Salomon v. Wells Fargo Bank, N.A. et al

Filing 11

ORDER GRANTING 4 Motion to Remand to State Court Signed by Judge Kathleen Cardone. (dl1, )

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS EL PASO DIVISION
D E B B I E V. SALOMON, Plaintiff, v. W E L L S FARGO BANK, N.A., and W E L L S FARGO BANK Defendants. § § § § § § § § § § ORDER O n this day, the Court considered Plaintiff's Motion to Remand ("Pl.'s Mot.") (Doc. No. 4 ) . For the reasons set forth herein, the Motion is GRANTED. I. BACKGROUND P la in t iff Debbie Salomon ("Salomon") is a citizen of Texas. Notice of Removal ¶3 (" N o t . Rem.") (Doc. No. 1). Defendant Wells Fargo Bank, N.A. ("Wells Fargo") 1 is a national b a n k i n g organization with its main office in South Dakota and is therefore a citizen of South D a k o ta . Id.; see also 28 U.S.C. §1348. Salomon was hired by Wells Fargo as a bank teller in 1 9 9 7 . Pl.'s Mot. to Remand 1 ("Pl.'s Mot.") (Doc. No. 4). She was later promoted to a customer s e rv ic e representative position and then to the position of personal banker. Id. at 1-2. In 2009, S a lo m o n applied for an assistant manager position but was not selected. Id. at 2. Salomon then a lle ged ly complained of discriminatory treatment and requested a transfer. Id. Her request for

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1

W e l ls Fargo Bank, N.A. asserts in its Original Answer that the a d d itio n a l Defendant, W e lls Fargo Bank, is a fictitious name u n d e r which W e l l s Fargo Bank, N.A. does business. Def.'s R e s p . to Pl.'s Mot. to Remand Ex. C ¶ 4.

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tra n s fe r was denied. Id. On April 28, 2009 she was suspended from her job and shortly th e re a fte r filed an EEOC charge of discrimination and retaliation. Id. On May 13, 2009, Plaintiff w a s terminated. Id. S a lo m o n filed her Original Petition in state court on December 21, 2009, alleging d is c rim i n a tio n on the basis of sex and age, and retaliation, all in violation of section 21.001 of the T e x a s Labor Code. See Pl.'s Orig. Pet. 4 (Doc. No. 4-1). Salomon asserted damages for "back p a y and benefits, front pay and benefits, compensatory damages in the past and future, reasonable a n d necessary attorney fees, exemplary damages, pre-judgment and post-judgment interest as a llo w e d by law, costs of Court and other compensatory damages . . . in an amount within the ju r is d i c tio n a l limits of [the state] [c]ourt." Id. at 5. On January 28, 2010, Wells Fargo filed its O r ig in a l Answer and served Salomon with Requests for Disclosures. Def.'s Resp. to Pl.'s Mot. to Remand 1 ("Def.'s Resp.") (Doc. No. 5). On February 18, 2010, Wells Fargo was served with Plaintiff's Response to Defendant's R e q u e s t for Disclosures, which stated that P la in tiff would calculate back pay and benefits at the rate of $16.49 per hour for a n average of 40 hours per week from the date of termination to present. Plaintiff w o u ld calculate her front pay and benefits at a rate of $16.49 per hour for an a v e r a g e of 40 hours per week from the date of trial for a period of five (5) years in t o the future. D e f.'s Resp. 1. On March 16, 2010, Wells Fargo removed the case to this Court alleging diversity ju ris d ic tio n . Id. Salomon then filed her Motion to Remand on March 23, 2010. Pl's Mot. 1. Wells Fargo filed its Response to Plaintiff's Motion to Remand on April 5, 2010. Def.'s Resp. 1. Salomon filed her Reply on April 12, 2010. See Pl.'s Reply to Def's. Resp. to Pl.'s Mot. to R e m a n d ("Pl.'s Reply") (Doc. No. 6).

