Holley v. Madison Industries Inc of Georgia et al
MEMORANDUM OPINION. Signed by Judge Virginia Emerson Hopkins on 8/27/2012. (JLC)
2012 Aug-27 PM 04:18
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
JEREMY DALE HOLLEY,
MADISON INDUSTRIES, INC. OF
GEORGIA, a corporation, et al.
) Case No.: 4:12-CV-2243-VEH
Plaintiff Jeremy Dale Holley (“Mr. Holley”), originally filed this personal
injury lawsuit in the Circuit Court of St. Clair County, Alabama, on July 5, 2011.
(Doc. 1-1 at 1). According to his complaint, Mr. Holley suffered from injuries and
damages stemming from a motorcycle collision that occurred on June 8, 2010. (Doc.
1-1 ¶ 8).
More than thirty days but less than one year after receipt of the complaint,
Defendant Madison Industries, Inc. of Georgia (“Madison”) removed the litigation
to federal court on June 22, 2012, asserting diversity under 28 U.S.C. § 1332 as the
basis for federal jurisdiction. (Doc. 1 ¶ 1). On July 20, 2012, Mr. Holley filed a
Motion To Remand and Motion for Attorney’s Fees, Costs, and Sanctions (Doc. 8)
(the “Remand Motion”).
Madison filed its opposition to the Remand Motion on August 10, 2012. (Doc.
10). Mr. Holley then filed a reply (Doc. 11) on August 13, 2012, in support of his
Remand Motion as well as a separate Motion for Sanctions Pursuant to Federal Rule
of Civil Procedure 11 (Doc. 12) (the “Rule 11 Motion”) on August 14, 2012.
On August 16, 2012, Madison followed with an opposition to the Rule 11
Motion, and four days later, on August 20, 2012, Madison also filed an Opposed
Motion for Leave To Amend Response to Plaintiff’s Motion To Remand (Doc. 14)
(the “Motion for Leave”). Mr. Holley opposed (Doc. 15) the Motion for Leave on
August 23, 2012.
The Remand Motion, the Rule 11 Motion, and the Motion for Leave are now
under submission and, for the reasons explained below, the Remand Motion is due
to be granted on the procedural ground of untimeliness only, the Rule 11 Motion (and
all other sanction-related matters) are due to be carried with the case on remand, and
the Motion for Leave is due to be granted.
Subject Matter Jurisdiction Generally
“It is by now axiomatic that the inferior courts are courts of limited jurisdiction.
They are ‘empowered to hear only those cases within the judicial power of the United
States as defined by Article III of the Constitution,’ and which have been entrusted
to them by a jurisdictional grant authorized by Congress.” Univ. of S. Ala. v. Am.
Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999) (quoting Taylor v. Appleton, 30
F.3d 1365, 1367 (11th Cir. 1994)). “Accordingly, ‘[w]hen a federal court acts outside
its statutory subject-matter jurisdiction, it violates the fundamental constitutional
precept of limited federal power.’” Univ. of S. Ala., 168 F.3d at 409 (quoting Victory
Carriers, Inc. v. Law, 404 U.S. 202, 212, 92 S. Ct. 418, 425, 30 L. Ed. 2d 383
(1971)). “Simply put, once a federal court determines that it is without subject matter
jurisdiction, the court is powerless to continue.” Univ. of S. Ala., 168 F.3d at 410.
“A necessary corollary to the concept that a federal court is powerless to act
without jurisdiction is the equally unremarkable principle that a court should inquire
into whether it has subject matter jurisdiction at the earliest possible stage in the
proceedings.” Id. “Indeed, it is well settled that a federal court is obligated to inquire
into subject matter jurisdiction sua sponte whenever it may be lacking.” Id. (citing
Fitzgerald v. Seaboard Sys. R.R., 760 F.2d 1249, 1251 (11th Cir. 1985) (per curiam)).
