In Re Methyl Tertiary Butyl Ether Products Liability Litigation
OPINION AND ORDER
[BJеcause “law is an instrument of governance rather than a hymn to intellectual beauty, some consideration must be given to practicalities.” 1
Following the May 2007 decision of the United States Court of Appeals for the Second Circuit in
People of the State of California v. Atlantic Richfield Company, et al.
and
The State of New Hampshire v. Amerada Hess Corporation, et al.,
2
defendants in the above-captioned distinct but related action (“the
Suffolk County
action”), having removed this case to federal court in 2004, now move to remand the
I. BACKGROUND
A. Procedural Posture
“Tortured” is an understated description of the procedural history of this case. On May 6, 2002, the ease was originally filed in the United States District Court for the Eastern District of New York based on diversity and bankruptcy jurisdiction.
3
Apparently, thinking better of their decision to proceed in federal court, the plaintiffs filed another action in the New York State Supreme Court for Suffolk County on October 9, 2002. On March 22, 2004, after defendants’ time for removal had expired,
4
one of the many defendants in the action, Lyondell Chemical Company, served a third-party complaint on Marathon Ashland Petroleum, LLC. Eight days later, on March 30, 2004, Marathon removed the case to the United States District Court for the Eastern District of New York.
5
The removal was based solely on federal officer jurisdiction under
Promptly after this removal, plaintiffs moved to remand the action to state court. Defendants vigorously opposed that remand motion arguing that this Court had federal jurisdiction and that no abstention with respect to the state law claims was warranted. This Court agreed, and denied plaintiffs’ 2004 motion to remand. 6 The Suffolk County action was designated long ago as one of four focus actions. 7 As a result, this Court has presided over this action and given it top priority within the MDL for more than three years. During that time, it has issued thirty-six substantive opinions and orders, comprising more than one thousand pages of text; has issued thirty Case Management Orders; and has held over thirty-five status conferences. 8 Perhaps most importantly, a firm trial date has been set for March 3, 2008. 9
In October 2006, after receiving leave to amend, plaintiffs filed a Sixth Amended
B. The Parties and the Complaint
The Suffolk County action includes two plaintiffs: the County of Suffolk (“the County”) and the Suffolk County Water Authority (“SCWA”). 14 Plaintiffs’ Sixth Amended Complaint, filed in October 2006, names fifty-three defendants and asserts these nine claims:
(a) violation of Section 8(e) of the Toxic Substances Control Act (“TSCA”),15 U.S.C. § 2607(e) ; (b) public nuisance; (c) strict liability for design defect; (d) strict liability for failure to warn; (e) negligence; (f) private nuisance; (g) violation of New York’s General Business Law; (h) violation of New York’s Navigation Law; and (i) trespass. 15
With the exception of the TSCA claim, each claim is asserted against each of the fifty-three named defendants. 16
C. Multi-District Litigation Number 1358
In order to fully understand the complexity of this motion, the
Suffolk County
action must be viewed in the context of this multi-district litigation (“MDL”) proceeding. The current iteration of this MDL began in 2004, with defendants’ removal of a number of actions that had been filed in state courts. There are now well over one hundred actions assigned to this Court, each having been transferred here for consolidated pretrial proceedings from district courts in nineteen states. Every action in the MDL asserts claims arising from one or more defendants’ production, distribution, handling, or sale of MTBE-containing gasoline that is alleged to have contaminated plaintiffs’ groundwater. Most of these actions were removed from state courts by defendants under some combination of: federal officer jurisdiction,
On October 19, 2004, the Suffolk County action, along with four other actions was designated a focus action within the MDL. In late 2006, Suffolk County was selected to be the first of the focus cases to be scheduled for trial. 18 As a result, it is now, and has been for some time, the most active case in the MDL and has demanded — and consumed — extensive judicial and party resources. For at least two years, the Court has held monthly status conferences, each lasting several hours, for which the parties prepare joint and separate agendas of issues arising in the MDL. Although the Suffolk County action is only one in over one hundred actions in the MDL, it is no exaggeration to say that the Suffolk County action consumes the majority of time at all of these conferences.
II. JURISDICTIONAL AND PROCEDURAL STATUTES
A. Statutory Bases for Original Jurisdiction in Federal Court
A federal court may exercise jurisdiction only if Congress has passed a statute granting it such jurisdiction.
19
Generally, Congress has granted original jurisdiction to district courts in two situations.
First,
Second,
Congress has granted district courts original jurisdiction in “diversity” actions under
The district courts shall have оriginal jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between — (1) citizens of different States; (2) citizens of a Stateand citizens or subjects of a foreign state; (3) citizens of different States and in which citizens or subjects of a foreign state are additional parties; and (4) a foreign state, defined in section 1603(a) of this title, as plaintiff and citizens of a State or of different States.
B. Statutory Bases for Removal and Remand
When a plaintiff files a complaint in state court that could have been filed originally in federal court, Congress allows the defendant or defendants to remove the action from state to federal court under
The requirements for considering a motion to remand to state court are set forth in
The reason for
Creative lawyers are capable of manufacturing many reasons for remand at any time, particularly when a case takes years to litigate and state courts continue to develop the law in the interim. However,
III. ISSUES TO BE DECIDED
A. Subject Matter Jurisdiction
A challenge to subject matter jurisdiction can be raised at any time during an action. Thus, the Court must consider whether it has subject matter jurisdiction in the Suffolk County action, based on the presence of a federal claim, despite defendants’ improvident removal of the action.
B. Supplemental Jurisdiction
If the Court has original subject matter jurisdiction over any claim, the next question is whether it may exercise supplemental jurisdiction over the state law claims as well as related parties. This question is governed by
IY. DISCUSSION
A. This Court Has Subject Matter Jurisdiction Over the Suffolk County Action
Defendants conceded at oral argument, as they had to, that if plaintiffs’ 2006 Amended Complaint adding a federal claim was validly filed, then this Court has original jurisdiction over this action. 30 Succinctly stated, defendants argue that because their removal of this case from state court turned out to have been improvidеnt — a result of the May 2007 opinion of the appellate court in a different case — this Court had no power to permit plaintiffs to amend their complaint in 2006 to add an unmistakable federal claim. Defendants’ argument must be rejected.
