Lauchheimer v. Gulf Oil

• Decision Date: 27 April 1998
• Docket Number: Civ. No. 97-4525(JCL).
• Parties: David LAUCHHEIMER, Plaintiff, v. GULF OIL, a limited partnership, Defendant.
• Court: U.S. District Court — District of New Jersey

6 F.Supp.2d 339

David LAUCHHEIMER, Plaintiff, v. GULF OIL, a limited partnership, Defendant.

Civ. No. 97-4525(JCL).

United States District Court, D. New Jersey.

April 27, 1998.

COPYRIGHT MATERIAL OMITTED

Jeffrey Walter Herrmann, Leonard Z. Kaufmann, Cohn, Lifland, Pearlman, Herrmann & Knopf, P.C., Saddlebrook, NJ, for Plaintiff.

Michael Xavier McBride, Richard D. Catenacci, Connell, Foley & Geiser, P.C., Roseland, NJ, for Defendant.

OPINION

CHESLER, United States Magistrate Judge.

I. INTRODUCTION

This matter comes before the Court on the motion of Plaintiff, David Lauchheimer, to remand the above captioned action to the New Jersey Superior Court, Law Division, Bergen County. Plaintiff's motion was referred to the undersigned by the Honorable John C. Lifland, U.S.D.J. Oral argument was heard on March 9, 1998. For the reasons set forth below, Plaintiff's motion will be granted.

II. BACKGROUND

Plaintiff filed this action on behalf of himself and all others similarly situated for monetary damages and injunctive relief allegedly arising from Defendant's culpable conduct under the New Jersey Consumer Fraud Act (the "Act"). See Complaint ¶ 1; N.J.S.A. 56:8-1 et seq. (West Supp.1997). Plaintiff alleges that, in an effort to induce prospective customers to purchase Gulf Oil gasoline, Defendant launched an advertising campaign that encouraged customers to obtain a "Gulf MasterCard" (the "Card"). Complaint ¶ 14. Through their various methods of advertising, Defendant promised consumers using the Card a four percent (4%) discount on the price of all gasoline products purchased.¹ Id. ¶ 15. In response to this advertising campaign, Plaintiff obtained a Card and purchased gasoline and other related products from Defendant. Id. ¶ 2.

In his Complaint, Plaintiff alleges that Defendant misled both himself and other class members by misrepresenting the facts surrounding the Card's discount. Plaintiff claims that although a 4% discount is advertised, the holders of the Card do not actually receive a full 4% discount as advertised and expected. Id. ¶ 16. Plaintiff's Complaint insists that consumers do not receive a "discount" on gasoline purchases but actually receive a "credit" for the future purchase of gasoline at a Gulf station. Id. ¶ 17.

Plaintiff's Complaint continues, however, and alleges that even in months where a cardholder has a credit due, the credit may not be applied to the actual purchase of gasoline. Plaintiff contends that when computing the credit due to the cardholder for a subsequent month, any previous unused credit is first deducted from the cardholder's current balance. Accordingly, it is the cardholder's balance, not the amount purchased, that the 4% is applied to.

On August 5, 1997, Plaintiff filed this class action suit on behalf of himself and all other similarly situated New Jersey residents² in the New Jersey Superior Court Law Division, Bergen County. See Kaufmann Aff. Ex. A. Plaintiff is seeking equitable relief pursuant to the Act in the form of an injunction restraining Defendant from continuing the allegedly deceptive advertising practice. See Complaint ¶¶ 20-24. Additionally, Plaintiff is seeking monetary damages in an amount equal to the difference between 4% of the gasoline purchases and the actual discount or credit provided. Id. ¶¶ 25-28. Finally, Plaintiff seeks treble damages as permitted under the Act and reasonable attorney's fees.³

On September 19, 1997, Defendant filed a Notice of Removal, pursuant to 28 U.S.C. § 1441(a), with the Clerk of the Court. Defendant alleged that this Court had subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a)(1) and 28 U.S.C. § 1367(a). On October 24, 1997, Defendant filed its answer to the Complaint denying Plaintiff's allegations. Plaintiff thereafter filed its motion to remand this action on February 5, 1998.

III. DISCUSSION

Plaintiff argues that removal to federal court was improper because this Court lacks the necessary subject matter jurisdiction to adjudicate this action. Defendant, however, argues that there is federal subject matter jurisdiction because the parties are from different states and the amount-in-controversy, exclusive of interest and costs, is in excess of $75,000. Each argument will be discussed in turn.

A. Removal and Remand

Civil actions filed in a state court can generally be removed to a federal court in that state if the district courts of the United States have original jurisdiction.⁴ See 28 U.S.C. § 1441 (1992). The notice of removal of a civil action must be filed within thirty days after the defendant receives, through service or otherwise, a copy of the pleading that sets forth a removable claim. 28 U.S.C. § 1446(b). Once removed, however, a case may be remanded to the state court if the court determines that it lacks adequate federal subject matter jurisdiction or if the notice of removal was untimely.⁵ See 28 U.S.C. § 1447(c) (1992); Brown v. Francis, 75 F.3d 860, 864 (3d Cir.1996); Rosebud Holding, L.L.C. v. Burks, 995 F.Supp. 465, 466 (D.N.J. 1998); Independent Mach. Co. v. International Tray Pads & Packaging, Inc., 991 F.Supp. 687, 690 (D.N.J.1998).

