Opinion
Civil Action No. 4:20-cv-00488-P
2020-07-22
Melinda HAMILTON, Plaintiff, v. MIKE BLOOMBERG 2020 INC., Defendant.
AMENDED ORDER
Before the Court is Plaintiff Melinda Hamilton's ("Hamilton") Motion to Remand (ECF No. 11), Defendant Mike Bloomberg 2020 Inc.'s ("Bloomberg") Response (ECF No. 14), and Hamilton's Reply (ECF No. 15). It is only with great hesitancy and consternation, after having considered the Motion to Remand, related briefing, and the relevant applicable law, that the Court determines finds that the Motion to Remand should be and is hereby DENIED .
This Amended Order VACATES and SUPERSEDES the Court's prior order, dated July 21, 2020. ECF No. 17.
A. Pre-Removal Events in State Court
This is a relatively small employment dispute that was initiated in a Tarrant County, Texas county court at law by Hamilton on March 23, 2020 against Bloomberg, a Delaware corporation with a principal place of business in New York. Hamilton alleges claims for breach of contract, fraud, promissory estoppel, and unjust enrichment. See Orig. Pet., ECF No. 1-2. Hamilton alleged that as a result of Bloomberg's actions, she "has suffered in the past, and in all reasonable likelihood, will suffer in the future, damages including, lost wages, lost earning capacity, mental anguish, emotional pain and suffering, lost employment benefits, inconvenience, loss of enjoyment of life, damage to professional reputation, and other damages." Id. at 3. Hamilton contended that Bloomberg promised to pay her $6,000 per month through the election, plus provide employment benefits such as paid leave and health insurance. Id. at 2. In her Original Petition, Hamilton sought "only monetary relief of $75,000 or less including damages of any kind, penalties, costs, expenses, pre-judgment interest, and attorney fees." Id.
In Texas, county courts at law are typically the filing destination for many small cases. Indeed, Texas county courts at law are limited to six rather than twelve person juries. See Tex. Const. art. V, § 17 (providing for six-member juries in Texas county courts). Further, the civil jurisdiction of county court at laws is limited, it is usually more than a justice of the peace or municipal court, but lower than a Texas district court. See generally, About Texas Courts , Texas Judicial Branch , https://www.txcourts.gov/about-texas-courts/trial-courts.aspx (last visited Jul. 21, 2020).
Hamilton subsequently filed an amended petition nearly identical to her Original Petition, with the only difference being that the Amended Petition included service of process to Bloomberg's registered agent. See First Am. Pet., ECF No. 1-4. In her Amended Petition, Hamilton repeated the same language contained in her Original Petition that the recovery she was seeking did not exceed $75,000. Id. at 3.
B. Notice of Removal
After Hamilton filed her Amended Petition, Bloomberg filed a notice removing the action to this Court, asserting this Court has diversity jurisdiction. See Removal at 1, ECF No. 1. In its Notice of Removal, Bloomberg argued that Hamilton's Amended Petition seeking "$75,000 or less," contravenes Texas pleading requirements. Id. at 3. For that reason, Hamilton's Amended Petition is not in good faith, and the sum claimed in her Amended Petition should not control. Id. In support of Bloomberg's contention that the amount in controversy actually exceeds the required jurisdictional amount, Bloomberg offered a declaration by Jennifer McCaig, Bloomberg's counsel, concerning attorney's fees and similar lawsuits against Bloomberg. See Declaration of J. McCaig, ECF No. 1-9. In that declaration, as evidence regarding Hamilton's attorney's fees, McCaig testified about Hamilton's demand letter, which represented that Hamilton had already incurred approximately $10,000 in attorney's fees. Id. at Ex. 3. McCaig also included another employment dispute involving Hamilton's counsel where the Northern District of Texas awarded Hamilton's counsel $154,200 in attorney's fees and conditional fees, with Hamilton's counsel's hourly rate at $500 per hour. Id. at Ex. 1. McCaig also offered evidence that in a similar lawsuit against Bloomberg also pending in this Court, eight plaintiffs seek "monetary relief of over $1,000,000." Id. at Ex. 4 at 2.
Monetary relief of over $1,000,000 for eight plaintiffs computes to $125,000 per plaintiff. See McCaig Declaration at ¶ 7 & Ex. 4.
C. Motion to Remand
Shortly after removal, Hamilton filed her Motion to Remand, supporting brief and supporting index. See ECF No. 11-13. Hamilton argues in her Motion to Remand that she has so limited her damage claims on the face of her Amended Petition, even when considered in the context of Bloomberg's declaration concerning attorney's fees and similar lawsuits against Bloomberg, does not provide the evidence it would need for Bloomberg to carry its burden of proving that the amount in controversy exceeds the jurisdictional amount. See Motion to Remand Brief, ECF No. 12. In Hamilton's Motion to Remand, Hamilton relies primarily on Steele v. DynCorp Int'l L.L.C. , 82 F. Supp. 3d 699 (N.D. Tex. 2015) (McBryde, J), in which the court held that an amended petition limiting damages to $75,000 or less, coupled with a post-removal declaration, was sufficient to sustain a motion to remand. Id. at 6. In addition, Hamilton contends that Bloomberg has failed to establish that Hamilton's claims exceed $75,000 because Bloomberg provided no facts or affidavits supporting its Notice of Removal. Id.
