Hodge v. GEICO General Insurance Company

Filing 4

Order that GEICO file a supplement to its Notice of Removal that properly alleges the Plaintiff's citizenship AND a Disclosure Statement by 12/10/2014. Signed by Magistrate Judge Katherine P. Nelson on 12/3/2014. (Attachments: # 1 request for reassignment) (srr)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
RACHEL A. HODGE,
Plaintiff,
v.
GEICO GENERAL INSURANCE
COMPANY,
Defendant.

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CIVIL ACTION NO. 14-00556-N

ORDER
This action is before the Court sua sponte on review of its subject matter
jurisdiction.1

This case was removed to this Court from the Circuit Court of

Baldwin County, Alabama, by the Defendant, GEICO General Insurance
Company (“GEICO”) pursuant to 28 U.S.C. § 1441(a).

GEICO’s Notice of

Removal (Doc. 1) claims diversity of citizenship under 28 U.S.C. § 1332(a) as
the sole basis for the Court’s subject matter jurisdiction.

See 28 U.S.C. §

1446(a) (“A defendant or defendants desiring to remove any civil action from a
State court shall file in the district court of the United States for the district
and

division

within

which

such

action

is

pending

a

notice

of

removal…containing a short and plain statement of the grounds for
removal…”).
“It is . . . axiomatic that the inferior federal 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, “it is well settled that a federal court is obligated to
inquire into subject matter jurisdiction sua sponte whenever it may be lacking.” Id. at
410. “[A] court should inquire into whether it has subject matter jurisdiction at the
earliest possible stage in the proceedings.” Id.

1

“A party removing a case to federal court based on diversity of
citizenship bears the burden of establishing the citizenship of the parties.”2
Rolling Greens MHP, L.P. v. Comcast SCH Holdings L.L.C., 374 F.3d 1020,
1022 (11th Cir. 2004) (per curiam).

See also, e.g., Ray v. Bird & Son & Asset

Realization Co., Inc., 519 F.2d 1081, 1082 (5th Cir. 1975) (“The burden of
pleading diversity of citizenship is upon the party invoking federal jurisdiction
. . .” (citing Mas v. Perry, 489 F.2d 1396 (5th Cir. 1974)).3
GEICO alleges that, both at the time the Plaintiff commenced her case
in state court and at the time of removal, it was a corporation incorporated
under the laws of Maryland with its principal place of business in that state.
(Doc. 1 at 4, ¶ 13).

Thus, for purposes of diversity, GEICO is deemed a

citizen of Maryland.

See 28 U.S.C. § 1332(c)(1).4

The removing party also bears the burden of demonstrating that § 1332(a)’s
requirement that the amount in controversy “exceeds the sum or value of $75,000,
exclusive of interest and costs…” See Williams v. Best Buy Co., 269 F.3d 1316, 1319-20
(11th Cir. 2001). As GEICO correctly notes (see Doc. 1 at 4, ¶ 11), while the Plaintiff’s
operative complaint does not request a specific damage amount, it does allege, inter alia,
that the subject uninsured motorist insurance policy is “sufficient to cover the full
$150,000.00 judgment” obtained against the uninsured/underinsured motorist
responsible for the underlying accident (Doc. 1-2 at 22). See Williams, 269 F.3d at 1319
(“When the complaint does not claim a specific amount of damages, removal from state
court is proper if it is facially apparent from the complaint that the amount in
controversy exceeds the jurisdictional requirement.”).

2

In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc), the
Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit
handed down prior to the close of business on September 30, 1981.

3

This is does not appear to be a “direct action against the insurer of a policy or contract
of liability insurance… to which action the insured is not joined as a party-defendant”
excepted from § 1332(c)(1)’s general rule, as the Plaintiff is claiming she is an insured
under the subject policy. See Fortson v. St. Paul Fire & Marine Ins. Co., 751 F.2d 1157,
1159 (11th Cir. 1985) (Section 1332(c) “was enacted by Congress in order to eliminate
the basis for diversity jurisdiction in states that allow an injured third-party claimant to
sue an insurance company for payment of a claim without joining the company's insured

4

2

However, GEICO alleges only that Plaintiff Rachel A. Hodge, a natural
person, is a “resident” of Alabama.

(Doc. 1 at 4, ¶ 12).

The Eleventh Circuit

has repeatedly stressed that “[c]itizenship, not residence, is the key fact that
must be alleged . . . to establish diversity for a natural person.”

Taylor v.

Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994) (emphasis added).

See also

Travaglio v. Am. Exp. Co., 735 F.3d 1266, 1269 (11th Cir. 2013) (“As we
indicated in remanding this case for jurisdictional findings, the allegations in
Travaglio’s complaint about her citizenship are fatally defective.

