McNickle v. American Express Company
Filing
13
MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF'S MOTION TO REMAND 7 . This case is to be REMANDED to the Circuit Court of Ohio County, WV. The case is DISMISSED and STRICKEN from this Court's active docket. Signed by Senior Judge Frederick P. Stamp, Jr. on 8/8/2013. (copy to all counsel of record via CM/ECF)(nmm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
FLORENCE McNICKLE,
Plaintiff,
v.
Civil Action No. 5:13CV60
(STAMP)
AMERICAN EXPRESS COMPANY,
Defendant.
MEMORANDUM OPINION AND ORDER
GRANTING PLAINTIFF’S MOTION TO REMAND
I.
Background
The plaintiff filed this action in the Circuit Court of Ohio
County, West Virginia against defendant American Express Company
alleging violations of the West Virginia Consumer Credit and
Protection Act (“WVCCPA”), W. Va. Code § 46A-1-101 et seq., and
common law causes of action due to several alleged instances of
improper debt collection practices and direct contact with the
plaintiff.
On May 1, 2013, the defendant filed a timely notice of
removal with this Court, claiming diversity jurisdiction pursuant
to 28 U.S.C. §§ 1332(a) and 1441(a).
The defendant supports its claim of diversity jurisdiction by
arguing that complete diversity exists1 and that the amount in
controversy exceeds $75,000.00 exclusive of interest and costs.
1
It seems to be agreed that complete diversity exists in this
case. The plaintiff is a resident of West Virginia and defendant,
American Express Company, is a New York corporation with its
principal place of business in New York.
The plaintiff has alleged several sources of damages under the
WVCCPA and three additional sources under the common law.
First,
the plaintiff claims that calls and letters that were sent by the
defendant were willful violations of the WVCCPA, which merit civil
penalties.
Second, the plaintiff owes an unsecured debt of
$7,214.64 to the defendant, and the plaintiff seeks forgiveness of
it.
The WVCCPA provides for forgiveness of such unsecured debts,
at the discretion of the court, when a defendant willfully violates
the
WVCCPA.
Third,
attorney’s
fees,
which
are
awarded
discretionarily, are also claimed by the plaintiff in her complaint
under the WVCCPA. Finally, under common law, the plaintiff has
sought actual and punitive damages for negligence, intentional
infliction of emotional distress, and invasion of privacy.
To demonstrate that the amount in controversy is sufficient,
the defendant approximates the value of the plaintiff’s claims.
The defendant argues that at least five instances of prohibited
communications were alleged by the plaintiff’s complaint and that
the
maximum
penalty
for
each
is
$4,600.00.
Therefore,
the
defendant claims that at least $23,000.00 is in controversy by
virtue of the civil penalties under the WVCCPA.
Thus, the civil
penalties and the plaintiff’s unsecured debt of $7,214.64 equal
$30,214.64 in total.
The defendant argues that by adding the
attorney’s fees available under the statute and the punitive
2
damages available under common law, the plaintiff’s damages could
exceed $75,000.00.
After removal, the plaintiff filed a motion to remand.
The
plaintiff argues that the defendant has failed to carry its burden
of proving that the amount in controversy exceeds $75,000.00 in
this case. According to the plaintiff, the notice of removal lacks
the evidence and analysis required to carry this burden.
A memorandum in opposition was filed by the defendant, which
detailed some of its claims more fully.
The defendant argued that
“$25,000.00 is a reasonable estimate of an award of attorney’s
fees.”
ECF No. 8 *6.
In contrast, the defendant does not assign
specific values for the plaintiff’s common law claims or the
punitive damages which may be awarded for such claims.
The
defendant does, however, suggest that a nine-to-one ratio of
punitive to compensatory damages is a reasonable award and that,
given this, the punitive damages alone could exceed $75,000.00.
ECF No. 8 *7.
For the reasons that follow, this Court will grant
the plaintiff’s motion to remand.
II.
Applicable Law
A defendant may remove a case from state court to federal
court in instances where the federal court is able to exercise
original jurisdiction over the matter.
28 U.S.C. § 1441.
A
federal district court has original jurisdiction over cases between
citizens of different states where the amount in controversy
3
exceeds $75,000.00, exclusive of interest and costs.
§
1332(a).
The
establishing
party
federal
seeking
removal
jurisdiction.
See
bears
the
Mulcahey
28 U.S.C.
burden
v.
of
Columbia
Organic Chems. Co., Inc., 29 F.3d 148, 151 (4th Cir. 1994).
Removal
jurisdiction
is
strictly
construed,
and
if
jurisdiction is doubtful, the federal court must remand.
III.
federal
Id.
Discussion
The defendant claims that civil penalties, loan forgiveness,
attorney’s fees, and common law compensatory and punitive damages
are all sources of damages, which satisfy the amount in controversy
when combined.
The defendant proposes calculating the value of
potential civil penalties by multiplying the minimum number of
statute violations, five, by the maximum penalty amount under the
WVCCPA.
The plaintiff’s objection to this estimate, as it is to
all others by the defendant, is that the defendant has not met its
burden in providing facts necessary to support its claim that
amount in controversy exceeds $75,000.00.
A.
Statutory claims
When there is a maximum penalty dictated by statute, it is
appropriate to measure the amount in controversy by the maximum
penalty and not by how much the plaintiff is likely to be awarded.
