Cargo Logistics Services Corporation et al v. Xtra Lease, LLC

Filing 23

ORDER granting 10 Motion to Remand; affirming 20 Memorandum and Recommendations.. Signed by Chief Judge Robert J. Conrad, Jr on 4/29/2013. (blf)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
3:12-cv-832-RJC-DSC
CARGO LOGISTICS SERVICES,
CORPORATION and JAMES SZWED

)
)
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Plaintiffs,
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v.
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XTRA LEASE, LLC,
)
)
Defendant.
)
__________________________________________)

ORDER

THIS MATTER comes before the Court on Plaintiffs’ Motion for Remand and
supporting memorandum, (Doc. Nos. 10 and 11), Defendant’s Memorandum in Opposition,
(Doc. No. 17), the Magistrate Judge’s Memorandum and Recommendations (M&R), (Doc. No.
20), and Defendant’s Objections to Memorandum and Recommendations (Doc. No. 21).

I.

BACKGROUND
On November 8, 2012, Plaintiffs filed suit in Superior Court of Mecklenburg County,

North Carolina. Defendant filed a Notice of Removal to this Court on December 14, 2012 under
28 U.S.C. § 1332. (Doc. No. 1). On December 21, 2012, Defendants moved to dismiss the
instant suit for improper venue. (Doc. No. 6). On January 21, 2013, Plaintiffs moved to remand
for lack of subject matter jurisdiction. (Doc. No. 10). On March 4, 2013, the Magistrate Judge
issued an M&R in which he recommended granting Plaintiffs’ motion to remand the suit to state
court. Additionally, the Magistrate Judge stayed all proceedings, including discovery, in this
action pending this Court’s ruling on Plaintiffs’ motion to remand. On March 21, 2013,
Defendant filed objections to the M&R. This issue is now ripe for adjudication.

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II.

STANDARD OF REVIEW
The Federal Magistrate Act provides that a district court “shall make a de novo

determination of those portions of the report or specific proposed findings or recommendations
to which objection is made.” 28 U.S.C. § 636(b)(1); Camby v. Davis, 718 F.2d 198, 200 (4th Cir.
1983). In the absence of a timely filed objection, a district court need not conduct a de novo
review, but instead must “only satisfy that there is no clear error on the face of the record in
order to accept the recommendation.” Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310,
315 (4th Cir. 2005) (quoting Fed. R. Civ. P. 72 advisory committee’s note).
III.

DISCUSSION
The Magistrate Judge recommended that this Court grant Plaintiffs’ Motion to Remand

for lack of subject matter jurisdiction. Specifically, the Magistrate Judge found that the
Defendant had not established by a preponderance of the evidence that the amount in controversy
exceeds $75,000. Defendant lodged two objections to the M&R, namely (1) that it adopted a
standard (“beyond a doubt”) that had been statutorily abrogated; and (2) that it failed to account
for potential claims that Plaintiff may have, including future medical expenses, pain and
suffering, permanent injuries and emotional distress. Accordingly, the Court reviews these de
novo.
Where removal is based on federal diversity jurisdiction, the party seeking removal has
the burden of establishing by a preponderance of the evidence that the jurisdictional threshold
amount in controversy is met. Bartnikowski v. NVR, Inc., 307 F. App’x 730, 734 (4th Cir.
2009). “If the amount in controversy in diversity cases is in doubt, there is a sharp distinction
between original jurisdiction and removal jurisdiction. For cases brought in federal court, it must
appear to a legal certainty that the plaintiff’s claim is really for less than the jurisdictional

