Johnson et al v. Tennessee Gas Pipeline, LLC et al

Filing 10

MEMORANDUM OPINION & ORDER: IT IS ORDERED that the 6 MOTION to Remand to State Court by Plaintiffs is DENIED. Signed by Judge Joseph M. Hood on 9/28/2018.(GLD)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
ANDREA JOHNSON, et al.,

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Plaintiffs,
v.
TENNESSEE GAS PIPELINE, LLC,
et al.,
Defendants.

Civil Case No.
5:17-cv-00483-JMH
MEMORANDUM OPINION
AND ORDER

***
This matter is before the Court on Plaintiffs’ Motion to
Remand to State Court.

[DE 7].

Defendants have responded [DE 8]

and Plaintiffs replied [DE 9], thus, Plaintiffs’ motion is ripe
for decision.
and

being

Having reviewed the motion, response, and reply,

otherwise

adequately

advised,

the

Court

will

deny

Plaintiffs’ motion for the reasons set forth below.
Background
This case arises from an incident alleged to have occurred on
August 1, 2016.
station

owned

Plaintiffs allege that a natural gas compression
and

operated

by

Tennessee

Gas

Pipeline,

“discharged natural gas condensate and compressor oil.”
Compl. ¶10].

LLC

[DE 1,

Plaintiffs allege the condensate contained “toxic

compounds including, but not limited to, Benzene, Heptane, and
Decane.” [Id. at ¶12]. This discharge allegedly “created a visible
oily film which settled on Plaintiffs’ persons and Plaintiff’s

physical

and

personal

property”

and

caused

“temporary

and

permanent damage to Plaintiff’s physical and personal property as
well as emotional distress and inconvenience.” (Id. at ¶¶14, 16.)
Plaintiffs

also

claim

personal

injuries

resulted

exposure to the condensate and compressor oil.

from

their

[Id. at ¶17].

Plaintiffs’ complaints against the Tennessee Pipeline and Kinder
Morgan defendants include negligence, negligence per se; product
liability;

temporary

nuisance;

trespass;

battery; and punitive damages.

res

ipsa

loquitor;

Plaintiffs further allege that

A.S.T. Environmental, Inc.; AMEC Foster Wheeler Environment &
Infrastructure, Inc.; and Clean Harbors Environmental Services,
Inc. (collectively referred to by plaintiffs as the “Remediation
Defendants”), engaged in “remediation efforts” at their property
and “were negligent in their efforts to rid Plaintiffs’ home,
personal property and real property of the remnants of the natural
gas condensate and compressor oil discharge.” (Compl., at ¶¶7-9,
44-46.)

Plaintiffs

assert

counts

for

negligence

and

punitive

damages against the Remediation Defendants.
Plaintiffs filed their lawsuit in Powell Circuit Court on
June 20, 2017.

The parties exchanged discovery over the following

months. Defendants served Request for Admissions, Interrogatories,
and Requests for Production of Documents on Plaintiffs in an effort
to determine the amount in controversy.

Although Plaintiffs did

not initially admit or deny that the amount in controversy exceeded
2

$75,000, after removal Plaintiffs supplemented their answers to
discovery and admitted that they were not seeking in excess of
$75,000. The parties appear to agree that diversity of citizenship
is not at issue in the motion to remand.
Standard
The statute authorizing removal, 28 U.S.C. § 1441, provides
that an action is removable only if it initially could have been
brought in federal court. A federal court has original “diversity”
jurisdiction where the suit is between citizens of different states
and the amount in controversy exceeds $75,000, exclusive of costs
and interest.

28 U.S.C. § 1332(a).

Therefore, a defendant

desiring to remove a case from state to federal court has the
burden of establishing the diversity jurisdiction requirements of
an

original

federal

court

controversy requirement.

action,

including

the

amount

in

Chapman v. Houston Welfare Rights Org.,

441 U.S. 600, 612 n. 28 (1979). That burden is not an insubstantial
one.

McKinney v. ICG, LLC, No. 13-cv-12, 2013 WL 1898632, at *1

(E.D. Ky. May 7, 2013).
Where, as here, the complaint seeks an unspecified amount of
damages “that is not self-evidently greater or less than the
federal

amount-in-controversy
carry

its

requirement,”

burden

by

a

the

preponderance

removing

defendants

must

of

the

evidence.

Id. at *2 (E.D. Ky. May 7, 2013) (citing Gafford v.

Gen. Elec. Co., 997 F.2d 150, 158 (6th Cir.1993), abrogated on
3

other grounds by Friend, 530 U.S. 77).

The preponderance-of-the-

evidence test requires defendants to support their claims to
jurisdiction

by

producing

“competent

proof”

of

the

necessary

“jurisdictional facts.” Id. (citing Gafford, 997 F.2d at 160)
(internal

citations

omitted).

“Competent

affidavits, documents, or interrogatories.

proof”

can

include

Ramsey v. Kearns, No.

12-cv-06, 2012 WL 602812, at *1 (E.D. Ky. Feb. 23, 2012) (citing
Gentek Bldg. Prods., Inc. v. Sherwin–Williams Co., 491 F.3d 320,
330 (6th Cir. 2007) (internal citation omitted)).
If the defendant does not produce evidence showing it is more
likely than not that the plaintiffs' claims exceed $75,000, the
case must be remanded to state court.

Id.

Federal courts are

courts of limited jurisdiction, therefore, any doubts regarding
federal jurisdiction should be construed in favor of remanding the
case to state court.

Shamrock Oil & Gas Corp. v. Sheets, 313 U.S.