The highly unusual facts of this case confront this Court with the following question: is remand necessary or appropriate where defendants remove an action to federal court, then seek to remand that same action to state court at a much later stage of litigation, after plaintiffs have added a jurisdiction-conferring federal claim and after removal is discovered to have been improvident? Despite sophisticated searches for similar cases, conducted by teams of lawyers for both sides and by this Court, this case appears to be
sui
While the general rule is that subject matter jurisdiction is assessed at the time a complaint is filed, or at the time of removal to federal court when a case is originally filed in state court,
33
a number of exceptions have been recognized by the courts. One such exception is found in
Finally, a judge-made exception allows an appellate court to find that a district court properly exercised jurisdiction based on a jurisdiсtion-curing event that occurred after filing, but before the entry of final judgment.
34
Given a recent Supreme Court decision discussed
infra,
it is not clear that this last exception is limited to actions by appellate courts.
35
A restatement of this last exception may be that if a
Neither the
Courts have distinguished between a post-filing change intended to deprive the court of jurisdiction and a post-filing change intended to solidify the court’s jurisdiction.
39
Some courts have also considered concepts of estoppel and waiver, finding that a party that took action to remain in federal court should not be heard to complain about the original lack of jurisdiction after events have caused it to regret its earlier decision.
40
Another factor
Plaintiffs cite many cases where a court was permitted to exercise jurisdiction based on post-removal (or post-filing events) despite a lack of jurisdiction at the time of removal (or filing). 43 Defendants, in turn, cite cases where a court declined to exercise jurisdiction based on subsequent events. 44 Resolving this apparent inconsistency requires a close reading of the factual and procedural contexts in which each decision was made. This is so because in each case, as discussed above, the court engages in a multi-factor analysis that depends on the circumstances of that particular case.
With this background of the factors considered by courts in determining whether a post-filing event permitted the trial court to exercise jurisdiction, I will now undertake a review of significant cases selected either because they are Supreme Court decisions or because they are usefully analogous (albeit not identical) to the factual and procedural context confronting this Court.
1. Supreme Court Cases
The following two Supreme Court cases both address jurisdiction based on diversity of citizenship and the application of
a. Newman-Green, Inc. v. Alfonzo-Larrain
In
Newman-Green, Inc. v. Alfonzo-Lar-rain,
the Supreme Court heard an appeal from a Seventh Circuit decision dismissing a lawsuit based on lack of subject matter jurisdiction. The Supreme Court reversеd, holding that in order to salvage jurisdiction, the appellate court had the power to grant plaintiffs motion to dismiss a dispensable non-diverse party that solidified rather than destroyed the court’s jurisdiction. Even though the court lacked subject matter jurisdiction over the action at the time the motion was granted, once the motion was granted, the court had
The
Newman-Green
action was originally filed in federal court based on
What happened next in
Neuman-Green
is quite interesting given the
Suffolk County
defendants’ argument here that this Court lacked the power to permit an amendment of the complaint at a time it lacked jurisdiction over the action. In
Newmarir-Green,
the individual defendants-guarantors sought rehearing en banc. The majority of the en banc court held that the appellate court lacked power to grant the motion under either
The Supreme Court then reversed the en banc decision and held that the appellate court had the power to grant the motion for leave to amend. The Court first found that the motion could' not be granted pursuant to
After this detailed exposition of the history of Nemnan-Green, I stress three essential points. First, the Supreme Court never questioned the authority of either the trial court or the appellate court to grant a motion at a time when it lacked jurisdiction. 51 Second, there was no final judgment in Newman-Green — not at the time the appellate panel decided it could grant a motion for leave to amend nor at the time the Supreme Court determined that the appellate court could grant a motion for leave to amend. Third, if this Court lacked the power in 2006 to grant plaintiffs’ motion for leave to amend, plaintiffs could have re-filed the action in federal court, asserting the federal TSCA claim, along with all of the state law claims, and then ask this Court to exercise supplemental jurisdiction over those claims. 52 Such a course would surely elevate form over substance, and would be a “hymn to intellectual beauty” rather than a recognition of “practicalities.” 53
b. Caterpillar Inc. v. Lewis
A subsequent Supreme Court case, Caterpillar Inc. v. Lewis, 54 built on the holding in Nemnaiv-Green and indeed applied it in the context of a case that was improvidently removed to federal court. Because the procedural details of the case are important to a full understanding of the holding in Caterpillar, I will describe them in some detail. Lewis (a citizen of Kentucky), who suffered personal injuries while operating a bulldozer, sued the manufacturer of the bulldozer (Caterpillar — a citizen of Delaware and Illinois) and the company that serviced it (Whayne Supply — a citizen of Kentucky) in state court. Liberty Mutual, the insurer for Lewis’ employer, intervened as a party plaintiff asserting subrogation claims against both defendants. Next, Lewis settled his claim with Whayne Supply. Caterpillar then removed the case to federal court on the ground of diversity of citizenship.
Lewis moved to remand, arguing that Whayne Supply (the nondiverse defendant) remained in the action because Liberty Mutual had not settled its claim against this defendant. The district court denied the motion to remand, choosing to treat Whayne Supply as effectively dropped from the case prior to removal due to the
The Supreme Court framed the question presented as follows: “Does the District Court’s initial misjudgment [denying a timely motion to remand] still burden and run with the case, or is it overcome by the eventual dismissal of the nondiverse defendant?” 55 In reinstating the verdict and holding that the district court’s initial misjudgment was overcome by later events, the Supreme Court established the propriety of the following actions. First, and foremost, the Court pеrmitted an improvident removal to be cured by subsequent events. Second, the Supreme Court validated a district court order dismissing a nondiverse defendant (as a result of a settlement), at a time when, in retrospect, that court lacked subject matter jurisdiction over the case. Finally, the Court based its decision, in part, on considerations of finality, efficiency and economy. 56 Quoting directly from its earlier decision in Neumanr-Green, the Caterpillar Court stated that “ ‘[requiring dismissal after years of litigation’ ... ‘would impose unnecessary and wasteful burdens on the parties, judges, and other litigants waiting for judicial attention.’ ” 57 The Caterpillar Court went on to say that this reasoning comports with a main theme of the removal scheme.
