Marine & Energy News Alert: Removal Into Admiralty Update

November 10, 2014

Prior to Congress’s 2011 amendments to the Federal Removal Statute (28 U.S.C. § 1441), effective in January 2012, it was well understood that maritime claims could not be removed to federal court absent an independent ground for federal subject matter jurisdiction.  See Romero v. International Terminal Operating Co., 358 U.S. 354 (1959).  In May 2013, however, Judge Gray Miller of the Southern District of Texas examined the revised language of section 1441, and held that the plain language of the revised code permitted removal of general maritime claims to federal court.  Ryan v. Hercules Offshore, Inc., 945 F.Supp.2d 772, 774-78 (S.D. Tex. 2013).  Since the decision in Ryan, marine and energy defendants have continued to remove cases to federal court based on admiralty jurisdiction.

Federal court litigation is often favored because: 1) federal courts handle a fewer number of cases than state courts, such that cases proceed more expeditiously; 2) discovery in federal court is more controlled; 3) federal courts are more likely to consider dispositive motions; 4) federal courts tend to push parties to case resolution more efficiently; and 5) there is no right to a jury trial in a federal court sitting in admiralty absent some other basis.

A number of courts in the Southern District of Texas, Middle District of Louisiana, and Eastern District of Louisiana have issued opinions agreeing with Judge Miller’s decision in Ryan.  Specifically, Judges Lee Rosenthal, Nancy Atlas, and Ewing Werlein in the Southern District of Texas and Judges James Brady and Shelly Dick in the Middle District of Louisiana and Judge Kurt Engelhardt in the Eastern District of Louisiana have issued opinions that concur with Ryan.

Some federal courts have disagreed with Ryan, and remanded cases back to state court.  In the Southern District of Texas, Judges Nevla Ramos and Kenneth Hoyt have issued opinions contrary to Ryan.  In Louisiana, Judges Jay Zainey, Stanwood Duval, and Jane Milazzo in the Eastern District of Louisiana, along with Judges Donald Walter and Richard Haik in the Western District of Louisiana have likewise held that the 2011 amendments did not alter the removability of admiralty matters.  The courts issuing opinions contrary to Ryan base their decision on the long history of admiralty jurisdiction and the Savings-to-Suitors Clause, which preserve a plaintiff’s right to a jury trial, that is generally not available under a federal court’s admiralty jurisdiction. These courts also note that the legislative history to the 2011 Amendments suggests that Congress did not intend to modify the removability of such claims.

The United States Court of Appeals for the Fifth Circuit has yet to resolve the conflict.  This is largely because an order remanding a case to state court is generally not reviewable on appeal.  28 U.S.C. § 1447(d) (exceptions for federal officers, federal agencies, and civil rights cases); See Schexnayder v. Entergy La., Inc., 394 F.3d 280, 283 (5th Cir. 2004).  The Fifth Circuit, in Schexnayder, stated it “will only review remand orders if the district court affirmatively states a non-1447(c) ground for remand,” which includes “remands made for purely discretionary reasons, abstention-based remands, remands based on § 1367, remands based on § 1445(c), and remands based on the district court’s discretionary powers under § 1441(c), among others.”  Schexnayder, 394 F.3d at 283 (citations omitted).  Accordingly, parties must litigate the case to a final appealable judgment before challenging whether removal or remand was proper.

If you are interested in a list of the numerous cases which have analyzed the new removal statute, please contact Andrew Brown.