Butler v. Target Corporation
Filing
18
MEMORANDUM AND ORDER. The plaintiff's motion to remand (Dk. 6) is granted, the plaintiff's motion for fees and costs pursuant to § 1447(c), (Dk. 7) is granted, but the plaintiff's motion for sanctions pursuant to Fed. R. Civ. P. 1 1 (Dk. 7) is denied. The court retains limited jurisdiction for the sole purpose of determining the amount of costs/fees pursuant to the procedure outlined in this order. Subject to that reservation, this case is immediately remanded to the District Court of Shawnee County, Kansas. The clerk of the court is directed to mail a certified copy of this order to the clerk of the Shawnee County District Court of Kansas pursuant to § 1447(c). See attached for more details. Signed by U.S. District Senior Judge Sam A. Crow on 10/31/2012. (bmw)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
KERRI BUTLER, individually
and as the mother and
natural guardian of R.B.,
Plaintiffs,
vs.
Case No. 12-4092-SAC
TARGET CORPORATION,
Defendant.
MEMORANDUM AND ORDER
The case comes before the court on the plaintiff’s motion to
remand (Dk. 6) and motion for fees, costs and sanctions (Dk. 7). The
plaintiff Kerri Butler filed this slip-and-fall case in the District Court of
Shawnee County, Kansas. The defendant Target Corporation (“Target”)
removed this action alleging in its notice the existence of federal diversity
jurisdiction in that both the diversity requirement and the amount in
controversy requirement of $75,000.00 were satisfied. On the latter
requirement, Target asserted that the plaintiff had “placed no limit on the
amount of damages she is seeking” and that “[b]ased on reasonable
information and belief of Plaintiff’s alleged injuries and Plaintiff’s failure to
stipulate to lesser damages, the amount in controversy exceeds
$75,000.00.” (Dk. 1, pp. 2-3). In its notice, Target did acknowledge that the
“plaintiff has requested a judgment in her favor for $60,000 and for any
further relief the Court may deem just and proper.” (Dk. 1, p. 1, ¶ 3)
(underlining added). The plaintiff’s prayer in her state court petition actually
reads, “[p]laintiffs pray the Court enter Judgment in their favor for $60,000,
and for any other relief the Court may deem just and proper.” (Dk. 1-1, p.
4) (underlining added).
The plaintiff moves to remand arguing that her petition cannot
be read to seek more than $75,000.00. Instead, it “clearly sets forth a
$60,000 demand” and “does not request an undetermined amount for
emotional distress, future injuries, pain suffering, or other damages as
alleged by Defendants Notice of Removal.” (Dk. 6-1, p. 3). Target’s position
is that the plaintiff’s allegations on the amount in controversy are
“ambiguous” because of the prayer for “other relief” and that the allegations
for $60,000 are not “necessarily dispositive” nor “binding” on the
jurisdictional issue. (Dk. 14, p. 4).
“[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 . . . to the district court . . . embracing the place where such
action is pending.” 28 U.S.C. § 1441(a). A federal district court has original
“diversity” jurisdiction over an action between citizens of different states and
where the amount in controversy exceeds $75,000.00, exclusive of interest
and costs. 28 U.S.C. § 1332(a). “It is well-established that statutes
conferring jurisdiction upon the federal courts, and particularly removal
statutes, are to be narrowly construed in light of our constitutional role as
limited tribunals.” Pritchett v. Office Depot, Inc., 420 F.3d 1090, 1094-95
(10th Cir. 2005) (citation omitted). “Removal statutes are to be strictly
construed, and all doubts are to be resolved against removal.” Fajen v.
Found. Reserve Ins. Co., 683 F.2d 331, 333 (10th Cir. 1982). The removing
party bears the burden of establishing that removal jurisdiction exists.
McPhail v. Deere & Co., 529 F.3d 947, 953 (10th Cir. 2008).
Because the only issue here is whether the amount in
controversy exceeds $75,000.00, the court will narrow its inquiry to that
relevant law. In their briefing of this issue, the parties have overlooked that
Congress recently amended the procedure for removing certain civil actions.
See Federal Courts Jurisdiction and Venue Clarification Act of 2011 (“JVCA”),
Pub.L. No. 112–63, § 103(b), 125 Stat 760, 762 (amending 28 U.S.C. §
1446).1 As amended by the JVCA, section (c) to 28 U.S.C. § 1446 now lays
out the procedural requirements for removal based on diversity of
1
The JVCA took effect on January 6, 2012. As set out in a note to 28 U.S.C.