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O n April 14, 2010, Wells Fargo filed a Motion for Leave to File a Sur-Reply to Plaintiff's M o tio n to Remand seeking permission to respond to issues that Wells Fargo claims Salomon ra is e d for the first time in her Reply. See Def.'s Mot. for Leave to File a Sur-Reply 3 ("Def.'s M o t ." ) (Doc. No. 7). Salomon filed a response claiming that she raised no new arguments in her R e p ly. See Pl.'s Resp. to Def.'s Mot. for Leave to File a Sur-Reply 2 ("Pl.'s Resp.") (Doc. No. 8 ). II. D ISC U SSIO N A. M o t io n for Leave to File a Sur-Reply

W e l l s Fargo has sought permission to file a sur-reply brief in connection with Salomon's M o tio n to Remand. See Def.'s Mot. 3. While much of the proposed sur-reply is dedicated to d i s c u s s i n g case law originally cited in Salomon's Motion to Remand, the sur-reply does address E x c e le r o n Software v. TGEC Communications, a case cited for the first time in Salomon's Reply. See Pl.'s Reply 1 (citing Exceleron Software v. TGEC Commc'ns, 3:05-cv-2007, 2005 WL 3 5 4 2 5 6 6 (N.D. Tex. Dec. 23, 2005)). Because Wells Fargo seeks to respond to Salomon's use of E x c e le r o n , and distinguish its facts from this case, it has provided adequate justification for its S u r-R e p l y. Accordingly, Wells Fargo's Motion for Leave to File is GRANTED. B. M o tio n to Remand

R e g a r d i n g the underlying issue of diversity jurisdiction and remand, neither party to this c a s e disputes that complete diversity of parties exists and that the amount in controversy exceeds th e jurisdictional minimum. Def.'s Resp. 2. The only issue before the Court is the timeliness of W e lls Fargo's removal.

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1.

Standa rd

A defendant may remove to federal court "any civil action brought in State court of which t h e district courts of the United States have original jurisdiction." 28 U.S.C. §1441(a); see also 2 8 U.S.C. § 1446(a). A federal district court has subject matter jurisdiction over a state law c o n tro v e rs y when the amount in controversy exceeds $75,000 and there is complete diversity of c itiz e n s h ip between the parties. See 28 U.S.C. § 1332(a). The removal statutes are to be c o n s tru e d strictly against removal and in favor of remand. Willy v. Coastal Corp., 855 F.2d 1 1 6 0 , 1164 (5th Cir. 1988); Brown v. Demco, Inc., 792 F.2d 478, 481 (5th Cir. 1986). The party s e e k i n g the federal forum bears the burden of showing that federal jurisdiction exists and that re m o v a l is proper. See id. A motion to remand, predicated on a procedural defect and not a lack o f subject-matter jurisdiction, must be filed within "30 days after the filing of the notice of re m o v a l." 28 U.S.C. § 1447(c). 2. T i m e lin e s s of Wells Fargo's removal

W e lls Fargo argues that its Notice of Removal was timely because Salomon's Original P e titio n does not include any specific allegation that she seeks an award in excess of $75,000. Def.'s Resp. 3-4. It argues that the time for removal only began once they received the discovery re s p o n s e noted above, in which Salomon outlines the lost pay damages she is seeking to recover. See id. 1, 3-4. For removal to be timely, a defendant must file a notice of removal within thirty d a ys of its receipt of the initial pleading in the action. 28 U.S.C. §1446(b). The thirty day re m o v a l period is triggered by the receipt of an initial pleading "only when that pleading a ffirm a tiv e ly reveals on its face that the plaintiff is seeking damages in excess of the minimum