Hamilton's Motion to Remand also included a sworn declaration from Hamilton, in which she indicated that she was seeking only lost wages and compensatory damages, and that she irrevocably limits her recovery of damages for the harms and losses to $75,000 as set forth in her Amended Petition. See Hamilton Remand App'x 5–6, ECF No. 13. Hamilton also included in her supporting index a similar employment lawsuit filed in the 134th Judicial District Court of Dallas County, Texas, Benavides v. Macy's Inc. , in which Hamilton's counsel explicitly limited damages and attorney's fees to $75,000 or less at trial. Id. at 8–23. Hamilton argues that this demonstrates her counsel's good faith in seeking $75,000 or less. See Remand Brief at 6, ECF No. 12.
D. Bloomberg's Response
On July 1, 2020, Bloomberg filed its response addressing Hamilton's arguments in her Motion to Remand. See Response, ECF No. 14. Bloomberg argues that the Court is not bound by Hamilton's Amended Petition because "[p]laintiffs attempt to deprive federal courts of jurisdiction by pleading that she seeks no more than $75,000 was, according to the Fifth Circuit, not in good faith, was not accompanied in the state court by a binding stipulation to that effect, and is not supported by the Texas Rules of Civil Procedure...." Id. at 6.
Regarding Hamilton's alleged evidence of good faith in Benavides , Bloomberg argues that Benavides does not hurt its case, but in fact, further bolsters its argument that the amount in controversy exceeds $75,000 because, in that case, the plaintiff recovered $25,000 in damages for mental anguish, loss of enjoyment, and inconvenience; $10,000 in lost earning capacity in the future; and $31,300 in attorney's fees through trial. Id. at 11. Bloomberg contends that "[a]ssuming similar damages in this case, plus the lost wages Plaintiff seeks, the amount in controversy would be $108,300 ($42,000 in lost wages; $25,000 in mental anguish; $10,000 in lost earning capacity; and $31,300 in attorney's fees through trial)." Id. at 12.
Regarding Hamilton's declaration, Bloomberg argues that the Court may not consider Hamilton's declaration in determining the amount in controversy because the declaration was filed post removal. Id. at 7. Although the court in Steele considered a post-removal affidavit, Bloomberg argues that the Court here should follow the Fifth Circuit instructions that a declaration must be filed in the state court to avoid removal. Id. at 6.
Bloomberg further argues that even if the Court could consider Hamilton's declaration, it does not unequivocally limit Hamilton's recovery to $75,000 or less because "[i]f the Court remanded the case and Plaintiff filed a second amended petition—as she is permitted to do in state court—the declaration would not apply, given Plaintiff's statement tying her damages limitation to the damages ‘set forth in [her] First Amended Petition.’ " Id. at 9.
E. Hamilton's Reply
On July 7, 2020, Hamilton filed a Reply to Bloomberg's Response, addressing Bloomberg's arguments supporting diversity jurisdiction. See Reply, ECF No. 15. In her Reply, Hamilton asserts that (1) Texas law allows a party to plead for $75,000 or less; (2) Bloomberg has failed to carry its burden that the amount in controversy exceeds $75,000; and (3) Hamilton's sworn declaration limiting damages to $75,000 unequivocally limits to a legal certainty that Hamilton will not recover any amount above the jurisdictional threshold. Id. at 1.
Regarding the pleading requirements of Texas Rule of Civil Procedure 47, Hamilton argues that " Rule 47 has been held to not limit a plaintiff's ability to specify damages in the amount of $75,000." Id. at 2. In support of this contention, Hamilton relies on the holding in Morales v. Allstate Tex. Lloyds , in which the court held that "the plain language of the amended Rule 47 does not prohibit a plaintiff from specifying a certain amount in damages." 410 F. Supp. 3d 816, 821 (S.D. Tex. 2019). Next, Hamilton argues that "[w]hile Bloomberg offers evidence of awards in other cases, it fails to offer evidence regarding Hamilton's damages, which is its burden on its motion to remand." See Reply at 2. Regarding her post-removal declaration, Hamilton contends that this declaration may be considered to determine the amount in controversy since the basis for jurisdiction is ambiguous. Id. at 4.
SUBJECT-MATTER JURISDICTION
Under Title 28 U.S.C. 1332(a), federal district courts have original jurisdiction of all civil actions involving citizens of different states, where the matter in controversy exceeds $75,000, exclusive of interest and costs. And § 1441(a) provides that:
any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.
