Bond v. Zale Delaware, Inc.
Filing
18
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFFS MOTION TO REMAND DKT. NO. 12 AND REMANDING THE CASE; Court DIRECTS the Clerk to transmit copies of this Order to counsel of record and to the Circuit Court of Harrison County,West Virginia and further DIRECTS the Clerk to enter a separate judgment order, and to remove this case from the Courts active docket. Signed by District Judge Irene M. Keeley on 5/17/2016. (copy counsel of record, Circuit Court of Harrison County)(jmm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
ASHLEY BOND,
Plaintiff,
v.
//
CIVIL ACTION NO. 1:16CV43
(Judge Keeley)
ZALE DELAWARE, INC.,
d/b/a ZALES JEWELERS,
Defendant.
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF’S
MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE
On February 9, 2016, the plaintiff, Ashley Bond (“Bond”), on
her
own
behalf
individuals,
and
sued
that
Zale
of
a
class
Delaware,
Inc.,
of
similarly
d/b/a
Zales
situated
Jewelers
(“Zales”), in the Circuit Court of Harrison County, West Virginia,
alleging
a
violation
of
the
West
Virginia
Wage
Payment
and
Collection Act (“WCPA”), W. Va. Code § 21-5-1 (Dkt. No. 1 at 2).
Zales removed the case to this Court on March 18, 2016 (Dkt. No.
1).
On April 18, 2016, Bond filed a motion to remand, arguing that
Zales had ignored the binding stipulation in her complaint barring
her from recovering damages in excess of $75,000 (Dkt. No. 13).
She also contended that Zales failed to provide any evidence that
the jurisdictional minimum had been satisfied.
For the reasons
that follow, the Court GRANTS Bond’s motion and REMANDS the case to
the Circuit Court of Harrison County.
BOND V. ZALES
1:16CV43
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF’S
MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE
BACKGROUND
Bond worked for Zales as a manager and consultant until her
employment was “involuntarily terminated” on December 7, 2013 (Dkt.
No. 1-3 at 2).
Under the version of the WPCA in effect at that
time, Zales was obligated to pay all discharged employees wages
owed in full by the next regular payday or four business days,
whichever came first.1
Id. at 1-2.
Zales paid Bond all of her
wages on December 26, 2013, which was outside the time period
mandated by the WPCA.
Id. at 2.
On February 9, 2016, Bond filed her complaint in state court
as a putative class action (Dkt. No. 1-3).
Zales removed the case
to this Court on March 18, 2016, invoking diversity jurisdiction
(Dkt. No. 1). Bond, a West Virginia citizen, is fully diverse from
Zales, a Delaware corporation with its principal place of business
in Texas.
Id. at 3.
Zales contends that the Court should
disregard Bond’s stipulation in the complaint that she does not
seek more than $75,000 because “she seeks liquidated damages
including attorneys fees, which have a value of more than $75,000.”
Id. at 4.
1
Under the current version of the statute, employers must pay
wages due “on or before the next regular payday on which the wages
would otherwise be due and payable.” W. Va. Code § 21-5-4 (2015).
2
BOND V. ZALES
1:16CV43
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF’S
MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE
With
her
complaint,
Bond
filed
a
motion
for
class
certification (Dkt. No. 5), which she later sought to withdraw
(Dkt. No. 8).
The Court granted Bond’s motion and allowed her to
withdraw the motion for class certification on April 11, 2016 (Dkt.
No. 11).
Bond then moved to remand on April 18, 2016, contending that
(1) her binding stipulation bars her from recovering in excess of
$75,000; (2) Zales failed to provide any evidence that she has met
the $75,000 jurisdictional requirement in her individual capacity;
(3) Zales solely relies on WPCA class action final approval orders
in other cases that have no bearing on the damages in this case;
(4) only a pro rata portion of attorneys’ fees could be attributed
to her; and (5) attorneys’ fees in the early stages of class action
litigation are too speculative to consider for jurisdictional
purposes (Dkt. No. 13 at 1).
