Bell v. Qwest Communications International Inc et al

Filing 18

ORDER granting 6 Motion to Remand to Court of Common Pleas for Saluda County. Clerk's Notice: Attorneys are responsible for supplementing the State Record with all documents filed in Federal Court. Signed by Honorable Henry F Floyd on 6/30/11.(gpre, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
ANDERSON/GREENWOOD DIVISION
HARRY BELL,
Plaintiff,
vs.
QWEST COMMUNICATIONS
INTERNATIONAL, INC. and QWEST
COMMUNICATIONS COMPANY, LLC,
Defendants.

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CIVIL ACTION NO. 8:11-00037-HFF

ORDER
I.

INTRODUCTION
This case was filed as an action alleging the wrongful use of Plaintiff’s property. Plaintiff

asserts causes of action for trespass, unjust enrichment, a violation of the South Carolina Unfair
Trade Practices Act, and conversion. Pending before the Court is Plaintiff’s motion to remand the
case to state court. Having carefully considered the notice of removal, the motion, the response, the
record, and the applicable law, it is the judgment of this Court that Plaintiff’s motion to remand will
be granted.
II.

FACTUAL AND PROCEDURAL HISTORY
The gravamen of Plaintiff’s complaint is that Defendants wrongfully installed fiber optic

cable across his land. Defs.’ Notice Removal Ex. A, at 5-11, ECF No. 1-1. Plaintiff alleges that
Defendants negotiated with railroad companies for the right to install fiber optic cable along existing
rights-of-way that the railroad companies held. Id. at 6-8. According to Plaintiff, these rights-of-

way are limited exclusively to railroad purposes and the installation of fiber optic cable falls outside
their scope. Id. Plaintiff seeks damages for the wrongful installation of fiber optic cable across his
land and for the continued wrongful use of his land. Id. at 10-11. Plaintiff’s complaint “prays for
relief and judgment against [Defendants], jointly and severally, not to exceed $75,000.00 exclusive
of interest and costs.” Id. at 10.
Plaintiff commenced this action in the Court of Common Pleas for Saluda County, South
Carolina, on June 25, 2010. According to Plaintiff, while the case was pending in state court, he
served Defendants with multiple discovery requests that Defendants failed to fulfill. Pl.’s Mot.
Remand 3-4, ECF No. 6. Instead, Defendants sought Plaintiff’s stipulation to maximum damages
of $75,000 through the following requests for admission and interrogatories:
REQUESTS FOR ADMISSION
1.

Admit that at the time the complaint was filed, you did not intend to seek
damages in excess of $75,000, exclusive o[f] interest and costs.
RESPONSE: Admit.

2.

Admit that you will not seek damages in excess of $75,000, exclusive of
interest and costs in this lawsuit.
RESPONSE: Plaintiff objects to this request. Plaintiff does not seek
damages in excess of $75,000 at this time. However, Plaintiff reserves
the right to amend this response after the parties conduct discovery.

3.

Admit that your damages in this lawsuit are $75,000 or less, exclusive of
interest and costs.
RESPONSE: Plaintiff objects to this request. Plaintiff does not seek
damages in excess of $75,000 at this time. However, Plaintiff reserves
the right to amend this response after the parties conduct discovery.

INTERROGATORIES
1.

If your response to any of the foregoing Requests for Admission is anything
other than an unqualified admission, as to each separate response please state

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and describe the facts upon which you rely in refusing to admit such
Requests for Admission.
ANSWER: No response is required.
2.

At the time the complaint was filed, did you intend to seek damages in
excess of $75,000, exclusive of costs and interest?
ANSWER: No.

3.

If the answer to interrogatory number 2 is “no,” are you willing to stipulate
that the answer has a binding effect, limiting the amount of damages,
exclusive of interests and costs, that you will pursue in this case?
ANSWER: Plaintiff objects to this Interrogatory as a party cannot be
required to stipulate to the amount of damages through an
interrogatory, and in any event, no response can be formulated at this
time because the parties have not conducted discovery. However,
Plaintiff reserves the right to amend this response.

4.

As of today’s date, do you intend to seek damages in excess of $75,000,
exclusive of costs and interest?
ANSWER: No.

5.

If the answer to interrogatory number 4 is “no,” are you willing to stipulate
that the answer has binding effect, limiting the amount of damages, exclusive
of interest and costs, that you will pursue in this case?
ANSWER: Plaintiff objects to this Interrogatory [as] a party cannot be
required to stipulate to the amount of damages through an
interrogatory, and in any event, no response can be formulated at this
time because the parties have not conducted discovery. However,
Plaintiff reserves the right to amend this response.

6.

