Dees et al v. Coleman American Moving Services, Inc. et al

Filing 29

ORDER granting 14 Motion to Remand to Circuit Court of Clarke County. Signed by District Judge William H. Steele on 10/26/2017. (tgw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
MARK DEES, et al.,
Plaintiffs,
v.
COLEMAN AMERICAN MOVING
SERVICES, INC., et al.,
Defendants.

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) CIVIL ACTION 17-0292-WS-N
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ORDER
This matter is before the Court on the plaintiffs’ motion to remand. (Doc.
14). The parties have submitted briefs and evidentiary materials in support of their
respective positions, (Docs. 14, 16, 18), and the motion is ripe for resolution.
After careful consideration, the Court concludes that the motion is due to be
granted.
BACKGROUND
The plaintiffs filed in state court a five-count complaint, with each count
asserting a claim under state law. The complaint alleges that the defendants, while
under contract to move the plaintiffs’ property, damaged that property but have
refused to pay for the damage as per the parties’ contract. No other wrongdoing of
any kind is alleged. Claims are asserted for bad faith, breach of contract, fraud,
negligence and wantonness. (Doc. 1 at 7-12). The complaint seeks an award of
compensatory and punitive damages but does not demand any particular amount.
The defendants removed on the basis of federal question jurisdiction.
Although the complaint asserts only state-law claims, the defendants argue that

those claims are completely preempted by the Carmack Amendment, thereby
furnishing federal question jurisdiction.1
DISCUSSION
This Court has already held that, in light of the Supreme Court’s analysis
expressed in Beneficial National Bank v. Anderson, 539 U.S. 1 (2003), “complete
preemption applies in a Carmack Amendment context.” U.S. Aviation
Underwriters, Inc. v. Yellow Freight System, Inc., 296 F. Supp. 2d 1322, 1338
(S.D. Ala. 2003); accord Stabler v. Pack & Load Services, Inc., 2011 WL 245491
at *1 (S.D. Ala. 2011). The Court is not alone. The only two courts of appeal
known to have addressed the issue have reached the same conclusion,2 as have a
number of sister courts within the Eleventh Circuit.3 The plaintiffs offer the Court
no reason to reconsider its position.
Instead, the plaintiffs assert that the amount in controversy does not exceed
$10,000. In support of this argument, they point to their amended complaint (filed

1

The Carmack Amendment applies only to shipments of property by carriers in
interstate commerce. E.g., Werner Enterprises, Inc. v. Westwind Maritime International,
Inc., 554 F.3d 1319, 1326 (11th Cir. 2009). The complaint does not allege that either
defendant is a carrier covered by the Carmack Amendment or that the move was between
states, but the defendants so assert, (Doc. 1 at 2-3), and the plaintiffs do not contest the
assertion.
2

Hall v. North American Van Lines, Inc., 476 F.3d 683, 688 (9th Cir. 2007);
Hoskins v. Bekins Van Lines, 343 F.3d 769, 778 (5th Cir. 2003).
3

E.g., Morris v. Mayflower Transit, LLC, 18 F. Supp. 3d 1342, 1344-45 (M.D.
Ala. 2014); Andrews v. Atlas Van Lines, Inc., 504 F. Supp. 2d 1329, 1332 (N.D. Ga.
2007); Bear MGC Cutlery Co. v. Estes Express Lines, Inc., 132 F. Supp. 2d 937, 947
(N.D. Ala. 2001); Baker v. Allied Van Lines, Inc., 2007 WL 461029 at *1 (M.D. Fla.
2007). But see Armstrong v. North Alabama Moving and Storage, Inc., 533 F. Supp. 2d
1157, 1159 (N.D. Ala. 2008) (questioning complete preemption in light of the Carmack
Amendment’s amount-in-controversy requirement); Intermed Ultrasound Services, Inc. v.
Fedex Freight, 2006 WL 3258548 at *2 (N.D. Fla. 2006) (rejecting complete preemption
based on pre-Anderson analysis).