In opposing Bond’s motion, Zales contended that (1) attorneys’
fees
for
the
entire
class
can
be
attributed
to
the
class
representative; (2) Bond’s stipulation is not binding; and (3) Bond
cannot bind the entire class and potential class counsel with her
stipulation (Dkt. No. 14 at 2-3).
On May 12, 2016, Bond filed a
reply that reiterated the failure of Zales to provide any actual
3
BOND V. ZALES
1:16CV43
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF’S
MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE
evidence that the amount in controversy exceeds $75,000 (Dkt. No.
17).
APPLICABLE LAW
The district court has original jurisdiction of civil actions
between
citizens
of
different
controversy exceeds $75,000.
states
where
the
amount
28 U.S.C. § 1332(a)(1).
in
To be a
“citizen” of a state, a natural person must be both a citizen of
the United States and be domiciled within the state. Newman-Green,
Inc. v. Alfonzo-Larrain, 490 U.S. 826, 828 (1989).
A person is
domiciled in a state where he is physically present and intends to
remain. Mississippi Band of Choctaw Indians v. Holyfield, 490 U.S.
30, 48 (1989).
The Court determines a corporation’s citizenship based on the
location of its principal place of business and its state of
incorporation.
28 U.S.C. § 1332(c)(1); see Hertz Corp. v. Friend,
559 U.S. 77, 80 (2010).
Ordinarily, the Court determines whether
the amount in controversy exceeds $75,000 based on the allegations
and relief sought on the face of the plaintiff’s well-pleaded
complaint.
See JTH Tax, Inc. v. Frashier, 624 F.3d 635, 648 (4th
Cir. 2010)(citing Wiggins v. North Am. Equitable Life Assurance
Co., 644 F.2d 1014, 1016 (4th Cir. 1981)).
4
BOND V. ZALES
1:16CV43
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF’S
MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE
When a complaint does not contain a specific amount in
controversy, the defendant filing a notice of removal bears the
burden of proving by a preponderance of the evidence that the claim
meets the requisite jurisdictional amount.
Francis v. Allstate
Ins. Co., 709 F.3d 362, 367 (4th Cir. 2013).
“[T]he Court may
consider the entire record” to determine whether that burden has
been met.
Elliott v. Tractor Supply Co., No. 5:14CV88, 2014 WL
4187691, at *2 (S.D.W. Va. Aug. 21, 2014)(citing Mullins v. Harry’s
Mobile Homes, Inc., 861 F. Supp. 22, 23 (S.D.W. Va. 1994)).
If the
defendant proves by a preponderance of the evidence that the amount
in controversy exceeds $75,000 and that the parties are diverse,
then removal is deemed proper.
Dart Cherokee, 135 S.Ct. at 553.
Removal statutes are strictly construed against the party seeking
removal, and the burden of establishing jurisdiction rests on the
removing party.
Mulcahey v. Columbia Organic Chem. Co., Inc., 29
F.3d 148, 151 (4th Cir. 1994).
ANALYSIS
I.
Stipulation
In
her
motion
to
remand,
Bond
argues
that
the
formal
stipulation attached to her complaint limits her recovery to an
amount below the jurisdictional minimum (Dkt. No. 13 at 4).
Zales
contends that Bond’s stipulation is not binding because it is
5
BOND V. ZALES
1:16CV43
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF’S
MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE
vague, and she failed to include a “sum-certain prayer for relief,”
as required in this District (Dkt. No. 14 at 4-5).
Courts generally treat the amount requested by the plaintiff
in state court as the amount in controversy. See Hicks v. Herbert,
122 F. Supp. 2d 699, 701 (S.D.W. Va. 2000) (internal citations
omitted). In states such as West Virginia, however, where recovery
is not limited to the amount demanded, the general rule is not
“fully satisfactory.”
Id.
Therefore, a formal stipulation filed
with a complaint can effectively limit the amount in controversy
for jurisdictional purposes.
McCoy v. Erie Ins. Co., 147 F. Supp.
2d 481, 485 (S.D.W. Va. 2001).
Such a stipulation, however, must
be (1) pre-removal, (2) signed by both counsel and client, (3)
explicit in limiting recovery, and (4) filed contemporaneously with
the complaint.
As a fifth requirement, the complaint also “should
contain the sum-certain prayer for relief.”
