Total Quality Logistics, LLC v. Summit Logistics Group, LLC et al

Filing 15

OPINION AND ORDER granting 11 Plaintiff's Motion to Remand and remanding this action to the Court of Common Pleas for Clermont County, Ohio. The Court denies without prejudice as moot 9 Summit's Motion to Dismiss. Signed by Judge Douglas R. Cole on 10/14/20. (sct)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
TOTAL QUALITY LOGISTICS,
LLC,
Plaintiff,

Case No. 1:20-cv-519
JUDGE DOUGLAS R. COLE

v.
SUMMIT LOGISTICS GROUP,
LLC, et al.
Defendants.

OPINION AND ORDER
This Cause is before the Court on Plaintiff Total Quality Logistics, LLC’s
Motion to Remand (the “Motion”) (Doc. 11), following Defendant Summit Logistics
Group, LLC’s (“Summit”) removal of this action from state court on July 6, 2020 (Doc.
1). For the reasons below, the Court GRANTS Plaintiff’s Motion and REMANDS
this action to state court.
BACKGROUND
This case began in an Ohio state court when Total Quality Logistics, LLC
(“TQL”) filed a complaint against its former employee, Nathan C. Ball (“Ball”), and
his new employer, Summit, on June 3, 2020. (See Complaint, Doc. 3, #25 1). Summit
removed to this Court and TQL now moves to remand. 2

Refers to PageID Number.
Summit did not need Ball’s consent to remove because, at the time of removal, Ball had not
been properly served in state court. See 28 U.S.C. §1446(b)(2); Notice of Removal, Doc. 1, #3
¶ 9.
1
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A.

TQL Sues Ball and Summit in State Court.
This case is one instance of what appears to be a frequently recurring type of

business dispute between TQL and some of its former employees—disputes which
sometimes end up in federal court, at least for a time. See, e.g., Total Quality Logistics,
LLC v. Franklin, No. 1:19-cv-266, 2020 WL 5051418, (S.D. Ohio Aug. 27, 2020)
(ordering remand); Total Quality Logistics, LLC v. Alliance Shippers, Inc., No. 1:19CV-1052, 2020 WL 3166672 (S.D. Ohio June 15, 2020) (denying remand); Total
Quality Logistics, LLC v. Reed Transport Services, Inc., No. 1:19-cv-182, 2019 WL
6723837 (S.D. Ohio, Dec. 11, 2019) (ordering remand); Total Quality Logistics, LLC
v. Johnson, No. 1:19-cv-850, 2019 WL 5540682 (S.D. Ohio Oct. 28, 2019) (ordering
remand).
As in those cases, the employee here, Ball, allegedly signed a noncompete
agreement with TQL. (See Compl., Doc. 3, #27 ¶ 12). Among other things, the
agreement prohibited Ball from working with any TQL competitor or recruiting other
TQL employees for one year after the end of his employment with TQL. (Id. at #27–
28 ¶ 13). Ball also agreed to keep confidential any trade secret, proprietary, or
otherwise confidential information to which he was exposed while working for TQL.
(Id. at #28 ¶ 13). In addition, he agreed to pay TQL’s attorneys’ fees if it had to sue
him to enforce the terms of the agreement. (Id.). The agreement further provided that
the restrictive covenant would be tolled for any amount of time that Ball was violating
it. (Id. ¶ 14).
Ball worked at TQL from December 4, 2017 until he voluntarily resigned on
December 31, 2018. (Id. at #27 ¶ 11). TQL later learned that Ball had gone to work
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for Summit, which TQL alleges is a direct competitor. TQL says Ball began with
Summit on or about July 23, 2019—within a year (7 months) after leaving his job at
TQL. 3
Consistent with its past practice regarding other former employees alleged to
be violating the noncompete agreement, TQL sued Ball and Summit in Ohio state
court to enforce that agreement. And, as in at least some of those other cases, a
defendant (here, Summit) removed the case to this Court. TQL has now responded—
in what also seems to be its typical fashion—by seeking remand.
LEGAL STANDARD
When a defendant removes an action from state court to federal court, the
federal court has jurisdiction only if it would have had original jurisdiction over the
action. 28 U.S.C. § 1441(a). Here, Summit claims this matter falls within the Court’s
original jurisdiction under 28 U.S.C. § 1332(a). For that to be true, two conditions
must be met: (1) the parties must be sufficiently diverse; and (2) the amount in
controversy must exceed $75,000. Id. Removal jurisdiction is assessed based on the
facts as they existed at the time of removal. See Harper v. AutoAlliance Int'l, Inc., 392
F.3d 195, 210 (6th Cir. 2004). When jurisdiction upon removal is uncertain, federal

