Claxton v. Kum & Go, L.C.
| Decision Date | 26 November 2014 |
| Docket Number | Case No. 6:14-cv-03385-MDH |
| Court | U.S. District Court — Western District of Missouri |
| Parties | COLTON CLAXTON, Plaintiff, v. KUM & GO, L.C. d/b/a KUM & GO, Defendant. |
Before the Court is Plaintiff's Motion to Remand (Doc. 21) and Defendant's Motion to Dismiss Count I (Doc. 23). The Court, after careful consideration of the issues raised and the legal arguments provided by the parties, hereby DENIES Plaintiff's motion (Doc. 21) and DENIES Defendant's motion (Doc. 23).
Plaintiff filed the present action in the Circuit Court of Greene County, Missouri on August 5, 2014. Plaintiff's Petition seeks to recover on behalf of himself and all others similarly situated, alleging that Defendant Kum & Go sold unleaded gasoline that improperly contained diesel fuel to its consumers at store number 473. Plaintiff alleges that Defendant's faulty gasoline caused damage to his truck and he seeks to recover based on six different legal theories: (1) violation of the Missouri Merchandising Practice Act ("MMPA"), (2) breach of the implied warranty of merchantability, (3) negligence, (4) strict products liability, (5) breach of the warranty of fitness for a particular purpose, and (6) breach of contract. Plaintiff requests that the Court certify the class and award restitution, punitive damages, reasonable attorney fees, and such other relief as may be just and proper.
Defendant filed a notice of removal on September 5, 2014. In its notice, Defendant argues two independent bases for the Court's subject matter jurisdiction. First, Defendant argues that removal is proper under 28 U.S.C. § 1332(a) because complete diversity exists and the amount in controversy exceeds $75,000. Second, Defendant argues that removal is proper under the Class Action Fairness Act of 2005 ("CAFA") because minimal diversity exists and the amount in controversy exceeds $5 million including the class allegations. According to Defendant, no exceptions to CAFA jurisdiction apply to this case.
Shortly after filing its notice of removal, Defendant served upon Plaintiff an offer of judgment pursuant to Rule 68 of the Federal Rules of Civil Procedure for the sum of $6,250. Defendant's offer included attorney fees and costs but did not address the claims on behalf of the putative class. Plaintiff filed a motion to strike Defendant's pre-certification offer of judgment, which the Court granted. Plaintiff also filed an amended complaint. Plaintiff's Amended Complaint is substantially the same as the Petition, other than changing certain class allegations.1
Plaintiff has now filed a motion to remand the case. Defendant filed suggestions in opposition to remand. Defendant also filed a motion to dismiss Count I of Plaintiff's Amended Complaint brought under the MMPA, which Plaintiff opposes. The issues are now fully briefed and ripe for review.
"In every federal case the court must be satisfied that it has jurisdiction before it turns to the merits of other legal arguments." Carlson v. Arrowhead Concrete Works, Inc., 445 F.3d1046, 1050 (8th Cir. 2006). Plaintiff's motion for remand challenges the Court's jurisdiction; therefore, the Court must address that issue first. See Warner v. Chase Home Fin. LLC, 530 F. App'x 614, 615 (8th Cir. 2013).
Plaintiff argues that the Court should remand this case because "based on Defendant's own calculations, filed with this Court, the amount in controversy is far from the required $75,000 jurisdictional minimum." Pl.'s Mot. Remand ¶ 6. To support his argument, Plaintiff notes that Defendant's offer of judgment was for a total sum of $6,250, inclusive of attorney fees and costs, and points out that Defendant previously stated that number is "approximately 30% greater than Plaintiff's alleged damages."2 Pl.'s Mot. Remand ¶¶ 4-5. Plaintiff further argues that "an estimate of punitive damages allowable under the MMPA is too speculative to sustain Defendant's burden[.]" Pl.'s Mot. Remand ¶ 6. Based on these arguments, Plaintiff requests that the Court enter an order remanding the case to state court and awarding reasonable attorney's fees to Plaintiff's counsel pursuant to 28 U.S.C. § 1447(c).
Defendant argues that Plaintiff's motion to remand should be denied because (1) Plaintiff acquiesced to the Court's subject matter jurisdiction by filing an amended complaint, (2) Plaintiff's motion does not challenge the Court's CAFA jurisdiction, and (3) Plaintiff's argument based on Defendant's offer of judgment "misstates the law and the facts." Def.'s Opp'n Mot. Remand 1.