Id.
Bond’s stipulation, filed at the same time as the complaint,
states as follows:
23.
24.
With respect to Plaintiff’s individual claims,
Plaintiff and her counsel do not seek to recover in
excess of $75,000, including an award of attorney’s
fees, exclusive of costs and interest.
With respect to Plaintiff’s individual claims, to
the extent any remedy is awarded in excess of
$75,000, inclusive of attorney’s fees, exclusive of
costs and interest, Plaintiff and her counsel
stipulate that they are not entitled to recover the
excess amount.
6
BOND V. ZALES
1:16CV43
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF’S
MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE
25.
This stipulation applies regardless of the form of
the remedy awarded.
Plaintiff agrees to be bound by this stipulation
throughout the pendency of this action.
26.
Dkt. No. 1-1 at 9.
Both Bond and her attorney signed the
stipulation, which was indisputably filed pre-removal.
Id. at 12,
13.
Bond’s stipulation appears to meet at least three of the five
requirements under McCoy.
attorney
and
complaint.
filed
It was signed by both the client and
pre-removal,
contemporaneously
with
the
Although Zales advances a colorable argument that
Bond’s stipulation is ambiguous because she does not limit recovery
for the class claim,2 the Court need not address that argument
because it finds the stipulation insufficient for another reason;
the complaint fails to include a sum certain prayer for relief
(Dkt. No. 1-1 at 8, 9).
See Nickerson v. Navy Fed. Credit Union,
No. 3:15CV75, 2016 WL 55320, at *3 (N.D.W. Va. Jan. 4, 2016) (Groh,
J.) (finding the stipulation insufficient to preclude removal
because it did not contain the sum-certain prayer for relief
required
2
by
federal
courts
in
West
Virginia).
The
Court
Supreme Court precedent supports this argument.
See
Standard Fire Ins. Co. v. Knowles, 133 S.Ct. 1345, 1348-49 (2013)
(finding that a pre-certification stipulation limiting recovery
does not preclude jurisdiction under the Class Action Fairness Act
when the court would otherwise have jurisdiction because “a
plaintiff who files a proposed class action cannot legally bind
members of the proposed class before the class is certified.”).
7
BOND V. ZALES
1:16CV43
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF’S
MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE
accordingly finds that the stipulation, standing on its own, is
insufficient to preclude removal, and therefore must attempt to
discern the amount in controversy.
II.
Amount in Controversy
Bond’s complaint seeks damages on her own behalf as well as a
class of similarly situated individuals based on Zales’ failure to
pay her wages within the WPCA’s time period (Dkt. No. 1-1 at 8).
Under the version of the WPCA in effect at the time of Bond’s
discharge, an employer who violates the WPCA must pay an employee
“three times [the] unpaid amount as liquidated damages.”
Code § 21-5-4(e) (2013).
attorneys’ fees.
W. Va.
The WPCA also provides for costs and
W. Va. Code § 21-5-12(b).
Bond’s complaint does
not include claims for either punitive damages or injunctive
relief.
See Dkt. No. 1-1.
When several plaintiffs, including class action plaintiffs,
assert separate and distinct demands in a single lawsuit, the
amount
involved
in
each
separate
controversy
must
meet
the
jurisdictional minimum. See Virden v. Altria Grp., 304 F. Supp. 2d
832, 847 (N.D.W. Va. 2004) (quoting Clark v. Paul Gray, Inc., 306
U.S. 583, 589 (1939) (internal quotation marks omitted)). In other
words, class plaintiffs’ claims “cannot be aggregated for purposes
8
BOND V. ZALES
1:16CV43
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF’S
MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE
of meeting the minimum jurisdictional amount.”3
Id. (citing Zahn
v. Int’l Paper Co., 414 U.S. 291, 296 (1973)).
In the Fourth Circuit, however, courts use the supplemental
jurisdiction statute to assume jurisdiction “over the claims of all
plaintiffs if the defendant can establish that the court has
jurisdiction over the claims of any named plaintiff.”
Id. (citing
Rosmer v. Pfizer, Inc., 263 F.3d 110, 114 (4th Cir. 2001)).
