Ronald A. White United States District Judge Eastern District of Oklahoma

ORDER

Before the Court is the motion of the plaintiff to remand. This action was commenced in the District Court of Choctaw County by the filing of a petition on October 30, 2015. The petition is labeled "Class Action Petition." It represents to bring the action on behalf of "a plaintiff class consisting of all persons and entities residing in and/or located in the city of Hugo, Oklahoma, and all surrounding area which are serviced by the Hugo Water Treatment Plant operated under the contract between Severn Trent and the Hugo Municipal Authority." The petition seeks "actual and compensatory damages in an amount in excess of $10,000," restitution and injunctive relief.

Defendant Severn Trent Environmental Services, Inc. filed its notice of removal on December 4, 2015. The stated basis for removal is 28 U.S.C. §1332(a). That is, defendant relies upon traditional diversity jurisdiction. Thus, this action is only removable if there is complete diversity of citizenship between the class representative and the defendant, and the class representative has a claim that is worth more than $75,000, exclusive of interest and costs.

In the prayer for relief in the original state court petition, plaintiff seeks "actual and compensatory damages in an amount in excess of $10,000.00, exclusive of interest and costs, in the aggregate for Counts I-IV." In its notice of removal, defendant notes this is not in compliance with 12 O.S. §2008(A)(2), which requires that every petition state whether plaintiff's claim exceeds the amount required for federal diversity jurisdiction or otherwise plead the actual amount sought. Defendant also notes, however, that 12 O.S. §2009(H) permits a defendant to file a motion to clarify damages if the amount of damages sought to be recovered is less than the amount required for federal diversity jurisdiction. Defendant states that it did not file such a motion because it is not required by the statute and because it did not wish to risk its removal being deemed untimely under 28 U.S.C. § 1446(b). (#3 at 2 n.3).

In this regard, defendant is referring to §1446(b)(1), which provides that the notice of removal must be filed within 30 days of the defendant's receipt of a copy of the initial pleading. If the case is not initially removable, it must be removed within thirty days of receipt of "a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." See 28 U.S.C. § 1446(b)(3). It should also be noted, however, that "[u]nder §1446(b), the removal period does not begin until the defendant is able to intelligently ascertain removability so that in his petition for removal he can make a simple and short statement of the facts." Huffman v. Saul Holdings Ltd. P'ship, 194 F.3d 1072, 1078 (10^th Cir.1999). Moreover, removal based on diversity of citizenship is prohibited under § 1446(b)(3) if the removal is "more than [one] year after commencement of the action, unless the district court finds that the plaintiff acted in bad faith in order in order to prevent a defendant from removing the action." See 28 U.S.C. §1446(c)(1). In the motion to remand, plaintiff asserts that "[t]he currently available evidence demonstrates that the individual claims of Tara Lowrimore greatly miss the $75,000 individual amount." (#14 at page 2 of 12).

At present, Tenth Circuit authority regarding a case such as the one at bar remains as follows: "Given the limited scope of federal jurisdiction, there is a presumption against removal, and courts must deny such jurisdiction if not affirmatively apparent on the record." Okla. Farm Bureau Mut. Ins. Co. v. JSSJ Corp., 149 Fed.Appx. 775, 778 (10^th Cir.2005). The court must strictly construe the federal removal statute, and resolve any doubts concerning removability in favor of remand. Fajen v. Found. Reserve Ins. Co., 683 F.2d 331, 333 (10^th Cir.1982).

There might be an argument that, given the existence of 12 O.S. §2009(H), an explicit provision of state law for clarifying damages, the case should be remanded for that purpose. The Ninth Circuit has held that "it is well within the [district] court's discretion to remand to state court rather than ordering jurisdictional discovery, with the knowledge that later-discovered facts may prompt a second attempt at removal." Abrego Abrego v. Dow Chemical Co., 443 F.3d 676, 691 (9^th Cir.2006). On the other hand, this amounts to punishing defendant for not employing a state statute when plaintiff did not comply with the pleading requirement of 12 O.S. §2008(A)(2). It appears no court in Oklahoma has made such a ruling, and this court will not do so.

