Pesole v. Health Care Serv. Corp.

• Decision Date: 29 September 2017
• Docket Number: Civil Action No. 3:17–CV–1987–D
• Citation: 277 F.Supp.3d 866
• Parties: Susan PESOLE, Plaintiff, v. HEALTH CARE SERVICE CORPORATION, a Mutual Legal Reserve Company, Defendant.
• Court: U.S. District Court — Northern District of Texas

277 F.Supp.3d 866

Susan PESOLE, Plaintiff,

v.HEALTH CARE SERVICE CORPORATION, a Mutual Legal Reserve Company, Defendant.

Civil Action No. 3:17–CV–1987–D

United States District Court, N.D. Texas, Dallas Division.

Signed September 29, 2017

Matthew R. Scott, Javier Perez, Scott Perez LLP, Dallas, TX, for Plaintiff.

Mark D. Temple, Paige Taylor Bennett, Reed Smith LLP, Houston, TX, Andrew W. Yung, Yung Keithly LLP, Dallas, TX, for Defendant.

MEMORANDUM OPINION AND ORDER

SIDNEY A. FITZWATER, UNITED STATES DISTRICT JUDGE

The instant motion to remand presents the principal question whether plaintiff's pre-removal declaration that she is limiting her recovery, and the amount of any judgment, to $74,000, exclusive of interest and costs, is sufficient to establish that the amount of the matter in controversy does not satisfy the minimum jurisdictional threshold for diversity jurisdiction. Concluding that the pre-removal declaration is sufficient, the court grants plaintiff's motion and remands this case to state court.

I

This is a removed action by plaintiff Susan Pesole ("Pesole") against defendant Health Care Service Corporation ("HCSC") to recover on claims for associational disability discrimination and wrongful termination under § 21.051 of the Texas Labor Code. Pesole is a Texas citizen, and HCSC is an Illinois citizen (an Illinois corporation with its principal place of business in Illinois). HCSC timely removed the case to this court under 28 U.S.C § 1332 based on diversity of citizenship. 28 U.S.C. § 1332(a)(1) provides that the district court "shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between ... citizens of different States[.]"

Pesole moves to remand, contending that because she included statements in her state-court original petition ("petition") purporting to limit her recovery to $74,000, exclusive of interest and costs, HCSC cannot satisfy the requirement of 28 U.S.C. § 1332(a)(1) that the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs. Pesole also points to her declaration, filed concurrently in state court with her petition, in which she avers that she agrees to limit her recovery to $74,000, exclusive of interest and costs. Her sworn declaration contains the following pertinent provisions:

8. In my Original Petition, which will be filed in state court, I specifically state I am limiting the amount of my recovery, and the amount of any judgment, to $74,000.00, exclusive of interest and costs.

9. I know that the claims and causes of action I brought could afford me greater relief than $74,000.00, but I intentionally agreed to limit my recovery to $74,000.00 nonetheless, exclusive of interest and costs.

10. I do not seek, I will not seek, and I will not accept, a final judgment in excess of $74,000.00, exclusive of interest and costs.

11. A final judgment of $74,000.00, exclusive of interest and costs, would make me whole for the damages I suffered as alleged in my Original Petition.

Pesole Decl. ¶¶ 8–11. HCSC opposes Pesole's motion.

II

As the removing party, HCSC "has the burden of overcoming an initial presumption against jurisdiction and establishing that removal is proper." Carnes v. Data Return, L.L.C. , 2005 WL 265167, at *1 (N.D. Tex. Feb. 1, 2005) (Fitzwater, J.) (citing Howery v. Allstate Ins. Co. , 243 F.3d 912, 916 (5th Cir. 2001) ). "In general, defendants may remove a civil action if a federal court would have had original jurisdiction." De Aguilar v. Boeing Co. , 47 F.3d 1404, 1408 (5th Cir. 1995) (citing 28 U.S.C. § 1441(a) ). "Due regard for the rightful independence of state governments, which should actuate federal courts, requires that they scrupulously confine their own jurisdiction to the precise limits which (a federal) statute has defined." Victory Carriers, Inc. v. Law , 404 U.S. 202, 212, 92 S.Ct. 418, 30 L.Ed.2d 383 (1971) (quoting Healy v. Ratta , 292 U.S. 263, 270, 54 S.Ct. 700, 78 L.Ed. 1248 (1934) ). "The federal removal statute, 28 U.S.C. § 1441, is subject to strict construction because a defendant's use of that statute deprives a state court of a case properly before it and thereby implicates important federalism concerns." Frank v. Bear Stearns & Co. , 128 F.3d 919, 922 (5th Cir. 1997) (citing Carpenter v. Wichita Falls Indep. Sch. Dist. , 44 F.3d 362, 365 (5th Cir. 1995) ). "[D]oubts regarding whether removal jurisdiction is proper should be resolved against federal jurisdiction." Acuna v. Brown & Root Inc. , 200 F.3d 335, 339 (5th Cir. 2000).

