Liesman v. Weisberg
Filing
26
ORDER denying 11 Motion to Dismiss for Lack of Jurisdiction; denying 11 Motion to Change Venue. Signed by District Judge Max O. Cogburn, Jr on 7/3/18. (tob)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
DOCKET NO. 3:17-cv-660
ROBERT M. LIESMAN,
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Plaintiff,
v.
AMY F. WEISBERG,
Defendant.
ORDER
THIS MATTER is before the court on the defendant’s Motion to Dismiss for Lack of
Jurisdiction and Alternative Motion to Change Venue (#11). Having considered the Motions and
the pleadings in this matter, the court enters the following Order.
I. BACKGROUND
This is a defamation dispute case arising out of custody litigation occurring in Mecklenburg
County, North Carolina. Plaintiff, a resident of North Carolina, contends that defendant, a resident
of Virginia, defamed him by making slanderous statements to the parties’ 13-year-old minor
child’s pediatrician and psychologist in Northern Virginia. On November 10, 2017, defendant filed
notice to remove the case to this court based on diversity jurisdiction. In his Amended Complaint
(#9), plaintiff asks the court to resolve the dispute in plaintiff’s home district. In the instant Motion
(#11), defendant asks the court to dismiss the action for a lack of jurisdiction, or in the alternative,
transfer this matter to an appropriate district court in Virginia. Id.
I. STANDARDS OF REVIEW
A.
Personal Jurisdiction
Rule 12(b)(2) of the Federal Rules of Civil Procedure provides for dismissal where the
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court lacks personal jurisdiction over a particular defendant. The standard for deciding a motion
based on Rule 12(b)(2) was set forth by the Fourth Circuit Court of Appeals in Combs v. Bakker,
886 F.2d 673, 676 (4th Cir. 1989), where it explained that a plaintiff has the burden to prove
personal jurisdiction by a preponderance of the evidence.
When a factual dispute arises as to whether or not jurisdiction exists, the court may either
conduct an evidentiary hearing or defer ruling on the matter until it receives evidence on the
jurisdictional issue at trial. Id. When a court decides the issue on the record then before it, the
court may consider “the motion papers, supporting legal memoranda, affidavits, other documents,
and the relevant allegations of the complaint,” and the burden is plaintiffs’ “to make a mere prima
facie showing of jurisdiction to survive the jurisdictional challenge.” Clark v. Milam, 830 F.Supp.
316, 319 (S.D.W.Va.1993) (citations omitted). A court must resolve factual disputes in favor of
the party asserting jurisdiction for the limited purpose of the prima facie showing. Combs, 886
F.2d at 676. Such resolution must include construing all relevant pleadings in a light most
favorable to the plaintiff, assume the credibility of any affiant, and must draw the most favorable
inferences for the existence of jurisdiction. Id.; see also Thomas v. Centennial Commc'ns Corp.,
2006 WL 6151153, at *2 (W.D.N.C. Dec. 20, 2006).
“[F]or a district court to assert personal jurisdiction over a nonresident defendant, two
conditions must be satisfied: (1) the exercise of jurisdiction must be authorized under the state’s
long-arm statute; and (2) the exercise of jurisdiction must comport with the due process
requirements of the Fourteenth Amendment.” Carefirst of Maryland, Inc. v. Carefirst Pregnancy
Centers, Inc., 334 F.3d 390, 396 (4th Cir. 2003). Since North Carolina’s long-arm statute extends
jurisdiction to the outer limits of due process, the jurisdictional analysis merges into a single due
process inquiry. Thomas, 2006 WL 6151153, at *2.
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i. General Jurisdiction
To be consistent with the limitations of due process, a defendant must have “minimum
contacts” with the forum state, “such that the maintenance of the suit does not offend traditional
notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945). Minimum contacts may be established by showing “general” or “specific” jurisdiction.
Helicopteres Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414 (1984). A court may
exercise general jurisdiction over a nonresident defendant if the defendant has contacts with a state
that are so “continuous and systematic” as to render them “essentially at home in the forum.”
Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011).
i. Specific Jurisdiction
In the absence of general jurisdiction, a court may exercise specific jurisdiction over the
defendant where the cause of action arises out of defendant’s activities in the forum state. Id.
(holding that a forum state may assert specific jurisdiction over a claim where there is an
“affiliatio[n] between the forum state and the underlying controversy”). In analyzing specific
jurisdiction over a defendant, courts consider whether: “(1) the defendant purposefully directed its
activities at residents of the forum state, (2) the claim arises out of or relates to the defendant’s
activities with the forum state, and (3) assertion of personal jurisdiction is reasonable and fair.”
