Opinion
No: 2:04-CV-67.
May 27, 2004
MEMORANDUM OPINION
This action filed on behalf of the plaintiff, Scott Sutton, and other similarly situated Tennessee consumers, was filed originally in the Circuit Court for Cocke County, Tennessee. On February 27, 2004, it was removed to this Court by the defendants who contend that this Court has jurisdiction by virtue of diversity, and that substantial issues of federal law are necessary elements of the plaintiff's claims. Before the Court is a motion for remand to the State Court. [Doc. 10]. Additionally, the defendants have requested in their response that these proceedings be stayed until such time as the Multi-District Litigation Panel ("MDL") determines whether to transfer this case to the District Court of Connecticut for consolidated proceedings.
The defendants are international shippers, involved in the shipping of liquid chemical products to and from the United States. Plaintiff alleges that these defendants conspired to suppress and eliminate competition through price-fixing, and other anti-competitive means, which ultimately caused the price of certain products containing liquid chemicals, e.g., antifreeze, to be artificially inflated. The Court has been advised of at least ten other cases filed against these defendants consolidated into the proceedings before the Multi-District Litigation Panel, which actions also allege that these defendants engaged in a conspiracy to eliminate competition. However, unlike the present action, which alleges violations of the Tennessee anti-trust laws and the Tennessee Consumer Protection Act, the defendants allege that the other ten actions claim violations of the Sherman Act and the Clayton Act.
Initially, the Court notes that, as the plaintiff correctly argues, the first and most fundamental question the Court must address is whether or not it has jurisdiction. Accordingly, the Court finds that no benefit will be gained by staying consideration of the motion to remand and defendants' request that this Court defer or stay any decision on the remand motion so that the issue may be decided by the transferee MDL Court in Connecticut will be DENIED.
The plaintiff has carefully worded his complaint to avoid alleging any federal cause of action, and to avoid the amount in controversy requirements of diversity jurisdiction. Nonetheless, the defendants argue that the artful pleading doctrine applies, insisting that the plaintiff has attempted to recast a federal claim as a state cause of action where no state cause of action exists. Further, defendants argue that despite the plaintiff's disclaimer of relief in excess of $74,000.00, the plaintiff's claim for damages more likely than not exceeds $75,000.00.
FEDERAL QUESTION JURISDICTION
The plaintiff argues that not only does federal anti-trust law not preempt state anti-trust law but that no cause of action exists under federal law for this plaintiff as an indirect purchaser. See Illinois Brick Co. v Illinois, 431 U.S. 720 (1977). The defendants point out that the plaintiffs in the MDL litigation, who have asserted federal causes of action against them, are also indirect purchasers. However, a review of the one other complaint filed by the defendant in its exhibits, that of Fleurchem, Inc., reflects that at least that plaintiff stands in a much different position than the plaintiff before this Court. Fleurchem, from its complaint, appears to be a purchaser of bulk chemicals from the wholesalers dealing directly with the defendants, which arguably might fall into one of the exceptions to Illinois Brick. See e.g. Associated General Contractors of California, Inc. v California State Council of Carpenters, 459 U.S. 519, 103 S. Ct. 897 (U.S. 1983). In contrast, the plaintiff here claims to be a purchaser of products manufactured from the bulk chemicals carried by the defendants, citing as an example Prestone Antifreeze. So presumably the defendants would file a motion to dismiss the plaintiff's cause of action if it were to remain in federal court under federal question jurisdiction.
The defendants also argue that the plaintiff should be viewed as having artfully pled a federal claim, contending that the plaintiff's complaint fails to state a cause of action under Tennessee law. However, this Court's jurisdiction does not hinge upon whether the plaintiff presented a valid state claim. If, as the defendants argue, the plaintiff has failed to state a state claim, dismissal by the state court would be the appropriate remedy.