The Complaint states that Ball began working for Summit “on or about July 23, 2018.”
(Complaint, Doc. 3, #28 ¶ 17). But that date is almost certainly off by one year, and should
be July 23, 2019, because the Complaint refers to that date as “prior to one year after
[Ball’s] employment with TQL ended.” (Id. (emphasis added)). And Ball’s employment with
Summit ended on December 31, 2018 (Id. at #27 ¶ 11). Other statements in the parties’
papers confirm that reading. For example, in its Notice of Removal, Summit said, in
summarizing TQL’s allegations, that “Ball subsequently resigned his position with [TQL]
and thereafter allegedly violated the terms of the Non-Compete Agreement by becoming
employed by Summit and taking certain actions as a Summit employee.” (Notice of
Removal, Doc. 1, #2 ¶ 3 (emphasis added)).

3

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courts must construe the removal statutes strictly, resolving all doubts in favor of
remand. See Brierly v. Alusuisse Flexible Packaging, Inc., 184 F.3d 527, 534 (6th Cir.
1999). That makes sense because, if the federal court lacks jurisdiction, that would
render “any decree in the case void and the continuation of the litigation in federal
court futile.” Eastman v. Marine Mech. Corp., 438 F.3d 544, 549-50 (6th Cir. 2006)
(citation omitted). And that serves no one’s interests.
LAW AND ANALYSIS
A.

This Action Will Be Remanded to State Court Because Summit Has
Not Satisfied its Burden Of Proof To Show Federal Jurisdiction.
As noted, parties asserting federal diversity jurisdiction must make two

