Summary
explaining the split among district courts
Summary of this case from Manguno v. Prudential Prop. Cas. Ins. Co.Opinion
NO. 01-0750
July 13, 2001
ORDER AND REASONS
Before the Court is Plaintiffs' motion to remand the above captioned case to the
23rd Judicial District Court, Parish of St. James, State of Louisiana. For the following
reasons, Plaintiffs' motion to remand is DENIED and defendant Chevron Chemical
Company's petition to certify this order for immediate interlocutory appeal pursuant to 28
U.S.C § 1292(b) is GRANTED.
BACKGROUND
Plaintiffs Elaine F. Grant, Alfred Grant and Jacqueline Leary filed the original petition (the "Class Action Petition") in the 23rd Judicial District Court, Parish of St. James, State of Louisiana against Chevron Phillips Chemical Co., LP ("Chevron Phillips") on February 13, 2001. Chevron Phillips removed the case to this Court on March 21, 2001. Plaintiffs filed the present motion to remand arguing that this Court lacks subject matter jurisdiction in this case. The basis for this Court's jurisdiction is diversity jurisdiction pursuant to 28 U.S.C. § 1332. Both parties agree that there is complete diversity between the adverse parties. The issue is whether the requisite jurisdictional amount is present. Plaintiffs did not specify any amount in damages. Chevron Phillips asserts that attorney's fees allowed pursuant to article 595 of the Louisiana Code of Civil Procedure ("Article 595") should be aggregated and attributed to the class representative. If this were done, the amount in controversy would exceed the $75,000 jurisdictional amount. The Court now considers whether attorney's fees pursuant solely to Article 595 can be aggregated onto the amount in controversy to satisfy the jurisdictional amount.
ANALYSIS
"When the plaintiffs complaint does not allege a specific amount of damages, the removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds [the jurisdictional amount]." Allen v. R H Oil Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995) citing De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir. 1993). Although Plaintiffs did not specify any amount, Chevron Phillips argues that if the attorney's fees pursuant to Article 595 are added to the claim of the class representative the amount in controversy will certainly exceed the jurisdictional amount.
The relevant language of Article 595 states that "[t]he court may allow the representative parties their reasonable expenses of litigation, including attorney's fees, when as a result of the class action a fund is made available, or a recovery or compromise is had which is beneficial, to the class." The Fifth Circuit in In re Abbot Laboratories considered the role of this codal article in determining the jurisdictional amount. See 51 F.3d 524 (5th Cir. 1995)
In Abbot, plaintiffs filed a class action suit based on the antitrust laws of Louisiana. See id. at 525. The district court found diversity jurisdiction over the named plaintiffs' claims but not over claims of the other members of the class. See id. Nevertheless, based on the doctrine of abstention, the district court remanded the case. See id. The Fifth Circuit affirmed the district court's ruling that the amount in controversy met the jurisdictional amount and that it had diversity jurisdiction over the claims, but reversed its decision to abstain from exercising diversity jurisdiction. See id. The Fifth Circuit held that the distribution of attorney's fees centers on two statutes. See id., at 526. The first, Article 595, gives a court the power to allow the representative parties reasonable attorney's fees when a fund is made available. See id. The second "key" Louisiana statute is Section 51:137 of the Louisiana Revised Statutes, which concerned actions involving monopolies and price fixing. See id. Section 51:137 lists attorney's fees as an element of the damages that a plaintiff can recover under that statute. See id. The Fifth Circuit rejected plaintiffs' argument that under Article 595 the fees should be distributed pro rata to all members of the class. See id. Instead, the court added the attorney's fees to the named plaintiffs' amount in controversy making that claim sufficient to meet the jurisdictional amount. See id. If one plaintiffs award does reach the necessary amount, the court may exercise supplemental jurisdiction over the remaining plaintiffs regardless of their amount of damages. See id. at 529.
Two lines of reasoning have sprung from Abbot creating a split among the district courts in this Circuit. See Braxton v. IMC Phosphates MP, Inc., 2000 WL 1576827 (E.D. La. 2000) (Clement, i.). Some district courts have interpreted Abbot to mean that attorney's fees allowed pursuant to Article 595 may be added to plaintiffs' amount in controversy only if, in addition to Article 595, there is another statute that allows recovery of attorney's fees as an element of the damages. See Cooper v. Koch Pipeline, Inc., 1995 WL 931091 (E.D. La. 1995) (Fallon, J.); Ace Pest Control Co. v. Kmart Corp., 979 F. Supp. 443 (E.D. La. 1997) (Porteous, J.); Greer v. Mobile Oil Corp., 1997 WL 180477 (E.D. La. 1997) (Clement, J.); Vaughn v. Mitsubishi Acceptance Corp., 1999 WL 1277541 (E.D. La. 1999) (Sear, J.); Dixon v. Ford Motor Credit Co., 1998 WL 914260 (E.D. La. 1998) (Barbier, J.) (acknowledging that there is a split in the courts). Others have interpreted Abbot to mean that attorney's fees may be added to the amount in controversy even if the sole basis for attorney's fees is Article 595. See Millet v. Marathon Oil, Co., 1995 WL 396313 (E.D. La. 1995) (Clement, J.) ("Millet I"); Kimball v. Modern Woodmen of America, 939 F. Supp. 479 (M.D. La. 1996) (Parker, J.); In re Gas Water Heater Products Liability Litigation, 1996 WL 732525 (E.D. La. 1996) (Duval, J.); Duncan v. Equitable Life Assurance Society, 1996 WL 736988 (E.D. La. 1996) (Duval, J.). Plaintiffs rely on the former, and Chevron Phillips on the latter.
