Total Quality Logistics, LLC v. AD Maxx, Inc
MEMORANDUM OPINION AND ORDER granting 8 Plaintiff's Motion to Remand to State Court. Pursuant to 28 USC Section 1447(c), the Clerk is ORDERED to REMAND this civil action to the Clermont County Ohio Court of Common Pleas. Signed by Magistrate Judge Stephanie K. Bowman on 10/17/2016. (km)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
TOTAL QUALITY LOGISTICS, LLC,
AD MAXX, INC.,
Case No. 1:16-cv-00595
Judge Stephanie Bowman
MEMORANDUM OF OPINION AND ORDER
This matter is before the Court on Plaintiff Total Quality Logistics, LLC’s Motion
to Remand Case to State Court.
Defendant AD Maxx, Inc. has filed a
memorandum in opposition (Doc. 10), to which Plaintiff has replied (Doc. 19).
September 29, 2016, the case was transferred to the undersigned magistrate judge for
final disposition, pursuant to the parties' consent. See 28 U.S.C. § 636(c) and Doc. 26.
For the reasons that follow, the undersigned finds that Plaintiff’s Motion to remand is
Plaintiff Total Quality Logistics, LLC (“TQL”) is a freight broker.
(Doc. 3 at
PageID 84 (¶ 2).) It locates motor carriers to pick up and deliver the freight of its
customers at the places and times specified by its customers. (Id. at PageID 84 (¶ 3).)
Defendant AD Maxx, Inc. (“AD Maxx) was one of TQL’s customers. (Id. at PageID 85 (¶
Background facts are drawn from Plaintiff’s Complaint (Doc. 3) and the docket maintained by the Clerk of this
4).) TQL maintains that its invoices to AD Maxx for freight brokerage services remain
unpaid. (Id. at PageID 85 (¶¶ 5–7).)
On April 7, 2016, TQL filed a three-count Complaint against AD Maxx in the
Clermont County, Ohio Court of Common Pleas. (Id. at PageID 84.) It alleges breach
of contract (Count One)2 and, in the alternative, unjust enrichment (Count Two)3 and
promissory estoppel (Count Three).4 It seeks judgment “in the principal amount of at
least $32,175.00 [for freight brokerage services], plus interest at the agreed upon rate of
18% and/or pursuant to the legal rate, plus all reasonable expenses, attorney’s fees and
costs, including court costs, and any and all other relief available at law and/or equity.”
(Id. at PageID 87.)
On May 27, 2016, Ad Maxx filed its Answer along with a
counterclaim against TQL and a third-party claim against Anthany Wingo. (Doc. 4.)
Count One, for breach of contract, seeks judgment in the amount of $24,000 against
TQL; it also seeks an amount between $300,000 and $5,000,000 as assignee of the
claims for Cathay Ocean Global Shipping Line, Ltd. and an additional award of
$4,000,000, the revenue lost for being “blacklisted” as a result of TQL’s alleged actions.
(Id. at PageID 104–06 (¶¶ 10–21).) Count Two, for fraud, seeks a judgment for not less
than $300,000 against both TQL and Wingo, jointly and severally. (Id. at PageID 106–
09 (¶¶ 22–34).) Count Three, for violation of Ohio’s Deceptive Trade Practices Act,
seeks actual damages in excess of $25,000, general damages in the amount of
$25,000, as well as punitive damages and attorney’s fees and costs (and injunctive
relief) against TQL and Wingo, jointly and severally. (Id. at PageID 109–10 (at ¶¶ 35–
(Doc. 3 at PageID 84–86 (¶¶ 1–14).)
(Doc. 3 at PageID 86 (¶¶ 15–17).)
(Doc. 3 at PageID 86–87 (¶¶ 18–21).)
41).) Finally, Count Four, for Punitive and Exemplary Damages, seeks an award of not
less than $5,500,000 against TQL. (Id. at PageID 110–11 (at ¶¶ 42–45).)
Four days later, on May 31, 2016, AD Maxx removed the case from Clermont
County to the Southern District of Ohio on the basis of diversity jurisdiction. (Doc. 1.)
TQL’s Motion to Remand followed on June 20, 2016. (Doc. 8.)
