Cook v. Winfrey

Citation141 F.3d 322
Decision Date08 April 1998
Docket NumberNo. 97-3403,97-3403
Parties26 Media L. Rep. 1586 Randolph L. COOK, Plaintiff-Appellant, v. Oprah WINFREY, Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)

Anthony Campanale (argued), Lee S. Perres, Marcus, Perres, Campanale & Weiner, Chicago, IL, Michael Sorokas, Sorokas & Karamanis, Chicago, IL, James A. Karamanis, Marcus, Perres, Campanale & Karamanis, Chicago, IL, for Plaintiff-Appellant.

Steven F. Molo (argued), Winston & Strawn, Chicago, IL, for Defendant-Appellee.

Before CUMMINGS, CUDAHY and EASTERBROOK, Circuit Judges.

CUMMINGS, Circuit Judge.

Randolph Cook had a story to tell, and he thought the segment of the press commonly known as supermarket tabloids might be interested in paying him for the rights to that story. For all this Court knows, he may have been right. The story involved a national celebrity, Oprah Winfrey, whose name is far from unfamiliar among readers of the tabloids. What is more, the story was about Winfrey's alleged use of cocaine while involved in a romantic relationship with Cook in 1985. Cook's story thus possessed in abundance the sensational character associated with the tabloid press.

In any event, Cook never cashed in on his tale. Winfrey herself revealed on her nationally syndicated television program in 1995 that she had abused drugs, although she denied ever having been romantically involved with Cook. Cook argues that Winfrey's response to his attempts to sell his story to the tabloids did not stop at confessing to drug abuse on her own program, but also included uttering defamatory comments about him and in the process committing tortious interference with his prospective economic advantage and with his contractual relations with one tabloid, the National Enquirer. The same statements by Winfrey, Cook maintains, also amounted to intentional infliction of emotional distress. He initially filed suit in January 1997, then amended his complaint to include four counts of defamation as well as the other torts listed above.

Pursuant to a motion by Winfrey, the district court dismissed the complaint in its entirety under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief could be granted. Cook filed a motion to vacate the order of dismissal, which the district court treated as a motion to reconsider under Rule 60(b). The court denied that motion on August 22, 1997. Cook filed a timely notice of appeal, and for the reasons stated below this Court affirms in part and reverses in part, remanding some of Cook's claims for further proceedings.

I. SUBJECT MATTER JURISDICTION

Winfrey filed her motion to dismiss the amended complaint, along with a supporting memorandum, on May 15, 1997. The motion's first sentence asked the court to dismiss the amended complaint "pursuant to Winfrey's supporting memorandum focused upon the grounds for dismissal under Rule 12(b)(6), but a footnote at the outset of the "Argument" section advanced grounds for dismissing the entire amended complaint pursuant to Rule 12(b)(1) as well (Pl. 18 at 3 n. 2). In essence, Winfrey argued that Cook had not alleged a sufficient amount in controversy to invoke the federal court's diversity jurisdiction. Correctly noting that the diversity statute was amended in 1996 to require that the amount in controversy exceed $75,000, see 28 U.S.C. § 1332(a), Winfrey pointed out that the amended complaint alleged only that the amount in controversy exceeded $50,000 (which was the minimum amount in controversy required prior to the 1996 amendment).

                Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6)" (Pl.17 at 1). 1  That is, Winfrey requested dismissal both because the court lacked subject matter jurisdiction over at least some of the claims and because at least some of the counts failed to state claims upon which relief could be granted
                

When it granted Winfrey's motion to dismiss the action, however, the district court resolved only the Rule 12(b)(6) issues, ignoring the jurisdictional challenge asserted under Rule 12(b)(1). Indeed, neither party saw fit to mention the jurisdiction issue in its briefs to this Court; the matter came to our attention quite accidentally during oral argument. It is axiomatic that a federal court must assure itself that it possesses jurisdiction over the subject matter of an action before it can proceed to take any action respecting the merits of the action. "The requirement that jurisdiction be established as a threshold matter 'spring[s] from the nature and limits of the judicial power of the United States' and is 'inflexible and without exception.' " Steel Co. v. Citizens for a Better Environment, --- U.S. ----, ----, 118 S.Ct. 1003, 1012, 140 L.Ed.2d 210 (quoting Mansfield C. & L.M.R. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 511, 28 L.Ed. 462). This Court has elaborated that "once the district judge has reason to believe that there is a serious jurisdictional issue, he is obliged to resolve it before proceeding to the merits even if the defendant, whether as a matter of indolence or strategy, does not press the issue." Crawford v. United States, 796 F.2d 924, 929 (7th Cir.1986). Moreover, "decisions that fail to remark a jurisdictional issue are not assumed to have resolved it by their silence." Id. at 928. It is therefore clear that the district court in this case erred in not resolving Winfrey's challenge to the jurisdictional amount, even if Winfrey herself did not press this ground as her preferred method of resolving the case. 2

