Opinion
No. SA-06-CV-0521-RF.
October 23, 2006
ORDER DENYING PLAINTIFF'S MOTION TO REMAND
BEFORE THE COURT is Plaintiff's Motion to Remand (Docket No. 4), filed July 13, 2006, and Defendant's Response (Docket No. 5), filed July 20, 2006. The parties appeared before the Court in a hearing on this matter on October 19, 2006. After due consideration, the Court is of the opinion the Plaintiff's Motion to Remand should be DENIED.
FACTUAL AND PROCEDURAL BACKGROUND
This case arises from a failure to pay medical expenses to which Plaintiff believes he is entitled. While at work in July of 2000, an A-frame struck Plaintiff causing injury to Plaintiff's head, back, groin, and arm. Repairing the injury required a total of five surgeries. After the Texas Workers' Compensation Commission determined that Plaintiff's back injuries were compensable injuries under the Texas Labor Code, Plaintiff complained of bowel, bladder, and erectile dysfunctions. In April of 2005, the Texas Workers' Compensation Commission extended Plaintiff's compensable injury to include Plaintiff's bowel, bladder, and erectile dysfunctions and determined that Plaintiff had not waived his right to seek compensation for these additional injuries. Defendant appealed this determination to the Texas Workers' Compensation Commission Appeals Panel, arguing that the evidence did not support the extension of the compensable injury and that the waiver determination was erroneous. The Appeals Panel, however, affirmed the Texas Workers' Compensation Commission findings.
Def.'s Notice of Removal (Docket No. 1, Ex. B to Pl.'s Original Pet., Texas Workers' Compensation Commission Decision and Order).
Id.
Id.
Id.
Id. at Ex. B, Texas Workers' Compensation Commission Appeals Panel Decision.
Id.
Having exhausted its administrative remedies, Defendant filed an original petition in state court seeking judicial review of the Appeals Panel decision. Plaintiff responded on August 15, 2005 by asserting counterclaims alleging breach of fiduciary duty, breach of contract, breach of the duty of good faith and fair dealing, and violations of the Texas Insurance Code and Texas Deceptive Trade Practices Act. Through his counterclaims, Plaintiff sought lifetime medical benefits under the Texas Workers' Compensation Division as well as compensatory damages for past and future medical expenses, past and future mental aguish damages, attorneys fees, court costs, pre- and post judgment interest, and punitive damages. Plaintiff did not, however, provide a specific dollar amount for these damages.
Def.'s Notice of Removal (Docket No. 1, Ex. B, Pl.'s Original Pet.). As a result of filing its original petition, Defendant Transcontinental Insurance was actually the plaintiff at the state court level. Accordingly, Plaintiff Williams was originally a defendant, but became a counter-plaintiff by filing his counterclaims. Upon removal, the case has been restyled, making it clear that Mr. Williams is the plaintiff and Transcontinental is the defendant. This Court utilizes these designations throughout its opinion for purposes of clarity.
Id. at Ex. C, Def.'s Original Answer and Counterclaim.
Def.'s Resp. to Pl.'s Mot. to Remand (Docket No. 5, Ex. C).
Id.
Defendant filed special exceptions in the state court requesting that Plaintiff replead stating the specific amount of damages sought. On the same day, Defendant also filed a motion to sever Plaintiff's counterclaims from Defendant's request for judicial review of the Appeals Panel Decision. The state court granted Defendant's requests on both accounts on April 21, 2006, severing the case and ordering Plaintiff to replead and state specific damages. Plaintiff then filed its First Amended Counterclaim on May 25, 2006, in which Plaintiff stated a maximum damages amount of $1,000,000. In response to the amended counterclaim, Defendant filed Notice of Removal on June 15, 2006.
Id. at Ex. F. ("Transcontinental specially excepts to . . . Michael Williams' counterclaim because he fails to specify the maximum amount of damages sought.").
Def.'s Notice of Removal (Docket No. 1, Ex. G, Def.'s Mot. to Sever).
Def.'s Resp. to Pl.'s Mot. to Remand (Docket No. 5, Ex. I).
Id. at Ex. K. (noting that the damages amount may increase per jury determinations on exemplary damages, interest, costs of court, and such other just relief).
Def.'s Notice of Removal (Docket No. 1).
Plaintiff now seeks remand, asserting that Defendant's removal was not timely. Specifically, Plaintiff contends that his original counterclaim affirmatively revealed damages in excess of the federal court jurisdictional amount. Defendant argues that removal is proper in this case because the parties are diverse and Defendant filed within the required thirty-day time period after receipt of Plaintiff's First Amended Counterclaim, which was the first clear assertion of damages sought over the minimum jurisdictional level of the federal court.
STANDARD OF REVIEW
A defendant may seek to remove any state-court action to federal court if that case could have originally been filed in federal court. Diversity jurisdiction is a proper basis for removing an action to federal court. In order for a federal court to properly have subject matter jurisdiction based on diversity, the party seeking removal must prove two elements: (1) complete diversity exists between the parties such that no plaintiff and no defendant are citizens of the same state; and (2) the amount in controversy satisfies the minimum federal jurisdictional amount of $75,000. In addition to demonstrating that a jurisdictional basis for removal exists, the moving party must also prove that the parties complied with the requirements of the removal statute. Further, courts are to construe removal statutes narrowly, with any doubts resolved against removal.
See 28 U.S.C. § 1441(a) (2002).
See 28 U.S.C. § 1332(a) (2005).