§ 1332, “Publ.L. 112-63, Title I, § 105, Dec. 7, 2011, 125 Stat. 762,
provided that: . . . the amendments made by this title . . . shall take effect
upon the expiration of the 30-day period beginning on the date of the
enactment of this Act [Dec. 7, 2011], and shall apply to any action or
prosecution commenced on or after such effective date.” For removal
actions, the commencement date is “the date the action or prosecution was
commenced, within the meaning of State law, in State court.” Id. The
plaintiff Butler commenced the instant action in state court after January 6,
2012.
citizenship. Of specific importance to the present case is the language
appearing at § 1446(c)(2), which reads:
(2) If removal of a civil action is sought on the basis of the jurisdiction
conferred by section 1332(a), the sum demanded in good faith in the
initial pleading shall be deemed to be the amount in controversy,
except that-(A) the notice of removal may assert the amount in controversy
if the initial pleading seeks-(i) nonmonetary relief; or
(ii) a money judgment, but the State practice either does
not permit demand for a specific sum or permits recovery
of damages in excess of the amount demanded; and
(B) removal of the action is proper on the basis of an amount in
controversy asserted under subparagraph (A) if the district court
finds, by the preponderance of the evidence, that the amount in
controversy exceeds the amount specified in section 1332(a).
This amendment caused the Tenth Circuit recently to comment that the
JVCA “requires a different approach . . . in diversity removals” from its rule
in McPhail that a removing defendant could present its own evidence of the
amount in controversy and “a plaintiff’s attempt to limit damages in the
complaint is not dispositive when determining the amount in controversy.”
Frederick v. Hartford Underwriters Insurance Company, 683 F.3d 1242,
1247 n.3 (10th Cir. 2012). The JVCA establishes now for removal purposes
that “the sum demanded in good faith in the initial pleading shall be deemed
to be the amount in controversy,” subject to certain exceptions. Id.; see,
e.g., Gable v. MSC Waterworks Co., Inc., 2012 WL 1118980, at *3 (N.D.
Okla. 2012) (“In cases removed to federal court based on diversity
jurisdiction, ‘the sum demanded in good faith in the initial pleading shall be
deemed to be the amount in controversy ....’ 28 U.S.C. § 1446.”)
The first procedural question is whether any exception applies
that permits the defendant to assert a different amount in controversy than
what the plaintiff has alleged in her initial pleading. The first exception is if
the plaintiff seeks nonmonetary relief. Target’s notice of removal concedes
that the plaintiff’s petition requests a judgment only for “$60,000” but also
seeks further relief as “the Court may deem just and proper.” The plaintiff’s
general catchall prayer for “other relief” is not the same as a specific claim
for “nonmonetary relief” contemplated in § 1446(c)(2)(A)(i). Kansas law on
pleading for monetary relief in non-contract actions either “must state only
that the amount sought as damages is in excess of $75,000” or “must
specify the amount sought as damages” when “demanding relief for money
damages in an amount of $75,000 or less.” K.S.A. 60-208(a)(2).
Consequently, Kansas law did not just permit but required the plaintiff to
plead a specific sum of damages here. See 28 U.S.C. § 1446(c)(2)(A)(ii).
Still, Kansas law also recognizes that a final judgment, other than a default
judgment, “should grant relief to which each party is entitled, even if the
party has not demanded that relief in its pleadings.” K.S.A. 60-254(c). It
seems that Kansas “permits recovery of damages in excess of the amount
demanded.” 28 U.S.C. § 1446(c)(2)(A)(ii). Thus, the defendant’s “notice of
removal may assert the amount in controversy” pursuant to §
1446(c)(2)(A).
Removal “is proper on the basis of an amount in controversy
asserted” in the notice of removal “if the district court finds, by the
preponderance of the evidence, that the amount in controversy exceeds the
amount specified in section 1332(a).” 28 U.S.C. § 1446(c)(2)(B). Prior to the
JVCA, the Tenth Circuit in recent decisions employed a preponderance of
evidence approach to this question, and this approach seems consistent with
the JVCA’s standard at § 1446(c)(2)(B):
Under the preponderance standard, defendants seeking to remove
must prove jurisdictional facts by a preponderance of the evidence.
See McPhail, 529 F.3d at 954 (“The ‘preponderance of the evidence’
standard applies to jurisdictional facts, not jurisdiction itself.”);
Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 540–41 (7th Cir.
2006) (“What the proponent of jurisdiction must ‘prove’ is contested
factual assertions. . . . Jurisdiction itself is a legal conclusion, a
consequence of facts rather than a provable ‘fact’.”). There are several
ways this can be done:
by contentions, interrogatories or admissions in state court; by
calculation from the complaint's allegations[;] by reference to
the plaintiff's informal estimates or settlement demands[;] or by
introducing evidence, in the form of affidavits from the
defendant's employees or experts, about how much it would cost
to satisfy the plaintiff's demands.
