Opinion
EP-02-CA-509-DB
April 22, 2003
MEMORANDUM OPINION AND ORDER
On this day, the Court considered Plaintiff Santiago Pizana's "Motion to Remand and Brief in Support," filed in the above-captioned cause on December 4, 2002. On December 20, 2002, Defendant International Mill Service, Inc. filed a Response. For the reasons that follow, the Court is of the opinion that Plaintiff's Motion to Remand should be granted.
BACKGROUND
Plaintiff commenced this cause in the 41st Judicial District Court of El Paso County, Texas ("state court"), on July 12, 2002. In his Original Petition, Plaintiff alleges he was wrongfully terminated from his employment with Defendant after he refused to perform an illegal act, and seeks damages for past and future mental pain and anguish, lost wages and employment benefits, as well as punitive damages, interest, and costs of court. Plaintiff based his suit upon Sabine Pilot Service, Inc. v. Hauch, 687 S.W.2d 733, 735 (Tex. 1985), which permits suits for wrongful termination where the employee was terminated for refusal to perform illegal acts. Plaintiff's Original Petition was silent as to the specific amount of damages sought, pursuant to Texas Rule of Civil Procedure 47. Plaintiff filed a First Amended Original Petition ("Amended Petition") on November 1, 2002, in which he plead damages in the amount of $75,000. On November 7, 2002, Defendant removed the case to this Court pursuant to 28 U.S.C. § 1332, asserting that Plaintiff's suit is between citizens of different states and the amount in controversy exceeds the sum of $75,000, exclusive of interest and costs. Plaintiff moved to remand, arguing that Defendant has failed to show that the amount in controversy is more than $75,000, failed to show that its principal place of business is in the State of Pennsylvania and not Texas, and failed to file its Notice of Removal within thirty days of receipt of the initial pleading in this cause.
The rule states, "An original pleading . . . shall contain . . . (b) in all claims for unliquidated damages only the statement that the damages sought are within the jurisdictional limits of the court." TEX.R.CIV.P. 47.
STANDARD
Title 28 U.S.C. § 1441, the general removal statute, allows a defendant to remove a case to the federal district court for the district and division within which the action is pending. 28 U.S.C.A. § 1441(a) (West 1994). In general, the party seeking removal bears the burden of establishing federal jurisdiction. See Wilson v. Republic Iron Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 37, 66 L.Ed. 144 (1921). "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C.A. § 1447(c) (West 1994). Because federal courts are courts of limited jurisdiction, the law imposes a presumption against federal jurisdiction. Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). The court must resolve any doubt concerning removability in favor of remand. See Vasquez v. Alto Bonito Gravel Plant Corp., 56 F.3d 689, 694 (5th Cir. 1995).
Title 28 U.S.C. § 1332 permits diversity jurisdiction where the parties are citizens of different states and the amount of controversy exceeds $75,000. 28 U.S.C.A. § 1332 (West 1993 Supp. 2001). "Normally, this burden is satisfied if the plaintiff claims a sum greater than the jurisdictional requirement." Phillips v. Kansas City S. Ry. Co., 1995 WL 529862, at *2 (E.D. La. 1995) (citing Gaus v. Miles, Inc., 980 F.2d 564, 566 (5th Cir. 1992)). When a complaint does not allege a specific amount of damages, the party invoking federal jurisdiction must prove by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional amount. White v. FCI USA, Inc., 319 F.3d 672, 675 (5th Cir. 2003). The district court must first examine the complaint to determine whether it is "facially apparent" that the claims exceed the jurisdictional amount. Id. If it is not apparent, the court may rely on "summary judgment-type" evidence to ascertain the amount in controversy. Id. (citing St. Paul Reinsurance Co. Ltd. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998); De Aguilar v. Boeing Co., 11 F.3d 55, 57-58 (5th Cir. 1993)) The propriety of removal in this cause turns o n whether the amount in controversy in Plaintiff's cause exceeds the sum of $75,000. Because the Court's resolution of the amount in controversy requirement is dispositive of the instant Motion, the Court need not address Plaintiff's grounds for remand based on diversity of citizenship and timeliness of removal.
DISCUSSION
Defendant alleges removal is proper because the amount in controversy actually exceeds $75,000, notwithstanding Plaintiff's pleading to an amount below the statutory jurisdictional threshold in his Amended Petition. Plaintiff argues that Defendant has failed to show by a preponderance of the evidence t hat the amount in controversy actually exceeds the jurisdictional amount. The Court agrees with Plaintiff.
Because Plaintiff's Original Petition did not allege an amount of damages, Defendant filed a special exception to require Plaintiff to amend his petition to state the maximum amount of damages sought. According to Defendant, at a hearing on Defendant's special exception, counsel for Plaintiff represented to the state court judge that Plaintiff would amend his pleading alleging only $75,000 as the amount in controversy, conduct further discovery, and then amend his pleading to seek a larger amount of damages. Plaintiff's Amended Petition alleging $75,000 in damages followed. Defendant claims Plaintiff is simply pleading to an amount barely within the statutory limit in state court in a bad faith effort to avoid federal jurisdiction.