Moreover, “[t]he jurisdiction of a court over the subject matter of a claim
involves the court’s competency to consider a given type of case, and cannot be
waived or otherwise conferred upon the court by the parties. Otherwise, a party could
‘work a wrongful extension of federal jurisdiction and give district courts power the
Congress denied them.’” Jackson v. Seaboard Coast Line R.R., 678 F.2d 992, 100001 (11th Cir. 1982) (quoting American Fire & Cas. Co. v. Finn, 341 U.S. 6, 18
(1951)) (footnote omitted) (citation omitted). Furthermore, “[b]ecause removal
jurisdiction raises significant federalism concerns, federal courts are directed to
construe removal statutes strictly.” Univ. of S. Ala., 168 F.3d at 411 (citing Shamrock
Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941)).
Lastly, Congress has decreed and the Supreme Court has confirmed that - with
the express exception of civil rights cases that have been removed - orders of remand
by district courts based upon certain grounds, including in particular those premised
upon lack of subject matter jurisdiction, are entirely insulated from review. More
specifically, § 1447(d) provides:
An order remanding a case to the State court from which it was removed
is not reviewable on appeal or otherwise, except that an order remanding
a case to the State court from which it was removed pursuant to section
1443 of this title shall be reviewable by appeal or otherwise.
28 U.S.C. § 1447(d) (emphasis added); see also Kirchner v. Putnam Funds Trust, 547
U.S. 633, 642 (2006) (recognizing that “‘[w]here the [remand] order is based on one
of the grounds enumerated in 28 U.S.C. § 1447(c), review is unavailable no matter
how plain the legal error in ordering the remand’”) (citing Briscoe v. Bell, 432 U.S.
404, 413 n.13 (1977)); Milton I. Shadur, Traps for the Unwary in Removal and
Remand, 33 no. 3 Litigation 43 (2007); Powerex Corp. v. Reliant Energy Servs., Inc.,
127 S. Ct. 2411, 2418 (2007) (holding that when “the District Court relied upon a
ground that is colorably characterized as subject-matter jurisdiction, appellate review
is barred by § 1447(d)”).
Madison’s Burden on Removal
The burden of establishing subject matter jurisdiction for the purposes of
removal to this court is on the removing defendant. See Williams v. Best Buy Co., 269
F.3d 1316, 1319 (11th Cir. 2001) (“Because this case was originally filed in state
court and removed to federal court by Best Buy, Best Buy bears the burden of proving
that federal jurisdiction exists.”). “The court should determine its jurisdiction over
the case ‘based upon the plaintiff’s pleadings at the time of removal.’” Fowler v.
Provident Life & Accident Ins. Co., 256 F. Supp. 2d 1243, 1246 (N.D. Ala. 2003).
“[B]ecause the jurisdiction of federal courts is limited, the Eleventh Circuit
Court of Appeals favors remand of cases that have been removed where federal
jurisdiction is not absolutely clear.” Lowe’s OK’d Used Cars, Inc. v. Acceptance Ins.
Co., 995 F. Supp. 1388, 1389 (M.D. Ala. 1998) (citing Burns v. Windsor, 31 F.3d
1092, 1095 (11th Cir. 1994)). “In fact, removal statutes are to be strictly construed,
with all doubts resolved in favor of remand.” Lowe’s, 995 F. Supp. at 1389 (emphasis
added) (citing Diaz v. Sheppard, 85 F.3d 1502, 1505 (11th Cir.1996)).
As stated above, Madison premises its removal exclusively upon this court’s
diversity jurisdiction. “Diversity jurisdiction exists where the suit is between citizens
of different states and the amount in controversy exceeds the statutorily prescribed
amount, in this case $75,000.” Williams, 269 F.3d at 1319 (citing 28 U.S.C. §
1332(a)). Therefore, removal jurisdiction based upon diversity mandates: (1) a
complete diversity of citizenship between the plaintiff(s) and the defendant(s); and
(2) satisfaction of the amount in controversy requirement.
Diversity jurisdiction “requires complete diversity—every plaintiff must be
diverse from every defendant.” Palmer v. Hosp. Auth., 22 F.3d 1559,1564 (11th Cir.
1994). “Citizenship, not residence, is the key fact that must be alleged in the
complaint to establish diversity for a natural person.” Taylor, 30 F.3d at 1367.
In its notice of removal, Madison has effectively met the diversity of
citizenship requirement based upon the citizenship and residence of Mr. Holley in
Alabama (see Doc. 1 ¶ 1), the sole state of citizenship for Madison in Georgia (id.);
and the other named defendants, who are either citizens of South Carolina or Georgia.
