Stell et al v. Gibco Motor Express, LLC

Filing 39

ORDER granting 26 Motion to Remand: This action is REMANDED to the Circuit Court of the Twentieth Judicial Circuit, St. Clair County, Illinois, for lack of federal subject matter jurisdiction. Plaintiffs request for an award of attorney fees pursuant to 28 U.S.C. § 1447(c) is DENIED. Signed by Judge David R. Herndon on 5/9/2016. (dsw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
JOHN STELL and CHARLES WILLIAMS, JR.,
on behalf of themselves individually and as class
representatives on behalf of similarly situated
employees,,
Plaintiffs,
v.

No. 3:15-cv-1105-DRH-DGW

GIBCO MOTOR EXPRESS, LLC,
Defendant.
ORDER
HERNDON, District Judge:
I.

INTRODUCTION

This matter is before the Court on the plaintiffs’ motion to remand (Doc.
26). For the following reasons, plaintiffs’ motion to remand is GRANTED.
II.

BACKGROUND

A. The Present Litigation
On August 28, 2015, plaintiffs, John Stell and Charles Williams, Jr., on
behalf of themselves individually and as class representatives on behalf of
similarly situated employees, filed a putative class action against defendant, Gibco
Motor Express, LLC (“Gibco”). Plaintiffs allege Gibco failed to pay its employees
overtime wages at time and a half for all hours worked over 40 hours a week in

violation of the Illinois Wage Payment and Collection Act and in breach of Gibco’s
Employee Handbook. Plaintiffs estimate the class includes approximately 150
employees with aggregate damages amounting to approximately $400,000 (Doc. 11 ¶ 28; Doc. 35 p. 6). Plaintiffs John Stell and Charles Williams, Jr. are citizens of
the State of Illinois. Gibco Motor Express, LLC is a citizen of the state of Indiana
(Doc. 7 ¶ 6). On October 6, 2015, Gibco removed the above captioned matter to
federal court pursuant to 28 U.S.C.A. §§ 1332(a) and 1441.
Presently pending is plaintiffs’ motion to remand to state court. Plaintiffs’
primary argument is that, because this is a putative class action, Gibco may not
remove this case pursuant to Section 1332(a) (traditional diversity jurisdiction).
Instead, plaintiffs insist, jurisdiction is only present if the jurisdictional
requirements set forth in Section 1332(d)(2), otherwise known as the Class Action
Fairness Act (“CAFA”), are satisfied. Plaintiffs argue that Gibco fails to establish
that the amount in controversy exceeds CAFA’s jurisdictional requirement of
$5,000,000.00 and therefore, the above-captioned matter should be remanded to
state court.
Gibco does not allege that the jurisdictional requirements of CAFA are
present. Instead, Gibco’s jurisdictional argument focuses entirely on traditional
diversity jurisdiction.

B. Related Action Previously Filed in the Southern District of Illinois
This action is the progeny of a similar action against Gibco that was
originally filed in the Southern District of Illinois in February 2012. See, Tyrone

Ross v. Gibco Motor Express, LLC, Case No. 3:12-cv-00184-JPG-SCW (“Ross
Action”). The Ross Action was filed directly in the Southern District of Illinois
pursuant to CAFA. In October 2014, the presiding judge issued a show cause
order directing the plaintiff show cause why the case should not be dismissed for
failure to meet CAFA’s amount in controversy requirement (Ross Action Doc. 89).
The plaintiff was given 30 days to correct the jurisdictional defect. Id. In response,
the plaintiff stated he did not believe there were sufficient grounds to assert the
aggregated amount in controversy exceeds the jurisdictional requirement of
$5,000,000.00 (Ross Action Doc. 90). Accordingly, the plaintiff asked the Court to
dismiss the action without prejudice for lack of subject matter jurisdiction.
Plaintiffs’ contend Gibco wrongfully removed this action because of the
prior dismissal in the Ross Action. However, the Ross Action was voluntarily
dismissed by the plaintiff because the plaintiff agreed CAFA jurisdiction did not
exist. Gibco has removed the present action under the traditional diversity
statute. As is explained more fully below, traditional diversity jurisdiction and
CAFA jurisdiction are separate bases for subject matter jurisdiction. The fact that
CAFA jurisdiction is lacking does not mean that traditional diversity jurisdiction
is also lacking. Moreover, in the Ross Action, the plaintiff, as the proponent of
federal jurisdiction, carried the burden of establishing jurisdiction. The plaintiff

in the Ross Action concluded he could not carry this burden and elected to seek a
voluntary dismissal.
III.