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ju r is d i c tio n a l amount of the federal court." Chapman v. Powermatic, Inc., 969 F.2d 160, 163 (5 th Cir. 1992). If the initial pleading is not removable, the defendant may file a notice of re m o v a l within thirty days of its receipt of an "other paper" from which it can be determined that th e action is removable. 28 U.S.C. §1446(b). Discovery responses may constitute "other p a p e r[s ]" under section 1446(b). See, e.g., S.W.S. Erectors v. Infax, Inc., 72 F.3d 489, 494 (5th C i r. 1996). However, the amount in controversy must be judged with reference to the time the o rigin a l state court pleading is filed. See St. Paul Reins. Co. v. Greenberg, 134 F.3d 1250, 1253 (5 th Cir. 1998). An initial pleading that does not assert a specific numerical amount of damages above the fe d e r a l threshold can still "provide sufficient notice that an action is removable so as to trigger th e time limit for filing a notice of removal." Bosky v. Kroger Tex., LP, 288 F.3d 208, 210 (5th C i r. 2002); see also Marcel v. Pool, 5 F.3d 81, 84 (5th Cir. 1993). Where a specific numerical a l l e ga t i o n of damages is not provided, the court must determine if it clear that the damages will lik e ly exceed $75,000 in that particular case. White v. FCI USA, Inc., 319 F.3d 672, 675 (5th Cir. 2 0 0 3 ) ; Muniz v. El Paso Marriott, No. 09-cv-274, 2009 U.S. Dist. LEXIS 114619, at *14 (W.D. T e x . Dec. 8, 2009) (El Paso Div.) (Cardone, J.). W h e n damages are not set forth in the pleadings numerically, parties generally contest the a m o u n t in controversy in remand motions under one of two common procedural postures. In the firs t posture, the defendant has removed a case within thirty days of the service of the original p le a d in gs, and the plaintiff is objecting on the basis that the amount in controversy is not met. See, e.g., Muniz, 2009 U.S. Dist. LEXIS 114619, at *12-14. In such a case, the defendant can

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ju s t ify removal in two distinct ways: (1) by arguing that the face of the complaint made it clear th a t the amount in controversy minimum is reached; (2) by bringing summary-judgment-type e v id e n c e to prove, factually, that the amount at stake in the particular case exceeds the threshold. St. Paul Reinsur. Co., 134 F.3d at 1253. In the second posture, the defendant has declined to remove within the first thirty days of th e case, removing later on the basis of some "other paper" which, the defendant claims, was the firs t indication that the suit was removable. See, e.g., Chapman, 969 F.2d at 161; see also B u r r o u g h s v. Raytheon Tech. Servs. Co., No. EP-06-CA-89-DB, 2006 U.S. Dist. LEXIS 16727, a t *6-7 (W.D. Tex. Apr. 6, 2006). Under such a circumstance, the plaintiff may resist removal by a rgu i n g that the face of the complaint made it clear that the amount in controversy minimum was re a c h e d , and thus the defendant missed the deadline by not removing after receiving the initial c o m p la in t. Chapman, 969 F.2d at 161. But a plaintiff may not bring summary-judgment-type e v id e n c e to prove, factually, that the amount at stake in the particular case exceeds the threshold, a n d that the defendant knew or should have known this earlier but failed to act on it. See id. at 1 6 3 - 6 4 . Both postures allow parties to argue that the pleadings themselves reveal that a case is re m o v a b le , even when an amount is not numerically pleaded. Accordingly, though the posture of th e instant case matches the second posture discussed above, cases arising under both postures w i ll be cited in this Order. There is no basis to hold that the "facially apparent" standard is d e fin e d differently in cases where the defendant claims that the pleadings set forth a large enough m e a s u re of damages, when compared with cases where the plaintiff claims the exact same thing. Salomon argues that her initial pleadings made clear that the amount in controversy

