Bridges v. Freese, Civil Action No. 3:13CV457TSL–JCG.

• Decision Date: 10 August 2015
• Docket Number: Civil Action No. 3:13CV457TSL–JCG.
• Citation: 122 F.Supp.3d 538
• Parties: Mary BRIDGES, Bobby Gordon, and Johnnie Griffin, all Individually and on Behalf of 345 other named Plaintiffs, Plaintiffs v. Richard A. FREESE; Tim K. Goss; Sheila M. Bossier; Dennis C. Sweet, III; Freese and Goss PLLC ; Sweet and Freese PLLC ; Bossier and AssociatesPLLC ; and Dennis C. Sweet, D/B/A Sweet and Associates, PLLC, Defendants v. Don A. Mitchell, Third–Party Defendant.
• Court: U.S. District Court — Southern District of Mississippi

122 F.Supp.3d 538

Mary BRIDGES, Bobby Gordon, and Johnnie Griffin, all Individually and on Behalf of 345 other named Plaintiffs, Plaintiffs

v.Richard A. FREESE; Tim K. Goss; Sheila M. Bossier; Dennis C. Sweet, III; Freese and Goss PLLC ; Sweet and Freese PLLC ; Bossier and AssociatesPLLC ; and Dennis C. Sweet, D/B/A Sweet and Associates, PLLC, Defendants

v.Don A. Mitchell, Third–Party Defendant.

Civil Action No. 3:13CV457TSL–JCG.

United States District Court, S.D. Mississippi, Northern Division.

Signed Aug. 10, 2015.

Charles R. McRae, Chuck McRae Law Office, Shane F. Langston, Langston & Langston, PLLC Jackson, MS, for Plaintiff.

Jesse Allan Okiror, Mikel J. Bowers, Bell Nunnally & Martin, LLP, Christopher J. Schwegmann, Jeffrey M. Tillotson, Lynn, Tillotson, Pinker & Cox, LLP, Dallas, TX, Martin Patrick McDowell, R. David Kaufman, Robert Richard Cirilli, Jr., Brunini, Grantham, Grower & Hewes, PLLC, Jackson, MS, for Defendant.

MEMORANDUM OPINION AND ORDER

TOM S. LEE, District Judge.

This cause is before the court on the motion of defendants Richard A. Freese, Tim K. Goss, Sheila M. Bossier, Dennis C. Sweet, III, Freese and Goss, PLLC, Sweet and Freese, PLLC, Bossier and Associates, PLLC, and Dennis C. Sweet d/b/a Sweet and Associates, PLLC (hereafter defendants), to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. Plaintiffs Mary Bridges, Bobby Gordon and Johnnie Griffin have responded in opposition to the motion and the court, having considered the memoranda of authorities, together with attachments, submitted by the parties, concludes the motion is well taken and should be granted.

Background

Plaintiffs Mary Bridges, Bobby Gordon and Johnnie Griffin and 345 others were previously represented by defendants Freese, Goss, Sweet and Bossier (and their respective law firms) in litigation over PCB contamination. A global settlement of $28,000,000 was ultimately reached with the primary defendant BorgWarner Corporation. On July 23, 2013, plaintiffs Bridges, Gordon and Griffin filed the present lawsuit for themselves and on behalf of a putative class comprised of the other 345 former clients represented by defendants, asserting various claims relating to defendants' handling of litigation expenses and disbursement of settlement proceeds. Plaintiffs filed a motion for class certification on May 1, 2014, and, on November 13, 2014, following a period of discovery relating to the motion, filed a supplement to their motion. On March 26, 2015, the court issued its memorandum opinion and order denying the motion for class certification, finding that plaintiffs had failed to satisfy Federal Rule of Civil Procedure 23(a)'s requirements of numerosity and adequacy of representation. Defendants have now moved to dismiss, contending the court does not have subject matter jurisdiction over the claims of the three individual plaintiffs because none of them satisfies the $75,000 amount in controversy requirement for diversity jurisdiction set forth in 28 U.S.C. § 1332(a).

Standards

Plaintiffs have argued in response to defendants' motion that in determining whether jurisdiction exists, the court is limited to consideration of their complaint and may not consider evidence adduced by defendants. They are mistaken. A motion to dismiss for lack of subject matter jurisdiction may be based on "(1) the complaint alone; (2) the complaint supplemented by undisputed facts in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts." Carroll v. Abide, 788 F.3d 502, 504 (5th Cir.2015) (internal quotation marks and citations omitted). A motion to dismiss based on the complaint alone presents a "facial" attack, and requires the trial court "merely to look to the sufficiency of the allegations in the complaint because they are presumed to be true." Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir.1981). In contrast, a "factual attack" "challenges the existence of subject matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits, are considered." Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir.1980). "Unlike in a facial attack where jurisdiction is determined upon the basis of the allegations of the complaint, accepted as true when a factual attack is made upon federal jurisdiction, no presumptive truthfulness attaches to the plaintiffs' jurisdictional allegations, and the court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case." Evans v. Tubbe, 657 F.2d 661, 663 (5th Cir. Unit A Sept.1981) ; see also In re The Complaint of RLB Contracting, Inc., as Owner of the Dredge Jonathan King Boyd its Engine, Tackle, Gear for Exoneration or Limitation of Liability,

