Court Opinion

ID: 14018
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:32:02+00
Date Added: 2024-06-11T15:04:44.097196
License: Public Domain

UNITED STATES COURT OF APPEALS

                                FOR THE FIFTH CIRCUIT

                                         No. 96-60213

GLADYS MADISON, Guardian for
Viola Williams,
                                                                                      Plaintiff,
                                             versus

VINTAGE PETROLEUM, INC., ET AL.,
                                                                                   Defendants.
                                        *********

HENRY LEE WILLIAMS,
                                                                         Plaintiff-Appellant,
                                             versus

VINTAGE PETROLEUM, INC., ET AL.,
                                                                                  Defendants,
G.B. “BOOTS” SMITH COMPANY,
                                                                         Defendant-Appellee.

                         Appeal from the United States District Court
                           For the Southern District of Mississippi

                                         July 10, 1997
Before POLITZ, Chief Judge, KING, Circuit Judge, and FOLSOM,* District Judge.

POLITZ, Chief Judge:

   *
       District Judge of the Eastern District of Texas, sitting by designation.
      Henry Lee Williams appeals a judgment granting G.B. “Boots” Smith

Corporation’s motion to dismiss and denying Williams’s motion to remand to state

court. Concluding that the district court erred in finding that Boots Smith was

fraudulently joined, we vacate and remand to the district court with instructions to

remand to state court.

                                   Background

      On September 9, 1993 Gladys Madison, acting as guardian of Viola

Williams, filed suit in Mississippi state court against Vintage Petroleum, Inc.,

Placid Oil Company, and Texas International Petroleum Corporation, all of whom

operated oil wells on property in which Williams held a life estate. Madison also

named as a defendant Southeastern Norm Environmental, Inc., hired by Vintage

Petroleum to perform an environmental audit of the property. Madison’s complaint

alleged that the defendant oil companies contaminated the property with naturally

occurring radioactive material, referred to as NORM.

      The defendants removed the case to federal court on the basis of diversity of

citizenship jurisdiction, claiming that Southeastern Norm, the only non-diverse

defendant, was fraudulently joined. Prior to any disposition by the district court,

Madison moved to dismiss because Viola Williams died. Meanwhile Williams’s

son, Henry Lee, who held a remainder interest in the property, filed suit in

                                         2
Mississippi state court alleging identical claims to those alleged by Madison in the

first suit. He also named two additional non-diverse defendants, Boots Smith, a

company hired by Vintage Petroleum to clean up the oil sites on the Williams’s

land, and Eddie Fuente, Director of the Division of Radiological Health in the

Mississippi Department of Health. The defendants removed the case to federal

court claiming that the non-diverse defendants were fraudulently joined.

       The district court ordered that Williams be given the opportunity to proceed

in his mother’s lawsuit as executor of her estate. Williams chose to do so and that

case was consolidated with his individual action. The district court found that all

three non-diverse defendants, Southeastern Norm, Fuente, and Boots Smith, were

fraudulently joined, and the court entered Fed.R.Civ.P. 54(b) judgments in favor

of those defendants. Williams filed a motion for new trial and/or amendment of

judgment which was denied. Thereafter, Williams filed this appeal challenging

only the dismissal of Boots Smith.1

                                      Analysis

       1. Appellate Jurisdiction

       Boots Smith contends that we lack appellate jurisdiction because Williams

   1
     In a separate appeal Williams challenged the dismissal of Southeastern Norm and we
affirmed in an unpublished opinion. Madison v. Vintage Petroleum, Inc., No. 95-60573
(5th Cir. May 13, 1996). Williams has not appealed the dismissal of Fuente.
                                          3
failed to file a timely notice of appeal. The district court entered a Rule 54(b)

judgment in favor of Boots Smith on August 10, 1995 and Williams subsequently

filed a timely motion for new trial and/or amendment of judgment. Although that

motion was not labeled under a particular Federal Rule of Civil Procedure, we view

it as a Rule 59(e) motion to alter or amend judgment because it questioned the

correctness of the district court’s judgment.2 Fed.R.App.P. 4(a)(4)(C) provides that

the time for appeal runs from the date on which the court enters an order disposing

of a timely motion to alter or amend judgment under Rule 59. The district court

entered an order denying Williams’s motion on February 8, 1996 and within 30

days Williams appealed. The appeal is therefore timely and we have appellate

jurisdiction.