McPhail, 529 F.3d at 954 (10th Cir. 2008) (quoting Meridian, 441 F.3d
at 541–42). The defendant is thus “entitled to present its own estimate
of the stakes; it is not bound by the plaintiff's estimate” in the
complaint. Back Doctors [Ltd. v. Metro. Prop. & Cas. Ins. Co.,] 637
F.3d [827] at 830 [(7th Cir. 2011)]. State pleading standards do not
affect a defendant's entitlement to present this evidence, and a
plaintiff's attempt to limit damages in the complaint is not dispositive
when determining the amount in controversy. Regardless of the
plaintiff's pleadings, federal jurisdiction is proper if a defendant proves
jurisdictional facts by a “preponderance of the evidence” such that the
amount in controversy may exceed $5,000,000. Once a defendant
meets this burden, remand is appropriate only if the plaintiff can
establish that it is legally impossible to recover more than $5,000,000.
See St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288–
89, 58 S.Ct. 586, 82 L.Ed. 845 (1938); Back Doctors, 637 F.3d at 830;
Bell, 557 F.3d at 959.
Frederick v. Hartford Underwriters Ins. Co., 683 F.3d at 1247 (discussed the
amount in controversy requirement for federal jurisdiction under the Class
Action Fairness Act (“CAFA”), adopted the preponderance standard used in
McPhail, and recognized the JVCA to have “largely codified the holding of
McPhail” on the preponderance standard) (footnote omitted).
Here, it is not facially apparent from the face of the slip-and-fall
petition that the plaintiffs’ recoverable damages are likely to exceed
$75,000.00. The damages are limited to the minor’s broken arm and her
emotional distress, and the mother’s emotional distress, lost wages and
related expenses. The defendant attaches what it describes as “claim notes”
without any evidentiary foundation. (Dk. 14-8, pp. 1-3). These notes
indicate that the child broke her dominant arm “in two places,” that the child
received “outpatient surgery,” and that the arm cast came off one month
later. Id. at 1. In a second telephone call, the plaintiff mother referred to
approximately “$6k in specials plus” the arm “is not healing correctly” so
other options are being considered including physical therapy. Id. at 3. The
defendant offers nothing from which the court would infer that these
injuries, the expected medical treatment, the associated emotional distress
and lost wages are of such seriousness here that the total amount of
monetary damages would be likely to exceed $75,000.00. The defendant
offers nothing but a conclusory allegation that “a reasonable reading of the
Petition shows that the amount Plaintiff has placed in controversy exceeds
$75,000.00.” (Dk. 1, p. 2). While the plaintiffs’ pleading of claimed damages
may not be binding under § 1446(c)(2), nor is the defendant’s conclusory
assertion binding particularly in light of the required preponderance
standard. The defendant must do more than point to the theoretical
availability of certain categories of damages or possible medical expenses.
The defendant offers no reasonable estimates for any of the likely categories
of damages and costs recoverable in this slip-and-fall case that involves only
a broken arm to a child. Simply put, the defendant fails to offer anything
approaching a preponderance of evidence on the relevant jurisdictional facts
and the defendant’s conclusory allegations on the amount in controversy are
insufficient.
As for the plaintiff’s refusal to stipulate to an amount in
controversy less than the jurisdictional threshold, this fact alone is not
enough to justify a finding of jurisdiction absent other persuasive evidence:
One may not reasonably infer from Plaintiff's “refusal” to stipulate to a
limitation on her claims that the claims are reasonably likely to exceed
$75,000. Any number of reasons can account for Plaintiff's failure to
execute Defendant's proposed stipulation: Plaintiff may not yet know
the value of her claims; she may prefer to be uncooperative with
Defendant; or the stipulation may simply have gotten lost in the mail
(it is not clear if Plaintiff affirmatively declined to sign the stipulation,
or if she just never responded to Defendant's letter). The Court will not
make a finding of its subject-matter jurisdiction upon the mere whim
of Plaintiff's counsel to resist signing a stipulation.
Martin v. Wal-Mart Stores, Inc., 709 F. Supp. 2d 345, 350 (D.N.J. 2010)
(footnote omitted); see Schillaci v. WalMart, 2012 WL 4056758 at *2 (W.D.
Pa. 2012) (“Courts that applied this evidentiary standard [preponderance of
evidence standard] in similar cases before it was uniformly required have
rejected the notion that the failure to stipulate, on its own, will defeat a
Motion to Remand.” (citations omitted)).
Concerning the refusal to stipulate, the defendant overstates
Eatinger v. BP America Production Co., 524 F. Supp. 2d 1342, 1347 (D. Kan.
