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This is a portion of the successful reply brief I wrote in ANPAC v. Dow, 988 F.2d 559 (5th Cir. 1992). I think it's a good example of my skills in research, writing (and, for that matter, HTML coding).
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Pages 6-10 of defendants' brief are devoted to various arguments for the proposition that each individual fisherman's "amount in controversy" was more than fifty thousand dollars, in other words, that the total "amount in controversy" exceeds thirty five million dollars.
It should first be noted that defendants did not raise this argument below. It was first raised in defendants' reply brief in support of their motion for sanctions. Defendants' Reply Memorandum of July 18 at page 4. Prior to the sanctions motion, defendants argued only that the individual claims should be aggregated. (R. 68-73). Defendants never asserted while the motion to remand was pending that each individual plaintiffs' claim was actually for more than fifty thousand dollars.
Even though defendants did not properly raise this argument in the District Court, plaintiffs are eager to address it on the merits. For it is clear that no individual fisherman has a claim in excess of fifty thousand dollars.
Defendants rely upon St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283 (1938). However, defendants ignore two controlling Fifth Circuit cases, each of which cites St.Paul Mercury, directly contrary to defendants' position.
The first controlling precedent ignored by defendants is Gaitor v. Peninsular & Occidental Steamship Co., 287 F.2d 252 (5th Cir. 1961), which was decided when the jurisdictional limit was $10,000. The plaintiffs commenced an action in Florida state court which demanded damages "in language no more specific than 'in excess of $5,000.00.'" Id. at 253.
In Gaitor, this Court held that subject matter jurisdiction was lacking due to lack of amount in controversy. In other words, it refused to double the number specified in the state-court pleading. In the instant case, the only allegation of the pleading is that total damages exceed $500.00, or that each individual plaintiff's claim exceeded the approximate sum of seventy one cents. (See supra, page 2). In Gaitor, this Court refused to double the amount in controversy from five thousand to ten thousand. In the instant case, plaintiffs respectfully submit that the Court should not increase it by a factor of over seventy thousand from seventy one cents to fifty thousand dollars.
Gaitor is still the law in this Circuit. It was cited with approval most recently in October, 1990, in Kliebert v. Upjohn Co., 915 F.2d 142, 146 (1990), rehearing en banc granted, 923 F.2d 47 (1991), appeal dismissed per stipulation of settlement (5th Cir. June 3, 1991). [Footnote 1]
Footnote 1: Kliebert is not itself exactly on point, because the plaintiff sought a sum certain in his Louisiana State court pleading. The plaintiff claimed exactly $10,000.00, at a time when the federal jurisdictional limit was also $10,000.00. However, under Louisiana law, a plaintiff was able to recover a sum larger than demanded. Id. at 147. This Court held that in order to remove, "the trial court must be able to conclude from the pleadings or, at the most, summary judgment-type evidence, that if a jury awarded less than $10,000.00, the court would be required to grant a new trial. Id. at 146, emphasis added. While this exact standard might not be applicable to the instant case, it is instructive to note that defendants are not even in the same ballpark. It would be absurd to argue in the instant case that if a jury awarded less than thirty five million dollars, the court would be required to grant a new trial.
The other controlling precedent ignored by defendants is Lindsey v. Alabama Telephone Co., 576 F.2d 593 (5th Cir. 1978). If Gaitor was on all fours, then Lindsey is on all fives with the instant case. Lindsey, a class action, also involved the issue of aggregation of claims. The state-court pleading asked for $1,002,000.00. Id. at 595. However, the petition nowhere alleged the number of persons in the class. Id. at 595. This Court, citing St. Paul Mercury, held that the $10,000.00 amount in controversy was not met:
Significantly, the complaint nowhere alleges the number of persons in the class, an allegation that would have permitted the court to ascertain what dollar amount represents the "amount in controversy" for each member of the class. . . [I]t was not open for defendants to attempt to show that the class was small enough that the claims on its behalf exceeded the sum of $10,000.00 per capita. Nor was it open to the district court to speculate that such was in fact the case.
