Fastrac Logistics, Inc. v. Fuller Transport, Inc.

Filing 17

Judge Nathaniel M. Gorton: ORDER entered. MEMORANDUM AND ORDER "In accordance with the foregoing, plaintiff is directed to show cause in writing, on or before June 15, 2011, why the Court should not dismiss this action for lack of subject matter jurisdiction." (Duong, Diep)

United States District Court
District of Massachusetts
________________________________
)
FASTRAC LOGISTICS, INC.,
)
Plaintiff,
)
)
v.
)
Civil Action No.
)
10-10037-NMG
FULLER TRANSPORT, INC.,
)
Defendant.
)
________________________________ )
MEMORANDUM & ORDER
GORTON, J.
Plaintiff Fastrac Logistics, Inc. (“Fastrac”) brings this
action against defendant Fuller Transport, Inc. (“Fuller”) for
breach of contract and quantum meruit.
I.

Challenge to Subject Matter Jurisdiction
In response to Fastrac’s pending motion for an extension of

the discovery schedule, defendant asserts that Fastrac knew, when
it filed its complaint, that its claims were worth between $3,863
and $15,457 and did not meet the amount in controversy required
for diversity jurisdiction.

The $77,286 damages figure in the

complaint apparently represents the gross amount due under the
contract between the parties, including the amounts Fastrac would
have paid to the carriers to transport Fuller’s goods.

Fastrac’s

President, John Alphas, admitted in his deposition, however, that
Fastrac had not yet paid those amounts when the deal fell
through.

Thus, Fastrac’s actual alleged loss is its commission

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on the shipments which is between 5% and 20% of the $77,286
figure.

Fuller contends, therefore, that there is no subject

matter jurisdiction here because Fastrac did not plead the
jurisdictional amount in good faith.
II.

Legal Standard
“[A] court has an obligation to inquire sua sponte into its

subject matter jurisdiction, and to proceed no further if such
jurisdiction is wanting.”
1000, 1002 (1st Cir. 1988).

In re Recticel Foam Corp., 859 F.2d
United States District Courts have

subject matter jurisdiction based on diversity if the case
presents a controversy between citizens of different states and
the amount in controversy exceeds $75,000.

28 U.S.C. §§ 1332.

To determine whether those requirements are satisfied, the Court
must examine the circumstances at the time the complaint was
filed.

Stewart v. Tupperware Corp., 356 F.3d 335, 336 (1st Cir.

2004).

The amount claimed by the plaintiff controls if it was

“apparently made in good faith.”

St. Paul Mercury Indem. Co. v.

Red Cab Co., 303 U.S. 283, 288-89 (1938).
If the opposing party questions the damages allegation, then
plaintiff bears the burden of “alleging with sufficient
particularity facts indicating that it is not a legal certainty
that the claim involves less than the jurisdictional amount.”
Spielman v. Genzyme Corp., 251 F.3d 1, 5 (1st Cir. 2001).
Subsequent events that affect the amount in controversy do not

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undermine diversity jurisdiction.

Coventry Sewage Assocs. v.

Dworkin Realty Co., 71 F.3d 1, 6 (1st Cir. 1995).

Subsequent

revelations about the amount that plaintiffs expected in good
faith to recover at the time the complaint was filed are,
however, relevant.

Id.

III. Analysis
Fuller has certainly raised a material issue.

If Fastrac

does not proffer a plausible explanation in response to Fuller’s
proposition, the Court will dismiss the case for lack of subject
matter jurisdiction.

For that purpose, the Court will afford the

plaintiff two weeks to show cause, in a memorandum not to exceed
five pages, why its complaint should not be dismissed for lack of
subject matter jurisdiction.
ORDER
In accordance with the foregoing, plaintiff is directed to
show cause in writing, on or before June 15, 2011, why the Court
should not dismiss this action for lack of subject matter
jurisdiction.

So ordered.
/s/ Nathaniel M. Gorton
Nathaniel M. Gorton
United States District Judge
Dated June 1, 2011

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