Moore v. Gladiator Events LLC et al

Filing 31

Memorandum Opinion and Order denying 10 Motion to Remand to State Court filed by Laura Moore; granting 13 MOTION for Leave to File Defendant's Amended Notice of Removal filed by Gladiator Events LLC. (Ordered by Judge Barbara M.G. Lynn on 9/15/2015) (jrr)

IN UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
LAURA MOORE,
Plaintiff,
v.
GLADIATOR EVENTS, LLC,
Defendant.

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No. 3:15-cv-01877-M

MEMORANDUM OPINION AND ORDER
Before the Court is Defendant’s Motion for Leave to Amend its Notice of
Removal [Docket Entry #13] and Plaintiff’s Motion to Remand [Docket Entry #10]. For
the reasons stated below, the Motion for Leave to Amend is GRANTED, and the Motion
to Remand is DENIED.
I.

FACTUAL BACKGROUND
Plaintiff, Laura Moore, claims she was seriously injured while participating in an

obstacle course at the Gladiator Rock’n Run event hosted by Defendant, Gladiator
Events, LLC (“Gladiator”), when she encountered an object submerged and hidden in
muddy water. As a result, Moore alleges she suffered severe injuries to her foot and
ankle which required two surgeries and which will cause her future pain, suffering,
impairment, and disfigurement.
After nearly a year of proceedings in state court, Moore reached a settlement with
and dismissed a non-diverse defendant. Gladiator then removed this case to federal court
under 28 U.S.C. § 1332, alleging complete diversity and an amount in controversy
exceeding $75,000. Moore moved to remand, arguing that Gladiator’s Notice of

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Removal (“the Original Notice”) did not establish subject matter jurisdiction because
Gladiator did not properly plead its citizenship or show that the amount in controversy
exceeds $75,000. In response, Gladiator moved to amend its Notice of Removal to
correct and supplement its allegations. It attached an Amended Notice of Removal which
alleged it is a limited liability company and the citizenship of its sole member and
supplemented its allegations regarding the amount in controversy. Moore opposed the
Motion for Leave to Amend and argued that, even if the Court accepted the Amended
Notice, it was still not sufficient to establish jurisdiction. Finally, Moore provided
evidence, through an attorney declaration and medical records, to support her claim that
Gladiator failed to establish that the amount in controversy is likely to exceed $75,000.
Both parties request attorneys’ fees under 28 U.S.C. § 1447(c).
II.

DIVERSITY JURISDICTION
Gladiator, as the party invoking federal jurisdiction, bears the burden of

establishing, by a preponderance of the evidence, that diversity exists, and that the
jurisdictional minimum is satisfied. St. Paul Reinsurance Co. v. Greenberg, 134 F.3d
1250, 1253 (5th Cir. 1998). The “basis upon which jurisdiction depends must be alleged
affirmatively and distinctly and cannot be established argumentatively or by mere
inference.” Ill. Cent. Gulf R. Co. v. Pargas, Inc., 706 F.2d 633, 636 (5th Cir. 1983)
(internal quotation marks and citation omitted).
To determine the amount in controversy, courts look first to the state court
petition. Salazar v. Downey, 2012 WL 5389678, at *1–2 (N.D. Tex. Nov. 5, 2012)
(Lynn, J.). When the petition does not state the dollar amount of damages sought, courts
analyze the notice of removal. Id.; see Dart Cherokee Basin Operating Co., LLC v.