2

in federal court), which adds a sixth count invoking the Carmack Amendment, for
the violation of which they demand $6,130. (Doc. 8 at 6-7).
The defendants first suggest that the amount in controversy is irrelevant,
(Doc. 16 at 2), but this is incorrect. The only cases that may properly be removed
are those “of which the district courts of the United States have original
jurisdiction.” 28 U.S.C. § 1441(a). The Carmack Amendment is housed in 49
U.S.C. § 14706, and “the district courts shall have original jurisdiction of an action
brought under section 11706 or 14706 of title 49, only if the matter in controversy
for each receipt or bill of lading exceeds $10,000, exclusive of interest and costs.”
28 U.S.C. § 1337(a). As the party invoking the Court’s subject matter jurisdiction,
the burden lies with the defendants to demonstrate that this jurisdictional threshold
is satisfied.
“[W]here jurisdiction is based on a claim for indeterminate damages, ... the
party seeking to invoke federal jurisdiction bears the burden of proving by a
preponderance of the evidence that the claim on which it is basing jurisdiction
meets the jurisdictional minimum.” Federated Mutual Insurance Co. v.
McKinnon Motors, LLC, 329 F.3d 805, 807 (11th Cir. 2003). Because the
complaint does not identify a specific sum demanded under an (unpleaded)
Carmack Amendment cause of action, the defendants’ burden is to show by a
preponderance of the evidence that the amount in controversy under the Carmack
Amendment more likely than not exceeds $10,000.
To meet their burden, the defendants note the following: (1) the complaint
seeks an award of both compensatory and punitive damages; (2) the complaint
alleges the plaintiffs insured the moved property for $75,000; and (3) prior to
removal, the plaintiffs made a settlement offer of $22,500. (Doc. 16 at 5).4 These
circumstances do not carry the defendants’ burden.

4

The defendants initially asserted that the complaint affirmatively alleged
$75,000 in property damage. (Doc. 1 at 2). They have since corrected that error.
3

As noted, the complaint asserts state-law causes of action, some of which
permit an award of punitive damages and/or emotional distress damages. The
plaintiffs seek such damages, along with “loss and use [sic] of their property,
economic loss [and] consequential damages” and “full replacement value of the
damaged property.” (Doc. 1 at 8, 11). The defendants assume the Court can
consider all these elements of damage in determining the amount in controversy,
but they are mistaken.
“When determining the jurisdictional amount in controversy in diversity
cases, punitive damages must be considered, [citations omitted], unless it is
apparent to a legal certainty that such cannot be recovered.” Holley Equipment
Co. v. Credit Alliance Corp., 821 F.2d 1531, 1535 (11th Cir. 1987). Alabama law
may allow punitive damages and emotional distress damages, but that is not here
relevant. The defendants’ theory of the Court’s jurisdiction is that all state claims
have been completely preempted by the Carmack Amendment, which means that
the plaintiffs’ “state law claims morph into a federal Carmack Amendment claim.”
Yellow Freight, 296 F. Supp. 2d at 1339. The relevant question is thus whether
punitive damages and emotional distress damages are recoverable under the
Carmack Amendment; if they are not, they cannot be considered in determining
the amount in controversy.
The Eleventh Circuit has not addressed this issue. Other courts of appeal
are split, with a majority of the courts (and all the more recent decisions) ruling
that neither punitive damages nor emotional distress damages are recoverable
under the Carmack Amendment. Compare Morris v. Covan World Wide Moving,
Inc., 144 F.3d 377, 382-83 (5th Cir. 1998) (punitive damages and emotional
distress damages are not recoverable under the Carmack Amendment); Gordon v.
United Van Lines, Inc., 130 F.3d 282, 285-87 (7th Cir. 1997) (same); and
Cleveland v. Beltman North American Co., 30 F.3d 373, 379-81 (2nd Cir. 1994)
(same as to punitive damages) with Reed v. Aaacon Auto Transport, Inc., 637 F.2d
1302, 1307 (10th Cir. 1981) (Carmack Amendment does not preclude awards of
4