showings: (1) that the parties are completely diverse; and (2) that the case meets the
jurisdictional threshold—above $75,000. It is undisputed that the parties here satisfy
the complete diversity requirement. Thus, the amount in controversy requirement is
the sole issue in this case.
As a general rule, a plaintiff is the master of his or her own complaint, so a
plaintiff wishing to avoid removal can sue in state court for less than the
jurisdictional amount, thereby preventing removal even if the parties are diverse.
Heyman v. Lincoln Nat'l Life Ins. Co., 781 F. App’x 463, 469 (6th Cir. 2019). Some
States, though, including Ohio, make it more difficult for plaintiffs to achieve that
objective. That is true in two regards. First, under Ohio civil rules, the only statement
that a plaintiff is generally allowed to make regarding alleged damages in a complaint
is that the amount sought is more than $25,000, Ohio Civ. R. 8(A), which of course
includes amounts both below and above the jurisdictional threshold. Second, even if
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a plaintiff ignores that stricture, and includes an allegation in the complaint capping
the alleged damages (e.g., “plaintiff seeks less than $75,000”), such limitations are
not enforceable under Ohio law. The Ohio Civil Rules allow the plaintiff ultimately
to recover more than the amount specified. See Ohio Civ. R. 54(C). That is, plaintiffs
can recover in an Ohio court more than they allege in their complaints. Bower v. Am.
Cas. Co., Case No. 99-4102, 2001 U.S. App. LEXIS 18053, at *7 (6th Cir. 2001); see
also Shankle v. Egner, 2012-Ohio-2027, ¶ 47 (Ohio Ct. App. 2012) (“Civ.R. 54
authorizes courts to grant the relief to which a party is ‘entitled,’ regardless of
whether the party has demanded the relief in the pleadings.”); accord Fewell v. Gross,
2007-Ohio-5788, ¶ 32 (Ohio Ct. App. 2007). As a result, a defendant facing suit in
Ohio court is free to remove an action, even if the Ohio state court complaint purports
to cap the amount in controversy below $75,000, so long as the defendant can assert
in good faith in its removal papers that the amount in controversy in fact exceeds the
jurisdictional threshold. The removal statute puts it this way:
If removal of a civil action is sought on the basis of the jurisdiction
conferred by section 1332(a), the sum demanded in good faith in the
initial pleading shall be deemed to be the amount in controversy, except
that—the notice of removal may assert the amount in controversy if the
initial pleading seeks … a money judgment, but the State practice …
permits recovery of damages in excess of the amount demanded.
28 U.S.C. § 1446(c)(2)(A)(ii) (emphasis added).
A plaintiff desiring remand in that situation has two options. First, the
plaintiff can respond to the removal by stipulating in the federal court action that the
amount in controversy is less than the jurisdictional amount. So long as the
stipulation is clear that the plaintiff is not seeking, and will not accept, more than
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$75,000, that stipulation is binding, and thus deprives the federal court of subject
matter jurisdiction. 4 See Heyman, 781 F. App’x at 469-70. Second, the plaintiff can
move for remand, disputing the allegation in the removal papers regarding the
jurisdictional amount. If the plaintiff opts for this latter course, the defendant, as the
party seeking to keep the matter in federal court, then has the burden of showing, by
a preponderance of the evidence, that the jurisdictional amount is met. See 28 U.S.C.
§ 1446(c)(2)(B).
The Court applies this well-settled framework to the facts here. To start,
consistent with Ohio’s rules, TQL specified in its state court Complaint that it was
seeking more than $25,000 in compensatory damages, as well as: injunctive relief,
punitive damages, attorneys’ fees, costs, and “[a]ny other relief that [the state court]
deem[ed] just and proper.” (See Compl., Doc. 3, #34). Summit then filed a Notice of
Removal with this Court on the basis of diversity jurisdiction, alleging complete
diversity and asserting that the amount in controversy exceeds $75,000. (See Notice
of Removal, Doc. 1, #3).
TQL thus had two basic options if it wished to direct this case back to state
court: (1) provide a proper stipulation clarifying that the relief it sought has a value

There is an exception to this principle where the stipulation is a reduction in what
the plaintiff seeks, rather than a clarification of the amount in controversy. Diversity
is measured at the time of removal. Thus, a plaintiff seeking more than $75,000 in a
state court action cannot defeat removal by reducing his or her demand, once in
federal court, below the jurisdictional amount. See Heyman, 781 F. App’x at 469-70.
But, as often occurs given the constraints under Ohio civil rules, if the amount
claimed in state court is ambiguous with regard to the jurisdictional limit, the
plaintiff can clarify that he or she has never sought more than $75,000. That would
prevent diversity jurisdiction from attaching and require remand to state court. Id.
4

