Johnson et al v. Hui Huliau Staffing et al
OPINION & ORDER: 1. Plaintiff's 6 MOTION to Remand to State Court by Brian Eschrich, Steven Johnson 7 MOTION to Remand are GRANTED. 2. Defendant 5 MOTION to Dismiss for Lack of Jurisdiction by 4P Management Company DENIED as moot. 3. Case is REMANDED to state court and STRICKEN from docket. Signed by Judge Karen K. Caldwell on 2/18/2021.(GLD)cc: COR, Jessamine Circuit Court
Case: 5:20-cv-00440-KKC Doc #: 11 Filed: 02/18/21 Page: 1 of 4 - Page ID#: 61
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION -- LEXINGTON
STEVEN JOHNSON and
CIVIL NO. 5:20-440-KKC
OPINION AND ORDER
HUI HULIAU STAFFING LLC,
4P MANAGEMENT COMPANY, LLC and
KAYA ASSOCIATES, INC.,
** ** ** ** **
This matter is before the Court on Plaintiffs Steven Johnson and Brian Eschrich’s
(“Plaintiffs”) motions to remand (DE 6 & 7). A motion to dismiss also pends (DE 5), but the
remand requests are of threshold importance. For the following reasons, the Plaintiffs’
motions to remand will be granted and this case will be remanded to state court for lack of
subject matter jurisdiction.
Plaintiffs filed this action in Jessamine Circuit Court on August 14, 2020, against
Defendants Hui Huliau Staffing LLC (“HHS”), 4P Management Company, LLC (“4P”), and
Kaya Associates, Inc. (“Kaya”). In the complaint, Plaintiffs allege that Kaya failed to
compensate them properly for accrued vacation time. (DE 1-1 at 3-4, ¶ 1.) They assert claims
of “unpaid wages” under the Kentucky Wage and Hour Act (“KWHA”), “unjust enrichment,”
and “tortious interference with a business expectancy.” (Id. at 4, ¶¶ 4–7.)
On October 26, 2020, Defendant 4P removed the action1 to this Court, asserting that
jurisdiction over the matter exists pursuant to the “diversity jurisdiction” of federal courts
Defendant 4P argues that the other defendants’ consent to removal was not required, see 28 U.S.C. §
1446(b)(2)(A), because they were not served in Jessamine Circuit Court and remain unserved in the current case.
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set forth in 28 U.S.C. § 1332. Under that statute, this Court has jurisdiction over all matters
in which the amount in controversy exceeds $75,000 and is between citizens of different
states. For subject matter jurisdiction to exist under this statute, complete diversity of
citizenship must exist, meaning that “no party has the same citizenship as any opposing
party.” PaineWebber, Inc. v. Cohen, 276 F.3d 197, 201 (6th Cir. 2001). Neither party disputes
that there is complete diversity and the Court does not perceive there to be an issue. There
is, however, a dispute as to whether the total amount in controversy exceeds $75,000,
exclusive of interests and costs.
In the remand motions, Plaintiffs assert that the combined total for their unpaid
wages claim equals $38,421.002, but make no stipulations regarding the other two claims—
unjust enrichment and tortious interference with a business expectancy. A review of the
complaint, however, indicates that the claims might actually have no independent monetary
value. In the complaint, Plaintiffs allege that they solely seek damages for “unpaid wages”
and “attorney fees and costs.” (See DE 1-1 at 9).
Diversity jurisdiction exists “where the matter in controversy exceeds the sum or
value of $75,000, exclusive of interest and costs, and is between . . . citizens of different
states.” 28 U.S.C. § 1332(a). The amount in controversy must exceed the jurisdictional
minimum at the time of removal. See Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 871 (6th
Cir. 2000); see also Harnden v. Jayco, Inc., 496 F.3d 579, 581 (6th Cir. 2007). The burden
rests on the removing party to demonstrate the amount in controversy requirement by a
preponderance of the evidence. See Gafford v. Gen. Elec. Co., 997 F.2d 150, 158 (6th Cir.