Despite a federal trial court’s threshold denial of a motion to remand, if, at the end of the day and case, a jurisdictional defect remains uncured, the judgment must be vacated. In this case, however, no jurisdictional defect lingered through judgment in the District Court. To wipe out the adjudication postjudgment, and return to state court a case nowsatisfying all federal jurisdictional requirements, would impose an exorbitant cost on our dual court system, a cost incompatible with the fair and unpro-tracted administration of justice. 58
2. Circuit Court Cases
No fewer than eight circuit courts have reached the same conclusion as the Supreme Court in Newman-Green and Caterpillar. Although one of these circuit court cases did not involve a removal, all of the courts approved a district court’s having permitted an amendment despite not having jurisdiction at the time of such amendment.
a. Bernstein v. Lind-Waldock & Company
In Bernstein v. Lind-Waldock & Company, plaintiff sued two defendants in state court seeking to enjoin the auction of his seat on the Chicago Mercantile Exchange. 59 Both defendants removed to federal court, claiming that plaintiffs rights were governed by federal law rather than state law. Plaintiff moved to remand, but the motion was denied. Thus, as in the instant case, the action remained in federal court although plaintiff had not pled a federal claim.
Plaintiff then amended the complaint to add a Constitutional claim: that the Exchange had taken his seat without due process of law. The district court granted summary judgment in favor of both defendants, except as to one “minor” count which was remanded to state court.
60
Plaintiff appealed. The appellate court began its analysis by questioning whether the case had been properly removed. It held that the removal was improper as the allegations of the complaint did not state a claim arising under federal law pursuant to
b. Barbara v. New York Stock Exchange
In
Barbara v. New York Stock Exchange, Inc.,
the Second Circuit followed
The Second Circuit began its analysis by determining that the case had been improperly removed. However, rather than vacating and remanding based on the lack of federal jurisdiction ab initio, it held that the plaintiffs proposed amendment should have been permitted and, in fact, conferred jurisdiction over the action. Having thereby determined that the district court had jurisdiction to hear the case, the appellate court agreed with the district court and affirmed the summary judgment for defendant.
Unlike courts in the cases cited earlier, the Barbara court was not asked to grant a motion at a time when it lacked jurisdiction. Barbara’s amendment was “as of right” because the defendant had not yet filed an answer. 67 Nonetheless, the court stressed the “voluntariness” of plaintiffs action stating that “if a district court erroneously exercises removal jurisdiction over an action, and the plaintiff voluntarily amends the complaint to allege federal claims, we will not remand for want of jurisdiction.” 68
While there are distinctions between Barbara and the instant case, the plain fact here is that plaintiffs have voluntarily added an “unmistakable” federal claim pri- or to the entry of final judgment. 69 Thus, at the time this case reaches an appellate court, it will be beyond cavil that the trial court had original jurisdiction to hear the case based on plaintiffs’ addition of a federal claim.
c. Balgowan v. State of New Jersey, Department of Transportation
In
Balgowan v. State of New Jersey,
Department of Transportation, engineers sued their employer, the State of New Jersey Department of Transportation (the “State”), in federal court, alleging violations of the Fair Tabor Standards Act and seeking monetary damages.
70
The district court granted summary judgment to the State and plaintiffs appealed. The Third Circuit Court of Appeals affirmed in part, reversed in part, and remanded with instructions to enter summary judgment in favor of plaintiffs on their back-pay for overtime claim. Before judgment was entered, the Supreme Court issued a decision which “abruptly changed the law regarding Eleventh Amendment immunity.”
71
Relying on
Seminole Tribe of Florida v.
Citing
N&wman-Green,
the Third Circuit held that it could rely on
Once again, the court never hesitated to act to salvage jurisdiction despite the fact that at the time the motion was made it turned out (retrospectively) that the court lacked jurisdiction. Thus, it accepted the proposition that practicalities can and should override “intellectual beauty” based on the notion of protecting limited judicial resources and efficiency toward all parties. Nor can this case be shoehorned into a so-called “final judgment” exception. 74 At the time the jurisdictional defect arose — as a result of the recent Supreme Court decision in Seminole — the case was far from final judgment. Indeed, in its first decision, the circuit court had remanded the matter to the district court to enter judgment in favor of plaintiffs on some, but not all of their claims. On defendant’s motion for a rehearing, the Third Circuit granted plaintiffs’ motion to amend, thereby salvaging its own jurisdiction to act. The circuit court then reversed its earlier holding, based on yet another intervening Supreme Court opinion, and granted summary judgment to all defendants,
d. Additional Circuit Court Decisions
The remaining five circuit courts all approved an amendment by plaintiffs, adding a federal claim prior to verdict, as sufficient to cure a jurisdictional defect that existed at the time of removal. Specifically, the First, Fifth, Eighth, Ninth and Tenth Circuits have each held that an amended complaint, filed after an imрroper removal, that adds a claim arising under federal law is sufficient to confer subject matter jurisdiction on the district court.
75
3. Curative Action Is Not Limited to Appellate Courts
In opposition to this list of persuasive authorities, defendants rely on the general rule that the court’s jurisdiction must be evaluated as of the time of filing or removal (the “time-of-filing” rule).
77
Defendants recognize one exception to the general rule, acknowledging that “the entry of final judgment can alter the analysis for purposes of appeal.”
78
Defendants then cite a number of cases where appellate courts salvaged jurisdiction by assessing the jurisdictional posture of the case at the time final judgment is entered.
79
One problem with this distinction between the power of appellate courts and that of district courts is that an appellate court rarely hears a case prior to a final judgment. Another problem is that appellate courts often refer to final judgment as a milestone for gauging the stage of litigation in an efficiency analysis, rather than as a prerequisite for sustaining jurisdiction.