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of $75,000 or less, and that TQL would not accept more than that amount; or
(2) dispute the veracity of Summit’s assertion about the amount in controversy. 5
Apparently not wanting to leave any stone unturned, TQL opted for both approaches:
It filed a Motion to Remand in which it disputed Summit’s claims about the
jurisdictional amount. (See Motion to Remand, Doc. 11, #68). And it attached to that
Motion a Stipulation that TQL asserted was “unequivocal and binding on [it].”
(Stipulation, Doc. 11-1, #78). In that Stipulation, TQL asserted that it was “not
seeking, and [would] not accept, damages over $75,000,” in aggregate, for economic
damages, compensatory damages, punitive damages, attorneys’ fees, and all other
“forms of potential damages.” (Id. at #78 ¶ 1).
If TQL were only seeking monetary damages in this action, TQL’s stipulation
would almost certainly be the end of the matter. It contains the type of unequivocal
language limiting damages that the Sixth Circuit and this Court have found sufficient
to prevent federal jurisdiction from attaching, including in a previous case involving
TQL. See, e.g., Heyman, 781 F. App’x at 470 (collecting cases finding stipulations
unequivocal when plaintiff asserts that he will not seek or accept damages over
$75,000); Reed Transp. Servs., 2019 WL 6723837, at *7 (holding that a TQL
stipulation defeated diversity jurisdiction as the stipulation was expressly binding on
TQL and limited “total damages … to an amount totaling less than $75,000”).
But here there is an additional wrinkle. As Summit points out, beyond seeking
monetary relief (damages, attorneys’ fees, and punitive damages), TQL also seeks
TQL has not disputed that the parties are diverse, and the Court is satisfied that, based
on the allegations in the Complaint, they are.

5

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injunctive relief. Generally speaking, in suits seeking injunctive relief, the value of
that relief also counts toward the jurisdictional limit and is measured by the “the
object of the litigation.” Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 347
(1977).
That poses a problem for TQL. As TQL explained in its Stipulation, it is seeking
retrospective “damages in an amount less than $75,000 because the amount of
monetary damages suffered by [it]” is “less than 75,000.” (Stipulation, Doc. 11-1,
#78 ¶ 1). But that does not speak to the value of the prospective declaratory and
injunctive relief TQL seeks; namely, “a preliminary and permanent injunction
prohibiting Defendants from any further violation of the Agreement with TQL.” (Id.
#78 ¶ 2).
Consider, for example, if TQL were awarded damages totaling $74,999 for the
period of the alleged violation. It is at least conceivable that the value of a prospective
injunction for any remaining non-compete period under the agreement would exceed
$1.01, and that the total amount in controversy would thus meet the jurisdictional
amount. After all, Ball allegedly went to work for Summit about five months earlier
than the agreement permitted, and at least some of the covenants are tolled during
the period of the violation. As a result, it is at least possible that there is a substantial
amount of time remaining for those covenants, such that an injunction enforcing a
future period of noncompetition (if TQL shows it is entitled to such relief) conceivably
might provide substantial value to TQL. And that is all aside from the fact that some
of the covenants, like the covenant against disclosing confidential information,

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appear to have no expiration date. (See Compl., Doc. 3, #27–28 ¶ 13). Injunctions
enforcing those covenants could well have forward-looking value no matter how much
time elapses before they are entered.
TQL correctly points out that in at least some cases involving noncompete
agreements, courts have concluded that the values of the injunctive and monetary
relief sought in such cases are one and the same and that, therefore, assigning any
additional value to the injunctive relief for diversity purposes, beyond the monetary
damages, would amount to unwarranted “double counting.” Total Quality Logistics,
LLC v. Covar Transp., No. 1:17-CV-797, 2017 WL 6546617, at *4 (S.D. Ohio Dec. 22,
2017); Midwest Motor Supply Co. v. Cataldo, No. 2:05-CV-1135, 2006 WL 1133201,
at *3 (S.D. Ohio Apr. 27, 2006); Midwest Motor Supply Co. v. Addis, No. 2:05 CV 0733,
2006 WL 181990, at *4 (S.D. Ohio Jan. 23, 2006). According to such cases, the
monetary relief measures what the previous employer would suffer if the noncompete
were not enforced—that is, the damages figure essentially reflects the use of
monetary damages as an alternative to enforcement. But that seems somewhat of an
overstatement. To be sure, if the employer’s position were that it would accept
$75,000 or less as full recovery for all damages and in lieu of any and all injunctive
relief the employer might otherwise receive, that reasoning might work. In such
situations, the employer would essentially be pricing the sum of: (1) its damages
(including compensatory damages, punitive damages, and attorneys’ fees); plus
(2) the remainder of its enforcement rights, at a combined aggregate amount lower
than the jurisdictional threshold. Where though, as here, the employer could receive