773 F.3d 596, 601 (5th Cir.2014) ("On issues involving jurisdiction, the district court may consider evidence outside the pleadings and resolve factual disputes."). "A ‘factual attack’ under Rule 12(b)(1) may occur at any stage of the proceedings," Menchaca, 613 F.2d at 511, and to defeat a "factual attack" on jurisdiction, plaintiffs must "submit facts through some evidentiary method ... proving by a preponderance of the evidence that the trial court does have subject matter jurisdiction." Paterson, 644 F.2d at 523. Thus, while "[t]he plaintiff's burden to demonstrate that the court has jurisdiction is ‘[n]ormally ... satisfied if the plaintiff claims a sum greater than the jurisdictional requirement[,]’ " Warrior Energy Servs. Corp. v. JC Fodale Energy Servs., Cv. No. 5:14–CV–911–DAE, 2015 WL 869146, at *2 (W.D.Tex. Feb. 27, 2015) (quoting White v. FCI USA, Inc., 319 F.3d 672, 674 (5th Cir.2003) ), and "[a] claim for damages made in apparent good faith controls the jurisdictional question[,]" Jouett Investments Inc. v. Intuit Inc., Civ. Action No. 3:14–CV–1803–L, 2015 WL 3770715, at *6 (N.D.Tex. June 15, 2015),

when "it appears or is in some way shown that the amount stated in the complaint is not claimed in ‘good faith,’ " ... courts may look beyond a plaintiff's allegations. Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 353, 81 S.Ct. 1570, 6 L.Ed.2d 890 (1961) (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938) ). Dismissal of an alleged diversity action for lack of jurisdiction is proper when it "appear[s] to a legal certainty that the claim is really for less than the jurisdictional amount." Id. (quoting St. Paul Mercury Indem. Co., 303 U.S. at 289 ). Claimed damages necessarily fall short of the jurisdictional amount when disregarding any asserted defense, there is a legal certainty "that the plaintiff cannot recover the amount claimed", or "that the plaintiff never was entitled to recover that amount, and that his claim was therefore colorable for the purpose of conferring jurisdiction." De Aguilar v. Boeing Co., 47 F.3d 1404, 1409 (5th Cir.1995) (quoting St. Paul Mercury Indem. Co., 303 U.S. at 289 ). When determining the amount in controversy, the courts may apply common sense to the allegations, Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1336 (5th Cir.1995), and "may look, not only to the face of the complaint, but to the proofs offered by the parties." U.S. Fire Ins. Co. v. Villegas, 242 F.3d 279, 283 (5th Cir.2001). The amount in controversy includes all damages available under the law governing the suit, but the party seeking to invoke the court's jurisdiction must rely on more than conclusory allegations to establish jurisdiction. St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d 1250, 1254–55 (5th Cir.1998).

Id. at *7.

"Regardless of whether the attack is facial or factual, the party asserting federal jurisdiction ‘constantly bears the burden of proof that jurisdiction does in fact exist.’ " Ramirez v. Lone Star Pediatrics, P.A., No. 3:13–cv–2035, 2014 WL 1281510, at *3 (N.D.Tex. Mar. 31, 2014) (quoting Ramming v. United States, 281 F.3d 158, 161 (5th Cir.2001) (per curiam)).

Diversity Jurisdiction—Amount in Controversy

The diversity jurisdiction statute, 28 U.S.C. § 1332(a), "instructs that a suit between diverse parties may be adjudicated in a federal forum only if ‘the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs.’ " Garcia v. Koch Oil Co. of Texas Inc., 351 F.3d 636, 638 (5th Cir.2003)(quoting § 1332(a) ). "The party seeking to invoke federal diversity jurisdiction bears the burden of establishing both that the parties are diverse and that the amount in controversy exceeds $75,000." Id. (citing St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir.1998) ). Here, defendants do not dispute the existence of diversity of citizenship between the parties but maintain that plaintiffs are unable to satisfy the amount in controversy requirement because they cannot prove that any one of them presents claims that satisfy the amount in controversy requirement.¹ The question, therefore, is whether plaintiffs have proven by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional amount.

Analysis

Plaintiffs' myriad causes of action in this case,² and the relief they seek based on those causes of action, all relate to the following basic allegations: (1) defendants overcharged them for litigation expenses; (2) defendants had a conflict of interest in the handling of claimants' Medicaid and Medicare liens with the result that plaintiffs were or may have been overcharged; (3) defendants reimbursed themselves for expenses and paid themselves attorneys' fees before disbursing settlement funds to their clients, including plaintiffs; and (4) defendants failed to deposit the settlement proceeds in an interest-bearing account for the benefit of their clients and instead, had the money deposited in an out-of-state bank owned by Richard Freese and enjoyed the use of the money, interest free, pending...