Labuy v. Peck et al
Filing
28
MEMORANDUM OPINION & ORDER: DENYING pla's 20 MOTION to Remand. Signed by Judge Joseph M. Hood on 5/31/11.(KJR)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
LEXINGTON
SEAN LABUY,
Plaintiff,
v.
DAVID L. PECK; and PRIME,
INC; and PRIME, INC. D/B/A
NEW PRIME INC.,
Defendants.
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) Civil Action No. 5:10-CV-158-JMH
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) MEMORANDUM OPINION AND ORDER
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This matter is before the Court upon Defendants’ Motion to
Remand Case from District Court to Madison Circuit Court [Record
No. 20] to which Plaintiff has filed a Response [Record No. 23].
The deadline for filing a reply having past, this motion is ripe
for decision.
In an order dated October 25, 2010, this Court held that
Defendants had successfully shown a probability that Plaintiff’s
demands met the amount in controversy requirement set forth in 28
U.S.C. § 1332.
[Record No. 7] (holding that a settlement letter,
in conjunction with Plaintiff’s listed claims in his complaint,
established an amount in controversy greater than $75,000); see
also Worthams v. Atlanta Life Ins. Co., 533 F.2d 994, 997 (6th Cir.
1976) (citation omitted) (“Absolute certainty is not required. It
is sufficient that there is a probability that the value of the
matter in controversy exceeds the jurisdictional amount.”). Nearly
five months later, Plaintiff filed a motion to remand [Record No.
20] acknowledging that he could not prove lost wages and, thus,
could
not
recover
damages
in
excess
of
$75,000.
Plaintiff
stipulated that he would not “seek lost wages in any negotiations
and/or at trial.”
Id. at para. 3.
Plaintiff argues that, as a
result, this Court lacks subject-matter jurisdiction because the
amount in controversy has fallen below the amount set forth in 28
U.S.C. § 1332.
Courts are obliged to consider whether they have proper
jurisdiction to decide the matter before them.
Steel Co. v.
Citizens for a Better Env’t, 523 U.S. 83, 95 (1988) (citing Capron
v. Van Noorden, 6 U.S. (2 Cranch) 126, 126-27 (1804)).
This
obligation applies regardless of whether the case originated in the
federal court or began in state court and was removed, and the
obligation to consider whether subject-matter jurisdiction exists
remains ongoing throughout the pendency of a case before the Court.
See id.; 28 U.S.C. § 1447(c) (“If at any time before final judgment
it
appears
that
the
district
court
lacks
subject
matter
jurisdiction, the case shall be remanded.”); see also Powerex Corp.
v. Reliant Energy Servs., Inc., 551 U.S. 224, 230 (2007) (“Nothing
in the text of § 1447(c) supports the proposition that a remand for
lack of subject-matter jurisdiction is not covered so long as the
case was properly removed in the first instance.”).
Where an
action
original
is
removed
to
this
Court
2
on
the
basis
of
jurisdiction under 28 U.S.C. § 1332, the amount in controversy is
evaluated as of the time of removal.
Northup Props., Inc. v.
Chesapeake Appalachia, L.L.C., 567 F.3d 767, 769-70 (6th Cir. 2009)
(citing Hayes v. Equitable Energy Res. Co., 266 F.3d 560, 572 (6th
Cir. 2001).
Thus, “events occurring after removal that reduce the
amount in controversy do not oust jurisdiction.”
Rogers v. Wal-
Mart Stores, Inc., 230 F.3d 868, 872 (6th Cir. 2000) (citation
omitted).1
1
Multiple district courts throughout the Sixth Circuit have
openly questioned whether this holding of Rogers v. Wal-Mart
Stores, Inc., 240 F.3d 868, 872 (6th Cir. 2000), was abrogated by
the Supreme Court’s decision in Powerex Corp. v. Reliant Energy
Servs., 551 U.S. 224, 232 (2007). See Baldori v. Delta Air Lines,
Inc., No. 1:11-CV-102, 2011 U.S. Dist LEXIS 33546, at *5-7 (W.D.
Mich. Mar. 29, 2011) (listing multiple decisions recognizing that
Rogers has been abrogated by Powerex including Stratton v.
Konecranes, Inc., No. 5:10-CV-66-KSF, 2010 U.S. Dist. LEXIS 52910,
at *7 (E.D. Ky. May 28, 2010), as well as several cases in which
district courts distinguished Rogers on its facts). But see, e.g.,
Great Tenn. Pizza Co. v. BellSouth Telecomm., Inc., No. 3:10-CV151, 2011 U.S. Dist. LEXIS 46968, at *16-18 (E.D. Tenn Apr. 29,
2011) (relying on the holding in Rogers that post-removal
assertions regarding the amount in controversy does not divest the
court of diversity jurisdiction); JSC Terminal, LLC v. Farris, No.
