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finding that plaintiffs' affidavit agreeing "not to seek damages in excess of $75,000" insufficient because "plaintiffs are not limited to recovery of the damages requested in their pleadings," and they did not "stipulate that they would not accept more than $75,000 if a state court awarded it"
Summary of this case from Mitchell v. Amica Mut. Ins. Co.Opinion
CIVIL ACTION NO. 02-2721 SECTION "R" (5)
November 3, 2003
ORDER AND REASONS
Before the Court is plaintiffs' motion for remand. For the following reasons, the Court denies plaintiffs' motion.
I. BACKGROUND
Lassen Canyon is a strawberry nursery, in the business of growing strawberry planting stock for commercial strawberry farmers and home gardeners. Lassen Canyon grows several varieties of strawberry plants that it produces from meristem cells of each of the varieties.
On August 8, 2001, plaintiff Gary Crosby, a Tangipahoa Parish farmer, entered into a sales contract with Lassen Canyon for the purchase of 61,500 strawberry plants. Under the terms of the contract, Lassen Canyon agreed to sell and deliver specified strawberry stock to Crosby, and Crosby agreed to purchase and pay for the stock at the prices and on the terms and conditions expressed in the invoice. The invoice also required payment of $15.00 per thousand plants ordered upon placement of the order, with the balance due upon delivery. Crosby forwarded to Lassen Canyon the requisite deposit of $922.50.
On September 28, 2001, Lassen Canyon shipped 61, 500 strawberry plants to Crosby. After planting the strawberry plants, Crosby contacted Lassen Canyon about the high rate of plant mortality he was experiencing. Lassen Canyon agreed to send replacement plants of the same variety at no charge to the plaintiffs. Lassen Canyon sent 30,000 strawberry plants to Crosby on October 10, 2001, and shipped an additional 15,000 plants a short time later. Plaintiffs contend that these replacement plants also suffered a high mortality rate. Lassen Canyon refunded Crosby's $922.50 deposit to him, but Crosby has not deposited the check.
Plaintiffs filed suit against Lassen Canyon in the 21st Judicial District for the Parish of Tangipahoa praying for damages in the amount of $65,000 and attorney's fees, interest, and court costs. Lassen Canyon removed the suit to this Court, alleging diversity jurisdiction on September 4, 2002. On October 10, 2003, the plaintiffs filed this motion to remand, in which plaintiffs argue that the Court lacks subject matter jurisdiction under 28 U.S.C. § 1332 (a) because the amount in controversy does not exceed $75,000.
II. DISCUSSION
A defendant may generally remove a civil action filed in state court if the federal court would have had original jurisdiction. See 28 U.S.C. § 1441(a). The removing party bears the burden of establishing the existence of federal jurisdiction. See Allen v. R H Oil Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995). The jurisdictional facts supporting removal are examined as of the time of removal. See Gebbia v. Walmart Stores, Inc., 223 F.3d 880, 883 (5th Cir. 2000); Asociacion Nacional de Pescadores a Pequena Escala 0 Artesanales de Colombia ("ANPAC") v. Dow Quimica de Colombia S.A., 988 F.2d 559, 565 (5th Cir. 1993), abrogated on other grounds by Marathon Oil Co. v. Ruhrgas, 145 F.3d 211 (5th Cir. 1998), rev'd on other grounds, 526 U.S. 574 (1999); Bonck v. Marriott Hotels, Inc., 2002 WL 31890932, at *1 (E.D.La.). Nevertheless, the Court must remand the case to state court "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction[.]" 28 U.S.C. § 1447 (c).
In this case, the diversity of the parties is undisputed. The parties dispute, however, whether the amount in controversy exceeds $75,000, as required by 28 U.S.C. § 1332. Louisiana law prohibits a plaintiff from pleading a specific amount of monetary damages. See LA. CODE CIV. PROC. art. 893(A) . This prohibition does not apply, however, to suit on conventional obligations. See LA. CODE CIV. PROC. art. 893(B). In this case, plaintiffs' complaint seeks damages of $65,000 plus attorney's fees. In Louisiana, a purchaser may recover attorney's fees from a bad faith seller in a redhibition action. LA. CIV. CODE art. 2545. Because Louisiana law allows for the recovery of attorney's fees, "such fees are included as part of the amount in controversy." Manguno v. Prudential Property and Casualty Insurance Co., 276 F.3d 720, 723 (5th Cir. 2002). Plaintiffs did not specify the amount of attorney's fees sought, so that the amount of damages they claimed in the complaint was indeterminate.
When the plaintiff has alleged an indeterminate amount of damages, the removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds $75,000. Simon v. Wal-Mart Stores, 193 F.3d 848, 850 (5th Cir. 1999); see also De Aguilar v. Boeing Co., 47 F, 3d 1404, 1412 (5th Cir. 1995). A defendant makes this showing when it is facially apparent that the claims are likely to exceed $75,000. See Allen, 63 F.3d at 1335. In the alternative, the defendant can set forth the facts in controversy, preferably in the removal petition, but sometimes by affidavit or stipulation, that support a finding of the requisite amount. See id. The defendant must do more than point to a state law that might allow plaintiff to recover more than what is pled; the defendant must submit evidence that establishes that the actual amount in controversy exceeds $75,000. See De Aguilar, 47 F.3d at 1412. If defendant meets its burden in either of these ways, the plaintiffs must then show with legal certainty that their claims are really less than $75,000. See id. at 1411-12.
