1 Richard Holliday was PPG’s plant manager. Terry Messenger, John

Shamburger, and James Rock were PPG safety managers. United States Court of Appeals

Fifth Circuit



## FILED

December 20, 2005

Charles R. Fulbruge III

Clerk IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

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 hazar dous 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 summary2 Appellants are citizens of Louisiana; PPG is a citizen of Pennsylvania;

destroying diversity, the individual defendants are also citizens of Louisiana.

- 2 - judgment, dismissing with prejudice all claims against the

individual defendants, and denied Appellants’ motion to remand.

Because Appellants have no reasonable possibility of recov e ry

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 con tractors for Zachary

Construction Company, contended that they were exposed to the

chemical release a nd 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 diversi ty jurisdiction, asserting that the individual

defendants were improperly joined. 2 Over five months after- 3 -

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 de fendants and indicated that he was considering

entering summary judge s ua sponte in favor of these defend ants,

provided that PPG could show that the Appellants had no reasonable

possibility of recovery against them.

Subsequently, Appellants moved to rem and 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 de fendants be dismissed with prejudice and that the

motion to remand be denied. According to the magistrate judge, by

the uncontroverted evidence, Rock, Sham burger, and Messenger had

not been delegated responsibility for preventing t he April 2002

chemical release and Holliday––PPG’s plant manager––had not

delegated responsibility for the safe ty 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 findings3 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.” P artial 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, suffi c ient 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 ev en though only a few

were actually objected to); Jasso v. Barnhart

, 102 Fed. Appx. 877 (5th Cir. 2004)

- 4 - 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 jurisdictio n. 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

rev iew is for plain error. 4 However, when the district court

engages in an independent evaluati on of the record, as here, 5 the

standard of review depends upon the issue on appeal. 6(“Although the failure to object to a magistrate judge’s findings and conclusions

generally subjects appellate arguments t o plain-error review, because the

district court undertook an indepe ndent examination of the record despite the

lack of objections in the instant case, the plain-error s tandard 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 d e 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).

- 5 - Thu s, we review the district court’s decision to deny

Appellants’ motion to remand de novo

. 7 There are two ways to

establish improper joinde r: “(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

demonst rated 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 instate 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 the11 Id.

12 See Griggs v. State Farm L loyds , 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 F ED

. R. C IV

. P. 56(c).

16 See Norman v. Apache Corp.

, 19 F.3d 1017, 1023 (5th Cir . 1994); L odge

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).

- 6 - plaintiff, resolving all contested issues of substantive fact in

favor of the plaintiff.” 1 1 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 c laim, 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.” 1 5 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. 1718 Smallwood v. Illinois Cent. R.R. Co.

, 385 F.3d 568, 573 (5th Cir. 2004)

(en banc).

19 See, e.g.

, Hawthorne Lan d 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).

- 7 - B

Appellants challenge the procedure followed by the magistrate

judge in deciding the improper joinder issue. In S mallwood 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

allega tions of the complaint to determine whether the

complaint states a claim under state law against the instate defendant. Ordinarily, if a plaintiff can survive

a Rule 12(b)(6)-type challenge, there i s 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 joinde r. In such cases, the district

court may, in its disc retion, 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 act ions of the

individual defendants to various safety responsibilities concerning

the April 2002 chemical release. 19 The magistrate judge, however,

decided to pi e rce Appellants’ pleadings, conducting a summary

inquiry into whether A ppellants had any reasonable basis of20 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 proc edure

necessary in a given case must lie with the discretion of the trial court.”).

22 I d. at 574. In S mallwood

, we provided several examples of the t ype of

inquiry appropriate under a pierce-the-pleadings inquiry: “For example, the instate doctor defendant did not treat the plaintiff, the in-state pharmacist

defendant did not fill a prescription for the plaintiff p a tient, a party’s

residence was not as alleged, or any other fact that can easily be disproved if

not true.” I d. 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.