(Id.). Additionally, Mr. Holley does not dispute that complete diversity exists.
Amount in Controversy Requirement
Regarding this quantitative component, “when Congress created lower federal
courts, it limited their diversity jurisdiction to cases in which there was a minimum
monetary amount in controversy between the parties.” Smith v. GTE Corp., 236 F.3d
1292, 1299 (11th Cir. 2001) (citing Snyder v. Harris, 394 U.S. 332, 334 (1969)).
Today, the threshold amount in controversy for diversity jurisdiction, excluding
interests and costs, is that which exceeds $75,000. 28 U.S.C. § 1332(a) (2012) (“The
district courts shall have original jurisdiction of all civil actions where the matter in
controversy exceeds the sum or value of $75,000, exclusive of interest and costs . .
Here, Mr. Holley does not contest satisfaction of the amount in controversy
prong, but instead challenges the timeliness of Madison’s removal.1
The removal procedure statute, 28 U.S.C. § 1446, contemplates two ways that
a case may be removed based on diversity jurisdiction. The first way (formerly
Mr. Holley raises numerous objections to Madison’s removal, but because the court agrees
with him that Madison’s petition is untimely, it does not reach the merits of his other challenges.
referred to as “first paragraph removals”)2 involves civil cases in which the
The now-defunct distinction between “first paragraph” and “second paragraph” removals
is rendered obsolete by a clearer version of the removal statute, as amended by the Federal Courts
Jurisdiction and Venue Clarification Act of 2011, PL 112-63, December 7, 2011, 125 Stat. 758,
which added subsections to 28 U.S.C. § 1446(b). The substance of the removal procedure is not
affected by the stylistic changes to the statute; therefore, the previous case law discussing “first
paragraph” and “second paragraph” removals is still applicable despite its outdated terminology.
See, e.g., Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 747 (11th Cir. 2010) (“As we will
explain, Lowery was a case that involved the removal procedures in the second paragraph of 28
U.S.C. § 1446(b), and the decision must be read in that context.”); Lowery v. Ala. Power Co., 483
F.3d 1184, 1211 (11th Cir. 2007). The recently revised version of the removal procedure statute
reads, in relevant part, as follows:
(b) Requirements; generally.-(1) The notice of removal of a civil action or proceeding shall be filed within 30
days after the receipt by the defendant, through service or otherwise, of a copy
of the initial pleading setting forth the claim for relief upon which such action
or proceeding is based, or within 30 days after the service of summons upon the
defendant if such initial pleading has then been filed in court and is not required
to be served on the defendant, whichever period is shorter.
(A) When a civil action is removed solely under section 1441(a), all
defendants who have been properly joined and served must join in or
consent to the removal of the action.
(B) Each defendant shall have 30 days after receipt by or service on that
defendant of the initial pleading or summons described in paragraph (1)
to file the notice of removal.
(C) If defendants are served at different times, and a later-served
defendant files a notice of removal, any earlier-served defendant may
consent to the removal even though that earlier-served defendant did not
previously initiate or consent to removal.
(3) Except as provided in subsection (c), if the case stated by the initial pleading
is not removable, a notice of removal may be filed within 30 days after receipt
by the defendant, through service or otherwise, of a copy of an amended
pleading, motion, order or other paper from which it may first be ascertained
that the case is one which is or has become removable.
jurisdictional grounds for removal are apparent on the face of the initial pleadings.
See 28 U.S.C. § 1446(b)(1) (2012).
The second way (formerly referred to as “second paragraph removals”), which
is the relevant mechanism in this particular instance, contemplates removal when,
e.g., damages are unspecified in the original complaint and the jurisdictional grounds
later become apparent through the defendant’s receipt of “an amended pleading,
motion, order or other paper from which it may first be ascertained that the case is
one which is or has become removable.” 28 U.S.C. § 1446(b)(3) (2012) (emphasis
added). The recently revised version of the statute thus expressly clarifies that
discovery responses, such as those presented in the instant case, can constitute “other
paper” from which diversity jurisdiction can be established. Id. § 1446(c)(3)(A)
(2012) (“If the case stated by the initial pleading is not removable solely because the
amount in controversy does not exceed the amount specified in section 1332(a),
information relating to the amount in controversy in the record of the State
proceeding, or in responses to discovery, shall be treated as an ‘other paper’ under
subsection (b)(3).” (emphasis added)).
