Channell v. Nutrition Distribution, LLC et al

Filing 25

OPINION AND ORDER, it is the ORDER, JUDGMENT, and DECREE of the court that plf Tony Channell's 13 Motion to Remand is granted and that, pursuant to 28 USC 1447(c), this cause is remanded to the Circuit Court of Covington County, Alabama for wa nt of subject-matter jurisdiction; further ORDERED that plf Channell's 13 Request for Fees and Costs is denied; DIRECTING the clerk to take appropriate steps to effect the remand. Signed by Honorable Myron H. Thompson on 12/4/2008. (Attachments: # 1 Civil Appeals Checklist)(wcl, )

IN THE DISTRICT COURT OF THE UNITED STATES FOR THE MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION

TONY CHANNELL, Plaintiff, v. NUTRITION DISTRIBUTION, LLC, d/b/a Anabolic Xtreme; et al., Defendants.

) ) ) ) ) ) ) ) ) ) )

CIVIL ACTION NO. 2:08cv794-MHT (WO)

OPINION AND ORDER This lawsuit was previously removed based on

diversity-of-citizenship jurisdiction (28 U.S.C. §§ 1332, 1441) by one of the defendants, Designer Supplements, Inc., but the lawsuit was remanded to state court because Designer Supplements failed to prove that the $ 75,000 amount-in-controversy requirement had been met. Now,

Nutrition Distribution seeks removal, pursuant to 28 U.S.C. § 1446(b), after having received "other paper" from Channell allegedly establishing that the amount-incontroversy requirement is satisfied; plaintiff Tony

Channell again moves for remand.

Channell also argues

that Nutrition Distribution's removal is unreasonable and, pursuant to 28 U.S.C. § 1447(c), the court should award him fees and costs incurred as a result. For the

reasons that follow, Channell's motion to remand will be granted, but his request for costs and fees will be denied.

I. Where damages have not been specified by the

plaintiff, a removing defendant has the burden of proving by a preponderance of the evidence that the $ 75,000 amount-in-controversy jurisdiction is met. requirement for diversity

Leonard v. Enterprise Rent-a-Car,

279 F.3d 967, 972 (11th Cir. 2002); Lowery v. Alabama Power Co., 483 F.3d 1184, 1209-1211 (11th Cir. 2007). The defendant must do so by presenting documents received from the plaintiff "which contain an unambiguous

statement that clearly establishes federal jurisdiction." Lowery, 483 F.3d at 1213 n. 63. "If the jurisdictional

amount is either stated clearly on the face of the 2

documents before the court, or readily deducible from them, then the court has jurisdiction. must remand." Id. at 1211. If not, the court

Finally, the court may not look beyond the notice of removal and evidence submitted by the parties relevant to the amount in controversy at the time the case was removed, Leonard, 279 F.3d at 972; and "[r]emoval

statutes are construed narrowly; where plaintiff and defendant clash about jurisdiction, uncertainties are to be resolved in favor of remand." Burns v. Windsor Ins.

Co., 31 F.3d 1092, 1095 (11th Cir. 1994). This second removal suffers from the same, fatal flaw as the first: it fails to demonstrate by a preponderance of the evidence that the $ 75,000 amount-in-controversy requirement has been met. alleges that the Briefly, Channell's complaint in this case designed, known as

defendants a

advertised

and

sold

dietary

supplement

Superdrol, which Channell consumed, causing him to suffer serious and life-threatening injuries, including liver failure. Channell further contends that the defendants 3

acted

recklessly,

maliciously,

and/or

with

conscious

disregard of the foreseeable harm caused by Superdrol, warranting an award of punitive damages. Nutrition

Distribution's notice of removal shows Channell's out-ofpocket expenses--which short-term include disability lost wages, medical lost

payments,

payments

and

vacation time--total $ 49,987.72. Nutrition Distribution argues that the court should consider Channell's requests for "other for damages"--including pain and suffering, punitive mental damages anguish, and and

damages

permanent injuries--and conclude that the total amount in controversy exceeds $ 75,000. Although Nutrition

Distribution is correct that "other damages," including punitive damages, must be considered in evaluating the amount-in-controversy requirement, Holley Equipment Co. v. Credit Aliance Corp., 821 F.2d 1531, 1535 (11th Cir. 1987), the court must ultimately reject Nutrition

Distribution's argument that these unspecified damages suffice to meet the amount-in-controversy requirement. As explained above, a removing defendant must submit 4

documents from which it is "clear" or "readily deducible" that the threshold amount has been met, and the court may not look beyond the evidence submitted in making its determination. the court Nutrition Distribution has not provided documents that clearly establish

with

jurisdiction or any other evidence upon which it can properly appraise Channell's claims for "other damages."* Any attempt to valuate these claims would require the court to look outside the documents submitted to the court (for example, to consider, and draw inferences based on, past experiences with similar personal-injury cases) and engage in the kind of "impermissible

speculation" that the Eleventh Circuit Court of Appeals has expressly rejected. Lowery, 483 F.3d at 1220.

