Summary
discussing amount-in-controversy requirement under section 1332 and finding that defendants "wholly fail" to show that costs related to Rule 202 petition exceed $75,000
Summary of this case from In re Petition of Priscilla Johnson to Perpetuate Testimony of the Corporate Representative of Carnival Corp.Opinion
Action No. 4:01-CV-629-Y
March 4, 2002
ORDER GRANTING MOTION FOR REMAND
Pending before the Court is the Motion for Remand filed by plaintiff Linda Waller ("Waller") on August 1, 2001. Defendants filed a response in opposition to the motion on August 21, and Waller filed a reply to the response on August 31. On December 26, Waller filed a supplemental brief in support of her motion. Defendant Wal-Mart Stores, Inc. ("Wal-mart") filed a response to Waller's supplemental brief on January 2, 2002, and defendant Hartford Life Insurance Company filed a response to Waller's supplemental brief on January 14. Waller filed a second supplemental brief in support of her motion on February 14. After review of the foregoing documents, Defendants' Notice of Removal and their July 27, 2001 supplemental brief in support of their Notice of Removal, and the applicabie law, the Court concludes that Waller's Motion to Remand should be granted.
Waller originally brought this suit in the 220th Judicial District Court of Comanche County, Texas, under Texas Rule of Civil Procedure 202, seeking authorization to take pre-suit depositions to investigate a potential claim against Defendants. Defendants thereafter removed the action to this Court, contending that removal was proper under 28 U.S.C. § 1441(a). Specifically, Defendants contend that this matter constitutes a removable "civil action" under § 1441(a) and that it falls within this Court's original jurisdiction based upon diversity jurisdiction under 28 U.S.C. § 1332. Alternatively, Defendants contends that removal was proper under the All Writs Act, 28 U.S.C. § 1651, because Waller's state-court petition for authorization to take depositions will interfere with orders issued in the case of Scott Mayo, et al. v. Hartford Life Insurance Company, et al., Civil Action No. 01-2139 ("the Mayo action"), which is a proposed class action filed by Waller's counsel in the Southern District of Texas, Houston Division ("the Southern District"). Waller's Motion to Remand contends that remand is appropriate because this matter is not a civil action under § 1441(a) and does not fall within the ambit of this Court's diversity jurisdiction; Waller further contends that removal was not proper under the All Writs Act.
"[B]ecause the effect of removal is to deprive the state court of an action properly before it, removal raises significant federalism concerns . . . which mandate strict construction of the removal statute." Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 365-66 (5th Cir. 1995). As a result, the party removing a case from state court has the burden to demonstrate the existence of federal subject-matter jurisdiction. See Id. at 365. Any doubts regarding the existence of federal jurisdiction are resolved in favor of remand. See Nelon v. Mitchell Energy Corp., 941 F. Supp. 73, 74 (N.D. Tex. 1996). After consideration of this matter, the Court concludes that, regardless of whether Defendants are correct that this matter constitutes a civil action under § 1441(a), Defendants have failed to adequately demonstrate that this matter falls within this Court's original subject-matter jurisdiction. As a result, removal was not authorized by § 1441(a).
The parties vigorously dispute in their respective briefs the issue of whether this Rule 202 proceeding constitutes a "civil action" under § 1441(a), and both side's positions are supported by conflicting federal district court decisions. Waller cites Mayfield-George v. Texas Rehabilitation commission, 197 F.R.D. 280 (N.D. Tex. 2000) (Kendall, J.), for the proposition that a petition to take depositions under Texas Rule of civil Procedure 202 is not a "civil action" under the removal statute, 28 U.S.C. § 1441(a). See also McCrary v. Kansas city S. R., 121 F. Supp.2d 566, 569 (E.D. Tex. 2000) (cobb, J.) (agreeing "with Judge Kendall's well-reasoned analysis of this issue" in Mayfield-George). Defendants counter by citing In re Texas, 110 F. Supp.2d 514 (E.D. Tex. 2000) (Folsom, J.), in which the court concluded that Mayfield-George was wrongly decided and that a Rule 202 proceeding was indeed a "civil action" under § 1441(a). The Fifth circuit recently reversed the district court's decision in In re Texas on other grounds, however, expressly refusing to determine whether a Rule 202 proceeding constitutes a "civil action" under S 1441(a). See Texas v. Real Parties In Interest, 259 F.3d 387, 395 n. 14 (5th cir. 2001). This court need not become enmeshed in this debate, however, because even assuming this action qualifies as a "civil action" under § 1441(a), Defendants have failed to demonstrate that it falls within this court's original jurisdiction; thus this action is not subject to removal under that statute.
