Thursday, August 8, 2013

Ackerman v. ExxonMobil Corporation

Aug 7: In the U.S. Court of Appeals, Fourth Circuit, Case No. 12-1103. Appealed from the United States District Court for the District of Maryland, at Baltimore. ExxonMobil Corporation (Exxon) and John R. Hicks (together, Defendants) appeal a district court order abstaining from exercising jurisdiction under the Colorado River doctrine in a case brought against Defendants. See Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976). The Appeals Court said it could find no reversible error and affirmed the decision of the district court.
    In June 2004, hundreds of residents of Fallston, Maryland, filed a putative class action (the Koch action) against Defendants in Maryland state court. The complaint alleged several state law causes of action for the contamination of their properties by gasoline and the gasoline additive methyl tertiary-butyl (MTBE) from an Exxon station that Hicks operated.
     The Ackerman Plaintiffs filed a motion in federal court seeking to remand the case to state court, arguing that removal was time-barred and that the Defendants waived their right to remove by litigating for several years in state court. Alternatively, the Ackerman Plaintiffs requested that the district court abstain under the Colorado River doctrine, which permits federal courts, under exceptional circumstances, to refrain from exercising jurisdiction in deference to pending, parallel state proceedings.
    When concluding that abstention was proper, the district court focused in large part on the length of time that the Koch action had been pending in state court and the progress that had been made on the case in the state system. The Koch case had proceeded in state court for years before the Ackerman claims were extracted and separately re-filed, and extensive discovery efforts had been conducted over the course of those years.
    The Appeals Court explained, "Balancing these facts and the other relevant factors against its own duty to exercise jurisdiction, the district court ultimately concluded that 'this litigation presents the rare, exceptional circumstances when wise judicial administration counsels abstention.'. . . The court therefore stayed Ackerman pending the resolution of the Koch proceedings in state court. The Defendants now appeal, arguing that the district court erred by granting the Plaintiffs' motion to abstain."
    In its conclusion the Appeals Court rules, "To summarize, we hold that 28 U.S.C. § 1446(d) affects only the jurisdiction of the state court only with regard to the case actually removed to federal court. Because Koch was not removed, the state court maintained jurisdiction over it, and the amendment to the complaint in that case was not void ab initio. That the district court might have had authority to issue an injunction striking the amendment does not make the amendment void when the district court never issued an injunction. The district court thus was correct to consider the amended Koch complaint in determining whether the Koch and Ackerman actions were parallel, and the court did not abuse its discretion when concluding that exceptional circumstances warranted abstention in favor of the pending Koch action. Accordingly, for the foregoing reasons, we hereby affirm the district court's order."
    In a strange separate, "concurrence" opinion, one Justice writes, "I write separately because the district court's errors were so many and of such significance that I cannot share the majority's confidence that they did not contribute to that result. More importantly, I believe that leaving those errors not only unaddressed but unacknowledged will allow, if not encourage, their repetition. My fundamental concern with the majority's opinion is that in its magnanimity to a profoundly flawed disposition below, it omits critical facts at the expense of our well-established obligation to exercise the jurisdiction that we have. . ."
    Access the complete opinion and concurrence (click here). [#Remed, #CA4]