Opinion
Civil Action No. 4:20-cv-00490-P
2020-07-22
Gregory SNOW, Plaintiff, v. MIKE BLOOMBERG 2020 INC., Defendant.
Jason C.N. Smith, Law Offices of Jason Smith, Fort Worth, TX, for Plaintiff. Greg W. Curry, Dina McKenney, Jennifer Meghan Nylin McCaig, Thompson & Knight LLP, Dallas, TX, for Defendant.
Jason C.N. Smith, Law Offices of Jason Smith, Fort Worth, TX, for Plaintiff.
Greg W. Curry, Dina McKenney, Jennifer Meghan Nylin McCaig, Thompson & Knight LLP, Dallas, TX, for Defendant.
This Amended Order VACATES and SUPERSEDES the Court's prior order, dated July 21, 2020. ECF No. 18.
Mark T. Pittman, UNITED STATES DISTRICT JUDGE
Before the Court is Plaintiff Gregory Snow's ("Snow") Motion to Remand (ECF No. 12), Defendant Mike Bloomberg 2020 Inc.’s ("Bloomberg") Response (ECF No. 15), and Snow's Reply (ECF No. 16). It is only with great hesitancy and consternation, after having considered the Motion to Remand, related briefing, and the relevant applicable law, that the Court determines finds that the Motion to Remand should be and is hereby DENIED .
BACKGROUND
A. Pre-Removal Events in State Court
This is a relatively small employment dispute that was initiated in a Tarrant County, Texas county court at law by Snow on March 23, 2020 against Bloomberg, a Delaware corporation with a principal place of business in New York. Snow alleges claims for breach of contract, fraud, promissory estoppel, and unjust enrichment. See Orig. Pet., ECF No. 1-2. Snow alleged that as a result of Bloomberg's actions, he "has suffered in the past, and in all reasonable likelihood, will suffer in the future, damages including, lost wages, lost earning capacity, mental anguish, emotional pain and suffering, lost employment benefits, inconvenience, loss of enjoyment of life, damage to professional reputation, and other damages." Id. at 3. Snow contended that Bloomberg promised to pay Snow $6,000 per month through the election, plus provide employment benefits such as paid leave and health insurance. Id. at 2. In his Original Petition, Snow sought "only monetary relief of $75,000 or less including damages of any kind, penalties, costs, expenses, pre-judgment interest, and attorney fees." Id.
In Texas, county courts at law are typically the filing destination for many small cases. Indeed, Texas county courts at law are limited to six rather than twelve person juries. See Tex. Const. art. V, § 17 (providing for six-member juries in Texas county courts). Further, the civil jurisdiction of county court at laws is limited, it is usually more than a justice of the peace or municipal court, but lower than a Texas district court. See generally, About Texas Courts , Texas Judicial Branch , https://www.txcourts.gov/about-texas-courts/trial-courts.aspx (last visited July 21, 2020).
Snow subsequently filed an amended petition nearly identical to his Original Petition, with the only difference being that the Amended Petition included service of process to Bloomberg's registered agent. See First Am. Pet., ECF No. 1-4. In his Amended Petition, Snow repeated the same language contained in his Original Petition that the recovery he was seeking did not exceed $75,000. Id. at 3.
B. Notice of Removal
After Snow filed his Amended Petition, Bloomberg filed a notice removing the action to this Court, asserting this Court has diversity jurisdiction. See Removal at 1, ECF No. 1. In its Notice of Removal, Bloomberg argued that Snow's Amended Petition seeking "$75,000 or less," contravenes Texas pleading requirements. Id. at 3. For that reason, Snow's Amended Petition is not in good faith, and the sum claimed in his Amended Petition should not control. Id. In support of Bloomberg's contention that the amount in controversy actually exceeds the required jurisdictional amount, Bloomberg offered a declaration by Jennifer McCaig, Bloomberg's counsel, concerning attorney's fees and similar lawsuits against Bloomberg. See Declaration of J. McCaig, ECF No. 1-9. In that declaration, as evidence regarding Snow's attorney's fees, McCaig testified about Snow's demand letter, which represented that Snow had already incurred approximately $10,000 in attorney's fees. Id. at Ex. 3. McCaig also included another employment dispute involving Snow's counsel where the Northern District of Texas awarded Snow's counsel $154,200 in attorney's fees and conditional fees, with Snow's counsel's hourly rate at $500 per hour. Id. at Ex. 1. McCaig also offered evidence that in a similar lawsuit against Bloomberg also pending in this Court, eight plaintiffs seek "monetary relief of over $1,000,000." Id. at Ex. 4 at 2.
