Cane Creek Quarry, LLC v. Equip. Transp., Inc.

• Decision Date: 26 February 2021
• Docket Number: Case No. 1:20-cv-00268-SRC
• Parties: CANE CREEK QUARRY, LLC, Plaintiff(s), v. EQUIPMENT TRANSPORT, INC., Defendant(s)
• Court: U.S. District Court — Eastern District of Missouri

CANE CREEK QUARRY, LLC, Plaintiff(s), v. EQUIPMENT TRANSPORT, INC., Defendant(s)

Case No. 1:20-cv-00268-SRC

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI SOUTHEASTERN DIVISION

February 26, 2021

Memorandum and Order

The Court considers Plaintiff Cane Creek Quarry, LLC's [16] Motion to Remand. Equipment Transport, Inc. and Great West Casualty Company¹ oppose the motion. For the reasons set forth below, the Court grants the motion and remands the case to state court.

I. Background

Cane Creek owns and operates a quarry in Poplar Bluff, Missouri. Equipment Transport is a freight shipping and trucking company that Cane Creek hired to remove and haul a Caterpillar 992 G loader from the quarry. On July 17, 2020, Equipment Transport's owner, Derek Mann, arrived at the quarry with his truck, and Cane Creek's employees told Mann to exit the quarry using a specific exit, away from Cane Creek's main building on site.

While Mann was removing the loader from the quarry, his truck encountered a slanted road surface. Due to the uneven surface, the loader tipped over and both the loader and the truck turned over on their side. As a result of tipping on its side, the loader leaked 250 gallons of diesel fuel out onto the quarry grounds. The incident caused damage both to Equipment Transport's truck and the loader. As a result of the fuel spill, Equipment Transport and its insurer, Great West, spent over $300,000 to clean the area and remediate the grounds, as well as towing and repairing the damaged vehicles.

Cane Creek filed a negligence action against Equipment Transport in the Butler County Circuit Court. Doc. 11. Equipment Transport removed the case to this Court on the basis of diversity jurisdiction and, purportedly along with Great West, filed a counterclaim against Cane Creek for negligence. Docs. 1, 9. Cane Creek filed the present Motion to Remand, arguing that the Court lacks diversity jurisdiction because Cane Creek did not plead damages above the jurisdictional threshold of $75,000 and because counterclaim damages do not count towards the jurisdictional minimum. Doc. 16.

II. Standard

A defendant may remove to federal court any state court civil action over which the federal court could exercise original jurisdiction. 28 U.S.C. § 1441(a). "The [removing] defendant bears the burden of establishing federal jurisdiction by a preponderance of the evidence." In re Prempro Prod. Liab. Litig., 591 F.3d 613, 620 (8th Cir. 2010). The federal court must remand the case to state court if it appears the federal court lacks subject matter jurisdiction. Id.; 28 U.S.C. § 1447(c). "All doubts about federal jurisdiction should be resolved in favor of remand to state court." In re Prempro Prod. Liab. Litig., 591 F.3d at 620.

III. Discussion

Cane Creek argues that Equipment Transport has failed to establish diversity jurisdiction because its petition filed in Missouri state court asks for damages not exceeding $75,000. Doc. 17. Under 28 U.S.C. § 1332, federal district courts have original jurisdiction "where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between citizens of different states." 28 U.S.C. § 1332(a)(1). When evaluating whether the amount in controversy requirement is met, the Court must look to the amount in controversy at the time of removal. Hatridge v. Aetna Cas. & Sur. Co., 415 F.2d 809, 814 (8th Cir. 1969) ("It is the situation at the time of removal which is determinative.").

A. Allegations in Cane Creek's petition

Cane Creek sought damages in its petition "in an amount that does not exceed $75,000.00, exclusive of interest and costs." Doc. 11 at ¶ 10. When a party seeks removal based on diversity jurisdiction, "the sum demanded in good faith in the initial pleading shall be deemed to be the amount in controversy" unless "the State practice either does not permit demand for a specific sum or permits recovery of damages in excess of the amount demanded." 28 U.S.C. § 1446(c)(2)(A). In that case, "the notice of removal may assert the amount in controversy." Id.

Missouri law does not permit a plaintiff to plead a specific sum in the petition: "no dollar amount or figure shall be included in the demand except to determine the proper jurisdictional authority[.]" Mo. Ann. Stat. § 509.050.1(2). Instead, a litigant must only plead that the matter is more or less than $25,000. See, e.g., Mo. Ann. Stat. § 517.011 (specifying that Associate Circuit Court jurisdiction is exclusive in matters that do not exceed $25,000). When state law prohibits the plaintiff from specifying a specific damage amount in the complaint, the plaintiff cannot attempt to avoid federal jurisdiction by pleading a specific damage amount inviolation of state law. Bell v. Hershey Co., 557 F.3d 953, 958 (8th Cir. 2009) ("Where, as here, state law forbids pleading a specific amount in the complaint, any attempt to do so is a legal nullity."); Smith v. AT&T, 2020 WL 2061206, at *1 (W.D. Mo. 2020) ("Because Missouri does not permit a plaintiff to demand a specific sum, the Court looks to the Notice of Removal to ascertain the amount in controversy."). The Court must construe Cane Creek's petition as one that does not plead a specific sum; therefore, the burden falls on the removing party to show by a preponderance of the evidence that the amount in controversy exceeds $75,000. See id.; In re Minnesota Mut. Life Ins. Co. Sales Practices Litig., 346 F.3d 830, 834 (8th Cir. 2003).