An action may be removed from state court to federal district court if the case falls within the original jurisdiction of the district court. 28 U.S.C. § 1441(a). If the case is not within the original jurisdiction of the district court, the court must remand the case to the state court fromwhich it was removed. 28 U.S.C. § 1447(c). A defendant seeking removal "bears the burden of establishing that the district court ha[s] original jurisdiction by a preponderance of the evidence." Knudson v. Sys. Painters, Inc., 634 F.3d 968, 975 (8th Cir. 2011). "All doubts about federal jurisdiction should be resolved in favor of remand to state court." Junk v. Terminix Int'l Co., 628 F.3d 439, 446 (8th Cir. 2010).
Where a defendant seeks to remove a case based on diversity of citizenship under 28 U.S.C. § 1332(a), the defendant "bears the burden of proving by a preponderance of the evidence that the amount in controversy satisfies the jurisdictional minimum." LaPree v. Prudential Fin., 385 F. Supp. 2d 839, 842 (S.D. Iowa 2005) (citing Trimble v. Asarco, Inc., 232 F.3d 946, 959 (8th Cir.2000)). Under this standard, "the jurisdictional fact is not whether the damages are greater than the requisite amount, but whether a fact finder might legally conclude that they are." Grawitch v. Charter Commc'ns, Inc., 750 F.3d 956, 959 (8th Cir. 2014) (internal punctuation and citations omitted).
The preponderance standard requires the removing party to present "some specific facts or evidence demonstrating that the jurisdictional amount has been met" such as "responses to discovery requests or damage recoveries in similar cases." Hoffmann v. Empire Mach. & Tools Ltd., No. 4:10-CV-00201-NKL, 2010 WL 2216631, at *2 (W.D. Mo. May 28, 2010). In computing the amount in controversy, a removing party may include punitive damages and statutory attorney fees. Crawford v. F. Hoffman-La Roche Ltd., 267 F.3d 760, 766 (8th Cir. 2001). However, punitive damages are "given closer scrutiny" and "the trial judge [is] accorded greater discretion" in determining the appropriate amount. Larkin v. Brown, 41 F.3d 387, 389 (8th Cir. 1994).
"Once the removing party has established by a preponderance of the evidence that the jurisdictional minimum is satisfied, remand is only appropriate if the plaintiff can establish to a legal certainty that the claim is for less than the requisite amount." Hargis v. Access Capital Funding, LLC, 674 F.3d 783, 790 (8th Cir. 2012) (citing Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir. 2009)). The legal-certainty standard is not met if even a possibility exists of recovering more than the statutory minimum. Basham v. Am. Nat. Cnty. Mut. Ins. Co., 979 F. Supp. 2d 883, 886 (W.D. Ark. 2013) (citing Back Doctors Ltd. v. Metropolitan Property & Casualty Ins. Co., 637 F.3d 827, 831 (7th Cir.2011)).
Plaintiff argues that federal jurisdiction is lacking because the amount in controversy requirement is not satisfied. Because the Court finds that Defendant satisfied the jurisdictional minimum by a preponderance of the evidence, remand is appropriate only if Plaintiff proves to a legal certainty that his claims are for less than the requisite amount. Plaintiff failed to satisfy this burden and therefore remand is inappropriate.
The Court finds that Defendant's notice of removal presented sufficient facts and evidence to prove diversity jurisdiction by a preponderance of the evidence. The notice first established that the parties have diverse citizenship, which Plaintiff does not dispute. Defendant next calculated the amount in controversy by citing Plaintiff's actual damages pleaded in the amount of $4,840.49, noting that the MMPA allows statutory attorney's fees and punitive damages, and citing Missouri case law examples of MMPA cases with small actual damage awards yet relatively large awards of attorney's fees and punitive damages.3 Defendant concluded that:
In short, although a fact-finder might legally conclude that Plaintiff is only entitled to $4,840.49—or less—in actual damages, Defendant could be found liable for attorneys' fees exceeding $100,000 and punitive damages exceeding $500,000 (five times the sum of actual damages and attorneys' fees). As a result, the total amount in controversy could exceed $500,000, well above the $75,000 jurisdictional threshold.
Thus, Defendant met its burden to prove that the amount in controversy exceeds $75,000 by a preponderance of the evidence because it presented "specific facts or evidence" - including actual damages pled and damage recoveries in similar MMPA cases - to prove that a fact finder "might legally conclude" the damages are greater than $75,000.
Plaintiff attempts to challenge Defendant's proffer of diversity jurisdiction by arguing that Defendant's offer of judgment proves that Defendant believes the amount in controversy is less than $75,000 and by further arguing that punitive damages are too speculative to include in the amount in controversy. The latter argument is clearly contrary to Eighth Circuit precedent and Plaintiff cites no authority to support its proposition that punitive damages are too speculative in this case. See Raskas v. Johnson & Johnson, 719 F.3d 884, 887 (8th Cir. 2013); OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 348 (8th Cir. 2007).
Plaintiff's other argument is similarly unavailing. In determining the amount in...
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