Opinion
Civil Action No. 01-863, Section "K" (2)
February 20, 2002
MINUTE ENTRY
Before the Court is plaintiff's Motion to Remand wherein he asserts that the requisite jurisdictional amount is lacking for this Court to exercise diversity jurisdiction. Having reviewed the pleadings, memoranda and the relevant law, the Court finds no merit in the motion.
Background
On January 23, 2000, a severe hail storm struck the New Orleans metropolitan area, pelting thousands of homes and vehicles with golf ball-sized hail. Shelton Pollet, individually and on behalf of a purported class, filed this action in the Civil District Court for the Parish of Orleans on March 2, 2001 against the Standard Fire Insurance Company ("Standard") and James Christian claiming, along other things, that the defendants failed to settle his claim for storm damage in a satisfactory manner and failed to act in good faith in the adjustment of his claim. Standard removed this case to another section of this court, and plaintiff filed a Motion to Remand. Initially, that motion to remand was granted; however, on a motion for reconsideration filed by defendants, the court vacated its prior remand order finding that there was complete diversity and that the potential entitlement of plaintiff and the class to attorneys' fees resulted in the amount in controversy exceeding $75,000 thus satisfying the jurisdictional amount required for diversity jurisdiction.
On October 2, 2001, defendants sought dismissal of plaintiffs class claims and a denial of class certification. On November 16, 2001, the court granted defendants' motion finding individual issues predominated over common issues of law and fact making class certification inappropriate.
This case was then transferred to this section of the court, and the subject second Motion to Remand was filed. In it, plaintiff contends that because the class claims have been dismissed, the potential attorneys' fees to which the class may have been entitled cannot be cumulated in order to satisfy the amount in controversy requirement for diversity jurisdiction. Thus, plaintiff maintains the Court lacks subject matter jurisdiction. Thus, the issue before the Court is whether the denial of class certification could be considered a "later event clarifying a previously uncertain jurisdictional issue such that "the court still examin[es] the jurisdictional facts as of the time the case is removed but the court is considering information submitted after removal."Printworks, Inc. v. Dorn Co., Inc., 869 F. Supp. 436, 439 (E.D.La. 1994) (emphasis provided).
Analysis
It is clear that once a district court's jurisdiction is established, subsequent events that reduce the amount in controversy to less that the required jurisdictional amount do not divest the court of diversity jurisdiction. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586 (1938). However, plaintiff relies on Printworks, Inc. v. Dorn Co., 869 F. Supp. 436 (E.D. La. 1994), and Asociacion Nacional de Pescadores v. Dow Ouimica, 988 F.2d 559 (5th Cir. 1993), cert. denied 510 U.S. 1041 (1994), for the proposition that although post-removal events may not defeat jurisdiction, a different situation arises when later events clarify a previously uncertain jurisdictional issue. Plaintiff asserts that Judge Clement's order, refusing to certify a class, was an event that "clarified" her previous determination that the requisite amount in controversy was met. Thus, plaintiff contends that Judge Clement made her earlier finding based on an uncertain jurisdictional issue, and her subsequent denial of class certification served to clarify that uncertain issue.
This analysis ignores the fact that a court assumes that the class is certified for purposes of determining jurisdictional amount at the time of removal. In re Abbott Laboratories, 51 F.3d 524, 525 (5th Cir. 1995). This approach is analogous to a court assuming a plaintiff will recover over $75,000 when an amount in excess is sought in the original complaint. Thus, reliance on Printworks is misplaced.
This conclusion is further supported by HD Tire and Automotive-Hardware, Inc. v. Pitney Bowes, 227 F.3d 326 (5th Cir. 2000),rehearing and rehearing denied en banc, 250 F.3d 302 (5th Cir. 2001),cert. denied, 122 S.Ct. 214 (2001). In that case, HD brought an action in Texas state court, seeking to represent a class of Pitney Bowes customers. HD alleged that Pitney Bowes overcharged certain customers. Pitney Bowes removed the case to federal court based on diversity jurisdiction. HD then moved to remand asserting that Pitney Bowes had not established the requisite amount in controversy.
The federal district court denied the motion to remand, finding that the jurisdictional amount was satisfied because the award of punitive damages could be aggregated. The district court subsequently denied class certification and granted summary judgment in favor of Pitney Bowes. The plaintiffs appealed the grant of summary judgment.
On appeal, the United States Court of Appeals for the Fifth Circuit raised the issue of subject matter jurisdiction sua sponte. The court's only concern was whether the amount in controversy was sufficient to justify removal. It stated:
The district court's denial of class certification is not relevant to our analysis. See St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 292-93, 58 S.Ct. 586, 82 L.Ed. 845 (1938) (if district court had jurisdiction at time of removal, subsequent event that decreases amount in controversy does not defeat jurisdiction).HD Tire, 227 F.3d at 328, n. 3. The circuit court went on evaluate the amount in controversy issue as if the case were still a class action. Thus, the Court will follow this example; Judge Clement's decision to deny class certification is not a "clarification" of an uncertain issue. Plaintiff sought to represent a class at the time of removal and as such the court correctly included the attorneys' fee award in determining jurisdictional amount. Plaintiffs failure to prove the viability of this matter as a class action does not "clarify" a murky issue; it is a subsequent event that reduced the amount in controversy to less that the required jurisdictional amount which does not divest the court of diversity jurisdiction. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586 (1938). Accordingly,
IT IS ORDERED that the Motion to Remand is DENIED.