ADMIRAL INSURANCE COMPANY v. SNAP TRANSLOADING, LLC et al

Filing 23

OPINION. Signed by Judge Brian R. Martinotti on 1/10/2022. (sm)

Case 2:21-cv-10392-BRM-CLW Document 23 Filed 01/10/22 Page 1 of 6 PageID: 349

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
ADMIRAL INSURANCE COMPANY,
Plaintiff,
Case No. 2:21-cv-10392 (BRM) (CLW)
v.
OPINION
SNAP TRANSLOADING, LLC,
Defendant.
MARTINOTTI, DISTRICT JUDGE
Before the Court is Defendant Snap Transloading, LLC’s (“Snap”) Motion to Dismiss the
Complaint pursuant to Federal Rule of Civil Procedure 12(b)(1), or in the alternative, Motion to
Stay. (ECF No. 14.) Plaintiff Admiral Insurance Company (“Admiral”) opposed the motions (ECF
No. 21), and Snap replied (ECF No. 22). Having reviewed the submissions filed in connection
with the Motions and having declined to hold oral argument pursuant to Federal Rule of Civil
Procedure 78(b), for the reasons set forth below and for good cause having been shown, Snap’s
Motion to Dismiss is GRANTED, and Snap’s Motion to Stay is DENIED AS MOOT.

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I.

BACKGROUND1
In July 2019, Alessandra Souza Costa2, an employee of Snap, sued New Jersey Rail Carrier

in the New Jersey Superior Court, seeking damages for injuries sustained when constructing a
metal building. (Compl. (ECF No. 1) ¶ 21.) In August 2020, New Jersey Rail Carrier3 commenced
a third-party action4 against Snap asserting claims for common law indemnity, contribution, and
contractual indemnity. (Id. ¶ 16.) By letter dated January 28, 2021, Admiral agreed to defend Snap
for the claims asserted by New Jersey Rail Carrier under a reservation of rights to deny coverage
pursuant to Admiral’s insurance policy. (Id. ¶¶ 8, 17.)
Three months later, on April 28, 2021, Admiral filed this Complaint against Snap in the
District Court, asking the Court for a declaratory judgment that Admiral “can withdraw from the
defense of Snap Transloading in the Underlying Action.” (Id. at 9.) According to Admiral, its
insurance policy applies to injuries caused by “Waste Transloading Onto Railcars” and the injuries

1

As a preliminary matter, the Court finds Snap is making a facial Rule 12(b)(1) attack primarily
because Snap’s motion was made before answering the Complaint. Kalick v. United States, 35 F.
Supp. 3d 639, 644 (D.N.J. 2014 (“A motion to dismiss for lack of subject matter jurisdiction
pursuant to FED. R. CIV. P. 12(b)(1) which is filed prior to answering the complaint is considered
a ‘facial challenge’ to the court’s subject matter jurisdiction.”). In addition, Snap accepts all
allegations in the Complaint as they are pled for the purpose of its motion (ECF No. 14-2 at 2) and
argued for the application of the motion standard for a Rule 12(b)(1) facial challenge (Id. at 4),
further demonstrating Snap is making a facial Rule 12(b)(1) attack. A facial attack “challenges the
subject matter jurisdiction without disputing the facts alleged in the complaint, and it requires the
court to ‘consider the allegations of the complaint as true.’” Davis v. Fargo, 824 F.3d 333, 346 (3d
Cir. 2016).
2

Alessandra Souza Costa was dismissed from this case due to Plaintiffs’ failure to effect service.
(ECF No. 20.)
3

New Jersey Rail Carrier was dismissed from this case due to Plaintiffs’ failure to effect service.
(ECF No. 17.)
4

Hereinafter, the original action filed against New Jersey Rail Carrier and the third-party action
filed against Snap are referred to as the “Underlying Action.”

