Kennedy v. Commercial Carriers, Inc.

• Decision Date: 25 May 1990
• Docket Number: No. 90 C 00293.,90 C 00293.
• Citation: 739 F. Supp. 406
• Parties: Clinton KENNEDY, Dale Long, Kenneth H. Chandler, and Harold Sutphin, individually and on behalf of a class of similarly situated persons, Plaintiffs, v. COMMERCIAL CARRIERS, INC., a Michigan corporation, Defendant.
• Court: U.S. District Court — Northern District of Illinois

739 F. Supp. 406

Clinton KENNEDY, Dale Long, Kenneth H. Chandler, and Harold Sutphin, individually and on behalf of a class of similarly situated persons, Plaintiffs, v. COMMERCIAL CARRIERS, INC., a Michigan corporation, Defendant.

No. 90 C 00293.

United States District Court, N.D. Illinois, E.D.

May 25, 1990.

Robin Potter, Potter & Schaffner, Joel M. Hellman, Charles Pressman, Chicago, Ill., for plaintiffs.

John T. Schriver, McDermott Will & Emery, Julie Badel, Chicago, Ill., for defendant.

MEMORANDUM OPINION

GRADY, Chief Judge.

The issue before us is whether defendant properly removed this case. For the reason stated below, we hold that removal was improper.

BACKGROUND

Plaintiffs Clinton Kennedy ("Kennedy"), Dale Long ("Long"), Kenneth Chandler ("Chandler"), and Harold Sutphin ("Sutphin") filed this purported class action, for breach of contract and an accounting, in the Circuit Court of Cook County, Illinois. In their state complaint, plaintiffs alleged as follows. Kennedy, Long, Chandler, and Sutphin are, respectively, citizens of Kentucky, Illinois, Tennessee, and Alabama. Defendant Commercial Carriers, Inc. ("Commercial"), a Michigan corporation with its principal place of business in Michigan, transports automobiles as a contract and common carrier. Each of the plaintiffs leased a transport vehicle (a tractor/truck) to Commercial, which used those trucks in its business. Each plaintiff had a separate written lease agreement with Commercial, and each lease required Commercial to pay as rent a percentage of Commercial's gross revenues from loads carried on the lessor's truck. Commercial agreed to pay sixty-five percent of its gross revenues (based upon billings to customers), less certain charges: final delivery charges where the vehicles did not make final delivery; drivers' wages and vacation pay at the union contract rates; and transportation costs attributable to the deliveries.

Plaintiffs allege that Commercial breached the leases by failing to pay them the proper rents. They claim that Commercial calculated the base rents on something less than its gross revenues. According to plaintiffs, Commercial incorrectly calculated the base rents by deducting "ancillary charges" from its gross billings prior to applying the sixty-five percent rental factor. Plaintiffs assert that Commercial should not have deducted the ancillary charges¹ prior to applying the rental factor. Plaintiffs fail, however, to allege any specific amount of damages in their complaint.

Plaintiffs also seek an accounting. They allege that Commercial's tariffs require it to bill its customers for various surcharges under certain circumstances. Plaintiffs have made numerous demands on Commercial, seeking to inspect Commercial's bills to its customers to determine whether Commercial included any and all surcharges to its customers in the base rents. Plaintiffs maintain that Commercial calculated the rents due based on the presumed billings at the standard vehicle rate, but failed to include the surcharges in the base rents.

On January 18, 1990, Commercial removed the entire case to this court, asserting both diversity and federal-question jurisdiction. In its removal petition, Commercial alleges that Kennedy and Long, along with nine other individuals purportedly included but not individually named in this case, had previously filed (and later voluntarily dismissed) an action, charging Commercial with improperly deducting ancillary charges from gross revenues in calculating rent on its equipment leases. In that previous action, the aggregate claim of the eleven plaintiffs was $945,000.00. Thus, Commercial maintains that this court has diversity jurisdiction because the named plaintiffs in this action are of diverse citizenship from it and the damages claimed by the eleven plaintiffs in the previous action, which exceed $50,000.00, are indicative of plaintiffs' losses in this action.

