Morales v. Fagen, Inc.
| Citation | 654 F.Supp.2d 863 |
| Decision Date | 31 July 2009 |
| Docket Number | Case No. 09-1042 (MMM/BGC). |
| Parties | Christopher MORALES, Plaintiff, v. FAGEN, INC., Defendant. |
| Court | U.S. District Court — Central District of Illinois |
David W. Olivero, Louis E. Olivero & Associates, Peru, IL, for Plaintiff.
Bryan T. Symes, Seaton Beck & Peters PA, Minneapolis, MN, for Defendant.
This order follows from Fagen's timely objection to Magistrate Judge Byron G. Cudmore's Report & Recommendation. The Magistrate Judge found that there is no federal jurisdiction over the case and, consequently, the case should be remanded to state court. (d/e 9.) For the reasons set forth below, this Court agrees.
Plaintiff, Christopher Morales ("Morales") began working as a laborer for Defendant, Fagen, Inc., ("Fagen") on October 31, 2007. (d/e 9 at 1.) Fagen paid Morales an hourly wage for his at-will employment and included a modest benefits package. (d/e 3 at 1.) On November 17, 2007, Morales was injured in a work-related accident. (d/e 9 at 1.) He filed a workers' compensation claim on January 20, 2008. (Id.) On March 12, 2008, Fagen terminated Morales, approximately four and a half months after his employment began. (Id.)
Morales then filed a retaliatory termination claim against Fagen in the Circuit Court for Putnam County, Illinois, on January 20, 2009. (d/e 1.) Morales alleges that Fagen fired him because he filed a worker's compensation claim. (Id. at 2.) Morales also claimed that he "suffered lost wages and benefits and has been humiliated and embarrassed and has suffered mental anguish and is entitled to exemplary damages." (Id.) He seeks actual damages "in excess of $50,000.00," attorney's fees, and other relief "as this Court deems proper." (Id.)
On February 3, 2009, Fagen filed a Notice of Removal. Removal was based on 28 U.S.C. § 1332, as the parties were diverse and the amount in controversy was asserted to be more than $75,000.00. (d/e 1.) With regard to the amount in controversy, Fagen stated:
Plaintiff's Complaint fails to identify with clarity or precision the alleged amount in controversy; however, the Plaintiff does seek general damages "in excess ... of $50,000.00 for the damages actually suffered by the plaintiff," "exemplary [punitive] damages," damages in response to "lost wages and benefits," humiliation, embarrassment and "mental anguish,["] as well as "attorney's fees" and "other and further relief."
Attorneys' fees, damages for mental anguish and punitive damages are potentially available pursuant to the claims made in the Complaint (and are indeed sought by the Plaintiff through his Complaint), and therefore, are properly included in determining whether the jurisdictional threshold is met. As a result, at least $75,000 is at issue in the above-captioned matter.
(d/e 1 at 2; citations omitted.) In other words, Fagen asserted that even though actual damages may not satisfy the jurisdictional amount, the other types of damages that the Morales seeks raise the case's value over the jurisdictional minimum. Fagen argued that other damages—attorneys' fees and damages for mental anguish and punitive damages— made up the difference between Morales's actual damages "in excess of $50,000.00" and the jurisdictional requirement of over $75,000.00.
The following day, the Magistrate Judge directed:
Plaintiff is given to 3/3/2009 to file objections .... Defendant is given to 3/13/2009 to answer or otherwise plead to the complaint. If Plaintiff avers he will not seek an amount in excess of $75,000, exclusive of interest and costs, the case will be remanded to State Court.
(2/4/09 Text Order)
On March 3, 2009, Morales sent the defendant a Stipulation for Voluntary Dismissal of the case from federal court to state court. (d/e 4.) In this stipulation, Morales proposed:
Plaintiff, Christopher Morales, stipulates by his Affidavit to limit his damages to a sum not to exceed seventy-five thousand ($75,000) dollars, so that the same may be remanded to state court.
(d/e 4 at 3.) Fagen refused to stipulate. (d/e 4 at 1.) Nevertheless, Morales attached and signed an affidavit which stated: "I agree to limit the total amount of damages I deem myself entitled to $75,000.00, which is just and unpaid after allowing all just credits, deductions and set-offs." (d/e 4 at 5.) The affidavit is dated February 18, 2009.