Monetary relief of over $1,000,000 for eight plaintiffs computes to $125,000 per plaintiff. See McCaig Declaration at ¶ 7 & Ex. 4.
C. Motion to Remand
Shortly after removal, Snow filed his Motion to Remand, supporting brief and supporting index. See ECF No. 12-14. Snow argues in his Motion to Remand that he has so limited his damage claims on the face of his Amended Petition, even when considered in the context of Bloomberg's declaration concerning attorney's fees and similar lawsuits against Bloomberg, does not provide the evidence it would need for Bloomberg to carry its burden of proving that the amount in controversy exceeds the jurisdictional amount. See Motion to Remand Brief, ECF No. 13. In Snow's Motion to Remand, Snow relies primarily on Steele v. DynCorp Int'l L.L.C. , 82 F. Supp. 3d 699 (N.D. Tex. 2015) (McBryde, J), in which the court held that an amended petition limiting damages to $75,000 or less, coupled with a post-removal declaration, was sufficient to sustain a motion to remand. Id. at 6. In addition, Snow contends that Bloomberg has failed to establish that Snow's claims exceed $75,000 because Bloomberg provided no facts or affidavits supporting its Notice of Removal. Id.
Snow's Motion to Remand also included a sworn declaration from Snow, in which he indicated that he was seeking only lost wages and compensatory damages, and that he irrevocably limits his recovery of damages for the harms and losses to $75,000 as set forth in his Amended Petition. See Snow Remand App'x 5–6, ECF No. 14. Snow also included in his supporting index a similar employment lawsuit filed in the 134th Judicial District Court of Dallas County, Texas, Benavides v. Macy's Inc. , in which Snow's counsel explicitly limited damages and attorney's fees to $75,000 or less at trial. Id. at 8–23. Snow argues that this demonstrates his counsel's good faith in seeking $75,000 or less. See Remand Brief at 6, ECF No. 13.
D. Bloomberg's Response
On July 1, 2020, Bloomberg filed its response addressing Snow's arguments in his Motion to Remand. See Response, ECF No. 15. Bloomberg argues that the Court is not bound by Snow's Amended Petition because "[p]laintiffs attempt to deprive federal courts of jurisdiction by pleading that he seeks no more than $75,000 was, according to the Fifth Circuit, not in good faith, was not accompanied in the state court by a binding stipulation to that effect, and is not supported by the Texas Rules of Civil Procedure...." Id. at 6.
Regarding Snow's alleged evidence of good faith in Benavides , Bloomberg argues that Benavides does not hurt its case, but in fact, further bolsters its argument that the amount in controversy exceeds $75,000 because, in that case, the plaintiff recovered $25,000 in damages for mental anguish, loss of enjoyment, and inconvenience; $10,000 in lost earning capacity in the future; and $31,300 in attorney's fees through trial. Id. at 11. Bloomberg contends that "[a]ssuming similar damages in this case, plus the lost wages Plaintiff seeks, the amount in controversy would be $108,300 ($42,000 in lost wages; $25,000 in mental anguish; $10,000 in lost earning capacity; and $31,300 in attorney's fees through trial)." Id. at 12.
Regarding Snow's declaration, Bloomberg argues that the Court may not consider Snow's declaration in determining the amount in controversy because the declaration was filed post removal. Id. at 7. Although the court in Steele considered a post-removal affidavit, Bloomberg argues that the Court here should follow the Fifth Circuit instructions that a declaration must be filed in the state court to avoid removal. Id. at 6.