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Owens, __ U.S. __, 135 S. Ct. 547, 553–54 (2014) (a CAFA case with broader
implications for diversity cases). Where the notice of removal alleges an amount in
controversy, and the amount is not contested, courts accept the removing party’s
allegation. Dart Cherokee Basin Operating Co., LLC, 135 S. Ct. at 553. However,
where the amount in controversy is contested, “‘[r]emoval . . . is proper on the basis of an
amount in controversy asserted’ by the defendant ‘if the district court finds, by the
preponderance of the evidence, that the amount in controversy exceeds’ the jurisdictional
threshold.” Id. at 553–54 (quoting 28 U.S.C. § 1446(c)(2)(B)); Statin v. Deutsche Bank
Nat.’l Trust Co., 599 F. App’x 545, 546 n.1 (“[O]nce the notice of removal’s asserted
amount is ‘challenged,’ the parties ‘must submit proof and the court decides, by a
preponderance of the evidence, whether the amount-in-controversy requirement has been
satisfied.’” (quoting Dart Cherokee Basin Operating Co., LLC, 135 S. Ct. at 554)).
A removing party may establish the jurisdictional amount by either: (1)
demonstrating that it is “facially apparent” from the petition that the claim more likely
than not exceeds $75,000 or (2) setting forth the facts in controversy that support a
finding of the requisite amount. Arriaga v. Midland Funding LLC, 2015 WL 567264, at
*2 (N.D. Tex. Feb. 11, 2015) (Lynn, J.) (citing Grant v. Chevron Phillips Chem. Co., 309
F.3d 864, 868 (5th Cir. 2002)). “[I]f the value of the claims is not apparent, then the
defendants may support federal jurisdiction by setting forth the facts—[either] in the
removal petition [or] by affidavit—that support a finding of the requisite amount.”
Larremore v. Lykes Bros. Inc., 454 F. App’x 305, 306-07 (5th Cir. 2011) (quoting Garcia
v. Koch Oil Co. of Texas, Inc., 351 F.3d 636, 638 (5th Cir. 2003)). “Once a defendant
has met this burden, the motion to remand will be denied, unless the plaintiff can show by

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a legal certainty that [she] will not recover more than $75,000.” Salazar, 2012 WL
5389678, at *1–2.
III.

MOTION FOR LEAVE TO AMEND
Under 28 U.S.C. § 1653, “[d]efective allegations of jurisdiction may be amended,

upon terms, in the trial or appellate courts” after the thirty day period for removing a state
court action under 28 U.S.C. § 1446(b) has expired. Sanders v. Leggett & Platt, Inc.,
2010 WL 3282978, at *1 (N.D. Tex. Aug. 17, 2010) (Lynn, J.); see also Menendez v.
Wal-Mart Stores, Inc., 364 F. App’x 62, 66 (5th Cir. 2010); Swindol v. Aurora Flight
Sciences Corp., __ F.3d __, 2015 WL 5090578, at *1 (5th Cir. Aug. 28, 2015).
Section 1653 is “liberally construed to allow a party to cure technical defects, including
the failure to specifically allege the citizenship of parties.” Moreno Energy, Inc. v.
Marathon Oil Co., 884 F. Supp. 2d 577, 586-87 (S.D. Tex. 2012) (Harmon, J.) (quoting
Menendez, 364 F. App’x at 66.) 1 However, a court’s discretion to allow amendments is
not unlimited. A court “may allow amendments to notices of removal with defective
allegations of jurisdiction, but not missing allegations of jurisdiction.” Sanders, 2010
WL 3282978, at *1. Similarly, courts may allow amendments to cure defective
jurisdictional allegations but not procedural defects. Grand Texas Homes, Inc. v. Am.

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Moore argues that the Fifth Circuit has not issued a binding decision on the propriety of
using § 1653 to amend notices of removal more than thirty days after an action becomes
removable. In fact, the Fifth Circuit has, in published and unpublished opinions, granted
motions to amend notices of removal under § 1653. Swindol, __ F.3d __, 2015 WL
5090578, at *2 (“[W]e exercise our discretion to grant Swindol’s motion for leave to
amend under Section 1653 because the judicially noticed documents persuade us that the
parties are completely diverse.”); Menendez, 364 F. App’x at 68 (“To remedy the
technical defect, we grant the defendants’ motion for leave to amend their notice of
removal.”).