Commercial also maintains this court has federal-question jurisdiction. According to Commercial, during the time periods alleged in the complaint, plaintiffs were members of the Central and Southern Conference of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America ("Union"), and Commercial had a collective bargaining agreement with the Union which covered the plaintiffs. Commercial claims that the lease agreements between it and plaintiffs Chandler, Long, and Sutphin, respectively, incorporated provisions of the collective bargaining agreement. It maintains that the collective bargaining agreement defines the term "gross revenues," which is an essential compensation term of the lease agreements, and thus plaintiffs' claims are, in reality, claims for breach of the collective bargaining agreement. Commercial insists that it properly removed this case inasmuch as the Labor Management Relations Act ("LMRA") provides jurisdiction over suits alleging violations of collective bargaining agreements. 29 U.S.C. § 185(a).

Plaintiffs counter that Commercial's grounds for removal are improper. First, plaintiffs maintain that there is no federal-question jurisdiction. Plaintiffs argue that they do not allege a breach of any collective bargaining agreement. Rather, they claim that Commercial breached the lease agreements. Based on the face of their complaint, plaintiffs insist there is no federal-question jurisdiction. Further, plaintiffs assert that Caterpillar, Inc. v. Williams, 482 U.S. 386, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987), forecloses Commercial's reliance on federal-question jurisdiction. Second, plaintiffs argue that Commercial failed to make proper allegations of all the necessary elements of diversity jurisdiction. Specifically, plaintiffs maintain that Commercial failed to allege that each plaintiff has an individual claim in excess of the jurisdictional amount of $50,000.00.

Although plaintiffs contest Commercial's grounds for removal, they nonetheless maintain that there is a basis for this court to retain jurisdiction of the entire case based on diversity and the provisions of 28 U.S.C. § 1441(c). Plaintiffs assert that, although the claims of other named plaintiffs and some putative class members may be less than $50,000.00, plaintiff Kennedy's claim against Commercial is in excess of $50,000.00. Each plaintiff and each class member, they argue, has a separate contract with Commercial and has suffered a separate injury. Thus, plaintiffs contend, the claims of each plaintiff and each class member are separate and independent. Because there is diversity of citizenship between Kennedy and Commercial and the amount in controversy is in excess of $50,000.00 and because Kennedy's claim is separate and independent from the other plaintiffs' claims, Kennedy's claim supports removal of the entire case pursuant to 28 U.S.C. § 1441(c), plaintiffs contend.

DISCUSSION

The removal statute provides in relevant part:

(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district court of the United States have original jurisdiction, may be removed by the defendant or defendants, to the district court of the United States for the district and division embracing the place where such action is pending....

(b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising Under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the state in which such action is brought.

(c) 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....

28 U.S.C. § 1441.

We determine removability from the record as a whole. Oglesby v. RCA Corp., 752 F.2d 272, 277-78 (7th Cir.1985). The burden of establishing the jurisdiction of this court is on the party seeking to remove and we should remand "if there is doubt as to the right of removal in the first instance." Jones v. General Tire & Rubber Co., 541 F.2d 660, 664 (7th Cir.1976). Thus, the burden is on Commercial to establish diversity of citizenship together with the requisite jurisdictional amount, McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 56 S.Ct. 780, 80 L.Ed. 1135 (1936), or that the real nature of plaintiffs' claims is federal. Jones, 541 F.2d at 664.

Diversity Jurisdiction²

We agree with plaintiffs that Commercial's grounds for removal based on diversity jurisdiction are inadequate. In a class action,³ the courts look only to the citizenship of the representative parties. See Snyder v. Harris, 394 U.S. 332, 340, 89 S.Ct. 1053, 1058-59, 22 L.Ed.2d 319 (1969). Thus, complete diversity has to exist only between the named plaintiffs Chandler, Dale, Long and Sutphin and the defendant Commercial. There is complete diversity among the parties as the named plaintiffs are citizens of Alabama, Illinois, Kentucky, and Tennessee while defendant is a citizen of Michigan.

As to the requisite jurisdictional amount, it is axiomatic that "when several plaintiffs assert separate and distinct demands in a single suit, the amount involved in each separate controversy must be of the requisite amount to be within the jurisdiction of the district court, and that those amounts cannot be added together to satisfy jurisdictional requirements." Clark v. Paul Gray, Inc., 306 U.S. 583, 589, 59 S.Ct. 744, 748, 83 L.Ed. 1001 (1939). Thus, each plaintiff in a class action must satisfy the jurisdictional amount, and we must dismiss the claims of any plaintif...