Bloomberg further argues that even if the Court could consider Snow's declaration, it does not unequivocally limit Snow's recovery to $75,000 or less because "[i]f the Court remanded the case and Plaintiff filed a second amended petition—as he is permitted to do in state court—the declaration would not apply, given Plaintiff's statement tying his damages limitation to the damages ‘set forth in [his] First Amended Petition.’ " Id. at 9.
E. Snow's Reply
On July 7, 2020, Snow filed a Reply to Bloomberg's Response, addressing Bloomberg's arguments supporting diversity jurisdiction. See Reply, ECF No. 16. In his Reply, Snow asserts that (1) Texas law allows a party to plead for $75,000 or less; (2) Bloomberg has failed to carry its burden that the amount in controversy exceeds $75,000; and (3) Snow's sworn declaration limiting damages to $75,000 unequivocally limits to a legal certainty that Snow will not recover any amount above the jurisdictional threshold. Id. at 1.
Regarding the pleading requirements of Texas Rule of Civil Procedure 47, Snow argues that " Rule 47 has been held to not limit a plaintiff's ability to specify damages in the amount of $75,000." Id. at 2. In support of this contention, Snow relies on the holding in Morales v. Allstate Tex. Lloyds , in which the court held that "the plain language of the amended Rule 47 does not prohibit a plaintiff from specifying a certain amount in damages." 410 F. Supp. 3d 816, 821 (S.D. Tex. 2019). Next, Snow argues that "[w]hile Bloomberg offers evidence of awards in other cases, it fails to offer evidence regarding Snow's damages, which is its burden on its motion to remand." See Reply at 2. Regarding his post-removal declaration, Snow contends that this declaration may be considered to determine the amount in controversy since the basis for jurisdiction is ambiguous. Id. at 4.
SUBJECT-MATTER JURISDICTION
Under Title 28 U.S.C. 1332(a), federal district courts have original jurisdiction of all civil actions involving citizens of different states, where the matter in controversy exceeds $75,000, exclusive of interest and costs. And § 1441(a) provides that:
any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.
Id. at § 1441(a). "[D]oubts regarding whether removal jurisdiction is proper should be resolved against federal jurisdiction." Acuna v. Brown & Root Inc. , 200 F.3d 335, 339 (5th Cir. 2000). When assessing the amount in controversy for diversity-jurisdiction purposes, "the sum claimed by the plaintiff controls if the claim is apparently made in good faith" unless the law gives a different rule. St. Paul Mercury Indem. Co. v. Red Cab Co. , 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938). A sum pled by a plaintiff, however, is made in bad faith and will not control when the specified sum is made in contravention of the state law's pleading requirements. See De Aguilar v. Boeing Co. , 47 F.3d 1404, 1410 (5th Cir. 1995) (citation omitted) (holding that a pleading for damages under the jurisdictional amount where a state rule prevents such a pleading "is surely characterized as bad faith").
"When a defendant seeks to remove a case, the question of whether jurisdiction exists is resolved by looking at the complaint at the time the petition for removal is filed." Brown v. Sw. Bell Tel. Co. , 901 F.2d 1250, 1254 (5th Cir. 1990) ; see also Gebbia v. Wal-Mart Stores, Inc. , 233 F.3d 880, 883 (5th Cir. 2000) (noting that "the jurisdictional facts that support removal must be judged at the time of the removal"). And when uncontested by a plaintiff, "the defendant's amount-in-controversy allegation should be accepted ... by the court." Dart Cherokee Basin Operating Co. v. Owens , 574 U.S. 81, 135 S. Ct. 547, 553, 190 L.Ed.2d 495 (2014). If the plaintiff contests, however, then " ‘[r]emoval ... is proper on the basis of an amount in controversy asserted’ by the defendant ‘if the district court finds, by the preponderance of the evidence, that the amount in controversy exceeds’ the jurisdictional threshold." Id. at 553–54 (quoting § 1446(c)(2)(B)).