5:10-CV-40-R, 2010 U.S. Dist. LEXIS 45766, at * 4 (W.D. Ky. May 10,
2010) (relying on the holding in Rogers that post-removal
assertions regarding the amount in controversy does not divest the
court of diversity jurisdiction); Smith v. Appalachian Reg’l
Healthcare, Inc., No. 07-166-ART, 2009 U.S. Dist LEXIS 11313, at *7
(E.D. Ky. Feb. 12, 2009) (relying on the holding in Rogers that
post-removal assertions regarding the amount in controversy does
not divest the court of diversity jurisdiction). Powerex, however,
did not address jurisdiction under 28 U.S.C. § 1332, and, thus, did
not address the requirement that this court must evaluate the
amount in controversy as the complaint stood at the time of
removal.
See Northup Props., Inc. v. Chesapeake Appalachia,
L.L.C., 567 F.3d 767, 769-70 (6th Cir. 2009). Further, it remains
the case that “subsequent events that reduce the amount below the
statutory requirement do not” divest this Court of subject-matter
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In considering Plaintiff’s second amended complaint, the Court
has already determined that there was an adequate amount in
controversy at the time of removal to establish jurisdiction under
28 U.S.C. § 1332 despite Plaintiff’s failure to request a set
amount in damages. Specifically, the Court concluded that a letter
from Plaintiff’s counsel to Defendants authorizing a settlement of
the matter for $125,0000 reflected “a reasonable estimate of the
plaintiff’s claim” at the time of removal.
[Record no. 7, p. 5-6]
(relying on Cohn v. Petsmart, Inc., 281 F.3d 837, 840 (9th Cir.
2002)). Further, Plaintiff’s stipulation does not suggest that the
amount in controversy did not reach the jurisdictional limit as of
the
time
of
removal
but,
rather,
reflects
a
post-removal
reevaluation of the action in which Plaintiff has determined that
he values his case at no more than $72,500 because he “will be
unable to present sufficient proof of
. . . lost wage[s] . . . and
has therefore instructed Plaintiff’s counsel to drop his claim for
lost wages.”
[Record No. 20, para. 2].
Certainly, where a complaint does not state the amount of
jurisdiction under 28 U.S.C. § 1332. Jones v. Knox Exploration
Corp., 2 F.3d 181, 182-83 (6th Cir. 1993) (considering a case
brought originally under 28 U.S.C. § 1332). Thus, a post-removal
stipulation lowering the amount-in-controversy will not divest this
Court of jurisdiction requiring remand under 28 U.S.C. § 1447(c).
See 28 U.S.C. § 1447(c) (“If at any time before final judgment it
appears that the district court lacks subject matter jurisdiction,
the case shall be remanded.”); see also Powerex Corp. v. Reliant
Energy Servs., 551 U.S. 224, 232 n.1 (2007) (recognizing the
“general rule that postremoval events do not deprive federal courts
of subject-matter jurisdiction”).
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damages,
a
post-removal
stipulation
can
be
understood
as
a
clarification of the amount in controversy at the time of removal.
See Egan v. Premier Scales & Sys., 237 F. Supp. 2d 774, 778 (W.D.
Ky. 2002) (“[W]here a plaintiff provides specific information about
the amount in controversy for the first time, it should be deemed
a clarification rather than a change.”)(emphasis in original);
Fenger v. Idexx Labs., Inc., 194 F. Supp. 2d 601, 604-05 (E.D. Ky.
2002) (remanding the case to state court where Plaintiff submitted
an affidavit stipulating a limitation of damages to less than the
threshold amount and the complaint did not specify an amount of
damages).
While Plaintiff’s second amended complaint seeks no
specific amount of damages, the present matter is distinguishable
from Egan and Fenger because there was sufficient evidence from
which the Court could and did ascertain an amount in controversy
was greater than $75,000 at the time of removal.
[Record No. 7].
See generally
More importantly, the stipulation in Plaintiff’s
motion to remand does not suggest that the amount in controversy
failed
to
meet
the
threshold
required
for
subject-matter
jurisdiction under 28 U.S.C. § 1332 at the time of removal.
See
Jones v. Knox Exploration Corp., 2 F.3d 181, 183 (6th Cir. 1993)
(distinguishing
subsequent
events
that
change
the
amount
in
controversy which do not divest the court of jurisdiction under 28
U.S.C. § 1332 from “subsequent revelations that, in fact, the
required amount was or was not in controversy at the commencement
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of the action” which would divest the court of jurisdiction).
Rather, Plaintiff’s decision to “drop his claim for lost wages”
reflects a post-removal recognition by the Plaintiff that his claim
for lost wages cannot succeed.
This stipulation does not divest
this Court of jurisdiction under 28 U.S.C. § 1332, and, thus, does
not require remand to the state court pursuant to 28 U.S.C. §
1447(c). Accordingly, this Court shall deny Plaintiffs’ motion for
remand.
Accordingly, IT IS ORDERED that Plaintiff’s Motion to Remand
Case from District Court to Madison Circuit Court [Record No. 20]
is DENIED.
This the 31st day of May, 2011.
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