Id. at 595.
In the instant case, the size of the class is known to be approximately seven hundred. Arguably, the dollar amount for each plaintiff is not stated (except for the state jurisdictional allegation, which amounts to a claim of seventy one cents per plaintiff). As the Court in Lindsey was not allowed to speculate as to the size of the class, defendants in the instant case are not at liberty to speculate as to the dollar amount per plaintiff.
Defendants claim in their brief that "[i]f, at the time of removal, it does not appear to a legal certainty that the claim is actually for less than the jurisdictional amount, jurisdiction attaches immediately." Brief at 7. In support of this dubious proposition, defendants cite three lower court decisions, two from outside the Circuit: Hale v. Billups of Gonzales, Inc., 610 F. Supp. 162 (M.D. La. 1985); Corwin Jeep Sales v. American Motors Sales, 670 F. Supp. 591 (M.D. Pa. 1986); and Cunningham v. Ford Motor Co., 413 F. Supp. 1101 (D.S.C. 1976). Unfortunately for defendants, this Court in Kliebert specifically rejected this argument, and specifically rejected these three cases! Stated the Court:
Several district courts have articulated the defendant's burden. They have held that the defendant "has a burden of proving that it does NOT appear to a legal certainty that the claim is actually for less than the requisite jurisdictional amount." [Citations, including Hale, omitted.] Courts have simplified the awkward negative phrasing of the burden by requiring that in order for the defendant "'to establish the jurisdictional amount it is sufficient that there is a probability that the value of the matter in controversy' exceeds the jurisdictional amount. [Corwin Jeep Sales, Cunningham]. We are persuaded that this burden is too light.
915 F.2d at 146, emphasis added. To put it bluntly, this Court has overruled what defendants claim to be the controlling precedents.
Defendants cite two other lower court cases for the proposition that the recitations of the notice of removal are binding for jurisdictional purposes: Smith v. Executive Fund Life Ins. Co., 651 F. Supp. 269 (M.D. La. 1986); and Estevez- Gonzalez v. Kraft, Inc., 606 F. Supp. 127 (S.D. Fla. 1985).
First of all, the continued validity of these cases is dubious in light of the Kliebert decision. But these cases do not hold, as defendants suggest, that the Court must accept without question the allegations of the notice of removal. Instead, they hold that the Court must make an "independent evaluation" of the amount in controversy when the State pleading is silent on the issue. The allegations of the notice of removal may be considered, but they are by no means binding.
For example, in Smith, the amount in controversy was readily calculable. The plaintiff sued for benefits under a disability insurance policy. The policy was to pay $540.00 per month, plus attorney fees. The Court held that as of a certain date (when the monthly payments equalled $8,700.00 plus reasonable attorney fees), the $10,000 amount in controversy was met. 651 F. Supp. at 270. The amount in controversy in Smith was readily calculable. Indeed, "the defendant even provided the court with a chart of the accrued payments and penalties." Id. at 271. The Court did not, as defendants here suggest, follow unquestioningly the allegations of the notice of removal.
Similarly, in Estevez-Gonzalez, the Court in dicta held that allegations of "permanent and serious injuries, pain, disfigurement, disability, loss of wages, loss of earning capacity, loss of capacity for the enjoyment of life and gre at expenses for future medical treatment, were sufficient to establish the jurisdictional amount." Id. at 129. In the instant case, the allegations were merely of economic losses and personal injuries, including skin rashes. (R. 178-179, RE 15, 16). In other words, the instant case is clearly distinguishable from Estevez-Gonzalez.
Also, the above-quoted language of Estevez-Gonzalez is dicta. No mention was made of this Court's Gaitor decision. The case was remanded on another ground, and apparently no appeal was ever brought to this Court. It is doubtful th at this dicta in Estevez-Gonzalez would withstand the holding in Gaitor, much less this the panel's recent holding in Kliebert.
