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Matthey v. Johnson & Johnson

United States District Court, M.D. Florida, Tampa Division

July 11, 2019

PATRICIA A. MATTHEY, Plaintiff,
v.
JOHNSON & JOHNSON, JOHNSON & JOHNSON CONSUMER INC., and PUBLIX SUPER MARKETS, INC., Defendants.

          ORDER

          VIRGINIA M. HERNANDEZ COVINGTON UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court pursuant to Plaintiff Patricia A. Matthey's Motion in Support of Remand and Mandatory Abstention (Doc. # 14), filed on May 22, 2019. Defendants Johnson & Johnson and Johnson & Johnson Consumer Inc. (the Johnson & Johnson Defendants) filed a response on June 5, 2019. (Doc. # 17). For the reasons that follow, Matthey's Motion is granted.

         I. Background

         Matthey initiated this action against the Johnson & Johnson Defendants, Publix Super Markets, Inc., and Imerys Talc America, Inc., in state court on September 10, 2018. (Doc. # 1-5). For purposes of diversity jurisdiction, Publix is a Florida corporation. (Id. at 3). In the Complaint, Matthey alleges that she developed ovarian cancer as a result of asbestos in the Johnson & Johnson Defendants' baby powder, which used talc manufactured by Imerys. (Id.). The state court ultimately dismissed the claims against Imerys without prejudice for lack of personal jurisdiction. (Doc. # 1-10 at 8; Doc. # 14 at 5). Thus, Imerys is no longer a party to this action.

         Subsequently, the Johnson & Johnson Defendants removed the case to this Court on the basis of 28 U.S.C. §§ 1334 and 1452, which grant district courts jurisdiction over cases related to pending bankruptcy actions. (Doc. # 1). According to the Johnson & Johnson Defendants, this case is related to Imerys's bankruptcy in the United States Bankruptcy Court for the District of Delaware because they share insurance with Imerys and their agreement with Imerys contains indemnification and liability-sharing provisions that are implicated by Matthey's claims. (Id. at 9).

         Matthey argues that this case should be remanded to state court for the following reasons: first, there is no “related to” jurisdiction under 28 U.S.C. § 1334(a); second, even if jurisdiction existed, 28 U.S.C. § 1334(c)(2) requires mandatory abstention; and third, equitable grounds support remanding this case. (Doc. # 14). The Johnson & Johnson Defendants have responded in opposition (Doc. # 17), and the Motion is ripe for review.

         II. Legal Standard

         Federal courts are courts of limited jurisdiction. Home Depot U.S. A., Inc. v. Jackson, 139 S.Ct. 1743, 1746 (2019). As the removing party, the Johnson & Johnson Defendants bear the burden of demonstrating that removal is proper. See Williams v. Best Buy Co., 269 F.3d 1316, 1319 (11th Cir. 2001). Because removal jurisdiction implicates key federalism concepts, removal statutes are to be strictly construed with all doubts “resolved in favor of remand to state court.” See Univ. of S. Alabama v. Am. Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999).

         III. Analysis

         Matthey argues that this case should be remanded to state court for three reasons. Each will be addressed in turn.

         A. “Related to” Jurisdiction

         Under 28 U.S.C. § 1452(a), “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 1334 of this title.” Section 1334(b) gives district courts original jurisdiction over “all civil proceedings . . . arising in or related to cases under title 11.” 28 U.S.C. § 1334(b).

         “The test for determining whether a civil proceeding is related to bankruptcy is whether the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy.” Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir. 1984). The “conceivable effect” test is a broad standard and has been adopted by the Eleventh Circuit. See Wortley v. Bakst, 844 F.3d 1313, 1318 (11th Cir. 2017) (“[R]elated non-core proceedings can be quite broad, encompassing matters that ‘could conceivably have an effect on the estate being administered in bankruptcy' even if they are not proceedings ‘against the debtor or against the debtor's property.'”); In re Toledo, 170 F.3d 1340, 1345 (11th Cir. 1999) (“The key word in the Lemco Gypsum/Pacor test is ‘conceivable,' which makes the jurisdictional grant extremely broad.”).

         While “related to” jurisdiction can be quite broad, it is not without limit. For example, an “indemnification agreement between a defendant and a non-party bankrupt debtor does not automatically supply the nexus necessary for the exercise of ‘related to' jurisdiction.” SteelWorkers Pension Tr. v. Citigroup, Inc., 295 B.R. 747, 750 (E.D. Pa. 2003). “Even with an indemnification agreement, a court lacks ‘related to' jurisdiction if the non-debtor's recovery is predicated upon the results of a subsequent action for indemnification.” In re W.R. Grace & Co., 412 B.R. 657, 667 (D. Del. 2009). Only cases where indemnification arises “independent of any additional legal actions” confer “related ...


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