Sturkey et al v. Duty Free Americas, Inc.

Filing 26

OPINION AND ORDER granting 18 defendant's Motion to Dismiss and/or for summary judgment and denying 19 plaintiffs' Motion for Partial Summary Judgment as moot. Signed by District Judge George Caram Steeh (MBea)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
GINA STURKEY, et al.,
Plaintiffs,
Case No. 17-10221
HON. GEORGE CARAM STEEH

vs.
DUTY FREE AMERICAS, INC.,
Defendant.
__________________________/

OPINION AND ORDER GRANTING DEFENDANT’S
MOTION TO DISMISS AND/OR FOR SUMMARY
JUDGMENT (DOC. 18) AND DENYING PLAINTIFFS’ MOTION
FOR PARTIAL SUMMARY JUDGMENT (DOC. 19) AS MOOT
Plaintiffs Gena Sturkey, Latoya Jones, Corlette Person, Yun Bonilla,
Suchet Guha, Nancy Tarevski, Ping Moceri, Aminat Ahmed, Jie Wu,
Junying Lu, Hexhire Agolli, Lester Berry, Faye Jones, and Hazel Hager and
prospective plaintiff Eva Vigh1 bring numerous state-law claims against
their former employer Duty Free Americas, Inc. This matter is presently
before the Court on two motions. Pursuant to Local Rule 7.1(f)(2), the Court
shall rule without oral argument.

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Plaintiffs’ filed two motions for leave to amend their complaint to add Eva Vigh as a plaintiff in
November 2017. Defendant filed its motion to dismiss and/or for summary judgment before the
Court granted plaintiffs’ leave to amend to add Eva Vigh. Defendant’s motion, however, argued
that even if Vigh was permitted to join this case, the Court still lacks subject matter jurisdiction.
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The Court shall first address defendant’s motion to dismiss under
Federal Rule of Civil Procedure 12(b)(1) and/or for summary judgment,
which was filed on January 5, 2018, (Doc. 18). Plaintiffs responded on
February 5, 2018. (Doc. 22). Defendant filed a reply on February 26, 2018.
(Doc. 24).
Thereafter, the Court shall consider plaintiffs’ motion for partial
summary judgment, which was filed on January 5, 2018. (Doc. 19).
Defendant filed a response on February 5, 2018. (Doc. 21). Plaintiffs’ filed a
reply on February 26, 2018. (Doc. 23).
For the reasons stated below, defendant’s motion to dismiss for lack
of subject matter jurisdiction is GRANTED. (Doc. 18). As such, plaintiffs’
motion for partial summary judgment is DENIED AS MOOT. (Doc. 19).
I. Background
Defendant, a national travel retailer, employed plaintiffs pursuant to a
sales and/or service contract with Detroit Metro Airport. (Doc. 1 at PageID
2-3). On or about December 2015, defendant lost its contract with Detroit
Metro Airport. (Doc. 1 at PageID 3). Defendant’s contract term was
scheduled to end on September 19, 2016. (Id.). In February 2016, Bud
Silloway met with plaintiffs to discuss severance pay. (Id.). Silloway stated
that plaintiffs would receive a severance payment equal to one week of