LAW AND ANALYSIS

A. Removal
“[A]ny civil action brought in a State court of which the district courts of the
United States have original jurisdiction, may be removed by the defendant or the
defendants, to the district court of the United States for the district and division
embracing the place where such action is pending.” 28 U.S.C. § 1441(a). The
removal statute is to be interpreted narrowly, and any doubt regarding
jurisdiction should be resolved in favor of the states. Schur v. L.A. Weight Loss

Ctrs, Inc., 577 F.3d 752, 758 (7th Cir. 2009).
B. CAFA Does Not Replace Traditional Diversity Jurisdiction
CAFA established a new form of diversity-based subject matter jurisdiction
for class actions with 100 or more class members, minimal diversity, and a $5
million aggregate amount in controversy. Despite the plaintiffs arguments to the
contrary,

CAFA

does

not

supplant

traditional

diversity

jurisdiction;

supplements it. As explained in Newberg:
CAFA does not replace the basic diversity requirements; it
supplements them. That means that a class action case not arising
under federal law can be lodged in federal court if it meets either the
basic diversity requirements or CAFA's requirements.

it

2 W. Rubenstein, Newberg on Class Actions § 6:6 (5th ed.) (emphasis in original). 1
As commentators and other courts have observed, nothing in the text of
Section 1332(d) purports to supplant or restrict the traditional diversity
jurisdiction conferred under Section 1332(a). Absent such an express provision,
the Court cannot conclude that CAFA is now the exclusive means for establishing
subject matter jurisdiction over class actions. See Lu Junhong v. Boeing Co., 792
F.3d 805, 818 (7th Cir. 2015) (“A law granting one sort of jurisdiction does not
implicitly negate others.”). Indeed, CAFA’s primary objective is to expand federal
subject matter jurisdiction over class actions. See Addison Automatics, Inc. v.

Hartford Cas. Ins. Co., 731 F.3d 740, 744 (7th Cir. 2013). To hold that CAFA
supplants traditional diversity jurisdiction would be inconsistent with this
objective.
Additionally, there are numerous post-CAFA decisions, including decisions
from the Seventh Circuit Court of Appeals, which indirectly 2 demonstrate
traditional diversity jurisdiction remains a viable basis for removal of class

See also 1 S. Gensler, Federal Rules of Civil Procedure, Rules and Commentary, Rule 23 (“CAFA
does “not supplant the general diversity jurisdiction provisions. Thus, a class action can still
qualify for federal jurisdiction under the general diversity jurisdiction provision…”); Fredman,
Plaintiff's Paradise Lost: Diversity of Citizenship and Amount in Controversy Under the Class
Action Fairness Act of 2005, 39 Loy. L.A.L. Rev. 1055 (2006) (post-CAFA, “the traditional path to
diversity jurisdiction remains a viable option for some class actions.”).
1

The Court was hardpressed to find cases directly considering this argument.2 In the few cases
the Court located, the matter was quickly and summarily rejected. See e.g., Hellmers v.
Countrywide Home Loans, Inc., 2008 WL 191306 (E.D. La. Jan. 22, 2008) (Africk, J.) (rejecting
proposition that removing defendants relying upon class allegations may only establish federal
jurisdiction by satisfying the requirements set forth in Section 1332(d)(2).); Steel City Group v.
Global Online Direct, Inc., 2006 WL 3484318 (W.D. Pa. Nov. 30, 2006) (McVerry, J.) (CAFA does
not supplant traditional diversity jurisdiction).
2

actions. See e.g., Avila v. CitiMortgage, Inc., 801 F.3d 777, 781 n.3 (7th Cir. 2015)
(noting that jurisdiction was present under both § 1332(a) and § 1332(d), in postCAFA putative class action); Hart v. FedEx Ground Package Sys. Inc., 457 F.3d
675, 676-77 (7th Cir. 2006) (“Because [the class representative] too is a citizen of
Pennsylvania, in the absence of CAFA nothing would support federal subjectmatter jurisdiction over these claims. That is because § 1332 requires ‘complete
diversity,’ meaning that no plaintiff may be from the same state as any defendant,
and in class actions only the citizenship of the named plaintiff counts.”); 3 County

of Nassau, N.Y. v. Hotels.com, LP, 577 F.3d 89, 93 (2d Cir. 2009) (remanding for
further jurisdictional analysis and noting that general diversity jurisdiction might
exist even if CAFA jurisdiction does not). 4
In summary, the Court finds CAFA does not prevent federal courts from
exercising jurisdiction over class actions that fall within the parameters of the
traditional diversity jurisdiction provision found in § 1332(a). Rather, CAFA
provides parties with an alternative to traditional diversity jurisdiction. Thus, the
Court may exercise jurisdiction over this case if the requirements of traditional

