                                                                              FILED
                           NOT FOR PUBLICATION                                 JUN 13 2012

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS



                            FOR THE NINTH CIRCUIT


LISA CASWELL, in her capacity as                 No. 10-35748
executor of the estate of Robert Caswell,
                                                 D.C. No. 3:10-cv-05232-BHS
              Plaintiff - Appellant,

  v.                                             MEMORANDUM*

OLYMPIC PIPELINE COMPANY; et al.,

              Defendants - Appellees.



LISA CASWELL, in her capacity as                 No. 11-35260
executor of the estate of Robert Caswell,
                                                 D.C. No. 3:10-cv-05232-BHS
              Plaintiff - Appellant,

  v.

UNION OIL COMPANY OF
CALIFORNIA; et al.,

              Defendants - Appellees.


                   Appeal from the United States District Court
                     for the Western District of Washington
                   Benjamin H. Settle, District Judge, Presiding

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                        Argued and Submitted June 6, 2012
                               Seattle, Washington

Before: SILVERMAN and MURGUIA, Circuit Judges, and HALL, District
Judge.**

      Plaintiffs Robert and Lisa Caswell appeal the district court’s summary

judgment orders that dismissed their product liability claims. The court ruled that

the Caswells’ claims were barred by Oregon’s 8-year statute of repose. The

Caswells also ask us to review the Washington state trial court’s order granting

summary judgment to Olympic Pipeline Company on the same basis. We have

jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

      Like the district court, we apply Washington’s choice-of-law rules to decide

whether Washington’s or Oregon’s substantive law applies. See Fields v. Legacy

Health Sys., 413 F.3d 943, 950–52 (9th Cir. 2005). Also like the district court, we

hold that Oregon had the most significant relationship to this action. At the time of

injury, the Caswells were Oregon residents. Robert Caswell was injured in Oregon

while working in Oregon for an Oregon employer. In Rice v. Dow Chemical Co.,

875 P.2d 1213, 1217–18 (Wash. 1994), the Washington Supreme Court applied

Oregon’s statute of repose in a scenario very similar to this one.

       **
            The Honorable Janet C. Hall, District Judge for the District of
Connecticut, sitting by designation.

                                          2
      The Caswells also argue that the district court erred when it denied their

request for further discovery on whether the petroleum products were

manufactured and designed in Washington. We disagree. The district court

correctly held that, even if the Caswells can show that the products were

manufactured and designed in Washington, Oregon would still have more

significant contacts. Therefore, additional discovery would have been futile.

      The Caswells raise two new arguments for the first time on appeal. The first

is that, even if Oregon law applies, Oregon’s statute of repose was not triggered

because there was no evidence that the petroleum had been purchased for use or

consumption. The second argument is that the Oregon statute of repose violates

the Due Process Clause of the United States Constitution. We decline to review

these arguments because they were not raised before the district court. Barrientos

v. 1801-1825 Morton LLC, 583 F.3d 1197, 1215–16 (9th Cir. 2009).

      Lastly, the Caswells argue that the Washington state trial court erred in

applying Oregon’s statute of repose before the action was removed. We have

jurisdiction to review the state court’s order because the district court necessarily

adopted that order as its own after removal. See Resolution Trust Corp. v. Bayside

Developers, 43 F.3d 1230, 1238 (9th Cir. 1994); Butner v. Neustadter, 324 F.2d

783, 785–86 (9th Cir. 1963). We also have jurisdiction because, at the time


                                           3
judgment was entered, there was complete diversity between the parties. See

Gould v. Mut. Life Ins. Co., 790 F.2d 769, 774 (9th Cir. 1986).

      First, we note that removal based on diversity jurisdiction was proper here,

despite the lack of complete diversity, because the Caswells failed to contest the

allegations in the notice of removal that Tesoro Refining and Marketing Company

and Olympic Pipeline Company were fraudulently joined and that the Caswells

cannot state a claim against them. The Caswells’ failure to object to the factual

allegations in the notice of removal and their decision not to move for remand are

construed as an admission that Tesoro Refining and Olympic Pipeline were sham

defendants joined solely to destroy complete diversity. See Schnabel v. Lui, 302

F.3d 1023, 1032 (9th Cir. 2002). After removal, the district court correctly

adopted as its own the state court’s decision to dismiss Tesoro Refining and

Olympic Pipeline on the grounds that Oregon’s statute of repose barred the

Caswells’ claims against them. Although Olympic Pipeline has its principal place

of business in Washington, the decision to apply Oregon law was correct.

      AFFIRMED.




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