Accordingly, to determine whether this Court has federal question jurisdiction over the case, the Court must look at whether the artful pleading doctrine applies to the plaintiff's claims. On its face, the plaintiff's complaint only addresses state causes of action. "The fact that a plaintiff has both the state and federal remedies does not mean that he must state his federal claim." Magic Chef, Inc. v International Molders and Allied Workers' Union, 581 F. Supp. 772, 776 (E.D. Tenn. 1983).
The Eastern District of Tennessee has previously been presented with a situation very similar to the one at hand, wherein Judge Jordan stated:
In opposing remand, the defendants rely on the "artful pleading" doctrine to argue that the plaintiff, an indirect purchaser, has no remedy against the defendants under federal antitrust law; that her causes of action pleaded under State law are an artful attempt to circumvent the rule of federal antitrust law which prevents indirect purchasers from recovering damages in federal antitrust lawsuits based on allegations like those in this case; and that the plaintiff's reliance in her complaint on state law does not, therefore, prevent removal to this court of what is in reality a federal anti-trust lawsuit. The District Court In re Wiring Devise Anti-trust litigation, 498 F. Supp. 79 (E.D.N.Y. 1980) accepted this argument, but this Court does not accept it . . .Blake v Abbott Laboratories, Inc., 894 F. Supp. 327, 329 (E.D. Tenn. 1995).
Defendants attempt to distinguish Blake, arguing that the case "turned in large part on a rejection of those defendants' federal preemption argument." However, this completely ignores the language of Blake quoted above and that the court indicated that remand was appropriate for multiple reasons. Likewise, the defendant ignores the fact that the Blake defendants, in support of their "artful pleading" argument, insisted that the plaintiff did not have a cause of action under Tennessee law. In response to that argument, Judge Jordan ruled:
That a Tennessee forum will be cognizant of its duty to consider the argument that it should dismiss a claim based on Tennessee anti-trust law when the basis in fact of the claim is an interstate transaction or transactions governed exclusively by federal law is shown by Standard Oil Company v State, 117 Tenn. 618, 100 S.W. 705 (1907), on which the defendants so staunchly rely.Blake at 330.
Accordingly, the Court FINDS that the plaintiff has not "artfully pled" a federal cause of action and this Court does not have federal question jurisdiction over this action.
DIVERSITY JURISDICTION
It is conceded that the parties are diverse in their citizenship and therefore the Court's focus is on the amount in controversy. In his complaint, the plaintiff specifically disavows any recovery in excess of $74,000.00, stating:
The total amount in controversy as to each Plaintiff and each individual Class Member alleged herein, including actual, compensatory, treble, or punitive damages; restitution; injunctive, declaratory and/or other equitable relief of any nature; and/or any other unspecified relief, does not exceed seventy-four thousand ($74.000.00) each, exclusive of interest and costs. Plaintiff seeks no form of "common" recovery. Plaintiff does not seek statutory attorneys' fees, but seeks attorneys' fees only from a common fund. Nor does plaintiff assert a claim under the federal laws of the United States. Plaintiff's state law claims are not federally pre-empted.
The defendants assert that this disclaimer of relief in excess of $74,000.00 is insufficient, insisting that the plaintiff's prayer for relief actually seeks damages in excess of $74,000.00, and that it is more likely than not that the plaintiff's claims will meet the amount in controversy requirement. Additionally, defendants claim that the plaintiff's unjust enrichment claim seeks disgorgement, which is subject to aggregation of the claims in the putative class.
