Summary
In Honsaker, the circumstances of the case suggested plaintiffs' motivation was to divest the Court of jurisdiction because plaintiff could have easily filed a binding stipulation or affidavit limiting her damages prior to removal.Id. at *2.
Summary of this case from RCI ENTERTAINMENT v. CITY OF SAN ANTONIOOpinion
Civil No. EP-03-CA-339(KC)
May 18, 2004
ORDER
Plaintiff moves to amend his complaint and separately moves to remand the present action to state court. For the reasons set forth herein, the motion to amend is denied and the motion to remand is denied.
I. BACKGROUND
On August 27, 2003, defendant removed this case from County Court at Law Number Five of El Paso County, Texas. On January 9, 2004, a Scheduling Order issued setting April 30, 2004 as the deadline for filing amended pleadings. On April 30, 2004, plaintiff moved to amend the prayer for relief in her single-count, original complaint alleging retaliation in violation of section 21.055 of the Texas Commission on Human Rights Act, TEX. LAB. CODE § 21.055 et seq. (Vernon 1996), to allege that "[t]he total amount of all damages sought does not exceed $74,500." The proposed amended complaint otherwise effects no substantive changes, with modifications limited to the transfer of damage allegations from within the substantive retaliation count of the original complaint to the prayer for relief of the amended complaint.
II. MOTION TO AMEND COMPLAINT
Plaintiff moves to amend the present complaint. Defendant opposes the amendment only to the extent it divests this Court of jurisdiction to hear the complaint.
Federal Rule of Civil Procedure 15(a), governing the amendment of pleadings, provides that "leave shall be freely given when justice so requires." Notwithstanding this liberal standard, leave shall not be granted when the apparent or declared reason for amendment constitutes "undue delay, bad faith or dilatory motive on the part of the movant." Foman v. Davis, 371 U.S. 178, 182 (1962). In the context of allegations of damages in state court pleadings, "manipulation [of pleadings by alleging a claim for damages below a jurisdictional threshold in an effort to evade federal jurisdiction] is surely characterized as bad faith" DeAguilar v. Boeing Co., 47 F.3d 1404, 1410 (5th Cir. 1995). The same would hold true if the pleading were amended in federal court with the object of divesting a court of jurisdiction.
As the amendment apparently serves no purpose other than alleging damages below the amount required for diversity jurisdiction, plaintiff's motion for leave to file her first amended complaint is denied.
III. MOTION TO REMAND
Plaintiff moves to remand the present case arguing that "[b]ased on [her] amended complaint, this Court lacks subject matter jurisdiction under 28 U.S.C. § 1332, and remand is proper."
A. Standard
Defendant bears the burden of showing that removal was proper. Winters v. Diamond Shamrock Chem. Co., 149 F.3d 387, 397 (5th Cir. 1998). "As the party invoking federal diversity jurisdiction, [defendant] bears the burden of establishing the amount in controversy by a preponderance of the evidence." Hartford Ins. Group v. Lou-Con Inc., 293 F.3d 908, 910 (5th Cir. 2002). The complaint is first examined to determine if it is facially apparent that the claims exceed the jurisdictional threshold. Id. If a basis for jurisdiction is not facially apparent, a court may then consider "summary judgment type evidence" addressing "jurisdictional facts . . . judged as of the time the complaint is filed." Id. Doubts as to the existence of federal jurisdiction are to be resolved in favor of state court jurisdiction. Acuna v. Brown Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000).
B. Discussion
Having rejected the proposed amended complaint, the argument for remand could be similarly rejected. This Court will however consider the merits of the arguments raised by plaintiff in support of remand. As an initial matter, plaintiff does not appear to argue that defendant cannot establish by a preponderance of the evidence that the present case does not involve an amount in controversy in excess of the jurisdictional threshold. Rather, plaintiff appears to argue that her unilateral actions in tendering a settlement offer below the jurisdictional amount and by attempting to amend her complaint to demand damages below the jurisdictional amount have divested this Court of jurisdiction.