Defendants also make the following remarkable statement at page 7 of their brief: "Plaintiffs' attempt to avoid federal jurisdiction by post-removal stipulations and affidavits is not a new strategy. For almost 140 years, the United States Supreme Court has expressly condemned such tactics when they are used to defeat a defendant's right to removal." Defendants then cite St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283 (1938), in which the Supreme Court stated:
Id. at 292-93, emphasis added.[T]hough, as here, the plaintiff after removal, by stipulation, by affidavit, or by amendment of his pleadings, reduces the claim below the requisite amount, this does not deprive the district court of jurisdiction. . . . [E]vents occurring subsequent to removal which reduce the amount recoverable, whether beyond the plaintiff's control or the result of his own volition, do not oust the district court's jurisdiction once it has attached.
It should first be noted that this Court has already considered and rejected this argument made now by defendants. In both Gaitor and Lindsey, supra, this Court applied St. Paul Mercury to facts indistinguishable from the instant case.
St. Paul Mercury is completely distinguishable from the instant case. At the time St. Paul Mercury was decided, the amount in controversy requirement was $3,000.00. Id. at 286. The state-court pleading in St. Paul Mercury demanded the sum of $4,000.00. Id. at 285. In other words, on the face of the complaint (unlike in the instant case), the amount in controversy requirement was met. After the case was removed to Federal Court, the plaintiff filed an amended complaint. The amended complaint still demanded the sum of $4,000.00, but also had attached to it an exhibit asserting that the claimed injuries totalled $1,380.89. Id. at 285. The case was dismissed on the merits, and the Court of Appeals he ld, sua sponte, that the amount in controversy requirements were not met, due to the exhibit attached to the amended complaint. Id. at 285.
The Supreme Court simply held that because $4,000.00 was claimed at the time of removal, nothing changed when the amended complaint was filed. In the passage from the opinion quoted above, it is clear that the plaintiff reduced the amount of his claim with the amended complaint. Id. at 292-93.
In the instant case, the plaintiffs never reduced the amount of their claim. As noted above, the only allegations of the state court pleadings were that each fisherman's damages exceeded the sum of seventy one cents. The motion to remand in this case and the affidavits submitted in connection therewith were simply submitted as evidence of the actual amount in controversy. The plaintiffs in this case never claimed anywhere near thirty five million dollars. The affidavits were submitted merely as evidence of that fact.
And while a plaintiff cannot reduce the size of his claim after removal, he clearly has the right to present evidence tending to show how much his claim was for. As noted above, the court should make an "independent evaluation" of the amount in controversy. The allegations of the notice of removal are not dispositive. The Court must consider evidence to make this factual determination. In the instant case, the following evidence is before the Court:
First, there is the notice of removal. It contains the conclusory allegation, in the words of the jurisdictional statute, that "the matter in controversy exceeds $50,000 exclusive of interest and costs." (R. 157, RE 22). The only factual allegation in support of this conclusion is found on the second page of the notice of removal:
On or about December 21, 1990, ANPAC, et al., as Plaintiffs, filed their Original Petition seeking to recover economic damages and damages for personal injury and property destruction occasioned as a result of an alleged escape of a pesticide from a storage facility located near Cartagena, Colombia. ANPAC, et al. claim that their damages exceed $50,000.
(R. 158, RE 23). This allegation is patently false. First of all, the Original Petition never claimed damages for "property destruction." And most importantly, the plaintiffs did not "claim that their damages exceed $50,000." On the face of it, this allegation of the notice of removal is false. And this is the only allegation supporting the conclusion that the amount in controversy exceeds $50,000.00.
So the notice of removal provides little evidence for the Court to make its "independent evaluation" of the amount in controversy. All the notice contains are a conclusion and a patently false allegation. The Court needn't accept that allegation hook, line, and sinker.
