Gen. Motors Co. v. Dinatale

• Decision Date: 20 July 2010
• Docket Number: Case No. 09-14445.
• Parties: GENERAL MOTORS COMPANY, Plaintiff,v.Eugene DINATALE, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

705 F.Supp.2d 740

GENERAL MOTORS COMPANY, Plaintiff,v.Eugene DINATALE, Defendant.

Case No. 09-14445.

United States District Court,

E.D. Michigan,

Southern Division.

April 9, 2010.

As Corrected July 20, 2010.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Michael S. Clawson, Hardy, Lewis, Birmingham, MI, for Plaintiff.

Paul C. Smith, Paul C. Smith PLLC, Royal Oak, MI, for Defendant.

OPINION AND ORDER DENYING PLAINTIFF'S MOTION TO REMAND AND DEFENDANT'S MOTION TO DISMISS OR TRANSFER VENUE

DAVID M. LAWSON, District Judge.

As part of its benefits plan, plaintiff General Motors Company (GM) maintains a program that grants vehicle purchase discounts to its employees, retirees, and their families who buy a new GM vehicle. Defendant Eugene DiNatale is a GM retiree residing in Maryland who, GM alleges, availed himself of that program several times between 2003 and 2007 to obtain vehicle discounts for twenty-two unspecified people. When DiNatale failed to respond to an audit and verify that these twenty-two individuals qualified for the discount as his family members, GM brought the present action in a Michigan circuit court alleging fraud, conversion, and breach of contract claiming damages totaling $115,593.92. DiNatale removed the case to this Court, invoking diversity jurisdiction and filed a motion to dismiss for lack of personal jurisdiction or transfer venue to the District of Maryland. In response, GM amended its complaint to limit its claim for damages to no more than $75,000, and then moved to remand to state court claiming lack of subject matter jurisdiction. The Court heard oral argument on all motions on March 4, 2010 and now finds that they lack merit. Therefore, the motions will be denied.

I. Facts

General Motors Company, headquartered in this District, brought an action alleging that defendant DiNatale abused the employee vehicle discount program. It bases its claim, presumably, on the facts that DiNatale obtained discounts of a large number of vehicles and refused to respond to an audit request for verification that the purchases were qualifying individuals under GM's plan. GM filed its lawsuit on October 16, 2009 in the Wayne County, Michigan circuit court.

Eugene DiNatale resides in Baltimore, Maryland. He apparently does not dispute that he was involved in the vehicle transactions, but he avers in an affidavit that the dealerships involved in the subject sales are located in Maryland; he has not been to Michigan in over thirty years; he always worked for GM in Maryland; he has never purchased an automobile in Michigan; no one has used his Program discount to purchase an automobile in Michigan; he has no knowledge of contracting with anyone in Michigan over the Program details; he has never contacted anyone in Michigan regarding the Program at all; and his participation in this lawsuit, if held in Michigan, will require over five hundred miles of travel. DiNatale removed the case to this Court on November 13, 2009 on the ground of diversity of citizenship.

GM apparently desires to be back in state court and is willing to forego some of its claimed damages for the privilege. On December 3, 2009, it filed an amended complaint alleging that its damages are $75,000. In an affidavit filed by its attorney, the plaintiff states that it took another look at the twenty-two vehicle transactions and now believes that the loss does not add up to as much as it originally claimed. On the basis of the amended complaint, GM contends that the amount-in-controversy jurisdictional requirement is lacking, so the case must be remanded.

As for the vehicle program itself, GM states that the program guidelines establish that a request for a discount must be initiated by the employee-or, in this case, the retiree. The retiree's request is directed to the discount center located in Michigan, where the transaction records are maintained. The request triggers the issuance of an authorization number to the retiree, who in turn gives it to the dealer, and the transaction is completed at the dealership. GM's program supervisor avers that DiNatale initiated a request for an authorization number on twenty-two separate occasions between 2003 and 2007.

DiNatale insists, however, that he has no contact with Michigan whatsoever, and it would be unfair to make him litigate the case here. He contends that the Court has no personal jurisdiction over him, but if it does, he believes that venue should be transferred to his home district.

II. Motion to Remand

The federal district courts are courts of “limited jurisdiction,” and the burden of establishing jurisdiction rests with the defendant, as the party removing the case and asserting federal jurisdiction. See, e.g., Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). “ ‘[A]ll doubts as to the propriety of removal are resolved in favor of remand.’ ” Jacada (Europe), Ltd. v. Int'l Mktg. Strategies, Inc., 401 F.3d 701, 704 (6th Cir.2005) (quoting Coyne v. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir.1999)) abrogated on other grounds by Hall St. Assoc., L.L.C. v. Mattel, Inc., 552 U.S. 576, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008). A defendant seeking to remove a case to federal court on the ground of diversity of citizenship under 28 U.S.C. § 1332 must establish that the amount in controversy is over $75,000, exclusive of interest and costs, and the parties are citizens of different states or citizens of a state and citizens or subjects of a foreign state. 28 U.S.C. § 1332.

