HELEN BERRIGAN, Chief Judge, District
Before the Court is Defendants' Motion to Enjoin State Court Proceedings.
After a thorough review of the record, the law, the Motion, and the memoranda filed in support thereof and in opposition thereto, Defendants' Motion to Enjoin State Court Proceedings is DENIED.
I. FACTUAL AND PROCEDURAL BACKGROUND
This civil action involves a chemical spill from a tractor-trailer tank truck. Plaintiffs allege that they suffered damages as a result of the spill. They brought suit in the Civil District Court for the Parish of Orleans, State of Louisiana, on August 7, 2003 styling the action as a class action. Defendants timely removed the suit on August 29, 2003 asserting diversity as the basis of removal. (Rec. Doc. 1).
On September 30, 2003, Plaintiffs' putative class action ("Fulford class" or "Fulford Plaintiffs") was consolidated with another putative class action ("Abram class" or "Abram Plaintiffs"), which alleged the same theories of recovery. (Rec. Doc. 7).
On October 23, 2003, the Court ordered Plaintiffs to file a Motion for Class Certification by November 25, 2003, to be set for hearing on December 10, 2003. Id. At that time, the Court also ordered that the parties confer with the Magistrate Judge to discuss a case management order. Id. After conferring with the Magistrate Judge, who conducted a status conference with the parties present, the Court ordered that the deadline for filing the Motion for Class Certification be extended to April 13, 2004. The Court further ordered that the hearing be set for hearing on April 28, 2004. (Rec. Doc. 15).
On December 2, 2003, Plaintiffs, Shirley Fulford, et al., filed a Motion for Leave to Supplement and Amend Original Class Action Petition for Damages. (Rec. Doc. 19). This Motion sought to add two new parties to the complaint: Dan Davis and Protective Insurance Company. Id. On December 11, 2003, Plaintiffs filed a Motion to Remand, which was denied as premature until after the Magistrate Judge's ruling on the Motions to Amend. (Rec. Doc. 21). On January 6, 2004, Plaintiffs, Yolanda Abram, et al., filed a Motion for Leave to Supplement and Amend Original Class Action Petition for Damages. (Rec. Doc. 26). This Motion virtually mirrored the Fulford Plaintiffs' Motion. Id. Oral argument was heard on both Motions for Leave to Supplement and Amend Original Class Action Petition for Damages on January 7, 2004.
On January 14, 2004, the Magistrate Judge denied the Motions in part and granted the Motions in part. (Rec. Doc. 31). The Magistrate Judge denied the Motions insofar as they sought to join Dan Davis, the truck driver of the tractor-trailer tank truck, who is a non-diverse party. Id. The Magistrate Judge allowed the joinder of Protective Insurance Company, as Defendants did not object to such joinder. Id.
In deciding the Motions, the Magistrate Judge noted that Defendants conceded that, because Dan Davis was acting in the course and scope of his employment with Defendants, Defendants would be liable if Dan Davis were found liable. Id. As such, the Magistrate Judge found that Dan Davis' participation in this lawsuit as a party was unnecessary. Id. Given the lack of necessity to join Davis as a defendant, the dilatory nature of Plaintiffs' Motions to Amend, and Plaintiffs' apparent motive to defeat diversity, the Magistrate Judge denied Plaintiffs' Motions. (Rec. Doc. 31).
Plaintiffs objected to the Magistrate Judge's ruling and requested this Court reverse the ruling. That request was denied on April 6, 2004.
Plaintiffs filed their Motion for Class Certification on April 13, 2004. Oral argument on the Motion was heard on April 28, 2004. After the hearing, the Court ordered the parties to supplement the memoranda filed in support of and in opposition to the Motion in light of additional considerations brought out at oral argument. After reviewing the new memoranda, the Court denied Plaintiffs' Motion on June 1, 2004. Plaintiffs filed a Motion for Reconsideration of the Motion for Class Certification, which was denied on June 29, 2004.
On June 15, 2004, Defendants were served with a state court lawsuit which essentially mimicked this lawsuit. The lawsuits were filed by the same Plaintiffs' attorneys purporting to represent the same class of Plaintiffs, seeking recovery for the same cause of action, and asserting many of the same theories of recovery. Only two differences existed in the lawsuits. First, the defendants had been expanded to include a non-diverse party, Dan Davis, the truck driver. Second, the class representatives were different.
On July 14, 2004, Defendants filed the current Motion to Enjoin State Court Proceeding. The only issue presented is whether this Court can properly enjoin the state court proceedings.
II. LAW AND ANALYSIS
When an injunction seeks to enjoin state court proceedings, the plaintiff must demonstrate that the injunction meets one of the narrowly tailored exceptions to the Anti-Injunction Act, codified at 28 U.S.C. § 2283, in order for the court to even consider an injunction. Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 145-46 (1988). The Anti-Injunction Act provides that a federal court may not grant an injunction to stay proceedings in a state court unless (1) expressly authorized by an Act of Congress, or (2) where necessary in aid of its jurisdiction, or (3) to protect or effectuate its judgments. 28 U.S.C. § 2283. The exceptions are narrow and not to be enlarged by loose statutory construction. Clothing Workers v. Rickman Brothers Co., 348 U.S. 511, 514 (1955).
