Angus v. Shiley Inc.

• Decision Date: 03 March 1993
• Docket Number: No. 92-3480,92-3480
• Citation: 989 F.2d 142
• Parties: Prod.Liab.Rep. (CCH) P 13,453 Helen W. ANGUS, Appellant, v. SHILEY INC. . Submitted under Third Circuit Rule 12(6)
• Court: U.S. Court of Appeals — Third Circuit

Page 142

989 F.2d 142

Prod.Liab.Rep. (CCH) P 13,453

Helen W. ANGUS, Appellant, v. SHILEY INC.

No. 92-3480.

United States Court of Appeals Third Circuit.

Submitted under Third Circuit Rule 12(6) March 3, 1993.

Decided March 29, 1993.

Irving M. Portnoy, Evans, Portnoy & Quinn, Pittsburgh, PA, for appellant.

G. Daniel Carney, George P. Faines, Thorp, Reed & Armstrong, Pittsburgh, PA, David Klingsberg, Maris Veidemanis, Kaye, Scholer, Fierman, Hays & Handler, New York City, for appellee.

Before: GREENBERG and SCIRICA, Circuit Judges, and ROBINSON, District Judge. ^*

OPINION OF THE COURT

GREENBERG, Circuit Judge.

I. BACKGROUND

Helen W. Angus appeals from an order entered on July 22, 1992, which denied her motion to remand this action to the Court of Common Pleas of Allegheny County, Pennsylvania, and which converted defendant Shiley Inc.'s motion to dismiss into a motion for summary judgment which the court then granted. We will affirm. ¹

We decide this appeal on the facts as alleged in Angus's complaint in the common pleas court. Angus, a Pennsylvania citizen, charged that in 1985 Shiley, a California corporation with its principal place of business in California, was in the business of manufacturing and selling Bjork-Shiley Convexo-Concave mitral heart valves for insertion into patients' hearts. On July 29, 1985, a surgeon implanted a Shiley valve into Angus's heart. Shiley manufactured and sold the valve anticipating that it would be implanted without further inspection or testing and knowing that a valve failure was likely to lead to the recipient's death or injury.

According to the complaint, prior to July 29, 1985, Shiley knew that an increasing number of its valves had experienced "strut fracture," i.e., an "outlet strut" would fracture spontaneously and without warning and cause the recipient's death or injury. Furthermore, Shiley recognized that valve recipients who learned of this risk were likely to suffer from extreme anxiety and emotional distress and to change their lifestyles by restricting their activities. On or about April 2, 1991, Angus learned that her valve was at significant risk of a fracture which could lead to her death.

Angus charged that Shiley was liable to her because it deliberately manufactured the valves notwithstanding its knowledge of the strut fracture problem, failed to warn Angus of the problem, misrepresented the product, and concealed its knowledge of the problem. ² Angus further charged that by reason of Shiley's conduct she suffers from severe mental anguish, anxiety, fear, worry, depression, and other emotional distress including constant fear of sudden death or permanent physical injury. Furthermore, Angus contended that her mental state has caused physical ailments including sleep disturbances, frequent panic feelings, nervousness with breathing difficulties, headaches, insomnia, uneasiness, tenseness, and psychiatric disturbances including mixed anxiety and depression. She further pleaded that these conditions required or may require her to expend money for medical and psychiatric attention, impaired her life style, and caused her to suffer a loss of enjoyment of life style.

As a result Angus asserted that Shiley was liable to her for "intentional infliction of emotional distress," "punitive damages," and "negligent infliction of emotional distress." Thus, she sought to recover on three counts, one for each of these theories, in each count seeking damages "in excess" of $20,000.

Shiley filed a timely notice removing the case to the district court. Shiley asserted that it believed Angus's claimed damages would exceed $50,000, exclusive of interest and costs, and that the matter was thus within the jurisdiction of the district court under 28 U.S.C. § 1332 and was removable pursuant to 28 U.S.C. § 1441(a). Shiley attached an affidavit of its attorney to the notice of removal which, though denying that Shiley was liable, recited his belief that Angus's claim exceeded $50,000, exclusive of interest and costs.

Angus filed an "answer to notice of removal" in the district court denying that she claimed damages in excess of $50,000 and indicating that she "hereby stipulates that her damages do not exceed the sum of $50,000.00." Thus, she contended that the case had not been removed properly to the district court and asked that it be remanded to the state court. The district court treated the answer as a motion to remand.

Shiley filed a motion to dismiss in the district court pursuant to Fed.R.Civ.P. 12(b)(6), pointing out that the valve had not failed and was functioning properly. Accordingly, Shiley asserted that Angus "failed to state any claim against [it] because [she] has not sustained any legally-cognizable present injury." Shiley contended that Angus simply claimed that the "valve may eventually fail."

The district court disposed of the case in a memorandum opinion and accompanying order of July 22, 1992. The court held, citing Edwards v. Bates County, 163 U.S. 269, 16 S.Ct. 967, 41 L.Ed. 155 (1896), and Government of Virgin Islands v. Sun Islands Car Rentals, Inc., 819 F.2d 430, 432 (3d Cir.1987), that it had jurisdiction because Angus's three claims totaled $60,000. It then said that even if the two claims for infliction of emotional distress were treated as one, it was still likely that the $50,000 jurisdictional threshold was met because Shiley filed an affidavit detailing its good faith belief that the claimed damages exceeded the jurisdictional amount.

The court then held that Angus's stipulation that the amount in controversy did not exceed $50,000 was ineffective as it was filed after the case was removed and that Shiley was entitled to invoke federal jurisdiction predicated on the allegations in the complaint. Accordingly, because jurisdiction attached when the case was removed, Angus could not defeat it with her subsequent stipulation.

The court next addressed the case on the merits, indicating that it would treat Shiley's motion to dismiss as a motion for summary judgment. It said that while ordinarily it would give a plaintiff an opportunity to present additional materials to meet a motion to dismiss converted into a motion for summary judgment, it would not do so in this case because nothing could change the facts that the valve always functioned properly and Angus's emotional distress was related to a revelation of the valve problems to her by a third party rather than to Shiley's conduct. The court acknowledged that while under Pennsylvania law, which the parties agree is applicable, there might be recovery for emotional distress without a physical injury, such a recovery could be possible only if the defendant's conduct was so outrageous that it went " 'beyond all possible bounds of decency; and to be regarded as atrocious, and utterly intolerable in a civilized society.' " Cox v. Keystone Carbon Co., 861 F.2d 390, 395 (3d Cir.1988) (quoting Buczek v. First Nat'l Bank of Mifflintown, 366 Pa.Super. 551, 531 A.2d 1122, 1125 (1987)). Ultimately the court followed Brinkman v. Shiley, Inc., 732 F.Supp. 33 (M.D.Pa.) (granting summary judgment to defendant on similar facts), aff'd, 902 F.2d 1558 (3d Cir.1989) (table), and granted the motion for summary judgment. Angus then appealed. We have jurisdiction under 28 U.S.C. § 1291.

II. DISCUSSION

A. The jurisdictional issue.

Angus first contends that the district court should have remanded the case to the Court of Common Pleas of Allegheny County because the amount in controversy did not exceed the sum or value of $50,000, exclusive of interest and costs, as required for the exercise of diversity jurisdiction under 28 U.S.C. § 1332(a). Thus, in Angus's view, Shiley could not remove the case under 28 U.S.C. § 1441(a). In this regard she cites Boyer v. Snap-On-Tools Corp., 913 F.2d 108, 111 (3d Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 959, 112 L.Ed.2d 1046 (1991), for the proposition that the removal statutes are "to be strictly construed against removal and all doubts should be resolved in favor of remand." She maintains that she has only one claim for emotional distress predicated on alternative theories. Therefore, according to Angus, her total claim was for damages in excess of only $40,000, $20,000 compensatory and $20,000 punitive. She also points out that in her answer to the notice of removal she stipulated that her damages do not exceed $50,000.

As an initial matter, we note that Angus's stipulation that her damages do not exceed $50,000 has no legal significance because a plaintiff following removal cannot destroy federal jurisdiction simply by amending a complaint that initially satisfied the monetary floor. See St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 293-94, 58 S.Ct. 586, 592-93, 82 L.Ed. 845 (1938); Albright v. R.J. Reynolds Tobacco Co., 531 F.2d 132, 135 (3d Cir.), cert. denied, 426 U.S. 907, 96 S.Ct. 2229, 48 L.Ed.2d 832 (1976). ³ Instead, we consider only the amount in controversy as alleged in Angus's complaint. After doing this, we hold that the district court correctly refused to remand the matter.

The general federal rule is to decide the amount in controversy from the complaint itself. Horton v. Liberty Mutual Ins. Co., 367 U.S. 348, 353, 81 S.Ct. 1570, 1573, 6 L.Ed.2d 890 (1961). Assuming, as Angus's urges us to do, that the complaint asserts only two claims, one for compensatory damages in excess of $20,000, and one for punitive damages in excess of $20,000, we find, as did the district court, that the jurisdictional minimum is met. Contrary to Angus's contention, the amount in controversy is not measured by the low end of an open-ended claim, but rather by a reasonable reading of the value of the rights being litigated. Hunt v. Washington State Apple Advertising Comm'n, 432 U.S. 333, 347, 97 S.Ct. 2434, 2443, 53 L.Ed.2d 383 (1977); Carey v. Pennsylvania Enters., Inc., 876 F.2d 333, 337 n. 12 (3d Cir.1989); Navarro v. Subaru of America...