In the future, do you intend to seek damages in excess of $75,000, exclusive
of costs and interest?
ANSWER: Plaintiff objects to this Interrogatory as he cannot fully
anticipate what discovery may reveal in this case. If Defendants have
evidence their wrongful actions have damaged Plaintiff in excess of
$75,000, Plaintiff requests Defendants produce such information
immediately, without further delay, and stipulate to the amount of
damages it caused Plaintiff.

7.

If the answer to interrogatory number 6 is “no,” . . . are you willing to
stipulate that the answer has a binding effect, limiting the amount of
damages, exclusive of interest and costs, that you will pursue in this case?
ANSWER: Plaintiff objects to this Interrogatory as a party cannot be
required to stipulate to the amount of damages through an
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interrogatory, and in any event, no response can[] be formulated at this
time because the parties have not conducted discovery. However,
Plaintiff reserves the right to amend this response.
Defs.’ Notice Removal Ex. B, at 2-4, ECF No. 1-2. On January 5, 2011, within thirty days of
receiving these responses, Defendants removed the case to this Court. Defs.’ Notice Removal 3-5,
ECF No. 1. On February 4, 2011, Plaintiff filed his motion to remand, to which Defendants
responded on February 22, 2011.
III.

STANDARD OF REVIEW
“Federal courts are courts of limited jurisdiction.” Barbour v. Int’l Union, 640 F.3d 599, 605

(4th Cir. 2011) (en banc) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377
(1994)) (internal quotation marks omitted). The presumption is that an action falls outside of this
limited jurisdiction, which means that the party asserting jurisdiction in federal court bears the
burden of establishing it. Id. Accordingly, when defendants remove cases from state court to
federal court, they carry the burden of showing that the requirements for jurisdiction are met. See
In re Blackwater Sec. Consulting, 460 F.3d 576, 583 (4th Cir. 2006) (“The party seeking removal
bears the burden of demonstrating that removal jurisdiction is proper.”). The Court strictly construes
removal statutes, and when jurisdiction is uncertain, federalism concerns militate in favor of granting
remand. Barbour, 640 F.3d at 605 (“Removal statutes, in particular, must be strictly construed,
inasmuch as the removal of cases from state to federal court raises significant federalism concerns.
Doubts about the propriety of removal should be resolved in favor of remanding the case to state
court.” (citations omitted)).

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IV.

CONTENTIONS OF THE PARTIES
Plaintiff asserts that remand is necessary because this Court lacks subject matter jurisdiction.

Specifically, Plaintiff maintains that the amount-in-controversy requirement for diversity jurisdiction
is unsatisfied. He insists that he acted in good faith when requesting damages not to exceed $75,000
and that Defendants’ failure to respond to discovery requests has prevented him from quantifying
damages more specifically. He resists Defendants’ request that he stipulate to maximum damages
of $75,000, arguing that he is unable to stipulate to damages until Defendants sufficiently respond
to his discovery requests. Finally, he requests that the Court award him costs and expenses as a
result of the wrongful removal.
In response, Defendants charge that Plaintiff is acting in bad faith by claiming less than the
jurisdictional amount. Defendants argue that Plaintiff’s refusal to stipulate to damages and his
express reservation of the right to amend his complaint indicate that he intends to manipulate
jurisdictional rules by amending his complaint for an amount greater than $75,000 once the one-year
limitations period for removal in 28 U.S.C. § 1446(b) has passed. To prevent such jurisdictional
abuse, Defendants urge the Court to follow the “preferred approach” and hold that Plaintiff’s refusal
to stipulate to damages is itself evidence of bad faith and jurisdictional manipulation. Defendants
assert that Plaintiff’s bad faith in claiming less than the jurisdictional amount justifies the Court
exercising diversity jurisdiction.
V.

DISCUSSION AND ANALYSIS
Defendants removed this case pursuant to the Court’s diversity jurisdiction. Diversity

jurisdiction requires complete diversity of citizenship between the parties and an amount in
controversy exceeding $75,000. 28 U.S.C. § 1332. There is no dispute that complete diversity of