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at the issue of the Underlying Action were not caused by “Waste Transloading Onto Railcars.” (Id.
¶ 21.) Admiral also alleges it has no duty to defend Snap under Admiral’s insurance policy
excluding common law indemnity and common law contribution. (Id. ¶¶ 27, 34.)
II.

LEGAL STANDARD
“A challenge to subject matter jurisdiction under Rule 12(b)(1) may be either a facial or a

factual attack.” Davis v. Fargo, 824 F.3d 333, 346 (3d Cir. 2016). A facial attack “challenges the
subject matter jurisdiction without disputing the facts alleged in the complaint, and it requires the
court to ‘consider the allegations of the complaint as true.’” Id. (citing Petruska v. Gannon Univ.,
462 F.3d 294, 302 n.3 (3d Cir. 2006)). A factual attack, on the other hand, “attacks the factual
allegations underlying the complaint’s assertion of jurisdiction, either through the filing of an
answer or ‘otherwise present[ing] competing facts.’” Id. (quoting Constitution Party of Pa. v.
Aichele, 757 F.3d 347, 358 (3d Cir. 2014)). A “factual challenge allows a court [to] weigh and
consider evidence outside the pleadings.” Id. (citation omitted). Therefore, when a factual
challenge is made, “no presumptive truthfulness attaches to [the] plaintiff’s allegations.” Id. (citing
Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977)). Rather, “the
plaintiff will have the burden of proof that jurisdiction does in fact exist,” and the court “is free to
weigh the evidence and satisfy itself as to the existence of its power to hear the case.” Id.
The Third Circuit has “repeatedly cautioned against allowing a Rule 12(b)(1) motion to
dismiss for lack of subject matter jurisdiction to be turned into an attack on the merits.” Davis, 824
F.3d at 348, 349 (collecting cases). “[D]ismissal for lack of jurisdiction is not appropriate merely
because the legal theory alleged is probably false, but only because the right claimed is ‘so
insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely
devoid of merit as not to involve a federal controversy.’” Id. at 350 (quoting Kulick v. Pocono

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Downs Racing Ass’n, Inc., 816 F.2d 895, 899 (3d Cir. 1987)). “In this vein, when a case raises a
disputed factual issue that goes both to the merits and jurisdiction, district courts must ‘demand
less in the way of jurisdictional proof than would be appropriate at a trial stage.’” Id. (citing
Mortensen, 549 F.2d at 892 (holding that dismissal under Rule 12(b)(1) would be “unusual” when
the facts necessary to succeed on the merits are at least in part the same as must be alleged or
proven to withstand jurisdictional attacks)). These cases make clear that “dismissal via a Rule
12(b)(1) factual challenge to standing should be granted sparingly.” Id.
III.

DECISION
Snap argues Admiral failed to “adequately allege that the jurisdictional threshold is met in

this case,” and therefore the Court lacks subject matter jurisdiction. (ECF No. 14-2 at 12.) Admiral
contends the insurance policy (ECF No. 21 at 14) and a “reasonable reading” of the Underlying
Action would “value it in excess of the $75,000 jurisdiction requirement” (id. at 15). The Court
agrees with Snap.
If a defendant challenges the sufficiency of the plaintiff’s amount in controversy, “the
plaintiff who seeks the assistance of the federal courts must produce sufficient evidence to justify
its claims.” Suber v. Kontinental Koaches, Inc., 104 F.3d 578, 583 (3d Cir. 1997). The standard is
preponderance of the evidence. McCann v. Newman Irrevocable Trust, 458 F.3d 281, 289 (3d Cir.
2006) “In an insurance coverage declaration action, courts look to the value of the insurance policy
and the damages alleged in the underlying case to determine whether the jurisdictional amount in
controversy has been met.” Colony Ins. Co. v. Troensa Constr., Inc., Civ. A. No. 17-3577, 2018
WL 4676038, at *6 (D.N.J. Sept. 28, 2018) (citing Jumara v. State Farm Ins. Co., 55 F.3d 873,
877 (3d Cir. 1995)).

