The Difficulty and Confusion Surrounding Removing Maritime Cases to Federal
Court
June 2002
Michael Orlando helps clear up the confusion
and provides some cases to consult when confronted with removal in an admiralty
context of separate and independent claims or causes of action.
by Michael
A. Orlando
Meyer Orlando,
LLC
This article will complete the discussion of the general removal statute
28 U.S.C. § 1441. Please see my prior article on
section (a) and (b) of the statute. Section (c) to be discussed below is equally
confusing and difficult in its interpretation and application. Statute 28 U.S.C.
§ 1441(c) permits removal of separate and independent federal claims and causes
of action. On first reading, the statute seems straightforward:
Whenever a separate and independent claim or cause of action within the
jurisdiction conferred by Section 1331 [federal question] of this title
is joined with one or more otherwise non-removable claims or causes of action,
the entire case may be removed and the district court may determine all
issues therein or, in its discretion, may remand all matters in which State
law predominates.
As noted by the Fifth Circuit Court of Appeals in Texas v Walker, 142 F3d 813, 816 (5th Cir 1998), "Section 1441(c) is
difficult to interpret . . . ." In discussing the removal statute generally
in the admiralty context, Michol O'Connor in her Practice Guide and Annotated Federal Rules of
Civil Procedure and Evidence, 2002, states "This area is extremely confusing."
p. 172 § 6.5. This article will attempt to bring into focus the issues and provide
some cases to consult when confronted with removal in an admiralty context relating
to separate and independent claims or causes of action.
"Separate and Independent Claims"
Let's begin by looking at what is meant by the phrase "separate and independent
claims or causes of action." Generally, that means the federal claim must be
distinct from the nonremovable claim. The U.S. Supreme Court has stated, "Where
there is a single wrong to the plaintiff, for which relief is sought, arising
from an interlocked series of transactions, there is no separate and independent
claim or cause of action under Section 1441(c)." [American
Fire & Casualty Company v Finn, 341 U.S. 6, 14, 71 S Ct 534, 540, 95
Lawyers Ed. 2d 702 (1951).]
The Fifth Circuit in the Walker case interpreted
this to mean that in a case "involving the violation of a single primary right
or wherein a party seeks redress for one legal wrong cannot contain separate
and independent claims, despite multiple theories of liability against multiple
defendants." [142 F2d at 817.] Put more basically, this has been construed to
mean that claims are not to be considered separate and independent when they
involve substantially the same facts or transactions.
Typically, those claims arise in the context of third-party complaints, but
they can arise in counterclaims and cross-claims, as well. Generally, a defendant
may not use Section 1441(c) to remove a case to federal court based on either
federal defenses or on a counterclaim based on federal law. (The Walker case, however, is an example of when a
counterclaim may be separate and independent.)
In an admiralty setting, a classic example of how this issue arises is when
a defendant files a third-party complaint for contractual indemnity, and a third-party
defendant removes the case to federal court alleging the third-party complaint
raises separate and independent claims from those raised by the plaintiff in
the main case. Reinforcing the notion that Section 1441(c) is a notoriously
difficult statute to interpret, there is a circuit split on whether a third-party
defendant may remove a case at all. The Fifth Circuit allows removal by third-party
defendants. See In re Wilson Industries, 886
F2d 93 (5th Cir 1989). District courts in New York and Illinois have denied
such a right.1
In Re Wilson
Two cases illustrate the issues. The first and the most simple is the case
of In Re Wilson Industries. That case involved
a suit by a worker on an offshore drilling rig who claimed personal injuries
from a fall. The plaintiff sued in state court. He sued Union Oil, among others.
Union Oil filed a third-party complaint against Wilson Industries claiming tort
based indemnity, i.e., that Wilson was directly responsible to the plaintiff
for the plaintiff's injuries.
Wilson removed the case to federal court, claiming that the third-party complaint
stated a cause of action under OCSLA, 43 U.S.C. § 1349(b)(1) and that it could
have been filed originally in federal court under federal question jurisdiction,
28 U.S.C. § 1331. The Fifth Circuit took a very simple approach in its analysis
in holding that a tort-based indemnity claim was not separate and independent
under Section 1441(c) because the essence of the third-party complaint was that
the third-party defendant caused the plaintiff's injuries, which was the same
type of claim as was involved in the main case.
The court distinguished this tort based indemnity claim from the contractual
indemnity claim that was the basis in Carl Heck Engineers,
Inc. v Lafourche Parish Police Jury, 622 F2d 133 (5th Cir 1980). The
Wilson Industries court would have allowed the removal had the third-party complaint
been based on contractual indemnity rather than tort based indemnity.2
Rivas v Energy Partners
Another case that is instructive is Rivas v Energy
Partners, 2000 WL 127290 (ED La 2000), but for different reasons. Rivas is at the opposite end of the spectrum
in terms of its complexity of analysis. In keeping with what was noted at the
outset of this paper, Judge Duval of the Eastern District of Louisiana states
at the beginning of the discussion of the Section 1441 issues: "While the jurisprudence
concerning the interplay of OCSLA and maritime claims is plentiful, unanswered
questions and confusion abound."