The
Court therefore must determine whether Bond’s claims meet the
jurisdictional requirement.
If so, that would trigger the Court’s
supplemental jurisdiction over the remainder of the putative class.
Zales contends that awards of attorneys’ fees in WPCA cases often
exceed $75,000.
It also asserts that the Court must attribute all
such fees to Bond, the class representative.
In support of its contention that attorneys’ fee awards in
WPCA cases often exceed $75,000, Zales attached several orders to
its brief (Dkt. Nos. 1-4, 14-1). Bond objects that approval orders
in other WPCA class actions have no bearing on the amount in
3
This general principle is subject to the so-called “common
fund” exception.
See Virden, 304 F. Supp. 2d at 847 (quoting
Glover v. Johns-Manville Corp., 662 F.2d 225, 231 (4th Cir. 1981)
(internal quotation marks omitted)).
Under the common fund
exception, aggregation of plaintiffs’ claims is permitted where
“two or more plaintiffs unite to enforce a single title or right in
which they have a common and undivided interest.” Id. (internal
quotation marks and citations omitted). Zales does not contend
that the common fund exception applies in this case, and the Court
finds it inapplicable.
9
BOND V. ZALES
1:16CV43
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF’S
MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE
controversy in this case (Dkt. No. 17 at 4).
The Court agrees.
Zales has identified no similarities between those class actions
and this case save that the claims all arise under the same
statute.
Indeed, Bond has attached several class action approval
orders with attorneys’ fees in WPCA cases totaling less than
$75,000. That variance alone supports this Court’s conclusion that
these orders, standing alone, are unreliable when determining
subject matter jurisdiction (Dkt. No. 13-1; Dkt. No. 17-1).
Zales’ second argument hinges on whether the Court must
attribute attorneys’ fees for the entire class to Bond, the class
representative (Dkt. No. 14 at 3).
According to Zales, Aikens v.
Microsoft Corp., 159 F. App’x 471, 474-75 (4th Cir. 2005), compels
the conclusion that the Court must award such fees to the class
representative.
Bond, however, contends that, in Aikens, the
Fourth Circuit applied a state statute unique to Louisiana, and
that the general rule in federal courts is to attribute attorneys’
fees on a pro rata basis when determining the amount in controversy
(Dkt. No. 17 at 8).
In
Aikens,
the
Fourth
Circuit
rejected
a
jurisdictional
challenge to the amount in controversy, explaining that the amount
in controversy was satisfied “based on the provisions in Louisiana
law governing the allocation of attorney’s fees in class actions.”
10
BOND V. ZALES
1:16CV43
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF’S
MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE
159 F. App’x at 474-75.
attorneys’
fees
Under La. Code Civ. Proc. art. 595(A),
“would
representatives.”
be
awarded
Id. at 475.
entirely
to
the
class
The Fourth Circuit therefore found
the amount in controversy satisfied based on the fee award to the
class representative, and exercised supplemental jurisdiction over
the remaining class members.
Id.
The argument advanced by Zales is unpersuasive.
The outcome
in Aikens was a consequence of Louisiana’s unique Rules of Civil
Procedure,
determining
and
is
contrary
subject
to
matter
the
general
jurisdiction
rule
“must
that
courts
attribute
unliquidated damages sought by the plaintiff (viz. attorneys’ fees,
punitive damages) pro rata to each member of the putative class.”
Carrick v. Sears, Roebuck and Co., 252 F. Supp. 2d 116, 121 (M.D.
Pa. 2003) (collecting cases) (declined to follow on other grounds
in Samuel-Bassett v. KIA Motors Am., Inc., 357 F.3d 392 (2004)).
The general rule in the Fourth Circuit — unless modified by a state
statute or rule – is that courts should apportion attorneys’ fees
pro rata to all class members.
See, e.g., Phillips v. Whirlpool
Corp., 351 F. Supp. 2d 458, 463 (D.S.C. 2005).
Zales has failed to direct the Court to any West Virginia
statute or rule requiring apportionment of attorneys’ fees for the
entire class to the class representative.