III

The parties' diversity of citizenship is not disputed. The only issue is whether the required showing has been made that the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs.

A

When a defendant seeks to remove on the basis of diversity jurisdiction, the federal court ordinarily determines the amount in controversy based on the specific "good faith" sum demanded by the plaintiff in her state court petition. See 28 U.S.C. § 1446(c)(2) ; St. Paul Mercury Indem. Co. v. Red Cab Co. , 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938) ("[U]nless the law gives a different rule, the sum claimed by the plaintiff controls if the claim is apparently made in good faith."). "[T]he plaintiff's claim remains presumptively correct unless the defendant can show by a preponderance of the evidence that the amount in controversy is greater than the jurisdictional amount." In re 1994 Exxon Chem. Fire , 558 F.3d 378, 387 (5th Cir. 2009) (citing De Aguilar , 47 F.3d at 1412 ). This requirement can be satisfied if the defendant shows that "(1) it is apparent from the face of the petition that the claims are likely to exceed $75,000, or, alternatively, (2) the defendant sets forth ‘summary judgment type evidence’ of facts in controversy that support a finding of the requisite amount." Ford v. United Parcel Serv., Inc. (Ohio) , 2014 WL 4105965, at *2 (N.D. Tex. Aug. 21, 2014) (Fitzwater, C.J.) (citing Manguno v. Prudential Prop. & Cas. Ins. Co. , 276 F.3d 720, 723 (5th Cir. 2002) ).

Once a defendant shows that the amount in controversy more likely than not exceeds the jurisdictional amount, "the plaintiff must be able to show that, as a matter of law, it is certain that [the plaintiff] will not be able to recover more than the damages for which [she] has prayed in the state court complaint."

De Aguilar , 47 F.3d at 1411. The Fifth Circuit has suggested that a plaintiff may meet this obligation by citing a state law that prohibits recovery of damages in excess of those sought in the petition. Id. at 1412. Absent such a statute, " ‘[l]itigants who want to prevent removal must file a binding stipulation or affidavit with their complaints[.]’ " Id. (quoting In re Shell Oil Co. , 970 F.2d 355, 356 (7th Cir.1992) (per curiam)).

B

Pesole maintains that the amount in controversy requirement is not met because the stated amount in her petition is limited to $74,000, exclusive of interest and costs. HCSC responds that the face of Ford's petition and the unrebutted evidence that HCSC has submitted establish that the amount in controversy exceeds $75,000.

The court concludes that the amount stated in Pesole's state-court petition does not control because HCSC has shown by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional threshold. In the petition, Pesole seeks back pay, front pay, compensatory damages, punitive damages, and attorney's fees. HCSC has attached to its notice of removal a declaration filed by Lori Russell ("Russell"), HR Regulatory Compliance Specialist for HCSC. Russell avers that Pesole's last day of work at HCSC was February 26, 2016 and that Pesole's annual salary was around $71,000. Pesole's claim for front pay and back pay would alone exceed the sum of $75,000. Thus when Pesole's claims for compensatory damages, punitive damages, and attorney's fees are also taken into account, it is more likely than not that the amount in controversy exceeds the sum or value of $75,000, exclusive of interest and costs. See, e.g. , White v. FCI USA, Inc. , 319 F.3d 672, 674–76 (5th Cir. 2003) (affirming finding that alleged compensatory damages or punitive damages alone in wrongful termination case would exceed $75,000); Wilson v. Hibu Inc. , 2013 WL 5803816, at *3–4 (N.D. Tex. Oct. 28, 2013) (Lindsay, J.) (applying common sense analysis and concluding that it was facially apparent that plaintiff's claims in wrongful termination case for back pay, front pay, compensatory damages, punitive damages, attorney's fees, and expert fees more likely than not exceeded $75,000).

C

Pesole next posits that she has legally bound herself to an amount less than the $75,000 threshold, first, by stipulating to these limitations in her petition, and, second, by filing a declaration with her petition that binds her to a lower recovery than the jurisdictional threshold. HCSC responds that although Pesole has submitted a pre-removal declaration, it is not sufficiently binding to preclude removal. HCSC maintains that Pesole has not shown to a legal certainty that she will not be able to recover more than the damages for which she has prayed in the state court complaint because "judgment" does not include all her theories of recovery—specifically attorney's fees—and because the civil cover sheet requests damages in excess of $1,000,000.

As this court has previously explained, stipulations to limited recovery of the type contained in Pesole's state-court petition do not legally bind her because her petition can later be amended. See Ford , 2014 WL 4105965, at *4 ("Although the allegations of Ford's petition are binding judicial admissions for the time being, they will cease to be ‘conclusive and indisputable judicial admissions’ if she chooses to amend or supersede her petition[.]"). But the court agrees with Pesole that this case is distinguishable from F...