Gubagoo, Inc. v. Orlando

Decision Date21 July 2020
Docket NumberCASE NO. 20-CV-80122-MARRA
PartiesGUBAGOO, INC., Plaintiff, v. PETER ORLANDO, and RESPONSELOGIX, INC., d/b/a DIGITAL AIR STRIKE, Defendants. PETER ORLANDO, Counter-claimant, v. GUBAGOO, INC., Counter-defendant.
CourtU.S. District Court — Southern District of Florida
ORDER AND OPINION

THIS CAUSE is before the Court upon Defendant Responselogix, Inc., d/b/a Digital Air Strike's Motion to Dismiss for Lack of Subject Matter Jurisdiction and Improper Venue; Alternatively, Motion to Transfer the Case to the U.S. District Court, District of Arizona [DE 43] ("Motion to Dismiss"). The Motion to Dismiss is fully briefed and ripe for review. The Court has carefully considered the motion, response, reply, the entire Court file, and is otherwise fully advised in the premises.

Introduction

This is a dispute relating to Defendant Peter Orlando's alleged breaches of restrictive covenants in his employment and separations agreements with Plaintiff resulting from his employment with Plaintiff's competitor Digital Air Strike ("DAS"). DAS moves to dismiss the Amended Complaint for lack of subject matter jurisdiction and improper venue pursuant to Fed. R. Civ. P. 12(b)(2) and 12(b)(3), 28 U.S.C. § 1332(a), 28 U.S.C. § 1391(b), 28 U.S.C. § 1460(a), and Local Rule 7.1. Alternatively, DAS moves to transfer the case to the U.S. District Court, District of Arizona pursuant to 28 U.S.C. § 1404(a).

Procedural History

On December 30, 2019, Plaintiff filed the instant action in state court1 against Peter Orlando ("Orlando") as the sole defendant (DE 1-1). The Complaint asserts claims for Breach of Contract, Injunctive Relief, a Florida Computer Abuse and Data Recovery Act Claim, and Breach of Duty of Loyalty. Orlando removed the matter on January 27, 2020 (DE 1). On March 20, 2020, Plaintiff filed an Amended Complaint (DE 27). In the Amended Complaint, Plaintiff added DAS as a defendant to the lawsuit. On April 24, 2020, Plaintiff obtained a Clerk's Default against DAS (DE 36). On April 29, 2020, DAS filed an unopposed Motion to Vacate Default (DE 39). On April 30, 2020, the Motion to Vacate Default was granted (DE 40).

Subject Matter Jurisdiction

"Federal courts are courts of limited jurisdiction." Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329 F.3d 805, 807 (11th Cir. 2003) quoting Burns v. Windsor Ins., Co., 31 F.3d 1092, 1095 (11th Cir. 1994). In order to invoke a federal court's diversity jurisdiction, a plaintiff must claim, among other things, that the amount in controversy exceeds $75,000. 28 U.S.C. § 1332. "When a plaintiff seeks injunctive or declaratory relief, the amount in controversy is the monetary value of the object of the litigation from the plaintiff's perspective." Cohen v. OfficeDepot, Inc., 204 F.3d 1069, 1077 (11th Cir. 2000) (citation omitted). A plaintiff satisfies the amount in controversy requirement by claiming a sufficient sum in good faith. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1938) ("Red Cab Co.").

When a statute includes a jurisdictional amount requirement, the district court must determine whether the matter in controversy stated in the complaint meets the prescribed amount before it properly assumes jurisdiction over the case. Selecting the proper process for making this determination often requires striking a sensitive balance between two competing policies. On the one hand, a case should not be entertained by a federal court, which is a court of limited jurisdiction, either under its original or its removal jurisdiction, if there is no basis for the assertion that the jurisdictional amount requirement has been satisfied. On the other hand, a party should not be unduly delayed or deprived unfairly from securing a resolution of his claim or defense in a federal forum by protracted litigation over a preliminary jurisdictional determination. § 3702 Jurisdictional Amount—General Principles and the Legal Certainty Test, 14AA Fed. Prac. & Proc. Juris. § 3702 (4th ed.)

"Evidence establishing the amount is required by § 1446(c)(2)(B) only when the plaintiff contests, or the court questions, the defendant's allegation." Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 (2014). In attempting to achieve a sound balance that takes into account both concerns of judicial efficiency and the integrity of the judicial process, the federal courts have developed a principle that if the district judge, or defendant (as in this case), challenges the satisfaction of the jurisdictional amount requirement, it will succeed only if it is shown that there is a legal certainty that the amount in controversy cannot be recovered. Red Cab Co., 303 U.S. at 289 (generally, "[i]t must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal"); § 3702 Jurisdictional Amount—General Principles and the Legal Certainty Test, 14AA Fed. Prac. & Proc. Juris. § 3702 (4th ed.); Wonders Trust v. Deaton, Inc., 200 F.R.D. 473, 478 (M.D. Fla. 2000) ("A reviewing court should not dismiss an action for failure to satisfy the amount-in-controversy requirement unless it appears to a 'legal certainty' that plaintiff's claim is actually for less than the jurisdictional amount.")