         2. Fraudulent Joinder

         Williams contends that the district court erred in ruling that Boots Smith was

fraudulently joined. The removing party bears the heavy burden of proving

fraudulent joinder,3 being required to demonstrate “that there is no possibility that

the plaintiff would be able to establish a cause of action against the in-state

   2
      Harcon Barge Co. v. D & G Boat Rentals, Inc., 784 F.2d 665 (5th Cir.) (en banc),
cert. denied, 479 U.S. 930 (1986).
   3
       B., Inc. v. Miller Brewing Co., 663 F.2d 545 (5th Cir. Unit A Dec. 1981).
                                             4
defendant in state court; or that there has been outright fraud in the plaintiff’s

pleadings of jurisdictional facts.”4 In evaluating a claim of fraudulent joinder the

district court must resolve all disputed factual questions and legal ambiguities in

favor of the plaintiff.5

         The primary claims alleged against Boots Smith are negligence per se,

negligence, and trespass. The basis for Williams’s negligence per se claim is that

Boots Smith violated the Regulations for Control of Radiation in Mississippi in the

course of its cleanup operation by illegally disposing of nonexempt quantities of

NORM.6 The district court held that Williams could not recover from Boots Smith

as a matter of law because he did not allege that Boots Smith had knowledge of the

radioactive material. The district court relied primarily on the deposition testimony

of Eddie Fuente, the Mississippi official responsible for implementing the relevant

regulations. Fuente stated that Boots Smith would have violated the regulations if

   4
       Id. at 549 (footnote omitted) (emphasis in original).
   5
     Sid Richardson Carbon & Gasoline Co. v. Interenergy Resources, Ltd., 99 F.3d 746
(5th Cir. 1996).
   6
     See Thomas v. McDonald, 667 So. 2d 594 (Miss. 1995) (explaining that elements of
negligence per se under Mississippi law are: (1) violation of statute, (2) plaintiff is member
of class that statute was designed to protect, (3) harm suffered by plaintiff is type of harm
that statute was designed to prevent, and (4) proximate cause); Palmer v. Anderson
Infirmary Benevolent Ass’n, 656 So. 2d 790 (Miss. 1995) (applying negligence per se
analysis where there was violation of a regulation).
                                               5
it knew that elevated NORM levels were on the property. That statement does not

preclude the possibility that a defendant with a less culpable mental state could also

be in violation of the regulations. In the absence of an authoritative interpretation

of the regulations, it is conceivable that a Mississippi state court could find, for

example, that the regulations require only constructive knowledge or that they even

impose strict liability. That is a call for the Mississippi courts.

      Viewing the evidence and the pleadings in the light most favorable to

Williams, it is possible that a Mississippi state court could find that Boots Smith:

(1) disposed of nonexempt quantities of NORM; (2) failed to make the disposal in

accordance with the regulations; and (3) should have known that the soil contained

NORM contaminants because of the nature of its work. A Mississippi state court,

applying a strict liability or constructive knowledge standard, therefore could find

that Boots Smith violated the regulations. Accordingly, we must conclude that

Williams would have a possibility of recovering for negligence per se.

      For similar reasons we also conclude that Boots Smith failed to prove that

there was no possibility that Williams could have recovered for negligence or

trespass. Because a Mississippi state court could find that Boots Smith should have

known about the radioactive materials, it is possible that Boots Smith breached a

duty of ordinary care and/or committed an unauthorized invasion of Williams’s

                                          6
property when it allegedly disposed of NORM-contaminated soil. 7

       We conclude that the district court erred in dismissing Boots Smith and,

accordingly, the district court lacked diversity jurisdiction. We VACATE the

judgment entered in favor of Boots Smith and REMAND with instructions that this

consolidated action be remanded to state court.

   7
     We are not persuaded by Boots Smith’s contention that because a panel of this court
affirmed the dismissal of Southeastern Norm we must also find that Boots Smith was
fraudulently joined. Southeastern Norm collected and analyzed soil samples, a different
activity from the alleged illegal cleanup performed by Boots Smith. Thus, there is no
inconsistency in the findings that Williams could possibly recover from Boots Smith but not
from Southeastern Norm.
                                            7