The Court notes that despite Defendant's assertion that Plaintiff's counsel made these statements in "open court," Defendant presents no record of that proceeding to support its claim. Instead, Defendant has provided an affidavit by Felipe Zavala, counsel for Defendant, who claims to have been present at the special exceptions hearing. Zavala's affidavit states that no formal hearing was held on Defendant's special exceptions in the state court but that a "brief, informal discussion was held between counsel and the Judge." Zavala's affidavit states that Plaintiff indicated to t he court that if required to amend her pleading, "she would merely amend the pleading alleging only $75,000 as the amount in controversy, conduct discovery, and if the evidence obtained in discovery supported potential damages in excess of $75,000, reserve the right to later amend the Plaintiff's pleading to seek a larger amount of damages."
In support, Defendant relies heavily on the Fifth Circuit case, De Aguilar v. Boeing Co., 47 F.3d 1404 (5th Cir. 1995). In De Aguilar, the plaintiffs, relatives of persons who died in an airline crash in Mexico, filed suit in Texas state court against Boeing and other defendants for negligence and products liability. Id. at 1406. In the state court petition at issue, the plaintiffs described the amount of their claim by specifically alleging that their damages "did not exceed $50,000." Id. at 1407. Defendants removed to federal court, alleging t hat the amount in controversy exceeded $50,000. Id. Plaintiffs moved to remand for lack of jurisdiction. Id. at 1408. The district court held that the amount in controversy exceeded the jurisdictional amount, which was $50,000 at that time. Id.
In reviewing the district court's order, the Fifth Circuit expressed its concern that plaintiffs, in alleging that their respective damages would not exceed the jurisdictional amount, acted in bad faith in an effort to avoid federal court jurisdiction. Id. at 1410. The Court noted that state rules like Tex.R.Civ.P. 47, that strictly prohibit plaintiffs from pleading for specific amounts in cases of liquidated damages "have created the potential for abusive manipulation by plaintiffs, who may plead for damages below the jurisdictional amount in state court with the knowledge that they may be able to evade federal jurisdiction. . . . Such manipulation is surely characterized as bad faith." Id. In order for a plaintiff to avoid the specter of bad faith, the Court held " if a defendant can show that the amount in controversy actually exceeds the jurisdictional amount, the plaintiff must be able to show that, as a matter of law, it is certain that he will not be able to recover more than the damages for which he has prayed in the state court complaint." Id. at 1411 (emphasis added). As for the extent of the burden on the defendant in this situation, he must show by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional amount. Id. at 1412 (emphasis added). As such, "the preponderance burden forces the defendant to do more than point to a state law that might allow the plaintiff to recover more than what is pled. The defendant must produce evidence that establishes that the actual amount in controversy exceeds [$75,000]." Id.
The Court finds that Defendant has failed to meet its burden under Aguilar to establish by a preponderance of the evidence t hat the amount in controversy actually exceeds the jurisdictional amount. Plaintiff's Amended Petition states in relevant part:
By reason of all the above, Plaintiff has sustained damages within the jurisdictional limits of the Court. Plaintiff believes that those damages should be determined and assessed by the trier of fact. However, counsel for Defendant has filed a special exception which requires Plaintiff to plead the maximum amount of money which is being claimed in this lawsuit. Therefore, Plaintiff hereby pleads for actual damages and exemplary damages in the amount of Seventy-Five Thousand ($75,000.00) Dollars. Discovery is ongoing and may, in the future, reveal information which may make it necessary for Plaintiff to amend his petition and increase this amount at a later date.
In reviewing Plaintiff's Amended Petition, it is not facially apparent that Plaintiff's claims exceed a sum greater than the jurisdictional amount. Plaintiff alleges that both his actual and exemplary damages amount to $75,000. Other than Defendant's claim that counsel for Plaintiff represented to the state court that Plaintiff may increase the amount of damages alleged after further discovery, Defendant points to no summary judgment-type evidence in the form of data, figures or calculations that support a finding that Plaintiff's damages will actually exceed $75,000. Without any evidence providing a valuation of Plaintiff's claims, there is nothing to suggest that the multiple elements of damages alleged by Plaintiff will even likely exceed the jurisdictional amount. Because the jurisdictional facts are assessed on the basis of Plaintiff's state court Petition as of the time of removal, the critical jurisdictional fact at the time of removal was that Plaintiff's Amended Petition specified $75,000 in damages, and no more. Defendant's allegation that Plaintiff's counsel represented that Plaintiff may amend his state court Petition to seek a larger amount of damages after a time for discovery is insufficient evidence to satisfy Defendant's burden to show by a preponderance of the evidence that the amount in controversy actually exceeds $75,000.
Accordingly, IT IS HEREBY ORDERED that Plaintiff Santiago Pizana's "Motion to Remand and Brief in Support" is GRANTED.
IT IS FURTHER ORDERED that the instant case is REMANDED to the 41st Judicial District Court of El Paso County, Texas, from where it was removed. IT IS FINALLY ORDERED that all other pending Motions, if any, are DENIED AS MOOT.