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e x c e e d e d the threshold, and that the removal clock started running when those pleadings were firs t served. See Pl.'s Mot. 2. Salomon's Original Petition requests "back pay and benefits, front p a y and benefits, compensatory damages in the past and in the future, reasonable and necessary a tto rn e y fees through the appeal process, and exemplary damages, all in an amount within the ju ris d ic tio n a l limits of the State court." Pl.'s Mot. 5. Similar damages allegations were sufficient in both Burroughs and White to put the defendants on notice that the amount in controversy w o u ld likely exceed the jurisdictional minimum. See White, 319 F.3d at 673; Burroughs, 2006 U .S . Dist. LEXIS 16727, at *2. Further, this Court recently found that a recitation of damages th a t did not even include front and back pay was sufficient on its face to support removal. See M u n i z , 2009 U.S. Dist. LEXIS 114619, at *15. W e lls Fargo asserts that, in Chapman, the Fifth Circuit established a "bright line rule" r e q u i ri n g plaintiffs to include in their initial pleadings a "specific allegation that damages are in e x c e s s of the federal jurisdictional amount" if the thirty day period is to be triggered. See Def.'s R e s p . 3 (citing Chapman, 969 F.2d at 163). Wells Fargo argues that Salomon's Motion to R e m a n d should be dismissed because she failed to include the "requisite specific allegation." Def.'s Resp. 4. There is a split among district courts in this circuit regarding the holding in C h a p m a n . See Capturion Network, L.L.C. v. Daktronics, Inc., No. 08-cv-232, 2009 U.S. Dist. LE X IS 49171, at *8-9 (S.D. Miss. May 29, 2009) (noting the split of opinion). Some district c o u rts have interpreted Chapman to mean that the thirty-day removal clock is triggered only w h e n the plaintiff's initial pleading spells out, in as many words, that the federal jurisdictional lim it has been reached. See, e.g., Capturion, 2009 U.S. Dist. LEXIS 49171, at *13 (collecting

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c a s e s and adopting this first alternative). However, a majority of courts in this circuit have found that Chapman does not " m a n d a t[e ] rigid adherence to some kind of formalistic pleading requirement." Evett v. Consol. F r e ig h tw a y s Corp., 110 F. Supp. 2d 510, 512-13 (E.D. Tex. 2000); see also Burroughs, 2006 U .S . Dist. LEXIS 16727, at *8; see also Capturion, 2009 U.S. Dist. LEXIS 49171, at *13 (o b s e rv in g that "probably the larger contingent" of district courts in the Fifth Circuit have a d o p t e d this second view). Rather, the Chapman "bright line rule" is simply an attempt to avoid a n inquiry into "what the defendant knew at the time it received the initial pleading and what the d e fe n d a n t would have known had it exercised due diligence." Chapman, 969 F.2d at 163. This C o u rt adopts the "prevailing view [that] Chapman `merely requires that a state court complaint b e sufficiently definite on its face to enable defendants to ascertain removability without reliance o n speculation or conjecture.'" Stone v. Nirvana Apts., No. 08-CA-656, 2008 U.S. Dist. LEXIS 9 3 0 9 0 , at *14 (W.D. Tex. Oct. 17, 2008) (San Antonio Div.) (Biery, J.) (citing Wise v. Bayer, 281 F . Supp. 2d 878, 884 (W.D. La. 2003)).2 T h is reading of Chapman is further supported by subsequent Fifth Circuit opinions which h a v e not required plaintiffs to make a specific numerical allegation of damages or specifically

2

This standard is distinct from the standard applied when a s c e r ta in in g whether an "other paper" gave the requisite notice i n cases where the initial pleadings failed to do so. Courts h a v e consistently held that the notice provided by such "other p a p e r s " must be "unequivocally clear and certain," in order to r e lie v e defendants of the burden of filing for "protective" r e m o v a l s on an "equivocal" record which may change and e x p a n d over the course of litigation. See Bosky v. Kroeger T e x . LP, 288 F.3d 208, 211-12 (5th Cir. 2002).

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a v e r in state court pleadings that damages exceed the federal threshold. See, e.g., Bosky, 288 F .3 d at 208; Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880, 882-83 (5th Cir. 2000); Luckett v. D e lta Airlines, Inc., 171 F.3d 295, 298 (5th Cir. 1999). Notably, Wells Fargo does not cite the re c e n t Fifth Circuit decision in White, which involved a wrongful termination claim. In White, th e plaintiff alleged that she was terminated for refusal to commit an illegal act and included a re c ita tio n of damages in her initial state court pleadings that was similar to Salomon's. White, 3 1 9 F.3d at 673-74. The Fifth Circuit affirmed this Court's finding that it was facially apparent fro m the initial state court pleading that the amount in controversy would more likely than not e x c e e d $75,000, given the extensive categories of compensatory and punitive damages sought in a d d itio n to attorney's fees. Id. at 675.3 Accordingly, a mere recitation of an extensive list of d a m a g e s in an employment matter may suffice to affirmatively reveal that the amount in c o n tro v e rs y will likely exceed the jurisdictional minimum. H o w e v e r , Wells Fargo is correct that, in other recent employment discrimination cases,
3