ANALYSIS
In the present action, the parties’ diversity of citizenship is not disputed. The only issue is whether the required showing has been made that the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs. Accordingly, the Court must determine if (a) the sum pled by Snow's was made in bad faith, and, if so (b) whether Bloomberg has demonstrated by a preponderance of the evidence that Snow's claims, if successful, would in fact trigger a recovery exceeding $75,000.00, and, if so, (c) whether Snow has effectively bound himself to an award below the jurisdictional threshold.
A. The sum claimed in Snow's Amended Petition does not control.
Based on binding Fifth Circuit precedent, Snow's attempt to limit the amount in controversy to "$75,000 or less" unfortunately does not control because such a demand is not permitted under Texas law. As stated above, a sum pled by a plaintiff is considered to be made in "bad faith" and will not control when the specified sum is made in contravention of the state law's pleading requirements. See De Aguilar , 47 F.3d at 1413 ("[A] plaintiff ... cannot ... avoid removal by pleading for damages under the jurisdictional amount where a state rule prevents such a pleading."). Rule 47 requires that a plaintiff provide "a statement that the damages sought are within the jurisdictional limits of the court"; and
(c) a statement that the party seeks:
(1) only monetary relief of $100,000 or less ...; or
(2) monetary relief of $100,000 or less and non-monetary relief; or
(3) monetary relief over $100,000 but not more than $200,000; or
(4) monetary relief over $200,000 but not more than $1,000,000; or
(5) monetary relief over $1,000,000;
Therefore, the plain language of Rule 47 does not allow a plaintiff to plead for monetary relief of "$75,000 or less." See Wilson v. Hibu Inc. , No. 3:13-CV-2012-L, 2013 WL 5803816, at *5–6 (N.D. Tex. Oct. 28, 2013) (Lindsey, J.). "Had Plaintiff[s] properly followed Rule 47, [they] would not have included the ‘75,000 or less’ language, as the rule is quite specific as to what a party must set forth with respect to the monetary relief he or she seeks." Id.
While to the Court's knowledge the Fifth Circuit has not addressed the amendments to Rule 47 in the context of the amount-in-controversy requirement, Judge Fitzwater has found that De Aguilar continues to apply and that the subsequently amended Rule 47 prohibits plaintiffs from pleading a specific amount of damages rather than the prescribed ranges. See, e.g., Ford v. United Parcel Serv., Inc. , No. 3:14-CV-1872-D, 2014 WL 6491446, at *7 (N.D. Tex. Nov. 20, 2014) (Fitzwater, J.) ("And although [the plaintiff's] assertion that revised Rule 47(c) permits her to plead a specific amount rather than a range seems to run directly counter to the Rule's mandatory terms, the court is bound by De Aguilar , the law of this circuit, unless and until it is changed.").
Nonetheless, Snow argues that a demand for "$75,000 or less" no longer violates Rule 47. The Court must respectfully disagree. Snow relies on the court's holding in Morales that held a demand for damages that "[does] not exceed $74,999.99" no longer violates Rule 47. 410 F. Supp. 3d at 821. However, one of the salient facts of Morales was the state petition recited that "[p]laintiff seeks only monetary relief of $100,000 or less including damages of any kind, penalties, costs, pre-judgment interest and attorney's fees," and only specified further, that the damages "do not exceed $74,999.99." Id. Here, in contrast, Snow's Amended Petition does not include any of the damage ranges stated under Rule 47. Accordingly, it appears that Snow, has purposefully contravened the Texas rules governing pleading requirements to avoid federal jurisdiction, resulting in his Amended Petition is not being in "good faith," and the sum claimed in his Amended Petition does not control.
B. Bloomberg has shown by a preponderance of the evidence that the actual amount in controversy likely exceeds $75,000.
In situations such as this, where the plaintiff's pleading does not control, the burden is on the defendant to show by a preponderance of the evidence that the amount in controversy actually exceeds the jurisdictional amount. See Gebbia , 233 F.3d at 882. The removing party can satisfy that burden (1) by showing that it is apparent from the face of the petition that the claims are likely to exceed $75,000, or (2) by providing evidence to support such a conclusion. See Wilson , 2013 WL 5803816 at *3–4 ; see also Gebbia , 233 F.3d at 883 ; Luckett v. Delta Airlines, Inc. , 171 F.3d 295, 298 (5th Cir. 1999) ; Greco v. Jones , 992 F. Supp. 2d 693, 699 (N.D. Tex. 2014).
