Jeffries v. CU Recovery, Inc. et al

Filing 17

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF'S 9 MOTION TO REMAND AND DENYING PLAINTIFF'S REQUEST FOR ATTORNEYS' FEES. It is ORDERED that this civil action be REMANDED to the Circuit Court of Ohio County, West Virginia. It is f urther ORDERED that this civil action be DISMISSED and STRICKEN from the active docket of this Court. The Clerk is DIRECTED to enter judgment on this matter. Signed by Senior Judge Frederick P. Stamp, Jr. on 11/13/17. (counsel via CM/ECF; Clerk of Ohio County /certified public docket sheet via US Mail) (lmm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
NORMAN E. JEFFRIES,
Plaintiff,
v.

Civil Action No. 5:17CV124
(STAMP)

CU RECOVERY, INC. and
GREATER IOWA CREDIT UNION,
Defendants.
MEMORANDUM OPINION AND ORDER
GRANTING PLAINTIFF’S MOTION TO REMAND AND
DENYING PLAINTIFF’S REQUEST FOR ATTORNEYS’ FEES
I.

Background

The plaintiff, Norman E. Jeffries, originally filed his class
action

complaint

in

the

Circuit

Court

of

Ohio

County,

West

Virginia, against defendants CU Recovery, Inc. (“CU Recovery”) and
Greater Iowa Credit Union (“GICU”).

The plaintiff, individually

and on behalf of a class of West Virginia consumers, alleges that
the defendants violated Chapter 46A, Article 2 of the West Virginia
Code by attempting to collect debts that were barred by the
applicable statute of limitations.

The complaint makes claims for

(1) statutory violations and (2) unjust enrichment.

The plaintiff

seeks actual damages, statutory damages, debt collection relief,
and an award of attorneys’ fees and costs.
Defendant CU Recovery timely removed the civil action to this
Court.

Defendant GICU consented to the removal of this civil

action.

In the notice of removal, CU Recovery asserts that this

Court has jurisdiction over the matter pursuant to 28 U.S.C. § 1332
because the parties are of diverse citizenship and the amount in
controversy exceeds $75,000.00 exclusive of interests and costs.
CU Recovery states that there is complete diversity because the
plaintiff

is

a

resident

of

West

Virginia,

CU

Recovery

is

a

Minnesota corporation with its principal place of business in
Minnesota, and GICU is an Iowa credit union with its principal
place of business in Iowa.

CU Recovery states that the amount in

controversy exceeds $75,000.00 exclusive of interests and costs
because the complaint seeks statutory damages and debt forgiveness
in excess of $50,000.00, statutory damages based on attempts by
GICU to contact the plaintiff in West Virginia, actual damages
and/or

disgorgement

or

restitution

of

monies

collected,

and

attorneys’ fees accrued in the prosecution of this litigation.
The plaintiff then filed a motion to remand, in which he
argues that the defendants have failed to satisfy their burden of
proving that the amount in controversy exceeds $75,000.00 exclusive
of interests and costs.

The plaintiff’s motion to remand also

seeks an award of attorneys’ fees under 28 U.S.C. § 1447(c).

The

plaintiff argues that remand is proper because the complaint does
not provide any monetary figures and does not demand a sum certain.
The plaintiff contends that the defendants have not satisfied their
burden of proving that the value of the claim exceeds $75,000.00
exclusive of interests and costs.

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Specifically, the plaintiff

contends that the only actual damages figure provided by the
defendants is the amount of debt, which is $20,550.00.
The plaintiff argues that the defendants’ attempt “to increase
the amount in controversy by pointing to the plaintiff’s claim for
statutory damages” must fail because the statutory damages cap is
$1,000.00 under West Virginia Code § 46A-5-101.
points

out

that

the

record

contains

only

one

The plaintiff
debt-related

communication, a May 12, 2016 letter attached to the complaint,
and, thus, the claim for statutory damages is $1,000.00 for removal
purposes.

Although the defendants suggest there have been as many

as six communications, the plaintiff argues there is no proof to
support that assertion.