To determine whether the amount in controversy has been satisfied, the Court must examine the complaint at the time it was filed. St. Paul Mercury Indemnity Co., v Redcap Co., 303 U.S. 283, 888, 58 S. Ct. 586 (1938). "[T]he amount alleged in the complaint will suffice unless it appears to a legal certainty that the plaintiff in good faith cannot claim the jurisdictional amount. A plaintiff in a diversity case may defeat removal to federal court by suing for less than the jurisdictional amount." Id. At 294. When a plaintiff's complaint does not set forth a specific amount of damages sought, the amount in controversy requirement is satisfied when the defendants prove that the amount "more likely than not" exceeds the jurisdictional requirement. Gafford v. General Electric Elec. Co., 997 F. 2d 150, 150 (6th Cir. 1993). In addition to a defendant asserting a good faith belief that the amount in controversy exceeds the jurisdictional requirement, the defendant must also provide facts in its removal documents which form basis of its belief. Thompson v. Fristsch, 1966 F. Supp. 543, 545 (E.D. Mich. 1997).
Defendants argue that the Sixth Circuit decision in Rogers v. Wal-Mart Stores, Inc., 230 F. 3d 868 (6th Cir. 2000), controls. However, Rogers is factually dissimilar to this case. In Rogers, plaintiff originally filed suit seeking approximately $950.000.00 in damages. After Wal-Mart removed the case to the District Court for the Western District of Tennessee on diversity grounds, the case was voluntarily dismissed by joint stipulation. When Rogers filed a new complaint in Tennessee State Court arising out of the same occurrence, the plaintiff sought to recover an amount "not exceeding $75,000.00." Wal-Mart again removed the case, and the plaintiff submitted an affidavit stipulating that she would not seek damages in excess of $75,000.00. Prior to the dismissal of the first action, the plaintiff made sworn responses to discovery requests stating that her damages exceeded $447,000.00.
The Court held that a post removal stipulation reducing the amount in controversy to below the jurisdictional limit does not require remand, since jurisdiction is determined at the time of removal. Id. Accordingly, the court held that given the plaintiff's previous demands and representations, her damages would "more likely than not" exceed $75,000.00. Id. at 873.
In the present case, the plaintiff has represented that his damages will not exceed in excess of $74,000.00 and defendants have failed to set forth sufficient facts to demonstrate that it is "more likely than not" that the plaintiff's will exceed the requisite jurisdictional amount.
In his complaint, the plaintiff also seeks to recover "monies defendants received as a result of their unjust enrichment." Defendants argue that this claim for unjust enrichment essentially seeks the disgorgement of monies from the defendants as a penalty to the defendants, rather than a way to compensate the plaintiffs for their individual losses. Plaintiff responds that his claim for damages is based on the "separate and distinct" interest of each class member, and should not be aggregated for determining the amount in controversy. The plaintiff asserts that it does not seek disgorgement of a separate fund, but that each plaintiff is entitled to the defendants' profits which resulted from the wrongdoing to that particular plaintiff.
"The general rule is that while separate and distinct claims may not be aggregated, aggregation is permissible when `two or more plaintiffs unite to enforce a single title or right in which they have a common and undivided interest.'" Sellers v. O'Connell, 701 F. 2d 575, 579 (6th Cir. 1983). "An identifying characteristic of a common and undivided interest is that if one plaintiff cannot or does not collect his share, the shares of the remaining plaintiffs are increased." Id. at 579.
Unlike the plaintiffs in the cases cited by the defendants, Sutton does not seek to simply disgorge the defendants of funds unrelated to overcharges to these particular plaintiffs. Rather, the plaintiff's claim for relief makes it clear that the plaintiff seeks only restitution, as an alternative theory of relief. The plaintiff's complaint requests that the Court enter an order "declaring that the defendants have been unjustly enriched by their illegal, unfair and/or deceptive acts, and awarding restitution to the plaintiff and class." That the plaintiff only seeks restitution makes it clear that the plaintiff is only seeking compensation for the amounts he overpaid for products containing bulk chemicals shipped by the defendants. Thus, each plaintiff could sue individually for restitution of the amount overpaid, and thus, the claims of the plaintiff and the potential class members do not represent a common and undivided interest. Accordingly aggregation of their claims for purposes of the jurisdictional amount is not appropriate.
An appropriate order shall enter.