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wages for every year of employment if plaintiffs worked through the end of
the Detroit Metro Airport contract. (Id.).
Plaintiffs continued working for defendant until the Detroit Metro
Airport contract ended. (Doc. 1 at PageID 3-4). Defendant thereafter
provided plaintiffs with their severance payments. (Doc. 1 at PageID 4).
These payments, however, were equal to half of one week’s wages for
every year of employment. (Id.). In a letter dated October 6, 2016, Silloway
corrected his previous statement and explained that defendant’s usual
policy only compensated for half of one week’s employment for every year
of employment. (Id.). Plaintiffs filed this suit in the Eastern District of
Michigan on January 24, 2017 to recover additional severance payment.
(Doc. 1). Plaintiffs assert seven claims; breach of contract, (Count I),
intentional misrepresentation, (Count II), negligent misrepresentation,
(Count III), innocent misrepresentation, (Count IV), promissory estoppel,
(Count V), unjust enrichment, (Count VI), and declaratory relief, (Count VII).
II. Legal Standard
“Motions to dismiss for lack of subject matter jurisdiction fall into two
general categories: facial attacks and factual attacks.” United States v.
Ritchie, 15 F.3d 592, 598 (6th Cir.1994). “A facial attack is a challenge to
the sufficiency of the pleading itself. On such a motion, the court must take
the material allegations of the petition as true and construed in the light
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most favorable to the non-moving party.” Id. (emphasis in original). “A
factual attack, on the other hand, is not a challenge to the sufficiency of the
pleading's allegations, but a challenge to the factual existence of subject
matter jurisdiction. On such a motion, no presumptive truthfulness applies
to the factual allegations” and “the court is free to weigh the evidence and
satisfy itself as to the existence of its power to hear the case.” Id.
(emphasis in original). A challenge regarding the amount in controversy is
a factual attack. See Allstate Ins. Co. v. Renou, 32 F. Supp. 3d 856, 860
(E.D. Mich. 2014).
“Where subject matter jurisdiction is challenged pursuant to 12(b)(1),
the plaintiff has the burden of proving jurisdiction in order to survive the
motion.” Michigan S. R.R. Co. v. Branch & St. Joseph Counties Rail Users
Ass'n, 287 F.3d 568, 573 (6th Cir.2002); see also Ohio Nat'l Life Ins. Co. v.
United States, 922 F.2d 320, 324 (6th Cir.1990). “The plaintiff must
establish subject matter jurisdiction by a preponderance of the evidence.”
Renou, 32 F. Supp. 3d at 860 (citing McNutt v. Gen. Motors Acceptance
Corp. of Ind., 298 U.S. 178, 189 (1936)).
III. Analysis
Federal courts are courts of limited jurisdiction. Pursuant to 28 U.S.C.
§ 1332(a), “[t]he district courts shall have original jurisdiction of all civil
actions where the matter in controversy exceeds the sum or value of
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$75,000, exclusive of interest and costs, and is between (1) citizens of
different States.” Federal courts rigorously enforce Congress’ intent to
“drastically [ ] restrict federal jurisdiction in controversies between citizens
of different states.” St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S.
283, 288 (1938). “The rule governing dismissal for want of jurisdiction in
cases brought in the federal court is that, unless the law gives a different
rule, the sum claimed by the plaintiff controls if the claim is apparently
made in good faith.” Id. “[I]f, from the face of the pleadings, it is apparent, to
a legal certainty, that the plaintiff cannot recover the amount claimed or if,
from the proofs, the court is satisfied to a like certainty that the plaintiff
never was entitled to recover that amount, and that his claim was therefore
colorable for the purpose of conferring jurisdiction, the suit will be
dismissed.” Id. at 289.
Defendant argues that the amount in controversy is less than $75,000
because the unpaid severance figures range from $250.00 to $5,722.21,
and total $35,869.75. Plaintiffs’ first responsive argument urges the Court
to aggregate their claims to determine the amount in controversy.
The amount in controversy requirement has traditionally been
interpreted such that “the separate and distinct claims of two or more
plaintiffs cannot be aggregated in order to satisfy the jurisdictional amount
requirement.” Snyder v. Harris, 394 U.S. 332, 335 (1969). “The Supreme
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Court recognizes a limited exception to this anti-aggregation principle for
cases where ‘two or more plaintiffs unite to enforce a single title or right in
which they have a common and undivided interest.’” Sidling & Insulation
Co. v. Acuity Mut. Ins. Co., 754 F.3d 367, 369 (6th Cir. 2014) (quoting
Snyder, 394 U.S. at 335). The Sixth Circuit recently considered two
principles, introduced in other circuit courts, to guide the court’s claim
aggregation analysis. Sidling, 764 F.3d at 369. First, it considered whether
“plaintiffs share a ‘joint interest in [a] fund, such that . . . plaintiffs’ rights are
. . . affected by the rights of co-plaintiffs.’” Id. (quoting Travelers Prop. Cas.
v. Good, 689 F.3d 714 (7th Cir. 2012)). Second, the court “examined the
‘nature of the right asserted,’ framing the relevant inquiry as whether the
class members shared a ‘pre-existing (pre-litigation) interest in the subject
of the litigation’ – and not simply ‘whether successful vindication of the right
will lead to a single pool of money that will be allocated among the
plaintiffs.’” Id. (quoting Travelers, 689 F.3d at 722 (quoting Gilman v. BHC
Sec., Inc., 104 F.3d 1418, 1427 (2d Cir. 1997))). The Sixth Circuit reiterated
that “claim aggregation requires a pre-existing (pre-litigation) interest in the
subject of the litigation instead of a single pool of money that will be
allocated among the plaintiffs.” Id. at 372 (internal quotations and citations
omitted).