3

Here, the Seventh Circuit’s discussion regarding the possible bases for subject matter
jurisdiction demonstrate that CAFA does not affect those cases in which parties can already
establish complete diversity under § 1332(a).
4

Plaintiffs rely on several cases that discuss CAFA’s abrogation of the traditional diversity
standards. Plaintiffs misread these decisions. These decisions do not indicate that CAFA has
abrogated traditional diversity jurisdiction over class actions. Rather, they are simply noting that
when jurisdiction is exercised under § 1332(d), Congress adopted different requirements than
those found under traditional diversity jurisdiction. For instance, CAFA jurisdiction requires only
minimal diversity while traditional diversity jurisdiction requires complete diversity.

diversity jurisdiction are met. 5 In making that assessment, the Court applies
Seventh Circuit precedent regarding the exercise of traditional diversity
jurisdiction over class actions.
C. Traditional Diversity Jurisdiction is Lacking
Class actions are removable under traditional diversity if there is complete
diversity of citizenship between the class representatives and the defendants, that
is, no class representative is a citizen of the same state as any defendant, and the
required amount in controversy is met. See 28 U.S.C. § 1332(a)(1); 28 U.S.C. §
1367; Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 125 S.Ct. 2611,
2620–21, 162 L.Ed.2d 502 (2005); Synfuel Techs., Inc. v. DHL Express (USA),

Inc., 463 F.3d 646, 651–52 (7th Cir.2006); Rubel v. Pfizer Inc., 361 F.3d 1016,
1017 (7th Cir.2004); Garbie v. DaimlerChrysler Corp., 211 F.3d 407, 409, 410
(7th Cir.2000); In re Brand Name Prescription Drugs Antitrust Litig., 123 F.3d
599, 607 (7th Cir.1997); Stromberg Metal Works v. Press Mech., Inc., 77 F.3d
928, 930–33 (7th Cir.1996).
Here, complete diversity is unquestionably present. The only issue is
whether the amount in controversy is met. At the outset, the Court rejects the
contention that plaintiffs’ claims may be aggregated in order to meet the amount
in controversy requirement. As a general rule, putative class members’ individual
5

CAFA jurisdiction is not in issue. Gibco does not assert that jurisdiction is present under CAFA.
Moreover, both parties seem to be in agreement that the prospective damages are well below
CAFA’s requisite $5,000,000 jurisdictional amount in controversy. See Doc. 35 p. 3 (noting that
the action was previously dismissed because it “was determined that the prospective damages
were well below the $5,000,000 jurisdictional amount in controversy.”).

damages cannot be aggregated to reach the required amount in controversy. In re

Brand Name Prescription Drugs Antitrust Litigation, 123 F.3d 599, 607 (7th Cir.
1997). There is, however, one exception to the general rule. Under this exception,
“[i]f two or more plaintiffs unite to enforce a single right or title in which they have
a common and undivided interest, the amount in controversy is the aggregate in
which they each have their undivided share.” Id. at 608. Gibco insists the
exception applies because the putative class members’ claims arise from the same
alleged agreement. Gibco’s argument misses the mark.
In assessing whether aggregation is permitted, the question is whether the
putative class members’ claims are “separate and distinct” or “common and
undivided.” Griffith v. Sealtite Corp., 903 F.2d 495, 496 (7th Cir. 1990). Claims
are “common and undivided” only when there is both “a common fund from
which the plaintiffs seek relief” and the plaintiffs “have a joint interest in that
fund, such that…plaintiffs’ rights are…affected by the rights of co-plaintiffs.”

Travelers Prop. Cas. v. Good, 689 F.3d 714, 722 (7th Cir. 2012). Here, there is
no common fund and there is no joint interest. Each putative class member could
pursue a separate claim seeking to recover unpaid wages without implicating the
rights of his or her co-plaintiffs. Accordingly, the claims are separate and distinct;
the exception to the rule against aggregation does not apply.
Because the exception is not applicable, the required amount in controversy
is only met if at least one class representative has a claim that is worth more than
$75,000, exclusive of interest and costs. In conducting this analysis, the Court

considers the “amount required to satisfy the plaintiff's demands in full.” Oshana

v. Coca–Cola Co., 472 F.3d 506, 510–11 (7th Cir. 2006) (citations omitted).
Further, in the event of a removal, the amount in controversy is measured “on the
day the suit was removed.” This includes attorneys’ fees. See Smith v. American

General Life and Acc. Ins. Co., Inc., 337 F.3d 888 (7th Cir. 2001). Gibco, as the
party invoking federal jurisdiction, must set out the basis for jurisdiction and
prove any contested factual allegation by a preponderance of the evidence.