28 U.S.C. § 1446(d), the pertinent subsection of the Judicial Code's removal chapter, has been recognized as an express statutory authorization for a federal court to enjoin a state court proceeding. Touchey v. New York Life Ins. Co., 314 U.S. 118 (1941). Frith v. Blazon-Flexible Flyer, Inc., 512 F.2d 899 (5th Cir. 1975); WRIGHT, MILLER, KANE, FEDERAL PRACTICE PROCEDURE: CIVIL § 4224 (2d. ed. 1986). Thus, when a state court proceeding falls within this express statutory authorization, the anti-injunction act does not prohibit a federal court from enjoining the state court proceedings.
§ 1446(d) provides, in pertinent part, that "[after removal] the State court shall proceed no further unless and until the case is remanded." 28 U.S.C. § 1446(d) (emphasis added). This statute prohibits the continuation of state court proceedings once a suit has been removed. The express statutory authorization of § 1446(d) prohibits continuation not only of the state court suit which was removed to federal court but also continuation of a secondary state court suit when such a suit is an attempt to subvert the purposes of the removal statute. Frith, 512 F.2d at 901. The Fifth Circuit's decision in Frith is instructive as to when a secondary state court suit is an attempt to subvert the purposes of the removal statute.
In Frith, the plaintiff filed a second state lawsuit adding a non-diverse party after the defendants had already removed the previously filed state suit. Id. at 901. The defendants removed the second suit basing removal jurisdiction on diversity of citizenship and the doctrine of fraudulent joinder. Id. The second suit was assigned to a different judge who did not transfer the suit to the first judge. Id. The judge in the second suit granted the plaintiffs' motion to remand, finding that the plaintiffs did not fraudulently join the additional defendants, before the judge in the first suit granted the defendants' motion to enjoin the state court proceedings. Frith, 512 F.2d at 901. The plaintiffs appealed the entry of the injunction. Id. at 900.
On appeal, the court found that when a secondary state lawsuit, filed after a federal suit premised on diversity has already been removed, is an attempt by the plaintiff to subvert the purposes of the removal statute, proceedings in the secondary state lawsuit may be enjoined by the federal court. Id. at 901. However, the court vacated the first federal judge's order granting the injunction because the second federal judge's ruling that the additional defendants were not fraudulently joined collaterally estopped the defendant from rearguing that the secondary state suit was an attempt to subvert the purpose of the removal statute by working a fraud on the court. Id.
As such, Frith stands for the proposition that the test for fraudulent joinder and the test to determine whether the secondary state suit was an attempt to subvert the purpose of the removal statute are the same, despite the dicta in Frith to the contrary. Therefore, even after valid removal of a state court lawsuit, if a second state court lawsuit premised on the same cause of action names an additional defendant who has not been fraudulently joined, a federal court may not enjoin that lawsuit. At oral argument, Defendants did not claim that Dan Davis had been fraudulently joined by Plaintiff. Accordingly, this Court finds that, absent fraudulent joinder of Mr. Davis in the second state lawsuit, the Court cannot find that Plaintiff's intent in filing the second state suit was to subvert the purpose of the removal statute. Therefore, an injunction is improper under the express authorization exception to the anti-injunction act.
The Court notes that one district court has reached the opposite conclusion this Court now reaches. In Myers v. Hertz Penske Truck Leasing, Inc., a case decided by a district court sitting in the Northern District of Georgia, the district judge found that injunction of the state court proceedings was appropriate. Myers v. Hertz Penske Truck Leasing, Inc., 572 F. Supp. 500, 503 (N.D. Ga. Sept. 21, 1983). In that case, the suit was removed from state court based on diversity jurisdiction. Id. at 501. After removal, the plaintiff filed a second suit in state court naming additional non-diverse defendants and filed a motion to voluntarily dismiss his federal suit without prejudice. Id. The defendants opposed the voluntary dismissal and sought an injunction of the state court proceedings. Id. The court denied the voluntary dismissal and granted the injunction relying on Firth. Id. at 503. The court found that, based solely on the aforementioned actions, the plaintiffs intended to subvert the purposes of the removal statutes. Myers, 572 F. Supp. at 502-503. Although the issue never came before the court, the court readily admitted that the added defendants had not been fraudulently joined. Id.
However, the Myers decision is neither binding nor, under the circumstances, persuasive. The Myers court ignored critical language in Frith. In Frith, the Fifth Circuit stated that "[The second federal judge] found, on the basis of his familiarity with both pending suits, that the joinder of the resident defendant in the state court suit was not fraudulent. Implicit in this finding is the fact that the second suit was not brought in an attempt to subvert the purposes of the removal statute and was not aimed at defeating federal jurisdiction." Frith, 512 F.2d at 901 (emphasis added). That language binds this Court and requires the Court deny Defendants' Motion.
The Court would welcome a further clarification of Frith from the Fifth Circuit as it does plainly appear that plaintiffs' motive in naming Davis was in fact to avoid removal.
In conclusion, the Court finds that Defendants are not entitled to injunctive relief. The anti-injunction act bars such relief.
Accordingly, Defendants' Motion to Enjoin State Court Proceedings is DENIED.