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Here, plaintiffs do not establish union to enforce a single title or right
in which they have a common and undivided interest. If liable for an
additional payment totaling one-half week wages for each year of service,
defendant would pay each plaintiff a different fee. There are no allegations
that defendant shall pay from a common fund, such that payment to one
plaintiff impacts payment to another plaintiff. Moreover, there are no
allegations that plaintiffs’ shared a pre-existing interest in the subject of the
litigation. Instead, it merely appears that plaintiffs joined together for
convenience, brought separate and distinct claims, and, if they were to
receive a judgment, would receive a single pool of money to be allocated
amongst themselves. As such, plaintiffs’ may not aggregate their claims to
establish subject matter jurisdiction.
The Court must therefore consider whether the claims of any single
plaintiff satisfy the amount in controversy requirement. If just one plaintiff
states claims “where the matter in controversy exceeds the sum or value of
$75,000, exclusive of interest and costs,” 28 U.S.C. § 1332(a), then 28
U.S.C. § 1367(a) “confers supplemental jurisdiction over” the claims of the
other plaintiffs, even “those that do not independently satisfy the amount in
controversy requirement, if the claims are part of the same Article III case
or controversy.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546,
558-59 (2005).
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Plaintiffs ask the Court to consider economic damages, attorney’s
fees, exemplary damages, and non-economic damages. Plaintiffs’ briefs
also refer to punitive damages. In Michigan, depending on the cause of
action, a plaintiff may seek compensatory damages, exemplary damages,
punitive damages, and attorney’s fees. If warranted by the circumstances,
such damages may be considered in determining the amount in
controversy. S. States Police Benevolent Ass’n, Inc. v. Second Chance
Body Armor, Inc., 336 F. Supp. 2d 731, 734 (W.D. Mich. 2004).
Compensatory damages include both economic and non-economic
loss caused by a defendant. Compensatory damages “include
compensation for mental distress and anguish.” Veselenak v. Smith, 414
Mich. 567, 574 (1982). Mental distress and anguish include shame,
mortification, mental pain and anxiety, annoyance, discomfiture, and
humiliation. Id. (citing Beath v. Rapid R. Co., 119 Mich. 512, 517 (1899);
Grenawalt v. Nyhuis, 335 Mich. 76, 87 (1952)). The highest economic
damage of a single plaintiff appears to be $5,722.21. Plaintiffs do not assert
otherwise. Furthermore, the complaint and plaintiffs’ brief in response to
defendant’s motion to dismiss fail to allege mental distress or anguish.
Exemplary damages are a category of damages distinct from
“ordinary [compensatory] damages for mental distress,” see id. at 572, and
punitive damages. In re Disaster at Detroit Metro. Airport on Aug. 16, 1987,
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750 F. Supp. 793, 805 (E.D. Mich. 1989). “[E]xemplary damages are
recoverable as compensation to the plaintiff, not as punishment of the
defendant.” Kewin v. Mass. Mut. Life Ins. Co., 409 Mich. 401, 419 (1980).
Exemplary damages “are not necessary where plaintiffs’ injuries can be
adequately compensated in other ways.” In re Rospatch Sec. Litig., No.
1:90-CV-805, 1992 WL 226912, at *16 (W.D. Mich. July 8, 1992).
“[P]laintiffs must specifically plead exemplary damages.” Id.
Exemplary damages require “tortious conduct on the part of the
defendant.” Kewin, 409 Mich. at 419. They are “designed to compensate
plaintiffs for humiliation, outrage and indignity resulting from a defendant’s
willful, wanton, or malicious conduct.” In re Disaster at Detroit Metro.
Airport, 750 F. Supp. at 805. But, even if a defendant’s conduct is willful,
wanton, or malicious, courts do not award exemplary damages for injuries
to feelings that are “duplicative of the award of ordinary [compensatory]
damages for mental distress and anguish.” Veselenak, 414 Mich. at 572.
“In cases involving only a breach of contract, however, the general
rule is that exemplary damages are not recoverable.” Kewin, 409 Mich. at
419-20. “Just as with that denying damages for mental distress, the theory
underlying the denial of exemplary damages in breach of contract cases is
that the plaintiff is adequately compensated when damages are awarded
by reference only to the terms of the contract.” Id. at 420. “In the
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commercial contract situation, unlike the tort and marriage contract actions,
the injury which arises upon a breach is a financial one, susceptible of
accurate pecuniary estimation. The wrong suffered by the plaintiff is the
same, whether the breaching party acts with a completely innocent motive
or in bad faith.” Id. Thus, “absent allegation and proof of tortious conduct