Attorney's Fees Based Solely on Article 595
In Millet I, the first case to address this issue following the Abbot opinion, the court denied plaintiffs motion to remand because the attorney's fees allowed by Article 595 would have caused the amount in controversy to exceed the jurisdictional amount. See 1995 WL 396313. In a motion to reconsider, the plaintiff in Millet I urged the court to limit Abbot to cases involving the "key" price fixing statute. See Millet v. Marathon Oil, Co., 1995 WL 495901 (E.D. La. 1995) (Schwartz, J.) ("Millet II"). However, the court in Millet II denied plaintiffs motion noting that the court in Abbot "focused the remainder of its discussion solely on . . . Article 595." Id.
Similarly, in McNight v. Illinois Central Railroad, 967 F. Supp. 182 (E.D. La. 1997) (Duval, J.), the court held that "based on the plain language found in [Abbot,] . . . the amount in controversy requirement would be met." McNight, 967 F. Supp. at 184 (reaffirming the court's holding in Francis v. Lomas Mortgage USA, Inc., 1995 WL 468172 (E.D. La. 1995)). Likewise, Brooks v. Georgia Gulf Corp., 924 F. Supp. 182 (M.D. La. 1996) (Polozola, J.), found that attorney's fees pursuant to Article 595 when aggregated onto the damages would cause the amount in controversy to exceed the jurisdictional amount.
Attorney's Fees Based on Article 595 Plus Another Statute
However, other courts in the Eastern District of Louisiana have interpreted Abbot to stand for the proposition that attorney's fees pursuant to Article 595 may be added to the amount in controversy only when, in addition to Article 595, there is another statute that allows recovery of attorney's fees as an element of the damages.
This Court first addressed this issue in Cooper v. Koch Pipeline. See 1995 WL 931091. In that case, this Court held that in class action suits attorney's fees pursuant Article 595 may be factored in the amount in controversy only when another statute allows recovery of attorney's fees as an element of the damages. See Cooper, 1995 WL 93 1091 at *2. The Court reasoned that Abbot considered La. R.S. 51:137 "key" in its decision to include attorney's fees when determining the amount in controversy because 51:137 allows a successful plaintiff to recover a "reasonable attorney's fee" as part of her damages. See id. The Court noted that 51:137 carried an award of attorney's fees over and above an award for compensatory damages. See id. Article 595 carries no such extra award. See id. Rather, Article 595 allows the court to designate a certain amount of the recovery to be awarded as attorney's fees and does not compel the defendants to pay anything over and above the amount of compensatory damages. See id.
La. R.S. 51:137 provides:
Any person who is injured in his business or property by any person by reason of any act or thing forbidden by this Part may sue in any court of competent jurisdiction and shall recover threefold damages sustained by him, cost of suit, and a reasonable attorney's fee.
Likewise, the court in Johnson v. Cytec Industries, Inc., 1999 WL 212753 (E.D. La. 1999) (Vance, J.), stated that "[t]he Fifth Circuit based its decision on two Louisiana statutes" — Article 595 and La. R.S. 51:137. Johnson, 1999 WL 212753 at *3, Other district courts have held Abbot inapplicable to class action suits brought pursuant to Article 595 when another statute does not mandate the award of attorney's fees over and above an award of compensatory damages. See id. (citing Ace Pest Control Co. v. Kmart Corp., 979 F. Supp. 443; Greer v. Mobile Oil Corp., 1997 WL 180477).
Chevron Phillips notes that as a result of the split of authority that exists in Louisiana federal district courts the decision as to whether a diversity action can be successfully filed in or removed to federal court depends on the luck of the draw. A review of the jurisprudence supports their argument. There needs to be uniformity on this issue. Therefore, this question is appropriate for interlocutory appeal under 28 U.S.C. § 1292 (b).
CONCLUSION
To allow the Fifth Circuit to address the split among the district judges on this issue, Plaintiffs' motion to remand is DENIED, reserving Plaintiffs' right to reurge the motion and Chevron Phillips' motion to certify this order for interlocutory appeal pursuant to 28 U.S.C. § 1292 (b) is GRANTED.