In its Sur-Reply, W e l l s Fargo contends that "the Court in W h i t e did not conclude the Plaintiff's Original Petition alone a ffir m a tiv e l y revealed the amount in controversy requirement w a s met." Def.'s Mot. Ex. A at 4. Defendants are correct that, in White, the district court and the Fifth Circuit also examined e v i d e n c e presented by the defendant in support of removal and fo u n d that "it was apparent from the face of the Original P e titio n and the evidence presented by FCI that the amount in c o n tr o v e r s y exceeded $75,000." 319 F.3d at 676. But the p o s tu r e in White involved a defendant who removed on the in itia l pleadings, and thus had the opportunity to argue that the p l e a d i n g s themselves sufficed, as well as introduce summaryj u d g m e n t - ty p e evidence regarding the amount in controversy. Neither the trial court nor the Fifth Circuit held that the p l e a d i n g s , alone, were insufficient; rather, both courts suggest, if anything, that the pleadings alone could well have been e n o u g h . See id. at 675-76.

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t h i s Court has found that initial state court pleadings alleging similar categories of damages did n o t satisfy the facially apparent standard. See Def.'s Resp. 5-7. For example, Wells Fargo notes th a t "the plaintiff's original petition in Doss mirrored that of this case." Id. at 6-7; see Doss v. A lb e r ts o n 's LLC, 492 F. Supp. 2d 690, 691-94 (W.D. Tex. 2007) (El Paso Div.) (Martinez, J.) ( h o l d i n g that the "Original Petition did not trigger the thirty-day time limit for removal"). Wells F a r go thus points out a recurring issue in the removal jurisprudence of this district. O rigin a l state court pleadings that do not assert a specific numerical amount of damages a r e a continuing problem for federal district courts in Texas in part because of state court p le a d in g requirements. The Texas Rules of Civil Procedure state that "in all claims for u n liq u id a te d damages" a plaintiff's original petition should contain "only the statement that d a m a ge s are sought within the jurisdictional limits of the court." TEX. R. CIV. P. 47(b) (emphasis a d d e d ) . As specific numerical allegations of unliquidated damages are prohibited by Rule 47(b), i n i t i a l state court pleadings typically do not include such allegations and, even if they are in c lu d e d , courts need not consider them when determining the amount in controversy. See M a s s a a d v. Lear Corp., No. 03-cv-479, 2004 U.S. Dist. LEXIS 4554, at *5 (W.D. Tex. Feb. 13, 2 0 0 4 ) (El Paso Div.) (Cardone, J.) ("As plaintiff's allegation defining an amount of unliquidated d a m a g e s violates Rule 47(b), it will not be considered in assessing whether the amount in c o n tro v e rs y affords this Court jurisdiction."). Accordingly, the removal of state court pleadings la c k i n g a specific numerical allegation of damages have frequently come before the federal d is tric t courts in Texas and have not been decided consistently. One possible explanation for this inconsistency is that "an inquiry into a motion for

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re m a n d is a highly fact-specific inquiry, driven by the unique circumstances of each particular c a s e ." Rivas v. Sw. Foam L.P., No. 09-cv-42, 2009 U.S. Dist. LEXIS 49727, at *11 n.2 (W.D. T e x . Apr. 14, 2009) (El Paso Div.) (Briones, J.). In an employment matter, for example, the l e n g th of time between a plaintiff's termination and the time a suit is filed, a plaintiff's ability to m i tiga te damages, or a plaintiff's annual salary may influence whether the jurisdictional amount in controversy will likely be met. See, e.g., Villasana v. Bed Bath & Beyond, 502 F. Supp. 2d 5 2 8 , 530 (W.D. Tex. 2007) (El Paso Div.) (Martinez, J.); Masaad, 2004 U.S. Dist. LEXIS 4554, a t *7; Martin v. Sw. PCS, L.P., No. 03-cv-866, 2003 U.S. Dist. LEXIS 19448, at *10 (W.D. Tex. N o v . 3, 2003) (San Antonio Div.) (Rodriguez, J.). However, defendants are not without guidance regarding the likely amount in controversy w h e n considering whether removal is proper in an employment discrimination case brought p u rs u a n t to the Texas Labor Code. Section 21.2585(d) stipulates the maximum amount of c o m p e n s a to ry and punitive damages that a plaintiff may recover based on the size of the e m p lo ye r. TEX. LAB. CODE §21.2585(d).4 Wells Fargo requested that the compensatory and p u n i tiv e damages be limited in accordance with section 21.2585(d) but did not specify a number