Residence

alone is not enough.”); Molinos Valle Del Cibao, C. por A. v. Lama, 633 F.3d
1330, 1342 n.12 (11th Cir. 2011) (“Ordinarily, the complaint must allege the
citizenship, not residence, of the natural defendants.”); Corp. Mgmt. Advisors,
Inc. v. Artjen Complexus, Inc., 561 F.3d 1294, 1297 (11th Cir. 2009) (“If a party
fails to specifically allege citizenship in their notice of removal, the district
court should allow that party to cure the omission…” (quotation marks
omitted)); Beavers v. A.O. Smith Elec. Prods. Co., 265 F. App’x 772, 778 (11th
Cir. 2008) (per curiam) (“The plaintiffs’ complaint alleges only the residence of
the nearly 100 plaintiffs, not their states of citizenship. Because the plaintiffs
have the burden to affirmatively allege facts demonstrating the existence of
jurisdiction and failed to allege the citizenship of the individual plaintiffs, the
district court lacked subject matter jurisdiction on the face of the complaint.”
(internal citation and quotation omitted)); Crist v. Carnival Corp., 410 F.

as a party, where the insured would be a nondiverse party, even though the party
insurance company would otherwise be diverse. We hold that unless the cause of
action against the insurance company is of such a nature that the liability sought to be
imposed could be imposed against the insured, the action is not a direct action.”
(internal citations omitted)).

3

App'x 197, 200 (11th Cir. 2010) (per curiam) (“The allegation that Crist is a
‘resident’ of Florida is insufficient for diversity jurisdiction purposes because
residency is not the equivalent of citizenship.”).
“Citizenship is equivalent to ‘domicile’ for purposes of diversity
jurisdiction.

A person's domicile is the place of his true, fixed, and

permanent home and principal establishment, and to which he has the
intention of returning whenever he is absent therefrom.”

McCormick v.

Aderholt, 293 F.3d 1254, 1257-58 (11th Cir. 2002) (citations, quotations, and
footnote omitted).

See also Travaglio, 735 F.3d at 1269 (“ ‘Citizenship is

equivalent to “domicile” for purposes of diversity jurisdiction.’

And domicile

requires both residence in a state and ‘an intention to remain there
indefinitely....’ ” (quoting McCormick, 293 F.3d at 1257-58 (internal quotation
marks omitted)) (internal citation omitted)); Mas, 489 F.2d at 1399 (“For
diversity purposes, citizenship means domicile; mere residence in the State is
not sufficient.”).
“Defective allegations of jurisdiction may be amended, upon terms, in
the trial or appellate courts.”

28 U.S.C. § 1653.

“If a party fails to

specifically allege citizenship in their notice of removal, the district court
should allow that party to cure the omission, as authorized by § 1653.”
Mgmt. Advisors, 561 F.3d at 1297.
disclosure

statement

in

Corp.

Additionally, GEICO has not filed a

accordance

with

SD

ALA

LR

3.4

(www.alsd.circ11.dcn/documents/forms/local-rules.pdf) and Federal Rule of
Civil Procedure 7.1 contemporaneously with its notice of removal.
Accordingly, GEICO is hereby ORDERED to file, no later than

4

Wednesday, December 10, 2014, 1) a supplement to its notice of removal
that properly alleges the Plaintiff’s citizenship, and 2) a disclosure statement
in accordance with SD ALA LR 3.4 and Federal Rule of Civil Procedure 7.1.
DONE and ORDERED this the 3rd day of December 2014.5
/s/ Katherine P. Nelson
KATHERINE P. NELSON
UNITED STATES MAGISTRATE JUDGE

As the parties have been made aware (see Doc. 3), this case has been randomly
assigned to the undersigned United States Magistrate Judge for all purposes, including
trial,
in
accordance
with
this
Court’s
Standing
Order
No.
24
(www.alsd.circ11.dcn/documents/forms/STDO24.pdf). Currently, unless the parties
consent to the jurisdiction of the undersigned no later than January 16, 2015, this action
will be reassigned to a District Judge. Before that time, however, unless a party
returns to the Clerk of Court a Request for Reassignment to a United States District
Judge, there exists implicit consent to the undersigned conducting all proceedings in
this case. See Roell v. Withrow, 538 U.S. 580, 123 S. Ct. 1696, 1703, 155 L. Ed. 2d 775
(2003) (“We think the better rule is to accept implied consent where, as here, the litigant
or counsel was made aware of the need for consent and the right to refuse it, and still
voluntarily appeared to try the case before the Magistrate Judge. Inferring consent in
these circumstances thus checks the risk of gamesmanship by depriving parties of the
luxury of waiting for the outcome before denying the magistrate judge’s authority.
Judicial efficiency is served; the Article III right is substantially honored.”).

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