Defendants contend that this Court can exercise diversity subject-matter jurisdiction over Waller's Rule 202 proceeding and that this case thus falls within the Court's original jurisdiction as required by § 1441(a). In order to establish the existence of diversity jurisdiction, Defendants must demonstrate that the amount in controversy "exceeds the sum or value of $75,000, exclusive of interest and costs." See 28 U.S.C. § 1332(a). Waller's Rule 202 petition for depositions does not specify an amount in controversy. As a result, Defendants must prove by a preponderance of the evidence that the amount in controversy exceeds $75,000. See De Aguilar v. Boeing Co., 47 F.3d 1404, 1409 (5th Cir. 1995) (quoting De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir. 1993)), cert. denied, 516 U.S. 865 (1995). In support of their position, Defendants have presented the affidavit of Ray Tiffany, an attorney for Wal-Mart, in which he indicates that Defendants would be forced to expend approximately $805,000 in photocopying costs to engage in the discovery requested by Waller's Rule 202 petition. As Waller notes, however, copying costs are taxable costs under 28 U.S.C. § 1920(4) and thus, under the express provisions of § 1332(a), cannot be considered in determining the amount in controversy. Tiffany's affidavit also refers to additional undefined "internal administrative costs, expenses [,] lost time of company witnesses, and counsel fees," but Defendants wholly fail to demonstrate that these costs exceed $75,000 or that they can properly be considered in determining the amount in controversy.
As a result, Waller's objection, contained in her reply, to Defendants' submission of Ray Tiffany's affidavit regarding this issue lacks merit.
Defendants alternatively contend that removal was appropriate under the All Writs Act, 28 U.S.C. § 1651, insisting that Waller's attempt to engage in pre-suit discovery will interfere with the Southern District's "prior order concerning discovery and case management" in the Mayo action. (Defs.' Notice of Removal at ¶ 1.) Although Waller is not a named party in the Mayo action, Defendants contend that she is part of the proposed class in that suit. Defendants urge that Waller's Rule 202 proceeding constitutes "an end-run around FRCP 26 disclosure rules and FRCP 16 case management orders in the Mayo action." (Defs.' Notice of Removal at ¶ 20.) As a result, Defendants contend that, even if removal under § 1441(a) is not justified, removal under the All Writs Act is appropriate.
Defendants' contention that removal of this otherwise unremovable action is proper under the All Writs Act is virtually foreclosed by the Fifth Circuit's recent opinion in Texas v. Real Parties In Interest, 259 F.3d 387 (5th Cir. 2001). In that case, the Fifth Circuit recognized that, in exceptional circumstances, certain courts previously have permitted removal of an otherwise unremovable action to federal court under the All Writs Act. Id. at 392-393. The Fifth Circuit noted, however, that in light of the Supreme Court's opinion in Rivet v. Regions Bank of Louisiana, 522 U.S. 470 (1998), "it would be bold indeed to read the All Writs Act as authorizing removal of an otherwise unremovable action." Real Parties in Interest, 259 F.3d at 393-394. The Fifth Circuit went on to conclude, however, that "[e]ven accepting the remote proposition that removal still can be proper under the All Writs Act in the face of `extraordinary circumstances,'" such circumstances were not present in that case. Id. at 394.
Thus, this Court doubts that removal of an action outside of this Court's original jurisdiction remains appropriate under the All Writs Act even in the presence of extraordinary circumstances. In any event, this Court is not persuaded that such circumstances are present herein. The Court simply is not convinced that Waller's Rule 202 proceeding will unduly conflict with the Southern District's scheduling and case-management orders in the Mayo action. Furthermore, to the extent Defendants seek to justify removal under the All Writs Act, it appears that they should have removed this action directly to the Southern District. See In re Fraser, 75 S. Supp.2d 572, 579 (noting that the All Writs Act permits removal of an action "from a state court directly to the implicated federal court."). Indeed, it appears to this Court that the Southern District is in the best position to decide the extent of interference, if any, that Waller's Rule 202 proceeding poses to the Mayo action pending before it, and Defendants certainly can seek injunctive relief under the All Writs Act from that court. See Real Parties in Interest, 259 F.3d at 394 at n. 11 (concluding that despite the fact that the All Writs Act may not permit removal of an otherwise unremovable state-court action, it nevertheless would allow a federal court to enjoin state-court proceedings where those proceedings might frustrate the federal court's prior orders).
It is, therefore, ORDERED that Waller's Motion to Remand [document number 11-1] is hereby GRANTED. The clerk of the Court shall transmit a certified copy of this order and the final judgment of remand issued this same day to the clerk of the 220th Judicial District Court of Comanche County, Texas.