Grober v. Mako Products, Inc., 686 F.3d 1335, 1346 (Fed. Cir. 2012) (citation omitted).
A defendant purposely establishes “minimum contacts” in the forum state either by
deliberately engaging in significant activities or by creating continuing obligations such that she
has “availed [herself] of the privilege of conducting business there.” Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 476 (1985); Int’l Shoe Co., 326 U.S. at 316. These acts must be “such
that [a defendant] should reasonably anticipate being hauled into court [in the forum state].”
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World-Wide Volkswagen Corp. v. Woodson, 444, U.S. 286, 297 (1980). Plaintiff has the burden
of making a prima facie showing of specific jurisdiction by satisfying the first two elements. The
burden then shifts to defendant to show that such assertion is unreasonable and unfair. Id.
B. Subject Matter Jurisdiction
As a threshold matter, the court must determine whether it has subject matter jurisdiction
to adjudicate Plaintiffs’ claims. See Fed. R. Civ. P. 12(h)(3) (“If the court determines at any time
that it lacks subject-matter jurisdiction, the court must dismiss the action.”). Subject matter
jurisdiction involves “[j]urisdiction over the nature of the case and the type of relief sought.” In
the Matter of T.R.P., 360 N.C. 588, 590 (2006) (citing Black’s Law Dictionary, 856 (7th ed.
1999)). In the absence of such jurisdiction, the court has no power to decide a case.
The primary sources of the subject-matter jurisdiction of federal courts include diversity
jurisdiction and federal question jurisdiction. See 28 U.S.C. § 1331, 1332(a). 28 U.S.C.A. §
1332(a), which pertains to diversity jurisdiction, provides: “The district courts shall have original
jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of
$75,000, exclusive of interest and costs, and is between: (1) citizens of different states; (2) citizens
of a State and citizens or subjects of a foreign state, except that the district courts shall not have
original jurisdiction under this subsection of an action between citizens of a State and citizens or
subjects of a foreign state who are lawfully admitted for permanent residence in the United States
and are domiciled in the same State; (3) citizens of different States and in which citizens or subjects
of a foreign state are additional parties; and (4) a foreign state, defined in section 1603(a) of this
title, as plaintiff and citizens of a State or of different States.”
Diversity jurisdiction is determined based on the state of the pleadings at the time of
removal. A plaintiff may not defeat diversity jurisdiction by filing a post-removal amendment
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which reduces the amount of damages requested by the complaint below the amount in controversy
required by 28 U.S.C. § 1332(a). Saint Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283,
294 (1938). The Third and Fifth Circuits, as well as district courts within the Fourth Circuit, have
held that plaintiffs in removal actions may clarify the damages sought when state pleading
requirements did not permit him to do so in the original complaint. See Angus v. Shiley, Inc., 989
F.2d 142, 145 n. 3 (3d Cir. 1993); Asociacion Nacional v. Dow Quimica, 988 F.2d 559, 565 (5th
Cir. 1993); Griffin v. Holmes, 843 F. Supp. 81 (E.D.N.C. 1993). However, the Fourth Circuit has
not specifically addressed this issue. See Woodward v. Newcourt Commer. Fin. Corp., 60
F.Supp.2d 530, 532 (D.S.C. 1999).
Where federal subject matter jurisdiction is at issue, the burden of establishing diversity
jurisdiction rests with the party seeking to preserve removal. Mulcahey v. Columbia Organic
Chems. Co. Inc., 29 F.3d 148, 151 (4th Cir. 1994). The burden thus rests on defendant to prove
that diversity jurisdiction exists. Id.
C. Change of Venue
28 U.S.C. § 1404(a) provides: “For the convenience of parties and witnesses, in the interest
of justice, a district court may transfer any civil action to any other district or division where it
might have been brought or to any district or division to which all parties have consented.” Id. For
a motion to transfer, a movant’s burden is heavy. Datasouth Computer Corp. v. Three Dimensional
Technologies, Inc., 719 F.Supp. 446, 451 (W.D.N.C. 1989). A court’s decision to grant a motion
to transfer venue under 28 U.S.C. § 1404(a) is largely discretionary. 3A Composites USA, Inc. v.