80
In addition, if such a distinction was ever valid — and it is not clear that it was, given the Supreme Court’s recognition that a district court has the power to decide a motion (e.g., under
a. Grupo Datañux v. Atlas Global Group L.P.
In
Grupo Dataflux v. Atlas Global Group L.P.,
plaintiff sued in federal court,
The Supreme Court reversed, holding that this change in the status of a continuing party could not cure the original defect in jurisdiction. The Court reasoned that the status of a party must be evaluated at the time of the filing, and a subsequent change in that status makes no difference from the perspective of analyzing jurisdiction, whether that change is noticed before or after final verdict. That is, a defect in jurisdiction is either curable or it is not, and it does not matter in which court or at what stage the cure is first noticed.
[Tjhere is no basis in reason or logic to dismiss preverdict if in fact the change in citizenship has eliminated the jurisdictional defect. Either the court has jurisdiction at the time the defect is identified (because the parties are diverse at that time) or it does not (because the postfiling citizenship change is irrelevant). If the former, then dismissal is inappropriate; if the latter, then retention of jurisdiction postverdict is inappropriate. 82
Thus, for all intents and purposes, the Court has eliminated the distinction between the power of an appellate court to recognize a preverdict cure and the power of a trial court to do the same. 83
b. Instances in Which a Subsequent Event or Proposed Subsequent Event Does Not Cure a Defect in Jurisdiction
Defendants cite a string of cases in which courts have declined to allow a cure where the Court lacked jurisdiction at the time of removal or filing. While it is not necessary to discuss each case in detail, it is sufficient to say that each such case is distinguishable from the instant case in one or more important respects.
One case cited by defendants is particularly noteworthy. Defendants rely on a Ninth Circuit case,
Libhart v. Santa Monica Dairy Co.,
for the proposition that a district court lacks jurisdiction to entertain an amendment to a complaint when a removal petition fails to establish subject
In several other cases, the defect in jurisdiction was found to be “not curable,” like the defect in diversity jurisdiction at issue in
Grupo Dataflux.
88
In several cases, the district court was aware that it lacked jurisdiction (“had notiсed the defect”) over the case at the time it declined to accept an amendment that would have permitted it to exercise jurisdiction over the action.
89
Moreover, because the vast
In sum, after three and a half years of intense and complex litigation, scores of formal and informal court conferences, and many opinions, I conclude that plaintiffs’ voluntary amendment, which added an unmistakable federal claim before the defect in removal was identified, is sufficient to confer subject matter jurisdiction upon this Court despite what now appears to have been an improvident removal. Any other result would ignore the years of effort by the Court and the parties — a critical factor specifically recognized by the Supreme Court and several circuit courts. 92 I turn now to the question of whether this Court has the power to exercise supplemental jurisdiction over the state law claims and, if so, whether it should nonetheless exercise its discretion to remand those claims to state court.
B. This Court Has Supplemental Jurisdiction Over the Remaining State Law Claims and Defendants Named Only in Those Claims and Declines, in Its Discretion, to Remand the State Law Claims
“Although the district courts may not exercise jurisdiction without a statutory basis, it is well established — in certain classes of cases' — ’that, once a court has original jurisdiction over some сlaims in
In 1990, however, Congress broadened the jurisdiction of district courts when it enacted the supplemental jurisdiction statute,
... in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties. 98
For example, in
Exxon Mobil Corp. v. Allapattah Services, Inc.,
ten thousand Exxon gasoline dealers brought state law claims against the Exxon Corporation.
99
With that overview, I now address first whether I have jurisdiction over the state law claims and the defendants named only in those claims because they form part of the same case or controversy at issue in the federal claim. I then consider whether, despite having jurisdiction, I should exercise my discretion to remand the state law claims to state court.
1. This Court Has Jurisdiction Under
Defendants argue that this Court lacks jurisdiction over the state law claims on the ground that they do not form part of the “same case of controversy” as the TSCA claim, as required by
a. The State and Federal Claims Must Be Part of the Same Case or Controversy
Federal and state claims form “one case or controversy,” and thus satisfy
As an initial matter, the Second Circuit recognized that some district courts “have refused to rely on the existence of subject matter jurisdiction in one action to provide supplemental jurisdiction over claims in a related action.” 108 “This distinction [of a separate action as the basis for jurisdiction], however, has never troubled us.” 109
Turning to the question of whether
The district court had managed the securities action for a number of years and, in so doing, had issued rulings related to that case. “The district court was thus well-placed to consider the issues that would arise in the malpractice action, including questions as to whether [the plaintiffs’ counsel] asserted all appropriate
Achtman also relied on the Second Circuit’s ruling that federal courts have jurisdiction in “fee dispute” cases. 115 So long as the action for which the attorney was hired involved a federal claim in federal court, the Second Circuit has held that the fee dispute (between an attorney and client) could be resolved in federal court even though that dispute raised only a state law breach of contract claim. For example, the Achtman Court relied on its earlier holding in Itar-Tass Russian News Agency v. Kwier, Inc., 116 quoting that decision as holding that “the district court had the power to exercise supplemental jurisdiction over a fee dispute because it had already ‘obtained total familiarity with the subject matter of the [underlying] suit and the professional services of the moving parties thereon and of the virtual totality of all the compensation arrangements contended for and disputed.’ ” 117 The court went on to note that in Itar-Tass, “[a]fter identifying these clear hallmarks of a common nucleus of operative fact, [the Itar-Tass court] focused exclusively on the district court’s discretionary decision to decline jurisdiction.” 118
Achtman described the outer limits of the “same case or controversy” doctrine, given that it addressed a case with no independent federal claim but one related to a different case that had federal claims. There are many cases like this one, where state and federal claims are brought in one lawsuit. In those cases, the courts have engaged in the same analysis of whether there is a “common nucleus of operative facts” among the state and federal claims. 119
For example, in Briarpatch Ltd., L.P. v. Phoenix Pictures, Inc., plaintiffs did not expressly plead any copyright violations but instead alleged a number of state law claims that could potentially be preempted by the Copyright Act. 120 The Second Circuit held that some of the claims were preempted, but other claims were not. The court went on to conclude that supplemental jurisdiction over the non-preempted state law claims was proper because all of the claims were derived from a common nucleus of operative facts for one reason: “they all deal with the purported sale of the [allegedly infringing] movie.” 121
The counterclaims and the underlying claim bear a sufficient factual relationship (if one is necessary) to constitute the same “case” within the meaning of Article III and hence ofsection 1367 . Both the ECOA claim and the debt collection claims originate from the Plaintiffs’ decisions to purchase Ford cars. 124
Having concluded that the court had jurisdiction under
As these cases demonstrate, pointing to differences among claims (e.g., different underlying facts, different defendants) does not help determine whether the claims are part of the same case or controversy. Rather, the key question is whether the parties would ordinarily be expected to try all of those claims in one judicial proceeding given the common threads running throughout the claims.