The second piece of evidence before the Court is the state court pleading. As noted above, that document alleges that the plaintiffs were small-scale fishermen. The only dollar amount claimed was that "[d]amages far exceed the minimum jurisdicti onal limits of [the State Court]." (R. 173, RE 10). The jurisdictional limits of the Texas District Court are five hundred dollars. Texas Constitution, Article 5, Section 8. And furthermore, under Texas law, it is mandatory that the individual claims be aggregated to determine the jurisdictional amount. Vernon's Texas Gov't Code, Section 24.009. So, in other words, the only allegation in the state pleading was that total damages of the approximately 700 fishermen "far exceeded" five hu ndred dollars. The original petition also contains the allegation that plaintiffs' economic losses have caused "severe hardship, poverty, hunger, and deprivation for Plaintiffs and their families." (R. 178, RE 15). This allegation is the hallmark of a poor man made poorer. "Poverty, hunger, and deprivation" usually do not result when someone with fifty thousand dollars loses it. Instead, "poverty, hunger, and deprivation" result when a poor man loses everything he has. In other words, the state cour t pleading does not present evidence for the Court to make an "independent determination" that the amount in controversy exceeds fifty thousand dollars.
Defendants presented no evidence as to the amount in controversy. They rested on the allegations of their notice of removal. Plaintiffs, however, submitted affidavits tending to show that the amount in controversy for each individual fisherman w as for less than fifty thousand dollars. These affidavits were not submitted to, nor do they purport to, reduce the claim. Their purpose was to elucidate how much the claim was for at the time of removal.
The main evidence on this point was an affidavit by Dr. German Sarmiento Palacio, plaintiffs' Colombian attorney. Dr. Sarmiento testified:
Each of the individual plaintiffs in this action is a small-scale commercial fisherman who derives a living from the waters of the Bay of Cartagena, Colombia.
As a result of the June 19, 1989, chemical spill which is the subject of this lawsuit, each individual plaintiff suffered personal injuries, property damage, and /or loss of income.
While each individual fisherman suffered a loss of livelihood, annual wages in Colombia are lower than in the United States.
No individual fisherman suffered a loss greater than fifty thousand U.S. dollars ($50,000.00).
(R. 90, RE 33).
Attorney Clem made a similar affidavit. (R. 84, RE 27). These affidavits were not intended to reduce the plaintiffs' claim. Instead, they were offered as evidence of the original claim. The Court can also take judicial notice of the fact that Colombia is, by North American standards, a relatively poor country. See Sonya C. v. A.S.D.B., 743 F. Supp. 700, 710 (D. Ariz. 1990). Fifty thousand dollars to a "small scale" fisherman in such a country would be a princely sum. The power of attorney on page 93 of the record (RE 36) is, like many of the others, signed with a fingerprint. Most of the plaintiffs in this case are illiterate. They never lost fifty thousand dollars each because they never had fifty thousand dollars.
Affidavits such as these can be considered as evidence of what the plaintiffs' claim was at the time of remand. As noted above, the Court must make an "independent evaluation." As one court has stated:
An illustration of the principles which guide this Court is provided by Wright v. Continental Cas. Co., 456 F. Supp. 1075 (M.D. Fla. 1978). In that case the complaint did not disclose whether the requisite amount was in controversy. The defend ant removed, however, and alleged that more than $10,000 was at issue. . . . The court [stated] that had the plaintiff denied the allegations of the petition by a motion to remand, a factual determination would be necessary. Id. The court's appr oach was dictated by the Supreme Court's opinion in McNutt v. General Motors Acceptance Corp., 298 U.S. 178 (1936). In that case the parties contested whether the requisite amount was in controversy. The Court held that the burden of proof lay on the party seeking to invoke the court's jurisdiction. Id. at 189. Its analysis is instructive:
* * *
If [the removing party's] allegations of jurisdictional facts are challenged by his adversary in any appropriate manner, he must support them by competent proof.