existing independent of the breach [ ] exemplary damages may not be
awarded in common-law actions brought for breach of a commercial
contract.” Id. at 420-21 (internal citation omitted).
The Court cannot include any exemplary damages in its
determination of the amount in controversy. First, plaintiffs are prohibited
from collecting exemplary damages on their breach of contract claim.
Kewin, 409 Mich. at 419-21. Second, plaintiffs have not specifically pleaded
exemplary damages. In re Rospatch, 1992 WL 226912 at *16. As such, it is
unclear that plaintiffs’ injuries cannot be adequately compensated in other
ways. Id. Plaintiffs’ have also failed to allege willful, wanton, or malicious
conduct. In re Disaster at Detroit Metro. Airport, 750 F. Supp. at 805.
Plaintiffs further failed to establish that exemplary damages would not be
duplicative of compensatory damages. Veselenak, 414 Mich. at 572.
Finally, the Court dismisses plaintiffs’ argument that they may collect
exemplary damages because of their harassment and discrimination claim.
Plaintiffs’ original complaint does not include any claims for harassment or
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discrimination. Plaintiffs’ sought leave to amend their complaint to include a
claim under Title VII, 42 U.S.C. § 1981, and/or the Elliott-Larsen Civil
Rights Act. (Doc. 12 and 13). The Court, however, denied plaintiffs’
requests for leave to amend. As such, plaintiffs’ argument fails.
The Court shall also decline to consider a punitive damages figure. It
is not clear whether plaintiffs’ refer to punitive damages as exemplary
damages or as a separate category of damages. As stated above, the two
figures are distinct. Veselenak, 414 Mich. at 574. If plaintiffs’ reference to
punitive damages was a misstated reference to exemplary damages, the
argument fails for the reasons stated above. Out of an abundance of
caution, however, the Court shall consider a separate and distinct request
for punitive damages. Any such request, however, fails because plaintiffs
have not pleaded punitive damages nor established that they are
applicable to the seven claims in plaintiffs’ complaint.
Plaintiff also argues that the Court should aggregate the punitive and
exemplary damages for each plaintiff in order to find an amount in
controversy in excess of $75,000. Plaintiff relies on out of circuit precedent;
some of which has been abrogated by subsequent cases. See Allen v. R &
H Oil & Gas Co., 63 F.3d 1326, 1330 (5th Cir. 1995); Tapscott v. MS
Dealer Service Corp., 77 F.3d 1353 (11th Cir. 1996). In addition to its poor
substantive support, plaintiff’s argument fails because, as stated above,
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plaintiffs have not established union to enforce a single title or right in which
they have a common and undivided interest.
Finally, the Court cannot consider attorney’s fees because plaintiffs’
have not established that attorney’s fees apply to any of their seven claims.
Plaintiffs’ brief contemplates attorneys’ fees in connection to their proposed
claim under the Elliott-Larsen Civil Rights Act, but, as stated above, the
Court denied plaintiffs’ motion for leave to amend their complaint to add this
claim.
As such, plaintiff’s argument distills to economic damages ranging
from $250.00 to $5,772.21 and an unspecified figure for non-economic
damages. In order to satisfy the amount in controversy requirement,
plaintiff Jones, the individual with the largest proposed economic damages
figure, would need to collect at least $69,277.80. The other plaintiffs would
need to collect even larger sums of non-economic damages. The complaint
does not include any details regarding mental distress or anguish. As such,
the Court concludes that, from the face of the pleadings, it is apparent that
any one plaintiff cannot recover an amount greater than $75,000.00. The
court further finds that plaintiffs’ claims were not made in good faith, but
rather, made solely to confer jurisdiction.

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IV. Conclusion
For the reasons stated above, defendants’ motion is GRANTED.
Plaintiffs’ case is dismissed for lack of subject matter jurisdiction.2
Without subject matter jurisdiction, the Court cannot rule on the
merits of plaintiffs’ pending motion for partial summary judgment. (Doc. 19).
As such, plaintiffs’ motion is DENIED as moot.
IT IS SO ORDERED.
Dated: August 1, 2018
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE

CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
August 1, 2018, by electronic and/or ordinary mail.
s/Marcia Beauchemin
Deputy Clerk

2

Plaintiffs requested that the Court remand the case should it find jurisdiction lacking. But the
Court may only remand cases that were removed to federal court after being filed in state court.
See 28 U.S.C. § 1447(c). The Court cannot remand a case, like plaintiffs’, that was originally
filed in federal court.
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