Appellants contend that the individual defendants are
responsible for injuries caused by the April 2002 chemical release
because they are corporate officers, imbued with safety
responsibilities under Louisiana law. The magistrate judge found
uncontroverted evidence that Rock, Shamburger, and Messenger had
not been delegated responsibility to enact measures that would have
prevented the April 2002 release. Moreover, the magistrate judge
found that Holliday––PPG’s plant manager––had delegated his general
responsibility for safety issues to other subordinates, that there
was no evidence that Holliday delegated his responsibility without
due care, and that there was no evidence that he knew or should
have known that the delegated officials were not performing their
duties. Thus, the magistrate judge concluded that Appellants had
no reasonable possibility of recovery against the instate
defendants. We agree.
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Under Louisiana law, a corporate officer or employee may,
under certain circumstances, be held individually liable for
injuries to third persons.30 The liability may be imposed on such
individuals even if the duty breached arises solely from the
employment relationship.31 In Canter v. Koehring Co., the Louisiana
Supreme Court established four criteria for imposing liability upon
a supervisor: first, PPG must owe a duty of care to the Plaintiffs,
breach of which causes the damage for which recovery is sought;
second, PPG’s duty must have been delegated to the nondiverse
defendants; and third, the nondiverse defendants must have breached
the delegated duty through “personal (as contrasted with technical
or vicarious) fault.”32 Finally, Canter offers a defense:
“[P]ersonal liability cannot be imposed upon the officer, agent, or
employee simply because of his general administrative
responsibility for performance of some function of the
employment.”33
Appellants argue, first, that the affidavit submitted by Dr.
Paul Templet, Appellants’ expert witness, establishes that the
individual defendants held positions in which they were responsible
for workplace safety, had the power to remedy dangerous conditions
30
See Canter v. Koehring Co., 283 So.2d 716, 722 n.7 (La. 1973).
31
Ford v. Elsbury, 32 F.3d 931, 936 (5th Cir. 1994).
32
Canter, 283 So.2d at 721.
33
Id.
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at PPG, and had actual knowledge of the prior accidents occurring
at PPG’s facility. Appellants reading of Templet’s affidavit goes
too far. Templet states that it “seems logical” that Rock and
Shamburger, as director and manager, respectively, of the
Environment, Health, and Safety division at PPG, should have known
whether, in order to prevent additional chemical release, steps
were taken after prior incidents. A review of the uncontroverted
deposition testimony provides, however, no basis for concluding
that either individual had any knowledge of whether any steps were
taken. In addition, Templet’s own affidavit, after offering his
prediction, recognized that the uncontroverted deposition testimony
of Rock, Shamburger, and Messenger established that they did not
know whether steps were taken to prevent further chemical releases.
Second, Appellants argue that the magistrate judge erred in
concluding that the individual defendants had not been delegated
the responsibility for their safety. Again, the uncontroverted
testimony indicates that neither Rock, Shamburger, or Messenger had
any safety responsibility with respect to the particular DH Still
from which the chemical release occurred.34 Moreover, there is no
34
The following passage from the deposition of Richard Holliday is
illustrative:
Q. Would Mr. Rock have had responsibility for insuring that
adequate monitoring devices were in place at the DH still
during this time frame?
A. No, that would not fall in his responsibility but in the
responsibility of the unit.
Q. Okay. Would Mr. John Shamburger have had any responsibility
for insuring that adequate monitoring devices were in place at
that time?
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evidence that Holliday failed to delegate responsibility with due
care.35
Finally, Appellants rely heavily upon this Court’s decision in
Ford v. Elsbury, in which we reversed a finding of improper joinder
and ordered the matter remanded to the state court.36 In Ford,
litigation resulted from an explosion at a fertilizer plant. As
here, the suit was against the plant and its manager, a nondiverse
defendant. After removal, plaintiffs filed a motion to remand;
following limited discovery, the district court denied plaintiffs’
motion, finding the nondiverse defendant improperly joined. We
reversed, finding that affidavits submitted by the plaintiffs
contradicted the defendants’ bare allegation that the nondiverse
defendant had not been delegated responsibility for safety
measures.
As here, the district court relied upon the self-serving
testimony of the nondiverse defendant that he had no responsibility
A. No, that would not fall in his responsibility either.
Q. What about Terry Messenger?
A. No, not –– not him, either.
Q. Okay.
Deposition of Richard Holliday, at 30. Appellants presented no evidence that
contradicted the testimony given by Holliday in his deposition.
35
Appellants submitted several documents with their motion to remand. None
of the documents mention Rock, Shamburger, or Messenger by name, or give any
indication that these three individual defendants had any connection to the
particular chemical release in April 2002. Holliday’s name appears on several
documents reporting the incident to the Louisiana Department of Environmental
Quality, Surveillance Division; however, as discussed above, Appellants presented
no evidence that Holliday delegated his safety responsibilities without due care.
36
32 F.3d 931 (5th Cir. 1994).
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for safety measures relating to the particular plant explosion.
However, unlike Appellants, the plaintiffs in Ford came forward
with affidavits contradicting the testimony of the nondiverse
defendant. Here, nothing in the record contradicts the testimony
of the individual defendants. We are persuaded that the magistrate
judge, relying upon undisputed facts, correctly determined that the
individual defendants were improperly joined and should be
disregarded in determining whether there is complete diversity of
citizenship.
2
Next, Appellants contend that PPG’s operation of a chemical
manufacturing plant is an inherently dangerous activity that, under
Louisiana law, may not be delegated. As this theory of recovery
was not raised below, we decline to consider it.37
III
As there was never a reasonable possibility of recovery
against the named individual defendants, we affirm.
37
See In re McCloy, 296 F.3d 370, 376 (5th Cir. 2002) (“We do not reach
issues not raised before the district court.”). Here, there is no discussion of
this alternative theory in Appellants’ petition or the magistrate judge’s report
and recommendation.
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