When faced with a motion to remand, the party who removed the action has the responsibility of establishing the propriety of removal. Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 (3d Cir.1992); Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir.1990), cert. denied, 498 U.S. 1085, 111 S.Ct. 959, 112 L.Ed.2d 1046 (1991); Steel Valley Authority v. Union Switch & Signal Div., 809 F.2d 1006, 1012 n. 6 (3d Cir.1987), cert. dismissed, 484 U.S. 1021, 108 S.Ct. 739, 98 L.Ed.2d 756 (1988); Bishop v. General Motors Corp., 925 F.Supp. 294, 297 (D.N.J. 1996); Rosebud Holding, 995 F.Supp. at 466; Independent Mach., 991 F.Supp. at 690. Removal is a statutory right and, therefore, must be construed in favor of the non-removing party. Id. Any doubts about the existence of federal jurisdiction must be resolved in favor of remand. Batoff, 977 F.2d at 851; Boyer, 913 F.2d at 111; Bishop, 925 F.Supp. at 297.

B. Federal Jurisdiction

Jurisdiction in this matter is predicated upon diversity of citizenship. See Notice of Removal ¶¶ 5-12. Federal jurisdiction based on diversity of citizenship has two requirements. First, no plaintiff in the action can be a citizen of the same state as any of the defendants. Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806); Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978). Second, the "amount in controversy," exclusive of interest and costs, must exceed $75,000. 28 U.S.C. § 1332 (Supp.1998); Independent Mach., 991 F.Supp. at 690. There is no question that the parties in this case are diverse.⁶ Therefore, this Court's inquiry into the satisfaction of 28 U.S.C. § 1332 is based solely on the amount in controversy.

1. Amount in Controversy Generally

The party who invokes the jurisdiction of the federal courts carries the burden of demonstrating that court's jurisdiction. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936); Columbia Gas Transmission Corp. v. Tarbuck, 62 F.3d 538, 541 (3d Cir. 1995). Courts will generally accept a party's good faith allegation of the amount in controversy, but if it is challenged by either the opposing party or the court, the party seeking the assistance of the federal court must provide sufficient evidence to justify its claims. Id.

Generally, the amount claimed in the plaintiff's complaint is controlling and is deemed to be the entire amount in controversy. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89, 58 S.Ct. 586, 589-90, 82 L.Ed. 845 (1938). Specifically, when federal subject matter jurisdiction is based on diversity of citizenship, the amount in controversy must be determined from an examination of the complaint at the time it was filed. Horton v. Liberty Mutual Ins. Co., 367 U.S. 348, 353, 81 S.Ct. 1570, 1573, 6 L.Ed.2d 890 (1961). This is not true, however, if upon the face of the pleadings or other proof submitted, it "appears to a legal certainty that the claim is really for less." St. Paul Mercury Indem. Co., 303 U.S. at 288-89, 58 S.Ct. at 589-90, 82 L.Ed. at 845. It is then up to the plaintiff to refute the implication that jurisdiction is lacking. Gibbs v. Buck, 307 U.S. 66, 59 S.Ct. 725, 83 L.Ed. 1111 (1939); Nelson v. Keefer, 451 F.2d 289 (3d Cir.1971); Independent Mach., 991 F.Supp. at 691; Associated Business Tel. Systems Corp. v. Danihels, 829 F.Supp. 707, 709-10 (D.N.J.1993).

Where a case has been removed, however, the amount in controversy is generally gleaned from the plaintiff's complaint. Angus v. Shiley, Inc., 989 F.2d 142, 145 (3d Cir.1993); Independent Mach., 991 F.Supp. at 691; see also Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095-97 (11th Cir.1994) (recognizing that federal removal jurisdiction is determined by the amount of damages a plaintiff seeks); Wilson v. Belin, 20 F.3d 644, 651 n. 8 (5th Cir.) (noting that the amount in controversy was determined by the plaintiff's pleadings and papers), cert. denied, 513 U.S. 930, 115 S.Ct. 322, 130 L.Ed.2d 282 (1994); Marcel v. Pool, 5 F.3d 81, 84 (5th Cir.1993) (same); Shaw v. Dow Brands, 994 F.2d 364, 366 (7th Cir.1993) ("the amount in controversy [is determined] by merely looking at plaintiff's state court complaint"). The possibility that the plaintiff may "ask for or recover more after removal is not sufficient to support jurisdiction." Burns, 31 F.3d at 1097 n. 13; Asociacion Nacional de Pescadores v. Dow Quimica, 988 F.2d 559, 564-65 (5th Cir.), reh'g denied, 5 F.3d 530 (5th Cir.1993), cert. denied sub nom. Dow Chemical Co. v. Asociacion Nacional de Pescadores, 510 U.S. 1041, 114 S.Ct. 685, 126 L.Ed.2d 653 (1994); Opelika Nursing Home v. Richardson, 448 F.2d 658, 664 (5th Cir.1971). If the complaint is ambiguous as to the damages asserted, the court may consider subsequent documentation....