(DE 10, n.1). Should they be served, however, they maintain that “[c]omplete diversity would exist regardless.”
“The pay rate for [Steven] Johnson equates to approximately $73.15/ hour and he was not paid for 356 hours.
That totals $26,041 in damages. [Brian] Eschrich’s pay rate is $50.74/hour and he was not paid for 244 hours.
That totals $12,380 in damages.” (DE 6 at 1, DE 7 at 1).
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1993), abrogated on other grounds by Hertz Corp. v. Friend, 130 S. Ct. 1181 (2010); see also
Northup Props., Inc. v. Chesapeake Appalachia, LLC, 567 F.3d 767, 769–70 (6th Cir. 2009)
(“The burden is on [the removing party] to show by a preponderance of the evidence that the
allegations in the complaint at the time of removal satisfy the amount in controversy
requirement.”). If the defendant fails to satisfy the burden with respect to either diversity
jurisdiction requirement, then the federal court is without subject matter jurisdiction to hear
the case. Id.
In matters removed from Kentucky state courts, the amount in controversy is
frequently unclear from the face of a complaint because state law prevents a plaintiff from
reciting a specific sum as alleged damages, Ky. R. Civ. P. 8.01(2), and permits recovery in
excess of the amount prayed for, Ky. R. Civ. P. 54.03(2). Parties thus often must engage in
pre-removal discovery before a defendant can ascertain that a case is removable. See 28
U.S.C. § 1446(b)(3) (“[I]f the case stated by the initial pleading is not removable, a notice of
removal may be filed within thirty days after receipt by the defendant . . . of a copy of an
amended pleading, motion, order or other paper from which it may first be ascertained that
the case is one which is or has become removable.”).
A removing party may satisfy the requirement via “competent proof” of the at-issue
amount, see Cleveland Hous. Renewal Project v. Deutsche Bank Tr. Co., 621 F.3d 554, 559
(6th Cir. 2010), which “can include affidavits, documents, or interrogatories” obtained during
pre-removal discovery. Bishop v. Tennessee Gas Pipeline, LLC, No. 5:17-CV-00424-JMH,
2018 WL 4686416, at *2 (E.D. Ky. Sept. 27, 2018). But notably, “mere averments are not
enough”; rather, “defendants must affirmatively come forward with some competent proof
showing that the amount-in-controversy requirement is satisfied.” Caudill v. Ritchie, No. 0928-ART, 2009 WL 1211017, at *3 (E.D. Ky. May 1, 2009) (citing Gafford, 997 F.2d at 160).
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In this case, opposing remand, Defendant 4P argues that even though compensatory
damages have been capped to $38,421.00, the amount in controversy also includes attorney
fees provided for by the Kentucky Wage and Hour Act. They specifically argue that Plaintiffs
have failed to take this into account. (DE 10). Unfortunately, as previously stated, the
defendant bears the burden of proving, by a preponderance of the evidence, that it is “more
likely than not” that the jurisdictional amount in controversy prerequisite is met. Gafford,
997 F.2d at 158. But, here, absolutely “no competent proof” regarding satisfaction of the
amount-in-controversy has been shown. Caudill, 2009 WL 1211017, at *3.
By asserting that attorney fees are recoverable by statute, KRS § 344.450, Defendant
argues that the fees—taken together with the $38,421.00—will exceed $75,000.00. However,
the only issue is that these are mere speculations. Without saying as much, 4P presumably
argues that the missing amount equates to over $36,579.00 in attorney fees, and that such
fees will ensure the amount-in-controversy requirement is satisfied. However, Defendant
attaches no competent proof to this blanket allegation. Defendant 4P has simply not satisfied
its burden. The Court declines to maintain it jurisdictionally.
Accordingly, for the reasons above, the Court hereby ORDERS that:
1. Plaintiffs’ motions to remand (DE 6 & 7) are GRANTED;
2. Defendant 4P’s motion to dismiss (DE 5) is DENIED as moot; and
3. This case shall be REMANDED to state court and STRICKEN from this
Court's active docket.
Dated February 12, 2021.
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