Hammond et al v. Dean Team-Kirkwood et al.
Filing
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MEMORANDUM AND ORDER...IT IS HEREBY ORDERED that by November 26, 2014, Defendant Patterson shall file: 1. An amended notice of removal, to allege jurisdictional facts establishing complete diversity of citizenship and consent to removal by all Def endants who have been properly joined and served. 2. A memorandum in support of the amended notice of removal, including specific facts or evidence, to establish by a preponderance of the evidence that the amount in controversy exceeds $75,000, exclusive of interest and costs. Patterson's failure to timely and fully comply with this Order will result in the remand of this case for lack of subject matter jurisdiction. IT IS FURTHER ORDERED that Plaintiffs may file a response no later than seven days after the amended notice of removal and memorandum are filed. IT IS FURTHER ORDERED that all other proceedings in this case are STAYED pending further order of this Court. ( Show Cause Response due by 11/26/2014.), Case stayed. Signed by District Judge Audrey G. Fleissig on 11/17/2014. (NEB)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
DENNIS R. HAMMOND, et al.,
Plaintiffs,
vs.
PATTERSON AUTO SALES,
INC., et al.,
Defendants.
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Case No. 4:14CV01460 AGF
MEMORANDUM AND ORDER
This matter is before the Court on review of the file following removal. The
Eighth Circuit has admonished district courts to “be attentive to a satisfaction of
jurisdictional requirements in all cases.” Sanders v. Clemco Indus., 823 F.2d 214, 216
(8th Cir. 1987). “In every federal case the court must be satisfied that it has jurisdiction
before it turns to the merits of other legal arguments.” Carlson v. Arrowhead Concrete
Works, Inc., 445 F.3d 1046, 1050 (8th Cir. 2006). Statutes conferring diversity
jurisdiction are to be strictly construed, as are removal statutes. See Sheehan v.
Gustafson, 967 F.2d 1214, 1215 (8th Cir. 1992); Nichols v. Harbor Venture, Inc., 284
F.3d 857, 861 (8th Cir. 2002).
BACKGROUND
This case arises out of alleged fraud and misrepresentations in connection with
the sale of a 1987 Land Rover Defender in St. Louis County. Plaintiffs initially filed suit
in the Circuit Court for St. Louis County, Missouri. Plaintiffs’ petition asserts state law
claims of violation of the Missouri Merchandising Practices Act, Mo. Rev. Stat. §
407.020; fraud; breach of contract; negligent misrepresentation; breach of the implied
warranty of fitness for a particular purpose; and breach of the implied warranty of
merchantability.1 Defendant Patterson Auto Sales, Inc. (“Patterson”) removed the action
to this Court on August 22, 2014, asserting diversity jurisdiction pursuant to 28 U.S.C. §§
1332 and 1441(b).
DISCUSSION
In removal cases, the district court reviews the complaint or petition pending at
the time of removal to determine the existence of subject matter jurisdiction. St. Paul
Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 291 (1938). The district court may
also look to the notice of removal to determine its jurisdiction. 28 U.S.C. §
1446(c)(2)(A)(ii); Ratermann v. Cellco P’ship, No. 4:09 CV 126 DDN, 2009 WL
1139232, at *3 (E.D. Mo. Apr. 28, 2009). The removing defendants, as the parties
invoking jurisdiction, bear the burden of proving that all prerequisites to jurisdiction are
satisfied. Central Iowa Power Co-op v. Midwest Indep. Transmission Sys. Operator,
Inc., 561 F.3d 904, 912 (8th Cir. 2009). “[A]ll doubts about federal jurisdiction must be
resolved in favor of remand.” Id.
Federal district courts have diversity jurisdiction over all civil actions between
citizens of different states in which the amount in controversy exceeds $75,000, exclusive
of interest and costs. 28 U.S.C. § 1332(a)(1). “[A]ny civil action brought in a State court
1
Plaintiffs have voluntarily dismissed several Defendants in this case, and the only
claim against the remaining Defendants is the claim for violation of the Missouri
Merchandising Practices Act. (See Docs. No. 9, 5.)
