16‐933‐cv Chapman v. Crane Co.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 31st day of May, two thousand seventeen.

PRESENT: PETER W. HALL, DENNY CHIN, Circuit Judges, LASHANN DeARCY HALL, District Judge.* ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x

ALTON CHAPMAN, FRANCIS CHAPMAN, Plaintiffs‐Appellees, 16‐933‐cv v.

CRANE CO., Individually and as Successor to Pacific Valves, Defendant‐Appellant,

CBS CORPORATION, successor by merger to CBS Corporation, FKA Viacom Inc., FKA Westinghouse Electric Corporation, Elliott Company, Foster

* Judge LaShann DeArcy Hall, of the United States District Court for the Eastern District of New York, sitting by designation. Wheeler, L.L.C., Jenkins Valces, Inc., Weinman Pump & Supply Co., Riley Power Inc., Defendants.

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x

FOR DEFENDANT‐APPELLANT: MICHAEL J. ROSS (Nicholas P. Vari, on the brief), K&L Gates LLP, Pittsburgh, Pennsylvania; Angela DiGiglio, K&L Gates LLP, New York, New York.

FOR PLAINTIFFS‐APPELLEES: PIERRE RATZKI, Weitz & Luxenberg, P.C., New York, New York.

Appeal from the United States District Court for the Southern District of

New York (Abrams, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the decision and order of the district court is

AFFIRMED.

Defendant‐appellant Crane Co. (ʺCraneʺ) appeals the decision and order

of the United States District Court for the Southern District of New York remanding the

action to New York state court following removal pursuant to the ʺfederal officer

removal statute,ʺ

(a)(1). We assume the partiesʹ familiarity with the

underlying facts, procedural history, and issues on appeal.

We review a district courtʹs legal ruling on a motion to remand de novo.

Yakin v. Tyler Hill Corp.,

(2d Cir. 2009). We review a district courtʹs

2 decision declining to exercise supplemental jurisdiction for abuse of discretion. Spiegel

v. Schulmann,

(2d Cir. 2010) (per curiam).

Crane makes two principal arguments. First, Crane argues that the

district court erred in remanding the case because there was original subject matter

jurisdiction at the time. Second, Crane argues that, even assuming the court lacked

original jurisdiction, the district court abused its discretion in declining to exercise

supplemental jurisdiction. We discuss each argument in turn.

A. Original Jurisdiction

The district court concluded that plaintiffs‐appellees Alton and Francis

Chapman (the ʺChapmansʺ) had abandoned ʺany and all claims arising from asbestos

exposure which are alleged to have occurred at any government facility, effectively

excis[ing] any claim on which a government‐contractor defense could be premised and

thereby extinguish[ing] the basis on which this action was originally removed.ʺ Special

App. at 26. Crane argues that an abandonment or disclaimer of claims does not

constitute a ʺdismissalʺ of claims over which the district court has original jurisdiction.

See

(c)(3) (providing that district courts may decline to exercise

supplemental jurisdiction where it has dismissed all claims over which it has original

jurisdiction). In other words, Crane argues that the claims giving rise to original

jurisdiction must be formally dismissed for a properly removed case to be remanded to

state court. The case law is to the contrary. See Valencia v. Lee,

(2d Cir.

3 2003) (concluding district court abused discretion in retaining supplemental jurisdiction

where plaintiffs had abandoned all federal claims; it was a relatively early stage of the

case; ʺ[n]o substantive motions had been filed; no judicial opinions had been issued;

and the case was not yet ready for trialʺ); see also Carnegie‐Mellon Univ. v. Cohill,

(1988) (ʺA federal district court has discretion under the doctrine of pendent

jurisdiction to remand a properly removed case to state court when all federal‐law

claims in the action have been eliminated and only pendent state‐law claims remain.ʺ).

It was clear here that the federal claims had been abandoned, and the district court

explicitly recognized the claims were no longer in the case. Hence, federal question

jurisdiction no longer existed.