On March 18, 2009, Morales filed an Objection to Fagen's Petition for Removal and Motion to Remand. (d/e 4.) He argued that "[s]ince plaintiff avers that he is not seeking damages in an amount in excess of $75,000, ... his case should be remanded to State court." (Id. at 1.) The exhibits to this Objection and Motion included the March 3, 2009, proposed stipulation and the February 18, 2009, affidavit.
Fagen responded to Morales's Motion to Remand on April 1, 2009. (d/e 8.) It argued that previous motions demonstrated that the amount in controversy was above the jurisdictional minimum. (Id. at 2-6.) Fagen also maintained that Morales filed his Motion too late and is therefore out of luck. (Id. at 6-8.)
On June 17, 2009, Magistrate Judge Byron G. Cudmore filed his Report and Recommendation ("R & R"), in which he recommended that the Court grant Morales's motion and remand the case to state court because the "Plaintiff's scant and conclusory allegations in the Complaint are not enough to satisfy Defendant's burden of showing, by a preponderance of the evidence, that more than $75,000 is at stake." (d/e 9.) The Magistrate Judge also recommended that no fees be assessed because Fagen had a good faith basis for removing the case to federal court. In determining whether federal diversity jurisdiction existed, the Magistrate Judge found that neither party provided the calculations for how the value of the case could exceed $75,000.00. He further opined that punitive damages, attorney fees, or known wages and benefits, could not make up the difference between Morales's claim and the jurisdictional minimum.
On June 25, 2009, Fagen filed an Objection to the Magistrate Judge's R & R. (d/e 11.) The Court now addresses this Objection.
When a party objects to any part of a magistrate judge's recommendation, the standard of review is de novo. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b) () The reviewing court identifies the jurisdictional elements according to the entire record available at the time of removal. Shaw v. Dow Brands, Inc., 994 F.2d 364 (7th Cir.1993); In re Shell Oil Co., 970 F.2d 355, 355 (7th Cir.1992).
When a plaintiff files a civil complaint in state court, the defendant can remove the case to federal court if the federal court has original jurisdiction over the matter. 28 U.S.C. § 1441. A court has original jurisdiction over a matter when the parties are diverse and the amount in controversy exceeds $75,000.00. Id. § 1332. Fagen removed this case to federal court, but the Magistrate Judge found that diversity jurisdiction had not been properly established. In response, Fagen raised two fundamental objections which the Court now addresses: first, whether the parties are of diverse citizenship; second, whether punitive damages raise the amount in controversy above the $75,000.00 jurisdictional minimum.
Diversity jurisdiction requires that the plaintiff and defendant be of diverse citizenship, that is, citizens of different states. 28 U.S.C. §§ 1332(a)(1) and 1441(a). A party's domicile, rather than residence, determines citizenship. Tylka v. Gerber Prod. Co., 211 F.3d 445, 448 (7th Cir.2000) () Courts often allow a party to amend a pleading or motion that accidentally alleges "residency" rather than "citizenship." 28 U.S.C. §§ 1441(c) and 1653. Also, an opposing party generally has thirty days to object to a defective statement about citizenship. Id. § 1446(a) (). See also Hart v. FedEx Ground Package Sys. Inc., 457 F.3d 675, 677 (7th Cir.2006) ().
Fagen's objection to the R & R is misdirected. Fagen interprets part of the Magistrate Judge's findings to mean that speaking of "residency" rather than "citizenship" or "domicile" necessarily leads to remand. The Magistrate wrote:
Citizenship (domicile), not residence, is the controlling inquiry for diversity determinations. This deficiency would alone support remand. Tylka v. Gerber Products Co., 211 F.3d 445, 448 (7th Cir.2000). However, if this was the only deficiency, the Court would recommend that Defendant be allowed to amend its notice to cure the deficiency. Id. ().
(d/e 9 at 2.)
Contrary to Fagen's interpretation, the Magistrate Judge's primary concern is not about word choice, but about the disclosure of citizenship. A party's inability to show diverse citizenship would indeed support remand. Moreover, as the final sentence of the footnote reveals, the Magistrate Judge shares Fagen's understanding that the petition's choice of words is a relatively minor procedural problem compared to the jurisdictional problem of the parties' domicile.
Going beyond interpretation, this Court acknowledges that Morales never objected to this procedural oversight or claimed that the parties were not diverse. Instead, he filed his Motion to Remand forty-four days after removal, weeks after the...
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