If the challenge to the amount in controversy were one that turned upon factual questions concerning how much Cook could hope to recover by his suit, we would have no choice but to remand the case to the district court so that it could resolve the matter. In this case, however, Winfrey's challenge is limited to the allegations of the amended complaint and is fully capable of resolution as a matter of law. 3 As noted above, Winfrey's challenge to Cook's allegations supporting diversity jurisdiction turns upon the fact that Congress in 1996 increased the minimum amount in controversy, declaring that diversity suits must involve This argument is mistaken for two independently sufficient reasons, one simple and the other more intricate. The simple reason is that the amended complaint repeatedly prays for damages of $20 million (see Pl. 16 at 3, 4, 5, 8, 9, 11). In the absence of a factual challenge to Cook's potential to recover more than the jurisdictional minimum, any technical defect in reciting the $50,000 minimum in the allegation of jurisdiction was overcome by the clear allegations elsewhere in the complaint that the case involved a sum well in excess of the $75,000 minimum. See Loss v. Blankenship, 673 F.2d 942, 950 (7th Cir.1982) ("Imperfections in pleading style will not divest a federal court of jurisdiction where the complaint as a whole reveals a proper basis for jurisdiction.").

more than $75,000 where previously the amount had been $50,000. Because Cook's amended complaint alleged only that the amount in controversy exceeded $50,000, Winfrey argues, the district court lacked diversity jurisdiction over the suit.

The more complex reason why Winfrey's halfhearted argument concerning jurisdiction is incorrect concerns timing. The increase in the jurisdictional amount was signed into law on October 19, 1996 and provided that its effective date would be ninety days from its enactment, see Federal Courts Improvement Act of 1996, Pub.L. No. 104-317, § 205(b), meaning that the change took effect on January 17, 1997. Cook's initial complaint in this case was filed with the district court one day earlier, on January 16. The action commenced, therefore, when the $50,000 jurisdictional minimum was still the law of the land. It is well settled that subject matter jurisdiction is to be determined as of the time when jurisdiction is invoked; later developments such as a decrease in the amount recoverable do not remove federal jurisdiction once it has been established. See, e.g., Grinnell Mut. Reinsurance Co. v. Shierk, 121 F.3d 1114, 1116 (7th Cir.1997).

Although authority is scarce on the question whether this rule holds when the change is not to the facts supporting jurisdiction but rather to the jurisdictional statute itself, it stands to reason that it should. Given the existence of statutes of limitations, a substantial injustice would result in many cases if a change in the jurisdictional amount were suddenly to divest federal courts of jurisdiction over actions in which jurisdiction was entirely proper when they were filed. Nor should the fact that Cook filed an amended complaint on April 26, 1997 (that is, after the increase to $75,000 took effect) operate to divest the district court of jurisdiction. The amended complaint, it is true, gave Cook an opportunity to allege explicitly that the higher amount was in controversy, but it did not obligate him to do so. Diversity jurisdiction was properly alleged at the outset of the action and therefore remained proper throughout. This Court may proceed to review the merits of the Rule 12(b)(6) dismissal, despite the district court's unfortunate failure to address the challenge to its jurisdiction.

II. RULE 60(b) RULING

Before attacking the merits of the district court's decision to dismiss his claims, Cook raises a procedural quarrel. When the district court granted Winfrey's motion to dismiss, Cook had not filed a response; the court noted as much in its memorandum opinion of July 9, 1997. As stated previously, Cook filed a motion to vacate the dismissal order, claiming that his failure to file a response was excusable neglect. The district court granted Cook leave to file his response brief late, but on the same day resolved the motion to vacate as if it had been a motion to reconsider pursuant to Federal Rule of Civil Procedure 60(b). Cook now complains that the district court...

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