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citizenship exists. The parties disagree, however, as to whether the amount-in-controversy
requirement is satisfied. The resolution of Plaintiff’s motion to remand turns on that issue.
The Supreme Court has interpreted 28 U.S.C. § 1441(a) to require that a “case be fit for
federal adjudication at the time [a] removal petition is filed.” Caterpillar Inc. v. Lewis, 519 U.S. 61,
73 (1996). This means that federal district courts must possess original jurisdiction over a case at
the time of removal. Rota v. Consolidation Coal Co., No. 98-1807, 1999 WL 183873, at *1 (4th Cir.
Apr. 5, 1999) (“[J]urisdiction is determined as of the time of removal . . . .”). Accordingly, it is
well-settled that when a defendant bases removal on diversity jurisdiction, the amount in controversy
is determined at the time of removal. 14AA Charles Alan Wright, Arthur R. Miller & Edward H.
Cooper, Federal Practice and Procedure § 3702.4, at 457-61 (4th ed. 2011). In making this
determination, the amount claimed by the plaintiff in his complaint controls unless the claim is made
in bad faith. See id. § 3702, at 322 (“Under well-settled principles of pleading, the plaintiff is the
master of the statement of his claim. Thus, . . . as the judicial precedents make clear, if the plaintiff
chooses to ask for less than the jurisdictional amount in a state court complaint, absent a showing
of bad faith[,] only the sum actually demanded is in controversy even though the pleader’s
motivation is to defeat removal.”).
The United States Court of Appeals for the Fifth Circuit has recognized that plaintiffs act in
bad faith when they engage in jurisdictional manipulation by “plead[ing] for damages below the
jurisdictional amount in state court with the knowledge that the claim is actually worth more, but
also with the knowledge that they may be able to evade federal jurisdiction by virtue of the
pleading.” De Aguilar v. Boeing Co., 47 F.3d 1404, 1410 (5th Cir. 1995). To prevent such abuse,
the Fifth Circuit has held that “if a defendant can show that the amount in controversy actually

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exceeds the jurisdictional amount,” the burden shifts to the plaintiff to demonstrate to a legal
certainty that he “will not be able to recover more than the damages for which he has prayed in the
state court complaint.” Id. at 1411. This standard requires the defendant to prove “by a
preponderance of the evidence that the amount in controversy is greater than the jurisdictional
amount,” which involves “more than point[ing] to a state law that might allow the plaintiff to
recover more than what is pled.” Id. at 1412 (emphasis omitted). If the defendant is able to make
this showing, the Fifth Circuit noted that plaintiffs could satisfy their “legal certainty” obligation by
pointing to a statute limiting their damages to what they claimed in their complaints or, in the
absence of such a statute, by “fil[ing] a binding stipulation or affidavit with their complaints.” Id.
(quoting In re Shell Oil Co., 970 F.2d 355, 356 (7th Cir. 1992)) (internal quotation marks omitted).
A United States District Judge in the Southern District of Mississippi has determined that
defendants may satisfy their burden of proving that the amount in controversy exceeds $75,000
through the use of interrogatories and requests to admit. Draper v. U.S. Fid. & Guar. Co., No.
Civ.A. 3:00CV70BN, 2000 WL 268565, at *2-3 (S.D. Miss. Mar. 8, 2000). He outlined what he
coined the “preferred approach,” which provides the following:
When a plaintiff has pleaded damages below $75,000
and defense counsel believes that the damages are in excess
of $75,000, the defendant can have the case properly removed
by utilizing state court discovery procedures. Specifically,
the defense lawyer can have the plaintiff admit through a
deposition, an interrogatory, or a request for admission that
his damages do not exceed $75,000. If the plaintiff denies
this request, the case can be removed and this discovery
response should be filed in the record. This discovery
response will constitute “other paper” that affirmatively
shows that the jurisdictional amount may be satisfied.
McLain v. Am. Int’l Recovery, Inc., 1 F. Supp. 2d 628, 631 (S.D. Miss. 1998) (citation omitted).
Following his adoption of the preferred approach, the Fifth Circuit decided Tedford v. Warner7

Lambert Co., 327 F.3d 423 (5th Cir. 2003), holding that “forum manipulation justifies application
of an equitable exception” to the one-year limitation for removal in 28 U.S.C. § 1446(b). Id. at 427.
This led the district judge in Mississippi to note that “the application of the ‘Preferred Approach’
is somewhat tempered by Tedford.” Wilbanks v. N. Am. Coal Corp., 334 F. Supp. 2d 921, 926 (S.D.
Miss. 2004). He recognized that Tedford now allows defendants to utilize the equitable exception
to § 1446(b) if plaintiffs engage in jurisdictional manipulation by amending their complaints after
the time for removal has passed. Lee v. State Farm Mut. Auto. Ins. Co., 360 F. Supp. 2d 825, 832
(S.D. Miss. 2005); Wilbanks, 334 F. Supp. 2d at 926-28.
Although the Fifth Circuit’s and Mississippi district court’s decisions do not bind this Court,
their sustained reasoning merits serious consideration. The United States Court of Appeals for the
Fourth Circuit has cited the Fifth Circuit’s decision in De Aguilar favorably in an unpublished
opinion. Aikens v. Microsoft Corp., No. 05-1013, 2005 WL 3439552, at *4 (4th Cir. Dec. 15, 2005).
But, thus far, it has not adopted the “preferred approach” and has declined to recognize an equitable
exception to the one-year limitations period in 28 U.S.C. § 1446(b). See Lovern v. Gen. Motors
Corp., 121 F.3d 160, 163 (4th Cir. 1997) (noting that § 1446(b) erects an “absolute bar” to the
removal of diversity cases one year after their commencement).
As noted, Plaintiff’s complaint seeks damages not to exceed $75,000. Except for Plaintiff’s
responses to Defendants’ interrogatories and requests to admit, Defendants have offered nothing to
show, or even suggest, that Plaintiff’s damages will exceed $75,000. Instead, Defendants ask the
Court to adopt the preferred approach and find that Plaintiff, in claiming less than $75,000, acted
in bad faith because he will not enter into a binding stipulation that he will not seek or accept more