Therefore, Channell's motion to remand will be granted.

* Nutrition Distribution cites 1975 Ala. Code § 6-11-21(d), which clarifies that recovery for punitive damages is limited to the greater of thrice the plaintiff's compensatory damages or $ 1,500,000. This section merely establishes a cap for punitive damages; it provides no evidence of how much Channell actually seeks or is likely to receive. 5

In concluding that remand is warranted, this court recognizes that there is a tension standard received between and from the the the

p r e p o n d e rance-of-the-evidence requirement that the

documents

plaintiff "contain an unambiguous statement" and "clearly establish" recognized federal this jurisdiction. The Lowery that court law

difficulty,

admitting

the

effectively requires the removing defendant to meet a "far higher burden than preponderance of the evidence" and requires courts applying the standard to force "a square peg into a round hole." 483 F.3d at 1211

(emphasis added).

This court hopes that the Eleventh

Circuit Court of Appeals will soon resolve this tension, for, because uncertainties are to be resolved in favor of remand, it works to the clear and rarely surmountable and thus unfair disadvantage this is of those law for seeking this removal. and

Nevertheless,

the

court

therefore it must be followed.

6

II. Channell also argues that, pursuant to 28 U.S.C. § 1447(c), he should be awarded the fees and costs that have resulted from Nutrition Distribution's

"unreasonable" removal. that the appropriate

The Supreme Court has explained test for awarding fees under

§ 1447(c) should balance Congress's "desire to deter removals sought for the purpose of prolonging litigation" with its decision "to afford defendants a right to remove as a general matter, when the statutory criteria are satisfied." 132, 140 Martin v. Franklin Capital Corp., 546 U.S. Therefore, the court rejected a

(2005).

presumption in favor of awarding fees, id. at 136-139, and clarified that: "Absent unusual circumstances,

courts may award attorney's fees under § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking reasonable removal. basis Conversely, exists, fees when should an be

objectively denied."

Id. at 140.

7

Although this is the second time this lawsuit has been removed based on diversity jurisdiction and denied for a failure the show that the amount-in-controversy requirement has been met, the court is not prepared to say that Nutrition Distribution's removal lacked an

objectively reasonable basis. Nutrition Distribution

First, following remand, discovery revealing

conducted

Channell's out-of-pocket expenses totaling $ 49,987.72. This information was not available to the defendants or the court when the lawsuit was previously removed, and provides a reasonable, though ultimately insufficient, basis for Nutrition Distribution's argument that the various, combined damages exceed $ 75,000. In addition,

Channell has declined Nutrition Distribution's requests that he admit or deny the amount in controversy exceeds $ 75,000. While the court does not view Channell's

refusal as an admission of jurisdiction, it does suggests that Nutrition Distribution has not behaved unreasonably in seeking removal. Finally, as mentioned above, the

Eleventh Circuit Court of Appeals itself admitted that it 8

can

be

difficult

to

apply

the

preponderance-of-the-

evidence standard in this particular context and requires the court to force a "square peg into a round hole." 483 F.3d at 1211. As such, the court is

Lowery ,

unwilling to say that Nutrition Distribution's pursuit of removal was unreasonable; Channell's request for fees and costs will be denied. Accordingly, it is the ORDER, JUDGMENT, and DECREE of the court that plaintiff Tony Channell's motion to remand (doc. no. 13) is granted and that, pursuant to 28 U.S.C. § 1447(c), this cause is remanded to the Circuit Court of Covington County, Alabama for want of subject-matter jurisdiction. It is further ORDERED that plaintiff Channell's

request for fees and costs (doc. no. 13) is denied. The clerk of the court is DIRECTED to take

appropriate steps to effect the remand. DONE, this the 4th day of December, 2008. /s/ Myron H. Thompson UNITED STATES DISTRICT JUDGE