Id. at § 1441(a). "[D]oubts regarding whether removal jurisdiction is proper should be resolved against federal jurisdiction." Acuna v. Brown & Root Inc. , 200 F.3d 335, 339 (5th Cir. 2000). When assessing the amount in controversy for diversity-jurisdiction purposes, "the sum claimed by the plaintiff controls if the claim is apparently made in good faith" unless the law gives a different rule. St. Paul Mercury Indem. Co. v. Red Cab Co. , 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938). A sum pled by a plaintiff, however, is made in bad faith and will not control when the specified sum is made in contravention of the state law's pleading requirements. See De Aguilar v. Boeing Co. , 47 F.3d 1404, 1410 (5th Cir. 1995) (citation omitted) (holding that a pleading for damages under the jurisdictional amount where a state rule prevents such a pleading "is surely characterized as bad faith").
"When a defendant seeks to remove a case, the question of whether jurisdiction exists is resolved by looking at the complaint at the time the petition for removal is filed." Brown v. Sw. Bell Tel. Co. , 901 F.2d 1250, 1254 (5th Cir. 1990) ; see also Gebbia v. Wal-Mart Stores, Inc. , 233 F.3d 880, 883 (5th Cir. 2000) (noting that "the jurisdictional facts that support removal must be judged at the time of the removal"). And when uncontested by a plaintiff, "the defendant's amount-in-controversy allegation should be accepted ... by the court." Dart Cherokee Basin Operating Co. v. Owens , 574 U.S. 81, 135 S. Ct. 547, 553, 190 L.Ed.2d 495 (2014). If the plaintiff contests, however, then " ‘[r]emoval ... is proper on the basis of an amount in controversy asserted’ by the defendant ‘if the district court finds, by the preponderance of the evidence, that the amount in controversy exceeds’ the jurisdictional threshold." Id. at 553–54 (quoting § 1446(c)(2)(B)).
ANALYSIS
In the present action, the parties' diversity of citizenship is not disputed. The only issue is whether the required showing has been made that the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs. Accordingly, the Court must determine if (a) the sum pled by Hamilton's was made in bad faith, and, if so (b) whether Bloomberg has demonstrated by a preponderance of the evidence that Hamilton's claims, if successful, would in fact trigger a recovery exceeding $75,000.00, and, if so, (c) whether Hamilton has effectively bound herself to an award below the jurisdictional threshold. A. The sum claimed in Hamilton's Amended Petition does not control.
Based on binding Fifth Circuit precedent, Hamilton's attempt to limit the amount in controversy to "$75,000 or less" unfortunately does not control because such a demand is not permitted under Texas law. As stated above, a sum pled by a plaintiff is considered to be made in "bad faith" and will not control when the specified sum is made in contravention of the state law's pleading requirements. See De Aguilar , 47 F.3d at 1413 ("[A] plaintiff ... cannot ... avoid removal by pleading for damages under the jurisdictional amount where a state rule prevents such a pleading.").
Rule 47 requires that a plaintiff provide "a statement that the damages sought are within the jurisdictional limits of the court"; and
(c) a statement that the party seeks:
(1) only monetary relief of $100,000 or less ...; or
(2) monetary relief of $100,000 or less and non-monetary relief; or
(3) monetary relief over $100,000 but not more than $200,000; or
(4) monetary relief over $200,000 but not more than $1,000,000; or
(5) monetary relief over $1,000,000;
Therefore, the plain language of Rule 47 does not allow a plaintiff to plead for monetary relief of "$75,000 or less." See Wilson v. Hibu Inc. , No. 3:13-CV-2012-L, 2013 WL 5803816, at *5–6 (N.D. Tex. Oct. 28, 2013) (Lindsey, J.). "Had Plaintiff[s] properly followed Rule 47, [they] would not have included the ‘75,000 or less’ language, as the rule is quite specific as to what a party must set forth with respect to the monetary relief he or she seeks." Id.
While the Fifth Circuit has not addressed the amendments to Texas Rule of Civil Procedure 47, another judge of this Court has found that De Aguilar continues to apply and that the subsequently amended Rule 47 similarly prohibits plaintiffs from pleading a specific amount of damages rather than the prescribed ranges. See, e.g., Ford v. United Parcel Serv., Inc. , No. 3:14-CV-1872-D, 2014 WL 6491446, at *7 (N.D. Tex. Nov. 20, 2014) (Fitzwater, J.) ("And although [the plaintiff's] assertion that revised Rule 47(c) permits her to plead a specific amount rather than a range seems to run directly counter to the Rule's mandatory terms, the court is bound by De Aguilar , the law of this circuit, unless and until it is changed.").