The plaintiff also contends that it is

insufficient in consumer protection cases for the defendants to
“simply cite the categories of damages that the Plaintiff is
seeking to recover and then leap to the conclusion that $75,000.00
is in play.”
Defendant CU Recovery filed a response in opposition to the
plaintiff’s motion to remand. In response, CU Recovery argues that
its notice of removal specifically addressed each component of the
damages/relief demanded by the plaintiff in his complaint.

CU

Recovery argues that “it made reasonable estimates, inferences, and
deductions
considering

to

conclude

the

that

numerous

the

amount

components

Plaintiff, exceeded $75,000.00.”

of

in

controversy,

damages

when

demanded

by

Specifically, CU Recovery argues

3

that it identified: “(1) estimated actual damages of $5,000; (2)
estimated maximum statutory damages of almost $30,000; (3) debt
cancellation relief of over $20,000; (4) an estimated attorneys’
fees range of $18,000 to $25,000; and (5) any additional actual or
statutory damages attributable to actions by GICU, restitution,
disgorgement.” CU Recovery also contends that the plaintiff is not
entitled to an award of attorneys’ fees because it has set forth
sufficient information to allow the Court to determine that removal
is proper.
The plaintiff filed a reply to CU Recovery’s response in
opposition.

In reply, the plaintiff argues that CU Recovery blurs

the distinction between the pleading standard applied in removal
cases and the applicable standard of proof.

The plaintiff cites

Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547, 554
(2014), which states that, once removal is challenged, “both sides
submit proof and the court decides, by a preponderance of the
evidence, whether the amount-in controversy requirement has been
satisfied.”

The plaintiff contends that he never questioned the

sufficiency of the notice of removal. Rather, by filing his motion
to remand, the plaintiff argues that he made a jurisdictional
challenge as to the amount in controversy.
For the reasons set forth below, the plaintiff’s motion to
remand is granted and the plaintiff’s motion for attorneys’ fees is
denied.

4

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.

Federal

courts have original jurisdiction over primarily two types of
cases: (1) those involving federal questions under 28 U.S.C.
§ 1331, and (2) those involving citizens of different states where
the amount in controversy exceeds $75,000.00, exclusive of interest
and costs pursuant to 28 U.S.C. § 1332(a).
jurisdiction

arises

only

by

virtue

of

However, if federal

the

parties’

diverse

citizenship, such an action “shall be removable only if none of the
. . . defendants is a citizen of the State in which such action is
brought.”

Tomlin v. Office of Law Enf’t Tech. Commercialization,

Inc., No. 5:07CV42, 2007 WL 1376030, at *1 (N.D. W. Va. May 7,
2007).

The party seeking removal bears the burden of establishing

federal jurisdiction.

See In re Blackwater Sec. Consulting, LLC,

460 F.3d 576, 583 (4th Cir. 2006); Mulcahey v. Columbia Organic
Chems. Co., Inc., 29 F.3d 148, 151 (4th Cir. 1994).

Removal

jurisdiction is strictly construed, and, if federal jurisdiction is
doubtful, the federal court must remand.

Hartley v. CSX Transp.,

Inc., 187 F.3d 422 (4th Cir. 1999); Mulcahey, 29 F.3d at 151.
Further, the court is limited to a consideration of facts on
the record at the time of removal.

See Lowrey v. Ala. Power Co.,

483 F.3d 1184, 1213–15 (11th Cir. 2007) (“In assessing whether

5

removal was proper . . . the district court has before it only the
limited universe of evidence available when the motion to remand is
filed.”); O’Brien v. Quicken Loans, Inc., No. 5:10CV110, 2011 WL
2551163 (N.D. W. Va. June 27, 2011); Marshall v. Kimble, No.
5:10CV127, 2011 WL 43034, at *3 (N.D. W. Va. Jan. 6, 2011) (“The
defendant’s removal cannot be based on speculation; rather, it must
be based on facts as they exist at the time of removal.”);
Fahnestock v. Cunningham, 5:10CV89, 2011 WL 1831596, at *2 (N.D. W.
Va. May 12, 2011) (“The amount in controversy is determined by
considering the judgment that would be entered if the plaintiffs
prevailed on the merits of his case as it stands at the time of
removal” (internal citations omitted)).
This Court recognizes that “a defendant’s notice of removal
need include only a plausible allegation that the amount in
controversy exceeds the jurisdictional threshold.”
Basin

Operating

Co.

v.