However, where jurisdiction is based on a claim for indeterminate damages, the Red Cab Co. "legal certainty" test gives way, and the party seeking to invoke federal jurisdiction bears the burden of proving by a preponderance of the evidence that the claim on which it is basing jurisdiction meets the jurisdictional minimum. Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329 F.3d 805, 807 (11th Cir. 2003) citing Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1356-57 (11th Cir. 1996), abrogated on other grounds by Cohen v. Office Depot, Inc., 204 F.3d 1069, 1072-77 (11th Cir. 2000); Stern v. First Liberty Ins. Corp., 424 F. Supp. 3d 1264, 1269 (S.D. Fla. 2020); Coffey v. Nationstar Mortg., LLC, 994 F. Supp. 2d 1281, 1283 (S.D. Fla. 2014); Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 752 (11th Cir. 2010) ("Pretka"); see also 28 U.S.C. § 1332(a). In determining whether subject matter jurisdiction exists, the Court must focus on the amount in controversy at the time of removal, not at any later point. Pretka, 608 F.3d at 751 (citations omitted); E.S.Y., Inc. v. Scottsdale Ins. Co., 217 F. Supp. 3d 1356, 1360 (S.D. Fla. 2015) ("E.S.Y."); see also Coker v. Amoco Oil Co., 709 F.2d 1433, 1440 (11th Cir. 1983) ("Removability should be determined 'according to the plaintiff's pleading at the time of the petition for removal.'" (citing Pullman Co. v. Jenkins, 305 U.S. 534, 537 (1939))).

"To determine whether this standard is met, a court first examines whether 'it is facially apparent from the complaint that the amount in controversy exceeds the jurisdictional requirement.'" Miedema v. Maytag Corp., 450 F.3d 1322, 1330 (11th Cir. 2006) (quotingWilliams v. Best Buy Co., Inc., 269 F.3d 1316, 1319 (11th Cir. 2001)), abrogated on other grounds by Dudley v. Eli Lilly & Co., 778 F.3d 909 (11th Cir. 2014). "If the jurisdictional amount is not facially apparent from the complaint, the court should look to the notice of removal and may require evidence relevant to the amount in controversy at the time the case was removed." Id.

"Where, as in this case, the complaint alleges an unspecified amount of damages, 'the district court is not bound by the plaintiff's representations regarding its claim,' and may review the record for evidence relevant to the amount in controversy." DO Rests., Inc. v. Aspen Specialty Ins. Co., 984 F. Supp. 2d 1342, 1344 (S.D. Fla. 2013) (citing Roe v. Michelin N. Am., Inc., 613 F.3d 1058, 1061 (11th Cir. 2010) ("Roe"). Moreover, "defendants may submit a wide range of evidence in order to satisfy the jurisdictional requirements of removal," including "affidavits, declarations, or other documentation." Pretka, 608 F.3d at 755. The Court may also use its judicial experience and make reasonable inferences and deductions to determine the amount in controversy. See Roe, 613 F.3d at 1061-62; Pretka, 608 F.3d at 754 (discussing the difference between reasonable deductions and inferences with "conjecture, speculation, or star gazing"); E.S.Y., Inc., 217 F. Supp. 3d at 1360.

In his Notice of Removal, Orlando states, in pertinent part, as follows:

15. Plaintiff seeks unspecified damages including specific performance of Defendant's Employment Agreement through an order prohibiting Defendant from continuing to be employed by his current employer in alleged violation of his contractual obligations for a period of twelve (12) months, injunctive relief, actual lost profits and economic damages for alleged deletion of computer data, disgorgement of any profits Defendant or others acting in concert with him received or earned, attorney fees, costs2 and punitive damages. Exhibit A, at pgs. 19, 22, 24, at¶¶ 80, 106-108, 117-118, and Prayers for Relief therein at (a)-(f).

16. At his current job, Defendant is earning in excess of $150,000. Therefore, Plaintiff s requested disgorgement of any profits Defendant or others acting in concert with him received or earned while since October 2019 in alleged breach of his contractual duties alone is $50,000 of the required diversity jurisdictional limit of $75,000.

17. Also, where an award of attorney fees is at issue, the amount of attorney fees incurred by the Plaintiff at the time of removal are in controversy for establishing the diversity threshold.3 See Morrison v. Allstate Indem. Co., 228 F.3d 1255, 1265 (11th Cir. 2000) ("When a statute authorizes the recovery of attorney's fees, a reasonable amount of those fees is included in the amount in controversy.") Plaintiff's Complaint seeks a fee award under various claims based on the parties Employment Agreement indemnification terms, which includes repayment of "costs, damages, fees and expenses (including reasonable attorney fees)," but does not specify an exact amount of damages incurred...

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