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Safety Indem. Co., 2012 WL 5355958, at *3 (N.D. Tex. Oct. 30, 2012) (Lynn, J.) (finding
that “[f]ailure to join in removal is a procedural defect that cannot be cured” under § 1653
and granting a motion to remand).
Because, in its Original Notice, Gladiator provided only its place of legal
organization and principal place of business, and not the citizenship of its members,
Gladiator failed properly to allege complete diversity. “[L]ike limited partnerships and
other unincorporated associations or entities,” a limited liability company’s citizenship is
that of each of its members. Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th
Cir. 2008). Therefore, to adequately plead the citizenship of a limited liability company,
a removing party must allege the citizenship of each of its members, not its principal
place of business and place of incorporation. Id. To demonstrate diversity, Gladiator
must prove that none of its members share citizenship with Moore.
In its Original Notice, Gladiator alleged that Moore is a citizen of Texas and
identified itself as a citizen of California, stating that it is a “limited liability corporation
incorporated under the laws of the State of California, having its principal place of
business in California” [Docket Entry #1 at 3]. It did not allege its membership or its
member’s citizenship. Now, however, in the Amended Notice, Gladiator alleges that it
has one member—Dan Clark, who “is a citizen of California” [Docket Entry #13-1 at 3].
Gladiator’s error is a defective jurisdictional allegation which Gladiator should be
allowed to correct. Courts have recognized that, “where a notice of removal fails to
identify the citizenship of the members or partners of an unincorporated association,
leave to amend should be granted under 28 U.S.C. § 1653.” Moreno Energy, Inc., 884 F.
Supp. 2d at 586–87; Mullins v. Testamerica Inc., 300 F. App’x 259, 260–61 (5th Cir.

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2008) (remanding to the district court so that a limited partnership could amend the
jurisdictional allegations in its notice of removal to identify the citizenship of its
partners); ALMS, Ltd., L.L.P. v. Guzman, 1998 WL 684245, at *1 (N.D. Tex. Sept. 25,
1998) (Fish, J.) (allowing a removing defendant to amend a notice of removal that alleged
a limited liability partnership’s citizenship based on its principal place of business and
place of legal organization in order to allege the citizenship of its partners). Because the
citizenship of limited liability companies is determined in the same way as the citizenship
of partnerships and other unincorporated associations, courts treat them the same way.
Alvarez v. Aldi (Texas), L.L.C., 2014 WL 1694901, at *3 (N.D. Tex. Apr. 28, 2014)
(Lindsay, J.) (allowing a removing limited liability company to amend its notice of
removal to provide the correct citizenship of its sole member); Lindley Contours, LLC v.
AABB Fitness Holdings, Inc., 414 Fed. Appx. 62, 64–65 (9th Cir. 2011) (granting
removing defendants leave to amend their notice of removal under § 1653 to allege the
citizenship of the members of limited liability corporations).
Gladiator also should be permitted to supplement its allegations regarding the
amount in controversy. In the Original Notice, Gladiator stated that “the allegations of
harm contained within the Petition” make it “facially apparent” that the amount in
controversy exceeds $75,000: Moore claims she “sustained severe and painful injuries
including, but not limited to, a fractured ankle which required screws and plates to fix
and two surgeries,” and seeks damages for “past and future medical expenses, physical
pain and suffering, mental anguish, physical impairment, [and] disfigurement” [Docket
Entry #1 at 3–4]. Based on those claims, along with “medical records and bills as well as
other information,” Gladiator obtained through discovery, Gladiator “estimate[d]” that

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the amount in controversy was “approximately $150,000.” Id. at 4. Gladiator also noted
that Moore is alleging gross negligence, which, under Texas law, allows a plaintiff to
seek punitive damages, and claimed that, by stating in the Petition that the case would be
conducted under a Level 2 Discovery Plan under the Texas Rules of Civil Procedure,
Moore conceded that the case involved at least $50,000. Id.
Gladiator now seeks to supplement its allegations of the amount in controversy.
Specifically, the Amended Notice cites additional caselaw and states that “based on
defense counsel’s background, education, training and 16 years of experience in personal
injury cases,” Gladiator estimates that the amount in controversy is approximately
$150,000 [Docket Entry #13-1 at 7].
Gladiator alleged, in the Original Notice, that the amount in controversy exceeded
$75,000; so at worst the allegation in the Original Notice was merely conclusory.
Allegations regarding the amount in controversy are allegations regarding jurisdictional
facts, not procedural requirements. Accord Menendez v. Wal-Mart Stores, Inc., 2009 WL
2407949, at *2 (S.D. Tex. July 31, 2009) (Crane, J.), aff’d by Menendez, 364 F. App’x 62
(allowing defendants who wholly failed to state any amount in controversy to amend
their notice of removal to specifically allege the amount in controversy, because there
was “no indication that the jurisdictional facts supporting the exercise of diversity
jurisdiction did not exist at the time of removal; Removing Defendants simply failed to
allege those facts with the requisite specificity”). Courts often therefore allow removing
defendants to supplement their allegations regarding the amount in controversy under
§ 1653. See, e.g., ALMS, Ltd., L.L.P., 1998 WL 684245, at *1 (allowing defendant to
amend a notice of removal to provide additional evidence of the amount in controversy);

