Mitchell v. ACSO of Texas L.P.

Filing 6

ORDER DENYING 2 Motion to Remand to State Court. Signed by Judge Xavier Rodriguez. (rg)

Mitchell v. ACSO of Texas L.P.

Doc. 6

In the United States District Court for the Western District of Texas
S H E R I S E MICHELLE M IT C H E L L v. A C S O OF TEXAS L.P. ORDER § § § § §

SA-10-CA-574-XR

O n this day came on to be considered Plaintiff's motion to remand. BACKGROUND P la in t iff Sherise Michelle Mitchell filed an original petition in Texas state c o u r t on February 25, 2010. In that petition she alleged that ACSO of Texas was v io la t in g the Texas Credit Services Organizations Act ("CSOA"), Texas Finance C o d e Chapter 393. In that short and vague two-page petition, Plaintiff made the f o llo w in g statements: "Plaintiff has been injured by such conduct through a s e r ie s of CSO contract transactions with ACSO of Texas LP [sic]." "As cause of a c t io n , Plaintiff relies on the statutory rights of action provided under the CSOA. In addition, Plaintiff asserts that all contracts entered into with ACSO of Texas L P are illegal and void because [sic] made in violation of the CSOA." Plaintiff s u e s for recovery of all CSO fees paid to ACSO of Texas LP and for punitive d a m a g e s . Plaintiff also seeks injunctive relief." O n March 30, Plaintiff filed her First Amended Petition, which merely

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added claims for attorney's fees and prejudgment interest. Plaintiff also included a statement that she was not alleging or seeking relief under any federal statute. O n April 5, ACSO filed a notice of removal to this Court asserting that this C o u r t possessed diversity jurisdiction. This Court disagreed and remanded the c a s e to the state district court. See SA-10-CA-252-XR, Dkt. No. 8. The Court fo u n d that Defendant based the amount in controversy on a single sentence in P la in t iff's petition, which stated: "Plaintiff also seeks injunctive relief." The C o u r t noted, however, that the nature of the injunctive relief that the Plaintiff s o u g h t was unspecified. On June 2, 2010, Plaintiff filed a Second Amended Petition in the state c o u r t.1 In that much more extensively pled document, Plaintiff alleged the fo llo w in g : " A c t in g as a Private Attorney General as expressly authorized by S e c t io n 393.502 of the CSOA, Plaintiff seeks the broadest possible in ju n c t iv e relief, including but not limited to orders enjoining D e fe n d a n t from enforcing all existing contracts with Texas C o n s u m e r s that have been made in violation of the CSOA; and o r d e r s enjoining Defendant from continuing to employ practices in it s CSO operations that violate the CSOA...."

A ls o on June 2, a number of individuals filed "First Amended Plea[s] in I n t e r v e n t io n .2 " This second amended petition was served upon the Defendant

This June 2 document was incorrectly styled by Plaintiff as her first amended petition. As noted above, however, on March 30, Plaintiff filed her First Amended Petition. Accordingly, the Court will refer to the June 2 petition as Plaintiff's Second Amended Petition. These pleas in intervention contain the same exact allegations made by Plaintiff Mitchell. The purported intervenors are all represented by Mitchell's counsel, and no explanation is given as to why these individuals were not simply added to an amended petition as plaintiffs.
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on June 8. O n July 7, Defendant filed its notice of removal. Defendant argues that t h e r e is diversity jurisdiction and the amount in controversy exceeds $75,000. Alternatively, it argues that this case is removeable pursuant to the Class Action F a ir n e s s Act, 28 U.S.C. § 1332(d) because Plaintiff in essence is seeking classw id e injunctive relief. O n July 8, Plaintiff filed her motion to remand and Defendant filed a S u p p le m e n t a l Notice of Removal. A n a ly s is P la in t iff, relying upon S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 493 a t n.1. (5th Cir. 1996), argues that this "case should be summarily remanded b e c a u s e Defendant has removed the case for a second time based on exactly the s a m e grounds that predicated its prior removal." Plaintiff also argues that D e fe n d a n t has not met its burden of establishing the amount in controversy r e q u ir e m e n t .3 P la in t iff's reliance upon S.W.S. Erectors, Inc. is misplaced. That case s t a t e s : "The Fifth Circuit recognizes a defendant's right to seek subsequent r e m o v a ls after remand." Id. at 492. The second removal attempt, however, m u s t be based upon subsequent pleadings or events. That is exactly what has o c c u r r e d here.

In addition, Plaintiff argues that the Defendant has not established the citizenship of the intervenors. However, as noted above, Defendant filed a supplement notice of removal, which addressed the citizenship of the intervenors and citizenship is diverse.

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The Defendant must allege and "bears the burden of actually proving" that t h e amount in controversy exceeds $75,000. White v. FCI USA, Inc., 319 F.3d 6 7 2 , 674 (5th Cir. 2003). Because the First Amended Petition was vague and the s c o p e of injunctive relief unclear, the Defendant was unable to establish during t h e first removal that the amount in controversy requirement was met. P la in t iff, however, has now amended her complaint and detailed the scope o f injunctive relief she seeks. She seeks "orders enjoining Defendant from e n fo r c in g all existing contracts with Texas Consumers that have been made in v io la t io n of the CSOA." In paragraph 5 of his Declaration, W. Thomas Newell, V ic e -P r e s id e n t of the Defendant's parent corporation states the value of any s u c c e s s fu l injunction far exceeds the $75,000 threshold.4 In actions seeking d e c la r a to r y or injunctive relief, it is well established that the amount in c o n t r o v e r s y is measured by the value of the object of the litigation. Hunt v. W a s h in g to n State Apple Advertising Comm'n, 432 U.S. 333 (1977).

Mr. Newell opines that outstanding contracts entered into in 2010 alone are in excess of $3.6 million.

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Conclusion D e fe n d a n t has met its burden of establishing the diversity of parties and t h e amount in controversy. D E N I E D .5 I t is so ORDERED. S I G N E D this 23rd day of September, 2010. Plaintiff's motion to remand (docket no. 2) is

_________________________________ X A V I E R RODRIGUEZ U N I T E D STATES DISTRICT JUDGE

Because the Court has disposed of the motion, finding diversity jurisdiction, the Court will not decide the issue of whether CAFA provides jurisdiction.

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