* * *
There is an additional reason for our conclusion in this case. Plaintiffs in civil actions have the option of avoiding a federal forum. . . . [Citing St. Paul Mercury]. This right would be totally abrogated were we to allow the unsupported al legation in a petition for removal to control the issue of removal when the complaint is silent. A factual inquiry is necessary.
Rollwitz v. Burlington Northern R.R., 507 F. Supp. 582, 586-87 (D. Mont. 1981). The Supreme Court's decision in McNutt, cited in Rollwitz, makes clear that the removing party must establish the amount in controversy by "competent proof." 298 U.S. at 189. Naked allegations in the notice of removal do not suffice (especially when, as in the instant case, those allegations are false). The defendants must support their allegations by "competent proof." The only "competent proof" i n this case came from the plaintiffs. And that competent proof showed that each fisherman's claim was for less than fifty thousand dollars.
St. Paul Mercury clearly allows evidence tending to show what the original amount in controversy was, even though reductions are not permitted. The Supreme Court cited with approval two cases where it appeared at trial that the "pla intiff's injuries and losses were so slight that a verdict for more than a fraction of the jurisdictional amount could not be sustained [and] the courts remanded." 303 U.S. at 292, n. 23, citing American Stores Co. v. Gerlach, 55 F.2d 658 (3d Cir. 1932); and Turmine v. West Jersey & Seashore, 44 F.2d 614 (E.D. Pa. 1930).
Defendants' position on this issue also leads to a curious result. If defendants are correct, and the naked allegations of the notice of removal control the amount in controversy, then there is a very different result depending on whether the cas e was originally filed in federal court or filed in state court and subsequently removed. For example, one of defendants' leading cases is Albright v. R.J. Reynolds Tobacco Co., 531 F.2d 132 (3d Cir.), cert. denied, 426 U.S. 907 (1976). Plaintif fs respectfully submit that the result obtained in Albright is bizarre, and ought not be followed in this Circuit.
In Albright, the plaintiff filed a claim in Federal Court, and the district court dismissed because the court was "convinced to a legal certainty" that the claim was below the jurisdictional minimum. Id. at 134. The Third Circuit a ffirmed. Id.
Undaunted, the plaintiff rejuvenated a case pending in State court. The defendant removed. This time around, because a significantly different standard of "amount in controversy" applied, the same Judge held that the jurisdictional limit was met . Id. And the Third Circuit affirmed again. In other words, in two cases involving the same parties, the same facts, and the same Judge, in one case the jurisdictional limit is met, and in the other it is not. Plaintiffs respectfully submit tha t this is an absurd result which should not be followed in this circuit. As Judge Jolly of this Court stated in his dissent in Kliebert,
I am convinced that irrespective of which party asserts jurisdiction, plaintiff's claim should satisfy the same standard of review. . . . [J]urisdiction is jurisdiction: we either have jurisdiction over a particular claim or we do not, or so it seems to me.
Kliebert, 915 F.2d 142, 147 (Jolly, J., dissenting).
The standard proposed by defendants (blind acceptance of the notice of removal) leads to absurd results such as Albright. It should not be adopted in this Circuit.
Also, defendants' position that the notice of removal is binding renders a nullity 28 U.S.C. 1447(c), which provides:
If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.
If defendants have their way, and the allegations of the notice of removal are controlling, then no case would ever be remanded under this provision. See also Fed. R. Civ. P. 12(h)(3).
In light of the current state of the law, it is not surprising to read the holding of Denette v. Life of Indiana Insurance Co., 693 F. Supp. 959, (D. Colorado 1988), in which the complaint did not specify the amount of the claim. In that c ase, like in the instant case, in the plaintiff's motion to remand, she "affirmatively state[d] that she did not file the state court complaint seeking $10,000 or more in damages." Id. at 961. On these facts, the court held:
While the complaint is silent as to the amount in controversy, the defendant argues that "a reasonable reading of the Plaintiff's Complaint discloses the sum prayed for does in fact exceed $10,000.00" Defendant alternatively argues that its removal pe tition establishes an amount in controversy greater than $10,000. However, as quoted above, the plaintiff contends that she is not seeking damages in the amount of $10,000 or more. Thus she has waived any award of damages above that amount. Accordingly diversity jurisdiction is not present.
