Federal Jurisdiction Lacking for Case Alleging Exposure to Hazards from Pipeline Spill

A Utah federal court rejected an oil and gas company’s bid to keep a lawsuit alleging that a crude oil pipeline spill caused a plaintiff’s acute myeloid leukemia in federal court last week. The company argued that the federal court had federal question jurisdiction over the suit, which alleged negligence, strict liability for abnormally dangerous or ultra-hazardous activities, and negligent misrepresentation.

The oil and gas company argued that the plaintiff’s incorporation of facts and conclusions reached by a PHMSA report “inevitably raises important issues of federal law, including whether, and to what extent, the Court may require a DOT employee who prepared the PHMSA documents to testify here despite the DOT’s regulation” [that forbids PHMSA employees from participating in court proceedings. The court rejected the argument because a hypothetical evidentiary dispute in which a federal regulation may play a role was “neither necessarily raised nor substantial.” The court also questioned whether the regulation would be implicated because the plaintiff should be able to rely on a Utah evidence rule that exempts from hearsay any records or statements of a public office setting out factual findings from a legally authorized investigation, which would negate the necessity of the PHMSA employee’s testimony.

The court also rejected the company’s argument that the plaintiff intentionally omitted necessarily raised federal questions from the complaint to avoid removal (and specifically deleted allegations from the first filed complaint that had referenced certain federal statutes).

The case was No. 2:18-cv-697 in the U.S. District Court for the District of Utah.