As § 1446(b)(3) prescribes, “a notice of removal may be filed within 30 days
28 U.S.C. § 1446(b). As such, the “first paragraph removals” discussed in prior case law are now
embodied in subsection (1), id. § 1446(b)(1), and the “second paragraph removals” are now
encompassed in subsection (3), id. § 1446(b)(3).
after receipt by the defendant, through service or otherwise, of a copy of an amended
pleading, motion, order or other paper from which it may first be ascertained that the
case is one which is or has become removable.” 28 U.S.C. § 1446(b)(3) (emphasis
Here, Mr. Holley maintains that Madison was in receipt of discovery responses
from him well before June 6, 2012,3 which unambiguously establish satisfaction of
the amount in controversy component. In particular, Mr. Holley points out that as of
October 6, 2011:
Madison, the Defendant that removed this case from St. Clair County
Circuit Court to this Court, was perfectly aware that the Plaintiff was
seeking at least $101,806.11 in hard damages for medical expenses and
property loss, as well as unspecified additional amounts for lost wages,
loss of earning capacity, mileage expense, mental anguish, physical pain
and suffering and punitive damages. Therefore, Defendant Madison’s
assertion that its “first notice” that the damages in this case exceeded
$75,000.00 came from an attorney’s email and objections to Requests
for Admissions in June, 2012 is an outright misrepresentation to this
Court – their notice came from responses to discovery that the
Defendant propounded, and it came on October 6, 2011.
(Doc. 8 at 11).
The record confirms that Mr. Holley served written responses to Madison’s
Madison’s removal hinges upon June 6, 2012, as the triggering date for § 1446(b)(3)’s 30day clock. (Doc. 1 ¶ 2 (“Plaintiff’s counsel has acknowledged via e-mail that damages sought will
exceed $75,000. See Exhibit B – E-mail from Andrew Moak dated June 6, 2012”)). The court notes
that the actual date of the referenced email is June 5, 2012. (Doc. 1-2 at 1). This discrepancy in
dates has no impact on the court’s timeliness analysis, and the court will continue to use June 6,
2012, as the operative date relied upon by Madison.
document requests on October 6, 2011, which included a damages chart itemizing
more than $72,000 in medical expenses alone. (See Doc. 8-12 at 6-7 (exactly totaling
$72,701.11)). Another piece of written discovery also served on October 6, 2011,
values Mr. Holley’s total property loss as equaling $26,000. These two figures
combined are appreciably in excess of the jurisdictional minimum. Further, Mr.
Holley’s discovery responses constitute “paper” from which it could “first be
ascertained that the case is one which is or has become removable.” 28 U.S.C. §
In the Motion for Leave, Madison’s counsel admits that she “overlooked [the]
chart disclosed in discovery” detailing Mr. Holley’s medical costs claimed to be
causally related to the collision, but insists that her omission “was a mistake and not
intentional.” (Doc. 14 ¶¶ 3, 4). In the amended response Madison further states:
By the Plaintiff’s own estimate in its Motion to Remand, it claims
that Madison was aware of “at least $101,806.11 in hard damages for
medical expenses and property loss,” along with other unspecified
amounts as of October 6, 2011 [Document 8, p. 11, Plaintiff’s Motion
to Remand]. By Plaintiff’s own estimate, $72,701.11 of said damages
were included in a chart of medical billings that the Plaintiff included in
written responses to Requests for Production. However, this additional
amount was neither cross-referenced nor set forth in Plaintiff’s Verified
Answers to Interrogatories specific to the Plaintiff’s medical damages.
Madison reasonably relied on Plaintiff’s verified discovery answers.
(Doc. 14-1 at 4 (emphasis added)).
Thus, Madison does not dispute that it had within its possession discovery
responses from Mr. Holley which indicated that the amount in controversy was
satisfied and that the case was removable, but apparently contends that such
information did not trigger the 30-day clock in October 2011because the “amount was
neither cross-referenced nor set forth in Plaintiff’s Verified Answers to
Interrogatories specific to the Plaintiff’s medical damages.” (Id.).