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of which the district courts of the United States have original jurisdiction, may be
removed by the defendant or the defendants, to the district court of the United States for
the district and division embracing the place where such action is pending.” 28 U.S.C. §
1441(a).
If removal is based solely on diversity of citizenship, the action “may not be
removed if any of the parties in interest properly joined and served as defendants is a
citizen of the State in which such action is brought.” 28 U.S.C. § 1441(b)(2).
Additionally, “[w]here there are multiple defendants, all must join in a notice to remove
within thirty days of service.” Christiansen v. W. Branch Cmty. Sch. Dist., 674 F.3d 927,
932 (8th Cir. 2011) (citation omitted); see also 28 U.S.C. § 1446(b)(2)(A). To satisfy this
so-called “unanimity requirement” in the Eighth Circuit, “it is not necessary for all
defendants to actually sign the notice of removal so long as there is some timely filed
written indication from each served defendant that the defendant has actually consented
to the removal.” Christiansen , 674 F.3d at 932 (citation omitted).
Citizenship of Parties
Diversity jurisdiction requires complete diversity of citizenship, meaning “no
defendant holds citizenship in the same state where any plaintiff holds citizenship.”
OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th Cir. 2007). To establish
complete diversity of citizenship, a complaint (or notice of removal) must include factual
allegations of each party’s state of citizenship. Sanders, 823 F.2d at 216. It is well
established that an allegation of residence is not equivalent to an allegation of citizenship
and does not satisfy the pleading requirements for federal diversity jurisdiction. Id.;
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Pattiz v. Schwartz, 386 F.2d 300, 300-01 (8th Cir. 1968). “In the case of a removed
action, diversity of citizenship must exist both when the state petition is filed and when
the petition for removal is filed.” Knudson v. Sys. Painters, Inc., 634 F.3d 968, 975 (8th
Cir. 2011) (citation omitted).
A corporation’s citizenship is determined by its state of incorporation and its
principal place of business. 28 U.S.C. § 1332(c)(1). Unlike corporations, for purpose of
diversity jurisdiction, limited liability companies do not have their own citizenship, and
instead, the limited liability company’s citizenship is determined by the citizenship of all
of its members. GMAC Commercial Credit LLC v. Dillard Dep’t Stores, Inc., 357 F.3d
827, 829 (8th Cir. 2004).
With respect to the parties’ citizenship, the petition alleges that “Plaintiffs are
residents of Palm Beach, Florida.” (Doc. No. 5 at 2.) The petition further alleges that
“Defendant Patterson . . . is a company doing business in North Carolina”; “Defendant
GB4x4, LLC (‘GB4x4’) is a company doing business in North Carolina”; and
“Defendant Aaron Richardet (‘Richardet’) is the sole member of GB4x4.” (Id. at 4.)
The notice of removal alleges that “Plaintiffs are citizens and residents of Palm
Beach, Florida.” (Doc. No. 1 at 2.) The notice of removal further states that “Patterson
[Auto] . . . is . . . a corporation with its principal place of business in Wilmington, North
Carolina,” and “GB4x4 . . . is . . . a company doing business in North Carolina and . . .
has its principal place of business is in North Carolina.” (Id. at 3.) With respect to
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Richardet, the notice of removal simply restates the petition’s allegation that Richardet is
“the sole member of GB4x4, located in North Carolina.” (Id.)2
These allegations do not adequately plead the citizenship of the Defendants.
Specifically, neither the petition nor notice of removal alleges the state of incorporation
of Patterson. And there are no allegations regarding the citizenship of Richardet, who is
named as a separate Defendant and who is the sole member of GB4x4, the limited
liability company Defendant. Thus, the Court is unable to determine whether complete
diversity of citizenship exists in this case or whether any Defendant is a citizen of
Missouri.
Unanimity
It is unclear from the record whether Defendants GB4x4 and Richardet have
been served in this case, and neither the notice of removal nor any other filing indicates
whether these Defendants have consented to removal. Therefore, the Court is unable to
determine whether the unanimity requirement has been met.
