Opinion
Case No. 1:02CV0567
May 30, 2002
MEMORANDUM OF OPINION AND ORDER
The plaintiff, Toni Sylvester, is the owner of a Plymouth Voyager minivan equipped with Gen-3 seat belt buckles which she purchased in Ohio. She brought this action, originally filed in the Court of Common Pleas of Cuyahoga County, Ohio, on behalf of people and entities who reside in Ohio and who own or lease model year 1993-2001 vehicles manufactured by defendant equipped with Gen-3 Buckles and all nonresident people and entities who purchased these model year vehicles with the Gen-3 Buckles and who resided in Ohio when they made such purchase regardless of whether they may have already paid to replace the Gen-3 Buckles. Unlike other seat belts, the release button on the Gen-3 Buckle sticks up above the cover and does not have to be pressed below the cover to release. When the latch plate is engaged into the Gen-3 Buckle, the release button sticks up a little higher. Plaintiff alleges that the Gen-3 Buckle is susceptible to accidental release although the Owner's Manual and advertising and promotional materials represent that the vehicles have properly operating seat belt systems. The seat belts allegedly fail the "ball test," the automobile industry standardized test to determine whether a seat belt buckle is prone to accidental release. Other crash tests conducted by the defendant as well as the U.S. Highway Safety Administration and by the Canadian government have allegedly confirmed the ball test results. Defendant has received complaints about accidental release of the Gen-3 Buckles and there has been at least one civil action in a Texas court wherein a jury determined that the Gen-3 Buckle is defective.
The complaint contains claims for common law fraud and negligent misrepresentation. Plaintiff states that neither she nor any member of the class seeks damages in excess of $74,500.00 including punitive damages. The defendant's removal of the action to this Court was based on diversity of citizenship, 28 U.S.C. § 1332 and federal question jurisdiction, 28 U.S.C. § 1331. This matter is before the Court upon the plaintiff's motion to remand and for costs and attorney fees. (ECF 11). The Court has also reviewed the defendant's opposition to plaintiff's motion to remand and for costs and attorney fees (ECF 25) and plaintiff's reply memorandum in support of her motion. (ECF 28). For the reasons that follow, plaintiff's motion to remand will be granted and her motion for costs and attorney fees will be denied.
28 U.S.C. § 1332(a) grants federal courts jurisdiction over cases where citizenship is diverse and the amount in controversy exceeds $75,000.00 exclusive of interest and costs. A defendant who removes a case to federal court has the burden of establishing the court's jurisdiction. Coyne v. American Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999). Removal should be precluded "where a defendant seeks to remove a case where the plaintiff has specifically claimed less than the federal amount-in-controversy requirement." Gafford v. General Electric Co., 997 F.2d 150, 157 (6th Cir. 1993); Farkas v. Bridgestone/Firestone, Inc., 113 F. Supp.2d 1107, 1112 (W.D. Ky. 2000). The defendant who removes the case must prove by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional amount. Removal may still be appropriate if the defendant can demonstrate that there is a substantial likelihood or reasonable probability that the amount in controversy will actually exceed the required amount. Gafford, 997 F.2d at 157-58.
Generally, in a diversity class action, the claim of each member of the class must exceed the $75,000.00 jurisdictional requirement where the class members claims are separate and distinct. Zahn v. International Paper Co., 414 U.S. 291, 294 (1973). Multiple plaintiffs may not aggregate their claims in order to meet the money requirement. Id., 414 U.S. at 295; Durant v. Servicemaster Co., 147 F. Supp.2d 744, 748 (E.D. Mich. 2001). Any class member whose claim does not meet the required amount in controversy must be dismissed from the case. Zahn, 414 U.S. at 295; Bowers v. Jefferson Pilot Financial Insurance Co., 2001 WL 1104592 (E.D. Mich. Aug. 9, 2001)
An exception to the general rule occurs when two or more plaintiffs combine to enforce a single title or right in which they have a common and undivided interest. In re Cardizem CD Antitrust Litigation, 90 F. Supp.2d 819, 824 (E.D. Mich. 1999) citing Sellers v. O'Connell, 701 F.2d 575, 579 (6th Cir. 1983) "A characteristic of a common and undivided interest is that if one plaintiff cannot or does not collect his share, the shares of the remaining plaintiffs are increased." Id.; Sellers, 701 F.2d at 579.