b. The Federal and State Claims in the Suffolk County Action Are Part of the Same Case or Controversy
A comparison of the claims in the
Suffolk County
action demonstrate that the state and federal claims share a common nucleus of operative facts and are part of the same case or controversy. A good example is the issue of the defendants’ knowledge and concealment of the dangers of MTBE. Plaintiffs’ TSCA claim alleges, in essence, that certain defendants violated the Act by withholding “information which reasonably supports the conclusion that [MTBE and/or gasoline with MTBE] presents a substantial risk of injury to health or the environment” from the Environmental Protection Agency.
126
Plaintiffs’ public nuisance, private nuisance, and trespass claims assert that defendants’ concealment of MTBE’s hazards led to its widespread use, and ultimately to
That overview of the TSCA and various state law claims makes clear that any issues related to what the oil companies knew, and when they knew it, are raised by the TSCA claim and also by those state law claims. 128 Moreover, the question of when one oil company knew of the dangers of MTBE will be relevant as to when another company knew, or should have known, about the threat. 129
Further, much of the evidence related to MTBE that plaintiffs will proffer is relevant to both the federal and state claims. For example, in order to establish their TSCA claim, plaintiffs must prove that the twelve defendants failed to inform the EPA of substantial information they possessed that reasonably supports the conclusion that the gasoline containing MTBE presents a substantial risk of injury to public health or the environment. Similarly, to prove plaintiffs’ state-law strict liability claim, plaintiffs must establish that MTBE was an unreasonably dangerous product. 130 While the jury instructions will differ as to each of those claims, plaintiffs will be required to present much of the same evidence to the jury regarding MTBE’s toxicity, its solubility in water, and the levels at which it harms drinking water in order to prove both the federal and state claims.
This is not a situation where “the federal and state claims rested on essentially unrelated facts.”
131
In the
Suffolk County
Regardless of the differences that defendants have identified among the state and federal claims, there is a certainly a common nucleus at the center of all of the claims: “two plaintiffs, the County of Suffolk and the Suffolk County Water Authority, sued various corporations for their use and handling of the gasoline additive methyl tertiary butyl ether (‘MTBE’).” 134 Indeed, this common nucleus of operative fact is why the Judicial Panel on Multidis-trict Litigation has repeatedly transferred actions involving MTBE to this Court.
Because the common threads running through the claims here are numerous and overlapping, a party would ordinarily expect all of them to be resolved in one proceeding. This Court therefоre has jurisdiction under
There is no dispute that this Court must keep the TSCA claim because federal courts have exclusive jurisdiction to hear claims arising under TSCA.
136
Nonetheless, defendants argue that the Court should exercise its discretion under
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,
(3) the district court has dismissed all claims over which it has original jurisdiction, or
(4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.”
On the other hand, a district court may retain jurisdiction over the action even if one or more of those factors is met. In deciding whether to retain jurisdiction over state law claims in such circumstances, the court must take into account considerations of “economy, convenience, fairness, and comity.” 137 Thus, for example, the Second Circuit has stated:
[I]f the dismissal of the federal claim occurs “late in the action, after there has been substantial expenditure in time, effort, and money in preparing the dependent [state law] claims, knocking them down with a belated rejection of supplemental jurisdiction may not be fair. Nor is it by any means necessary.” 138
Thus, keeping in mind that no factor is dispositive, I will examine the relevant
a. Whether Plaintiffs’ Claims Raise Novel or Complex Issues of State Law
With respect to
Nonetheless, it cannot be denied that as the years have gone by and the defendants have continued to make motions (and рlan to make several more), that there are complex issues of state law that continue to be raised. Surely the defendants knew this when they removed the case years ago to federal court. Defendants’ oscillating position on the issue of “market share liability” amply illustrates this point. 142
For the first time, defendants argue that the issues are complex and novel because “this case requires the Court to decide whether the ‘market share’ theory of liability is viable in this context, and if so, how it should be applied.” 143 Of course at the time of removal not a single defendant raised this argument. Indeed, in opposing plaintiffs’ timely motion to remand, the removing defendant stated that the “Questions Of State Law [raised by the Suffolk County action] Are Not Novel Or Difficult Such That [federal] Abstention Is Warranted” and that “The Suffolk Case Does Not Involve Difficult State Law Questions Warranting Abstention[.]” 144
b. Whether the State Claims Substantially Predominate Over the Federal Claims
The general rule is that in order “to promote judicial economy, convenience, and fairness to litigants by litigating in one case all claims that arise out of the same nucleus of operative fact” courts should exercise supplemental jurisdiction over related state law claims.
146
It must be remembered that the
There is a legitimate question here as to whether the state law claims substantially predominate over the federal claim; this factor could go either way. On the one hand, as explained above, the federal and state claims arise out of the same common nucleus of operative facts. Indeed, except for the issue of causation and damages, plaintiffs will present much of the same evidence for all of the claims.
147
Moreover, many of the state law issues have already been decided.
148
On the other hand, the state law claims are substantial and will surely require additional proof against many parties.