Madison offers no authority for the proposition that this court has the discretion
to excuse the lateness of Madison’s removal merely because Mr. Holley failed to
cross-reference his discovery responses, and, relatedly, find that it was reasonable for
Madison to rely (and wait) on the email that its counsel received on June 6, 2012,
from Mr. Holley’s lawyer (see Doc. 14-4 at 2 (“[I]f you want to pursue a motion to
have us be forced to admit that we are seeking more than 75K in damages, when the
time runs, go ahead.”)) as the legally cognizable event which transformed the lawsuit
into a removable one. Given the dearth of legal support provided, this court is under
no obligation to address Madison’s perfunctory and underdeveloped attempt to
demonstrate the timeliness of its removal. See Flanigan’s Enters., Inc. v. Fulton
County, Ga., 242 F.3d 976, 987 n.16 (11th Cir. 2001) (holding that a party waives an
argument if the party “fail[s] to elaborate or provide any citation of authority in
support” of the argument); Ordower v. Feldman, 826 F.2d 1569, 1576 (7th Cir. 1987)
(stating that an argument made without citation to authority is insufficient to raise an
issue before the court).
As the United States District Court for the Southern District of Alabama has
“Judges are not like pigs, hunting for truffles buried in briefs.” Smith v.
Secretary, Department of Corrections, 572 F.3d 1327, 1352 (11th Cir.
2009). An issue must be “fairly presented” in order to trigger
consideration, and a glancing reference without discussion or legal
authority does not meet that standard. Id. As the Court has previously
noted, (Doc. 110 at 2), “[t]here is no burden upon the district court to
distill every potential argument that could be made based upon the
materials before it on summary judgment.” Resolution Trust Corp. v.
Dunmar Corp., 43 F.3d 587, 599 (11th Cir. 1995).
Amazing Grace Bed & Breakfast v. Blackmun, No. 09-0298-WS-N, 2011 WL 606126,
at *3 (S.D. Ala. Feb. 11, 2011). Therefore, akin to Amazing Grace, because Madison
has not “fairly presented” its position establishing the timeliness of its removal, no
further consideration by the court of this issue is even required.
Moreover, in the absence of any controlling authority that would allow the
court to toll § 1446(b)(3)’s 30-day window of removal under the circumstances of a
plaintiff’s failure to cross-reference his discovery responses, the court is unwilling to
follow such an uncharted and peculiar path as Madison has suggested. Accordingly,
consistent with the above analysis, the court concludes that Madison’s removal on
June 22, 2012, was untimely, and that, as a result, Mr. Holley’s Remand Motion is
due to be granted in the form of ordering remand only.
Rule 11 Motion
The court does not reach the merits of the Rule 11 Motion (or the remainder of
the Remand Motion, which seeks an award of attorney’s fees, costs, and sanctions).
Instead, the Rule 11 Motion and those other undecided sanction-related issues
included in the Remand Motion will all be carried to state court as part of the remand
of Mr. Holley’s lawsuit.
Motion for Leave
In deciding the merits of the Remand Motion, the court has considered the
contents of Madison’s Motion for Leave and the related attachments, including the
amended written opposition. (Doc. 14-1). Accordingly, the Motion for Leave is due
to be granted.
Consistent with the above analysis, this case is due to be remanded to the
Circuit Court of St. Clair County, Alabama, on the basis of untimeliness only.
Further, Mr. Holley’s Rule 11 Motion (and all other sanction-related matters) are due
The court is aware that Mr. Holley has repeatedly requested the right to present oral
argument. (See, e.g., Doc. 8 at 1; Doc. 11 at 1; Doc. 12 at 1). However, the court finds that holding
a hearing is unnecessary due to the straightforward nature of the matters that it has addressed in this
opinion, and, accordingly, that request is due to be denied.
to be carried with the case on remand. Finally, Madison’s Motion for Leave is due
to be granted. The court will enter a separate order.
DONE and ORDERED this the 27th day of August, 2012.
VIRGINIA EMERSON HOPKINS
United States District Judge
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