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(per its Stipulation) slightly less than $75,000 in monetary relief, but then also
receive additional value in the form of injunctive relief on top of that, things are not
so simple. Absent an “unequivocal” statement from TQL limiting the combined value
of the monetary and injunctive relief to less than the jurisdictional amount, TQL’s
Stipulation does not prevent this Court’s jurisdiction.
Other decisions in this Circuit illustrate one way in which TQL might have
addressed this issue in its Stipulation. In particular, a party can include language in
its stipulation specifying that the stipulated maximum amount it will accept includes
“the fair value of any injunctive relief” that may be awarded. See, e.g., Jenkins v.
Delta Air Lines, Inc., No. 3:18-CV-244-CRS, 2018 WL 6728571, at *2 (W.D. Ky. Dec.
21, 2018); Emmitt v. Elmington Prop., No. 3:17-CV-00706-GNS, 2018 WL 2011932,
at *2 (W.D. Ky. Apr. 30, 2018); Tankersley v. Martinrea Heavy Stampings, Inc., 33 F.
Supp. 3d 775, 776 (E.D. Ky. 2014); Spence v. Centerplate, 931 F. Supp. 2d 779, 780
(W.D. Ky. 2013). For example, in Jenkins, the stipulation said:
The amount in controversy in connection with Plaintiff’s claims asserted
in this case is less than seventy-five thousand dollars ($75,000),
inclusive of punitive damages, costs, attorneys’ fees, and the fair market
value of any injunctive relief’ and that Plaintiff will neither seek nor
accept any amount equal to or greater than seventy-five thousand
dollars ($75,000), inclusive of punitive damages, costs, attorneys’ fees,
and the fair market value of any injunctive relief.
2018 WL 6728571, at *2 (cleaned up) (emphasis added). Under such a stipulation, the
value of the injunctive relief is included as one aspect of the capped damages. For
example, a determination that the injunctive relief has a value of $25,000 would mean

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that TQL would not accept more than $50,000 in other forms of monetary relief. By
capping the total relief, such stipulations settle the matter and preclude jurisdiction.
Here, though, TQL’s Stipulation speaks only to the total monetary amount that
TQL would accept. The Stipulation does not speak at all to the value of the
prospective injunctive relief that TQL also seeks. That difference matters. See Total
Quality Logistics, LLC v. Grigoryan, No. 1:18cv363, 2019 U.S. Dist. LEXIS 197760,
at *7 (S.D. Ohio Mar. 22, 2019) (concluding that a TQL Stipulation that expressly
limited damages did not also limit any potential injunctive relief).
To be sure, TQL attempted to address this issue in its reply brief in support of
remand. There, TQL stated that the total value of the judgment it seeks, “whether
monetary or based on the injunctive relief … shall not exceed $75,000.” (TQL Reply
Br., Doc. 14, #95). Had TQL included such language in its original Stipulation, that
might have worked. But TQL’s belated attempt to clarify its clarification arguably
runs afoul of at least two rules: First, a proper stipulation must be the plaintiff’s “first
post-removal statement regarding the amount in controversy.” Heyman, 781 F. App’x
at 470 (6th Cir. 2019) (emphasis added). And second, a party generally cannot raise
new arguments in a reply brief. Scottsdale Ins. Co. v. Flowers, 513 F.3d 546, 553 (6th
Cir. 2008). Thus, the statement in TQL’s reply brief does not solve the problem.
Fortunately, though, while the value-of-injunctive-relief issue creates a bit of
a tangle, the Court need not unravel it for present purposes, as this case is headed
back to state court anyway. Why? Because of the alternate path that TQL pursued in
its remand papers—challenging Summit’s allegation that the jurisdictional threshold

