Williams v. Shell Oil Co.

169 B.R. 684, 32 Collier Bankr. Cas. 2d 51, 1994 U.S. Dist. LEXIS 9517, 1994 WL 374549
CourtDistrict Court, S.D. California
DecidedJuly 11, 1994
DocketCiv. 94-906 R (AJB), 94-911 K (AJB), 94-907 IEG (AJB), 94-913 R (AJB), 94-909 GT (CGA), 94-914 H (AJB), 94-915 B (CM), 94-910 S (AJB), 94-912 B (BTM), 94-917 K (BTM), 94-918 R (LSP), and 94-916 GT (CM)
StatusPublished
Cited by22 cases

This text of 169 B.R. 684 (Williams v. Shell Oil Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Williams v. Shell Oil Co., 169 B.R. 684, 32 Collier Bankr. Cas. 2d 51, 1994 U.S. Dist. LEXIS 9517, 1994 WL 374549 (S.D. Cal. 1994).

Opinion

AMENDED ORDER GRANTING MOTION TO REMAND AND DENYING MOTION TO TRANSFER 1

RHOADES, District Judge.

On June 8, 1994, twelve cases concerning polybutylene plumbing systems were removed from state court to the District Court for the Southern District of California by defendant Hoechst Celanese Corporation *687 (“Celanese”). Two days later, on June 10, Plaintiffs Robert L. and Nancy K. Williams (“Williams”) filed an ex parte Motion to Remand. 2 A hearing was held, and discovery issues were addressed. The Motion to Remand was joined by Plaintiffs Sunset Ridge Owners Association, Inc., et al., Defendant Western Plastic and Rubber Co., Defendant Rancho Bernardo Development Co., et al., Defendant Christopher Homes, Inc. and Defendant Norland Plastics, Inc.

Also, on June 10, 1994, Defendant Cela-nese filed a Motion to Transfer to United States Bankruptcy Court for the Eastern District of Texas. Defendants Plast-A-Matic Corp., Vanguard Plastics, Inc., and Admiral Marine Products Co. join Celanese’s Motion to Transfer. At the hearing on June 10, 1994, the parties were granted leave to file briefs supporting and opposing the motions. 3 For the reasons stated below, this Court grants Williams’s Motion to Remand and Denies Celanese’s Motion to Transfer.

I. BACKGROUND

A series of cases concerning polybutylene plumbing systems were removed to this Court on June 8,1994, from San Diego County Superior Court. According to Williams, the first polybutylene case was filed in Superior Court some nine years ago. Since then, several dozen eases have been filed. Although most of the eases settled, three went to trial and resulted in jury verdicts finding defendants Celanese, Shell Oil Co. and U.S. Brass independently liable for the defects and damages.

Because of the large number of eases filed in Superior Court, the cases were coordinated before a single judge, the Honorable Ronald L. Johnson. Judge Johnson issued a comprehensive Case Management Order orchestrating the discovery in the cases. Over the course of the past year, Judge Johnson has heard and ruled on motions for judgment on the pleadings and motions for summary adjudication of virtually all of the claims in the various complaints, as well as motions relating to consolidation, class certification, and other issues.

In addition, Judge Johnson appointed two special masters, Michael J. Duekor and Mer-ville R. Thompson, to supervise discovery and mediation in all of the polybutylene cases. The special masters have conducted “dozens (if not hundreds) of discovery conferences.” Motion to Remand at 5. Finally, the Superior Court has also set a trial schedule for the cases. The Williams class action was set for trial on January 5, 1995, and the trials in the other cases were set to follow at regular intervals thereafter.

Celanese’s removal was effected pursuant to 28 U.S.C. § 1452 4 following a bankruptcy filing by co-defendant U.S. Brass (“Brass”). Although the pending state court actions were grounded in negligence, strict liability and fraud, Brass’s bankruptcy was viewed by Celanese as sufficiently compelling to warrant removal of the entire mass tort litigation to federal court. Following removal, counsel for Williams indicated their intent to dismiss Brass from the action, and moved for remand. At the June 10 hearing, the motion to remand was joined by the remaining plaintiffs in the related actions.

The section 1452 removal by Celanese was the first step in an attempt to consolidate related, nationwide polybutylene litigation in a single, “home court:” the United States Bankruptcy Court for the Eastern District of Texas. Spearheading this effort, Defendant *688 Celanese argues that only the “home court” can efficiently manage the voluminous litigation and orderly administer the Brass estate. In support of its motion, Celanese notes that 22 polybutylene-related actions were removed to “federal court” in Texas, and transferred to the United States Bankruptcy Court for the Eastern District of Texas for determination of pending motions to remand.

A significant number of co-defendants oppose Celanese’s Motion to Transfer. 5 Notably, bankruptcy debtor and former co-defendant Brass opposes Celanese’s motion to transfer California cases to Texas. Co-defendant Shell Oil Company (“Shell”) filed a brief indicating that it takes no position on the motions to remand or transfer. Shell does, however, oppose severance of the cross-complaints from the underlying matter.

Williams contends, in the Motion to Remand, that Celanese’s removal of the polybu-tylene litigation was improper under section 1452, and argues that Celanese’s Motion to Transfer is not authorized under section 1412. Williams asks this Court to remand the litigation to state court.

II. REMOVAL OF POLYBUTYLENE CASES TO FEDERAL COURT

Section 1452 6 authorizes removal of claims only when the target court has subject matter jurisdiction under 28 U.S.C. § 1334. Section 1334 states:

(a) Except as provided in subsection (b) of this section, the district court shall have original and exclusive jurisdiction of all cases under title 11.
(b) Notwithstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district courts, the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.

28 U.S.C. 1334 (emphasis added).

A. Application of Section 1334

Section 1334 sets forth four possible grounds for jurisdiction in federal court. First, the district courts have exclusive jurisdiction over all bankruptcy cases “under title 11” of the United States Code. “Under title 11” refers to bankruptcy proceedings. In re Wood, 825 F.2d 90, 92 (5th Cir.1987). The second and third grounds involve core proceedings “arising under” title 11 or “arising in a case under” title 11. These are causes of action which are expressly created by title 11. InreS & M Constructors, Inc., 144 B.R. 855, 859 (Bkrtcy.W.D.Mo.1992). The state court actions removed by Celanese charge Defendants with negligence, strict liability and fraud. The claims against Celanese were filed prior to Brass’s petition for bankruptcy, exist independently of bankruptcy law, and thus, fall within none of these categories.

Fourth, district courts have jurisdiction over matters which are “related to” a bankruptcy proceeding.

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Bluebook (online)
169 B.R. 684, 32 Collier Bankr. Cas. 2d 51, 1994 U.S. Dist. LEXIS 9517, 1994 WL 374549, Counsel Stack Legal Research, https://law.counselstack.com/opinion/williams-v-shell-oil-co-casd-1994.