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Cohn v. Petsmart, Inc., 281 F.3d 837, 840 n.1 (9th Cir. 2002) (allowing a removing
defendant to supplement a notice of removal that “only summarily alleged that the
amount in controversy exceeded $75,000, without alleging any underlying facts to
support this assertion” with an explanation that the amount in controversy was based on a
settlement demand).
Gladiator’s Motion to Amend its Notice of Removal is therefore GRANTED, and
the Court will consider the Amended Notice in evaluating Moore’s Motion to Remand.
IV.

MOTION TO REMAND
The Court must remand the action if either 1) the parties are not completely

diverse, or 2) the amount in controversy does not exceed $75,000. Because, in its
Amended Notice, Gladiator has adequately alleged both complete diversity and the
minimum jurisdictional amount, the Court will not remand.
Moore argues that Gladiator’s Amended Notice does not establish complete
diversity, because, although Gladiator alleges that it has only one member, it does not
allege the citizenship of that member at the time of removal, only stating that it has one
member and the member is a citizen of California. Further, Moore argues that the
Amended Notice is insufficient to establish citizenship because Gladiator did not provide
any evidence of its citizenship outside of its bare allegation. Neither argument is
persuasive. First, although Moore is correct that the Amended Notice uses the present
tense when alleging the identity and citizenship of Gladiator’s member, in the next
sentence it clarifies that “Gladiator Events, LLC, was at the time this action was
commenced, and is currently, a citizen of the State of California” [Docket Entry #13-1,
at 3]. The Court finds this allegation sufficiently specific to allege Gladiator’s citizenship

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at the time the action was filed and the time of removal—after alleging its membership,
and its member’s citizenship, it alleged that it was a citizen of California at both relevant
times. Second, it is well established that a notice of removal need not incorporate actual
evidence of the grounds for removal, as long as the notice provides a short and plain
statement of the jurisdictional allegations. Moore has not contested the fact of
Gladiator’s California citizenship. Fed. R. Civ. P. 1446(a); Dart Cherokee Basin
Operating Co., 135 S. Ct. at 551. The Court finds that complete diversity exists.
In determining the amount in controversy, the Court can consider items for which
Gladiator can be liable under state law, including attorneys’ fees, penalties, statutory
damages, and punitive damages. Salazar, 2012 WL 5389678, at *2; see St. Paul
Reinsurance Co., 134 F.3d at 1253; see also U.S. Fire Ins. Co. v. Villegas, 242 F.3d 279,
284–85 (5th Cir. 2001) (concluding that punitive damages may properly be considered in
determining whether the amount in controversy exceeds $75,000).
Here, the Petition makes clear that Moore is seeking significant damages: it
alleges that Moore “sustained severe injuries to her right ankle, foot and body in general”
including “a fracture in her right ankle which required screws and plates to fix and two
surgeries” [Docket Entry #1-1 at ¶12]. She incurred costs for medical care and treatment
and alleges she will continue to incur such costs in the future. Id. at ¶19. Further, the
Petition alleges that Moore suffered, and will suffer, physical pain, mental anguish,
physical disfigurement, and physical impairment “probably for the rest of her life.” Id.
Finally, the Petition claims that Moore “incurred reasonable and necessary consequential
and incidental expenses including, but not limited to: transportation expenses, mileage
expenses, [and] domestic assistance.” Id. These kinds of allegations—for “specific types

