Dotson v. FCA US LLC et al, No. 6:2019cv00581 - Document 10 (E.D. Tex. 2020)
Court Description: ORDER denying 6 Motion to Remand to State Court. Signed by District Judge J. Campbell Barker on 2/19/2020. (ndc)
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Dotson v. FCA US LLC et al Doc. 10 No. -cv- Lawrence Dotson, Plaintif, v. FCA US LLC and Kimbra Warren, Defendants. ”efore ” “RKER , District Judge ORDER ”efore the court is plaintif Lawrence Dotson s motion to remand to state court. Doc. . Dotson originally iled this case in the th Judicial District Court of Smith County, Texas. Defendant Fiat Chrysler “utomobiles US LLC, commonly referred to as FC“, removed to this court. Plaintif challenges that removal and requests that the court remand the case. For the reasons that follow, the court denies plaintif s motion. Plaintif brought this action following an October , car accident. Dotson was the front-seat passenger in a Dodge Journey, which collided with the car driven by defendant Kimbra Warren. “s a result, plaintif sufered numerous injuries. Plaintif sued Warren. ”ut he also sued FC“, whom he argues designed, manufactured, assembled, and tested the Dodge Journey. Plaintif claims that he was properly seated and wearing his seatbelt and that his injuries were extensive only because the Dodge Journey failed to satisfy various crashworthiness principles. In response, FC“ stated that it did not design, manufacture, assemble, or test the Dodge Journey at issue. Instead, FC“ argues, the car was manufactured by the Chrysler Corporation, and FC“ only obtained a legal interest in this car following Chrysler s “pril , petition for chapter Dockets.Justia.com bankruptcy in the United States ”ankruptcy Court for the Southern District of New York. Through that bankruptcy, FC“ acquired some of Chrysler s interests and liabilities. FC“ removed to this court in reliance on U.S.C. § a , which states that [a] party may remove any claim or cause of action in a civil action . . . to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section of this title. Under U.S.C. § b , this court has original but not exclusive jurisdiction of all civil proceedings arising under title , or arising in or related to cases under title . In response, plaintif moved to remand. He argues that the court lacks subject mater jurisdiction because his claims do not arise under or arise in a title proceeding and are not otherwise related to a title proceeding. Plaintif further argues that, if the court does have jurisdiction, it should abstain from hearing the case and remand to state court. “ proceeding arises under title if it involve[s] a cause of action created or determined by a statutory provision of title . In Mater of Galaz, F. “pp x , th Cir. quoting In re Wood, F. d , th Cir. . In contrast, a proceeding arises in title if it is not based on any right expressly created by title , but nevertheless, would have no existence outside of the bankruptcy. Wood, F. d at . “ case is related to a title proceeding if the outcome of that proceeding could conceivably have any efect on the estate being administered in bankruptcy. Id. at . In addition, the court must abstain from hearing this case if the claim has no independent basis for federal jurisdiction, other than § b the claim is a non-core proceeding an action has been commenced in state court and the action could be adjudicated timely in state court. In re TXNB Internal Case, F. d , th Cir. citing - - Schuster v. Mims In re Rupp & Bowman , F. d , th Cir. U.S.C. § c . In addition, the court may in the interest of justice, or in the interest of comity with State courts or respect for State law, [abstain] from hearing a particular proceeding arising under title or arising in or related to a case under title . U.S.C. § c . Dotson brings three claims against FC“ products liability, negligence, and breach of express and implied warranties. He argues that these claims are solely state-law claims and do not invoke any rights created in bankruptcy law. Moreover, he contends that, because these causes of action were not created by a statutory provision of Title but by Texas state law . . . [his] claims would exist whether there was a bankruptcy or not. Finally, plaintif argues that, although there was a relevant bankruptcy proceeding at one point, his claims now cannot be an integral part of the bankruptcy process because the bankruptcy is closed, and this case involves a pre-bailout vehicle involved in a post-bailout accident . . . [which] FC“ agreed to accept responsibility for outside the bankruptcy. Defendant responds that this action necessarily arises in title , because the court will need to interpret and enforce a Master Transaction “greement, which the bankruptcy court adopted by order, to address plaintif s claims against FC“. FC“ argues, and Dotson acknowledges, that FC“ s potential liability exists only because of the bankruptcy court s order approving the sale of substantially all of Old Chrysler's assets to FC“ pursuant to the terms of the [Master Transaction “greement] free and clear of all liens, claims and interests, except for “ssumed Liabilities Section . under the [Master Transaction “greement]. The court inds that FC“ s liability, if any, arises from its assumption of liability for certain claims as deined in the Master Transaction “greement. Plaintif s claims against FC“ would not exist but for the bankruptcy and subsequent transaction agreement. That agreement contains various - - exceptions to FC“ s successor liability, and the court would need to interpret and possibly enforce those exceptions and bankruptcy-court orders. So, this case arises in or relates to a bankruptcy mater. “s noted above, § c requires the court to abstain from hearing this proceeding if § b is the only basis for federal jurisdiction, the claim is a non-core proceeding, an action was commenced in state court, and the action could be adjudicated timely in state court. See In re TXNB Internal Case, F. d