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The maximum amount of damages for "future pecuniary lo s se s , emotional pain, suffering, inconvenience, mental a n g u i s h , loss of enjoyment of life, and other non pecuniary lo s s e s and the amount of punitive damages awarded" may not b e greater than $50,000 for defendants with fewer than 101 e m p lo y e e s , $100,000 for defendants with more than 100 and fe w e r than 201 employees, $200,000 for defendants with more th a n 200 and fewer than 501 employees, and $300,000 for d e f e n d a n t s with more than 500 employees. TEX. LAB. CODE § 21.2585(d).

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o f employees or indicate which cap on damages should apply. Def.'s Resp. Ex. C ¶11. This C o u rt has not reached the issue of whether the initial pleadings must specify the number of e m p lo ye e s in order for the statutory cap to inform the facially apparent amount in controversy. Still, courts have looked to the statutory cap in cases where the defendant has removed based on a n initial pleading to find that the $75,000 amount in controversy will likely be met. See, e.g., Muniz, 2009 U.S. Dist. LEXIS 114619, at *16; Rivas, 2006 U.S. Dist. LEXIS 16727, at *10. In th o s e cases, though, summary judgment-type evidence was also separately admissible on the a m o u n t in controversy issue because the defendants removed on the initial pleadings. See Muniz, 2 0 0 9 U.S. Dist. LEXIS 114619, at *16; Rivas, 2006 U.S. Dist. LEXIS 16727, at *10. However, the cap need not only serve as evidence to establish the amount in controversy. Defendants may be able to use the cap as a guide when deciding whether or not to remove an i n i t i a l pleading to federal court. Wells Fargo correctly claims that the statutory cap only limits w h a t a plaintiff may recover, not what a plaintiff is likely to recover. Def.'s Resp. 5 (citing V illa s a n a , 502 F. Supp. 2d at 530). Yet, as Salomon indicates, section 21.2585(d) does not apply t o back pay or attorney's fees, and an employer of Wells Fargo's size may be subject to an award fa r greater than the $75,000 minimum based on compensatory and punitive damages alone. Pl.'s M o t . 5; see Hoffman La Roche, Inc. v. Zeltwanger, 144 S.W.3d 438, 446 (Tex. 2004). Further, th is Court recently found that a case, like Salomon's, that presents a "claim for multiple forms of r e l ie f, including punitive damages, suggests that [the plaintiff] is indeed seeking any possible gro u n d s to maximize her recovery up to the cap, which is well above the jurisdictional th r e s h o ld . " Muniz, 2009 U.S. Dist. LEXIS 114619, at *16 (internal citations omitted). In this

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c a s e , Wells Fargo could have determined that Salomon was similarly seeking to maximize her a w a rd under the statute and that her compensatory and punitive damages alone had the potential to substantially exceed the jurisdictional minimum. III. C O N C L U SIO N S a lo m o n has shown that it was facially apparent from her Original Petition that the a m o u n t in controversy exceeds the jurisdictional minimum. Wells Fargo's removal was therefore u n tim e ly. Accordingly, Plaintiff's Motion to Remand is hereby GRANTED. S O ORDERED. S I G N E D on this 21 st day of June, 2010.

______________________________________ K A T H LE E N CARDONE U N IT E D STATES DISTRICT JUDGE

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