Opinion
1:01CV00546
September 19, 2002
MEMORANDUM OPINION
This case is now before the Court on Plaintiffs' Motion to Remand to the Superior Court of Rowan County, North Carolina [Doc. #4]. For the reasons set forth below, Plaintiffs' Motion to Remand is GRANTED.
I.
On April 30, 2001, Plaintiffs filed a complaint in the Superior Court of Rowan County, North Carolina. Plaintiffs' Complaint, as amended on May 8, 2001, seeks certification of a plaintiff class composed of all North Carolina residents who purchased or leased a new Chrysler minivan in North Carolina between April 1, 1995, and the end of the 2000 model year and who continue to own or lease the vehicle. (Amended Complaint ¶ 1.) The Complaint alleges that Defendant failed to install brake shift interlocks on its minivans after the safety devices had become industry standard and that Defendant deceived Plaintiffs and other members of the class regarding the safety of these unequipped minivans. (Amended Complaint ¶¶ 7, 56, 57, 58, 72.) The Complaint contends that Defendant's conduct constituted fraud under North Carolina law. (Amended Complaint ¶¶ 54-72.) Plaintiffs seek injunctive relief requiring Defendant to install brake shift interlocks or, in the alternative, pay damages equal to the costs of such installations. (Amended Complaint ¶ 9)
On May 31, 2001, Defendant filed Notice of Removal to this Court. On July 18, 2001, Plaintiffs filed a Motion to Remand to the Superior Court of Rowan County, North Carolina. Defendant contends the Motion to Remand should be denied because this Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332 (West 1993 Supp. 2001) and supplemental jurisdiction pursuant to 28 U.S.C. § 1367 (West 1993).
II.
A defendant may remove a claim to federal court if the claim is one over which the district court has original jurisdiction. 28 U.S.C. § 1441(a) (West 1993). While a district court should be cautious in denying access to a forum, removal statutes must be construed strictly against removal. Mulcahey v. Columbia Organic Chemical Cem. Co., 29 F.23d 148, 151 (4th Cir. 1994). The party seeking to remove a case to federal court has the burden of establishing federal jurisdiction. Id. If federal jurisdiction is doubtful, a remand is necessary. Id.
III.
28 U.S.C. § 1332(a) grants federal district courts subject matter jurisdiction over civil actions between parties of diverse citizenship when the amount in controversy exceeds $75,000.The Fourth Circuit Court of Appeals has not adopted a rule regarding the burden of proof on the removing party for establishing the amount in controversy. However, numerous courts have adopted such standards. The primary trend for the standard adopted by courts in this Circuit requires that a defendant show by a preponderance of the evidence that the amount in controversy exceeds $75,000.00. Gynn v. Wal-mart Stores, 955 F. Supp.2d 44, 46 (M.D.N.C. 1996); Momin v. Maggiemoo's International L.L.C., 2055 F. Supp.2d 506, 509 (D. Md. 2002). The alternate standard is that the defendant must show to a legal certainty that the amount in controversy exceeds $75,0000.00. Fountain v. Black, 876 F. Supp. 1294 (S.D.Ga. 1994).
Defendant argues that the cost, to the defendant, of possible injunctive relief would exceed $75,000.00. Fourth Circuit law is not settled on the viewpoint from which the amount in controversy should be calculated. See Purcell v. Summers, 126 F.2d 390, 394 (4th Cir. 1942) (stating that the amount in controversy should be determined from a plaintiff's perspective); Government Emp. Ins. Co. v. Lally, F.2d 568 (4th Cir. 1964) (stating that the amount in controversy is the pecuniary result to either party). The Supreme Court does not mention a viewpoint valuation, but instead states that "the amount in controversy is the value of the object of the litigation." Hunt v. Washington State Apple Adver. Comm'n, 432 U.S. 333, 347 (1977). In this case, the object of litigation is the retrofitting and installation of brake shift interlock for each plaintiff. Therefore, the amount in controversy would be the cost to retrofit a brake shift interlock for one plaintiff.
Defendant has failed to show either by a preponderance of the evidence or to a legal certainty that retrofitting a single minivan would cost more than $75,000. Affidavits must present evidence in substantially the same form as if the affiant was testifying in court. Evans v. Technologies Applications Service Center Co., 80 F.3d 364 (4th Cir. 1996). Defendant offers an affidavit from Ray W. Rowell, III. Mr. Rowell estimates that engineering development costs for retrofitting brake shift interlocks would exceed $75,000 per vehicle line. (Rowell Aff. ¶ 6.) However, Mr. Rowell's affidavit does not reflect retrofitting each individual plaintiff's vehicle.
The affidavits of Paul V. Sheridan and L. Wayne McCracken, Jr., directly contradict Mr. Rowell's evaluation of the cost. Mr. Sheridan, as an employee of Minivan Operations, worked as a consultant in Chrysler's minivan division. (Sheridan Aff. ¶ 6.) In his position, Mr. Sheridan researched and recommended installation of the brake shift interlock in the new NS body minivan. (Sheridan Aff. ¶ 14.) Mr. Sheridan estimates that the cost of retrofitting and installing the brake shift interlocks would be substantially less than $5,000 per vehicle. (Sheridan Aff. ¶ 26.) In addition, Mr. McCracken states that the retrofit of a brake shift interlock system on the Chrysler "NS" body is "both practical and economically feasible." (McCracken Aff. ¶ 5.) In light of these conflicting affidavits, Defendant has not carried its burden of proof.
IV.
Defendant's second alleged basis for subject matter jurisdiction is supplemental jurisdiction pursuant to 28 U.S.C. § 1367. Defendant asserts that within the class of North Carolina minivan owners identified by Plaintiffs there are fleet owners whose individual damages could exceed $75,000. Since diversity jurisdiction exists with respect to such fleet owners, Defendant argues, 28 U.S.C. § 1367 grants supplemental jurisdiction over the claims of all other class members.
The Fourth Circuit has not yet decided the effect of 28 U.S.C. § 1367 on the holding of Zahn v. Int'l Paper Co., 414 U.S. 291 (1973). Zahn held that each member of a class action must satisfy the amount in controversy in order for a class action to fall under federal jurisdiction. Id. Even if the holding in Zahn was overruled by 28 U.S.C. § 1367, the statute only confers supplemental jurisdiction so long as one named plaintiff satisfies the amount in controversy requirement. Rosmer v. Pfizer Inc., 272 F.3d 243 (4th Cir. 2001). In the present case the named Plaintiffs each own a single minivan. Even assuming that the existence of fleet owners would create supplemental jurisdiction with respect to the entire class, Defendant has presented no evidence indicating that such individuals exist.
V.
Defendant, as the party seeking removal, has not met the required burden. Plaintiffs' Motion to Remand is, therefore, GRANTED.