11
W. Va. R. Civ. P. 23,
BOND V. ZALES
1:16CV43
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF’S
MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE
which mirrors the federal rule in some respects, does not mandate
that courts award attorneys’ fees, whether pro rata or entirely to
the class representative.
The Court therefore rejects Zales’
argument and concludes that it must apportion attorneys’ fees pro
rata for the purposes of determining jurisdiction.
In short, while the Court may consider attorneys’ fees when
calculating the amount in controversy because the WPCA provides for
recovery of those fees, it cannot engage in “pure speculation.”
Caufield v. EMC Mortg. Corp., 803 F. Supp. 2d 519, 529 (S.D.W. Va.
2011).
Fundamentally, it cannot assume jurisdiction based solely
on hypothetical class counsel fees when Zales has failed to provide
any
evidence
of
damages.
As
to
Bond,
the
putative
class
representative, Zales has failed to provide her final paycheck or
any evidence of the actual amount in controversy.
See id. at 527-
28 (“In order to demonstrate a basis for federal jurisdiction, the
party
seeking
removal
must
present
facts
rather
than
speculation.”).
Zales attempts to minimize this deficiency by pointing to the
large (potential) amount of attorneys’ fees, without providing
evidence of the number of putative class members or the aggregate
amount of the statutory violations.
Without some evidence of the
statutory violation, the Court cannot speculate as to attorneys’
12
BOND V. ZALES
1:16CV43
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF’S
MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE
fees for the potential class.
an unknown.”
Id. at 528.
“You cannot multiply an unknown by
For all of these reasons, therefore, the
Court concludes that Zales has failed to meet its burden of
establishing the jurisdictional minimum by a preponderance of the
evidence, thereby necessitating remand.
Francis, 709 F.3d at 367.
III. Costs
Having determined that Zales has failed to meet its burden of
establishing jurisdiction, the Court next addresses Bond’s argument
that she be awarded costs for improper removal (Dkt. No. 13 at 9).
Bond contends that Zales had no objectively reasonable basis for
removing this case because it ignored her binding stipulation and
controlling case law.
Id.
Unsurprisingly, Zales opposes Bond’s
request, arguing that it had an objectively reasonable basis for
removal because it followed applicable, controlling law (Dkt. No.
14 at 10).
A party opposing removal may be awarded actual expenses and
attorneys’ fees incurred as a result of improper removal.
See 28
U.S.C. § 1447(c); ITT Indus. Credit Co. v. Durango Crushers, Inc.,
832 F.2d 307, 308 (4th Cir. 1987).
Courts have limited authority,
however, to award fees for improper removal.
F.3d at 308.
See ITT Indus., 832
Costs are awarded only where a party “lacked an
objectively reasonable basis” for removing the case.
13
Martin v.
BOND V. ZALES
1:16CV43
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF’S
MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE
Franklin Capital Corp., 546 U.S. 132, 141 (2005). A removing party
lacks an objectively reasonable basis for removal if it “is
contrary to clear case law and a cursory examination of the
applicable law would have revealed that the Court does not have
jurisdiction.”
Clutter v. Consol. Coal Co., No. 1:14CV9, 2014 WL
1479199, at *6 (N.D.W. Va. Apr. 15, 2014) (Stamp, J.) (quoting Husk
v. E.I. Du Pont de Nemours and Co., 842 F. Supp. 895, 899 (S.D.W.
Va. 1994) (internal quotation marks and citations omitted)).
Although
removal
in
this
case
was
inappropriate,
Zale’s
argument in support of removal was not so bereft of logic that an
award of costs to Bond is warranted.
The Court therefore denies
Bond’s request for attorneys’ fees.
CONCLUSION
For the reasons discussed, the Court GRANTS Bond’s motion to
remand (Dkt. No. 12), and REMANDS the case to the Circuit Court of
Harrison County, West Virginia.
It is so ORDERED.
14
BOND V. ZALES
1:16CV43
MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF’S
MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE
The Court DIRECTS the Clerk to transmit copies of this Order
to counsel of record and to the Circuit Court of Harrison County,
West Virginia.
It further DIRECTS the Clerk to enter a separate
judgment order, and to remove this case from the Court’s active
docket.
DATED:
May 17, 2016.
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE
15
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