United Indus., Inc., 2014 WL 1471075, at *1 (W.D.N.C. Apr. 15, 2014) (citing Landers v. Dawson
Const. Plant Ltd., 201 F.3d 436 (4th Cir. 1999)). Factors to consider include:
1. The plaintiff’s initial choice of forum;
2. The residence of the parties;
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3. The relative ease of access of proof;
4. The availability of compulsory process for attendance of witnesses and the costs of
obtaining attendance of willing witnesses;
5. The possibility of a view by the jury;
6. The enforceability of a judgment, if obtained;
7. The relative advantages and obstacles to a fair trial;
8. Other practical problems that make a trial easy, expeditious, and inexpensive;
9. The administrative difficulties of court congestion;
10. The interest in having localized controversies settled at home and the appropriateness
in having the trial of a diversity case in a forum that is at home with state law that must govern the
action; and
11. The avoidance of unnecessary problems with conflict of laws.
Jim Crockett Promotions, Inc. v. Action Media Grp., Inc., 751 F.Supp. 93, 96 (W.D.N.C. 1990)
(citation omitted).
The court must exercise its own discretion and apply a balancing test in deciding whether
transfer is appropriate. Id. “The above factors fall into three categories: (1) factors that favor
neither party, (2) factors that favor Defendant, and (3) factors that favor Plaintiff.” Cohen v. ZL
Technologies, Inc., 2015 WL 93732, at *2 (W.D.N.C. Jan. 7, 2015) (citing Crockett, 751 F. Supp.
at 98). The court must analyze the eleven factors based on quality, not just quantity. Id. (citing
Crockett, 751 F. Supp. at 96). In most cases, the plaintiff’s choice of forum should be given
significant weight, and should not be disturbed unless the balance is strongly in favor of transfer.
Collins v. Straight, Inc., 748 F.2d 916, 921 (4th Cir. 1984) (citing Gulf Oil Corp. v. Gilbert, 330
U.S. 501, 508 (1947)).
III.
DISCUSSION
The court is asked to make several determinations:
1. Whether the court may properly exercise personal jurisdiction over Weisberg;
2. Whether the court may properly exercise subject matter jurisdiction over Weisberg; and
3. Whether the action should be transferred to another judicial district in the interests of
justice and for the convenience of the parties, pursuant to § 1404.
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The court will consider each question seriatim.
A. Personal Jurisdiction
In order to determine whether this court has personal jurisdiction over a nonresident
defendant, the court must apply a two-step test. First, “the transaction must fall within the language
of the State’s ‘long-arm’ statute. Second, the exercise of jurisdiction must not violate the due
process clause of the fourteenth amendment to the United States Constitution.” Wells Fargo Bank,
N.A. v. Affiliated FM Ins. Co., 193 N.C. App. 35, 39 (2008) (quoting Tom Togs, Inc. v. Ben Elias
Indus. Corp., 318 N.C. 361, 364 (1986)). To prove that the alleged transaction meets the first
condition, plaintiff argues that defendant’s conduct falls under N.C. Gen. Stat. 1-75.4 (1)(d) of
North Carolina’s “Long Arm Statute,” which requires that defendant be engaged in “substantial
activity within [North Carolina] . . . when service of process is made upon such party.” See N.C.
Gen Stat. 1-75.4 (1)(d). Specifically, plaintiff argues that defendant’s ongoing custody litigation
in North Carolina, in addition to defendant’s repeated trips to North Carolina to visit family and
friends, are evidence of defendant’s engagement of substantial activity within the state.
The court agrees with plaintiff that defendant’s ongoing custody litigation in North
Carolina represents “substantial activity” and thus falls under activity covered by the state’s “Long
Arm Statute.” The court is mindful that the defendant is unable to move the matter to another state
because of North Carolina’s compliance with the Uniform Custody Jurisdiction Act, N.C. Gen
Stat. 50A-10; however, defendant’s inability to legally move the dispute to another jurisdiction
does not necessarily mean that the conduct itself is incapable of being considered evidence of
“substantial activity” that places her within the jurisdictional purview of the state. As such, the
court finds that defendant is subject to North Carolina jurisdiction under the “Long Arm Statute.”
Additionally, plaintiff alleges that defendant has also been engaged in “substantial activity”
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within North Carolina in that she frequently visits friends and family who reside in the state.
Defendant disputes these factual allegations, and contends that her only relative in the state is her
sister, whom she has not visited since August 2015. Further, defendant argues that aside from a
visit to North Carolina last year for a celebration, her contact with the state has been limited to
drop offs and pickups of the minor children that are required under the custody order between the
parties, and that she immediately either returns to Virginia or stays with her mother in South
Carolina. Upon examining the diverging factual allegations offered by both plaintiff and
defendant, the court recognizes that where there is a dispute among the facts, “the court must
construe all relevant pleading allegations in the light most favorable to the plaintiff, assume
credibility, and draw the most favorable inferences for the existence of jurisdiction.” Combs, 886
F.2d at 675 (4th Cir. 1989). The court further notes that given the reason stated above for finding
jurisdiction in North Carolina under the “Long Arm Statute,” analysis of additional grounds for
jurisdiction in this state are unnecessary.
