Craig v. Congress Sportswear, Inc.

• Decision Date: 03 October 1986
• Docket Number: Civ. No. 85-0134-B.
• Citation: 645 F. Supp. 162
• Parties: George CRAIG, et al., Plaintiffs, v. CONGRESS SPORTSWEAR, INC., et al., Defendants.
• Court: U.S. District Court — District of Maine

645 F. Supp. 162

George CRAIG, et al., Plaintiffs, v. CONGRESS SPORTSWEAR, INC., et al., Defendants.

Civ. No. 85-0134-B.

United States District Court, D. Maine.

October 3, 1986.

Guy P. Seaberg, Lynch and Seaberg, Damariscotta, Me., for plaintiffs.

Richard G. Moon, Perkins, Thompson, Hinckley & Keddy, Portland, Me., Paul E. Stanzler, Burns & Levinson, Boston, Mass., for defendants.

Thomas Warren, Asst. Atty. Gen., Augusta, Me., for intervenor.

MEMORANDUM AND ORDER REMANDING ACTION

CYR, Chief Judge.

Plaintiffs commenced this class action¹ in Maine Superior Court (Sagadahoc County) in their own behalf and in behalf of "other employees of Congress Sportswear, Inc. situated similarly," seeking severance pay under Me.Rev.Stat.Ann. tit. 26, § 625-B (Supp.1985) (Maine Severance Pay Act). The action was removed to this court in timely fashion, based on diversity of citizenship. See 28 U.S.C. §§ 1332(a)(1), 1441(a) & (b).

The Maine Severance Pay Act requires an "employer who relocates or terminates a covered establishment" to pay eligible employees "severance pay at the rate of one week's pay for each year of employment...." Me.Rev.Stat.Ann. tit. 26, § 625-B(2). Defendants have answered, asserting, inter alia, that Congress Sportswear, Inc. is not a "covered establishment" and that the Maine Severance Pay Act is preempted by E.R.I.S.A., 29 U.S.C. § 1001 et seq., and violates the Contract Clause and the Commerce Clause of the United States Constitution.

Defendants have moved for summary judgment and plaintiffs have moved for partial summary judgment. The State of Maine has intervened.

The court has both the power and the duty to inquire into its own subject matter jurisdiction. Kanzelberger v. Kanzelberger, 782 F.2d 774, 777 (7th Cir.1986); Giannakos v. M/V Bravo Trader, 762 F.2d 1295, 1297 (5th Cir.1985). See Daley v. Town of Durham, 733 F.2d 4, 7 (1st Cir. 1984); Lane v. United States, 727 F.2d 18, 21 (1st Cir.1984). Accordingly, before addressing the merits of the pending motions, the court examines the record with a view to determining whether the court has subject-matter jurisdiction.

In order to determine whether the "amount in controversy" requirement of diversity jurisdiction under 28 U.S.C. § 1332(a) has been satisfied, the court must examine the allegations of the complaint and (if the complaint does not reveal the amount in controversy) defendants' removal petition. 14A C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3725, at 417-18 (1985).

The complaint alleges that defendants owe the plaintiff class "approximately $179,000" in severance pay. There is no allegation in the complaint as to the amount of severance pay owed to any individual class member, including the named plaintiffs. Defendants' "Verified Petition for Removal" contains no allegation of the amount in controversy, but conclusorily asserts that the "action, as stated in the plaintiffs' Complaint," is within the court's diversity jurisdiction.

In a class action the claims of the individual class members may not be aggregated, for purposes of determining the amount in controversy, unless the individual members of the class are seeking to enforce a common or undivided interest in a single right or title. Snyder v. Harris, 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969); Lopez v. Arraras, 606 F.2d 347, 351 (1st Cir.1979). The Snyder rule against aggregation "requires dismissal of those litigants whose claims do not satisfy the jurisdictional amount, even though other litigants assert claims sufficient to invoke the jurisdiction of the federal court." Zahn v. International Paper Co., 414 U.S. 291, 295, 94 S.Ct. 505, 509, 38 L.Ed.2d 511 (1973).

These plaintiffs each seek the severance pay due them individually, as calculated on the basis of the number of years worked and the weekly wages earned. This is not an assertion of a common or undivided interest in a single right or title, such as would permit aggregation of their claims. Barr v. Champion International Corp., 617 F.Supp. 45, 46 (D.Mont.1985).

There being no basis for aggregating the individual claims, it is necessary to examine the complaint and the removal petition to determine whether each individual claim meets the $10,000 jurisdictional amount.

The complaint alleges that "approximately 58 employees" are eligible for severance pay and that the "average `week's pay'" involved is approximately $220. Inasmuch as the amount of an individual's severance pay under the Maine Severance Pay Act is determined by multiplying the average weekly wage of the individual during the 12 months preceding the termination or relocation of the business, by the number of years worked, Me.Rev.Stat.Ann. tit. 26, § 625-B, it is impossible to determine whether any individual employee is claiming an entitlement to $10,000 in severance pay. Moreover, based on the average weekly pay alleged in the complaint ($220), an employee would have had to work for the defendants for more than 45 years in order to generate a claim for more than $10,000 — a highly improbable (though not impossible) scenario. Instead, the aggregate amount asserted ($179,000) would indicate that the average claim of the 58 employees would be less than $3,100. Thus, the allegations of the complaint, which are in no way contradicted or supplemented by the allegations of the removal petition, not only fail to allege the requisite amount in controversy but strongly suggest that no member of the plaintiff class has a claim for more than $10,000.

There remains the question of whether defendants should be permitted to make any further showing.² Although there is little case law on the question, the decisions discovered by the court preclude going beyond an examination of the complaint and the removal petition unless the allegations in either or both, are legally sufficient, if true, to establish the jurisdictional amount. See Lindsey v. Alabama Telephone Co., 576 F.2d 593, 595 (5th Cir. 1978) "It was not open for defendants to attempt to show that the class was small enough that the claims on its behalf exceeded the sum of $10,000 per capita. Nor was it open to the district court to speculate that such was in fact the case"; Bell v. Taylor, 509 F.2d 808, 810 (5th Cir.1975) "When it plainly appears that the allegations of the petition, even if true, are legally insufficient to state a ground for removal, no hearing into their factual merit is required"; Gaitor v. Peninsular & Occidental Steamship Co., 287 F.2d 252, 255 (5th Cir.1961) "The key to the door is an affirmative showing by he sic who seeks entry of all the requisite factors of diversity jurisdiction, including amount in controversy, at the time removal is attempted."; Wright v. Continental Casualty Co., 456 F.Supp. 1075, 1078 (M.D.Fla.1978) (dictum). Compare Rollwitz v. Burlington Northern Railroad, 507 F.Supp. 582, 587 (D.Mont.1981) factual inquiry necessary where petition for removal alleged that more than $10,000 was in controversy and plaintiffs disputed this allegation; Wright v. Continental Casualty Co., supra.

The removal petition contains no separate allegation of the amount in controversy but conclusorily asserts that the complaint establishes the basis for diversity jurisdiction. As previously stated, the complaint does not sufficiently allege the requisite jurisdictional amount and, indeed, strongly suggests that the individual claims are for substantially less than $10,000.

Even if some members of the plaintiff class have individual severance pay claims exceeding $10,000, the case cannot be said to have been removed properly unless it falls within 28 U.S.C. § 1441(c), which provides:

Whenever a separate and independent claim or cause of action, which would be removable if sued upon alone, is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters not otherwise within its original jurisdiction.

At best, it is unclear whether section 1441(c) applies to a multiple plaintiff suit on the basis that each plaintiff has a "separate and independent claim or cause of action." Indeed, two noted commentators have disagreed on this question. Compare 14A C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3724 at 386-88 (1985) with 1A J. Moore & B. Ringle, Moore's Federal Practice ¶ 1634.-5 at 336 (1985). Cases applying section 1441(c) to multiple plaintiff actions have relied on Professor Moore's view. See Northside Iron & Metal Co. Inc. v. Dobson & Johnson, Inc., 480 F.2d 798 (5th Cir. 1973) citing Moore's; Stokes v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 523 F.2d 433, 438 (6th Cir.1975) citing Northside Inn. Other cases, relying on the "single wrong" test of American Fire and Casualty Co. v. Finn, 341 U.S. 6, 71 S.Ct. 534, 95 L.Ed. 702 (1951), have concluded that the "separate and independent claim" requirement was not met in multiple plaintiff cases. See National Organization for Women v. Mutual of Omaha Insurance Co., 612 F.Supp. 100, 103-04 (D.D.C.1985); Strange v. Arkansas-Oklahoma Gas Corp., 534 F.Supp. 138, 140-41 (D.Ark. 1981); Schwartz v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 424 F.Supp. 672, 673-74 (N.D.Cal.1976); Burnett v. Eastman Kodak Co., 433 F.Supp. 514 (E.D. Tenn.1977).

Plaintiffs' claims in this class action are similar to the claims of the plaintiffs in Schwartz, supra, where the plaintiff class sought to recover pension benefits withheld by the defendant employer on the basis of a "single wrong" consisting of the defendant's "policy of forfeiting pension benefits that allegedly constitute wages and thus are not subject to forfeiture," 424 F.Supp. at 674. The Schwartz court further noted that to allow removal of the class action under section 1441(c) "would be tantamount to defendant accomplishing through the back door what it could not accomplish...