Wednesday, August 01, 2007

M.D. Alabama Holds Defendant Failed to Establish Diversity Based on Lack of Evidence in Removal Petition

Per Ellis Motor Cars, Inc. v. Westport Ins. Corp., Slip Copy, 2007 WL 1991573 (M.D.Ala. Jul 05, 2007) (NO. 2:07-CV-20-WKW):

The defendants have the burden of establishing diversity jurisdiction. FN1 "Where, as here, the plaintiff has not pled a specific amount of damages, the removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional requirement." Williams v. Best Buy Co., 269 F.3d 1316, 1319 (11th Cir.2001). "When the complaint does not claim a specific amount of damages, removal from state court is proper if it is facially apparent from the complaint that the amount in controversy exceeds the jurisdictional requirement." Id. The district court must determine the propriety of removal on the basis of the "limited universe of evidence available when the motion to remand is filed" in accordance with the scheme set forth in 28 U.S.C. § 1446(b) and § 1447(c). Lowery v. Alabama Power Co., 483 F.3d 1184, 1213-14 (11th Cir.2007) FN2. "If the jurisdictional amount is either stated clearly on the face of the documents before the court, or readily deducible from them, then the court has jurisdiction. If not, the court must remand. Under this approach, jurisdiction is either evident from the removing documents or remand is appropriate." Id. at 1211.

FN1. Because amount in controversy does not exceed $75,000, the court pretermits discussion of whether defendant Dickert has been fraudulently joined as a resident defendant.

FN2. Although Lowery was decided in a Class Action Fairness Act case, its holdings are not limited to that context. See Constant v. Int'l House of Pancakes, --- F.Supp.2d ----, No. 07-AR-0072-S, 2007 WL 1346604 (N.D.Ala. Apr. 30, 2007) (Acker, J.).

Gates and Claims Management claim the jurisdictional amount is supplied by Ellis's allegation that the defendants "inspected some of the damaged automobiles and paid the approximate sum of $154,000.00 to Plaintiff for damage to said automobiles." (Compl.¶ 6.) The defendants therefore conclude that "[t]he complaint on its face demonstrates that the amount in controversy exceeds the sum of $75,000, exclusive of interest and cost." (Gates' Br. n. 1.) However, the plaintiff prays not for the $154,000 paid by the defendants for a portion of the damage to the automobiles, but for " full compensation for the damages to [the] automobiles...." (Compl. ¶ 10 (emphasis added)). The amount of full compensation that the plaintiff seeks is nowhere stated on the face of the removal documents nor is there a hint as to the value of the claim. The court cannot summarily conclude that the amount in controversy exceeds $75,000 without evidence appearing in the removal documents that would suggest that such is the case. To do so would reduce the defendants' burden of establishing the amount in controversy by a preponderance of the evidence to an ambiguous suggestion of the jurisdictional amount. Under Lowery, district courts are no longer able to "speculate in an attempt to make up for the notice's failings." Lowery, 483 F.3d at 1215. Defendants therefore have failed to establish diversity jurisdiction.


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