Aggregation is appropriate where the results obtained by co-plaintiffs would affect an individual's share. Sellers, 701 F.2d at 579. The controlling factor is the nature of the right asserted, not whether vindication of that right would lead to a single pool of money that would be allocated among the plaintiffs. Gilman v. BHC Securities, Inc., 104 F.3d 1418, 1427 (2d Cir. 1997); Krieger v. Gast, 197 F.R.D. 310, 317 (W.D. Mich. 2000); Durant v. Servicemaster Co, 147 F. Supp.2d at 749. An interest is common and undivided where only the class as a whole is entitled to the requested relief. Garbie v. Chrysler Corp., 8 F. Supp.2d 814, 819 (N.D. Ill. 1998). A class member's rights are separate when they are trying to obtain relief anyone one of them is entitled to. Id., citing Hasek v. Chrysler Corp., 1996 WL 48602 at *2 (N.D. Ill. Feb. 5, 1996). In Garbie v. Chrysler Corp., claims could not be aggregated because each member of the class had a separate claim for paint damage to his or her vehicle that could be pursued in a separate lawsuit. The amount of any plaintiff's recovery of compensatory damages was not effected by the number of plaintiffs. Therefore, each plaintiff had to satisfy the jurisdictional amount.
Defendant argues that the plaintiff's demand for punitive damages is collective and should be aggregated. Most circuits that have ruled on this issue have determined that punitive damages cannot be aggregated. See Martin v. Franklin Capital Corp., 251 F.3d 1284, 1292-93 (10th Cir. 2001); H D Tire and Auto-Hardware, Inc. v. Pitney Bowes, Inc., 250 F.3d 302, 304-05 (5th Cir. 2001), cert. denied, 122 S.Ct. 214 (2001); Morrison v. Allstate Indem. Co., 228 F.3d 1255, 1264-65 (11th Cir. 2000); Gilman v. BHC Securities, Inc., 104 F.3d at 1430; See Bowers v. Jefferson Pilot Financial Insurance Co., 2001 WL 1104592 at *4
The courts in Martin and Bowers stated:
[T]he "Paradigm cases" allowing aggregation of claims "are those which involve a single indivisible res, such as real estate, a piece of property (the classic example), or an insurance policy. These are matters that cannot be adjudicated without implicating the rights of everyone involved with the res." The court pointed out that even though a claim for punitive damages may create a single pool of recovery, "a common interest in a pool of funds is not the type of interest that permits aggregation of claims under the common fund' doctrine." Each class member could sue separately for punitive damages and have his right to recovery determined without implicating the rights of every other person claiming such damages. Because a class member's right to punitive damages 15 separate, distinct, and independent from those of other class members, the class claim for such damages does not seek to enforce a single right in which the class has a common and undivided interest. Punitive damages therefore may not be aggregated in a class action and attributed in total to each member of the class.
Martin, 251 F.3d at 1292-93; Bowers, 2001 WL 1104592 at *4, quoting Gilman v. BHC Securities, Inc., 104 F.3d at 1430-31.
Defendant relies on Knauer v. Ohio State Life Ins. Co., 102 F. Supp.2d 443 (N.D. Ohio 2000), wherein the court found that punitive damages could be aggregated where the claim was collective not individual in nature. Knauer relied on Allen v. R H Oil Gas Co., 63 F.3d 1326 (5th Cir. 1995) and Tapscott v. MS Dealer Service Corp., 77 F.3d 1353 (11th Cir. 1996). Allen has been rejected by the Fifth Circuit in H D Tire and Auto-Hardware, Inc., 250 F.3d at 304-05 and Tapscott was abrogated by the Eleventh Circuit. Cohen v. Office Depot, Inc., 204 F.3d 1069, 1076 (11th Cir. 2000), cert. denied, 531 U.S. 957 (2000) Bowers v. Jefferson Pilot Financial Insurance Co., 2001 WL 1104592 at *5. Knauer, which involved fraudulently charged insurance premiums, a common and undivided interest, held that the court must look to the complaint to see if the punitive damages claimed are collective or individual in nature. In the present case, the Court concludes that punitive damages cannot be aggregated for purposes of subject matter jurisdiction based on diversity when each class member's right to punitive damages is separate and distinct.