- 8 - recovery against the individual defendants. Appellants contend

this inquiry exceeded the boundaries contemplated by Smallwood

.

To start, we review both the ma gistrate judge’s decision to

pierce the pleadings 20 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

d iscrete and undisputed facts that would preclude plaintiff’s

recovery against the in-state defendant.” 22 In addition, S mallwood

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-thepleading procedure was an abuse of discretion, the length of time

necessary to de termine improper joinder is a relevant24 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 avo id federal

jurisdiction by exclusive reliance on state law”).

- 9 - 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 defe ndants 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 indi cated that the joinder issue needed to be

resolved. For purposes of determining whether the magistrate

judge’s pierce-the-pl eading 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 jo inder. Appellants cannot bolster their

case by delay. Rather, the delay weighs against a finding that the

procedure adopted by the magistrate judge was a n abuse of

discretion. If Appellants wanted the case remanded to state court,26 See McKee v. Kansas C ity 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.

- 10 - they should have promptly raised the issue. Their failure to do so

cuts against their contention that the ma gistrate 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 magis trate judge resolved the improper joinder

i ssue. 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-pl eading 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; an d in support of their

motion to rem and, the plaintiffs may submit affidavits and

deposition transcripts along with the factual allegations contained27 663 F.2d 545, 549 (5 th Cir. 1981); s ee 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.

- 11 - in the verified compla int.” 2 7 In S mallwood

, 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 doe s 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

p rimary 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 piercethe-pleading procedure followed by the magistrate judge and now

turn to whether Appellants had any reasonable basis of recovery

against the individual defendants.

C- 12 -

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 activ ities 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 w ith 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 reas onable possibility of recovery against the instate

defendants. We agree.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.

- 13 - Under Louisi ana law, a corporate officer or employee may,

under certain circumstanc es, 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 C anter 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) fa ult.” 3 2 Finally, C anter offers a defense:

“[P]ersonal liability cannot be imposed upon the officer, agent, or

employee simply because of his general administrative

responsibility for performanc e of some function of the

employment.” 33

Appellants argue, first, that the affidavit submitted by Dr.

Paul Templet, Appellants’ expert wi tness, establishes that the

individual defendants held positions in which they were responsible

for workplace safety, had the power to remedy dangerous conditions34 The following passage from the deposition of Richard Holliday is

illustrative:

Q. Would Mr. Rock have had responsibility for insuring that

adequate monitoring dev ices 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?

- 14 - 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, respecti vely, of the

Environment, Health, and Safety division at PPG, should have known

whether, in order to prevent additi onal chemical release, steps

were taken after prior incidents. A review of the uncontroverted

deposition testimony provides, however, no basis for concl uding

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, Sham burger, and Messenger established that they did not

know whether steps were taken to prevent further chemical releases.

Second, App ellants argue that the magistrate judge erred in

concluding that the individual defendants had not been delegated

the responsibility for t heir 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 noA. 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 Messeng er by name, or give any

indication that these three individual defendants had any co nnection 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).

- 15 - 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

a nd ordered the matter remanded to the state court. 3 6 In F ord

,

litigation resulted from an explosion at a fertilizer plant. As

here, the suit was against the plant and its manager, a nondiverse

defenda nt. After removal, plaintiffs filed a motion to remand;

following limited discovery, the district court denied plaintiffs’

motion, finding the nondiverse defendant improperly joined. We

rev e rsed, finding that affidavits submitted by the plaintiffs

contradicted the defendan ts’ 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 responsibility3 7 See In re McCloy

, 296 F.3d 370, 376 (5th Cir. 2002) (“We do not re ach

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.

- 16 - for safet y measures relating to the particular plant explosion.

However, unlike Appellants, the plaintiffs in Ford came forward

wit h 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

N ext, Appellants contend that PPG’s operation of a ch emical

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 possib ility of recovery

against the named individual defendants, we affirm.