at . If, instead, the claim is a core proceeding, then the court has discretion to abstain and remand in the interest of comity with State courts or respect for State law. U.S.C. § c . No party contests that § b is the only possible basis for federal jurisdiction or that the action was commenced in state court. Similarly, FC“ has not challenged the state court s ability to timely adjudicate this mater if remanded. Therefore, the court is required to abstain and remand this case if Dotson s claims are non-core proceedings. “ proceeding is core if it invokes a substantive right provided by title or if it is a proceeding that, by its nature, could arise only in the context of a bankruptcy case. Wood, F. d at . In contrast, [i]f the proceeding does not invoke a substantive right created by the federal bankruptcy law and is one that could exist outside of bankruptcy[,] it is not a core proceeding. Id. Moreover, if a claim is only related to the bankruptcy because of its potential efect . . . it is an otherwise related or non-core proceeding. Id. emphasis in original . When reviewing the proceeding, the relevant inquiry is whether the nature of the adversary proceeding, rather than the state or federal basis for the claim, falls within the core of bankruptcy power. Mater of Case, F. d , th Cir. citing In re Manville Forest Products Corp., F. d , d Cir. . Finally, the distinction between core and non-core proceedings is addressed in U.S.C. § . This - - statute includes a non-exhaustive list of categories of core bankruptcy proceedings. Of particular importance here is that maters concerning the administration of the estate, are core proceedings. U.S.C. § b “ . The Fifth Circuit has held that both this and other listed core proceedings include interpretations of notes executed in a reorganization plan, Case, F. d at , and interpretations of bankruptcy courts orders approving various reorganization plans. In re Nat’l Gypsum Co., F. d , th Cir. . Here, Dotson s claims rely on the Master Transaction “greement, without which, FC“ would have no connection to the lawsuit. Plaintif s argument that a need to interpret the [Master Transaction “greement] does not exist in this case is incorrect. “t most, plaintif is correct that other courts have already interpreted various provisions of the agreement, and that whichever court hears this case will have litle diiculty construing its contents. ”ut that argument acknowledges that interpretation is required nonetheless. MartinezGarcia v. FCA US LLC, No. -cv-M“C, at E.D. Tex. Dec. , . Therefore, Dotson s claims are a core proceeding. “s such, the court is not required to abstain. In reviewing a motion for discretionary abstention in a bankruptcy mater, the court will generally consider the non-exhaustive factors listed in Broyles v. U.S. Gypsum Co., ”.R. , E.D. Tex. . The court inds that the balance of these factors, as well as other considerations, weigh against abstention here. Factor favors FC“. “s noted in other cases involving FC“, the Master Transaction “greement struck a delicate balance between protecting the rights of creditors asserting claims in the [Chrysler] bankruptcy and the rights of future claimants. “ federal court is in the best position to ensure any judgment in this case is consistent with the balance struck by the [agreement]. Martinez-Garcia, No. -cv-M“C, at . Similarly, it is not clear that state-law issues predominate over - - bankruptcy issues in this mater. Nor is applicable state law unsetled or diicult to apply. Negligence, products liability, and breach of warranty are well-established in Texas law, and this court anticipates no special diiculty in discerning state law on those claims. Factors and thus also support FC“. The parties have not identiied any related claims in either state or federal court, so factor is inapplicable. Factors and favor abstention. Section is the only jurisdictional basis identiied by FC“, and this case is far removed in time from the original bankruptcy proceeding. ”ut factor cautions against abstention because of the importance of the court s interpretation of the Master Transaction “greement and how that interpretation afects Dotson s claims. Under factor , the court cannot realistically sever Dotson s statelaw claims from the core bankruptcy mater because FC“ s potential liability arises from the bankruptcy proceeding. Factors , , and are neutral, given that the parties did not substantively argue these points and that a jury trial is available in both state and federal court. Similarly, factors , , and are neutral. Neither Dotson nor FC“ has convincingly argued that a federal forum would prejudice non-debtor parties or upset comity between state and federal courts. In addition to those factors, the court has also considered the possibility of local bias against FC“. Dotson and FC“ are diverse parties, yet this court lacks diversity jurisdiction only because Dotson iled his action against both FC“ and Warren, a Texas resident. Still, the diversity-jurisdiction rationale has some force here. Federal courts hear state claims to ensure that non-resident litigants of courts [are] free from susceptibility to potential local bias. Guaranty Trust Co. of New York v. York, U.S. , . Those concerns are said to be lessened if at least one defendant resides in the forum state. See Dresser Indus., Inc. v. Underwriters at Lloyd’s of London, F. d , d Cir. local bias concerns - - are understandably allayed when that [diverse] party is joined with a citizen from the forum state. ”ut concerns of local bias are not completely allayed by Warren s presence. The court cannot assume that Warren s inclusion would negate any local bias favoring Dotson. For all of the reasons given above, the court inds that discretionary abstention and remand is not warranted. Plaintif s motion to remand is denied. So ordered by the court on February 9, J. C “MP”ELL ” “RKER United States District Judge - - .
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