Nonetheless, Hamilton argues that a demand for "$75,000 or less" no longer violates Rule 47. The Court must respectfully disagree. Hamilton relies on the court's holding in Morales that held a demand for damages that "[does] not exceed $74,999.99" no longer violates Rule 47. 410 F. Supp. 3d at 821. However, one of the salient facts of Morales was the state petition recited that "[p]laintiff seeks only monetary relief of $100,000 or less including damages of any kind, penalties, costs, pre-judgment interest and attorney's fees," and only specified further, that the damages "do not exceed $74,999.99." Id. Here, in contrast, Hamilton's Amended Petition does not include any of the damage ranges stated under Rule 47. Accordingly, it appears that Hamilton, has purposefully contravened the Texas rules governing pleading requirements to avoid federal jurisdiction, resulting in her Amended Petition is not being in "good faith," and the sum claimed in her Amended Petition does not control.
B. Bloomberg has shown by a preponderance of the evidence that the actual amount in controversy likely exceeds $75,000.
In situations such as this, where the plaintiff's pleading does not control, the burden is on the defendant to show by a preponderance of the evidence that the amount in controversy actually exceeds the jurisdictional amount. See Gebbia , 233 F.3d at 882. The removing party can satisfy that burden (1) by showing that it is apparent from the face of the petition that the claims are likely to exceed $75,000, or (2) by providing evidence to support such a conclusion. See Wilson , 2013 WL 5803816 at *3–4 ; see also Gebbia , 233 F.3d at 883 ; Luckett v. Delta Airlines, Inc. , 171 F.3d 295, 298 (5th Cir. 1999) ; Greco v. Jones , 992 F. Supp. 2d 693, 699 (N.D. Tex. 2014).
Hamilton contends that her recovery is limited to $75,000 because Bloomberg failed to provide facts or affidavits that show Hamilton incurred damages in excess of $75,000. However, Bloomberg has not only provided facts and affidavits supporting its Notice of Removal, but for the reasons that follow, the Court concludes Bloomberg has set forth enough evidence to support a finding that the amount in controversy exceeds the jurisdictional threshold.
Both parties agree that Hamilton seeks lost wages of $42,000. In addition, Hamilton's demand letter represented that Hamilton's counsel had already incurred $10,000 in attorney's fees. When Hamilton's claims for compensatory damages, punitive damages, and attorney's fees at trial are also taken into account, this Court is bound to hold that it is more likely than not that the amount in controversy here exceeds the sum or value of $75,000, exclusive of interest and costs. See, e.g., White v. FCI USA, Inc. , 319 F.3d 672, 674–76 (5th Cir. 2003) (affirming finding that alleged compensatory damages or punitive damages alone in wrongful termination case would exceed $75,000); Wilson , 2013 WL 5803816 at *3–4 (applying common sense analysis and concluding that it was facially apparent that plaintiff's claims in wrongful termination case for back pay, front pay, compensatory damages, punitive damages, attorney's fees and expert fees more likely than not exceeded $75,000).
Hamilton seeks "lost earning capacity, mental anguish, emotional pain and suffering, lost employment benefits, inconvenience, loss of enjoyment, damage to professional reputation, and other damages," which under Texas law, could include punitive damages. See First Am. Pet. at 3; Tex Civ. Prac. & Rem. Code § 41.003(a)(1).
Accordingly, the Court concludes that Bloomberg has shown by a preponderance of the evidence that the amount in controversy is greater than $75,000.
C. Hamilton has not met her legal certainty requirement.
Because Bloomberg has proven by a preponderance of the evidence that the amount in controversy likely exceeds $75,000, removal was proper unless Hamilton can show to a "legal certainty" that she will not be able to recover in excess of this amount. De Aguilar , 47 F.3d at 1411–12. The Fifth Circuit has suggested that a plaintiff may meet this obligation by citing to a state law prohibiting recovery of damages in excess of those sought in the petition. Id. at 1412. In the absence of such a statute, "[l]itigants who want to prevent removal must file a binding stipulation or affidavit with their complaints[.]" Id. (quoting In re Shell Oil Co. , 970 F.2d 355, 356 (7th Cir. 1992) ).
Hamilton primarily relies on Judge McBryde's well-reasoned decision in Steele to show that she has met her legal certainty requirement. In Steele , the plaintiff expressly disclaimed any intention of recovering lost wages, lost earning capacity, lost employment benefits, damage to professional reputation, and medical bills and only sought damages for "inconvenience, mental pain and suffering and loss of enjoyment of life...." 82 F. Supp. 3d at 700. Judge McBryde found that "the amended pleading itself was in the form of a stipulation as to the limit on the elements and amount of damages that would be recoverable by the plaintiff." Id. at 703. In contrast here, Hamilton Amended Pleading did not limit the elements of damages that would be recoverable but did restate that Hamilton was seeking monetary relief of "$75,000 or less." See First Am. Pet., ECF No. 1-4.