149
In any event, it is not important to decide on which side of the line this factor falls because at bottom, this is a discretionary decision and the presence of one of the
c. The Exercise of Discretion
It is patently clear that considerations of “economy, convenience [and] fairness” weigh heavily in favor of retaining supple
With respect to fairness, it is perhaps even more compelling to deny defendants’ motion given the unique facts of this case. In many ways, defendants’ motion, both in its content and its timing, is gamesmanship in its purest form. Defendants removed this case and vigorously contested plaintiffs’ motion to remand. Now, on the basis of changed circumstances, namely, the addition of the TSCA claim and the later appellate decision that removal based on federal officer jurisdiction was improper, those same defendants ask the Court to reconsider whether the very claims they removed to federal court should remain here. If there were ever a case to deny such a request, this is it. As noted earlier, for more than three years, this Court has resolved virtually every substantive and procedural issue in the focus cases, including — and especially — the
Suffolk County
action. The number of opinions and orders has already been noted.
152
Granting defendants’ request would result in vacating each and every one of those opinions and orders and would possibly result in a delay of years before a jury finally considers the claims.
153
Further, requiring these cases to be brought in state court would burden a state court with the very time-consuming task of learning the facts, theo-
V. CONCLUSION
For the foregoing reasons, defendants’ Motion to Remand the Suffolk County action is denied in its entirety. The Clerk of the Court is directed to close this Motion (document # 1455).
SO ORDERED.
.
Newman-Green, Inc. v. Alfonzo-Larrain,
Notes
.
See In re MTBE Prods. Liab. Litig. (“In re MTBE"),
.
See
.
See
. By order of the Judicial Panel on Multidis-trict Litigation, this action was transferred to this Court on June 16, 2004 as part of multi-district litigation ("MDL”) No. 1358. The MDL is discussed infra Part I.C.
.
See In re MTBE,
. See Case Management Order No. 4, dated October 19, 2004, at 2.
. Many of the motions that have been decided resolved disputed issues of state law, including statutes of limitations for various state law claims,
see In re MTBE Products Liability Litigation,
Nos. 00 Civ. 1898, MDL 1358, M21-88,
.See
Case Management Order No. 22, dated November 16, 2006, at 2 (initially scheduling
Suffolk County
trial for January 2008).
But see
Transcript of May 16, 2007 telephone conference at 3 (setting March 3, 2008 as firm trial date). The parties and the Court expect
. See Case Management Order No. 20, dated August 25, 2006, ¶ 2 (granting leаve to amend the Suffolk County complaint). Defendants did not oppose plaintiffs’ request to amend. Moreover, defendants answered the amended complaint without moving to dismiss the TSCA claim.
.
See
.
See
. See Transcript of August 23, 2007 status conference ("8/23/07 Tr.”) at 76 (plaintiffs’ counsel noting that even if the state claims were remanded, the parties "would still be here on some of our claims on the TSCA claims”).
. The County is a municipality located on Long Island in the State of New York. SCWA is a "public benefit corporation” that provides water to over 1.1 million Suffolk County residents, making it one of the largest groundwater suppliers in the nation. Suffolk County Sixth Amended Complaint ("6AC”), dated October 16, 2006, ¶ 8. The groundwater beneath Suffolk County is SCWA’s sole source of drinking water. See id. ¶ 66.
. Id. ¶ 4.
. Plaintiffs’ TSCA claim is brought against twelve defendants. See id. ¶¶ 3, 201-213 (naming the "TSCA defendants” and alleging TSCA violations). Defendants play down the TSCA claim, suggesting that because some of the twelve TSCA defendants are affiliated corporate entities, the claim is only against four "real” companies, a small number relative to the total line up of fifty-three defendants. But this argument ignores the fact that most of the non-TSCA defendants are affiliated with one or more other defendants, as well.
.
See
. See Case Management Order No. 22, dated Nov. 16, 2006, at 2 (selecting Suffolk County as the first action to be tried).
.
See
.
.
See Allapattah,
. Id.
.
Id.
at 553-54,
.
See In re MTBE,
.
. Id. Interestingly, were the state claims to be remanded now to state court, the "just costs and ... actual expenses, including attorney fees, incurred as a result of the removal” would be astronomical — amounting to hundreds of thousands, if not millions of dollars.
. This thirty day requirement is not a mere technicality. Rather, it reflects a policy choice on the part of Congress to promote certainty and efficiency among litigants and the courts at a very early stage in the proceedings and to guard against mid-litigation forum shopping.
See, e.g., Pierpoint v. Barnes,
.In re Allstate Ins. Co.,
.
See
.
See
8/23/07 Tr. at 11, 17 (defense counsel conceding that if plaintiffs’ amendment was effective, this Court currently has original jurisdiction over the
Suffolk County
action). That, of course, was not a concession that the Court has the power,
see
. All of the district courts that denied leave to permit an amendment to create jurisdiction had already dismissed (or decided to dismiss) the case based on lack of jurisdiction. When district courts permitted an amendment of a complaint to add a federal claim for the purpose of solidifying jurisdiction, they acted at a time when they believed they had jurisdiction.
. This is because in every case where a district court permitted an amendment to a complaint, the general rule preventing interlocutory appeals meant that no challenge to jurisdiction was made until the case was appealed after a final judgment. Due to the fortuity of an appellate decision in a related action, this is the one case in a million in which the district court must confront that issue.
. See, e.g.,
Pullman Co.
v.
Jenkins,
.
See Grubbs v. General Elec. Credit Corp.,
.See
discussion of
Grupo Dataflux
v.
Atlas Global Group, L.P.,
[Tjhere is no difference in efficiency terms between the jury verdict and, for example, the moment at which the jury retires. Nor, for that matter, is there a large difference between the verdict and mid-way through the trial.... Indeed, in complicated cases requiring a great deal of discovery, the parties and the court often expend tremendous resources long before the case goes to trial.
Id.
(quoting
Atlas Global Group, L.P. v. Gmpo Dataflux,
. The Grupo Dataflux Court focused on whether a jurisdictional-defect is curable or not curable, rather than on which court has the power to effect a cure.
.
See id.
at 576,
.
See
.
See, e.g., Chabner v. United of Omaha Life Ins. Co.,
. Whether courts have found estoppel or waiver depends in large part on whether the post-filing or post-removal change was undertaken "voluntarily” or "involuntarily.”
