Employer Prefers Federal Over State Court

The key to winning or losing an employment lawsuit may be as simple where the case is heard.

Federal or state court?

Lawyers who represent employers clearly feel they get a more receptive hearing in federal courts, which is why they routinely file motions to remove cases filed in state court to federal court.  Removal is possible when the parties are “diverse” in citizenship. pursuant to 28 U.S.C. § 1332.

Appalachian Power Company (APCO) recently won a dispute over “diversity jurisdiction” with a former maintenance worker who allegedly contracted an infectious lung disease called histoplasmosis while working as a maintenance man at APCO’s  coal-fired power plant in New Haven, WV from March 2006 to March 2007.

A three-judge panel of the U.S. Court of Appeals for the Fourth Circuit in Richmond, VA, affirmed the removal of the lawsuit, which was  filed  by West Virginia residents Roger and Judy Hoschar in 2011 in state court.

Hoschar’s job regularly required him to clean 5-inch accumulations of ash and pigeon droppings from the top of massive steel precipitators which remove ash from gases produced by burning coal.  He argued that he contracted the disease by inhaling fungus deposited on the precipitators by pigeons. He said APCO failed to warn him about the health risks even though the U.S. Occupational Health and Safety Commission had issued a general warning that the fungus that causes the disease is carried on the wings, feet and beaks of pigeons.

Although APCO’s web site listed its headquarters as Charleston, WV, APCO filed a motion to remove the case to federal court on the grounds that its real headquarters was in Columbus, OH.

U.S. District Judge Robert C. Chambers ruled that although “many of the day-to-day business activities of [APCO] are conducted in Charleston[,] . . . the ultimate decision-making power, which directs, controls, and coordinates the big-picture activities of [APCO], is carried out in Columbus.”

Interpreting WV law, Judge Chambers then dismissed the Hoschar’s lawsuit against APCO on a motion for summary judgment, finding that APCO did not have a duty to warn Hoschar because the histoplasmosis hazard posed by the bird manure was not reasonably foreseeable to APCO. The judge concluded there was no “material” fact in dispute  and that no reasonable jury could find in the Hoschars favor.

The appeals court affirmed the lower court’s rulings. The appellate court said APCO “amply” satisfied its burden under a federal rule governing jurisdiction by showing that APCO’s entire Board of Directors is located in Columbus as well as 22 out of APCO’s 27 officers.  Furthermore, the appeals court said, APCO did not have actual or constructive knowledge of a potential histoplasmosis risk, and therefore, did not owe Roger Hoschar a duty to guard against the risk.

The case is Roger Hoschar and Judy Hoschar v. Appalachian Power Company, No. 12-2482, decided January 7, 2014.

Would the result have been any different if the case had remained in state court?


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