While the Court appreciates and greatly respects the logic of Steele , the Court declines to apply that reasoning here, because an amended pleading filed in Texas state court does not indefinitely bind a plaintiff to recovery of $75,000 or less. Thus, if the Court remanded the case, Hamilton would still be permitted to file a second amended petition in state court seeking an amount that exceeds $75,000. See Martinez v. Liberty Insurance Corporation , 2019 WL 6894497, at *2 (S.D.Tex. Dec. 18, 2019) ( [A]lleged damages stated in a Texas state court petition cannot prove that the amount in controversy does not exceed that amount as a legal certainty because plaintiffs may supersede those allegations with amended pleadings."); Ford v. United Parcel Service, Inc. (Ohio) , 2014 WL 4105965, at *4 (N.D.Tex. Aug. 21, 2014) ("Although the allegations of [the plaintiff's] petition are binding judicial admissions for the time being, they will cease to be ‘conclusive and indisputable judicial admissions’ if she chooses to amend or supersede her petition, as the Texas rules give her considerable latitude to do.") (quoting Sosa v. Cent Power & Light , 909 S. W.2d 893, 895 (Tex. 1995) ).
Hamilton argues that her sworn declaration establishes to a "legal certainty" that she will not be able to recover in excess of $75,000. See Reply at 1, ECF No. 15. Again, although the court is sympathetic to Hamilton, it must disagree because Hamilton's declaration was filed after Bloomberg removed the case. See St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d 1250, 1253–54 (5th Cir. 1998). ("Importantly, the jurisdictional facts must be judged as of the time the complaint is filed; subsequent events cannot serve to deprive the court of jurisdiction once it has attached."); Hayes v. Bank of Am. N.A. , No. 3:18-cv-3238-B, 2019 WL 585445, at *4 (N.D. Tex. Feb. 13, 2019) ("A simple allegation in a state-court petition that a plaintiff seeks less than the jurisdictional threshold, without more, is insufficient to defeat diversity jurisdiction ... [H]ere, Plaintiff submitted no binding stipulation or affidavit with his complaint, nor can Plaintiff remedy his error by submitting a post-removal stipulation").
Hamilton is correct that post-removal stipulations or affidavits limiting damages "may be considered in determining the amount in controversy at the time of removal" but "only if the basis for jurisdiction is ambiguous at the time of removal." Gebbia , 233 F.3d at 883 (emphasis added). Here, the amount in controversy and, in turn, the basis for jurisdiction, at the time of removal was unambiguous, as evidenced by the damages sought in the Amended Petition and pre-suit demand letter. Thus, Hamilton's post-removal declaration limiting damages is irrelevant, and the Court will not consider it in determining the amount in controversy. See De Aguilar , 47 F.3d at 1412 ("[L]itigants who want to prevent removal must file a binding stipulation or affidavit with their complaints ; once a defendant has removed the case, St. Paul makes later filings irrelevant. ") (emphasis added).
CONCLUSION
In light of the foregoing, the Court concludes that the amount in controversy exceeds the jurisdictional threshold. Therefore, the Court has subject-matter jurisdiction over this case, and removal was proper.
Although the Court holds that removal was proper in this case, as the old saying goes, "don't make a federal case of it." Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/make% 20a% 20federal% 20case% 20out% 20of (last visited July 21, 2020). Indeed, the Court must question the wisdom of pursuing this litigation in federal court versus a Tarrant County Court at Law. After service as a judge on a Tarrant County district court and the Second Court of Appeals, the undersigned has uniformly found Tarrant County juries and judges to be diligent, intelligent, and fair. Certainly, federal removal should never be used by litigants for gamesmanship purposes or to delay litigation in relatively small cases. The Court has no doubt that this minor employment dispute could have been resolved quickly and without any bias or prejudice toward Bloomberg had it been allowed to remain in Tarrant County Court at Law. Practically speaking, not every case or controversy belongs in federal court, even if the federal court has diversity jurisdiction. See The Federalist NO. 17 (Alexander Hamilton) (writing as "Publius") (explaining that under the Constitution, "the ordinary administration of criminal and civil justice" would be left to the states); Cf. Letter from Thomas Jefferson to James Madison (Mar. 15, 1789), in THE LIFE AND SELECTED WRITINGS OF THOMAS JEFFERSON 426 (Adrienne Koch & William Peden, eds., 2004 Modern Library Paperback ed.) (1944) (the federal "judiciary ... is a body, which, if rendered independent and kept strictly to their own department, merits great confidence for their learning and integrity.").
Accordingly, the Court finds that Hamilton's Motion to Remand (ECF No. 11), should be and is hereby DENIED.
SO ORDERED on this 22nd day of July, 2020.
ORDER ON RECONSIDERATION
Before the Court is Plaintiff Melinda Hamilton's ("Hamilton") Motion for Reconsideration of Court's Amended Order ("Amended Order") (ECF No. 18) Denying Plaintiff's Motion to Remand and Brief in Support Thereof. See ECF No. 19. After considering the Motion for Reconsideration, related briefing, and relevant applicable law, the Court determines that the Motion for Reconsideration should be and is hereby DENIED .