See, e.g., In re Wireless Tel. Fed. Cost Recovery Fees Litig.,
. See, e.g., cases cited infra note 89.
.
See, e.g., Caterpillar, Inc. v. Lewis,
. See Plaintiffs’ Memorandum of Law in Opposition to Defendants’ Motion to Remand Suffolk County Water Authority to State Court at 5-9.
. See Memorandum in Support of Defendants' Motion to Remand (“Def. Mem.”) at 9-12; Reply Memorandum in Support of Defendants' Motion to Remand ("Def. Reply Mem.”) at 2-3.
.
.
See
.
Newman-Green,
.
Id.
at 830,
.
Newman-Green,
.
Id.
at 832-33,
.
Cf. Mullaney v. Anderson,
.
See Newman-Green,
.
Newman-Green,
.
See
.Id.
at 70,
. Here, while there is as yet no finality, concerns of both economy and efficiency are present and unusually compelling. As for finality, see discussion of Grupo Dataflux, infra Part IV.A.3.a.
.
Caterpillar,
.
Id.
at
76-77,
.
See
. Id. at 182.
. See id. at 185. As in the instant case, the removal was based on a federal question, and the district court had failed to perceive the defect when deciding the motion to remand.
.
Id.
In the instant case, plaintiffs also voluntarily amended their claim to bring an "unmistakable” federal claim against some, but not all, of the defendants.
Accord In re Wireless Tel.,
. As in the instant case, the "cure” of the jurisdictional defect occurred in the trial court, not in the appellate court. Thus, defendants' argument here that only an appellate court (but not a trial court) may implement a jurisdictional fix is plainly incorrect.
.
See Bernstein,
.
See
.
See id.
at 49 (citing
.
See id.
at 56 (citing
.
Id.
(emphasis added) (citing
Bernstein,
. See discussion of Grupo Dataflux, infra Part IV.A.3.a.
.
See
. Id. at 216 (citing
Seminole Tribe of Fla. v. Florida,
.
See
August 31, 2007 Letter from Peter Sacripanti, liaison counsel for defendants, to the Court (citing
Harper v. Virginia Dep't of Taxation,
.
Balgowan,
. See Def. Mem. at 5-7; see also Def. Reply Mem. at 4-5.
.
See In re Wireless Tel.,
In addition, a district court decision found, although acknowledging that the law on that point was "not entirely clear,” that the court could consider an amended complaint in addressing whether it had subject matter jurisdiction in the face of an improper removal.
See Home Savings & Loan Assoc, of Joliet v. Samuel T. Isaac & Assocs., Inc.,
. According to the defendants, when "plaintiffs sought to add TSCA claims, however, all defendants had answered plaintiffs' complaint, and none consented to amendment. As a result, plaintiffs could not amend without leave of the court.” 8/23/07 Tr. at 3-4. However, at oral argument, defendants conceded that they did not formally object because the Court had informed the defendants they could always move to dismiss the claim pursuant to
In the current motion, however, defendants assert, for the first time, that plaintiffs lack standing to bring the TSCA claim.
See
Def. Mem. at 13-14. The argument lacks any merit. TSCA allows citizen suits against “[a]ny person who manufactures, processes, or distributes in commerce a chemical substance or mixture” such as MTBE.
.See Pullman,
. Def. Reply Mem. at 4 (citing
Caterpillar,
.
See id.
at 4-5 (citing,
e.g., Grubbs,
.
Cf. Grupo Dataflux,
.
See
.
Id.
at 576,
. I recognize that the
Grupo Dataflux.
suit originated in federal court, as opposed to being removed from state court. Thus, the question remains whether a defective removal can be cured
at any level
by a post-removal cure. But given the reasoning of
Grupo Da-taflux
— that there is no principled distinction between a cure at the trial level or at the appellate level — the appellate cases
permitting
a defective removal to be
cured
by a subsequent change (either by dropping or adding a party or by amendment to add a federal claim), solidifying rather than destroying jurisdiction, should also be available to the district courts.
See, e.g., Chabner,
. See 592 F.2d 1062 (9th Cir.1979) (cited in Def. Mem. at 10-11).
.
Id.
at 1065 n. 2 (quoting
.
. It comes as no surprise, therefore, that the Ninth Circuit reached a different outcome in its 2000 decision in
Chabner,
.
See, e.g., Prize Frize, Inc. v. Matrix (U.S.) Inc.,
.See, e.g., Pressroom Unions-Printers League Income Sec. Fund v. Continental Assurance Co.,
.
See Rudow,
.
Waste Control Specialists, LLC v. Envirocare of Texas, Inc.,
. Moreover, such a result would frustrate the purpose of the Federal Rules of Civil Procedure, which "shall be construed and administered to secure the just, speedy, and inexpensive determination of every action.”
.
Allapattah,
. Congress coined the phrase "supplemental jurisdiction” when it enacted
.
Id.
(quoting
Finley v. United States,
.
Id.
at 556-57,
. The statute was enacted December 1, 1990, as part of the Judicial Improvements Act of 1990, Pub.L. No. 101-650, 104 Stat. 5089 (codified at
. The word "shall” in
.
See Allapattah,
.
See Allapattah Servs., Inc. v. Exxon Corp.,
. See id. at 1313.
.
Achtman v. Kirby, Mclnemey & Squire, LLP,
The "common nucleus” test comes from the Supreme Court’s 1966 decision in
Gibbs,
which was not based on the Constitution’s definition of "case or controversy” but rather on a court’s authority to administer justice fairly, efficiently, and with minimal waste and burden.
See Gibbs,
.
See Achtman v. Kirby, Mclnerney & Squire, LLP,
.
See Achtman,
. Id. at 330.
.
Id,
at 331 (explaining the purpose of the court’s remand order).
Accord Achtman v. Kirby, Mclnemey & Squire, LLP,
.
See Achtman,
. Id. at 335 (citations omitted).
.
Id.
(citing
Alderman
v.
Pan Am World. Airways,
.
Id.
at 335 (quoting
Lyndonville,
. Id. at 336.
. Id.
. Id.
. Id.
. See id.