Although defendant was not tasked to provide evidence of the actual amount in controversy, it refers to $2 1,523.00 in back pay, front pay, $50,640.69 in attorney's fees, Foret v. S. Farm Bureau Life Ins. Co., 918 F.2d 534, 536 (5th Cir. 1990) ("attorney's fees may be included in determining the jurisdictional amount"), and further refers to claims for front pay, benefits denied, punitive damages, Dow Agrosciences, LLC v. Bates, 332 F.3d 323, 326 (5th Cir. 2003) (considering potential punitive damages claim in assessing amount in controversy) and pre-and post-judgment interest. Were plaintiff to raise questions as to actual amount in controversy, this Court would not be inclined to question whether her claims satisfy the jurisdictional threshold. While the figures provided in defendant's argument may not be considered evidence that would support a denial of a motion to remand if plaintiff directly argued that the amount in controversy is less than that required for diversity jurisdiction, Hartford Ins. Group, 293 F.3d at 910, plaintiff's motion is limited to the jurisdictional effect of both a tendered settlement offer and an allegation of damages less than a threshold amount. As such, defendant need not provide evidence in opposition to an issue not raised in the motion papers. FED. R. CIV. P. 7(b) ("[a]n application to the court for an order shall be by motion which . . . shall be made in writing, shall state with particukrity the grounds therefor, and shall set forth the reliefer order sought").
Construing the attachments to plaintiff's motion for leave to amend her complaint as incorporated into the motion to remand, plaintiff provides a letter to defendant dated April 28, 2004 referring to a "last demand of $35,000." Mot. for Leave to File First Amended Complaint, Exh. 1. As to the effect of plaintiff's settlement demand, it suffices to say that the standard set forth above for determining amount in controversy is one of objective proof of damages at issue, not subjective valuation by a plaintiff of what he or she believes to be an acceptable settlement of such damages. While a plaintiff's subjective valuation of a case is certainly evidence supporting diversity jurisdiction as an admission that a case is worth more than a jurisdictional threshold, Wilson v. Belin, 20 F.3d 644, 651 n. 8 (5th Cir. 1994), the same likely cannot be said of a letter that on its face is one of a sequence of letters used in the course of settlement negotiations. Nor may it be said that such a declaration would defeat empirical data that otherwise establishes by a preponderance of the evidence that the amount in controversy has been met.
This Court notes defendant's concern as to the import of the letter and concerns as to misconceptions that may arise therefrom. The letter itself belies its value as to an objective valuation of the amount in controversy as the reference to "last" presumes that there were other demands. Given the nature of settlement negotiations, it is unlikely that settlement offers by a plaintiff would proceed on an incremental rather than a decremental basis with earlier tenders of a lesser value than the latest tender attached as an exhibit.
Little more need be said as to the proposed amendment limiting damages to $74,500. A plaintiff may not unilaterally act "to destroy the jurisdictional choice that Congress intended to afford a defendant in the removal statute." Boelens v. Redman Homes, Inc., 759 F.2d 504, 507 (5th Cir. 1985). As stated by the Supreme Court long ago, if a "plaintiff after removal, by stipulation, by affidavit, or by amendment of his pleadings, reduces the claim below the requisite amount, this does not deprive the district court of jurisdiction." St. Paul Mercury Indem. v. Red Cab Co., 303 U.S. 283, 292 (1938). As such, absent a statute limiting damages recoverable, "[I]itigants who want to prevent removal must file a binding stipulation or affidavit with their complaints; once a defendant has removed the case, . . . later filings [are] irrelevant." De Aguilar, 47 F.3d at 1410.
As there is no basis at present on which to question subject matter jurisdiction to hear the claims in the present case, plaintiffs motion to remand is denied.
IV. CONCLUSION
Plaintiffs motion for leave to file first amended complaint (Doc. No. 12-1) is denied. Plaintiff's motion to remand (Doc. No. 13-1) is denied.
SO ORDERED.