Landmark Corp. v. Apogee Coal Co.

Decision Date04 November 1996
Docket NumberCivil Action No. 2:96-0476.
Citation945 F.Supp. 932
CourtU.S. District Court — Southern District of West Virginia
PartiesLANDMARK CORPORATION, Plaintiff, v. APOGEE COAL COMPANY, Defendant.

John E. Lutz, Jr., Charleston, WV, for plaintiff.

Timothy M. Miller, Charleston, WV, for defendant.

MEMORANDUM ORDER

COPENHAVER, District Judge.

This matter is before the court on plaintiff's motions to remand this action to state court and for costs pursuant to 28 U.S.C.A. § 1447(c).

I.

In 1993, plaintiff and defendant entered into a contract whereby plaintiff agreed to reclaim mines owned by defendant. Plaintiff hired employees in order to reclaim the mines. Private labor contracts and federal regulations1 acting in conjunction impose upon plaintiff monetary obligations ("Coal Act obligations") as a result of employing miners. Specifically, plaintiff is required to make payments in order to provide health benefits to miners. The amount of these payments apparently is based upon the number of employees who, after working for plaintiff, retire before working for a new employer in the mining industry. These obligations accrue until the death of the retired employee, unless the employee comes out of retirement and goes to work for a different employer in the mining industry, in which case the new employer becomes liable for the payments. Plaintiff paid $19,243.50 to the fund as a result of the employees in question as of March 31, 1996, and alleges in its complaint that damages will accrue at the rate of $1,350 per month.

Plaintiff filed an action in the Circuit Court of Kanawha County, West Virginia, on April 15, 1996. Plaintiff asserts that defendant is responsible for some of its Coal Act obligations as a result of the portion of their contract that states that "[defendant] agrees to be responsible for post-employment liabilities for the first 20 employees hired by [plaintiff] for the purpose of performing reclamation work." Plaintiff's complaint concludes:

WHEREFORE, for the foregoing reasons, plaintiff moves the Court to enter judgment against defendant equivalent to the amount of damages sustained by plaintiff at the time of the trial, plus prejudgment and post judgment interest as required by law, for its costs and for such other and further relief as this Court deems just and proper.

(Compl. at 3.)

Defendant removed this case to this court on May 17, 1996, alleging the existence of federal diversity jurisdiction as the basis for removal. On May 24, 1996, plaintiff moved to remand this case to state court.

II.

Subject to limited exceptions, a defendant may transfer a case from a state to federal court if the action is one "of which the district courts of the United States have original jurisdiction." 28 U.S.C.A. § 1441(a). Federal district courts have original jurisdiction of actions between citizens of different states in which the "matter in controversy" exceeds the value of fifty thousand dollars. 28 U.S.C.A. § 1332(a). Plaintiff asserts that, although the requisite diversity of citizenship exists, this action is not one of which this court has original jurisdiction because the matter in controversy does not exceed the value of fifty thousand dollars. A district court must remand an action that was removed from state court "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C.A. § 1447(c).

In a case that is filed initially in federal court, a district court has original jurisdiction if the requisite diversity of citizenship exists unless it "appear[s] to a legal certainty that the claim is really for less than the jurisdictional amount." St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 590, 82 L.Ed. 845 (1938). However, the "legal certainty" test expressly applies only in instances in which a plaintiff invokes federal jurisdiction by filing a case in federal court. A different test applies in removal situations like this one in which the plaintiff has made an unspecified demand for damages in state court. A defendant that removes a case from state court in which the damages sought are unspecified, asserting the existence of federal diversity jurisdiction, must prove by a preponderance of the evidence that the value of the matter in controversy exceeds the jurisdictional amount. Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th Cir.1992).2 This test is framed alternatively as a requirement that a defendant demonstrate that it is more likely than not that the amount in controversy exceeds the jurisdictional amount. Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1357 (11th Cir.1996).

Removal statutes must be construed in the light of the federalism concerns that animate the policy of strictly confining federal jurisdiction within the congressionally-set limits. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941). "The policy of the statute calls for its strict construction." Healy v. Ratta, 292 U.S. 263, 270, 54 S.Ct. 700, 703, 78 L.Ed. 1248 (1934). "If federal jurisdiction is doubtful, a remand is necessary." Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir.1994); see also Able v. Upjohn Co., 829 F.2d 1330, 1332 (4th Cir.1987) (stating that "congressional desire to restrict removal has been understood to require that doubts about the propriety of removal be resolved in favor of retained state court jurisdiction"), cert. denied, 485 U.S. 963, 108 S.Ct. 1229, 99 L.Ed.2d 429 (1988).

