Barclay v. Seco Architectural Systems, Inc. (TWP2)

Filing 12

MEMORANDUM OPINION. Signed by District Judge Thomas W Phillips on 7/13/16. (JBR)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
KNOXVILLE DIVISION
JAMES “BUDDY” BARCLAY,
Plaintiff,
v.
SECO ARCHITECTURAL SYSTEMS, INC.,
Defendant.

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No. 3:16-cv-176

MEMORANDUM OPINION
This matter is before the Court on Plaintiff’s Motion to Remand [doc. 8], Plaintiff’s
Brief in Support of the Motion to Remand [doc. 9], and Defendant’s Response in
Opposition [doc. 10]. For the reasons herein, the Court will deny Plaintiff’s motion.
I.

BACKGROUND

Plaintiff James “Buddy” Barclay (“Mr. Barclay”) initiated this action in the Circuit
Court for Knox County, Tennessee, claiming employer discrimination under the Tennessee
Human Rights Act (“THRA”), Tenn. Code Ann. §§ 4-21-401–4-21-1004. Specifically, Mr.
Barclay alleges that, on or about January 15, 2016, Defendant Seco Architectural Systems,
Inc. (“Seco”), his former employer, terminated him “when [his] ability to obtain
employment was otherwise diminished because of his age” and replaced him with
employees “much younger.” [Compl., doc. 1-1, at 6, 7]. Mr. Barclay’s alleged “sustained
damages” consist of a “loss of future earnings, employment benefits, and personal injuries
[from] humiliation and embarrassment.” [Id. at 7]. Mr. Barclay seeks “compensatory

damages, inclusive of costs and attorney’s fees, under the law and evidence not to exceed
Seventy-Three Thousand, Five Hundred Dollars ($73,500).” [Id. at 8]. He also requests
“such further and general relief to which he may be entitled under the law.” [Id.].
Based on diversity of citizenship jurisdiction, Seco removed this action to this Court
under 28 U.S.C. § 1441(a). [Notice of Removal, doc. 1, at 1–5]. In doing so, Seco claims,
in its Notice of Removal, that the amount in controversy exceeds $75,000, exclusive of
interests and costs. [Id. ¶ 7]. Seco backs this claim with two assertions:
At the time of his separation from SECO on January 7, 2016, Plaintiff
earned an annual salary of $43,680.00 per year and was eligible for employee
benefits. Assuming a trial date set to begin in 20 months (roughly 23 months
from Plaintiff’s termination), Plaintiff would be entitled to more than
$75,000 in back pay at the time of trial.
In addition to Plaintiff’s claim for back pay, Plaintiff may seek
compensatory damages for future pecuniary losses and nonpecuniary losses
(including emotional pain, suffering, inconvenience, mental anguish, and
loss of enjoyment of life). Pursuant to Tenn. Code. Ann. § 4-21-313(a)(3),
these damages may total up to $100,000, given that SECO employs more
than 100 employees.
[Id. ¶¶ 13–14 (citations omitted)]. Mr. Barclay now moves this Court to remand this action,
arguing that federal subject matter jurisdiction is absent. In particular, the parties dispute
whether the amount in controversy exceeds 75,000, exclusive of interests and costs, under
28 U.S.C. § 1332(a). [See Pl.’s Br. at 5–12; Def.’s Resp. at 1–6].
II.

