Raymond v. Lane Const. Corp.

• Decision Date: 13 December 2007
• Docket Number: Civil No. 07-155-B-W.
• Citation: 527 F.Supp.2d 156
• Parties: Cindy RAYMOND, Plaintiff, v. The LANE CONSTRUCTION CORPORATION, Defendant.
• Court: U.S. District Court — District of Maine

527 F.Supp.2d 156

Cindy RAYMOND, Plaintiff, v. The LANE CONSTRUCTION CORPORATION, Defendant.

Civil No. 07-155-B-W.

United States District Court, D. Maine.

December 13, 2007.

Arthur J. Greif, Julie D. Farr, Gilbert & Greif, P.A., Bangor, ME, for Plaintiff.

John W. McCarthy, Brent A. Singer, Rudman & Winchell, Bangor, ME, for Defendant.

ORDER ON MOTION TO REMAND TO STATE COURT

JOHN A. WOODCOCK, JR., District Judge.

The Court denies Plaintiffs Motion to Remand to State Court, finding that the Defendant has demonstrated that the amount in controversy, including attorney's fees, meets the $75,000 jurisdictional threshold for diversity jurisdiction.

I. FACTS AND PROCEDURAL HISTORY

On September 19, 2007, Cindy Raymond filed a law suit in Maine Superior Court against The Lane Construction Corporation (Lane Construction), alleging a violation of the Maine Human Rights Act, 5 M.R.S.A. §§ 4551 et seq., and the Maine Whistleblowers' Protection Act, 26 M.R.S.A. §§ 831 et seq. Aff. of John W. McCarthy Ex. 1 (Docket # 2) (Compl.). The Complaint alleges that "[t]he amount in controversy in this dispute is $75,000.00." Id. ¶ 6. On October 4, 2007, Defendant Lane Construction petitioned for removal to this Court pursuant to 28 U.S.C. § 1441, claiming diversity of citizenship and an amount in controversy exceeding $75,000 under 28 U.S.C. § 1332. Pet. for Removal (Docket # 1). In its Petition for Removal, Lane Construction averred that "[t]he matter in controversy, as alleged by plaintiff, exceeds the value of $75,000, exclusive of interest and costs .... Attorney's fees can be part of the amount in controversy when a statute, such as the Maine Human Rights Act, allows an award of fees . . ." Id. ¶ 4.

In response, on October 9, 2007, Ms. Raymond moved to remand to state court, arguing that the amount in controversy did not exceed $75,000. Mot. To Remand to State Ct. at 1 (Mot. to Remand) (Docket # 6). She attached an affidavit signed by her attorney representing that she "is not seeking total damages in excess of $72,218.00," and "will stipulate that $72,218.00 (plus interest and costs) is the maximum award of damages which may be awarded to her in this case." Mot. to Remand Ex. 1 ¶ 4 (Ex. 1). The affidavit further represents that the plaintiff had incurred $2782 in attorney's fees as of October 4, 2007, the date of removal. Id. ¶ 3.

While she is barred by Maine statute from demanding a dollar figure in the ad damnum clauses of her complaint under 14 M.R.S.A. § 52, Ms. Raymond did allege in the body of the Complaint that "the amount in controversy in this dispute is $75,000.00." Compl. ¶ 6. Further, in her reply memorandum, Ms. Raymond states that through her attorney's affidavit, she "is not seeking `total damages' in excess of $75,000, inclusive of attorneys' fees incurred through the date of removal (but exclusive of interest and costs, which are not included in the jurisdictional amount)." Pl.'s Reply Br. in Supp. of Mot. to Remand to State Ct. at 4 (Docket # 8) (Pl.'s Reply) (footnote omitted). She defines "total damages" as "all damages—compensatory, punitive, back pay, and reinstatement and/or front pay." Id. at 4 n. 1. Lane Construction opposes this motion. Def's Objection to Pl.'s Mot. to Remand with Incorporated Mem. of Law (Docket # 7) (Def's Objection).

II. DISCUSSION

Ms. Raymond's motion neatly raises a narrow issue: Whether the potential award of future attorney's fees sustains a defendant's burden to demonstrate that the plaintiff's claim exceeds the federal diversity jurisdiction threshold in a removal action. She has squarely framed the issue because if the Court includes any attorney's fees accrued after the date of removal in the amount in controversy, her damages will exceed the jurisdictional limit.¹

A. Jurisdictional Limits

Under 28 U.S.C. § 1332(a), Congress has provided that the "district courts 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 ...." 28 U.S.C. 1332(a). In questions of federal jurisdiction, "the party invoking the jurisdiction of the federal court carries the burden of proving its existence." Coventry Sewage Assoc. v. Dworkin Realty Co., 71 F.3d 1, 4 (1st Cir.1995) (quoting Taber Partners, I v. Merit Builders, Inc., 987 F.2d 57, 60 (1st Cir.1993)). Here, Lane Construction, as the party that removed the case to this Court, bears that burden.²