The amount in controversy is determined on the basis of the record existing at the time the petition for removal is filed. Red Cab, 303 U.S. at 291, 58 S.Ct. at 591; Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir.1995). The relief that plaintiff requests in its complaint is "the amount of damages sustained by plaintiff at the time of trial, plus prejudgment and post judgment interests as required by law."3 The matter in controversy thus has two aspects: (1) the Coal Act obligations incurred by plaintiff up to the time of the filing of the complaint and (2) the Coal Act obligations that plaintiff will incur between the time of the filing of the complaint and the time of trial. With regard to the first figure, plaintiff alleges that, at the time of the filing of the complaint, it had incurred damages of $19,243.50. The second figure, however, is contingent upon at least four factors: (1) the number of additional employees who retire before working for another employer in the mining industry, (2) the number of retired employees who come out of retirement in order to work for a different employer in the mining industry, (3) the number of retired employees who die, and (4) the date of the trial. "[C]osts to be incurred subsequent to the filing of the complaint but prior to trial," when they are alleged in the complaint, are properly considered as a part of the value of the matter in controversy. Broglie v. MacKay-Smith, 541 F.2d 453, 455 (4th Cir.1976). Plaintiff alleges in its complaint that its obligations under the Coal Act accrue at a rate of $1350 per month.4 Defendant has not proved by a preponderance of the evidence that at the time of trial, plaintiff's damages will be more than fifty thousand dollars.5

The value of the matter in controversy in this case is determined by considering the judgment that would be entered if plaintiff prevailed on the merits. Healy v. Ratta, 292 U.S. 263, 267, 54 S.Ct. 700, 702, 78 L.Ed. 1248 (1934) (stating that "[t]he controversy here is that defined by the pleadings, and the matter in controversy does not embrace more than the right asserted") (citation omitted). If plaintiff were to prevail on the merits, this court most likely would enter a judgment for less than fifty thousand dollars; defendant certainly has not satisfied its burden of proving otherwise. This potential judgment determines the value of the amount in controversy, and, since that value is less than the jurisdictional amount, the court does not have jurisdiction of this case.

Defendant, however, argues that the court should consider the possibility of payments incurred by plaintiff even after the beginning of trial in determining the amount in controversy. The Supreme Court faced an analogous situation in New England Mortgage Security Co. v. Gay, 145 U.S. 123, 12 S.Ct. 815, 36 L.Ed. 646 (1892). In New England Mortgage, the plaintiff entered into an allegedly usurious contract with the defendant. In order to void the contract in its entirety, the plaintiff was statutorily required to establish the existence of usury by maintaining an action that essentially involved only one of the payments. The statute provided that, by establishing usury in the first action involving a single payment, the plaintiff could void the entire contract in a second action as a matter of course.

The Supreme Court held that the value of the matter in controversy in the first action was the value of the single payment, which was less than the jurisdictional amount, despite the fact that the practical force of the first action clearly involved the validity of the entire contract, which was well in excess of the jurisdictional amount:

It is well settled in this court that when our jurisdiction depends upon the amount in controversy, it is determined by the amount involved in the particular case, and not by any contingent loss either one of the parties may sustain by the probative effect of the judgment, however certain it may be that such loss will occur.

New England Mortgage, 145 U.S. at 130, 12 S.Ct. at 816. See also Healy, 292 U.S. at 267, 54 S.Ct. at 702 (stating that "the collateral effect of the decree, by virtue of stare decisis, upon other and distinct controversies may not be considered in ascertaining whether the jurisdictional amount is involved, even though their decision turns on the same question of law").

The present matter is similar to New England...

To continue reading

Request your trial
108 cases
  • Heller v. Trienergy, Inc.
    • United States
    • U.S. District Court — Northern District of West Virginia
    • July 9, 2012
    ...the defendant bears the burden of proving that the plaintiff's claim exceeds the jurisdictional amount. Landmark Corp. v. Apogee Coal Co., 945 F.Supp. 932, 935 (S.D.W.Va.1996). Often, this burden is settled without argument because a plaintiff's good-faith claim for specific monetary damage......
  • Sayre v. Potts
    • United States
    • U.S. District Court — Southern District of West Virginia
    • January 8, 1999
    ...the defendant bears the burden of proving that each plaintiff's claim exceeds the jurisdictional amount. Landmark Corp. v. Apogee Coal Co., 945 F.Supp. 932, 935 (S.D.W.Va.1996). This burden is often resolved without debate because a plaintiff's good-faith claim for specific monetary damages......
  • Ashworth v. Albers Medical, Inc.
    • United States
    • U.S. District Court — Southern District of West Virginia
    • July 25, 2005
    ...relief that may be granted to the plaintiffs if they succeed on all of their claims asserted in good faith. Landmark Corp. v. Apogee Coal Co., 945 F.Supp. 932, 936-37 (S.D.W.Va.1996). In addition to compensatory and statutory damages, punitive damages may be included for the purpose of dete......
  • Browning v. WVDOC
    • United States
    • U.S. District Court — Northern District of West Virginia
    • February 7, 2022
    ... ... grounds upon which it rests.'” Bell Atlantic ... Corp. v. Twombly , 550 U.S. 544, 555 (2007) (quoting ... Conley v ... the jurisdictional amount.” Landmark Corp. v ... Apogee Coal Co. , 945 F.Supp. 932, 935 (S.D. W.Va.1966) ... ...
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT