Shaw v. Dow Brands, Inc.

• Decision Date: 13 July 1993
• Docket Number: No. 92-2323,92-2323
• Citation: 994 F.2d 364
• Parties: , Prod.Liab.Rep. (CCH) P 13,486 Billy Joe SHAW, Plaintiff-Appellant, v. DOW BRANDS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 364

994 F.2d 364

61 USLW 2727, Prod.Liab.Rep. (CCH) P 13,486

Billy Joe SHAW, Plaintiff-Appellant, v. DOW BRANDS, INC., Defendant-Appellee.

No. 92-2323.

United States Court of Appeals,

Seventh Circuit.

Argued Jan. 20, 1993.

Decided May 18, 1993.

Rehearing and Suggestion for Rehearing En Banc Denied July 13, 1993.

Paul F. Henry (argued), Richard K. Kruger, Mary Susan Henry, Kruger & Henry, Metropolis, IL, for plaintiff-appellant.

Thomas F. Crosby, Winters, Brewster, Murphy, Crosby & Patchett, Marion, IL (argued), for defendant-appellee.

Before CUMMINGS and ROVNER, Circuit Judges, and SHADUR, Senior District Judge. ^*

CUMMINGS, Circuit Judge.

Billy Joe Shaw claims his lungs were permanently damaged when, on August 12, 1990, he tried to clean his bathroom. Shaw mixed something called "X-14 Instant Mildew Stain Remover" with Dow Bathroom Cleaner, a product manufactured by defendant. Though he opened the windows, set the ceiling fan swirling and let the air conditioner blow, Shaw was twice overcome by the fumes. When an hour later he found it hard to breathe, Shaw went to a doctor and eventually was put in the hospital to treat a lung condition known as Bronchiolitis Obliterans, allegedly caused by exposure to toxic fumes.

Shaw sued a series of companies including Dow Brands, Inc. ("Dow Brands"), its parent and 100 percent owner, Dow Chemical Co. ("Dow Chemical"), along with the manufacturer of the X-14 mildew stain remover, Block Household Products Co. (which had dissolved and was not in existence when the complaint was filed), Block Drug Co. Inc. ("Block"), and the store that sold the stain remover, Wal-Mart. Shaw filed his suit in Massac County, Illinois; Dow Brands had it removed to federal court in the Southern District of Illinois. The district judge decided that Shaw's state law strict liability and negligence claims for failure to warn were pre-empted by the Federal Insecticide, Fungicide and Rodenticide Act, more commonly and easily referred to as FIFRA, 7 U.S.C. § 136 et seq. Based on a recent Supreme Court decision, we affirm the district court's pre-emption finding. We also hold that Shaw is properly in federal court despite two vexing jurisdictional issues that, inexplicably, did not come up until we raised the matter with the parties just before oral argument.

Plaintiff's first jurisdictional claim (when prodded by our order of December 29, 1992) is that the $50,000 jurisdictional minimum in a diversity case has not been met. 28 U.S.C. § 1332(b). ¹ Any defect in the removal procedure, or the lack of subject matter jurisdiction, requires a remand. In re Amoco Petroleum Additives Co., 964 F.2d 706, 708 (7th Cir.1992). Jurisdiction exists in a removal action if the case might have been brought in federal court to begin with. Grubbs v. General Elec. Credit Corp., 405 U.S. 699, 702, 92 S.Ct. 1344, 1347, 31 L.Ed.2d 612 (1972). Normally, the federal court in a removal action determines the amount in controversy by merely looking at plaintiff's state court complaint, Davenport v. Proctor & Gamble Mfg. Co., 241 F.2d 511, 513 (2d Cir.1957), along with the record as a whole. See Oglesby v. RCA Corp., 752 F.2d 272, 275, 278 (7th Cir.1985). In Illinois, however, tort claimants may not specify exact damages in their complaint beyond a limit set by the local circuit court rule. ILL.REV.STAT. 735 ILCS 5/2-604. Thus Shaw's complaint, which in accordance with Illinois law and the local rule asked only for damages "in excess of $15,000" (R. 2 at 18), gives no hint whether the real amount in controversy is greater than $50,000, in which case we have subject matter jurisdiction, or between $15,000 and $50,000, in which case we don't.

Dow's petition for removal stated a good faith belief that the amount in controversy was greater than $50,000 (R. 1 at 2). Shaw not only didn't take issue with this claim but stated blithely in the jurisdictional statement of his opening brief to this Court, "This action is between citizens of different states and the amount in controversy exceeds Fifty Thousand Dollars ($50,000)" (plaintiff's brief at 1). But after we questioned the parties about this and other discrepancies between the state court complaint and the removed action, Shaw took up the jurisdictional issue with a vengeance; he now steadfastly maintains that his complaint is worth less than the $50,000 threshold. Thus at oral argument we had the privilege of witnessing a comic scene: plaintiff's personal injury lawyer protests up and down that his client's injuries are as minor and insignificant as can be, while attorneys for the manufacturer paint a sob story about how plaintiff's life has been wrecked.