In this case, the defendant met its burden. In the removal petition, defendant notes that plaintiffs' complaint seeks $65,000 plus attorney's fees. Defendant alleges that the attorney's fees in this case will exceed $10,000, and thus the total amount in controversy exceeds $75,000. Defendant supports this allegation with the sworn affidavit of Wayne K. McNeil, who testified that, based upon his experience in litigating agricultural matters and his knowledge of the attorney market in the New Orleans area, the plaintiffs' attorney's fees will exceed $10,000. As further support for its position, the defendant points out in the removal petition that under La. Code CIV. Proc. art. 862, the plaintiffs' recovery is not limited to the $65,000 requested in their pleadings. The Court finds that the defendants established by a preponderance of the evidence that the amount in controversy exceeds $75,000.
As a result, the plaintiffs must show with legal certainty that their claims are really less than $75,000. Plaintiffs contend that "[i]t is now certain that this matter does not involve a claim exceeding
To support this contention, plaintiffs submit a sworn affidavit that "[t]hey stipulate and agree that their claims for damages in this matter, including but not limited to, attorney fees, exclusive of interest and costs, do not exceed $75,000.00." Plaintiffs further aver in their affidavit that "[t]hey agree not to seek damages in excess of $75,000.00 exclusive of interest and costs in their claims for damages, including but not limited to, attorney fees, if this matter is remanded to State Court." The plaintiffs' affidavit does not establish with legal certainty that their claims are really less than $75,000. As noted above, under La. Code CIV. Proc. art. 862, the plaintiffs are not limited to recovery of the damages requested in their pleadings. Their stipulation regarding the amount of damages and their agreement not to seek damages in excess of $75,000 do not bind a state court. Notably, plaintiffs do not stipulate that they would not accept more than $75,000 if a state court awarded it. Plaintiffs have also failed to present any evidence as to the expected attorney's fees in this case. Therefore, the Court finds that the plaintiffs failed to meet their burden of establishing with legal certainty that their claims are really less than $75,000. As a result, the Court concludes that it has jurisdiction in this matter.
Plaintiffs cite ANPAC, 988 F.2d 559, to support its argument that the defendant failed to meet its burden of proof regarding the amount in controversy. In ANPAC, the Fifth Circuit identified the following circumstances under which the removing party fails to satisfy its burden of showing that removal is appropriate:
(1) the complaint did not specify an amount of damages, and it was not otherwise facially apparent that the damages sought or incurred were likely above [$75,000];
(2) the defendant offered only a conclusory statement in their notice of removal that was not based on direct knowledge about the plaintiff's claims; and (3) the plaintiff timely contested removal with a sworn, unrebutted affidavit indicating that the requisite amount in controversy was not present.988 F.2d at 566. Plaintiffs' reliance on ANPAC is misplaced, however, because the second circumstance identified in ANPAC is not present here. In this case, the defendant offers more than a conclusory statement in its notice of removal to support the conclusion that the amount in controversy exceeds $75,000. The defendant points to the $65,000 in damages sought by the plaintiffs and submits a sworn affidavit to support its contention that the attorney's fees will exceed $10,000 in this case.
Furthermore, the plaintiffs failed to promptly contest removal, but rather filed this motion on the eve of trial, more than a year after removal. Although plaintiffs may attack subject matter jurisdiction at any time before final judgment, see 28 U.S.C. § 1447(c), the Court must examine the jurisdictional facts that support removal as of the time of removal. "[S] ubsequent events that reduce the amount in controversy to less than $75,000 generally do not divest the court of diversity jurisdiction." Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880, 883 (5th Cir. 2000) (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289-90 (1938)). In Gebbia, the plaintiff filed a motion to remand a year and a half after the case was removed. She indicated in her motion that after conducting discovery and receiving information from her treating doctors, it was clear that the amount in controversy did not exceed $75,000. Id. at 882. The district court concluded that it was facially apparent from plaintiff's original petition that the alleged damages exceeded $75,000 at the time of removal and denied plaintiff's motion in spite of plaintiff's post-removal affidavit and stipulation that the damages would not exceed $75,000. Id. at 883. The Fifth Circuit upheld the district court's denial of the plaintiff's motion to remand. Id.
This case is similar to Gebbia. Here, the plaintiffs filed their motion to remand a year after removal. The plaintiffs indicate in their motion that "it is now certain that this matter does not involve a claim exceeding [$75,000]." (Pla.'s Mot. for Remand, at p. 3, emphasis added.) Plaintiffs also state that "plaintiffs' financial records have now made it abundantly clear . . . that the damages of the plaintiffs do not even amount to [$65,000]." ( Id. at p. 7, emphasis added.) These statements imply that, as in Gebbia, information came to light after removal that led the plaintiffs to conclude that their damages do not exceed the requisite amount. Because the Court finds that the defendant established at the time of removal that the amount in controversy exceeded $75,000, plaintiffs stipulation based on later information does not deprive this Court of jurisdiction. Cf. Gebbia, 233 F.3d at 883. Accordingly, the Court denies plaintiff's motion for remand.
III. CONCLUSION
For the foregoing reasons, the Court denies the plaintiffs' motion for remand.