Opinion
Case No. 04-00009-CV-W-HFS.
September 20, 2004
MEMORANDUM AND ORDER
The issue before me concerns the right of removal in a diversity case where the plaintiff prays for judgment just below the $75,000 necessary for a controversy to be taken to federal court. For reasons stated, I will remand.
Plaintiff, who claims discrimination by her employer, seeks to invoke rights under the Missouri Human Rights Act (RSMo. § 213.055) under the newly recognized jury trial procedure. She does not assert rights under Federal law, and her prayer for $74,999, is patently designed to allow processing of the case in State Court.
Gender discrimination seems central to her claim, although she alleges a hostile work environment and retaliation, and seeks punitive damages as well as lost wages and emotional distress. As pleaded, the case suggests basically a male chauvinist favoritism contention. Defendant has removed the case and resists remand on the theory that cases of this nature typically are valued by plaintiffs in excess of $75,000, and that a successful jury claim typically draws a larger judgment. Defendant files a declaration of counsel supporting these theories.
Plaintiff disclaims "engaging in tricks or ploys to defeat removal", asserts that she has written a letter to defendant's counsel calculating damages at $23,000, and attaches a letter from counsel inconsistently belittling the claim and offering $1,000 to dispose of the controversy — rather less than the typical valuation asserted in his declaration.
Defendant responds that plaintiff is unwilling to stipulate to a limitation of damages in accordance with the prayer, emphasizes that attorneys' fees would likely become a major claim in addition to routine damages, and that punitive damages against a "Fortune 500 Company", if included in the total, would push the amount that is fairly in controversy well beyond the $75,000 mark.
I note that the fee issue is generally excluded from consideration because it is not a damage item and that without some factual description of the events in question it cannot be easily determined whether this is a "nuisance suit" or the start of major litigation.
Golden v. Dodge-Markham Co., Inc., 1 F. Supp.2d 1360, 1366 (M.D. Fla. 1998).
The motion must be ruled more on the applicable law and a description of the burden of demonstration resting on defendant than on the vague factual context.
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The early decisions of the United States Supreme Court are quite favorable to plaintiff, in giving controlling effect to the prayer. In a case out of Iowa, decided in 1915, the Court ruled that the prayer for $10 less than the necessary amount in controversy (then $2,000) signified that "the amount required to give jurisdiction to the Federal court was not involved." Iowa Central Ry. Co. v. Bacon, 236 U.S. 305, 310. This conclusion of the unanimous Court was reached even though the death in question was alleged to have damaged the decedent's estate by some $10,000. Apparently the final judgment taken in State Court was consistent with the prayer; otherwise it may be supposed it would have been noted by the Court.
In a unanimous opinion by Justice Roberts in 1938, it was stated "(if plaintiff) does not desire to try his case in the federal court he may resort to the expedient of suing for less than the jurisdictional amount, and though he would be justly entitled to more, the defendant cannot remove." St. Paul Indemnity Co. v. Red Cab Co., 303 U.S. 283, 294. This is of course what plaintiff has done here, and it might be inferred that ends the removal question.
The cited cases are placed somewhat in doubt in what may be considered the most pertinent recent appellate decision. Burns v. Windsor Ins. Co., 31 F.3d 1092, 1096 n. 6 (11th Cir. 1994). Although Burns is also quite favorable to plaintiff, it does suggest that the "old cases" in the Supreme Court may be out of date because subject to more strict rules about pleading damages, so that the plaintiffs in question were apparently bound by their pleadings. This consideration leads us to look at Missouri procedural law, which is by no means as malleable as Burns may think typical.
In a recent Missouri Supreme Court decision, Judge Benton said "(t)he relief awarded in a judgment is limited to that sought by the pleadings." Norman v. Wright, 100 S.W. 3d 783, 786 (Mo. banc 2003). That case involved money, but denied a reduced verdict to account for the amount of a settlement because it had not been pleaded and sought in a prayer.
A case that is more nearly in point resulted in a divided court. In Stewart v. Sturms, 784 S.W. 2d 257, the majority of the judges in the Eastern District of the Missouri Court of Appeals held that a plaintiff was not bound by a prayer for $50,000 (although counsel did not ask for more at trial) and that a judgment for $150,000 could be sustained. Two judges dissented. Judge Crandall pointed out that a default judgment "would have been limited to the prayer." 784 S.W. 2d at 265. His theory was that plaintiff "clearly sought a total of $50,000 in damages and her recovery should be limited to that sum."
Missouri procedural law no longer requires a prayer for a specified sum, but I assume the pleading here was permissible. While it is likely the Eastern District would allow a recovery exceeding $74,999, it cannot be said that Missouri law is settled on this point. That being the case, the question should probably be left to the Missouri Courts to decide, according to a recent Eighth Circuit decision. Filla v. Norfolk Southern Rwy. Co., 336 F. 3d 806, 811 (8th Cir. 2003).
Going beyond the question of absolute bar of the prayer on plaintiff asserting a controversy of $75,000 or more, it may be assumed that the prayer could be used as a possible admission by plaintiff, at any trial in State Court, and thus tends to "cool" recovery far more than in the typical civil rights litigation against a major company. Defendant may also achieve a binding admission in State Court. See Lewis v. Abbott Laboratories, 189 F.Supp. 2d 590 (S.D. Miss. 2001).
I do not make any predictions about how a Circuit Judge would deal with such a procedural maneuver.
As noted before, the Burns case from the 11th Circuit supports the general concept that "only the sum actually demanded is in controversy", at least absent a strong showing to the contrary by a defendant. 31 F.3d 1092, 1095 (quoting Wright Miller). Burns also rejects defendant's theory that plaintiff's failure to stipulate and commit herself to a recovery below $75,000 is highly persuasive of a current intent to seek more. Under Burns defendant carries a heavy burden "to prove to a legal certainty that plaintiff, if she prevailed, would not recover below (the jurisdictional amount)." 31 F.3d at 1095, 1097. Conclusory presentations by a defendant, as here, are not enough.
Local precedent also supports a remand. In addition to unpublished decisions cited by counsel, See Judge Smith's published ruling in Central Associated Carriers, Inc. v. Nickelberry, 995 F. Supp. 1031, 1034 (W.D. Mo. 1998); Nagel v. Wal-Mart Stores, Inc., 319 F. Supp. 2d 981 (D.N.D. 2004) (citing Eighth Circuit trial court rulings).
I am attracted to the simple rule used in the older Supreme Court cases. Removal and remand controversies should not require mini-trials, and no great injustice occurs when diversity jurisdiction is minimized. If more complex analysis is appropriate, however, defendant's conclusory claims here presented, which are contrary to its contentions prior to litigation, are insufficient to carry the day.
The motion to remand is therefore GRANTED, effective twenty-one days after this ruling.