Under the second part of the two-party inquiry for establishing jurisdiction over a
nonresident defendant, the court must decide whether assuming personal jurisdiction over the
defendant would comport with the due process requirements of the Fourteenth Amendment. Wells
Fargo, 193 N.C. App. at 39 (quoting Tom Togs Inc., 318 N.C. at 364). In making this assessment,
the court will consider whether defendant has purposefully availed themselves of the forum state,
whether the claim arises out of or relates to defendant’s conduct within the state, and whether the
exercise of personal jurisdiction is reasonable and fair under the due process clause of the
Fourteenth Amendment. Grober, 686 F.3d at 1346. In the instant case, plaintiff contends that
defendant is subject to personal jurisdiction under theories of both general and specific jurisdiction.
Plaintiff also alleges that defendant has waived the defense of lack of general jurisdiction by
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evincing her intent to refute and defend the merits of his defamation claim. As explained herein,
the court finds that personal jurisdiction is appropriate in this matter.
i. General Jurisdiction
A forum state may exercise general jurisdiction over a nonresident defendant where that
party maintains “continuous and systematic contacts with a state.” Perkins v. Benguet Consol.
Mining Co., 342 U.S. 437, 446 (1952). Plaintiff argues that defendant has established “minimum
contacts” with North Carolina and purposefully availed herself by engaging in significant activities
and creating continuing obligations with residents of the state. In support, plaintiff points to the
seven-year ongoing custody lawsuit with defendant, which plaintiff argues creates an expectation
for the defendant that she can reasonably anticipate being hailed into court in North Carolina since
she already has been and thus has the necessary continuing obligations with the state.
After reviewing the factual allegations presented by both parties, the court finds that
personal jurisdiction in North Carolina would not violate the due process clause of the Fourteenth
Amendment. As the Supreme Court has emphasized, “[t]he unilateral activity of those who claim
some relationship with a nonresident defendant cannot satisfy the requirement of contact with the
forum State” and “it is essential in each case that there be some act by which the defendant
purposefully avails [him]self of the privilege of conducting activities within the forum State, thus
invoking the benefits and protections of its laws.” Burger King, 471 U.S. at 474-75 (citing Hanson
v. Denckla, 357 U.S. 235, 246 (1958)).
Here, defendant argues that such custody proceedings initiated by plaintiff against
defendant would appear to be the kind of “unilateral activity of another party or a third person”
that cannot satisfy due process. Id. at 475. However, although defendant’s compliance with the
custody proceedings enforced by North Carolina might alone not constitute a deliberate “act” by
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which the defendant has purposefully availed herself of the state, given that she was the one to
initiate the proceedings against plaintiff in 2011, the court finds defendant has indeed purposefully
availed herself to the state of North Carolina. Id. at 475. The court acknowledges that the Supreme
Court has held that a state’s ability to govern the obligations of a defendant does not signify that
the defendant has “purposefully avail(ed themselves) of the privilege of conducting activities
within the forum state,” and that to hold otherwise “strains reason.” Shaffer v. Heitner, 433 U.S.
186, 216 (1977) (quoting Hanson, 357 U.S. at 253). However, the instant case can be distinguished
from Shaffer, in that defendants in Shaffer had no connection to the State of Delaware aside from
being shareholders to the organization that was incorporated there, whereas here, defendant on her
own, initiated a lawsuit in North Carolina and thus created a continuing obligation between her
and the state in which she has continued to receive protections and benefits from its custody laws.
For these reasons, the court finds that defendant’s ongoing custody litigation constitutes
“continuing obligations” that are systematic enough to afford the court general jurisdiction finding
defendant “at home” in the state of North Carolina. Goodyear, 564 U.S. at 919.
The court does, however, note that defendant did not waive her personal jurisdiction
defense based on the discussion captured in the affidavit defendant submitted in this matter. In
determining whether defendants waive their personal jurisdiction defense, it must be decided
whether defendant’s appearances and filings “amount to legal submission to the jurisdiction of the
court, whether voluntary or not.” Days Inns Worldwide, Inc. v. Patel, 445 F.3d 899, 905 (6th Cir.
2006). The court notes that actions that give “plaintiff a reasonable expectation that [defendants]
will defend the suit on the merits or must cause the court to go to some effort that would be wasted
if personal jurisdiction is later found lacking” will result in a waiver of a personal jurisdiction
defense. Mobile Anesthesiologists Chicago, LLC v. Anesthesia Associates of Houston
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Metropolex, P.A., 623 F. 3d 440, 443 (7th Cir. 2010).