Snow contends that his recovery is limited to $75,000 because Bloomberg failed to provide facts or affidavits that show Snow incurred damages in excess of $75,000. However, Bloomberg has not only provided facts and affidavits supporting its Notice of Removal, but for the reasons that follow, the Court concludes Bloomberg has set forth enough evidence to support a finding that the amount in controversy exceeds the jurisdictional threshold.
Both parties agree that Snow seeks lost wages of $42,000. In addition, Snow's demand letter represented that Snow's counsel had already incurred $10,000 in attorney's fees. When Snow's claims for compensatory damages, punitive damages, and attorney's fees at trial are also taken into account, this Court is bound to hold that it is more likely than not that the amount in controversy here exceeds the sum or value of $75,000, exclusive of interest and costs. See, e.g., White v. FCI USA, Inc. , 319 F.3d 672, 674–76 (5th Cir. 2003) (affirming finding that alleged compensatory damages or punitive damages alone in wrongful termination case would exceed $75,000); Wilson , 2013 WL 5803816 at *3–4 (applying common sense analysis and concluding that it was facially apparent that plaintiff's claims in wrongful termination case for back pay, front pay, compensatory damages, punitive damages, attorney's fees and expert fees more likely than not exceeded $75,000).
Snow seeks "lost earning capacity, mental anguish, emotional pain and suffering, lost employment benefits, inconvenience, loss of enjoyment, damage to professional reputation, and other damages," which under Texas law, could include punitive damages. See First Am. Pet. at 3; Tex Civ. Prac. & Rem. Code § 41.003(a)(1).
Accordingly, the Court concludes that Bloomberg has shown by a preponderance of the evidence that the amount in controversy is greater than $75,000.
C. Snow has not met his legal certainty requirement.
Because Bloomberg has proven by a preponderance of the evidence that the amount in controversy likely exceeds $75,000, removal was proper unless Snow can show to a "legal certainty" that he will not be able to recover in excess of this amount. De Aguilar , 47 F.3d at 1411–12. The Fifth Circuit has suggested that a plaintiff may meet this obligation by citing to a state law prohibiting recovery of damages in excess of those sought in the petition. Id. at 1412. In the absence of such a statute, "[l]itigants who want to prevent removal must file a binding stipulation or affidavit with their complaints[.]" Id. (quoting In re Shell Oil Co. , 970 F.2d 355, 356 (7th Cir. 1992) ).
Snow primarily relies on Judge McBryde's well-reasoned decision in Steele to show that he has met his legal certainty requirement. In Steele , the plaintiff expressly disclaimed any intention of recovering lost wages, lost earning capacity, lost employment benefits, damage to professional reputation, and medical bills and only sought damages for "inconvenience, mental pain and suffering and loss of enjoyment of life...." 82 F. Supp. 3d at 700. Judge McBryde found that "the amended pleading itself was in the form of a stipulation as to the limit on the elements and amount of damages that would be recoverable by the plaintiff." Id. at 703. In contrast here, Snow Amended Pleading did not limit the elements of damages that would be recoverable but did restate that Snow was seeking monetary relief of "$75,000 or less." See First Am. Pet., ECF No. 1-4.
While the Court appreciates and greatly respects the logic of Steele , the Court declines to apply that reasoning here, because an amended pleading filed in Texas state court does not indefinitely bind a plaintiff to recovery of $75,000 or less. Thus, if the Court remanded the case, Snow would still be permitted to file a second amended petition in state court seeking an amount that exceeds $75,000. See Martinez v. Liberty Ins. Corp. , 2019 WL 6894497, at *2 (S.D. Tex. Dec. 18, 2019) ([A]lleged damages stated in a Texas state court petition cannot prove that the amount in controversy does not exceed that amount as a legal certainty because plaintiffs may supersede those allegations with amended pleadings."); Ford v. United Parcel Service, Inc. (Ohio) , 2014 WL 4105965, at *4 (N.D. Tex. Aug. 21, 2014) ("Although the allegations of [the plaintiff's] petition are binding judicial admissions for the time being, they will cease to be ‘conclusive and indisputable judicial admissions’ if she chooses to amend or supersede her petition, as the Texas rules give her considerable latitude to do.") (quoting Sosa v. Cent. Power & Light , 909 S. W.2d 893, 895 (Tex. 1995) ).