See Brill v. Countrywide Home Loans Inc., 427 F.3d 446, 449 (7th
Cir. 2005); Korn v. Polo Ralph Lauren Corp., 536 F. Supp. 2d 1199
(9th
Cir.
2008).
This
method
4
of
measuring
the
amount
in
controversy is also the common practice in cases brought under the
West Virginia Consumer Credit Protection Act that have been removed
to federal court.
See Knott v. HSBC Card Services Inc., No.
3:10CV82, 2010 WL 35522105 at *4 (N.D. W. Va. Sept. 8, 2010);
Maxwell v. Wells Fargo Bank, N.A., No. 2:09-0500, 2009 WL 3293871
(S.D. W. Va. Oct. 9, 2009).
This Court, therefore, accepts
$23,000.00 as an appropriate estimate of the civil penalties
portion of the amount in controversy.
The defendant argues that attorney’s fees should be included
in the amount in controversy because they are provided by statute.
Based on estimates from other WVCCPA cases, the defendant claims
$25,000.00 to be an appropriate estimate of reasonable attorney’s
fees.
In actions under the WVCCPA, attorney’s fees may be awarded
to the consumer, at the discretion of the court, for “illegal,
fraudulent
or
unconscionable
collection practice.”
conduct
or
any
prohibited
W. Va. Code § 46A-5-104.
debt
Because the
plaintiff in this case can claim attorney’s fees under a state
statute
as
a
substantive
right,
attorney’s
fees
should
considered for the calculation of the amount in controversy.
be
See
McGraw v. Discover Fin. Servs., Inc., No. Civ.A. 2:050215, 2005 WL
1785259 at *6 (S.D. W. Va. July 26, 2005).
However, the West
Virginia Supreme Court of Appeals held in Vanderbilt Mortgage and
Finance, Inc. v. Cole that attorney’s fees must be awarded in
accordance with the twelve factors enunciated in Aetna Casualty &
5
Surety Company v. Pitrolo. Cole, 740 S.E.2d 562, 572 (W. Va. 2013)
(citing Aetna, 342 S.E.2d 156, 191-92 (W. Va. 1986)).
Further,
several of these Aetna factors are difficult to assess in advance
of a trial. These factors include, among other things, the results
obtained by the attorneys and the time and labor involved.
Due to the impact of the Aetna factors on the value of an
attorney’s fees award and the discretionary nature of such an
award, attorney’s fees are difficult to assess when estimating the
amount in controversy.
Where the complaint does not specifically
set forth the amount of damages sought, as is the case here, the
defendant
must
present
actual
evidence
that
the
amount
controversy is exceeded; simple conjecture will not suffice.
in
See
Bartnikowski v. NVR, Inc., 307 F. App’x 730, 737 (4th Cir. 2009)
(unpublished) (finding that amount in controversy is not shown when
defendant “has put forth no evidence of its own to support [the
claimed amount in controversy, but] rather, has only presented a
conjectural argument”).
Attorney’s fees in this case cannot be
accurately predicted by reference to attorney’s fees awarded in
other cases under the WVCCPA.
McWha v. Otway, No. 5:06CV164, 2007
WL 2362898, *2 (N.D. W. Va. August 15, 2007) (requiring the
defendant to supply more than speculation regarding the amount in
controversy). Therefore, despite defendant’s arguments, attorney’s
fees are too speculative to meaningfully increase the amount in
controversy in this case.
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The loan forgiveness claim is the most certain in terms of
amount, but whether the loan will be forgiven is still speculative
because it is in the discretion of this Court whether such award
will be granted. Of the statutory claims, only the civil penalties
are certain enough to contribute to the amount in controversy.
the
plaintiff
proves
her
case,
she
must
receive
the
If
civil
penalties, but the other forms of recovery at issue under the
WVCCPA, loan forgiveness and attorney’s fees, are at the discretion
of the court. W. Va. Code §§ 46A-5-101(1), -105, -104. Therefore,
the common law claims would have to make up the remainder in order
to satisfy the amount in controversy requirement.
B.
Common law claims
The plaintiff, Florence McNickle, has also asserted claims for
negligence, intentional infliction of emotional distress, and
invasion of privacy.
The defendant also argues that these claims
could exceed $75,000.00, especially once combined with punitive
damages at nine times the compensatory award.
however, is lacking in several regards.
This argument,
First, the plaintiff is
correct, in that there is no evidence to quantify the liability to
come from these claims.
Second, even the defendant acknowledges
that the average ratio of punitive to compensatory damages is
closer to four than nine.
ECF No. 8 *7 n.3.
damages are left to the discretion of the court.
Finally, punitive
For this reason,
punitive damages are not of much assistance in estimating the
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amount in controversy. Perrine v. E.I. du Pont de Nemours and Co.,
694 S.E.2d 815, 883 (W. Va. 2010) (citing Mayer v. Frobe, 22 S.E.
58 (W. Va. 1895).
Thus, the defendant has not carried its burden
of proving that the amount in controversy is sufficient.
IV.
Conclusion
For the reasons stated above, the plaintiff’s motion to remand
is hereby GRANTED.
Accordingly, it is ORDERED that this case be
REMANDED to the Circuit Court of Ohio County, West Virginia. It is
further ORDERED that this case be DISMISSED and STRICKEN from the
active docket of this Court.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein and to the Clerk of
the Circuit Court of Ohio County, West Virginia.
Pursuant to
Federal Rule of Civil Procedure 58, the Clerk is DIRECTED to enter
judgment on this matter.
DATED:
August 8, 2013
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
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