Defendant argues that the amount-in-controversy would be satisfied by each putative class member because any award of punitive damages to the class will more than likely result in individual awards exceeding $75,000.00. This argument is without merit. First, anyone who has suffered damages in excess of $75,000.00 is not included in the class. Those whose claims would exceed $74,500.00, even using a progressive punitive damages award formula, are not included. Plaintiff is seeking the cost of replacement seat belts. The cost is likely low but could not be more than the cost of a new car. Plaintiff pointed out that using the unlikely award of the cost of a new car to a class of about one million people, an award of punitive damages would have to be in the billions. It is highly unlikely that however punitive damages might be apportioned, any class member would then meet the minimum required for jurisdiction.
Also, attorney fees cannot be aggregated to determine the amount-in-controversy without the plaintiffs having a common undivided interest in relief. Farkas v. Bridgestone/Firestone, 113 F. Supp.2d at 1114; Nelson v. Associates Financial Services Co. of Indiana, Inc., 79 F. Supp.2d 813, 821 (W.D. Mich. 2000) Crosby v. America Online, Inc., 967 F. Supp. 257, 262 (N.D. Ohio 1997).
Since the Court has concluded that diversity jurisdiction does not exist, defendant must show that the case involves a federal question. 28 U.S.C. § 1331. Defendant argues that plaintiff's claims are based on a notion that she was entitled to have a seat belt buckle installed in her vehicle designed to prevent accidental release. The accidental release design specification to which plaintiff refers, according to defendant, derives from Federal Motor Vehicle Safety Standard 209 which provides:
Release. A Type 1 or Type 2 seat belt assembly shall be provided with a buckle or buckles readily accessible to the occupant to permit his easy and rapid removal from the assembly. Buckle release mechanism shall be designed to minimize the possibility of accidental release. A buckle with release mechanism in the latched position shall have only one opening in which the tongue can be inserted on the end of the buckle designed to receive and latch the tongue.49 C.F.R. § 571.209 S4.1(e). The complaint contains references in which plaintiff avers she is entitled to a design specification preventing accidental release. Defendant contends that plaintiff's claims are based on alleged violations of, and/or are an attempt to enforce a federal statute.
28 U.S.C. § 1331 provides that "the district court shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." In determining whether federal jurisdiction is present, the court uses the "well-pleaded complaint" rule, which requires that a federal question appear on the face of the complaint. See Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). An action is properly removed if it "appears that some substantial, disputed question of federal law is a necessary element of one of the well-pleaded state claims, or that one or the other claim is really one of federal law." Franchise Tax Bd. of State of Cal. v. Construction Laborers Vacation Trust for Southern California, 463 U.S. 1, 13 (1983). Where the basis for federal jurisdiction appears doubtful, any doubt should be resolved in favor of remand. Long v. Bando Mfg. of America, Inc., 201 F.3d 754, 757 (6th Cir. 2000),
The Plaintiff relies on Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804 (1986). In Merrell Dow the plaintiff sued a drug manufacturer in state court alleging that the use of a certain drug during pregnancy caused birth defects in plaintiffs' children. Plaintiffs alleged that the drug was misbranded in violation of the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 301 et seq. and such violation proximately caused the injuries suffered by the children. The United States Supreme Court held that when Congress has determined that there is no federal private cause of action for violation of a statute, a complaint alleging its violation as an element of a state cause of action does not state a claim arising under federal law. Id., 478 U.S. at 817; Citicasters Co. v. Stop 26-Riverbend, Inc., 107 F. Supp.2d 871, 974-75 (N.D. Ohio 2000). The court in Citicasters followed Merrell Dow in holding that a mere claim of violation of a federal statute which does not expressly provide a private right of action is insufficient to confer federal question jurisdiction. Id.; See Cabana v. Forcier, 148 F. Supp.2d 110, 113-14 (D. Mass. 2001) (after Merrell Dow, no federal statute lacking an express or implied private cause of action can form the basis for federal question jurisdiction); Brock v. Provident America Ins. Co., 144 F. Supp.2d 652, 657 (N.D. Tex. 2001). The Federal Motor Vehicle Safety Standard does not provide a private cause of action. In the present case, based on the above courts' interpretation of Merrell Dow, plaintiff's complaint does not involve a substantial question of federal law.
Although courts have interpreted Merrell Dow in this manner, the Sixth Circuit seems to have interpreted it differently. In Long v. Bando Mfg. of America, Inc., 201 F.3d at 759, the court stated:
Although the scope of the Court's holding in Merrell Dow is somewhat unclear, it clearly left open the possibility of federal jurisdiction even in the absence of an express or implied federal cause of action, if a substantial federal question of great federal interest is raised by a complaint framed in terms of state law, and if resolution of that federal question is necessary to resolution of the state-law claim.