B. Evidence from Equipment Transport's notice of removal

At this stage, Equipment Transport must point to evidence in its notice of removal that Cane Creek's damages could exceed $75,000. Bell, 557 F.3d at 959. Equipment Transport must meet a "preponderance of the evidence" standard: "[u]nder the preponderance standard, '[t]he jurisdictional fact . . . is not whether the damages are greater than the requisite amount, but whether a fact finder might legally conclude that they are.'" Id. (quoting Kopp v. Kopp, 280 F.3d 883, 884 (8th Cir. 2002)). Put another way, Equipment Transport "need only show a fact finder could legally award more than $75,000[.]" Smith, 2020 WL 2061206, at *1. This burden is a pleading requirement, rather than a demand for proof. Id. Once the removing party demonstrates that damages could plausibly exceed $75,000, the party seeking remand must establish it is legally impossible to recover more than $75,000. Id.; see also Raskas v Johnson & Johnson, 719 F.3d 884, 888 (8th Cir. 2013) (CAFA) ("Once the proponent of federal jurisdiction has explained plausibly how the stakes exceed $5 million, . . . the case belongs in federal court unless it is legally impossible for the plaintiff to recover that much.").

Equipment Transport asserts that more than $75,000 is in controversy. Initially, Equipment Transport relied on the amount it seeks on its counterclaim. Doc. 1 at ¶ 11. Hedging its bets that the counterclaim may not provide a basis for diversity jurisdiction, Equipment Transport pivots to trying to establish that Cane Creek's damages could exceed $75,000. But Equipment Transport did not fully pivot, as it curiously still maintains that the Court has jurisdiction based on the amount it seeks in its own counterclaim. Doc. 21 at ¶ 10 (referring also to Docs. 9 and 11). For purposes of diversity jurisdiction, the Court does not consider amounts in controversy on a counterclaim. See, e.g., State Farm Mut. Auto. Ins. Co. v. Meeks, 2014 WL 949361, at *3 (D.S.D. 2014) ("[C]ounterclaims cannot be used to satisfy the jurisdictional amount. This conclusion is supported by Eighth Circuit 'precedent [which] requires the district court to rely solely on the plaintiff's viewpoint in meeting the requisite amount [in controversy].'" (quoting Smith v. American States Preferred Ins. Co., 249 F.3d 812, 813 (8th Cir. 2001)); Central Associated Carriers v. Nickelberry, 995 F.Supp. 1031, 1036 (W.D. Mo. 1998) (following the "logical and majority rule . . . that the question of jurisdictional amount is based upon the plaintiff's Petition or Complaint and jurisdiction cannot be invoked by the filing of a counterclaim in the jurisdictional amount, even though such counterclaim is compulsory under state law.").

The Court accordingly turns to Equipment Transport's attempt to establish the amount in controversy based on Cane Creek's negligence claim.² Equipment Transport points to Cane Creek's allegations of "disrupting Plaintiff's business operations, causing lost profits,environmental contaminants, and cleanup expenses." Doc. 11 at ¶ 9. Equipment Transport submits an invoice (directed not to Cane Creek but to Great West) for cleanup costs in the amount of $121,603.14. Doc. 21-3, 9. Cane Creek did not allege its own estimated cleanup costs, however, and Equipment Transport does not explain how cleanup costs invoiced to its own insurer indicate what amount Cane Creek incurred. Equipment Transport also observes that the assessed value of Cane Creek's real property at issue was $78,100 in 2017, with a market valuation of $267,345.00, but again, Equipment Transport does not tie the property valuation to any unreimbursed losses Cane Creek incurred. Doc. 21-4. Neither party submits information as to the potential "lost profits" or disruptions to "business operations" at the quarry from the incident. Under these circumstances, Equipment Transport has failed to meet its burden and the Court remands the case on this basis.

C. Legal impossibility to recover jurisdictional minimum

The Court also examines whether Cane Creek has established that it is legally impossible for it to recover more than $75,000 in this action. See Raskas, 719 F.3d at 888. Cane Creek cannot rely on the unlikelihood of recovering more than $75,000; rather, it would need to establish that it is impossible to recover more than $75,000, assuming Equipment Transport had met its burden. See id. Cane Creek states that it cannot legally recover the jurisdictional minimum...