SUBJECT MATTER JURISDICTION

The federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins.
Co. of Am., 511 U.S. 375, 377 (1994). “Just as a criminal defendant is presumed innocent
until the government proves him guilty, a case is presumed to fall outside a federal court’s
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jurisdiction until a litigant proves otherwise.” May v. Wal-Mart Stores, Inc., 751 F. Supp.
2d 946, 950 (E.D. Ky. 2010); see Patsy v. Bd. of Regents, 457 U.S. 496, 525 n.10 (1982)
(Powell, J., dissenting). (“[B]ecause it would not simply be wrong but indeed would be an
unconstitutional invasion of the powers reserved to the states if the federal courts were to
entertain cases not within their jurisdiction, the rule is well settled that the party seeking to
invoke the jurisdiction of a federal court must demonstrate that the case is within the
competence of that court.” (quotation omitted)). Under § 1332(a), diversity of citizenship
jurisdiction requires an amount in controversy that exceeds $75,000, exclusive of interest
and costs. A party invoking diversity jurisdiction must allege that the cause of action
satisfies the jurisdictional amount in controversy, Mitan v. Int’l Fid. Ins. Co., 23 F. App’x
292, 297 (6th Cir. 2001), including in cases that arrive in federal court by removal, Dart
Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547, 551 (2014).
III. ANALYSIS
Under 28 U.S.C. § 1446(c)(2), when a defendant removes a civil case from state court
to federal court based on diversity jurisdiction, “the sum demanded in good faith in the
initial pleading shall be deemed to be the amount in controversy.” See Dart Cherokee
Basin, 135 S. Ct. at 551 (“If the plaintiff’s complaint, filed in state court, demands monetary
relief of a stated sum, that sum, if asserted in good faith, is ‘deemed to be the amount in
controversy.’” (quoting id.)); St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283,
288 (1938) (stating that, in the context of removal, “the sum claimed by the plaintiff
controls if the claim is apparently made in good faith” (footnotes omitted)). “Generally,
because the plaintiff is ‘master of the claim,’ a claim specifically less than the federal
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requirement should preclude removal.” Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 871
(6th Cir. 2000) (quotation omitted)).
In some situations, however, even when a plaintiff demands a specific sum in an
initial pleading and that sum is less than the federal threshold, remand is improper. The
Sixth Circuit, in a case whose removal was based on diversity jurisdiction, has counseled
courts not to remand an action when a state’s laws permit a plaintiff “to recover damages
in excess of what she prayed for.” Id. at 873. Specifically, when a state’s rules of civil
procedure contain an analog to Federal Rule of Civil Procedure 54(c), which permits “relief
to which each party is entitled, even if the party has not demanded that relief,” a plaintiff’s
demand for a particular sum less than $75,000 is not always determinative. Rogers, 230
F.2d at 871. In constructing this exception to the notion that the plaintiff is the “master of
the claim,” id. (quotation omitted), the Sixth Circuit explained its rationale:
[S]tate counterparts to Rule 54(c) . . . might enable a plaintiff to claim in his
or her complaint an amount lower than the federal amount-in-controversy
requirement in an attempt to defeat federal jurisdiction, while actually
seeking and perhaps obtaining damages far in excess of the federal
requirement. Thus, courts have considered allowing removal where the
defendant establishes a “substantial likelihood” or “reasonable probability”
that the plaintiff intends to seek damages in excess of the federal amount-incontroversy requirement. . . . We conclude that the “preponderance of the
evidence” (“more likely than not”) test is the best [test].
Gafford v. Gen. Elec. Co., 997 F.2d 150, 157–58 (6th Cir. 1993) (citations and quotations
omitted), abrogated on other grounds by Hertz Corp. v. Friend, 559 U.S. 77 (2010). Under
the Tennessee Rules of Civil Procedure, a near-facsimile of Rule 54(c) exists, and it
provides that “every final judgment shall grant the relief to which the party in whose favor
it is rendered is entitled, even if the party has not demanded such relief in the party’s
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pleadings.” Tenn. R. Civ. P. 54.03. “In such situations,” the defendant has the onus to show
that that the plaintiff’s claim, more likely than not, satisfies the amount-in-controversy
requirement under § 1332(a). Rogers, 230 F.3d at 871 (citing Gafford, 997 F.2d at 158).
A defendant initiates removal by filing a notice of removal, which must contain “a
short and plain statement of the grounds for removal.” 28 U.S.C. § 1446(a). If a plaintiff
contests the defendant’s allegations regarding the amount in controversy, the defendant
must then present evidence to establish that amount. See Dart Cherokee Basin, 135 S. Ct.
at 554 (stating that “when a defendant’s assertion of the amount in controversy is
challenged,” the proper “procedure” requires “both sides [to] submit proof,” based on
which “the court decides, by a preponderance of the evidence, whether the amount-incontroversy requirement has been satisfied”). In weighing the evidence, a court must
consider whether federal jurisdiction existed at the time the defendant filed the notice of
removal. See Ala. Great S. Ry. Co. v. Thompson, 200 U.S. 206, 216 (1906) (noting that the
removability of a case “depends upon the state of the pleadings and the record at the time
of the application for removal” (citation omitted)); Ahearn v. Charter Twp. of Bloomfield,
100 F.3d 451, 453 (6th Cir. 1996). Because the federal courts are courts of limited
jurisdiction, they resolve doubts regarding their jurisdiction by favoring remand. Eastman
v. Marine Mech. Corp., 438 F.3d 544, 549–50 (6th Cir. 2006).
Seco has satisfied its burden by showing that Mr. Barclay’s claim is more likely than
not to exceed the amount in controversy under § 1332(a). Citing to evidence that was part
of the record at the time of removal, Seco notes that Mr. Barclay’s salary was $43,680 and
that Seco employs more than a hundred people. [Mitchell Decl., doc. 1-3, ¶¶ 5, 7]. Based
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on these assertions, Seco argues that Mr. Barclay would be entitled to more than $75,000
in back pay by the time the case proceeds to trial, in addition to other pecuniary and nonpecuniary losses that can total up to $100,000 under Tenn. Code. Ann. subsection 4-21313(a)(4).1 [Notice of Removal ¶¶ 13–14]. Indeed, “[i]t is appropriate to consider back pay
beyond the time of removal when a plaintiff seeks an award for back pay that includes
future accruals.” Shupe v. Asplundh Tree Expert Co., 566 F. App’x 476, 479 (6th Cir. 2014)
(quotation omitted).
Mr. Barclay seeks this very type of compensation, maintaining that his damages
include “a loss of future earnings,” [Compl. at 7], and when the Court calculates the back
pay to which he would be entitled—from the date of his alleged termination through a
prospective trial date—it totals roughly $60,000.2 See Shupe, 566 F. App’x at 480 (stating
that the district court’s “calculation of [the plaintiff’s] backpay appropriately included
accruals through the projected trial date” when the plaintiff alleged that she suffered a loss
of future earnings). Mr. Barclay also seeks “such further and general relief to which he may
be entitled under the law,” [Compl. at 8], and alleges “personal injuries including
humiliation and embarrassment caused by the Defendant’s discriminatory and unlawful

