Atkins v. Harcros Chemicals, Inc.

• Decision Date: 11 January 1991
• Docket Number: Civ. A. No. 89-5155.
• Citation: 761 F. Supp. 444
• Parties: Gracie S. ATKINS, et al. v. HARCROS CHEMICALS, INC., et al.
• Court: U.S. District Court — Eastern District of Louisiana

761 F. Supp. 444

Gracie S. ATKINS, et al. v. HARCROS CHEMICALS, INC., et al.

Civ. A. No. 89-5155.

United States District Court, E.D. Louisiana.

January 11, 1991.

John J. Cummings, III, Richard M. Martin, Jr., Cummings, Cummings & Dudenhefer, New Orleans, La., for plaintiffs.

C.J. Poirier, Joel R. Mosher, David E. Shay, Shughart, Thomson & Kilroy, Kansas City, Mo., and Burt Carnahan, Lobman, Carnahan & Batt, Metairie, La., for defendant Harcros Chemicals, Inc.

William R. D'Armond, Neil Sweeney, Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, Baton Rouge, La., for North American Philips Corp.

ORDER AND REASONS

MENTZ, District Judge.

Before the Court is the motion of plaintiffs to remand in Civil Action No. 90-1580, Elisa Adams, et al. v. Harcros Chemicals, Inc., et al. This case, which had originally been filed in state court as a class action, was consolidated with the above captioned Civil Action No. 89-5155 after its removal. Plaintiffs contend that this matter should be remanded because the defendant has not shown that plaintiffs' claims meet the jurisdictional amount in controversy. By Minute Entry dated November 21, 1990, the Court stated that because the motion involved subject matter jurisdiction, the Court would consider the motion as if filed in all consolidated cases.¹ In addition, the Court gave the parties in all consolidated cases an opportunity to submit briefs on the issue. The Court also stated that in the interest of judicial economy it would be prudent to hear the motion to remand prior to the pending motion for class certification. Accordingly, after reviewing the motion to remand, memoranda of counsel, the record and the law, the Court grants the motion for the reasons set forth below.²

The Defendants' Burden of Proof In a Removal Case

The party invoking the jurisdiction of the federal district court has the burden of demonstrating that the exercise of jurisdiction is proper. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 56 S.Ct. 780, 80 L.Ed. 1135 (1936). When the jurisdictional amount is challenged, the party invoking the jurisdiction of the federal court has the burden of showing that the jurisdictional amount is in controversy. Hale v. Billups of Gonzales, Inc., 610 F.Supp. 162, 163-64 (M.D.La.1985) (citations omitted). Some courts have held that "the party invoking the jurisdiction of the federal court has the burden of proving that it does NOT appear to a legal certainty that the claim is actually for less than the requisite jurisdictional amount." See, e.g., id (citing St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845 (1938)).³

This awkward negative phrasing caused other courts to interpret the standard to require only that the removing party establish that there is a probability that the jurisdictional amount requirement is satisfied. Corwin Jeep Sales v. American Motors Sales, 670 F.Supp. 591, 595 (M.D.Pa. 1986) (citation omitted); Garza v. Bettcher Industries, Inc., 752 F.Supp. 753 (E.D. Mich.1990). However, if the defendant were only required to establish that any award would "probably" exceed the jurisdictional amount, the trial judge would likely be forced to conduct a minitrial in order to determine the amount of any probable award. Kliebert v. Upjohn Co., 915 F.2d 142, 146 (5th Cir.1990).

Our circuit has recently stated that this burden is too light. Id. In Kliebert, the Fifth Circuit reasoned that "in effect, those courts that follow the probability standard allow a defendant to establish the plaintiff's bad faith understatement of his claim by demonstrating that the plaintiff would probably recover in excess of the jurisdictional amount." Kliebert v. Upjohn Co., 915 F.2d 142, 146 (5th Cir.1990).

The defendants in the present case, Harcros Chemicals, Inc. and North American Philips Corporation, make much of the fact that both Kliebert and St. Paul Mercury involved situations in which there were allegations that the plaintiff had, in bad faith, claimed a specific amount of damages below the requisite jurisdictional amount. Defendants argue, therefore, that these two cases have no application in the present motion because there are no allegations that plaintiffs have, in bad faith, claimed an amount below the jurisdictional amount in controversy. Indeed, there has been no such allegation because under La.Code Civ.Proc.Ann. art. 893 (West Supp.1990) the plaintiffs were precluded from alleging any amount in controversy in their state court petitions.⁴ The defendants also argue that since plaintiffs were not allowed to allege any amount in controversy, Kliebert has no application in the present motion. See Kliebert, 915 F.2d at 147 n. 3.

