Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-2_06-cv-01775/USCOURTS-alnd-2_06-cv-01775-0/pdf.json

Nature of Suit Code: 385
Nature of Suit: Property Damage - Product Liabilty
Cause of Action: 28:1441 Petition for Removal- Property Damage

---

See Carter v. Frito-Lay, Inc., 144 Fed. Appx. 815, 817 (11th Cir. 2005) 1

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

MIDDLE DIVISION 

TENNESSEE ALUMINUM )

PROCESSORS, INC., )

)

Plaintiff, )

)

vs. ) CV 06-PT-1775-M

)

ALLIED MINERAL PRODUCTS, )

INC., )

)

Defendant. )

MEMORANDUM OPINION

This cause comes on to be heard on Plaintiff’s Opposed Motion to Remand filed on

September 29, 2006. The motion is opposed by defendant Allied Mineral Products, Inc. 

FACTS 

The following facts are undisputed:

(1) This action was commenced in the Circuit Court of Etowah County, Alabama on May

25, 2005.

(2) Melt Tech, Inc., was originally a party defendant in this action whose presence in the

case prevented removal on the basis of diversity of citizenship.1

(3) Melt Tech, Inc. filed a Chapter 11 petition for bankruptcy on August 8, 2005.

(4) On or about November 30, 2005 (perhaps on December 1, 2005) Melt Tech, Inc. filed

FILED

 2006 Nov-02 PM 01:07

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 2:06-cv-01775-RBP Document 27 Filed 11/02/06 Page 1 of 6
In a “Joint Motion to Approve Compromise and Settlement” filed in the bankruptcy court on or about May

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4, 2006, it is alleged that plaintiff filed a motion requesting relief from the 11 U.S.C. Section 362(a) automatic stay

on January 3, 2006. This court is not aware of any ruling on that motion. The court notes that Allied refers to the

state court’s placement of this action on its Administrative Docket as, “the state court stayed the case.” Allied has

argued that the state court “determined” that the bankruptcy court stay applied to Allied. The state court, at Allied’s

suggestion, placed the case on its Administrative Docket. The state court did not make such a determination in its

order.

Allied has stated at page 6 of its Memorandum, “The effect of the bankruptcy court’s order was that 3

Tennessee Aluminum could dismiss Melt Tech, Inc. as a defendant in the state court action, thereby removing the

stay of that case.” It is not clear when Allied received notice of the bankruptcy court’s said order.

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a “Notice of Bankruptcy” in the Circuit Court of Etowah County, Alabama.

(5) On February 24, 2006, on suggestion of the defendant Allied Mineral Products, Inc.

(Allied), the Circuit Court of Etowah County, Alabama placed this action on its “Administrative

Docket pending the bankruptcy outcome.” 

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(6) On or about May 4, 2006 Plaintiff and Melt Tech, Inc. filed a “Joint Motion to

Approve Compromise and Settlement” in the bankruptcy court, seeking an order approving a

settlement of plaintiff’s claims against Melt Tech, Inc. in the aforementioned state court action. 

The bankruptcy court approved that settlement on June 7, 2006. Allied did not file a notice of

removal in this court within 30 days after that approval.3

(7) On August 24, 2006, the plaintiff moved the state court to remove the case from its

Administrative Docket. Plaintiff filed an amended complaint on August 24, 2006 naming only

Allied as a defendant. This court has not been provided information as to when, if ever, the state

court dismissed Melt Tech, Inc. as a party or ordered the case removed from its Administrative

Docket.

(8) On September 7, 2006, Allied removed this action to this court.

PERTINENT LAW

28 U.S.C. § 1446(b) provides inter alia, 

Case 2:06-cv-01775-RBP Document 27 Filed 11/02/06 Page 2 of 6
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If the case stated by the initial pleading is not removable, a notice of

removal may be filed within thirty days after receipt by the defendant,

through service or otherwise, of a copy of an amended pleading,

motion, order, or other paper from which it may first be ascertained

that the case is one which is or has become removable except that a

case may not be removed on the basis of jurisdiction conferred by

section 1332 of this title more than 1 year after commencement of the

action. (Emphasis added).

This language could not be clearer. Soon after the 1988 passage of this provision, this

court decided, en banc, Greer v. Skilcraft et al., 704 F. Supp. 1570 (N.D. Ala. 1989). This court

stated:

The one-year bar added to the end of the second paragraph of §

1446(b) is not, however, by its terms merely a limitation on removal

of cases that become removable by receipt of a jurisdiction-creating

document in the case. It provides that “a case may not be removed on

the basis of jurisdiction conferred by section 1332 of this title more

than 1 year after the commencement of the action;” and it applies

whenever the second paragraph of § 1446(b) is triggered; i. e., “if the

case stated by the initial pleading is not removable.” In short, the

second paragraph of amended § 1446(b) provides that for cases not

removable on the basis of the initial complaint there are two separate

and independent time limits: (1) the Notice of Removal must be filed

within 30 days from the receipt of a jurisdiction-creating document

in the case; and (2), if removal is based on diversity of citizenship, the

Notice of Removal must also be filed within one year from the

commencement of the action.

This construction comports with the plain language of the subsection

as amended, uses the time limits that Congress considered to be

reasonable, and is not inconsistent with the sparse legislative history.

The Congressional Analysis did state that Section 1016(b)(2)

“addresses problems that arise from a change of parties as an action

progresses towards trial in state court.” This Analysis does not,

however, indicate that application of the one-year rule was intended

to apply solely in such situations, any more than it indicates that

removal based on Section 1016(a) should be postponed until receipt

of a document changing the parties in the case.

