Loehn et al v. Lumber Liquidators et al
Filing
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ORDER & REASONS that the Plaintiffs' 30 Motion to Remand to State Court is DENIED. Signed by Judge Eldon E. Fallon on 2/24/16. (dno)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
THOMAS E. AND RACHEL M. LOEHN
CIVIL ACTION
VERSUS
NO. 15-01088
LUMBER LIQUIDATORS, INC., AND
LIBERTY MUTUAL INSURANCE COMPANY
SECTION "L" (5)
ORDER & REASONS
Before this Court is Plaintiffs’ Motion to Remand. (Rec. Doc. 30). Having read the
parties’ briefs and reviewed the applicable law, the Court now issues this Order & Reasons.
I.
BACKGROUND
On January 5, 2015, Plaintiffs Thomas and Rachel Loehn filed an action for redhibition
and damages against Defendants Lumber Liquidators, Inc. (“LLI”) and Liberty Mutual Insurance
Company (“Liberty Mutual”) in the First Parish Court for the Parish of Jefferson, State of
Louisiana. (Rec. Doc. 1-3). The original petition was filed solely on behalf of the Plaintiffs and
did not request a specific amount of damages. On March 4, 2015, after LLI answered, Plaintiffs
moved to amend their Petition to assert, for the first time, class action allegations. The court
granted Plaintiffs’ motion to amend on March 10, 2015 and Plaintiffs filed a First Supplemental
and Amended Petition for Damages. (Rec. Doc. 1-3 at 26). The Amended Petition included the
following class action allegations:
Plaintiffs, Thomas E. Loehn and Rachel M. Loehn, are plaintiff representative of a
class of plaintiffs pursuant to La. CCP art. 591 et seq., such purported class being
defined as follows: All persons or entities located in the State of Louisiana who
sustained direct and/or consequential personal injury, fear, fright, property damage or
other compensable damage arising out of Louisiana Product Liability Laws, the
Louisiana Law of Redhibition and/or any other applicable law, because of the sale of
an unsafe and hazardous product, as outlined infra.
(Rec. Doc. 1-3 at 26). On April 7, 2015, LLI removed the suit to the Eastern District of
Louisiana based on the Class Action Fairness Act, 28 U.S.C. §1332(d) (“CAFA”). (Rec. Doc. 1).
On June 23, 2015, following a transfer order by the Judicial Panel on Multidistrict
Litigation, the matter was transferred from the Eastern District of Louisiana to the Eastern
District of Virginia to be included in the National Class Multidistrict Litigation. In the transfer
order, the Judicial Panel on Multidistrict Litigation noted that “all actions involve common
factual questions regarding whether LLI falsely represented that its Chinese-manufactured
laminate flooring complied with California Air Resources Board standards…” A listing of
products that was to be included in the items to be considered by the Multidistrict Litigation
Panel was established. The products utilized by the Plaintiffs herein were not included in that
listing, and, as such, the Plaintiffs never had any claim that was or could have been included in
the MDL litigation. Plaintiffs dismissed their class action allegations against LLI and filed a
motion to remand.
Plaintiffs filed the motion to remand in the Eastern District of Virginia. On October 22,
2015, the Eastern District of Virginia denied Plaintiffs’ motion to remand, finding that the matter
was properly removed under CAFA. (Rec. Doc. 31-1). The order stated specifically that “[a]s of
the date of removal from state court to the Eastern District of Louisiana, federal removal
jurisdiction existed and therefore, jurisdiction in this Court continues, plaintiffs’ amended claims
notwithstanding.” (Rec. Doc. 31-1 at 3). Recognizing that Plaintiffs’ claims were no longer
within the scope of the Multidistrict Litigation, the Eastern District of Virginia remanded the
case back to this Court. (Rec. Doc. 25).
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II.
PRESENT MOTION
Plaintiffs now contend that since the matter is not part of the Multidistrict Litigation and
all allegations regarding a Class Action have been dismissed, there was never any basis for
removal to federal court. (Rec. Doc. 30-2 at 3). Plaintiffs assert that the amount in controversy is
less than $20,000.00, the jurisdictional limit for the First Parish Court, and includes damages for
the purchase price of the LLI flooring ($4,933.82), the cost to remove the allegedly defective
flooring ($1,800), and the cost to replace the flooring ($10,480.00). (Rec. Doc. 30-2 at 1).
Accordingly, because the amount in controversy is less than the statutory threshold of $75,000
under 28 U.S.C. 1332, Plaintiffs claim this court does not have diversity jurisdiction. (Rec. Doc.
30-2 at 4). Plaintiffs argue that because this Court does not have subject matter jurisdiction over
this matter, remand to the First Parish Court for the Parish of Jefferson is appropriate. (Rec.
Doc. 30-2 at 4).