However persuasive these arguments may seem at first glance, they do not change the defendant's burden of proof. This burden of proof requires the defendants in these consolidated cases to show to a legal certainty that the plaintiffs' claims are not less than the jurisdictional amount. The standard would essentially be the same were there an allegation of bad faith understatement of the amount in controversy. In Kliebert, the Fifth Circuit held that "the defendants were required to establish that the plaintiff would, if successful, recover at least the minimum jurisdictional amount." Id. at 146. In other words, if the defendants can show that the plaintiffs' claims are not less than the jurisdictional amount, they have also implicitly shown that the plaintiffs would, if successful, each recover at least the jurisdictional amount.⁵

The Court is convinced that the defendants in these consolidated cases have not met their burden. The defendants rely primarily on their removal petition which alleges that the requisite jurisdictional amount is in controversy. They also rely on the plaintiffs' state court petition, which claims personal injuries, property damages, special, compensatory, and punitive damages. However, these assertions alone do not establish to a legal certainty that the claims of any of the plaintiffs in these consolidated cases are not less than the jurisdictional amount.⁶

Class Action Ramifications

As noted previously, there is pending in this matter a motion for class certification. However, were this consolidated matter treated as a class action, the result reached above would be no different. Claimants in a class action cannot aggregate their claims for the purpose of satisfying the jurisdictional amount in controversy requirement. Zahn v. International Paper Co., 414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973). Multiple plaintiffs must each satisfy the jurisdictional amount requirement in a diversity suit in federal court. Id. at 301, 94 S.Ct. at 512. Applying Zahn in the context of a removed action, the burden is on the removing party to prove to a legal certainty that every claimant in the class has suffered damages in excess of the jurisdictional minimum. See id at 292, 94 S.Ct. at 507. Even where a few claimants might be able to meet the jurisdictional amount requirement, it is proper to remand the entire case. See Rosack v. Volvo of America Corp., 421 F.Supp. 933, 936-37 (N.D.Cal.), stay denied, Volvo of America Corp. v. Schwarzer, 429 U.S. 1331, 97 S.Ct. 284, 50 L.Ed.2d 273 (1976) (citing Zahn v. International Paper Co., 414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973)). In the present case, the defendants have failed to meet their burden of proof by providing this Court with facts that would show to a legal certainty that each plaintiff's claim is not less than the jurisdictional amount.

Conclusion

No matter whether the plaintiffs in these consolidated cases are viewed individually or as potential members of a class, all the consolidated cases must be remanded because the defendants have failed to show to a legal certainty that each plaintiff's claim is not less than the jurisdictional amount. The defendants argue that since plaintiffs' counsel has stated some of the plaintiffs would probably meet the jurisdictional minimum, the Court should allow discovery to be taken for the purpose of sorting out those plaintiffs who might be able to meet the requisite jurisdictional amount. However, the Fifth Circuit has stated that such a procedure, which would inevitably lead to a mini-trial for the purpose of establishing just who might meet the jurisdictional minimum, is not proper. See Kliebert, 915 F.2d at 146. In addition, the Court finds Zahn and its progeny instructive in this regard. Even if a few of the plaintiffs in these consolidated cases might be able to satisfy the jurisdictional amount in controversy requirement, it would not be feasible for this Court to define a class of plaintiffs each of whom had a claim of more than $50,000. It is, therefore, more efficient and more prudent to remand this entire matter to the state court.⁷

Accordingly,

IT IS ORDERED that the plaintiffs' motion to remand is GRANTED, and the above captioned Civil Action No. 89-5155, along with all cases consolidated therewith, are hereby REMANDED to the Civil District Court for the Parish of Orleans.

PUBLISHER'S APPENDIX

United States Court of Appeals for the Fifth Circuit

Nos. 91-3104, 91-3106

In re: North American Philips Corp.

Consolidated With

In re: Harcros Chemicals, Inc.

(E.D.La.Civil Action No. 89-5155 "I" and consolidated cases)

Response to the Petitions for Writ of Mandamus

This memorandum is entered pursuant to the invitation of the Fifth Circuit Court of Appeals, as directed in its Stay Order issued February 4, 1991.

I.

Nothing in this Court's Order of January 11, 1991 is in clear error. While not stating explicitly in that Order under what statutory authority the case was being remanded, the Court based its remand on 28 U.S.C. § 1447(c) as amended in 1988, which states in pertinent part:

A motion to remand the case on the basis of any defect in removal procedure must be made within 30 days after the filing of the notice of removal under

...