When determining the amount in controversy, the general rule is that “the sum claimed by the plaintiff controls.” Everett v. Verizon Wireless, Inc., 460 F.3d 818, 822 (6th Cir.2006) (quoting ( Gafford v. Gen. Elec. Co., 997 F.2d 150, 156 (6th Cir.1993)). However, “where plaintiffs seek ‘to recover some unspecified amount that is not self-evidently greater or less than the federal amount-in-controversy requirement,’ the defendant satisfies its burden when it proves that the amount in controversy ‘more likely than not’ exceeds $75,000.” Ibid. (quoting Gafford, 997 F.2d at 158). Under Michigan law, a plaintiff is not limited to the award claimed in its complaint; the state's procedural rules permit a plaintiff purposely to plead an amount expressly less than $75,000, but set forth allegations in the complaint that would entitle the successful plaintiff to an amount significantly in excess of the federal diversity jurisdictional threshold. See Mich. Ct. R. 2.601(A); Mich. Comp. Laws § 445.911(2); see also Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 871 (6th Cir.2000)). As a result, courts allow the removing defendant to allege specific facts and provide “competent proof” to show that the amount in controversy will exceed the amount claimed in the complaint. See, e.g., Leys v. Lowe's Home Centers, Inc., 601 F.Supp.2d 908, 918-19 (W.D.Mich.2009) (citations omitted).

Federal courts “look to the complaint at the time of removal, ... and determine whether the action was properly removed in the first place.” Ahearn v. Charter Twp. of Bloomfield, 100 F.3d 451, 453 (6th Cir.1996) (internal citations omitted). Therefore, the propriety of removal, including a determination of whether the amount in controversy has been met, is evaluated at the time of removal. Williamson v. Aetna Life Ins. Co., 481 F.3d 369, 375 (6th Cir.2007) (stating that “[j]urisdiction is determined at the time of removal”) (citing ( St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 293, 58 S.Ct. 586, 82 L.Ed. 845 (1938)); see also Everett, 460 F.3d at 822). “ ‘[A] post-removal stipulation has no effect on federal jurisdiction over the original complaint.’ ” Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 872 (6th Cir.2000) (quoting Mitchell v. White Castle Sys., Inc., No. 94-1193, 1996 WL 279863, *2 n. 2 (6th Cir. May 24, 1996 (unpublished))). Similarly, a post-removal amended complaint that reduces the amount of damages claimed will not change the assessment of jurisdiction established on the basis of the original pleading. “[E]vents occurring subsequent to removal which reduce the amount recoverable, whether beyond the plaintiff's control or the result of his volition, do not oust the district court's jurisdiction once it has attached.” St. Paul Mercury Indem. Co., 303 U.S. at 293, 58 S.Ct. 586.

General Motors Company's principal place of business is in Michigan, and it is therefore a citizen of this state. See Hertz Corp. v. Friend, ---U.S. ----, 130 S.Ct. 1181, 1192, --- L.Ed.2d ---- (2010) (holding that a corporation's “principal place of business” is “where a corporation's officers direct, control, and coordinate the corporation's activities”). DiNatale unquestionably is a citizen of Maryland. GM pleaded in its complaint an amount in controversy exceeding $75,000. Jurisdiction is established.

Citing Eastman v. Marine Mech. Corp., 438 F.3d 544 (6th Cir.2006), GM argues that the Court has the discretion to remand the case based on its newly-claimed damage amount. The plaintiff misreads the holding of that case, however. Eastman applies strictly to supplemental jurisdiction and actually holds that “if an amendment eliminates all federal claims, remand becomes a discretionary decision for the district court under 28 U.S.C. § 1367(c).” 438 F.3d at 551 (internal citations omitted). However, a court may not dismiss or remand state law claims when diversity jurisdiction is the basis of the Court's authority over the action. See Foster v. Fed. Exp. Corp., No. 04-10325, 2005 WL 3369484, at *2 (E.D.Mich. Dec. 12, 2005) (citing Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976) (observing that federal courts have a “virtually unflagging obligation ... to exercise the jurisdiction given them”)).

The motion to remand, therefore, must be denied.

III. Motion to Dismiss or Transfer Venue

A.

DiNatale argues that this Court cannot exercise personal...