Id. at 961; see also Craig v. Congress Sportswear, Inc., 645 F. Supp. 162 (D. Me. 1986).
Defendant's argument on this issue (which was not raised below) ignores no less than three precedents of this Court and relies upon no less than three cases which were specifically rejected by this Court. The Court is not required to accept unque stioningly the allegations of the notice of removal (especially in this case where those allegations are false). The Court can look to the State Court pleadings, and to the affidavits and evidence introduced to controvert defendants' conclusory allegatio ns.
From the evidence, it is abundantly clear that plaintiffs are not now nor were they ever claiming anywhere near fifty thousand dollars each (over thirty-five million dollars total). Instead, the only rational conclusion, and the only conclusion f or which there is "competent proof" is that no individual fisherman claimed more than fifty thousand dollars. Accordingly, the Court lacks subject matter jurisdiction over the individual claims.
The cases cited in Defendants' brief on the issue of aggregation are clearly inapposite. As noted in Appellants' Principal Brief (page 10), Pinel v. Pinel, 240 U.S. 594 (1916), involved two persons suing together to recover undivided sh ares of a single piece of real property.
And Insurance Co. of North America v. Chinowith, 393 F.2d 916 (5th Cir.), cert. denied, 393 U.S. 990 (1968) is also clearly not on point. (The District Court held that this case was "indistinguishable" from the instant. (T. 38-39, RE 42- 43)). Chinowith simply held that the death benefit provision of the Worker's Compensation statute "confers one right of recovery and one amount to be recovered, even though that recovery must be divided according to the Texas laws of descent and d istribution. Id. at 918.
The instant case is completely distinguishable. The statute construed in Chinowith, Vernon's Revised Civil Statutes of Texas, Article 8306, section 8 (1966 Supp.), provided that in the case of death, the "legal beneficiaries" of the deceas ed shall receive sixty percent of his wages for a certain period. Section 8a of the statute provided that the recovery be distributed "according to the laws of descent and distribution of this State. . . ."
In other words, the statute construed in Chinowith mandated a certain dollar amount without regard to how many people would ultimately divide it. The deceased in Chinowith left four children, but that fact was totally irrelevant to a determination of how much the total recovery would be. Even had Mr. Chinowith left behind ten children, the total amount of the recovery would be the same. It was, in the words of the Court, "one right of recovery and one amount to be recovered."
In Chinowith, it made no difference to the total recovery whether there was one child or ten. But in the instant case, it makes all the difference in the world whether there is one fisherman or seven hundred; each Plaintiff can recover on ly his actual damages. For that reason, unlike in Chinowith, there is not "one right of recovery and one amount to be recovered."
As stated in the Principal Brief (page 10), this is not a fish wrongful death case. Defendants are simply wrong when they state on page 11 of their brief that "Plaintiffs seek damages for injuries to the aquatic environment of the Bay of Cartagen a." The plaintiffs in the instant case, like the Plaintiffs in Union Oil Co. v. Oppen, 501 F.2d 558 (9th Cir. 1974), are suing for "prospective pecuniary damage" (Id. at 563) and "commercial injury." (Id. at 570-71). As argued in the principal brief (page 10), the plaintiffs are not suing as executors of the estate of "100 sea bass." Yet defendants continue to claim that plaintiffs are suing for those "100 sea bass." Defendants' Brief at 14. Plaintiffs' claims in this case do n ot depend upon proprietary interest in particular fish. The fishermen in Union Oil didn't own the fish either; yet they were allowed recovery.
Each plaintiff in the instant case has his own right of recovery for his own personal injuries and economic losses. Plaintiffs respectfully submit that the trial court erred in aggregating their claims.
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