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In re Paulsboro Derailment Cases Tonya Kidd

United States District Court, Third Circuit

December 31, 2013

CONSOLIDATED RAIL CORPORATION, et al. Defendants. Civil No. 13-208 (RBK/KMW)


ROBERT B. KUGLER, District Judge.

This matter comes before the Court on the motion of Tonya Kidd, et al. ("Plaintiffs")[1] to remand this case to the Superior Court of New Jersey, Gloucester County. Consolidated Rail Corporation ("Conrail"), Norfolk Southern Railway Company, and CSX Transportation (collectively "Defendants") argue that the case was properly removed pursuant to this Court's diversity jurisdiction under 28 U.S.C. § 1332. Because the Court finds that it has jurisdiction over this matter, Plaintiffs' motion to remand will be DENIED.


A. Derailment and Procedural History

On the morning of November 30, 2012, a freight train derailed and plunged into the Mantua Creek in Paulsboro, New Jersey when the Paulsboro Bridge, [2] a railroad bridge spanning the creek, buckled and collapsed. Several cars became partially submerged in the creek. Am. Compl. ¶¶ 109, 120. At least one of the derailed railcars released its cargo of vinyl chloride into the air and water. Id . ¶ 121. As a result, the Borough of Paulsboro declared a state of emergency and shortly thereafter, residents of the area, including some plaintiffs in this matter, were directed to evacuate or shelter in place. Id . ¶ 132.

Plaintiffs allege that Defendants acted negligently and recklessly in their operation of the freight train and maintenance of the bridge. They further allege that the train proceeded across the bridge against a red signal, which indicated that the bridge, which could swing open to allow water traffic, was not ready to safely accommodate rail traffic. Id . ¶¶ 111-12. Plaintiffs also assert that shortly before the derailment, Defendants had been notified of deficient conditions relating to the operation of the bridge, but failed to correct the problems. Id . ¶ 117. Many plaintiffs allege that they have suffered from coughing fits and other physical symptoms as a result of exposure to the chemicals that spilled from the railcar. Id . ¶¶ 129-30, 134. They also allege that they are at a greater risk of future illnesses, including cancer, and have sustained a diminution in the value of their properties and other economic losses as a result of Defendants' conduct. Id . ¶¶ 135-38.

Plaintiffs brought this case against Defendants in the Superior Court of New Jersey, Gloucester County, on January 7, 2013. The defendants named in the Superior Court complaint were Conrail, which is incorporated in Pennsylvania and also maintains its principal place of business in Pennsylvania, Norfolk Southern Railway Company, which is incorporated in Virginia and maintains its principal place of business in Virginia, and CSX Transportation, a corporation with its principal place of business in Florida.[3] See Notice of Removal Ex. A ¶¶ 54-56

On January 11, 2013, Defendants removed the complaint to this Court pursuant to 28 U.S.C. § 1441, asserting that diversity jurisdiction existed, pursuant to 28 U.S.C. § 1332(a). On October 11, 2013, Plaintiffs filed the instant motion to remand, arguing that Conrail is a citizen of New Jersey by operation of N.J.S.A. 48:12-131, and for that reason, this Court does not have jurisdiction over this matter, and the case must be remanded to state court.

B. Origination of Conrail

Conrail was formed on April 1, 1976 pursuant to the Regional Rail Reorganization Act of 1973 ("Rail Act"), 45 U.S.C. § 741, et seq. The Rail Act provided for the establishment of "a corporation to be known as the Consolidated Rail Corporation." 45 U.S.C. § 741(a). Conrail was to be a "for-profit corporation established under the laws of a State, " and its principal office was to be "located in Philadelphia in the Commonwealth of Pennsylvania." Id . § 741(b). The Rail Act also contemplated "the filing of articles of incorporation." Id . § 741(c). Subsequently, Conrail established its principal place of business in Philadelphia, and after initially incorporating in Delaware, Conrail was officially incorporated in Pennsylvania on February 10, 1976. Def. Opp'n Ex. A. ¶ 18.[4] Conrail indicates that it has not filed articles of incorporation or a certificate of incorporation since that time in any state other than Pennsylvania.[5] The newly formed corporation was directed to take possession of the "rail properties" of certain bankrupt railroads. 45 U.S.C. § 742. As a result, in 1976, Conrail acquired most of the rail assets of the Central Railroad of New Jersey ("CNJ"). See In re Cent. R.R. Co. of N.J. , 473 F.Supp. 225, 226 (D.N.J. 1979).


A. Standard for Removal

Under 28 U.S.C. § 1441, a defendant may remove an action filed in state court to a federal court with original jurisdiction over the action. Once an action is removed, a plaintiff may challenge removal by moving to remand the case back to state court. To defeat a plaintiff's motion to remand, the defendant bears the burden of showing that the federal court has jurisdiction to hear the case. Abels v. State Farm Fire & Cas. Co. , 770 F.2d 26, 29 (3d Cir. 1985). Where the decision to remand is a close one, district courts are encouraged to err on the side of remanding the case back to state court. See Abels , 770 F.2d at 29 ("Because lack of jurisdiction would make any decree in the case void and the continuation of the litigation in federal court futile, the removal statute should be strictly construed and all doubts should be resolved in favor of remand."); Glenmede Trust Co. v. Dow Chem. Co. , 384 F.Supp. 423, 433-34 (E.D. Pa. 1974) ("It is well settled that district courts should remand ...

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