Blomberg v. Serv. Corp. Int'l, 639 F.3d 761, 763 (7th Cir. 2011); Carroll v.
Stryker Corp., 658 F.3d 675, 680 (7th Cir. 2011).
Here, the plaintiffs have contested Gibco’s estimate as to the amount in
controversy. The plaintiffs contend that, at most, each plaintiff’s damages amount
to approximately $2,700. 6 Given this assertion and Gibco’s failure to refute the
same, the likelihood that any one of the representative plaintiffs has damages that
exceed $75,000 is sufficiently remote to require Gibco to come forward with
“some evidence or argument to establish the plausibility of an inference that at
least one member of the class could cross the $75,000 threshold[.]” Pfizer, Inc. v.

Lott, 417 F.3d 725 725-26 (7th Cir. 2005). Gibco has not done this. Instead,
Gibco focuses on the potential recovery for multiple plaintiffs, 7 future attorney

6

The amount of unpaid wages allegedly due the entire class of 150 individuals is $400,000.
Notably, the plaintiffs indicate this amount is premised on discovery obtained from Gibco and
depositions that have already taken place. Gibco does not appear to contest this calculation. See
Doc. 35 p. 6 (arguing that because the plaintiffs’ aggregate damages are estimated to be $400,000
the jurisdictional amount in controversy is met).
7

(Doc. 35 p. 6) (arguing the jurisdictional amount in controversy is met because the plaintiffs
aggregated damages are in the neighborhood of $400,000).

fees, 8 and the fact that the complaint seeks damages, as to the class, in excess of
$50,000. 9 None of these arguments address the relevant question; whether the

individual claims of either named plaintiff exceed $75,000.
In summary, the record reflects the damages for each class representative
are, at most, $2,700 and Gibco has not demonstrated otherwise. Considering the
record before the Court, the relief available under the Illinois Wage Payment and
Collection Act,10 and the rule against aggregation, the Court cannot conceive how
the damages for any one of the named plaintiffs could possibly exceed $75,000.
D. Costs and Expenses under 28 U.S.C. § 1447(c)
Plaintiffs request an award of costs and expenses pursuant to 28 U.S.C. §
1447, which provides, in pertinent part, “An order remanding [a] case may
require payment of just costs and any actual expenses, including attorney fees,
incurred as a result of the removal.” 28 U.S.C. § 1447(c). In Martin v. Franklin

Capital Corp., 546 U.S. 132, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005), the Court
held that, “[a]bsent unusual circumstances, courts may award attorney's fees
8

(Doc. 35 p. 5) (arguing that future attorney fees in this complex action should be included in the
amount in controversy calculation); (Doc. 35 p. 6) (arguing that the jurisdictional amount in
controversy is met as to the class representatives if the Court considers compensatory damages,
the 2% statutory penalty, and future attorneys’ fees).
9

(Doc. 28 ¶4).

The IMWL provides for a punitive-damages award. See 820 ILL. COMP. STAT. 105/12(a)
(providing for “damages of 2% of the amount of any such underpayments for each month following
the date of payment during which such underpayments remain unpaid”). Gibco contends the
potential penalty period is 2-3 years (Doc. 35 p. 5). Even considering a 2% penalty over three
years, the Court fails to see how the amount in controversy could exceed $75,000 for a single
representative. Moreover, nothing in the record before the Court indicates that plaintiffs’ attorneys’
fees, at the time of removal, suffice to meet the jurisdictional mark.
10

under § 1447(c) only where the removing party lacked an objectively reasonable
basis for seeking removal.” Id. at 711. The Court concludes in its discretion that
an award pursuant to section 1447(c) is not appropriate in this case.
IV.

CONCLUSION

For the foregoing reasons, Plaintiffs’ motion to remand (Doc. 26) is
GRANTED. This action is REMANDED to the Circuit Court of the Twentieth
Judicial Circuit, St. Clair County, Illinois, for lack of federal subject matter
jurisdiction. Plaintiffs’ request for an award of attorney fees pursuant to 28 U.S.C.
§ 1447(c) is DENIED.
IT IS SO ORDERED.
Signed this 9th day of May, 2016.

Digitally signed by
Judge David R.
Herndon
Date: 2016.05.09
12:28:41 -05'00'
United States District Judge