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of medical treatment, emotional distress, [and] functional impairments”—support[ ] a
substantially larger monetary basis for federal jurisdiction.” Simon v. Wal-Mart Stores,
Inc., 193 F.3d 848, 851 (5th Cir. 1999).
Courts considering similar claims have found that the jurisdictional minimum was
exceeded. For example, this Court found that a petition “plainly indicate[d]” that it was
more likely than not that a plaintiff’s damages would “exceed $75,000 in the event of a
favorable verdict” where the plaintiff alleged unspecified bodily injuries and claimed he
had incurred $50,000 in continuing medical expenses, and sought exemplary damages.
Salazar, 2012 WL 5389678, at *2. Another court in this circuit found that, where a
plaintiff alleged “a ‘crushed’ foot and toes,” the petition “reveal[ed] on its face that the
amount in controversy [wa]s greater than $75,000.” Hernandez v. CST Drilling Fluid,
Inc., 2008 WL 150962, at *3 (S.D. Tex. Jan. 11, 2008) (Jack, J.). Another court held
that, where a plaintiff’s hand was injured in an accident, requiring surgery and additional
medical treatment, and plaintiff sought past, present, and future damages for physical
pain and suffering, emotional distress, loss of enjoyment of life, and medical expenses, it
was facially apparent that the jurisdictional minimum was met. Broussard v. Celebration
Station Props., Inc., 2014 WL 1402144, at *3–4 (M.D. La. Apr. 10, 2014); see also Berry
v. Toyota Motor Sales, U.S.A., Inc., 2011 WL 6965837, at *2 (W.D. La. Dec. 15, 2011)
report and recommendation adopted, 2012 WL 48044 (W.D. La. Jan. 9, 2012) (finding
that, although the claims for physical and mental pain and suffering, past and future
medical expenses, and disability due to certain injuries did not make the amount in
controversy facially apparent, evidence that the plaintiff’s jaw was fractured was enough
to establish the jurisdictional threshold).

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Moore’s choice of discovery plan further confirms that the amount in controversy
exceeds $75,000. See Dean v. Accenture Fed. Servs., LLC, 2011 WL 6355298, at *3
(W.D. Tex. Dec. 19, 2011) (“[G]iven the allegations of severe mental anguish, both past
and future, and invocation of a Level 2 discovery control plan, the Court finds that it is
facially apparent that the amount in controversy, based on compensatory damages and
attorneys’ fees, exceeds $75,000.”). Moore’s Petition states that discovery will be
conducted “under a Level 2 discovery plan pursuant to the Texas Rules of Civil
Procedure” [Docket Entry #1 at ¶1]. Gladiator argues that this is a concession that at
least $50,000 is in controversy. Moore does not contest that; in fact, she explicitly
concedes that the case involves $50,000. [Docket Entry #25 at 12]. However, the Texas
Rules of Civil Procedure recently changed. The prior rule stated that Level 1 applied
where plaintiffs “affirmatively ple[d] that they s[ought] only monetary relief aggregating
$50,000 or less,” and that Level 2 governed other actions. That rule has been revised.
The new rule, which took effect approximately fourteen months before this action was
filed, provides that Level 1 applies when claimants “affirmatively plead that they seek
only monetary relief aggregating $100,000 or less,” including attorneys’ fees. Tex. R.
Civ. P. §§190.2 & 169 (emphasis added); see Neal A. Hoffman, Diversity Jurisdiction
Dilemmas, Vol. 78, No. 2, Tex. Bar. J., Feb. 2015.
Moore’s choice of a state court Level 2 discovery plan is informative but not
dispositive, even under the new rules. A plaintiff who fails to “affirmatively plead” that
she is seeking $100,000 or less by choosing to conduct discovery under a Level 1
discovery plan is not affirmatively pleading that $100,000 is actually in controversy.
However, the fact that Moore did not seek to utilize the expedited discovery procedures