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was met. Given TQL’s challenge on that front, Summit bears the burden of proving
up the jurisdictional amount by a preponderance of the evidence, and Summit has
failed to do that here.
Preponderance of the evidence “is not a daunting burden,” but it “still requires
evidence.” Warren v. Sheba Logistics, LLC, No. 1:15-cv-148, 2016 U.S. Dist. LEXIS
32097 at *4 (W.D. Ky. Mar. 14, 2016). That evidence can come from many sources,
including a fair reading of the complaint if it contains “clear allegations … that the
case involved a sum well in excess of the $75,000 minimum.” Crimaldi v. Pitt Ohio
Express, LLC, 185 F. Supp. 3d 1004, 1008 (N.D. Ohio 2016); see also Total Quality
Logistics, LLC v. Franklin, No. 1:19-CV-266, 2020 WL 5051418, at *5 (S.D. Ohio Aug.
27, 2020) (discussing various procedural tools available to a party seeking discovery
about the jurisdictional amount). Whatever evidence a party seeking removal might
rely on, however, “[m]ere speculation is insufficient.” Terry v. Phelps KY Opco, LLC,
No. 7:20-cv-23, 2020 WL 2500306, at *2 (E.D. Ky. Apr. 20, 2020) (citations omitted).
Rather, the party must adduce “competent proof that shows the amount in
controversy requirement is satisfied.” Id.
Summit offers the Court nothing but “[m]ere speculation” as to the
jurisdictional amount. Id. Its entire basis for removal boils down to its argument that
TQL’s Stipulation only limits the amount of monetary damages, and not the
injunctive relief, that TQL seeks. Thus, Summit argues, “a court in this case could
potentially grant TQL injunctive relief on its claims to remedy future conduct and
also grant monetary damages totaling $75,000 to remedy past conduct.” (Summit’s

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Resp. Br., Doc. 13, #89–90 (emphasis added)). As already discussed, the Court is
inclined to agree with Summit on that score.
But that argument is not enough. At the end of the day, Summit must also
provide “at least some evidence” that the amount in controversy in this case exceeds
$75,000. Miller v. Malik, No. Civ. 11-74, 2011 WL 2968428, at *2 (E.D. Ky. July 20,
2011) (Thapar, J.). Yet Summit offered no evidence to that end. That is perhaps
because, as its briefing suggests, Summit apparently (and incorrectly) thought it was
TQL’s burden to make that showing. (See Summit’s Resp. Br., Doc. 13, #89–90 (“TQL
has fallen well short of meeting its burden of showing unequivocally that, all things
considered, the full amount in controversy does not exceed $75,000.”)).
Whatever the reason, the only evidence the Court is left with is TQL’s
Complaint and TQL’s Stipulation. Taken together, those two filings show that TQL
is seeking total monetary relief of some amount less than $75,000, plus injunctive
relief with some unspecified value. Thus, Summit was free to present evidence
showing that the combined amount of the monetary relief plus the value of the
injunctive relief is above $75,000. In doing so, Summit could have sought to show by
a preponderance that the monetary relief at issue here is any amount less than
$75,000 (it could not argue for a higher amount, no matter the evidence, given TQL’s
stipulation that TQL would not accept a higher amount). And it could then have
offered evidence ascribing some value to the injunctive relief that TQL is seeking
(which Summit would again need to substantiate by a preponderance). But Summit
never took a stab at either part of that.

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Given that the record contains no evidence on either front, the Court finds that
the amount in controversy is at best uncertain. And it is black letter law that “[a]ll
doubts as to the propriety of removal are resolved in favor of remand.” Coyne v. Am.
Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999). The Court therefore sends this case
back to the state court from which it came.
Accordingly, the Court GRANTS Plaintiff's Motion (Doc. 11) and REMANDS
this action to the Court of Common Pleas for Clermont County, Ohio. And the Court
DENIES WITHOUT PREJUDICE as moot Summit’s pending Motion to Dismiss
(Doc. 9), consideration of which the Court had stayed pending the resolution of
Plaintiff’s Motion.
SO ORDERED.
October 14, 2020
DATE

DOUGLAS R. COLE
UNITED STATES DISTRICT JUDGE

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