B. Plaintiff's Self-Imposed Limitation of Damages

The first question is whether a plaintiff may avoid federal jurisdiction by limiting her claim for damages to less than the $75,000 threshold amount. Even if Ms. Raymond's claim could be worth more than $75,000, the United States Supreme Court has noted that a plaintiff is permitted to prevent a defendant from removing to federal court by "resort[ing] to the expedient of suing for less than the jurisdictional amount ... though he would be justly entitled to more." St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 294, 58 S.Ct. 586, 82 L.Ed. 845 (1938). In the absence of First Circuit precedent, the Court is guided by Satterfield v. F.W. Webb, Inc., in which the plaintiff maintained, from the beginning of the case, that her claim was worth less than $75,000 and had stipulated to that limit. 334 F.Supp.2d 1, 1 (D.Me.2004). The. Court adopts Satterfield: Ms. Raymond's status as a plaintiff establishes her as "`master of the claim,' and therefore [she] should have the power to limit her claim so it is not subject to federal subject matter jurisdiction."³ Id. at 5 (quoting Gafford v. General Elec. Co., 997 F.2d 150, 157 (6th Cir. 1993)).

Lane Construction points out two equivocations in Ms. Raymond's attorney's affidavit. First, the "stipulation" is not actually a stipulation, but only an offer to stipulate in the future, and second, she failed to include certain elements of damage. Def's Objection at 5-6; see supra p. 157 (describing the stipulation). Regardless, the Court accepts Ms. Raymond's attorney's stipulation that she is seeking no more than $75,000, including "compensatory, punitive, back pay, and reinstatement and/or front pay," and attorney's fees through the date of removal, but notes that this stipulation does not include attorney's fees incurred after the date of removal. Pl.'s Reply at 4 n. 1.

C. Whether Attorney's Fees. May Satisfy the Jurisdictional Threshold

This outcome leads to the next question: Whether attorney's fees should be considered at all in determining whether the threshold amount has been satisfied. The general rule is that "attorney's fees are excluded from the amount-in-controversy determination." Spielman v. Genzyme Corp., 251 F.3d 1, 7 (1st Cir.2001). However, "[t]here are two exceptions to this rule: when the fees are provided for by contract, and when a statute mandates or allows payment of the fees." Id.; Missouri State Life Ins. Co. v. Jones, 290 U.S. 199, 202, 54 S.Ct. 133, 78 L.Ed. 267 (1933); Dep't of Recreation & Sports of Puerto Rico v. World Boxing Assoc., 942 F.2d 84, 89-90 (1st Cir.1991); 14C Charles A. Wright et al., Federal Practice & Procedure § 3725 (2007 Supp.) ("When attorneys' fees are provided for by state statute as an element of damages, courts also include them in calculating the jurisdictional amount."). Here, Ms. Raymond is proceeding under the Maine Human Rights Act, which provides that "the court, in its discretion, may allow the prevailing party ... reasonable attorneys' fees and costs. . . ."⁴ 5 M.R.S.A. § 4614. The Court concludes that attorney's fees are properly considered under the Maine Human Rights Act in determining whether the jurisdictional threshold has been met.

D. Whether Future Attorney's Fees Should Be Considered

The issue, thus winnowed, is whether future attorney's fees should be considered in determining whether the threshold limit has been met. The parties marshal separate lines of authority.

Citing the rule that the critical time for determining whether the jurisdictional amount has been met is the date of removal, Ms. Raymond argues that this rule, together with two Seventh Circuit cases, stands for the proposition that future attorney's fees should not be included when determining whether the jurisdictional amount has been met. Mot. to Remand at 2 (citing Vradenburgh v. Wal-Mart Stores, Inc., 397 F.Supp.2d 76, 77-78 (D.Me.2005); Hart v. Schering-Plough Corp., 253 F.3d 272 (7th Cir.2001); and Gardynski-Leschuck v. Ford Motor Co., 142 F.3d 955 (7th Cir.1998)).

Lane Construction counters that the First Circuit has "aligned itself with the Tenth Circuit, which holds that a reasonable estimate of fees likely to be recovered by the plaintiff if she prevails should be used in calculating the jurisdictional amount in a removal proceeding based upon diversity of citizenship."⁵ Def's Objection at 4 (citing Dep't of Recreation, 942 F.2d at 90; Spielman, 251 F.3d at 5-7, 10; and Miera v. Dairyland Ins. Co., 143 F.3d 1337, 1340 (10th Cir.1998)). Ms. Raymond vociferously objects, claiming that Lane Construction mischaracterized the status of First Circuit case law, that the First Circuit comments are dicta, and that the Circuit has not decided this question. Pl.'s Reply at 2-3. She argues that this Court, as the district court did in GreatAmerica Leasing Corp. v. Rohr-Tippe Motors, Inc., should acknowledge the split between the Seventh and Tenth Circuits, and should conclude the Seventh Circuit holding is more persuasive. 387 F.Supp.2d 992 (N.D.Iowa 2005).

1. The State of Law in the First Circuit

If the First Circuit has ruled on an issue, this Court owes deference to that ruling; the first question, therefore, is whether the First Circuit has issued a definitive ruling. Eulitt v. Maine Dep't of Educ., 386 F.3d 344, 349 (1st Cir.2004); Sarzen v. Gaughan, 489 F.2d 1076, 1082 (1st Cir.1973).

Relying on two cases, Lane Construction argues that the...