Jurisdiction: United States District Court for the Western District of Kentucky, Louisville Division

Plaintiff Linda Horton filed a civil lawsuit on Nov. 21, 2024 against GE and other defendants in the Jefferson Circuit Court. Plaintiff asserted various Kentucky law claims sounding in strict liability, negligence, and punitive damages. She alleged her decedent, Barney Horton, developed mesothelioma from exposure to asbestos-containing products, including those from GE. In discovery, it emerged that Barney Horton served in the U.S. Navy 1968-1972, including two years aboard the USS Cascade; GE’s records indicated this ship contained one or more General Electric marine turbines.

GE asserted that it relevantly acted under an officer or agency of the United Statesand removed the case to Federal Court. Plaintiff subsequently amended her operative complaint to waive any claims for damages caused by/arising from decedent Horton’s exposure to asbestos while in the Navy, including from GE’s equipment on board the USS Cascade. Based on this waiver, the plaintiff then moved to remand.

GE moved for a stay of proceedings while it appealed the remand.

In considering GE’s request for a stay, the court had to consider the following balancing factors: (1) whether GE has a likelihood of success on the merits; (2) whether it will suffer irreparable harm in the absence of a stay; (3) whether the requested injunctive relief will substantially injure other interested parties; and (4) where the public interest lies. Nken v. Holder, 556 U.S. 418, 433-34 (2009).

GE argued that Supreme Court’s holding in Coinbase Inc. v. Bielski, 599 U.S. 736 (2023) meant that its appeal automatically stayed the order for remand. Plaintiff argued contrarily that the Coinbase holding is limited to the context of arbitration appeals under § 16(a) of the Federal Arbitration Act.

In Coinbase, the Supreme Court held that a district court is required to enter an “automatic stay” pending appeal when a party exercises its statutory right under the Federal Arbitration Act to an interlocutory appeal of the denial of a motion to compel arbitration. There is a circuit split as to whether Coinbase requires courts to grant automatic stay pending interlocutory appeal of remand orders where the case was originally removed under the officer removal statute, with most Courts of Appeal holding that Nken and not Coinbase controls, and the Fourth Circuit alone holding that Coinbase applies to federal officer removal cases.

The District Court here agreed with most circuits that Nken, and not Coinbase, is the proper standard to apply to the instant case. First, the court noted there are fundamental differences between arbitration and litigation which do not exist as between litigation in state versus federal courts. Second, unlike in Coinbase, in the absence of a stay, this case will not proceed in the same court.

Applying the Nken test, the District Court found against GE on each of the four factors. Hence it denied the stay and remands to Jefferson County.

A copy of the decision can be found here.