Opinion
Civil Action No. 3:04-CV-2692-P.
March 8, 2005
MEMORANDUM OPINION AND ORDER
Now before the Court are the following Motions:
1. Plaintiff William Jefferson Ham, Jr.'s Motion for Extension of Time to File Motion to Remand ("Motion for Extension"), filed January 20, 2005; and,
2. Plaintiff's Motion to Remand, filed January 25, 2005.
Defendants Board of Pensions of the Presbyterian Church (U.S.A.) and Board of Pensions of the Presbyterian Church (U.S.A.) Benefit Plan (together "Presbyterian") filed their Response ("Resp. to Ext.") on January 24, 2005.
Defendant filed their Response ("Resp. to Rem.") on February 14, 2005, and Plaintiff filed its Reply on March 2, 2005 ("Pl.'s Reply").
For purposes made clear in this Opinion, the court considers the Motion for Extension contemporaneously with the Motion to Remand. After considering the parties' arguments and briefing, and the applicable law, the Court hereby GRANTS Plaintiff's Motion for Extension in PART and DENIES Plaintiff's Motion to Remand.
I. Background and Procedural History
"On December 23, 2003, Plaintiff filed his Original Petition in the 44th District Court of Dallas County, Texas," in which he alleged employment discrimination. Resp. to Rem. at 1. Subsequently, "[o]n January 23, 2004, Defendants removed the case to federal court alleging federal question jurisdiction." Mot. to Remand at 2. However, on May 24, 2004, the federal court "remanded the case to state court, holding that Plaintiff's employment discrimination claims as pleaded did not raise a federal question." Resp. to Rem. at 2. Afterwards, on September 20, 2004, Plaintiff filed his First Amended Original Petition ("Amended Petition"). Approximately three-months later, "[o]n December 7, 2004, Plaintiff sent a demand letter to Defendants . . . offering to settle Plaintiff's claims for $135,000." Id. at 3 (emphasis added) (citing Defendants' Notice of Removal Ex. C).
Thereafter, "[o]n December 21, 2004, Defendants removed to this Court the action brought by Plaintiff. . . ." Resp. to Ext. at 1. According to their Notice of Removal, "Defendants timely removed the action on the basis of diversity jurisdiction." Resp. to Rem. at 3 (emphasis added). Also on December 21, 2004, "the Court entered its Order Requiring Attorney Conference and Proposal for Contents of Scheduling Order. Pursuant to the Court's Order, on January 18, 2005, counsel for the parties conferred, and executed their Joint Proposal for Contents of Scheduling and Discovery Order (`Joint Proposal')." Resp. to Ext. at 2. Thereafter, on January 19, 2005, the parties filed their Joint Proposal.
Finally, on January 20, 2005, Plaintiff filed his Motion for Extension. Apparently, "[d]ue to a calendaring error, Plaintiff's counsel thought that the deadline to file Plaintiff's Motion to Remand was January 25, 2005. Plaintiff's counsel learned on January 19th that the deadline to file the Motion to Remand was January 20, 2005." Mot. for Ext. at 1-2.
II. Legal Standards
Removal of a state court action to federal court is proper when the complaint falls within the original subject-matter jurisdiction of the federal district court. See 28 U.S.C. § 1441(a). The burden of establishing that federal jurisdiction exists lies with the removing party. See St. Paul Reinsurance Co., Ltd. v. Greenburg, 134 F.3d 1250, 1253 (5th Cir. 1998). Under 28 U.S.C. § 1332(a), a federal court has diversity jurisdiction when (1) the action involves citizens of different states, and (2) the amount in controversy exceeds $75,000. Furthermore, "diversity jurisdiction is not to be available when any plaintiff is a citizen of the same State as any defendant." Owen Equip. Erection Co. v. Kroger, 437 U.S. 365, 374 (1978); Freeman v. Northwest Acceptance Corp., 754 F.2d 553, 555 (5th Cir. 1985) ("[E]ach plaintiff must have citizenship different from that of each defendant.").
1. Motion for Extension
"A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a)." 28 U.S.C. § 1447(c) (emphasis added). Moreover, as Defendants state, "Courts are `not empowered by § 1447(c) to remand a case because of a procedural defect in removal, sua sponte or on motion of the parties, more than thirty days after removal.'" Resp. to Mot. to Rem. at 3-4 (quoting FDIC v. Loyd, 955 F.2d 316, 323 (5th Cir. 1992), and also citing In re Shell Oil Co., 832 F.2d 1523, 1529 (5th Cir. 1991); Corry v. City of Houston, 832 F.Supp. 1095, 1086 (S.D. Tex. 1993)). However inequitable, the law is clear.