2007), as holding that “remand is not proper” when the plaintiff “refuses” to
“stipulate to an amount below the jurisdictional threshold.” (Dk. 14, p. 4).
The defendant’s notice of removal in Eatinger included affidavits with figures
and percentages that “moved beyond conclusory statements, and instead
provided the reasonable probability that the amount in controversy would
exceed the jurisdictional amount.” 524 F. Supp. 2d at 1347. The court in
Eatinger recognized that there was precedent in Kansas that a plaintiffs’
specific pleading of damages below the jurisdictional amount and their
express stipulation to the same “effectively waived any relief in excess of the
jurisdictional amount” and resulted in the defendants being unable to carry
their burden of preventing remand. Id. Thus, Eatinger recognizes that when
the plaintiffs plead specific damages less than jurisdictional amount but
refuse to stipulate and waive relief in excess of that amount, the defendants
may still be able to carry their burden of proving the jurisdictional amount.
Because Target has failed to carry its burden here, the court finds that
federal jurisdiction is not proper and grants the plaintiff’s motion to remand.
The plaintiff moves for fees and costs pursuant to 28 U.S.C. §
1447(c) arguing that Target lacked “an objectively reasonable basis for
seeking removal,” Martin v. Franklin Capital Corp., 546 U.S. 132, 141
(2005). The plaintiff points out Target’s unsupported allegations and its lack
of legal and factual authority for removal. Target summarily denies that it
lacked an objectively reasonable basis for removal.
“’Absent unusual circumstances, courts may award attorney’s
fees under § 1447(c) only where the removing party lacked an objectively
reasonable basis for seeking removal. Conversely, when an objectively
reasonable basis exists, fees should be denied.’” Porter Trust v. Rural Water
Sewer and Solid Waste Management Dist. No. 1, 607 F.3d 1251, 1253 (10th
Cir. 2010) (quoting Martin, 546 U.S. at 141). The court finds that the
plaintiff has shown the removal here was objectively unreasonable and that
Target is unable to articulate an objectively reasonable basis for filing the
notice of removal. The state court petition here does not allege damages
exceeding $75,000.00, and the face of the petition does not describe an
incident or injuries of such seriousness as to make it likely for the
jurisdictional amount to be reached. The defendant does not proffer any
evidence suggesting a reasonable factual basis for believing this threshold
would likely be reached. Finally, the plaintiff’s mere refusal to stipulate to an
amount of damages less than the jurisdictional amount is not an objectively
reasonable basis for removal, because this failure to stipulate is not a basis
for federal jurisdiction by itself. The court grants the plaintiff’s motion for
costs and attorney fees “incurred as a result of the removal,” namely the
reasonable amount of attorney's fees and costs incurred in preparing and
filing the motion to remand and motion for fees and costs.
The parties are directed to confer and reach agreement as to the
amount of costs/fees if possible. If no agreement is reached, the plaintiff
shall file her motion for determination of the cost/fees amount by November
21, 2012. The motion shall include “a statement that . . . the parties have
been unable to reach an agreement with regard to the” amount of
costs/fees, “a memorandum setting forth the factual basis” for the criteria
relevant in determining the reasonable costs/fees, and “time records,
affidavits or other evidence” in support of the requested amount of
costs/fees. See D. Kan. Rule 54.2(c). The defendant shall have 14 days to
file a response. Id. at 54.2(d).
The plaintiff also seeks sanctions pursuant to Fed. R. Civ. P. 11.
The plaintiff has not complied with the procedural requirements for sanctions
under Rule 11 in failing to file a motion separate from any other motion and
in serving but not filing the motion within the safe harbor period. For these
reasons, the court will summarily deny the request for sanctions, particularly
after reviewing additional email submitted by the defendant’s counsel
regarding efforts to resolve the issue of remand.
IT IS THEREFORE ORDERED the plaintiff’s motion to remand
(Dk. 6) is granted, the plaintiff’s motion for fees and costs pursuant to §
1447(c), (Dk. 7) is granted, but the plaintiff’s motion for sanctions pursuant
to Fed. R. Civ. P. 11 (Dk. 7) is denied;
IT IS FURTHER ORDERED that the court retains limited
jurisdiction for the sole purpose of determining the amount of costs/fees
pursuant to the procedure outlined above. Subject to that reservation, this
case is immediately remanded to the District Court of Shawnee County,
Kansas. The clerk of the court is directed to mail a certified copy of this
order to the clerk of the Shawnee County District Court of Kansas pursuant
to § 1447(c).
Dated this 31st day of October, 2012, Topeka, Kansas.
s/ Sam A. Crow_____________________
Sam A. Crow, U.S. District Senior Judge
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