Opinion
Case No. 4:18CV2039 HEA
12-20-2018
DIRECT BIOLOGICS, LLC, Plaintiff, v. KIMERA LABS, INC., Defendant
OPINION , MEMORANDUM AND ORDER
This matter is before the Court on Plaintiff's Motion to Remand, [Doc. No. 2]. Defendant has filed a response in opposition. Plaintiff filed a reply, to which Defendant has filed a Sur-Reply thereto.
Background
Plaintiff filed this action in the Circuit Court of St. Louis County, Missouri seeking specific performance of an Exclusive Distribution and Supply Arrangement Agreement entered into by the parties on April 16, 2018. Plaintiff also seeks injunctive relief against Defendant from employing a former employee of Plaintiff and from selling its products to any customers other than Plaintiff.
According to the Petition, the Agreement provided that Defendant appointed Plaintiff as its exclusive distributor for all of Defendant's amniotic products. When Plaintiff placed orders with Defendant, Defendant was required to ship product to Missouri to be distributed by Plaintiff, the said product was required to have a shelf life of at least 10 months.
The Petition further alleges that Defendant breached the agreement by providing products with a shelf life of less than 10 months and has refused to replace those products; has failed to take steps to obtain accreditation with the American Association of Tissue Banks as required by the Agreement; and has distributed amniotic products directly to customers rather than selling the products to Plaintiff to be sold to the ultimate customer.
Defendant removed the matter to this Court on December 6, 2018, based on the Court's diversity of citizenship jurisdiction. 28 U.S.C. § 1332. Plaintiff filed a motion to remand upon receipt of the notice of removal. Plaintiff does not dispute the diversity of the parties; rather, Plaintiff argues that the amount in controversy does not exceed $75,000.
Legal Standard
"The district courts of the United States ... are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute[.]" Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005) (internal quotations omitted). Congress has granted "district courts original jurisdiction in civil actions between citizens of different States, between U.S. citizens and foreign citizens, or by foreign states against U.S. citizens." Id. (citing 28 U.S.C. § 1332). However, "[t]o ensure that diversity jurisdiction does not flood the federal courts with minor disputes, § 1332(a) requires that the matter in controversy in a diversity case exceed a specified amount, currently $75,000." Id. "[A] complaint that alleges the jurisdictional amount in good faith will suffice to confer jurisdiction, but the complaint will be dismissed if it appears to a legal certainty that the claim is really for less than the jurisdictional amount." Kopp v. Kopp, 280 F.3d 883, 884 (8th Cir. 2002) (alteration and internal quotations omitted). If the amount in controversy alleged by the party asserting diversity jurisdiction is challenged, "the party invoking federal jurisdiction must prove the requisite amount by a preponderance of the evidence." James Neff Kramper Family Farm P'ship v. IBP, Inc., 393 F.3d 828, 831 (8th Cir. 2005) (internal quotations omitted). Thus, "[t]he district court has subject matter jurisdiction in a diversity case when a fact finder could legally conclude, from the pleadings and proof adduced to the court before trial, that the damages that the plaintiff suffered are greater than $75,000." Kopp, 280 F.3d at 885.
The precedent in this area of the law is clear. When a plaintiff seeks equitable relief, "the amount in controversy is measured by the value of the object of the litigation." Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333 (1977).
The object of this litigation is the parties' Exclusive Distribution and Supply Arrangement. Under that agreement, Plaintiff agreed to purchase goods minimally valued at $50,000 per month, of $150,000 per quarter, for an initial term of five (5) years, beginning on December 8, 2017. These requirements clearly exceed $75,000. Plaintiff argues that it was a "burden" on Plaintiff to purchase this amount and therefore it would be penalized in using this amount for the amount in controversy determination. Plaintiff's argument, however, fails to consider the benefit it receives through the purchase. In purchasing product, Plaintiff receives the product valued at $50,000 per month. In seeking specific performance, the value of the object of the litigation, i.e. the value of the Agreement, is $150,000 per quarter, for the term of five years, which equates to three million dollars over the course of the five year term of the initial agreement. Thus, Defendant has established to a legal certainty that the amount in controversy for this litigation is in excess of $75,000, the requisite jurisdictional amount.
Conclusion
Plaintiff seeks specific performance of the parties' Agreement. The Agreement requires Plaintiff to purchase and therefore receive products from Defendant in excess of $75,000. The amount in controversy requirement has been established to a legal certainty. The Court therefore has diversity jurisdiction over this matter.
Accordingly,
IT IS HEREBY ORDERED that Plaintiff's Motion to Remand, [Doc. No. 2] is DENIED.
Dated this 20th day of December, 2018.
/s/_________
HENRY EDWARD AUTREY
UNITED STATES DISTRICT JUDGE