100, 109 (1941); Walsh v. American Airlines, Inc., 264 F. Supp.
514, 515 (E.D. Ky. 1967).

Discussion
Here, because Defendant removed this case from state court,
it has the burden of proving that the requirements of diversity
jurisdiction, including the amount in controversy, are satisfied
by a preponderance of the evidence.
*2.

McKinney, 2013 WL 1898632, at

“[I]n reviewing the denial of a motion to remand, a court
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looks to whether the action was properly removed in the first
place.”

Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 871–72

(6th Cir. 2000).

Regarding the amount in controversy, Defendant

states as follows in its Notice of Removal:
14. In Plaintiffs’ responses to TGP’s Request
for Admissions served on July 21, 2017,
Plaintiffs refused to admit or deny that the
amount in controversy exceeded $75,000, the
jurisdictional threshold of this Court.
15. Upon information and belief based on TGP’s
thorough investigation, including allegations
of the Plaintiffs’ Complaint and Plaintiffs’
discovery responses to TGP and Defendant Clean
Harbors
Environmental
Services,
Inc.,
Plaintiff Andrea Johnson seeks compensatory
damages in excess of $200,000.
16. The Plaintiffs also seek punitive damages.
Even applying a conservative ratio of 1:1
punitive damages to Plaintiff Andrea Johnson’s
claimed compensatory damages, the amount in
controversy exceeds $400,000, in excess of
five times the jurisdictional requirement of
this Court. See, e.g., Heyman v. Lincoln
National Life Insurance Company, Civil Action
No. 3:16-cv-37-DJH-DW, 2017 WL 3274452, *4
(W.D. Ky. April 27, 2017) (noting that a 1:1
punitive-damages
ratio
was
“minimal”);
Proctor v. Swifty Oil Co., Inc., No. 3:12-CV00490-TBR, 2012 WL 4593409, *2 (W.D. Ky. Oct.
1, 2012) (acknowledging that “the Supreme
Court has embraced a punitive-to-compensatory
damages ratio near 4-to-1,” and holding that
even a “ratio of 2-to-1” was a “restrictive
estimate[] of compensatory and punitive
damages.”)
17. Considering the compensatory damages
described in Plaintiff Andrea Johnson’s
discovery responses, and the 1:1 punitive
damages ratio, the amount in controversy with
respect to Plaintiffs’ claims exceeds the
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jurisdictional
Court.

minimum

threshold

of

this

18. This Court has supplemental jurisdiction
over the claims of R.B. pursuant to 28 U.S.C.
§ 1367.
[DE 1, Defendant’s Notice of Removal at ¶¶ 14-18].
Plaintiffs argue that they eventually supplemented their
discovery answers to state that they are not seeking in excess of
$75,000.

Amount-in-controversy, for purposes of removal under 28

U.S.C. § 1441, is assessed at the time of removal, not answers to
discovery a plaintiff may later make.

Notably, Plaintiffs simply

answered that they are not seeking in excess of $75,000; they have
not stipulated to that.
The Court "review[s] the damages sought by Plaintiffs at the
time of removal."

Hayes v. Equitable Energy Resources Co., 266

F.3d 560, 573 (6th Cir. 2001).

Plaintiffs claimed that the amount

in controversy would not exceed $75,000 only after this case had
already been removed.

Events occurring after removal, including

post-removal supplemental answers to discovery, "which reduce the
amount

recoverable

jurisdiction."

below

the

statutory

limit

do

not

oust

St. Paul Mercury Indem. Co. v. Red Cab Co., 303

U.S. 283, 290 (1938).

At the time of removal, Plaintiffs had

provided discovery responses that included more than $200,000 in
property damages alone as related to Johnson, and refused to
provide any value or limitation on recovery for any other personal

6

or real property damage, personal injury including past, present,
and future medical bills, pain and suffering, mental anguish, lost
wages, lost earning capacity, punitive damages, and consequential
damages.

Plaintiffs now claim the $200,000 in damages they

attached to their discovery responses were not the actual value
they

are

seeking;

jurisdiction

is

made

however,
at

the

again,
time

of

the

determination

removal.

At

that

of

time,

Defendants had information that reasonably supported $200,000 in
property damages alone.

As Defendants noted, a 1:1 ratio of

punitive damages based only on property damages would exceed the
jurisdictional amount of this court.
The law makes clear that a good faith claim
for punitive damages may augment compensatory
damages
in
determining
the
amount
in
controversy unless it can be said to a legal
certainty that plaintiff cannot recover
punitive damages in the action. . . . If
relevant state law permits punitive damages on
the facts alleged, such punitive damages are
part of the amount in controversy for
jurisdictional
amount
purposes.
White v. J.C. Penney Life Ins. Co., 861 F.Supp. 25, 27 (S.D. W.Va.
1994) (citing Bell v. Preferred Life Assurance Society, 320 U.S.
238 (1943)).

While it appears property damages and punitive

damages alone could reasonably exceed the jurisdictional limit of
this court, that does not include any potential award for medical
expenses, lost wages, consequential damages, or an award of pain
and suffering. Even small awards for these claimed damages further

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supports Defendant’s position that the amount in controversy in
this matter was in excess of $75,000 at the time of removal.

Thus,

the Court finds that at the time of removal, a realistic assessment
of the record establishes the jurisdictional amount of $75,000.
Accordingly, for the reasons stated herein and the Court being
otherwise sufficiently advised, IT IS ORDERED that Plaintiffs’
Motion to Remand be, and the same hereby is, DENIED.
This the 28th day of September, 2018.

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