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amount to justify dismissal. For cases instituted in state court and removed, a strong presumption
arises that the plaintiff has not claimed an amount large enough to confer jurisdiction on a federal
court.” Evans v. CDX Services, LLC, 528 F.Supp.2d 599, 605 (S.D.W.Va. 2009) (internal
citations omitted).
The existence of subject matter jurisdiction must be satisfied; where it is lacking, a
removed case must be remanded. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94
(1998). Where plaintiff seeks to recover some unspecified amount that is not self-evidently
greater or less than the federal amount in controversy requirement, defendants seeking removal
must prove that it is more likely than not that the plaintiff’s claims exceed $75,000. Gafford v.
Gen. Elec. Co., 997 F.2d 150, 155 (6th Cir. 1993). Mere averments are not sufficient; the
defendant must produce some competent proof that the amount of controversy requirement is
satisfied. Id.
North Carolina prohibits plaintiffs from pleading a specific sum. Accordingly, Plaintiffs
did not state specific sums but merely provided that each was seeking recovery in excess of
$10,000. Plaintiffs and Defendant agree that the parties are diverse and that Plaintiff Cargo
Logistics damages do not exceed $75,000. The issue for this Court is to determine whether
Defendant has shown by a preponderance of evidence that Plaintiff Szwed’s damages exceed
$75,000. If Defendant can satisfy the amount in controversy requirement of 28 U.S.C. § 1332,
the Court may then exercise supplemental jurisdiction over Cargo Logistics under 28 U.S.C. §
1367. See Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 558 (2005).
A. Preponderance of Evidence Standard
Defendant objected that the Magistrate Judge’s statement that “[a]ny doubts about
removal must be resolved in favor of remand,” (Doc. No. 20 at 3) amounts to a “beyond a doubt”

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standard that was abrogated by the preponderance of evidence standard established by 28 U.S.C.
§ 1446. The Court finds any error harmless as the Magistrate Judge applied the correct standard
in his overall determination: “the party asserting jurisdiction must prove by a preponderance of
the evidence that the amount in controversy has been met.” (Id.)
B. Amount in Controversy
Defendant’s second objection is that the Court failed to account for damages related to
future medical expenses, pain and suffering, permanent injuries or emotional distress. For
purposes of determining subject matter jurisdiction, the Court may consider the type and extent
of injuries and possible damages recoverable, including punitive damages, as well as expenses or
losses incurred by the plaintiff up to the date the notice was filed. Watterson v. GMRI, Inc., 14
F.Supp.2d 844, 850 (S.D.W.Va. 1997).
In cases originally brought in state court, the “strong presumption” is that the plaintiff’s
claim does not exceed the amount in controversy. Here, Defendant has not provided any
competent evidence that the injuries sustained by Szwed exceed $75,000. Defendant cites to
cases in which, through settlement or verdict, plaintiffs obtained awards exceeding $75,000.
Defendant has not, however, provided any evidence to suggest that the injuries in the instant case
are similar to those in the cases cited.
In contrast, Plaintiff Szwed has provided an affidavit attesting to his medical expenses as
well as a stipulation that his injuries do not exceed $75,000. The affidavit states that Plaintiff’s
medical expenses totaled $8,690.35 and are limited to treatment received on April 17, 2012.
(Doc. No. 19-1). Plaintiff Szwed’s affidavit suggests that he incurred no additional medical bills
related to the injury between April 17, 2012 and February 27, 2013 when he signed the affidavit.
Finally, Plaintiffs stipulated that the damages for each Plaintiff were under $75,000. When faced

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with an unspecified claim for damages, several courts have held that a post-removal stipulation
by the plaintiff that the claim does not exceed the minimum federal jurisdiction amount is
appropriate for consideration. Griffin v. Holmes, 843 F.Supp. 81,88 (E.D.N.C. 1993).
Defendant, as the party seeking removal, has the burden to establish by a preponderance
of the evidence that the amount in controversy requirement is met. Defendant has failed to do so
in this case; accordingly this Court lacks subject matter jurisdiction and must remand the case.
IT IS, THEREFORE, ORDERED that:
1.

The Magistrate Judge’s M&R (Doc. No. 20) is ADOPTED

2.

Plaintiff’s Motion to Remand (Doc. No. 10) is GRANTED

Signed: April 29, 2013

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