A defendant may choose to remain in state court and seek clarification of damages, relying upon the one-year time limitation of 28 U.S.C. §1446(c)(1), which is itself subject to extension if the court finds plaintiff has acted in bad faith. This is what the defendant did in Calvary Baptist Church v. Church Mut. Ins. Co., 2016 WL 543239 (W.D.Okla.2016). On the other hand, in Singleton v. Progressive Direct Ins. Co., 49 F.Supp.3d 988 n.1 (N.D.Okla.2014), the court said there was no indication that plaintiff attempted to comply with the pleading requirements or that defendant attempted to avail itself of its rights under §2009(H). The court nevertheless proceeded to simply address the motion to remand on the merits. This court will adopt the same approach.

First, plaintiff argues that the contract itself requires this matter be remanded to state court. She points to the forum-selection clause (#14-1, section 12.7) which states in pertinent part that "[t]he parties agree that the venue of any action arising from this Agreement shall be in the appropriate State court having competent jurisdiction located in the judicial district in which the Client is located." The contract defines the "Client" as the Hugo Municipal Authority and Hugo is in Choctaw County, Oklahoma, where plaintiff originally filed the case. Plaintiff, however, is not a party to the contract. Nevertheless, a non-signatory may enforce a forum selection clause in a contract if that party is a third-party beneficiary of the contract. See Coastal Steel Corp. v. Tilghman Wheelabrator, 709 F.2d 190, 203 (3d Cir.1983). Plaintiff argues for such a finding, noting that section 4.1(b) of the contract states that defendant shall provide the City's customers (such as plaintiff) with treated water.

Under Oklahoma law, "[a] contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it." 15 O.S. §29. "As a general proposition, the determining factor as to the right of a third party beneficiary is the intention of the parties who actually made the contract." G.A. Mosites Co. of Ft. Worth, Inc. v. Aetna Cas. & Sur. Co., 545 P.2d 746, 749 (Okla.1976). Generally, public citizens are not intended third-party beneficiaries to government contracts despite the fact that such contracts are usually intended to benefit the public in some way. See Briggs v. Oklahoma ex rel. Dept. of Human Services, 472 F.Supp.2d 1288, 1293 (W.D.Okla..2007)(citing Restatement (Second) of Contracts §313). See also Klamath Water Users Protective Ass'n v. Patterson, 204 F.3d 1206, 1211 (9^th Cir.1999)("Parties that benefit from a government contract are generally assumed to be incidental beneficiaries, and may not enforce the contract absent a clear intent to the contrary"). The court finds that this authority leads to the conclusion that, although plaintiff is a citizen of Hugo and a "beneficiary" of a treated water supply, the contract does not expressly make her a third-party beneficiary entitled to enforce the contract.

The court now turns to jurisdictional amount. As the party requesting removal, defendant must allege "a short and plain statement of the grounds for removal" (pursuant to 28 U.S.C. §1446(a)), which includes "a plausible allegation that the amount in controversy exceeds the jurisdictional threshold." See Dart, 135 S.Ct. at 553-54 (2014). Where plaintiff contests defendant's allegations regarding the amount in controversy, both sides may present evidence and the court must decide by a preponderance of the evidence whether defendant has satisfied the amount-in-controversy requirement. Id. at 554. The burden is on the removing defendant to prove by a preponderance of the evidence that the amount in controversy exceeds $75,000. McPhail v. Deere & Co., 529 F.3d 947, 953 (10^th Cir.2008). A "defendant must affirmatively establish jurisdiction by proving jurisdictional facts that [make] it possible that $75,000 [is] in play . . . " Id. at 955 (emphasis in original). A "defendant may rely on an estimate of the potential damages from the allegations in the complaint." Id. The nature of a plaintiff's claims may also be relied on in this regard. See id. at 955-56. Only if it is "legally certain" that the recovery (from plaintiff's perspective) or cost of complying (from defendant's) will be less than the jurisdictional floor may the case be dismissed. Id. at 955 (quoting Meridian Security Ins. Co. v. Sadowski, 441 F.3d 536, 540, 543 (7^th Cir.2006)).

In the original petition filed in state court, plaintiff seeks "actual and compensatory damages . . . including a refund of any amounts paid . . . for having to purchase bottled water or substitute water." (See #3-2 at ¶¶8, 39-41). In the notice of removal, defendant asserts that "[b]ased on general water use determinations by the Oklahoma Department of Environmental Quality, those allegations put the amount in controversy on Plaintiff's individual claim in excess of $75,000." (#3 at 3). Plaintiff also seeks monetary damages for amounts she paid "to Severn Trent and/or Hugo Municipal Authority for increases in [her] water bill during the time operated by Severn Trent." (#3-2 at ¶50). Plaintiff also alleges general damage claims which may be in addition to those specific claims, such as that "[a]s a direct and proximate result of Severn Trent's negligence, Plaintiff and the class have been proximately damaged in an amount presently undetermined, but which is excess of $10,000.00 (Id. at ¶29). Similar allegations are made as to the breach of contract claim (¶34) and the claim of false representation (¶37).