Plaintiff argues that defendant’s statements in her affidavit, which refer to plaintiff’s
relationship with parties’ other daughter, represent attacks on his credibility and are misplaced
given that the dispute was strictly over jurisdictional issues. Plaintiff points to other circuits and
districts, where courts have found that similar conduct by a defendant constituted a waiver of a
personal jurisdiction defense. See, e.g., Trust Co. Bank v. Tingen-Millford Drapery Co., Inc., 119
F.R.D. 21, 22 (E.D.N.C. 1987) (holding that a motion for an extension of time to answer can
constitute an appearance by implication which is a waiver of personal jurisdiction, as “[a]n
appearance by implication . . . can arise as a result of an objective manifestation of intent on the
part of the defendant or counsel to defend the action”); see also Gerber v. Riordan, 649 F.3d. 514
(6th Cir. 2011) (finding that defendants’ filing of a general appearance with the district court
constituted a voluntary acceptance of that forum’s jurisdiction, and thus waived the defendants’
personal jurisdiction defense).
However, the instant case can be distinguished from those cited by the plaintiff in that
defendant’s counsel did not make a responsive pleading or file a general appearance to argue the
merits of the case. Instead, they filed a special appearance to contest only the jurisdiction of the
court. Additionally, defendant’s statements in the affidavit should not be construed as an
appearance by implication, since they do not convey a request to plaintiff’s counsel for an
extension to file an answer nor any motion which could be read as an intent to defend the suit on
its merits. To interpret the commentary otherwise would require a level of speculation that is
inappropriate at this stage. In short, the court finds that, since defendant filed a timely motion under
Fed. R. Civ. P. 12(b)(2) to dismiss for lack of personal jurisdiction, and did not “[f]ail to either: (i)
make it by motion under this rule; or (ii) include it in a responsive pleading,” defendant has not
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waived her right to a personal jurisdiction defense. See Fed. R. Civ. P. 12(h)(1).
ii. Specific Jurisdiction
Plaintiff asserts that the court also has specific jurisdiction over defendant, in that the
defendant has repeatedly made defamatory statements with the intent of influencing the parties’
domestic dispute in Mecklenburg County, North Carolina. Plaintiff further alleges that many of
the false, untruthful, and defamatory statements made by defendant, and which are the source of
his intentional infliction of emotional distress claim, are based on events that occurred while both
parties lived in North Carolina. Additionally, plaintiff contends that the “publication” of the
statements injured his business and have impacted his business within the State of North Carolina.
Thus, plaintiff argues that when taken as a whole, the defamatory statements and their injury to
plaintiff’s professional reputation in North Carolina, serve to establish specific jurisdiction over
the defendant. For reasons explained herein, the court holds that specific jurisdiction is also
appropriate here.
The court notes that “a defamatory statement made in due course of a judicial proceeding
is absolutely privileged and will not support a civil action for defamation, even though it be made
with express malice.” C.D. Harman v. Belk, 165 N.C. App 819, 825 (2004) (quoting Jarman v.
Offutt, 239 N.C. 468, 472 (1954)). See also Harris v. NCNB Nat’l Bank of N.C., 95 N.C. App.
669, 672 (1987). Thus, even if the statements were defamatory as alleged by plaintiff, they do not
support the contention that they alone can be used as a basis for establishing jurisdiction in this
case since such statements are privileged by absolute immunity.
The court also finds the North Carolina Supreme Court’s holding in Saxon v. Smith, 125
N.C. App. 163, 170 (1997) (citing Keeton v. Hustler Magazine, Inc. 465 U.S. 770, 777 (1984)), to
be instructive. There, the court held that libel and slander are “generally held to occur wherever
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the offending material is circulated.” Id. In the instant case, plaintiff contends that the “publication”
occurred during a medical examination in Virginia when defendant made statements to medical
professionals exclusively employed in Virginia. Thus, the event at issue here involves material
that was “circulated” in Virginia, not North Carolina, but which “relates” to the custody litigation
in North Carolina which as explained above, is evidence of defendant purposefully availing herself
to the state’s laws and protections. Thus, the said material can be said to “arise out of or relate to
the defendant’s contacts with the forum.” Goodyear, 564 U.S. at 924 (quoting Helicopteros
Nacionales, 466 U.S. at 414 n. 8).
Therefore, given that the controversy relates to the custody litigation representing
defendant’s contacts with North Carolina, the court concludes that specific jurisdiction is also
appropriate here. Accordingly, the court finds that personal jurisdiction is not lacking in this case.