Owens,

135

S.

Ct.

547,

Dart Cherokee
555

(2014).

Nonetheless, this Court has previously found that Dart does not
require it to grant jurisdictional discovery and, thus, this Court
has routinely exercised its discretion to deny such requests.

See

Antal v. State Farm Mut. Ins. Co., No. 5:15CV36, 2015 WL 2412358,
at *3 (N.D. W. Va. May 20, 2015) (denying the plaintiff’s request
for

jurisdictional

discovery

upon

finding

“that

the

language

contained in . . . 28 U.S.C. § 1446(c)(3)(A) is related to
discovery taken in the state court, not discovery that is taken in

6

the federal court after removal”); O’Brien v. Falcon Drilling Co.,
No. 5:15CV13, 2015 WL 1588246, at *6 (N.D. W. Va. Apr. 9, 2015)
(suggesting

that

appropriate

only

discretionary
where

jurisdictional

“further

evidence

is

discovery

revealed

is

through

discovery in the state court, a filing by the plaintiff, or some
‘other paper’”).
III.

Discussion

There is no dispute that complete diversity exists.

The only

issue in dispute is the amount in controversy requirement under 28
U.S.C.

§

1441.

Based

on

the

record

before

plaintiff’s motion to remand must be granted.

this

Court,

the

The defendants fail

to demonstrate that the amount in controversy requirement has been
satisfied.

The defendants have established that the amount of the

debt is $20,550.00, and the plaintiff agrees that this is the
amount of debt in controversy.

However, the defendants fail to

state any other amount with any specificity, and the amount of debt
alone

falls

below

the

$75,000.00

threshold

for

diversity

jurisdiction.
As stated earlier, the amount in controversy requirement
cannot be based on speculation or “what ifs” that may occur.
Rather, the court is limited to a consideration of facts on the
record at the time of removal.

See Lowrey, 483 F.3d at 1213–15.

At this time in the civil action, the amount of damages that may or
will be recovered, beyond the established $20,550.00 in debt, is

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completely unknown and speculative at best.

Speculation regarding

the amount in controversy requirement fails to satisfy the burden
that

the

removing

Consulting,

LLC,

party
460

bears.

F.3d

at

See
583.

In

re

Blackwater

Therefore,

Sec.

because

the

defendants only speculate as to the amount of damages above
$20,550.00, removal is improper.

As stated earlier, removal

jurisdiction is strictly construed, and, if federal jurisdiction is
doubtful, the federal court must remand. Hartley, 187 F.3d at 422;
Mulcahey,

29

F.3d

at

151.

Here,

doubts

exist

as

to

that

jurisdiction.
The Court notes, however, that nothing prevents the defendants
from filing a second notice of removal should the case become
removable within one year.

See 28 U.S.C. § 1446(b)(3) (“Except as

provided in subsection (c), if the case stated by the initial
pleading is not removable, a notice of removal may be filed within
30

days

after

receipt

by

the

defendant,

through

service

or

otherwise, of a copy of an amended pleading, motion, order or other
paper from which it may first be ascertained that the case is one
which is or has become removable.”).
Accordingly, the plaintiff’s motion to remand is granted, and
the case is remanded to the Circuit Court of Ohio County, West
Virginia.

Lastly, the Court denies the plaintiff’s request for

attorneys’ fees because the defendants did state an objectively
reasonable

basis

for

removal

8

on

the

basis

of

diversity

jurisdiction.

See Martin v. Franklin Capital Corp., 546 U.S. 132,

132 (2005) (“[A]bsent unusual circumstances, attorney’s fees should
not

be

awarded

when

the

removing

party

has

an

objectively

reasonable basis for removal.”).
IV.

Conclusion

For the reasons set forth above, the plaintiff’s motion to
remand (ECF No. 9) is GRANTED.

Accordingly, it is ORDERED that

this civil action be REMANDED to the Circuit Court of Ohio County,
West Virginia.

It is further ORDERED that this civil action be

DISMISSED and STRICKEN from the active docket of this Court.
Additionally,

the

plaintiff’s

request

for

attorneys’

fees

is

DENIED.
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:

November 13, 2017

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

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