Opinion
Civil Action No. 1:01-0021-RV-C.
January 12, 2001
ORDER
This case was recently assigned to the undersigned's docket. After review of the notice of removal and the complaint, the court concludes that it lacks subject matter jurisdiction over this action for the following two reasons, both of which are fatal.
As instructed by the United States Supreme Court, "The federal courts are under an independent obligation to examine their own jurisdiction." United States v. Hays, ___ U.S. ___, 115 S.Ct. 2431, 2435, 132 L.Ed.2d 635, 742 (1995). Accord, Wilson v. Minor, 220 F.3d 1297, 1303 n. 11 (11th Cir. 2000) ("Of course, a federal court has an independent obligation to ensure that it has jurisdiction over any claim brought before it even if jurisdictional questions are not raised by either party.") (citing Hays); University of So. Alabama v. American Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999) ("[A] court should inquire into whether it has subject matter jurisdiction at the earliest possible stage in the proceedings. Indeed, it is well settled that a federal court is obligated to inquire into subject matter jurisdiction sua sponte whenever it may be lacking.") (citations omitted); Fitzgerald v. Seaboard System R.R., Inc., 760 F.2d 1249, 1251 (11th Cir. 1985) ("A federal court not only has the power but also the obligation at any time to inquire into jurisdiction whenever the possibility that jurisdiction does not exist arises.").
1. Both of the two parties in this case appear to be corporations. To invoke federal diversity jurisdiction, a notice of removal must provide all "the requisite factors of diversity jurisdiction . . . at the time removal is attempted." Gaitor v. Peninsular Occidental S.S. Co., 287 F.2d 252, 255 (5th Cir. 1961). of course, when a corporation is a party, its citizenship is both "the State by which it has been incorporated and . . . the State where it has its principal place of business." 28 U.S.C. § 1332 (c)(1). Thus, if a notice of removal fails to identify both of these jurisdictional elements, the court is unable to determine whether there is complete diversity between the parties. In such a situation, the court must remand the case because the removing defendant has not met its burden of demonstrating the propriety of the removal. Here, defendant CSX merely alleged that it is a "citizen and resident" of Virginia and that plaintiff is a "citizen" of Mississippi. Because the notice of removal did not allege the state of incorporation and the principal place of business of either corporate party, the court is unable to determine that there is complete diversity of citizenship between the parties.
Because CSX Transportation, Inc. has been a party in numerous cases on the undersigned's docket, the court has judicial knowledge that it is a corporation. The court has no judicial knowledge regarding the plaintiff's legal status.
In Bonner v. City of Pritchard, 661 F.2d 1206, 1209 (11th Cir. 1981) ( en banc), the Eleventh Circuit adopted as binding precedent all decisions issued by the former Fifth Circuit prior to October 1, 1981.
2. Even if the court were to assume that defendant's allegations regarding citizenship established that the parties were diverse, defendant has not established that the amount in controversy exceeds $75,000. In its complaint, plaintiff makes a claim for an unspecified amount of compensatory and punitive damages. The Court of Appeals for the Eleventh Circuit has held that where there is an unspecified damages claim, the removing defendant must demonstrate by a preponderance of the evidence that the amount in controversy satisfies the federal jurisdictional minimum. See Tapscott v. MS Dealer Service Corp., 77 F.3d 1353, 1357 (11th Cir. 1996). The mere fact that plaintiff seeks punitive damages does not mean that the federal jurisdictional minimum is satisfied. Rather, the removing defendant must still demonstrate that it is more likely than not that the amount in controversy meets the court's jurisdictional threshold. See Tapscott, 77 F.3d at 1357.
To reach this conclusion, the court would have to assume (1) that CSX's assertion that it is a citizen of Virginia meant that its state of incorporation is Virginia and that its principal place of business is in Virginia and (2) that CSX's assertion that plaintiff is a citizen of Mississippi meant that its state of incorporation is Mississippi and that its principal place of business is in Mississippi.
The reason for this burden is that, because removal is conferred by statute, the right of removal must be strictly construed to limit federal jurisdiction. See Lane v. Champion Int'l Corp., 827 F. Supp. 701, 705 (S.D. Ala. 1993). Indeed, where there are unresolved doubts as to whether the removing defendant has shown that the amount in controversy has been satisfied, those doubts must be resolved in favor of remand. See Kline v. Avis Rent A Car System, Inc., 66 F. Supp.2d 1237, 1239 (S.D. Ala. 1999).
A removing defendant can discharge this burden by presenting sufficient evidence that a verdict rendered in favor of the plaintiff would exceed $75,000. See Bolling v. Union Nat'l Life Ins. Co., 900 F. Supp. 400, 405 (M.D. Ala. 1995). For example, a defendant may offer affidavits showing that it is more likely than not that the amount in controversy exceeded $75,000 at the time of removal. See, e.g., De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir. 1993) (noting with approval the district court's reliance on defendant's testimonial evidence in denying remand). The defendant may also present decisions rendered in comparable cases that yielded liability in excess of $75,000. See, e.g., Lowe's OK'd Used Cars, Inc. v. Acceptance Ins. Co., 995 F. Supp. 1388, 1392-93 (M.D. Ala. 1998) (reviewing similar Alabama state court cases in determining amount in controversy).
Here, however, defendant CSX has not met its burden of demonstrating that the amount in controversy is greater than $75,000. CSX has not presented any evidence indicating that the damages in this case satisfy the federal jurisdictional threshold, nor has CSX provided a decision from an Alabama state court — or any court for that matter — in which contract and tort claims in a factually similar action resulted in a judgment for more than $75,000. Instead, CSX merely offers plaintiff's complaint and makes the conclusory statement that this is "a civil action where the matter in controversy exceed the sum or value of $75,000.00, exclusive of interest and costs." As explained above, however, such a bald assertion, by itself, does not establish federal subject matter jurisdiction. Thus, having failed to offer any evidence demonstrating that the amount in controversy in this action exceeds $75,000, defendant CSX has not shown by a preponderance of the evidence that the amount in controversy in this action is greater than $75,000.
For the foregoing reasons, the court concludes that defendant CSX has not established that subject matter jurisdiction exists in this matter.
Accordingly, it is
ORDERED that this case is hereby REMANDED to the Circuit Court of Mobile County, Alabama, pursuant to 28 U.S.C. § 1447 (c). The Clerk is DIRECTED to take the necessary steps to effectuate the remand. Costs are taxed against defendant CSX.
The Clerk is FURTHER DIRECTED to send a copy of this order to the parties by facsimile in lieu of mail.