Id. at 1582.

Case 2:06-cv-01775-RBP Document 27 Filed 11/02/06 Page 3 of 6
See Caterpillar, Inc. V. Lewis, 519 U.S. 61 (1996) and Wilson v. General Motors Corp., 888 F.2d 779 4

(11th Cir. 1989). Also see In re Uniroyal Goodrich Tire Co., 104 F. 3d 322, ( 11th Cir. 1997).

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This court added:

We realize that some may view our holding as harsh, creating an

unfair situation for defendants who were bound by or entitled to rely

upon Hamby v. Zayre Corp., 544 F. Supp. 176 (N.D. Ala. 1982).

However, Congress, which had the power to preclude removal of all

cases, certainly could have precluded removal of cases commenced

more than one year prior to November 19, 1988. The clear language

of the statute compels that result. Courts are not free to disregard that

mandate merely because the drafters of the legislation failed to

consider all of the consequences of such a directive.

Id. at 1583.

Other pertinent discussion in Greer includes the following:

Initially Congress was considering total elimination of diversity

jurisdiction. This approach apparently proved too controversial and

was dropped from later versions of the legislation.

Id. at 1576, note 5.

 . . . . .

We expressly do not decide whether the one-year limitation contained

in Section 1016(b)(2)(B) is a jurisdiction bar or a procedural bar; but

we do conclude that, if a procedural bar, Congress intended it to be

strictly enforced.

Id. at 1577, note 7.4

 . . . . .

Some defendants contend that Section 1016(b)(2)(B) should not be

applied to pending cases, or at least not to those that had been

pending for more than one year when the Section became effective.

They argue that such an application would be prejudicial and indeed

manifestly unjust because they would be forever barred from

removing the case on the basis of diversity jurisdiction whereas,

under prior law, they had the potential opportunity--if not the

Case 2:06-cv-01775-RBP Document 27 Filed 11/02/06 Page 4 of 6
Allied cites this court’s case of Barnett v. Sylacauga Autoplex, 973 F. Supp. 1358 (N.D. Ala. 1997). That 5

case involved an amendment adding a purported new class of plaintiffs making claims against only the diverse

defendant. The removal was well within one year of the amendment.

Allied has stated that plaintiff’s “argument, while generally correct, is irrelevant.” 6

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accrued--right--to remove the case to federal court.

Id. at 1578. 

 . . . . .

Defendants’ contention that their rights would be prejudiced by

application of Section 1016(b)(2)(B) because of their “reliance” on

Hamby is, for most of the cases, a specious argument. To be sure,

Section 1016 proscribes removal rules different from those stated in

Hamby. This is simply because Section 1016 represents-as Congress

clearly intended-a change of existing law. In more of the cases before

the court-such as Greer v. Skilcraft, CV 88-P-2152-S, and Barnett v.

MTD Products, Inc., CV 88-P-2192-S-the defendants have failed to

exercise any rights of removal based upon some reliance on Hamby.

To the contrary, under Hamby prior to November 19, 1988, they did

not have the right to remove their case, but only the possibility of

such an opportunity depending on later developments in the case.

Application of the new one-year bar to removal will not, in the words

of the Supreme Court in Bradley v. Richmond School Board, 416

U.S. 696, 720, 94 S.Ct. 2006, 2020, 40 L.Ed.2d 476 (1974), deprive

them of any “right that had matured or become unconditional.”

Id. at 1579.5

CONCLUSIONS

Allied argues that the one year bar of § 1446(b) should be tolled because of a stay

resulting from the bankruptcy proceeding. Plaintiff argues that the automatic stay did not apply

to Allied because the bankruptcy proceeding was pursuant to Chapter 11.6

In any event, this court is of the opinion that the bankruptcy proceeding did not toll the

one year bar any more than would any dilatory action by a state court or by the parties in state

court. Perhaps there should not be any bar time if a non-diverse defendant is ever voluntarily

Case 2:06-cv-01775-RBP Document 27 Filed 11/02/06 Page 5 of 6
See Burns v. Windsor Ins. Co., 31 F.3d 1092, 1097, n. 12 (11th Cir. 1994). Also see footnote 4 on page

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1095 of Burns.

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dismissed. Perhaps, if there is to be a bar, it should be longer than one year. Those decisions are

up to Congress, not this court.

This court is at a loss to determine what removal action by Allied was stayed during the

one year period after the commencement of the action. There was no action during said one year

which would have triggered a removal. This court cannot speculate that if there had been no

bankruptcy proceeding, plaintiff and Melt Tech, Inc. would have settled earlier and the case

would have been removable earlier.

If this court were a creator of law, there might be a different result. This judge has

frequently expressed his concern that removals can be avoided based on initial claims of less

than $75,000.00 by plaintiffs, but followed by later increased claims. The spirit of diversity

jurisdiction law can be manipulated. Here, however, there is no suggestion that the plaintiff led 7

Melt Tech, Inc. to petition for bankruptcy. Delayed settlements might be made in any case. 

However, Congress did not make such delayed settlements an exception to the 1446(b) removal

exception.

The plaintiff’s Motion to Remand will be granted.

This the 2 day of November, 2006. nd

 

 ROBERT B. PROPST

 SENIOR UNITED STATES DISTRICT JUDGE

Case 2:06-cv-01775-RBP Document 27 Filed 11/02/06 Page 6 of 6