ANALYSIS
In Hamilton's Motion for Reconsideration, Hamilton asserts that the Court erred in concluding (1) that the sum pled by Hamilton was made in bad faith, and (2) that Bloomberg has demonstrated by a preponderance of the evidence that the amount in controversy exceeds $75,000. Motion at 2–5. Yet in support of these assertions, Hamilton essentially repeats the same arguments asserted in her Motion to Remand. Thus, for the reasons explained below, the Court, constrained by precedent, finds that Hamilton has failed to clearly establish a manifest error of law or fact or presented newly discovered evidence to alter or amend the Court's Order Denying Hamilton's Motion to Remand.
A. The Court is bound by Fifth Circuit precedent, and to the extent Steele is factually on point, the Court follows the majority approach instead.
Hamilton first contends that the Court failed to recognize the applicability of Steele v. DynCorp Intl L.L.C. , 82 F. Supp. 3d 699 (N.D. Tex. 2015) (McBryde, J.) and Morales v. Allstate Tex. Lloyds , 410 F. Supp. 3d 816, 821 (S.D. Tex. 2019), and instead felt "bound by De Aguilar v. Boeing Co. , 47 F.3d 1404, 1410 (5th Cir. 1995) and the Dallas district court opinions." See Motion at 2. As an initial matter, the Court is bound by the Fifth Circuit's ruling in De Aguilar and thus, regardless of the undersigned's personal opinion, the Court has no authority or discretion to diverge from Fifth Circuit precedent. See Poindexter v. R.J. Reynolds Tobacco Co. , No. CIV.A.3:99-CV-262-X, 2000 WL 358473, at *2 (N.D. Tex. Apr. 7, 2000) ("Although this Court is not without sympathy towards the Plaintiffs’ outrage, this Court is bound by the Fifth Circuit[’]s legal interpretations.") (Kendall, J.), aff'd , 237 F.3d 630 (5th Cir.).
The Fifth Circuit does not appear to have addressed the amendments to Texas Rule of Civil Procedure 47, and Hamilton provides no authority in her Motion for Reconsideration to show that the Fifth Circuit's holding in De Aguilar no longer applies. Moreover, several other district courts that have considered this question after the Rule 47 amendments continued to rely on De Aguilar and found pleading an amount of damages other than one of the predefined ranges to be impermissible.
See, e.g., Ford v. United Parcel Serv., Inc. , No. 3:14-CV-1872-D, 2014 WL 6491446, at *7 (N.D. Tex. Nov. 20, 2014) (Fitzwater, J.) ("And although [the plaintiff's] assertion that revised Rule 47(c) permits her to plead a specific amount rather than a range seems to run directly counter to the Rule's mandatory terms, the court is bound by De Aguilar , the law of this circuit, unless and until it is changed.").
See Martinez v. Allstate Texas Lloyds , No. 7:16-CV-00494, 2016 WL 6122728 at *1 (S.D. Tex. Oct 20, 2016) ("[Rule 47 ] prohibits a plaintiff from declaring a specific amount in controversy"); Chavez v. State Farm Lloyds , No. 7:15-CV-00487, 2016 WL 641634, at *3 (S.D. Tex. Feb. 18, 2016) ("[W]hile [Rule 47 ] was amended ‘to require a more specific statement of the relief sought by a party,’ Texas law simply does not permit a plaintiff to plead that he or she seeks damages not to exceed $75,000. Thus [such] a specific demand ... ‘is surely characterized as bad faith.’ ") (citations omitted); Ford , 2014 WL 6491446 at *7 ("[A]s amended, Rule 47(c) requires that Texas plaintiffs plead certain predefined damage ranges, and ... there is no provision in Rule 47 permitting a plaintiff to plead for damages ‘not to exceed $74,000’ ... although [the plaintiff] asserts that revised Rule 47(c) permits her to plead a specific amount rather than a range ... th[is] court is bound by De Aguilar , the law of this circuit, unless and until it is changed."); Wilson v. Hibu Inc. , No. 3:13-cv-2012-L, 2013 WL 5803816 at *5 (N.D. Tex. Oct. 28, 2013) (Lindsay, J.) ("[T]he plain language of the rule has no provision for a plaintiff limiting her damager to $75,000 or less. Had [the plaintiff] properly followed Rule 47, she would not have included the ‘$75,000 or less’ language, as the rule is quite specific as to what a party must set forth with respect to the monetary relief he or she seeks.").
The Court does, however, agree that it is not "bound" by the "Dallas district court opinions." To be clear, the Court's reference to various Dallas district court opinions at the telephonic status conference was simply to demonstrate a consistency within the Northern District. Indeed, the Court's holding is not only consistent with the Dallas judges’ holdings on the issue, but also Judge Means's opinion in Medina v. Allstate Texas Lloyds , No. 4:16-CV-781-Y, 2017 WL 3288513, at *3 (N.D. Tex. Jan. 11, 2017) (holding that a pleading seeking monetary relief of "$75,000 or less," does not comport with Texas pleading requirement and that such a claim for relief was made in bad faith). While the Court appreciates the reasoning in Steele , the Court finds Steele to be factually distinguishable. To the extent Steele is factually analogous, the Court declines to apply its holding to this case and instead adopts the majority approach.