Defendants Liberty Mutual and LLI oppose the motion and argue that federal jurisdiction
was properly determined at the time the Removal was filed. (Rec. Doc. 31 at 1). Defendants
aver that Plaintiffs cannot eliminate federal jurisdiction by amending their pleading to omit the
class action claims that were the basis for removal under CAFA. Additionally, Defendants argue
that the Plaintiffs should be precluded from re-litigating the remand issue in this Court under
law-of-the-case doctrine because their motion for remand has already been denied by the Eastern
District for Virginia. (Rec. Doc. 31 at 1). In the Order denying Plaintiffs’ motion to remand, the
Eastern District of Virginia agreed with the Defendants’ position that jurisdiction is determined
at the date of removal, regardless of Plaintiffs’ subsequent amendments to their claim. (Rec.
Doc. 31-1).
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III.
LAW AND ANALYSIS
Federal Courts are courts of limited jurisdiction and must have statutory power to
adjudicate a claim. Home Builders Association of Mississippi, Inc. v. City of Madison, 143 F.3d
1006 (5th Cir. 1998). Absent jurisdiction confirmed by statute or the Constitution, Federal Courts
lack the power to adjudicate claims and must dismiss an action if subject matter jurisdiction is
lacking. Stockman v. Federal Election Commission, 138 F.3d 144. 151 (5th Cir. 1998). Subject
matter jurisdiction cannot be created by waiver or consent. Howery v. Allstate Ins. Co., 243 F.3d
912, 919 (5th Cir. 2001).
The Class Action Fairness Act of 2005 (“CAFA”) “provides the federal district courts
with ‘original jurisdiction’ to hear a ‘class action’ if the class has more than 100 members, the
parties are minimally diverse, and the ‘matter in controversy exceeds the sum or value of
$5,000,000.’” Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345, 1348, 185 L. Ed. 2d 439
(2013) (quoting 28 U.S.C. § 1332(d)(2), (d)(5)(B)). As the United States Supreme Court
recently explained, in removed cases, “[f]or jurisdictional purposes, [the court’s] inquiry is
limited to examining the case as of the time it was filed in state court[.]”Id. at 1349; see also
Francis v. Allstate Ins. Co., 709 F.3d 362, 367 (4th Cir. 2013) (“The removability of a case
depends upon the state of the pleadings and the record at the time of the application for
removal[.]”). In other words, “post-removal events, including amending a complaint to reduce
the amount in controversy or eliminate a federal question, generally do not divest courts of
jurisdiction.” Dotson v. Elite Oil Field Servs., Inc., 91 F. Supp. 3d 865, 873-74 (N.D.W. Va.
2015) (collecting cases). This rule reflects a “sound policy” against forum manipulation: “‘If
parties were able to defeat jurisdiction by way of post-removal reductions of the amount in
controversy, they could unfairly manipulate judicial proceedings.”’ Id. (quoting Hatcher v.
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Lowe's Home Centers, Inc., 718 F.Supp.2d 684, 688 (E.D.Va. 2010)). Additionally, at least two
federal appellate courts have considered this issue and held that the filing of a post-removal
amended complaint removing class actions allegations does not divest the district court of CAFA
jurisdiction. See In Touch Concepts, Inc. v. Cellco P’ship, 788 F.3d 98 (2d Cir. 2015); In re
Burlington N. Santa Fe Ry. Co., 606 F.3d 379, 380 (7th Cir. 2010). In the present case, the basis
of federal jurisdiction is CAFA, not jurisdictional amount as suggested by the Plaintiff. At the
time of removal, the Plaintiff’s complaint alleged class action status which made it eligible for
CAFA status.
Pursuant to these authorities, the post-removal event wherein Plaintiffs dismissed their
class claims does not deprive this Court of jurisdiction, which was properly established at the
time of removal under CAFA. The Supplemental and Amended Petition, which was in effect at
the time of the removal, made allegations of putative class members exceeding 100, as required
under 28 U.S.C. § 1332(d)(5)(b). Plaintiffs alleged that the putative class action consisted of all
individuals in Louisiana who sustained injury or damage “because of the sale of an unsafe and
hazardous products (sic), as outlined infra.” Given the number of sales transactions and
customers of Lumber Liquidators in Louisiana, this description of claims by the plaintiffs
exceeded the required 100 putative members. Further, “a defendant’s notice of removal need
include only a plausible allegation that the amount in controversy exceeds the jurisdictional
threshold.” Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547, 554 (2014).
Thus, this case was properly removed under 28 U.S.C. § 1332(d)(2)(A) because, at the
time of removal, it was a putative class action in which at least one member of the class of
plaintiffs was a citizen of a state different from that of the Defendants, the number of members of
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the putative class of plaintiffs was more than 100, and the amount in controversy, if plaintiffs
proved their allegations, exceeded $5,000,000, exclusive of interests and costs.
IV.
CONCLUSION
As of the date of removal from state court to the Eastern District of Louisiana, federal
jurisdiction existed and therefore, jurisdiction in this Court continues, Plaintiffs’ amended claims
notwithstanding. Accordingly, IT IS ORDERED that Plaintiffs’ Motion to Remand (R. Doc. 30)
is DENIED.
New Orleans, Louisiana this 24th day of February, 2016.
________________________________
UNITED STATES DISTRICT JUDGE
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