Alternatively, Crane asserts that the district court should have retained

jurisdiction based on diversity of citizenship. See

. This avenue is also

unavailing. ʺ[W]hen diversity of citizenship is the basis of removal, diversity must exist

not only at the time the action was filed in the state court, but also at the time the case is

removed to federal court.ʺ 14B Charles Alan Wright & Arthur R. Miller, Federal

Practice & Procedure § 3723 (4th ed. 2013); see also United Food & Commercial Workers

Union, Local 919, AFL‐CIO v. CenterMark Props. Meriden Square, Inc.,

(2d

Cir. 1994) (noting that the ʺusual rule is that removability is determined from the record

as of the time the petition for removal is filed but where [the] basis of removal is

diversity[,] then diversity of citizenship must exist at [the] time [the] action was filed in

4 state court as well as at [the] time of removalʺ (citing 14B Wright & Miller § 3723 at 311‐

12)). Hence, to sustain removal based on diversity, Crane had to demonstrate that

diversity of citizenship existed both at the time of the filing of the Chapmansʹ original

complaint and at the time of removal.

Crane failed to meet its burden here. At the hearing on the Chapmansʹ

motion for remand, the district court asked the Chapmansʹ counsel whether there was

complete diversity at the time the complaint was filed. Counsel responded that he

ʺbeliev[ed] that Foster Wheeler was a New York defendant and defeated complete

diversity.ʺ Special App. at 18. Later on, the court inquired of Craneʹs counsel whether

there was any dispute ʺthat at the time the complaint was filed that there was not

complete diversity.ʺ Id. at 21. Counsel responded, ʺNo dispute.ʺ Id.

Crane contends on appeal that because it is now the sole remaining

defendant in this action, complete diversity exists. Whether non‐diverse parties were

subsequently dismissed is of no moment, however, when diversity did not exist at the

time of the original complaint. See CenterMark,

. Because Crane failed to

demonstrate that the parties were diverse when the original complaint was filed,

diversity of citizenship cannot serve as a basis for jurisdiction. To the extent that Crane

contends that the parties were in fact diverse as of the filing of the original complaint, it

has failed to establish as much by competent proof.

5 B. Supplemental Jurisdiction

Under

(a), ʺdistrict courts shall have supplemental

jurisdictionʺ over state‐law claims ʺthat are so related to claims in the action within [the

courtʹs] original jurisdiction that they form part of the same case or controversy under

Article III of the United States Constitution.ʺ Section 1367(c) further provides that a

district court may decline to exercise supplemental jurisdiction if ʺ(1) the claim raises a

novel or complex issue of State law, (2) the claim substantially predominates over the

claim or claims over which the district court has original jurisdiction, (3) the district

court has dismissed all claims over which it has original jurisdiction, or (4) in

exceptional circumstances, there are other compelling reasons for declining

jurisdiction.ʺ Accordingly, a district court may refuse to exercise supplemental

jurisdiction on any one of these four grounds. Cf. Itar‐Tass Russian News Agency v.

Russian Kurier, Inc.,

(2d Cir. 1998) (ʺ[T]he discretion to decline

supplemental jurisdiction is available only if founded upon an enumerated category of

subsection 1367(c).ʺ).

The district court declined to exercise supplemental jurisdiction because

the Chapmans had abandoned their claims giving rise to original jurisdiction; it was

still an early stage of the proceedings and discovery was not complete; no dispositive

motions had been decided; and interests of comity militated in favor of remand because

the case was predominately a matter of state law, potentially implicating unsettled

6 questions of state law. See Kolari v. N.Y.‐Presbyterian Hosp.,

, 124 (2d Cir.

2006) (ʺWe have repeatedly held that a district court particularly abuses its discretion

when it retains jurisdiction over state‐law claims raising unsettled questions of law

following dismissal of all original‐jurisdiction claims.ʺ). The district court did not abuse

its discretion in refusing to exercise supplemental jurisdiction. See

(c)

(ʺIf at any time before final judgment it appears that the district court lacks subject

matter jurisdiction, the case shall be remanded.ʺ).

. . .

We have considered Craneʹs remaining arguments and conclude they are

without merit. Accordingly, we AFFIRM the judgment of the district court.

FOR THE COURT: Catherine OʹHagan Wolfe, Clerk

7