Id.; see also Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68 (1996) (explaining complete diversity); Willy v. Coastal Corp., 855 F.2d 1160, 1164 (5th Cir. 1988), aff'd 503 U.S. 131 (1972) (explaining the burden of proof for removal (citing Wilson v. Republic Iron Steel Co., 257 U.S. 92 (1921)).
Willy, 855 F.2d at 1164; 28 U.S.C. § 1446 (1996) (stating the procedures for removal).
Id.
ANALYSIS
Defendant properly removed this case to federal court because it sufficiently proved all of the required elements of removal. As stated, to effectuate removal Defendant must prove complete diversity, amount in controversy, and compliance with the procedural requirements of the removal statute. In regard to complete diversity, the Court agrees with Defendant that the parties are completely diverse. Plaintiff, an individual, is a resident and citizen of Texas. Defendant, a corporation, is both incorporated in and has its principal place of business in the State of New York. In accordance with these facts and in light of the fact that Plaintiff does not contest diversity, complete diversity exists.Defendant has also sufficiently proven the requisite amount in controversy as evidenced by Plaintiff's own pleadings. When a defendant seeks to remove a case from state court in which the state-court complaint does not allege a specific amount of damages, the defendant must prove by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional amount. If, however, the plaintiff's complaint actually claims a sum exceeding the jurisdictional amount, the defendant's burden is light because "there is a strong presumption that the plaintiff has not claimed a large amount in order to confer jurisdiction in a federal court or that the parties have colluded to that end."
St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 n. 13 (5th Cir. 1998) (citing Allen v. RH Oil Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995) ("The test is whether it is more likely than not that the amount of the claim will exceed [the jurisdictionally required amount].").
See St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 290 (1938); see also CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE PROCEDURE: JURISDICTION 3d § 3702 (1998).
In the case at bar, the Court finds that Defendant sufficiently proves amount in controversy by a preponderance of the evidence. Plaintiff's own assertion of a maximum damages amount of $1,000,000 convinces the Court that this case satisfies the amount in controversy requirement. Had Plaintiff desired to prevent removal, he could have chosen to sue for less than the jurisdictional amount. This avenue, however, was not pursued. Instead, Plaintiff wishes the Court to refuse jurisdiction where both diversity and amount in controversy exist. The Court will not comply with such a request. Accordingly, the Court finds that the amount in controversy requirement has been met.
St. Paul Mercury, 303 U.S. at 294 (providing that a plaintiff who does not "desire to try his case in federal court . . . may resort to the expedient of suing for less than the jurisdictional amount, and though he would be justly entitled to more, the defendant cannot remove").
Finally, the Court believes that Defendant has satisfied the procedural requirements for removal by filing a notice of removal within thirty days after receiving Plaintiff's amended counterclaim, which stated a clear jurisdictional amount. Under 28 U.S.C. § 1446(b), a defendant must file a notice of removal within thirty days after receipt of an initial pleading setting forth the claim for relief upon which the action is based. Section 1446(b) goes on to state:
28 U.S.C. § 1446(b) (1996).
If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable. . . .
Id. (emphasis added).
Interpreting this second paragraph of § 1446(b), the Fifth Circuit in Bosky v. Kroger Texas, LP stated that the key language is "ascertained," which means "to make certain, exact, or precise" or "to find out or learn with certainty." As such, the standard under the second paragraph of § 1446(b) requires that the information supporting removal in an amended pleading must be "unequivocally clear and certain" to start the time limit running for notice of removal. This clearer standard promotes judicial economy by reducing protective and premature removals by defendants faced with an ambiguous record. Under the Bosky standard, defendants fearing loss of their removal right due to lapse in time are no longer tempted to remove based on equivocal information.
Bosky v. Kroger Tex., LP, 288 F.3d 208, 211 (5th Cir. 2002) (citing WEBSTER'S NINTH NEW COLLEGIATE DICTIONARY 1077 (1990)) (comparing the key language in the two paragraphs of § 1446(b)).
Bosky, 288 F.3d at 211.
Id. ("In short, a bright-line rule should create a fairer environment for plaintiffs and defendants.").
Id. at 212.
In accordance with both the standard and policies enunciated in Bosky, the Court finds that Defendant timely removed following the point at which the amount in controversy was unequivocally clear and certain. While Plaintiff's original counterclaim indicates alleged damages for medical benefits, mental anguish, attorneys fees, court costs, pre- and post judgement interest, and punitive damages, nowhere in this counterclaim does Plaintiff attach a dollar amount to his allegations. When, at the direction of the state court, Plaintiff amended his counterclaim, he stated the maximum damage amount as $1,000,000. The Court believes that it was at this point, and no earlier, that the amount in controversy became certain. Consequently, Defendant had thirty days from the filing of Plaintiff's amended counterclaim in which to file the notice of removal. Because Defendant filed its notice of removal within this thirty day time period, the Court finds that the case was timely removed.
Def.'s Resp. to Pl.'s Mot. to Remand (Docket No. 5, Ex. C).
Id. at Ex. K.
CONCLUSION
Defendant has met his burden of proof regarding complete diversity, amount in controversy, and satisfaction of the procedural requirements for removal. Specifically, Plaintiffs did not contest Defendant's assertion of complete diversity. The Court finds that Defendant, in light of Plaintiff's own pleading, proved amount in controversy by a preponderance of the evidence. And, finally, Defendant timely filed its notice of removal within thirty days of ascertaining the requisite amount in controversy for federal jurisdiction. Accordingly, the Court is of the opinion that Plaintiff's Motion to Remand (Docket No. 4) should be DENIED.
It is so ORDERED.