2
The Court notes that the petition originally named the following additional defendants:
Dean Team—Kirkwood, Mary Jinkerson, William C. Dean, Patrick C. Dean, Dean Team
Automotive Group, John Does 1-4, and Jane Does 1-4. Neither the petition nor notice of
removal pleads the citizenship of these Defendants. However, all of these Defendants
were voluntarily dismissed by Plaintiffs pursuant to Federal Rule of Civil Procedure
41(a)(1)(A)(i), after this case was removed. (Doc. No. 9.) Because these Defendants
have been voluntarily dismissed by Plaintiffs in this case, the Court will not consider
their citizenship for purposes of determining jurisdiction. See Knudson, 634 F.3d at 975
(stating that when a plaintiff voluntarily dismisses a diversity-destroying defendant, a
defendant may remove a case to federal court); Caterpillar v. Lewis, 519 U.S. 61, 73
(1996) (holding that notwithstanding lack of complete diversity at time of removal,
plaintiff’s settlement with and dismissal of non-diverse defendants before trial allowed
diversity to become complete for purposes of subject matter jurisdiction).
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Amount in Controversy
Federal courts must strictly construe the amount in controversy requirement, as
its underlying purpose is to limit the federal courts’ diversity caseload. Snyder v. Harris,
394 U.S. 332, 339-40 (1969). To meet its burden with regard to the jurisdictional
amount, the removing party must prove by a preponderance of the evidence that the
amount in controversy exceeds $75,000. 28 U.S.C. § 1446(c)(2)(B); Bell v. Hershey Co.,
557 F.3d 953, 956 (8th Cir. 2009). “The preponderance of the evidence standard requires
a defendant to demonstrate by sufficient proof that a plaintiff’s verdict reasonably may
exceed the jurisdictional amount.” City of Univ. City, Mo. v. AT & T Wireless Servs.,
Inc., 229 F. Supp. 2d 927, 932 (E.D. Mo. 2004) (citation omitted). Specific facts or
evidence are required to demonstrate that the jurisdictional amount is met. Hill v. Ford
Motor Co., 324 F. Supp. 2d 1028, 1036 (E.D. Mo. 2004).
Plaintiffs’ petition requests a judgment “in an amount that is fair and reasonable,
for additional award of punitive damages and attorney’s fees, for costs, and for any other
relief that to the Court seems proper.” (Doc. No. 5 at 10.) In its notice of removal,
Patterson cites the allegations of Plaintiffs’ petition and merely states that “[h]ere, given
the allegations of fraud and punitive damages, the jurisdictional amount is met.” (Doc.
No. 1 at 4.) The Court finds that this assertion does not meet Defendant’s burden to offer
specific facts or evidence to establish by a preponderance of the evidence that an amount
in excess of $75,000 is actually in controversy.
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CONCLUSION
Based on the foregoing, the Court cannot determine whether it has subject matter
jurisdiction over this action. The Court will grant Defendant Patterson until November
26, 2014 to file an amended notice of removal to allege jurisdictional facts establishing
complete diversity of citizenship and consent to removal by all Defendants who have
been properly joined and served. See 28 U.S.C. § 1653. Patterson shall also file a
separate memorandum, including citation to supporting authority or evidence, to establish
the existence of the jurisdictional amount in controversy. Plaintiffs shall have the
opportunity to respond. Patterson’s failure to timely and fully comply with this Order
will result in the remand of this case for lack of subject matter jurisdiction.
Accordingly,
IT IS HEREBY ORDERED that by November 26, 2014, Defendant Patterson
shall file:
1. An amended notice of removal, to allege jurisdictional facts establishing
complete diversity of citizenship and consent to removal by all Defendants
who have been properly joined and served.
2. A memorandum in support of the amended notice of removal, including
specific facts or evidence, to establish by a preponderance of the evidence
that the amount in controversy exceeds $75,000, exclusive of interest and
costs.
Patterson’s failure to timely and fully comply with this Order will result in the
remand of this case for lack of subject matter jurisdiction.
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IT IS FURTHER ORDERED that Plaintiffs may file a response no later than
seven days after the amended notice of removal and memorandum are filed.
IT IS FURTHER ORDERED that all other proceedings in this case are
STAYED pending further order of this Court.
________________________________
AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 17th day of November, 2014
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