TQL contends that the Complaint stated damages in an amount less than the
$75,000.00—the jurisdictional threshold amount required for this Court to obtain
diversity jurisdiction over this case. Accordingly, TQL contends this matter should be
remanded back to Clermont County. AD Maxx, however, asserts that the Court may
consider its third-party complaint independently to establish the amount in controversy
to obtain diversity jurisdiction. Ad Maxx further contends that because AD Maxx was
forced to assert its compulsory counterclaim in state court prior to removing this action
to federal court, the court should aggregate these claims with the complaint and find
that the amount-in-controversy requirement is satisfied here.
Upon careful review and for the reasons that follow, the undersigned finds TQL’s
motion to remand is well-taken.
On a motion for remand, the question presented is whether the district court
lacks subject matter jurisdiction. 28 U.S.C. § 1447(c). Defendant AD Maxx, as the
removing party, bears the burden of establishing that removal was proper. Long v.
Bando Mfg. of Am., Inc., 201 F.3d 754, 757 (6th Cir. 2000) (“The burden of showing that
the district court has original jurisdiction is on the party seeking removal.”) In deference
to federalism concerns, a district court must resolve any doubt of its removal jurisdiction
in favor of state court jurisdiction. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100,
Federal district courts have original jurisdiction in diversity of citizenship cases
where the civil action is between citizens of different states and the amount in
controversy in the action is greater than $75,000. 28 U.S.C. § 1332. PNC Equip. Fin.,
LLC v. Mariani, No. 1:14CV663, 2015 WL 4464810, at *2 (S.D. Ohio July 21, 2015).
Generally, the amount in controversy for federal diversity jurisdiction purposes is
determined as of the time the action is commenced. Klepper v. First American Bank,
916 F.2d 337, 340 (6th Cir. 1990); Sellers v. O’Connell, 701 F.2d 575, 578 (6th Cir.
Here, the amount in controversy at the time the action was commenced was less
than $75,000, i.e. TQL’s claim for damages for unpaid invoices is $32,175.00 in
principal, plus interest and fees. (Doc. 3). As such, TQL argues that this court lacks
subject matter jurisdiction based on diversity of citizenship.
contends that in viewing the amount in controversy courts must view the claims from the
vantage point of the time of removal—and at removal Defendant filed its $300,000.00+
Counterclaim. Defendant’s contention is not well-taken.
While the Sixth Circuit has not directly addressed this issue, it has referred
approvingly to the traditional rule that “‘no part of the required jurisdictional amount can
be met by considering a defendant's counterclaim’ to satisfy the amount in controversy
requirement for removal jurisdiction purposes…” Sanford v. Gardenour, 2000 WL
1033025, at *3 (6th Cir. July 17, 2000). Moreover, “[t]he majority of Sixth Circuit district
courts to confront the question have held that counterclaims should not be considered
when determining the amount in controversy for purposes of removal jurisdiction ...”
CMS North America, 521 F.Supp.2d at 627–28 (citing Firestone Financial Corp. v. Syal,
327 F.Supp.2d 809, 810–11 (N.D.Ohio 2004) (collecting cases)).5
noted by TQL, in Kochel v. Target National Bank, this Court held that “the relevant
jurisdictional statute, 28 U.S.C. § 1332, provides  jurisdiction in cases of diverse
citizenship of the parties, only if the amount claimed in the complaint, exclusive of
interest and counterclaims, exceeds $75,000. No. 3:10-cv-384, 2010 U.S. Dist. LEXIS
118533, *3 (S.D. Ohio Nov. 5, 2010) (Merz, J.).
Accordingly, the undersigned agrees that the amount in controversy for federal
diversity jurisdiction purposes is determined as of the time the action is commenced,
and is the amount claimed in the complaint. Here, the amount claimed in the complaint
is less than $75,000.00, and therefore this Court lacks subject matter jurisdiction based
on diversity of citizenship.
Based on the foregoing reasons, Plaintiff Total Quality Logistics, LLC’s Motion to
Remand Case to State Court (Doc. 8) is hereby GRANTED. Pursuant to 28 U.S.C.
§1447(c), the Clerk is ORDERED to REMAND this civil action to the Clermont County,
Ohio Court of Common Pleas.
IT IS SO ORDERED.
s/Stephanie K. Bowman
Stephanie K. Bowman
United States Magistrate Judge
Courts of Appeals in other circuits have also held that counterclaims must be excluded from the
determination of the amount in controversy. See Saint Paul Reins. Co. v. Greenberg, 134 F.3d 1250 (5th
Cir.1998); Ballard's Service Ctr., Inc. v. Transue, 865 F.2d 447 (1st Cir.1989).
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