To have defendant be subject to suit where the underlying cause of action did not occur, but where
she does maintain continuous and systematic contacts and whereby the underlying cause if action
is related to defendant’s contacts with the forum, is both reasonable and fair under the due process
clause of the Fourteenth Amendment.
B.
Subject Matter Jurisdiction
As noted earlier, defendant removed this case based on diversity of citizenship subject
matter jurisdiction under 28 U.S.C. § 1332. The court acknowledges the general rule that on a
motion to remand, the burden of establishing federal subject matter jurisdiction rests on the party
or parties seeking to preserve removal. Morales v. Showell Farms, Inc., 910 F. Supp. 244, 246
(M.D.N.C. 1995) (citing Mulcahey v. Columbia Organic Chems. Co., Inc., 29 F.3d 148, 151
(M.D.N.C. 1995)). Thus, here defendant has the burden to prove that plaintiff’s claim falls within
the purview of this court and is permissible under the narrow limitations of removal jurisdiction.
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The court also notes that diversity jurisdiction is determined based on the state of the pleadings at
the time of removal. Pinney v. Nokia, Inc., 402 F. 3d 430, 443 (4th Cir. 2005). As such, diversity
jurisdiction in the instant case will be based on plaintiff’s initial complaint filed in state court, as
his amended complaint was filed subsequent to removal. The court agrees with the parties that
they are completely diverse in that plaintiff is a citizen of North Carolina and defendant is a citizen
of Virginia. As such, the court’s analysis will focus on evaluating § 1332(a)’s requirement that the
amount in controversy exceed $75,000 in order for diversity jurisdiction to be established.
Plaintiff here asserts his claim for remand pursuant to 28 U.S.C.A. § 1332(a), in which he
argues that the amount in controversy is not in excess of $75,000, and thus, the court lacks subject
matter jurisdiction over this matter. The court notes that a plaintiff in a removal action may not
defeat diversity jurisdiction by filing a post-removal amendment which reduces the amount of
damages sought by the complaint below the amount in controversy required by 28 U.S.C. §
1332(a). Saint Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 294 (1938). However, as
held by the court in Griffin v. Holmes, 843 F. Supp. 81 (E.D.N.C. 1993), a plaintiff may clarify
the damages sought when state pleading requirements did not permit him to do so in the original
complaint. Here, plaintiff alleges that state pleading Rule 8(a)(2) did not permit him to specify his
damages any further than what he had in his motion to remand. Thus, he argues that his stipulation
does not reduce the amount of damages previously sought but rather clarifies the damages
requested in his initial complaint. Plaintiff also contends that his counsel has informed defendant’s
counsel subsequent to initiating the lawsuit that he was not currently seeking damages in excess
of $75,000. Ex. 1 at 1. Plaintiff notes that his filing a Motion to Remand for lack of subject matter
jurisdiction, filing an affidavit stipulating that the amount of controversy has been below $75,000
at all relevant times, his testimony under oath at deposition that his damages were below $75,000,
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and his verification of answer to defendant’s discovery that the amount in controversy is below
$75,000, all support his position that the amount of controversy in this claim has not been satisfied.
In his deposition, plaintiff stipulates in his affidavit that the matter in controversy is less
than $75,000, exclusive of interest and costs. See Affidavit of Robert Liesman, Doc. #13. Plaintiff
contends that he is seeking $39,000 in compensatory damages and approximately $10,000 in
punitive damages, which amounts to less than $50,000 in total awarded damages. (Ex. A. Interrog.
6.). Defendant, however, maintains that plaintiff’s total compensatory damages are over $39,000
since his projection does not include attorney’s fees, which are permissible under Missouri State
Life Ins. Co. v. Jones, 290 U.S. 199 (1933), and is based on what defendant considers an arbitrary
calculation of damages. Such a miscalculation, in culmination with a punitive award which could
be twice the amount of compensatory damages, would put plaintiff’s claim in excess of $75,000
and thus meet the statutory amount in controversy requirement. Defendant further argues that
plaintiff’s stipulated amount for compensatory damages failed to includes certain other damages,
which he asked for in part of his complaint, and if added would certainly bring the amount to well
over the $75,000 threshold. Lastly, defendant notes that under North Carolina General Statute §
1D-25, punitive damages can be the greater of $250,000 or three times compensatory damages.
Upon reviewing the factual allegations put forth by both parties, the court finds that
plaintiff’s attempt to convince the court that he is seeking less than $75,000 in damages falls short.