Snow argues that his sworn declaration establishes to a "legal certainty" that he will not be able to recover in excess of $75,000. See Reply at 1, ECF No. 16. Again, although the court is sympathetic to Snow, it must disagree because Snow's declaration was filed after Bloomberg removed the case. See St. Paul Reinsure. Co. at 1253–54, 58 S.Ct. 586. ("Importantly, the jurisdictional facts must be judged as of the time the complaint is filed; subsequent events cannot serve to deprive the court of jurisdiction once it has attached."); Hayes v. Bank of Am. N.A. , No. 3:18-cv-3238-B, 2019 WL 585445, at *4 (N.D. Tex. Feb. 13, 2019) ("A simple allegation in a state-court petition that a plaintiff seeks less than the jurisdictional threshold, without more, is insufficient to defeat diversity jurisdiction ... [H]ere, Plaintiff submitted no binding stipulation or affidavit with his complaint, nor can Plaintiff remedy his error by submitting a post-removal stipulation").
Snow is correct that post-removal stipulations or affidavits limiting damages "may be considered in determining the amount in controversy at the time of removal" but "only if the basis for jurisdiction is ambiguous at the time of removal." Gebbia , 233 F.3d at 883 (emphasis added). Here, the amount in controversy and, in turn, the basis for jurisdiction, at the time of removal was unambiguous, as evidenced by the damages sought in the Amended Petition and pre-suit demand letter. Thus, Snow's post-removal declaration limiting damages is irrelevant, and the Court will not consider it in determining the amount in controversy. See De Aguilar , 47 F.3d at 1412 ("[L]itigants who want to prevent removal must file a binding stipulation or affidavit with their complaints ; once a defendant has removed the case, St. Paul makes later filings irrelevant. ") (emphasis added).
CONCLUSION
In light of the foregoing, the Court concludes that the amount in controversy exceeds the jurisdictional threshold. Therefore, the Court has subject-matter jurisdiction over this case, and removal was proper. Accordingly, the Court finds that Snow's Motion to Remand (ECF No. 12), should be and is hereby DENIED.
Although the Court holds that removal was proper in this case, as the old saying goes, "don't make a federal case of it." Merriam-Webster.com Dictionary , Merriam-Webster, https://www.merriam-webster.com/dictionary/make% 20a% 20federal% 20case% 20out% 20of (last visited July 21, 2020). Indeed, the Court must question the wisdom of pursuing this litigation in federal court versus a Tarrant County Court at Law. After service as a judge on a Tarrant County district court and the Second Court of Appeals, the undersigned has uniformly found Tarrant County juries and judges to be diligent, intelligent, and fair. Certainly, federal removal should never be used by litigants for gamesmanship purposes or to delay litigation in relatively small cases. The Court has no doubt that this minor employment dispute could have been resolved quickly and without any bias or prejudice toward Bloomberg had it been allowed to remain in Tarrant County Court at Law. Practically speaking, not every case or controversy belongs in federal court, even if the federal court has diversity jurisdiction. See The Federalist No. 17 (Alexander Hamilton) (writing as "Publius") (explaining that under the Constitution, "the ordinary administration of criminal and civil justice" would be left to the states); Cf. Letter from Thomas Jefferson to James Madison (Mar. 15, 1789), in The Life and Selected Writings of Thomas Jefferson 426 (Adrienne Koch & William Peden, eds., 2004 Modern Library Paperback ed.) (1944) (the federal "judiciary ... is a body, which, if rendered independent and kept strictly to their own department, merits great confidence for their learning and integrity.").
SO ORDERED on this 22nd day of July, 2020.