As the dissent explains, a plaintiff is in the best position to know how much his claim is worth, and we deem a plaintiff's request for damages to have been made in good faith. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct. 586, 590, 82 L.Ed. 845 (1938). Even this understates the law because, as Justice Holmes said, "the party who brings a suit is master to decide what law he will rely upon." Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25, 33 S.Ct. 410, 411, 57 L.Ed. 716 (1913). It follows that a plaintiff may evade federal court by simply asking for less than the jurisdictional amount, St. Paul, 303 U.S. at 294, 58 S.Ct. at 592, so long as the plaintiff, should she prevail, isn't legally certain to recover more. In re Shell Oil, 966 F.2d 1130, 1131 (7th Cir.1992). Indeed, the burden rests on the defendant in a removal action to prove that the amount in controversy is sufficient. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 37, 66 L.Ed. 144 (1921). Defendants seeking removal may meet that burden by a preponderance of the evidence, McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936), which we take to mean proof to a reasonable probability that jurisdiction exists. ² Permitting a plaintiff to dictate the forum is more difficult, however, when the plaintiff's complaint is necessarily ambiguous because of state law. A most absurd (and unsatisfactory) result would be to deny jurisdiction in each tort case from Illinois because the complaint filed in state court is unclear about the amount in controversy. Judge Shadur's answer is that, before the defendant seeks to remove a case, she should request the specific amount in controversy from the plaintiff by interrogatory. Illinois allows such interrogatories despite the generalized cap on damages claims in complaints. Thus before a case is ever removed it will be clear how much the plaintiff is requesting and the defendant may proceed accordingly. Judge Shadur's suggestion is eminently sensible and we recommend it to removal-minded defendants in Illinois. We stop short, however, of declaring that this is the only means by which a defendant can establish to a reasonable probability that jurisdiction exists.

Judge Shadur's solution also doesn't tell a federal court how to deal with cases that have already been removed, such as this one. We could punish Dow Brands for not figuring out that it should have fired off an interrogatory to Shaw before seeking removal, and remand the case to state court. But the interrogatory procedure in Illinois is optional, and if appellate judges are not mind readers, Amoco Petroleum Additives, 964 F.2d at 708-709, neither are litigants. See A.O. Smith Corp. v. Lewis, Overbeck & Furman, 979 F.2d 546, 549 (7th Cir.1992). We cannot expect Dow in this case to have divined from reading tea leaves that before seeking removal it had to pry a firm number out of Shaw by interrogatory. We recently discussed another alternative to simple remand: a stipulation by plaintiff after removal that if the case is remanded, he will not seek more than $50,000 in damages. Shell Oil, 966 F.2d at 1131-1132. We ultimately rejected the stipulation procedure in Shell Oil by writ of mandamus. 970 F.2d 355, 356 (7th Cir.1992) (per curiam). Stipulation is problematic because it conflicts with a legal maxim that jurisdiction depends on the situation at the time of removal, St. Paul, 303 U.S. at 293, 58 S.Ct. at 592; In re Carter, 618 F.2d 1093, 1101 (5th Cir.1980), certiorari denied, 450 U.S. 949, 101 S.Ct. 1410, 67 L.Ed.2d 378 (1981), and that once a case is successfully removed a plaintiff cannot do anything to defeat federal jurisdiction and force a remand. St. Paul, 303 U.S. at 294, 58 S.Ct. at 592; see Kellam v. Keith, 144 U.S. 568, 12 S.Ct. 922, 36 L.Ed. 544 (1892) (suggesting that basis for removal must exist both at time complaint is filed and at time of removal). It seems unfair to defendants if a plaintiff can simply wait to see if her case is removed and then, once it is, have it sent back to state court by agreeing to a stipulation that the amount in controversy will not surpass $49,999.

We need not decide whether such cases as a general matter should be remanded for more factfinding (to state or federal district court) because in this instance Shaw has already conceded that his claim is worth more than $50,000: by not contesting removal when the motion was originally made, and by jurisdictional statements to this Court in his first brief. As noted, jurisdiction must exist at the time of removal, St. Paul, 303 U.S. at 293, 58 S.Ct. at 592, and once removal has been perfected plaintiffs may not manipulate the process to void the removal. As the Supreme Court has emphasized:

If the plaintiff could, no matter how bona fide his original claim in the state court, reduce the amount of his demand to defeat federal jurisdiction the defendant's supposed statutory right of removal would be subject to the plaintiff's caprice. The claim, whether well or ill founded in fact, fixes the right of the defendant to remove, and the plaintiff ought not to be able to defeat that right and bring the cause back to the state court at his election.

St. Paul, 303 U.S. at 294, 58...