Nevertheless, the law is equally clear that " [w]henever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action." Fed.R.Civ.P. 12(h)(3) (emphasis added); see also McNutt v. General Motors Acceptance Corp. of Indiana, Inc., 298 U.S. 178, 189 (1936) ("The prerequisites to the exercise of jurisdiction are specifically defined and . . . the District Court is vested with authority to inquire at any time whether these conditions have been met."). Hence, the Court GRANTS Plaintiff's Motion for Extension of Time to File Motion to Remand in PART, to the extent it challenges the amount in controversy.
2. Motion to Remand
As set forth more fully in his Motion to Remand, Plaintiff contends that diversity jurisdiction is improper because Defendants have failed to prove that the amount in controversy exceeds $75,000. While Plaintiff's Amended Petition does not seek an award of damages, the analysis does not end at this point. To be sure, when a state court petition in a removed action does not plead specifically an amount exceeding the federal jurisdictional minimum, the court must review the petition to determine if it is "facially apparent" that the amount in controversy is likely to exceed $75,000. Allen v. R H Oil gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995); see also Garcia v. Koch Oil Co. of Texas Inc., 351 F.3d 636, 638-39 (5th Cir. 2003). If not so apparent, the defendant must prove by a preponderance of the evidence that the damages sought likely exceed $75,000. De Aguilar v. Boeing Co., 47 F.3d 1404, 1409 (5th Cir. 1995). If the defendant meets this burden, it must appear to the court that the claim is really for less than the jurisdictional amount to justify dismissal. De Aguilar, 47 F.3d at 1412. "In situations where the facially apparent test is not met, the district court can require parties to submit summary-judgment type evidence, relevant to the amount in controversy at the time of removal." Allen, 63 F.3d at 1336.
Plaintiff does not dispute the action involves citizens of different states.
The amount in controversy is calculated based on the good faith allegations in the plaintiff's petition at the time of removal. St. Paul Mercury Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938); see also Valdes v. Wal-Mart Stores, Inc., 199 F.3d 290, 292 (5th Cir. 2000). "The defendant may prove that amount . . . by setting forth the facts in controversy that support a finding of the requisite amount." Gebbia v. Wal-Mart Store, Inc., 233 F.3d 880, 882-83 (5th Cir. 2000). While the requisite amount excludes costs, it can include attorney fees if recoverable by law. Sanborn v. MG Indistries, Inc., 1997 WL 289048, at *3 (N.D. Tex. May 27, 1997) (citing 28 U.S.C. § 1331).
In this case, while Plaintiff's Amended Petition seeks damages for breaches of contract and fiduciary duty, it fails to list any specific amount. To that end, Defendants offer Plaintiff's demand letter, which offers to settle Plaintiff's claim for $135,000. In response, Plaintiff argues such evidence "is not admissible to prove liability for or invalidity of the claim or its amount." Mot. to Remand at 4 (quoting Fed.R.Evid. 408). Nevertheless, such evidence can be offered for other purposes. United States Aviation Underwriters, Inc. v. Olympia Wings, Inc., 896 F.2d 949, 956 (5th Cir. 1990) (citing Belton v. Fibreboard, 724 F.2d 500, 505 (5th Cir. 1984)). Moreover, in ALMS, Ltd. v. Barnes, 1998 WL 907034 (N.D. Tex., Dec. 16, 1998), this Court held that "settlement offers are compelling evidence of the minimum amount in controversy." ALMS, 1998 WL 907034 at *2 (quoting Carnahan v. Southern Pac. R.R. Transp. Co., 914 F.Supp. 1430, 1431 n. 4 (E.D. Tex. 1995)). Such reasoning complies fully with Fifth Circuit precedent. See, e.g., Addo v. Glove Life Accident Ins. Co., 230 F.3d 759, 762 (5th Cir. 2000) ("Holding that a post-complaint letter, which is not plainly a sham, may be `other paper' under § 1446(b) is consistent with the purpose of the removal statute to encourage prompt resort to federal court when a defendant first learns that the plaintiff's demand exceeds the federal jurisdictional limit.").
In sum, the use of Plaintiff's demand letter satisfies Defendants' burden to prove the damages sought likely exceed $75,000. As such, the Court must DENY Plaintiff's Motion to Remand.
III. Conclusion
For the foregoing reasons, Plaintiffs' Motion for Extension of Time to File Motion to Remand is GRANTED in PART and Plaintiff's Motion to Remand is DENIED.