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available to Level 1 plaintiffs seeking less than $100,000 under the Texas rules is
relevant to determining the amount in controversy.
Here, the Petition also alleges gross negligence, a cause of action which, if
proven, will allow Plaintiff to seek exemplary damages [Docket Entry #1-1 at ¶11].
Nieto v. Roadrunner Transp. Servs., Inc., 2012 WL 5359614, at *2 (N.D. Tex. Oct. 30,
2012) (Lynn, J) (citing Tex. Civ. Prac. & Rem. Code § 41.003).
Moore’s claims make it likely that, if she prevails on the merits, she will recover
at least $75,000. The evidence Moore submitted after removal does not indicate
otherwise.2 In her Reply in Support of her Motion to Remand, Moore claims that her
medical bills are less than $17,000. Moore claims that she “has not required additional
treatment since this case was filed,” thus allegedly “indicating that the likely future
medical expenses will be zero” [Docket Entry #25 at 14].
Although Moore has incurred less than $20,000 in medical expenses, and argues
that she likely will not incur other medical expenses, she does not account for a
potentially significant recovery for past and future physical and mental anguish,
permanent disfigurement and impairment, attorneys’ fees, and incidentals, such as the
claimed transportation expenses and domestic assistance, as well as exemplary damages.
Under Texas law, a jury can award exemplary damages of 1) twice the amount of
economic damages, plus the amount of noneconomic damages awarded, or 2) $200,000,
whichever is greater. Tex. Civ. Prac. & Rem. Code § 41.008(b).
Because Gladiator has shown that the amount in controversy likely exceeds

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The Court can consider evidence when determining the amount in controversy. Dart
Cherokee Basin Operating Co., LLC, 135 S. Ct. at 553–54; Statin, 599 F. App’x at 546
n.1.
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$75,000, the Motion to Remand must be denied unless Moore has shown to a legal
certainty that that she cannot recover more than $75,000. The Fifth Circuit has suggested
that a plaintiff may show legal certainty in various ways, including by filing a binding
stipulation or affidavit, or by identifying a state statute that would limit damages to an
amount that does not exceed $75,000. Salazar, 2012 WL 5389678, at *1–2. Moore has
not attempted to provide any such legal certainty here.
For all these reasons, the Court concludes, by a preponderance of the evidence,
that the amount in controversy exceeds $75,000. The Motion to Remand is thus
DENIED.
V.

REQUESTS FOR ATTORNEYS’ FEES
Both parties request attorneys’ fees, but neither party is entitled to them. Under

28 U.S.C. § 1447(c), a court may award attorneys’ fees “incurred as a result of the
removal.” However, “absent unusual circumstances, attorney’s fees should not be
awarded when the removing party has an objectively reasonable basis for removal.”
Martin v. Franklin Capital Corp., 546 U.S. 132, 136 (2005). Clearly, for all the reasons
the Motion to Remand is denied, Gladiator had an objectively reasonable basis for
removal.
Gladiator also is not entitled to recover attorneys’ fees. Section 1447(c) allows a
party to recover attorneys’ fees when a case is remanded. The purpose of § 1447(c)’s
fee-shifting provision is “to deter removals sought for the purpose of prolonging litigation
and imposing costs on the opposing party.” Martin, 546 U.S. at 140; Micrometl Corp. v.
Tranzact Technologies, Inc., 656 F.3d 467, 472 (7th Cir. 2011) (“[B]ecause a case must
be remanded at any time when a court lacks jurisdiction . . . Congress sought to deter

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improper removals and delays in seeking remand by enacting the fee-shifting
provision.”). Requiring Moore to pay fees Gladiator incurred as a result of removal
would not serve the purposes of § 1447(c). The Court therefore declines to award
attorneys’ fees to Gladiator.
VI.

CONCLUSION
For these reasons, Defendant’s Motion to Amend its Notice of Removal [Docket

Entry #13] is GRANTED, and Plaintiff’s Motion to Remand [Docket Entry #10] is
DENIED.
SO ORDERED.
September 15, 2015.

_________________________________
BARBARA M. G. LYNN
UNITED STATES DISTRICT JUDGE
NORTHERN DISTRICT OF TEXAS

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