Plaintiff’s stipulation attempts to keep his action in state court while maintaining his ability to
collect a large amount of damages. Other districts have found that, where stipulations are used,
plaintiffs cannot recover a total amount of actual and punitive damages with respect to all claims
exceeding the jurisdictional amount. See Thrift v. Ford Motor Credit Co., 2006 U.S. Dist. Lexis
20838. During plaintiff’s deposition, plaintiff’s counsel stated that it was plaintiff’s position that,
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when put in front of a jury, plaintiff “could ask for $1,000,000.”(Exhibit “E” Dep. Pp. 152-153).
Such language evinces the view that plaintiff indeed could collect damages in excess of $75,000
and thus meet the amount in controversy as required by the statute. The court is therefore not
persuaded by plaintiff’s claim that he is seeking less than $50,000 in damages.
The court notes that although there is no minimum award under the statute, the limits
imposed are designed to set an absolute maximum punitive damages award against defendant and
should not be interpreted to mean that the court is likely to award such an amount. Further, the
court holds that although plaintiff could seek higher punitive damages, he has repeatedly insisted
that it is not his intention to do so. In regards to the attorney’s fees, the court finds the rulings by
other federal courts on this matter to be persuasive and as such, holds that the decision in Missouri
State Life Ins. Co. v. Jones applies only to cases whereby legal fees are recoverable under contract
or statute. See Francis v. Allstate Ins. Co., 709 F.3d 362, 368 (4th Cir. 2013) (quoting 15-102
Moore’s Federal Practice, Civil § 102.106(6)(a)) (holding that “generally, attorney’s fees are not
included in the amount in controversy calculation, but courts have created two exceptions to this
rule: (1) if the fees are provided for by contract; or (2) if a statute mandates or allows payments of
attorney’s fees.”); see also Saval v. BL Ltd., 710 F. 2d 1027, 1033 (4th Cir. 1983) (declining to
include attorney’s fees in the amount in controversy calculation recoverable as “costs”); Can-Dev,
ULC v. SSTI Brewster Brampton, LLC, 2016 WL 8467196, at *4 n.5 (M.D.N.C. 2016) (“Given
that this case is in an early stage of litigation and that the Complaint does not specify any damages,
it would be too speculative to project that Plaintiff’s attorneys’ fees could satisfy the amount in
controversy in this case”) (citation omitted). Here, since there appears to be neither a contract
among the parties, nor a pertinent North Carolina statute which expressly authorizes recovery of
attorney’s fees in defamation disputes, the court finds that the attorney’s fees may not be included
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in damages calculations.
That said, at this time the court finds that, based on plaintiff’s testimony during the
deposition and the potential for a large punitive damages award, the amount in controversy is met
for the purposes of establishing subject matter jurisdiction. As both personal jurisdiction and
subject matter jurisdiction are therefore proper in this court, the court will assess whether
defendant’s motion for a transfer of venue is warranted under § 1406.
C. Change of Venue
Even where venue is appropriately found in this district, the court may transfer the case to
another district, pursuant to § 1404(a). Within this district, motions to transfer venue are analyzed
using the eleven Crockett factors noted above. While the moving party bears a heavy burden on a
motion to transfer venue, Datasouth Computer Corp. v. Three Dimensional Technologies, Inc.,
719 F.Supp. 446, 451 (W.D.N.C. 1989), a court’s decision to grant a motion to transfer venue
under 28 U.S.C. § 1404(a) is largely discretionary. 3A Composites USA, Inc. v. United Indus.,
Inc., No. 5:13CV83-RLV, 2014 WL 1471075, at *1 (W.D.N.C. Apr. 15, 2014).
1. Initial Choice of Forum
The first Crockett factor is the plaintiff’s initial choice of forum. In this case, the plaintiff
initially chose the Western District of North Carolina as its preferred forum. Although the choice
of forum by the Plaintiff is ordinarily given considerable weight, that weight is diminished when
the conduct giving rise to the complaint did not occur in the forum. Hames v. Morton Salt, Inc.,
3:11cv570-MOC-DSC, 2012 WL 1247201, at *2 (W.D.N.C. Apr. 13, 2012) (citing Parham v.
Weave Corp., 323 F.Supp.2d 670, 674 (M.D.N.C. 2004)). Indeed, the weight given to the
plaintiff’s choice of forum is proportionate to the relation between the forum and the cause of
action. Parham, 323 F.Supp. 2d at 674. Here, this factor weighs in favor of the plaintiff and his
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desire to keep the case in this district, where he resides.
2. Residence of each party
In analyzing the second Crockett factor, the court examines the residence of each party. It
is undisputed that the plaintiff is a resident of this district and the defendant is not. It appears that
the defendant resides within the Virginia. Given that plaintiff is a resident of this district, the factor
will weigh toward retaining the case in the Western District of North Carolina.