B. Hamilton's pleading violated Rule 47 and Morales does not hold otherwise.
Hamilton further argues that "the Court's conclusion is wrong in concluding Hamilton demonstrated a lack of ‘good faith’ for merely doing what Rule 47 now allows." See Motion at 3. In support of this position, Hamilton again asserts that the holding in Morales supports her argument that Rule 47 allows a plaintiff to plead for "$75,000 or less." Id. at 2–3. However, the Court addressed this very argument in its Amended Order and explained that the Morales plaintiff (unlike Hamilton) pleaded both that the monetary relief was $100,000 or less (thus, satisfying Rule 47 ) and that the damages sought did not exceed $74,999.99:
Hamilton relies on the court's holding in Morales that held a demand for damages that "[does] not exceed $74,999.99" no longer violates Rule 47. 410 F. Supp. 3d at 821. However, one of the salient facts of Morales was the state petition recited that "[p]laintiff seeks only monetary relief of $100,000 or less including damages of any kind, penalties, costs, pre-judgment interest and attorney's fees," and only specified further, that the damages "do not exceed $74,999.99." Id. Here, in contrast, Hamilton's Amended Petition does not include any of the damage ranges stated under Rule 47.
See Amended Order at 9–10, ECF No. 18. At best for Hamilton, Morales stands for the proposition that a plaintiff may plead an amount more specific than required by Rule 47, as long as the pleading still includes one of the damage ranges stated under Rule 47. Thus, the Court again concludes that with respect to the Fifth Circuit's binding amount-in-controversy jurisprudence, Rule 47 does not allow Hamilton to exclude a damage range stated under Rule 47(c) and only plead for "$75,000 or less."
C. The face of Hamilton's pleading does not control merely because she alleges damages below the threshold.
Hamilton then argues that the Court's Amended Order runs contrary to the Supreme Court's holding in St. Paul Mercury Indem. Co. v. Red Cab Co. , 303 U.S. 283, 294, 58 S.Ct. 586, 82 L.Ed. 845 (1938), in which the Court held that tailoring the recovery sought in a pleading in such a way to avoid federal court jurisdiction is permissible. Motion at 3. However, the Fifth Circuit has addressed the application of St. Paul to a pleading that violates Texas pleading requirements. See De Aguilar , 47 F.3d at 1410. Of pertinence is the following language used by the Fifth Circuit in De Aguilar :
Plaintiffs have correctly cited the provision in St. Paul Mercury that a plaintiff who does not "desire to try his case in federal court ... may resort to the expedient of suing for less than the jurisdictional amount, and though he would be justly entitled to more, the defendant cannot remove." 303 U.S. at 294, 58 S. Ct. at 593. The inquiry, however, does not end merely because the plaintiff alleges damages below the threshold. The face of the plaintiff's pleading will not control if made in bad faith.
Id.
Accordingly, the Court's inquiry into amount-in-controversy analysis does not end merely because Hamilton alleged damages below the jurisdictional amount.
D. Hamilton's counsel's record of limiting damages to $75,000 at trial is not relevant in complying with pleading requirements.
Hamilton next argues that the "Court ignores Hamilton's counsel's record of limiting damages and attorney's fees to below $75,000 in other cases such as Benavides v. Macy's Inc. , (Cause No. DC-18-10796). Certainly that evidence demonstrates Hamilton's counsel's record of good faith." See Motion at 3–4. The Court fails to discern how Hamilton's counsel's history of limiting damages to $75,000 or less at trial is relevant to whether Hamilton pled a sum that complied with the state law's pleading requirements, nor does Hamilton cite any authority to support such a proposition. The Court is, however, sympathetic to Hamilton's counsel's concern with language in the Amended Order suggesting that Hamilton's state court pleadings were "not in good faith" or were in "bad faith." Indeed, the Court does not doubt Hamilton's counsel's representation that his word is his bond, and the Court's Amended Order was not intended to suggest otherwise. The Court writes to clarify that Hamilton's failure to plead the required dollar ranges as provided in Rule 47 does not demonstrate or suggest that Hamilton's counsel acted in subjective bad faith or violated any rule or canon of professional responsibility. With regard to the language of "not good faith" or "bad faith," the Court echoes Judge Fitzwater's sentiments in Ford :
Ford's counsel appears to take as a personal rebuke the conclusion in Ford I that the sum claimed by Ford was not made in good faith.... No such reproach was intended. The court's reference to the absence of a ‘good faith’ pleading was in accordance with the law of the circuit[ ]—indeed, this concept of ‘good faith’ is found in amended § 1446(c)(2). It was not a suggestion, for example, that Ford's counsel acted in subjective bad faith.
