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Shipyard Death Case Goes Back to State Court

In this negligence action by the estate of a 27-year-old machinist who died from a crush injury while working for defendant shipyard at the Great Lakes Dredge and Dock’s facility, the Virginia shipyard was not fraudulently joined as a defendant and the Norfolk U.S. District Court remands the case to state court because there is not complete diversity of citizenship.

Defendant Great Lakes removed this case by alleging both maritime jurisdiction and diversity jurisdiction. However, in its response to the motion for remand, Great Lakes does not provide any support of maritime jurisdiction but instead focuses on diversity jurisdiction. Regarding diversity jurisdiction, neither party disputes that the amount in controversy exceeds $75,000. Therefore, the relevant question before the court is whether this dispute is between citizens of different states. Great Lakes is an Illinois corporation with its principal place of business in the state of Illinois. Defendant Lyon Shipyard Inc. is a Virginia corporation with its principal place of business in Virginia. Plaintiff is a resident of Virginia. As such, plaintiff insists this case should be remanded to state court because complete diversity does not exist among the parties.

Defendants argue that plaintiff has fraudulently or nominally joined Lyon to this action despite Lyon’s immunity from tort liability under the Longshore and Harbor Workers Compensation Act.

The court lacks subject matter jurisdiction because plaintiff and defendant Lyon are citizens of Virginia, impeding complete diversity. To prove that Lyon was fraudulently joined here, defendants must show either that plaintiff cannot establish a cause of action in state court against Lyon.

However, the court finds that plaintiff states a claim against Lyon that withstands challenge on the basis of fraudulent joinder. Neither Great Lakes nor Lyon has demonstrated the impossibility of a cause of action or bad faith in joinder. Here, defendants have not provided this court with any evidence that plaintiff joined Lyon in bad faith. It is apparent that plaintiff has alleged specific actions on the part of Lyon to sustain a cause of action – specific actions that could have led to the harm plaintiff suffered. In particular, plaintiff asserts that Lyon provided and exercised control over the crane barge that crushed decedent and provided a crane barge that was too small for the drag head replacement operation.

Not only has plaintiff asserted specific allegations against Lyon, plaintiff has demonstrated a potentially viable argument against the applicability of the LHWCA’s exclusive remedy provision because he provides reasons why the decedent should not be characterized a “ship repairman.” Plaintiff has asserted sufficient evidence that decedent was not engaged in ship repairing services as contemplated by 33 U.S.C. §§ 902(3) or 905(b) but was involved in routine maintenance, thereby establishing the possibility of a claim against Lyon despite the preclusive effect of § 905(b).

Given the court’s finding of a potential cause of action against Lyon in state court, the court concludes that defendants have not established that plaintiff fraudulently joined Lyon to defeat diversity jurisdiction. The court does not have subject matter jurisdiction over this case arising from diversity of citizenship.

Case remanded to state court.

Monroe v. Great Lakes Dredge & Dock Co. LLC (Jackson) No. 2:14cv264, Aug. 5, 2014; USDC at Norfolk, Va. VLW 014-3-413, 8 pp.

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