punitive damages), overruled in part on other grounds, Underwriters at Lloyds of
London v. North American Van Lines, 890 F.2d 1112 (10th Cir. 1989) (en banc)
and Hubbard v. Allied Van Lines, Inc., 540 F.2d 1224, 1228 (4th Cir. 1976) (same).
Had the defendants acknowledged this issue and made any reasoned
argument that the Court should follow the older, minority view, the Court would
be required to weigh the relative merits of the two lines of cases. Because the
defendants have not done so, the Court need not do so, either, but may simply
conclude that the defendants have failed to meet their burden of showing that
punitive damages or emotional distress damages may be awarded in an action
under the Carmack Amendment.
The limits of the plaintiffs’ policy say little if anything about the value of
their claim. As this Court has noted, “a high policy limit does not establish a large
amount in controversy for the simple reason that the … claim may be for far les
than the policy limit.” Employers’ Mutual Casualty Co. v. Parker Towing Co.,
2007 WL 4577705 at *2 (S.D. Ala. 2007).
“While [a] settlement offer, by itself, may not be determinative, it counts
for something.” Burns v. Windsor Insurance Co., 31 F.3d 1092, 1097 (11th Cir.
1994). What it counts for, however, depends on the circumstances. As this Court
has noted, “[s]ettlement offers commonly reflect puffing and posturing, and such
a settlement offer is entitled to little weight in measuring the preponderance of the
evidence. On the other hand, settlement offers that provide specific information ...
to support [the plaintiff’s] claim for damages suggest the plaintiff is offering a
reasonable assessment of the value of [his] claim and are entitled to more weight.”
Jackson v. Select Portfolio Servicing, Inc., 651 F. Supp. 2d 1279, 1281 (S.D. Ala.
2009) (internal quotes omitted).
The settlement proposal advanced here falls in the former category; it offers
to settle for $22,500 without providing a single word of explanation how this
figure was derived. (Doc. 16-2 at 1). It is therefore entitled to “little weight” in
the jurisdictional analysis. This is especially so since the offer presumably takes
5

into account punitive damages and emotional distress damages, which the
defendants have failed to show can be awarded under the Carmack Amendment.
The best evidence of the amount in controversy under the Carmack
Amendment is the amount demanded by the plaintiffs in Count Six of the
amended complaint. The defendants correctly note that the amount in controversy
must be determined as of the time of removal and that jurisdiction then attaching
cannot be lost simply because the plaintiff lowers the amount demanded after the
case is removed.5 But the corollary to this rule is that post-removal evidence can
shed light on the amount in controversy at the time of removal.6 The amended
complaint does so, because it represents the first time the plaintiffs have identified
the damages they seek based solely on the single claim on which removal is
based.7
Because the defendants have not sustained their burden of establishing by a
preponderance of the evidence that the amount in controversy under the Carmack
Amendment exceeds $10,000, this action must be remanded to state court. The
defendants ask the Court, before remanding the action, to dismiss the state claims
5

“A court’s analysis of the amount-in-controversy requirement focuses on how
much is in controversy at the time of removal, not later.” Pretka v. Kolter City Plaza II,
Inc., 608 F.3d 744, 751 (11th Cir. 2010). “[E]vents occurring after removal which may
reduce the damages recoverable below the amount in controversy requirement do not oust
the district court’s jurisdiction.” Poore v. American-Amicable Life Insurance Co., 218
F.3d 1287, 1290-91 (11th Cir. 2000).
6

“[W]hat is prohibited are post-removal changes in the amount in controversy,
not post-removal clarifications of the amount that was in controversy at the moment of
removal.” Jackson, 651 F. Supp. 2d at 1282. The Court in Jackson thus properly
considered a post-removal affidavit from plaintiff’s counsel explaining the reasoning
behind a pre-removal settlement demand. Id.
7

Nor is the $6,130 demanded inherently suspect, since the only property
identified as damaged is a console piano, a storage cabinet and a bird bath. (Doc. 1 at 8).
While the complaint also seeks damages for loss of use, economic loss and consequential
damages (which the Court assumes without deciding may be awarded under the Carmack
Amendment), the defendants have offered no reason to believe there is much value in
such damages as applied to three pieces of household furnishings.

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on the grounds they are preempted by the Carmack Amendment. (Doc. 16 at 6).
Because the Court lacks subject matter jurisdiction over this action, it has no
authority to enter any such ruling.8 Similarly, the defendants ask the Court, before
remanding the action, to enter an order limiting the plaintiffs’ claim to $6,130.
They identify no legal principle permitting entry of such an order, and the Court
declines to investigate on their behalf.
CONCLUSION
For the reasons set forth above, the plaintiffs’ motion to remand is granted.
This action is remanded to the Circuit Court of Clarke County.
DONE and ORDERED this 26th day of October, 2017.
s/ WILLIAM H. STEELE
UNITED STATES DISTRICT JUDGE

8

“[O]nce a federal court determines that it is without subject matter jurisdiction,
the court is powerless to continue.” Underwriters at Lloyd’s v. Osting Schwinn, 613 F.3d
1079, 1092 (2010) (internal quotes omitted).
7