See De Aguilar , 47 F.3d at 1410 (citation omitted) (holding that a pleading for damages under the jurisdictional amount where a state rule prevents such a pleading "is surely characterized as bad faith"). This language reminds the Court of the Fifth Circuit's interchangeable use of "fraudulent joinder" and "improper joinder," and that while the preferred term is "improper joinder," see Smallwood v. Ill. Cent. R.R. Co. , 385 F.3d 568, 574 n. 1 (5th Cir. 2004) (en banc) (stating that "[a]lthough there is no substantive difference between [fraudulent joinder and improper joinder], ‘improper joinder’ is preferred"), the term "fraudulent joinder," is still used. See Salazar v. Allstate Tex. Lloyd's, Inc. , 455 F.3d 571, 573 (5th Cir. 2006) (stating "under the fraudulent joinder doctrine, federal removal jurisdiction is premised on diversity and cannot be defeated by the presence of an improperly-joined nondiverse and/or in-state defendant").
Ford , 2014 WL 6491446 at *8 (emphasis added).
Similar to Ford , no such reproach to Hamilton's counsel was intended or should be inferred from the Amended Order.
E. The Court properly considered Hamilton's demand letter regarding attorney's fees.
Hamilton also contends that the Court mistakenly relied upon Bloomberg's evidence of Hamilton's counsel's attorney fees in another case with Hamilton's counsel, but failed to consider the evidence offered by Hamilton regarding Hamilton's counsel limiting attorney's fees at trials. See Motion at 4–5. However, the Court did not reference Bloomberg's evidence of Hamilton's counsel's attorney fees in another case with Hamilton's counsel. Hamilton further states that "the only evidence Bloomberg offers regarding attorney fees is Hamilton's counsel attorney's fees in a discrimination case." Id. at 5. This is also inaccurate. For example, Bloomberg offered Hamilton's demand letter, which represented that Hamilton's counsel had already incurred $10,000 in attorney's fees. The Court properly considered this when determining that the amount in controversy exceeds $75,000. As stated in the Court's Amended Order, when Hamilton seeks lost wages of $42,000, compensatory damages, and punitive damages, and when attorney's fees at trial are also taken into account, the Court concluded that it is more likely than not that the amount in controversy here exceeds the sum or value of $75,000, exclusive of interest and costs. See White v. FCI USA, Inc. , 319 F.3d 672, 674–76 (5th Cir. 2003) (affirming finding that alleged compensatory damages or punitive damages alone in wrongful termination case would exceed $75,000); Wilson , 2013 WL 5803816 at *3–4 (applying common sense analysis and concluding that it was facially apparent that plaintiff's claims in wrongful termination case for back pay, front pay, compensatory damages, punitive damages, attorney's fees and expert fees more likely than not exceeded $75,000).
See Hartford Ins. Group v. Lou–Con Inc. , 293 F.3d 908 (5th Cir. 2002) (per curiam); St. Paul Reinsurance Co. v. Greenberg , 134 F.3d 1250, 1254–55 (5th Cir. 1998) (examining a pre-suit demand letter to determine whether the amount in controversy was satisfied); Molina v. Wal-Mart Stores Texas, L.P. , 535 F.Supp.2d 805, 808 (W.D. Tex. 2008) (citations omitted) ("Pre-suit demand letters may be submitted as evidence to demonstrate the amount in controversy exceeds $75,000").
F. The Court certifies a question pursuant to 28 U.S.C. § 1292(b).
Finally, given the undersigned's personal belief (which was pointedly communicated to the parties at the telephonic status conference) that De Aguilar needs to be clarified (even if reaffirmed) in light of the Rule 47 amendments, given that following De Aguilar seems to require district courts to find pleadings that do not strictly follow Rule 47 are not "in good faith" even though the phrase does not mean "subjective bad faith," given that Steele demonstrates a substantial ground for difference of opinion on the interplay between Rule 47 and the amount-in-controversy requirement, and given that good and experienced litigators such as Hamilton's counsel remain genuinely confused as to the best practices to properly plead the amount in controversy below the jurisdictional amount, the Court believes that resolving this controlling area of law may materially advance the ultimate termination of this litigation. See 28 U.S.C. § 1292(b).
Ford , 2014 WL 6491446 at *6.
CONCLUSION
In light of the foregoing, the Court concludes that Hamilton has failed to clearly establish a manifest error of law or fact or presented newly discovered evidence to alter or amend the Court's Order Denying Hamilton's Motion to Remand. Accordingly, the Court finds that Hamilton's Motion for Reconsideration (ECF No. 19), should be and is hereby DENIED.
Also in light of the foregoing, the Amended Order is MODIFIED to provide that the Court finds a controlling question of law, with a substantial ground for differences of opinion on the question, and for which an immediate appeal may materially advance the ultimate termination of this litigation.
SO ORDERED on this 18th day of August, 2020.