In Rivas, at issue was the removal of the
Outer Continental Shelf Lands Act (OCSLA) claims and maritime claims. Rivas did not involve removal of a third-party
claim, but it is nevertheless instructive on the mechanics of § 1441(c). The
plaintiff in Rivas was injured when he was being
transferred from a fixed offshore oil platform on the Outer Continental Shelf
to a supply vessel. He sued the owner of the fixed platform for negligence arising
from operations on the platform, and he sued the vessel owner for negligence
relating to operation of the vessel.
The court found that Rivas's claims against the owner of the fixed platform
were governed solely by OCSLA and that the court had federal question subject
matter jurisdiction over the claim because adjacent state law applied as surrogate
federal law. As to the claim against the vessel owner, the court found that
claim was governed by general maritime law. There was no diversity of citizenship
between the parties.
The defendants removed the case to federal court based on OCSLA. The plaintiff
argued that his general maritime law claim trumped the OCSLA claim, that there
was no diversity of citizenship that would make the maritime claim removable,
and that there was a local defendant, making the claim nonremovable under 28
U.S.C. § 1441(b).
The defendants argued that OCSLA vested the court with removal jurisdiction
under 28 U.S.C. § 1441(b), despite plaintiff's general maritime claim and the
savings to suitors clause. Alternatively, the defendants argued that even if
the court did not have removal jurisdiction under 28 U.S.C. § 1441(b), the maritime
claim was removable under 28 U.S.C. § 1441(c) because it was joined with, and
was separate and independent from, an otherwise removable claim (the OCSLA claim).
The court, citing Hufnagel v Omega Service Industries,
Inc., 182 F3d 340 (5th Cir 1999), and Tennessee Gas
Pipeline v Houston Casualty Ins. Co., 87 F3d 150 (5th Cir 1996), found
that the plaintiff's general maritime claim was not removable pursuant to 28
U.S.C. § 1441(b), as it was a maritime claim (not a federal question), and both
defendants had principal places of business in Louisiana where suit was filed.
The court also noted that the case before it was distinguishable from Hufnagel and Tennessee
Gas Pipeline in that in the case before it, OCSLA and maritime law overlapped.
(In Hufnagel, the claims were solely state law
claims which were made surrogate federal law under OCSLA, and in Tennessee Gas Pipeline, the claims were solely
maritime claims). The court in Rivas specifically
stated that the Fifth Circuit had never held that where OCSLA and general maritime
law overlap, the case is removable without regard to citizenship.
The court in Rivas also stated that "[a]lthough
the Fifth Circuit has suggested in dicta that when OCSLA claims and maritime
claims overlap, the congressional intent of OCSLA might support removal under
the first sentence of § 1441(b), [i.e., based on federal question alone], this
court will not make that leap." [Id. at
*5.] The general maritime law claim against the vessel owner was not removable
because there was no diversity of citizenship in Rivas.
The court in Rivas went on to evaluate the
applicability of removal under 28 U.S.C. § 1441(c). The court explained that
if the plaintiff's claim against the vessel owner was maritime, and no other
doctrinal basis existed for removal of that claim, then the propriety of the
removal of the entire case had to be analyzed under 28 U.S.C. § 1441(c) which
governs the removal of federal question claims which are joined with nonremovable
claims. Section 1441(c) provides that the federal question claim must be separate
and independent from the nonremovable claims.
In Rivas the defendants argued that the OCSLA
federal question claim and the maritime claim were separate and independent.
The court, however, determined that the plaintiff's federal question OCSLA claim
and maritime claim were not separate and independent as they arose out of the
same transactions/facts, citing the American Fire case. Accordingly, the case was not removable under section 1441(c), and the
plaintiff's motion to remand was granted.
In sum, in Rivas there were federal question
claims under OCSLA because the adjacent state law became surrogate federal law,
and there were overlapping maritime claims. It turns out the case was not removable
under 1441(c) because the claims arose out of the same facts.
When applied to a third-party defendant, this rule requires that the defendant/third-party
plaintiff's federal claims against the removing third-party defendant be "separate
and independent" from the plaintiff's claims against the original defendant.
To support removal based on federal question jurisdiction, the third-party defendant
must allege facts from which the court could conclude (1) that the third-party
claims are "separate and independent" obligations; and (2) that a federal court
would have had federal question jurisdiction over the dispute between the third-party
plaintiff and third-party defendant if the action had been brought separately.
Both need to be patently obvious and beyond dispute. Gray areas in either
factor will most certainly lead to a remand back to state court. Due principally
to the fact that much of maritime law is judge-made, seldom are there issues
that do not have gray areas. Couple that with the fact that courts struggle
in the first instance to interpret the general removal statute and you have
several layers of confusion added to the mix.
Conclusion
Having been involved very recently in two cases in which removal was attempted
pursuant to Section 1441(c) in maritime/OCSLA contexts, I can attest to the
complexity and confusion that surrounds the law in this area.3
Opinions expressed in Expert Commentary articles are those of the author and are
not necessarily held by the author's employer or IRMI. Expert Commentary articles
and other IRMI Online content do not purport to provide legal, accounting, or other
professional advice or opinion. If such advice is needed, consult with your attorney,
accountant, or other qualified adviser.