3. The Relative Ease of Access and Proof and the Availability and Costs of Witnesses
In examining the third and fourth Crockett factors, the court analyzes the relative ease and
access to the evidence in the suit. Traditionally, “[t]he convenience of witnesses, particularly
nonparty witnesses important to the resolution of the case, is often cited as the most significant
factor in ruling on a motion to transfer … One strong argument against transfer is that the original
forum will be the most convenient for the witnesses. And when transfer will better serve the
convenience of the witnesses, the motion under Section 1404(a) is more likely to be granted. ” 15
WRIGHT & MILLER, FEDERAL PRACTICE & PROCEDURE § 3851 (4th ed.) (collecting cases).
The court notes that the party asserting witness inconvenience has the burden to proffer
sufficient details respecting the witnesses and their potential testimony to determine the materiality
of evidence and the degree of inconvenience. Capital One Fin. Corp. v. Drive Fin. Servs., L.P.,
434 F. Supp. 2d 367, 375-76 (E.D. Va. 2006).
This dispute arises out of an alleged defamatory statement made by defendant in Virginia,
although the Court notes this dispute is closely related to an ongoing custody dispute in North
Carolina. Witnesses to the alleged defamatory statements were medical professionals and the
parties’ daughter both of whom reside in Virginia. Meanwhile, the evidence of the alleged damage
is in North Carolina, where plaintiff is a practicing podiatrist. The evidence in this case does not
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reside in one district alone. These factors favor neither the defendant or the plaintiff because the
burden would merely be shifted; therefore, this factor is neutral.
4. View by the Jury, Enforceability of a Judgement, and Relative Advantages/ Obstacles to
Fair Trial
Taking three Crockett factors together, the court evaluates whether transfer affords the
possibility of a view by the jury; allows for the enforceability of a judgment, if obtained; and
balances the relative advantages and obstacles to a fair trial. As to the first two of these three
factors, it is clear that a district court in Virginia can also enforce judgments and affords the parties
the possibility of a jury trial, which would favor transfer on both factors.
As to any relative obstacles or advantages for a fair trial, it is not necessary to probe whether
this district or that of a district court in Virginia would provide one side or the other any “home
field” advantage, as any advantage would go both ways. See Rice v. Bellsouth Adver. & Pub.
Corp., 240 F. Supp. 2d 526, 530 (W.D.N.C. 2002). The court therefore finds that this factor is
neutral.
5. Practical Problems and Administrative Difficulty
Examining two Crockett factors together, the court evaluates the administrative difficulties
of court congestion and practical problems affecting trial expediency and expense. First, there
would no administrative difficulty in transferring the case to a district court in Virginia. This factor
favors transfer.
Second, with regard to practical problems, Crockett itself noted that motions to transfer are
not to be granted merely to shift the inconvenience from one party to another. 751 F. Supp. at 95.
With that noted, if this action were transferred, both parties would be required to retain local
counsel, as either parties’ counsel are licensed to practice in state or federal court in Virginia. This
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factor favors not transferring.
6. Interest in Localized Controversies Settled at Home and Avoidance of Conflict of Laws
Issues.
The two remaining Crockett factors involve the localized adjudication of dispute and
avoidance of issues with conflicts of laws. Plaintiff is suing defendant for her alleged defamation
through a North Carolina statute. North Carolina has a strong interest in this case, although the
alleged defamation occurred in Virginia, the alleged damages occurred in North Carolina. In order
to avoid conflict of law issues and in the interest of localized controversies being settled at home,
these factors militate towards keeping this matter here.
7. Conclusion
While there may be some evidence that ease of access to proof may be better in Virginia,
as well as more availability of compulsory process for attendance of plaintiff’s witnesses, it does
not outweigh the overall ease of access of proof, the relative advantages for a fair, easy, expeditious
and inexpensive trial, and all the other Crockett factors. Ultimately, changing the venue to Virginia
would merely change the burden from defendant’s witnesses to plaintiff’s. Therefore, the court
cannot find that defendant has met their “particularly heavy burden” such that transfer is a viable
course of action. McDevitt & St. Co. v. Fid. & Deposit Co. of Maryland, 737 F. Supp. 351, 353
(W.D.N.C. 1990). As such, the case will remain in this Court.
Ultimately, for the reasons stated herein, the court finds that it properly has jurisdiction
over this matter and does not find transfer to be appropriate in this instance. Having thus considered
defendant’s motion and reviewing the pleadings, the court enters the following Order.
ORDER
IT IS, THEREFORE, ORDERED that defendant’s Motion to Dismiss for Lack of
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Jurisdiction and Alternative Motion to Change Venue (#11) is DENIED.
Signed: July 3, 2018
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