Plaintiff has presented her water bills for the year 2015, which total $1401.88 Plaintiff extrapolates from that amount that her damages do not approach $75,000. In response, defendant takes the number of gallons of water used, as reflected on the water bill and submits that the proper comparison is not to tap water, but to more expensive bottled water. The cited source is the cost of bottled water at the Hugo Walmart. (#16-5). This amount is then calculated for the purchase of the volume of water necessary to replace water used for drinking, bathing and cooking over a five-year period (which tracks the allegations of the state court petition). The court finds the formula used by defendant to be facially plausible and not irrational. Plaintiff responds that defendant's figures (for substitute water especially) are "patently absurd." (#20 at 4).

Plaintiff points to the median household income for Choctaw County, Oklahoma as $30, 201, and argues that under defendant's calculation, a household would not eat, pay the mortgage or pay any other bills in lieu of buying replacement water. This argument has its attraction too, but in the removal context it appears defendant is not precluded from postulating "Cadillac" damages for a plaintiff so long as acceptable methods of proof are used. The court cannot say it is "legally certain" that the recovery will be less than $75,000. Defendant has met its burden of proof.

In the interest of thoroughness, the court notes that plaintiff also seeks injunctive relief "because damages cannot adequately compensate Plaintiff and the Class for the injuries suffered and threatened." (#3-2 at ¶44). Defendant also relies upon this aspect of plaintiff's petition in resisting remand. When a plaintiff seeks declaratory and injunctive relief, the amount in controversy "is measured by the value of the object of the litigation." Lovell v. State Farm Mut. Auto. Ins. Co., 466 F.3d 893, 897 (10^th Cir.2006). "Put another way, the amount in controversy is the value of the right to be protected or the extent of the injury to be prevented." 16 Moore's Federal Practice §107.56[7] (3d ed.2015). "An action seeking an injunction or declaratory relief may have a different monetary value, often far less, to the plaintiff than to the defendant, who may be required to spend in excess of the jurisdictional minimum to comply with an injunction or declaration ultimately imposed by the court. Courts have taken different approaches to this valuation question." Id. In the Tenth Circuit, "the impact on the defendant, including its cost of complying with an injunction, is a proper consideration in determining the amount in controversy." Lee v. ConocoPhillips Co., 2015 WL 4993261 at *3 (W.D.Okla.2015)(citing Justice v. Atchison, Topeka & Santa Fe Ry. Co., 927 F.2d 503, 505 (10^th Cir.1991)).

Defendant argues that "based on the entirety of the Petition, [the request for injunctive relief] may only be interpreted as requesting a change in the method of processing/delivering water, which changes can only be accomplished by substantial renovations to the Hugo Municipal Authority Water Plant." (#3 at 4). In its response to plaintiff's motion, defendant evolves to "two reasonable interpretations" (#16 at page 23 of 26 in CM/ECF pagination): (1) a demand that defendant reimburse for bottled water on a prospective and ongoing basis, or (2) a demand that defendant prospectively deliver clean water. Interpretation (1) is not implausible, given the language in the petition about replacement water and the reference in ¶44 to "injuries suffered and threatened." (emphasis added). By contrast, the court does not rely on interpretation (2), which is basically equivalent to the single interpretation proffered in the notice removal, to maintain federal jurisdiction. Defendant acknowledges that the Comprehensive Performance Evaluation Report issued by the Oklahoma Department of Environmental Quality "determined that the filtering, turbidity and disinfection issues are deficiencies in the Facility's design rather than its operation." (#16 at page 24 of 26). Defendant has not established that defendant (as opposed to the non-party Hugo Municipal Authority) could possibly be ordered to make design changes in the City's water plant.

It is the order of the court that the motion of the plaintiff to remand (#14) is hereby DENIED. In view of plaintiff's amended complaint and defendant's motion to dismiss amended complaint, defendant's initial motion to dismiss (#10) is deemed moot.

ORDERED THIS 29^th DAY OF FEBRUARY, 2016. Dated this 29^th day of February, 2016.

/s/_________

Ronald A. White

United States District Judge

Eastern District of Oklahoma