.
See
.
Achtman,
. Id.
.
See, e.g., Rolhberg v. Chloe Foods Corp.,
No. 06 Civ. 5712,
.
See
. Id. at 308.
.
See
. See id. at 207.
. Id. at 213 (emphasis added).
. A recent decision from this Court is also instructive. In
Ouedraogo v. Durso Associates, Inc.,
plaintiffs sued a group of four different companies, alleging that they were paid less than minimum wages with no overtime and sued to recover unpaid wages under the federal Fair Labor Standards Act and New York Labor Law.
See
No. 03 Civ. 1851,
Plaintiffs allege similar claims and all share a basic common story, namely, that, as employees of Hudson/Chelsea, they were placed in various Key Food stores where they delivered groceries and allegedly provided a range of in-store help, worked long hours, and were paid wages below the statutory minimum. The claims against Mat-lyn will involve overlapping testimony, depositions and documentation with other plaintiffs' federal and state claims .... Ultimately, [the] state law claims share too many common threads with the other plaintiffs' federal claims for them to be separated from one another.
Id. at *2.
.
. 6AC ¶ 230.
. Likewise, many of the defenses that will be raised are relevant to both the federal and state claims. For example, when the oil companies argue that MTBE is not harmful, or at the very least not as harmful as plaintiffs contend, they will be raising an issue that underlies all of the claims.
. Though it is not evidence, the following observation highlights the type of operative fact that underlies many of the claims as well as the type of argument the jury will need to consider: "ARCO first began producing MTBE in December 1979. At that time, MTBE’s awful taste and odor were no secret, and its high solubility in water was a characteristic that was easily ascertainable by any engineer." Thomas O. McGarity, MTBE: A Precautionary Tale, 28 Harv. Envtl. L.Rev. 281, 286 (2004).
.
See, e.g., Denny v. Ford Motor Co.,
.
Lyndonville,
Defendants have relied on pre-1990 cases throughout their brief and at oral argument. For example, defendants continually referred to
Hales v. Winn-Dixie Stores, Inc.,
.
See Achtman,
.
Gibbs,
.
In re MTBE Prods. Liab.,
. Plaintiffs have argued that this Court has jurisdiction over the state law claims even absent the TSCA amendment based on two circumstances.
First,
all of the actions in this MDL are part of a large case or controversy involving MTBE, in which the court undoubtedly has original jurisdiction over some of the cases.
Second,
in late December 2003 and January 2004, defendants filed thirteen declaratory judgment actions in federal court, asserting federal preemption, and naming the plaintiffs in the MTBE actions as declaratory judgment defendants. Defendants dismissed these actions over three years later, in June 2007, during the briefing of the instant motion. Because the Court had jurisdiction over these actions, plaintiffs argue that the Court has supplemental jurisdiction over the Suffolk County action under
.
.
See City of Chicago v. International Coll., of Surgeons,
.
Purgess v. Sharrock,
.
.
In re MTBE,
. See supra note 8 (discussing the state law issues already reached by this Court).
. See Def. Mem. at 23-24.
. Id. at 23.
. Marathon Ashland's Memorandum of Law In Opposition to Plaintiffs’ Motion for Remand ("Marathon Mem.”), attached as Ex. 1 to PL Mem., at 11, 12. Many of the defendants also joined in filing a brief in opposition to plaintiffs' motion to remand. See Response of Certain Defendants to Plaintiffs' Motion to Remand ("Certain Def. Mem.”), dated May 28, 2004, attached as Ex. 4 to PL Mem. It is startling at best to compare the words that these "certain defendants” (listed at the end of this paragraph) wrote in 2004 with their words today. These defendants asserted and discussed at length four interests in federal jurisdiction over this case: "Protection Against Liability and Preservation of the Federal System,” "Efficiency,” “Consistency,” and “Fundamental Fairness.” Certain Def. Mem. at 2. The brief concludes:
Plaintiffs' arguments that the issues in this case are novel or unique, and therefore that they are only suited for resolution in state court, ring hollow in light of the fact that the very same issues are presented (and will be decided) in the other MTBE cases now before this Court. Under the MDL statute, this Court is charged with a special duty to provide for "the convenience of parties and witnesses,” and "to promote the just and efficient conduct of [these] actions.”28 U.S.C. § 1407(a) . That duty, along with the more general obligation of federal courts to exercise their jurisdiction, combine to make jurisdiction in this case singularly appropriate.
Id.
at 11. The certain defendants included: "Amerada Hess Corporation, Atlantic Rich-field Company, BP Corporation North America Inc., BP Products North America Inc., Chevron U.S.A., Inc., CITGO Petroleum Corporation, El Paso CGP Company, Exxon Mobil Corporation, Motiva Enterprises LLC, Co-nocoPhillips Company, Shell Oil Company, Shell Oil Products US, Sunoco, Inc. (R & M), and Valero Marketing and Supply Company.”
See id.
at 1. "These defendants comprise all of the originally-named defendants in the Suf
.
See In re MTBE,
No. 00 Civ. 1898, MDL 1358 (S.D.N.Y. Aug. 16, 2007);
In re MTBE Products Liability Litigation,
.
Borough of West Mifflin v. Lancaster,
.
See Gibbs,
. See supra note 8.
. "It is true that the state claims here outnumber the federal claims. The 'substantially predominate’ standard, however, is not satisfied simply by a numerical count of the state and federal claims the plaintiff has chosen to assеrt on the basis of the same set of facts.”
Borough of West Mifflin,
. Neither the parties nor this Court has been able to locate a single case in which an appellate court held that a district court exceeded its discretion in declining to remand state law claims once it found that the state and federal claims arose from the same case or controversy and that the principles of economy, convenience, fairness and comity would be best served by exercising supplemental jurisdiction.
. Defendants point to the fact that the remedies sought by plaintiffs are not the same under the federal and state claims but this factor alone does not warrant a remand.
See, e.g., Wilson v. PFS LLC,
No. 06 Civ. 1046,
. See supra note 8 and accompanying text.
.
See, e.g., Mauro v. Southern New England Telecomms., Inc.,