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at a later date. For the following reasons, the Court declines Defendants’ invitation to adopt the
preferred approach.
First, Plaintiff’s refusal to stipulate to maximum damages less than the jurisdictional amount
does not necessarily indicate bad faith. Plaintiffs, of course, may seek less than the jurisdictional
amount to litigate their cases in state court. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S.
283, 294 (1938). For any number of reasons not having to do with bad faith or jurisdictional
manipulation, plaintiffs who wish to litigate in state court may resist forfeiting their ability to amend
to seek or accept more than the jurisdictional amount, despite believing in good faith that their claim
does not exceed $75,000. Plaintiff’s asserted justification that he wishes to engage in “meaningful
discovery on issues of liability and damages before any permanent stipulation is made” exemplifies
one such reason. Pl.’s Mot. Remand 6. The reality is that cases often evolve as they progress
through litigation and the parties acquire more information pertaining to their claims and defenses.
Requiring plaintiffs at the outset of litigation to enter into a binding stipulation regarding damages
could seriously handicap them as the case progresses. As a result, it is understandable that, despite
believing in good faith that their claims do not exceed the jurisdictional amount, many plaintiffs
would decline to enter into such a binding stipulation. For these reasons, the Court does not believe
that a plaintiff’s simple refusal to stipulate to maximum damages, without more, is sufficient to
demonstrate bad faith.
Second, the Court is of the opinion that the preferred approach constitutes an aggressive
exercise of removal jurisdiction, which the Fourth Circuit has counseled against. Recently, the
Fourth Circuit, sitting en banc, reminded district courts of the presumption that a cause of action lies
outside of their limited jurisdiction, that removal statutes must be strictly construed, and that doubts

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about the propriety of removal must be resolved in favor of remand. Barbour, 640 F.3d at 605. In
this case, no evidence has been proffered indicating that the claims exceed $75,000. A plaintiff’s
refusal to stipulate to maximum damages does not establish that the claim exceeds $75,000. At best,
it provides a tenuous and hypothetical inference.

Thus, the Court has nothing before it

demonstrating that the claims exceed $75,000 to justify exercising diversity jurisdiction and
consequently divesting the state court of jurisdiction.
In a similar context, the United States Court of Appeals for the Eleventh Circuit has
recognized that exercising jurisdiction “anytime a plaintiff sued for less than the jurisdictional
amount but there remained even a possibility that she would amend her claim or be awarded more
than she pleaded . . . would unacceptably broaden removal jurisdiction.” Burns v. Windsor Ins. Co.,
31 F.3d 1092, 1096-97 (11th Cir. 1994). This Court agrees and finds the Eleventh Circuit’s concern
applicable in this case. Thus, the Court, mindful of its limited jurisdiction and the federalism
concerns implicated by removal, declines to adopt the preferred approach.
To be sure, the Court recognizes the plight of Defendants and agrees that the jurisdictional
manipulation of which they are fearful would constitute bad faith. But to demonstrate that Plaintiff
is engaging in jurisdictional manipulation, Defendants must offer more than his simple refusal to
enter a binding stipulation limiting his damages. Plaintiff has failed to do so. Accordingly, the
Court finds that the amount in controversy does not exceed $75,000 and that it lacks diversity
jurisdiction to entertain this case. Removal was improper, and remand is warranted.
Although the Court “may require payment of just costs and any actual expenses, including
attorney fees, incurred as a result of the removal,” 28 U.S.C. § 1447(c), it declines to do so. Given
the persuasive support for Defendants’ position, the Court believes that they possessed an

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objectively reasonable basis for seeking removal and, therefore, fees should be denied. See Martin
v. Franklin Capital Corp., 546 U.S. 132, 141 (2005) (“[W]hen an objectively reasonable basis exists,
fees should be denied.”).
VI.

CONCLUSION
Wherefore, based on the foregoing discussion and analysis, it is the judgment of this Court

that Plaintiff’s motion to remand is GRANTED and the case is hereby REMANDED. Furthermore,
Plaintiff’s request for costs and expenses is DENIED.
IT IS SO ORDERED.
Signed this 30th day of June, 2011, in Spartanburg, South Carolina.
s/ Henry F. Floyd
HENRY F. FLOYD
UNITED STATES DISTRICT JUDGE

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