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Here, Admiral’s Complaint is void of any factual assertion regarding the damages alleged
in the Underlying Action. In support of subject matter jurisdiction, Admiral offered only the
following statement:
Upon information and belief, the [p]laintiff in an underlying action
for bodily injury, seeks damages in excess of $75,000, exclusive of
interest or costs for which Snap Transloading will seek to be
indemnified from Admiral if the [p]laintiff and third-party plaintiff
in the underlying action prevail.”
(ECF No. 1 ¶ 6.)
“It is well settled in this court that, when our jurisdiction depends upon the amount in
controversy, it is determined by the amount involved in the particular case, and not by any
contingent loss either one of the parties may sustain by the probative effect of the judgment,
however certain it may be that such loss will occur.” New England Mortg. Sec. Co. v. Gay, 145
U.S. 123, 129 (1892); see also Columbia Gas Transmission Corp. v. Tarbuck, 62 F.3d 538, 54344 (3d Cir. 1995) (deeming “fines that [plaintiff] might have to pay in administrative proceedings”
as being too speculative in determining the amount in controversy). Mere conclusory statements
based “upon information and belief” that the plaintiff in the Underlying Action might seek
damages in excess of $75,000 are insufficient to establish whether the jurisdictional amount in
controversy has been met. See Abdel-Aleem v. OPK Biotech LLC, 665 F.3d 38, 45 (1st Cir. 2012)
(affirming district court’s dismissal of the complaint pursuant to Rule 12(b)(1) based on plaintiff
failing to provide factual support to defeat defendant’s challenge of jurisdictional amount).
Admiral offers no evidence to show its claims exceed the jurisdictional amount other than inviting
the Court to perform its independent appraisal of the value of the claim and measure it by a
“reasonable reading of the value of the rights being litigated.” (ECF No. 21 at 15). In other words,
Admiral’s Complaint failed to indicate the amount in controversy of its case, other than referring

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to the Underlying Action. Even in cases offered by Admiral, the parties offered more than mere
anticipation to pay damages to establish diversity jurisdiction. (ECF No. 21 at 11.) See Jumara v.
State Farm Ins. Co., 55 F.3d 873, 877 (3d Cir. 1995) (finding diversity jurisdiction established
based on allegations of “quite serious injuries” and entitlement to as much as $200,000 in
underinsured motorist benefits); see also Angus v. Shiley Inc., 989 F.2d 142, 145 (3d Cir. 1993)
(finding $50,000 amount in controversy requirement was satisfied based on “one for compensatory
damages in excess of $20,000, and one for punitive damages in excess of $20,000”). Accordingly,
because the Complaint fails to give notice regarding the amount in controversy, Admiral’s case is
dismissed.5
IV.

CONCLUSION

For the reasons set forth above, Snap’s Motion to Dismiss is GRANTED, and Snap’s
Motion to Stay is DENIED AS MOOT6.

/s/ Brian R. Martinotti
HON. BRIAN R. MARTINOTTI
UNITED STATES DISTRICT JUDGE
Dated: January 10, 2022

5

Because the Court cannot definitively conclude Admiral is not entitled to any remedy, dismissal
is without prejudice. See Figueroa v. Buccaneer Hotel Inc., 515 (3d Cir. 1999) (holding a Rule
12(b)(1) “dismissal for lack of subject matter jurisdiction is not an adjudication on the merits and
thus should be ordered ‘without prejudice’”); New Jersey Physicians, Inc. v. President of the
United States, 653 F.3d 234, 241 n.8 (3d Cir. 2011) (“[D]ismissal for lack for subject matter
jurisdiction [is] by definition without prejudice.”)
6

Because the Court finds it lacks subject matter jurisdiction over this case, the remaining filings
and objections are rendered moot. In re Corestates Trust Fee Litig., 837 F. Supp. 104, 105 (E.D.
Pa. 1993), aff’d, 39 F.3d 61 (3d Cir. 1994) (finding that once the court lacks subject matter
jurisdiction, all other objections become moot).