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Ingman v. FCA U.S. LLC

United States District Court, D. Montana, Great Falls Division

November 14, 2017

FCA U.S. LLC, et al., Defendant.


          Brian Morris United States District Court Judge

         Plaintiff Eddie Michael Ingman filed this action in Montana's Eight Judicial District Court, Cascade County on July 7, 2017. (Doc. 3.) Plaintiff named as defendants FCA U.S. LLC, Grimes Buick-GMC, Inc., and Does 1 through 100. Id. FCA U.S. removed this action to federal court on August 10, 2017, pursuant to 28 U.S.C. § 1452. (Doc. 1.)

         Plaintiff filed a Motion to Remand, pursuant to 28 U.S.C.A. §§ 1441, 1447 on September 1, 2017. (Doc. 7.) Plaintiff additionally moved for sanctions and costs, pursuant to 28 U.S.C.A. §§ 1446(a), 1447(c), and Fed.R.Civ.P. 11. Id. Defendants filed a Motion to Transfer to the Southern District of New York, pursuant to 28 U.S.C. § 1412 on September 14, 2017. (Doc. 22.) The Court conducted a hearing on November 2, 2017. (Doc. 45.)


         Chrysler, LLC (subsequently known as Old Carco LLC) and twenty-four of its affiliated entities (collectively “Debtors”) filed for bankruptcy in April 2009. (Doc. 1 at 2.) The Debtors and FCA U.S. entered into a Master Transaction Agreement (“MTA”) under which FCA U.S. purchased substantially all of Debtors' assets and assumed certain liabilities. Id. at 3. The United States Bankruptcy Court for the Southern District of New York entered an order approving an asset sale to FCA U.S. (“Sale Order”) under the terms of the MTA on June 1, 2009. Id.

         The Sale Order by the bankruptcy court makes clear that FCA U.S. assumed Chrysler's notification and remedy obligations pertaining to pre-existing safety defects in vehicles. (Doc. 1-2 at 21.) In an amendment to the MTA (“Amendment No. 4”), FCA U.S. agreed to assume liability for all product liability claims that may arise on or after closing and are not barred by the statute of limitations. Amendment No. 4 specifically excluded any product liability claims that alleged “exemplary or punitive damages.” (Doc. 1 at 5.) The bankruptcy court approved Amendment No. 4 on November 19, 2009. Id.

         Plaintiff alleges serious injuries from a single vehicle incident on March 5, 2017. Plaintiff was driving a 2001 Chrysler Jeep Wrangler Sahara/TJ Sahara on U.S. Highway 89 in Cascade County, Montana. (Doc. 3 at 2.) Plaintiff alleges that FCA US's predecessor, Chrysler Group LLC, defectively designed or manufactured the vehicle. Id. at 6. Plaintiff alleges that sometime after the bankruptcy sale, FCA U.S. knew or should have known, that the vehicle had not been designed, manufactured, sole, inspected, supplied, modified, and/or provided in a reasonable manner. Id. at 8. Plaintiff further alleges that after the bankruptcy sale, FCA U.S. negligently, carelessly, and/or maliciously failed to ensure that consumers had been warned of the dangers associated with the design of the vehicle, including steps to remedy and/or recall the product. Id. at 8. Plaintiff seeks punitive damages against FCA U.S. based on FCA US's alleged post-bankruptcy sale conduct. Id. at 10.


         FCA U.S. filed a Notice of Removal on August 10, 2017. (Doc. 1.) Plaintiff filed a Motion to Remand on September 1, 2017. Plaintiff asserts that the punitive damages provision in Amendment No. 4 to the Sale Order addresses only claims that arise from FCA's conduct before the bankruptcy sale. (Doc. 7.) Plaintiff contends that his punitive damages claim relies solely on FCA's conduct that occurred after the sale. Plaintiff seeks to have this case remanded to Montana's Eight Judicial District Court based on this Court lacks subject matter jurisdiction over the claims alleged against the Defendants. (Doc. 7 at 2.)

         FCA U.S. filed a Motion to Transfer Venue on September 14, 2017. (Doc. 22.) FCA U.S. seeks to transfer this matter to the United States District Court for the Southern District of New York, for referral to the bankruptcy court. FCA U.S. believes that the bankruptcy court sits in the best position to interpret and enforce the meaning of Amendment No. 4. (Doc. 22 at 11.) FCA U.S. further contends that it would serve the interest of justice to allow the bankruptcy court to interpret its own order.


         A defendant may remove an action from state court if it originally could have been brought in federal court. 28 U.S.C. § 1441. A court must remand a case removed from a state court “if at any time before final judgment it appears that the district court lacks subject matter jurisdiction.” 28 U.S.C. § 1447(c). This Court first must determine whether it possesses subject matter jurisdiction. Federal courts operate “under an independent obligation to examine their own jurisdiction.” Hernandez v. Campbell, 204 F.3d 861, 865 (9th Cir. 2000). A federal court may not entertain an action over which it lacks jurisdiction. Id.

         The Court faces a Motion to Remand competing with a Motion to Transfer Venue. This Court lacks power to transfer a case without first having determined that it possesses jurisdiction. The Complaint raise no federal question under § 1331. The allegations in the Complaint likewise demonstrate an absence of the complete diversity requirement for jurisdiction under § 1332.

         FCA U.S. argues that this Court remains free to rule “in any order” when faced with the competing motion to remand and the motion to transfer venue. Another court in this District, Simonsen v. Tsunami Capital, LLC, 2009 WL 368651 (D. Mont. 2009), faced a similar quandary. Simonsen determined that it should not exercise discretionary jurisdiction. The court instead recommended that the matter be remanded to state court thereby rendering moot the motion to change venue. Id. at 7. Significant overlap exists between these two issues in this case. The Court agrees with Simonsen, however, that ...

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