Tenn. Code. Ann. subsection 4-21-313(a)(4) states “[f]or any cause of action arising
under § 4-21-401 . . . the sum of the amount of compensatory damages awarded for future
pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of
enjoyment of life, and other nonpecuniary losses, shall not exceed, for each complaining
party . . . . [i]n the case of an employer who has more than one hundred (100) and fewer
than two hundred one (201) employees at the time the cause of action arose, one hundred
thousand dollars ($100,000)[.]”
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The Court is likely to set this case for a trial date in spring 2017. The Court therefore bases
its calculation on a timeframe of sixteen months, which spans the date of Mr. Barclay’s alleged
termination in January 2016 to the anticipated date of trial in May 2017.
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practices,” [id. at 7]. In computing the amount in controversy, the Court may consider these
unspecified amounts of damages, see Shupe, 566 F. App’x at 480 (recognizing that, for the
purpose of tallying the amount in controversy in a wrongful-termination action, the
plaintiff’s alleged unspecified damages for humiliation and embarrassment “would be in
addition to” back pay); Crumley v. Greyhound Lines, Inc., No. 11-2153, 2011 WL
1897185, at *2 (W.D. Tenn. May 18, 2011) (considering unspecified damages for mental
and emotional distress when calculating the amount in controversy in an action under the
THRA), which, as Seco points out, can range up to $100,000, Tenn. Code Ann. § 4-21313(a)(4).
In addition, Mr. Barclay seeks the recovery of unspecified attorney’s fees, [Compl.
at 8], which the Court may also consider in determining the amount in controversy, see
Charvat v. GVN Mich., Inc., 561 F.3d 623, 630 n.5 (6th Cir. 2009) (stating that “reasonable
attorney fees, when mandated or allowed by statute, may be included in the amount in
controversy for purposes of diversity jurisdiction” (citation omitted)); see also Tenn. Code
Ann. § 4-21-306(a)(7) (permitting the recovery of reasonable attorney’s fees for a
plaintiff); see also Shupe, 566 F. App’x at 480 (recognizing that, for the purpose of
calculating the amount in controversy in a wrongful-termination action, attorney’s fees
“would be in addition to” back pay). “Given the complexity of THRA cases and the
extensive discovery usually required, a successful plaintiff will almost always incur
substantial attorney’s fees.” Crumley, 2011 WL 1897185 at *3. In sum, based on Mr.
Barclay’s alleged damages, the types of relief that Mr. Barclay requests, and the record

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evidence at the time of removal, Seco has demonstrated that Mr. Barclay’s claim, more
likely than not, will exceed the amount in controversy under § 1332(a).
IV. CONCLUSION
Because the Tennessee Rules of Civil Procedure contain an analog to Federal Rule
of Civil Procedure 54(c), the Court has an obligation to look beyond the specific demand
in Mr. Barclay’s pleading to determine the amount in controversy. Seco has shown by a
preponderance of the evidence that Mr. Barclay’s alleged damages—which include back
pay that, at least, will total approximately $60,000, pecuniary harm from humiliation and
embarrassment, and attorney’s fees—will exceed $75,000. Mr. Barclay’s Motion to
Remand [doc. 8] is therefore DENIED.
IT IS SO ORDERED.
ENTER:

s/ Thomas W. Phillips
United States District Judge

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