The Sixth Circuit discussed Merrell Dow in Milan Express
Co, Inc. v. Western Surety Co., 886 F.2d 783, (6th Cir. 1989).
Merrell Dow can be distinguished from the present case on several grounds. First, this court declined to find federal jurisdiction in Merrell Dow because plaintiffs failed to prove that their relief depended necessarily on a substantial question of federal law. Thus, the jury could have easily fund the defendant negligent, but not in violation of the FDCA. . . . Second, the Merrell Dow plaintiffs did "not allege that federal law create[d] any of the causes of action that they . . . asserted." . . . Third, in Merrell Dow, no specific and compelling federal interest was demonstrated. (citations omitted)
Id., 886 F.2d at 788-89.
The plaintiff has made only one reference to federal safety regulations in the complaint. No specific federal regulations were mentioned. Plaintiff asserts that a jury could find that Chrysler made representations regarding safety of the Gen-3 Buckles without finding a violation of the Federal Motor Vehicle Safety Standard. The jury could find misrepresentations based on violation of the industries' own internal safety standards or that the seat belts were unsafe in a common sense without finding a violation of any federal safety regulations. Violation of federal safety regulations is one type of evidence in support of plaintiff's claims that defendant made representations regarding safety of the seat belts. The Merrell Dow plaintiffs merely alleged that violations of the FDCA constituted proof of negligence but it was not required for a finding of negligence. Milan Express Co. 886 F.2d at 789. Plaintiff's claims do not require a finding of a violation of the Federal Motor Vehicle Safety Standards. Since the Federal Motor Vehicle Safety Standard is not essential to plaintiff's claims, there is no substantial federal issue to invoke federal question jurisdiction.
28 U.S.C. § 1447(c) allows a court to "require payment of just costs and any actual expenses, including attorney fees, incurred as a result of removal." Whether or not to award attorney's fees is discretionary with the court. Morris v. Bridgestone/Firestone, Inc., 985 F.2d 238, 239 (6th Cir. 1993); Litchfield v. United Parcel Service, Inc., 2001 WL 345454 at *1 (S.D. Ohio March 30, 2001). An award of attorney's fees is justified when removal is not fairly supported by applicable law. Ahearn v. Charter Township of Bloomfield, 1998 WL 384558 at *2 (6th Cir. June 18, 1998); Strategic Assets, Inc. v. Federal Express Corp., 190 F. Supp.2d 1065, 1071 (M.D. Tenn. 2001). The court must consider the reasonableness of the defendant's removal of the action from state to federal court. Daleske v. Fairfield Communities, Inc., 17 F.3d 321, 324 (10th Cir. 1994), cert. denied, 511 U.S. 1082 (1994); Kendrick v. CNA Ins. Co., 2000 WL 1457002 at *1 (S.D. Ohio Sept. 25, 2000)
Although it appears that several cases involving Chrysler as a defendant were remanded for lack of diversity jurisdiction, defendant also claimed that the Court had federal question jurisdiction. There would have been no doubt that if the Court was obligated to use exclusively the reasoning of Merrell Dow, the case would have to be remanded. Using the Sixth Circuit law set forth in Long v. Bando Mfg. of America, Inc. required a closer look. Any doubt of the propriety of removal caused the decision to remand the action to state court. Since a federal regulation regulating seat belts exists, it was not unreasonable for the defendant to cause the case to be removed to federal court.
Gibson v. Chrysler Corp., 1999 U.S. Dist. Lexis 22305 (N.D. Cal. May 28, 1999); Garbie v. Chrysler Corp., 8 F. Supp.2d 814 (N.D. Ill. 1998); Fein v. Chrysler Corp., 1998 U.S. Dist. Lexis 15644 (E.D.N.Y. Sept 28 1998); Villarreal v. Chrysler Corp., 1996 U.S. Dist. Lexis 3159 (N.D. Cal. Mar. 11, 1996); Hasek v. Chrysler Corp., 1996 U.S. Dist. Lexis 1200 (N.D. Ill. Jan. 30, 1996).
Accordingly, for the foregoing reasons, plaintiff's motion to remand is granted. The motion for costs and attorney's fees is denied. This action is remanded to the Court of Common Pleas of Cuyahoga County, Ohio.
IT IS SO ORDERED.