Respess v. Crop Prod. Servs., Inc.
| Decision Date | 13 July 2016 |
| Docket Number | NO: 4:15-CV-00176-BR,: 4:15-CV-00176-BR |
| Court | U.S. District Court — Eastern District of North Carolina |
| Parties | CHARLES KEITH RESPESS, SR., JOHN CLAY RESPESS, AND CHARLES KEITH RESPESS, JR. d/b/a CKC FARMS; SLADES CREEK FARM, LLC; MATT RESPASS; STEPHEN KEITH DOUGLAS; HARRY PHELPS, JR.; DELBERT ARMSTRONG FARMS, INC.; DOUGLAS BOYD, JAMES BOYD, and TODD BOYD d/b/a 3-B FARMS PARTNERSHIP; and 3-B FARMS, INC., Plaintiffs, v. CROP PRODUCTION SERVICES, INC., Defendant. |
This matter is before the court on the motion to dismiss filed by defendant Crop Production Services, Inc. ("CPS"). (DE # 10.) Also before the court is the motion to remand filed by plaintiffs Charles Keith Respess, Sr., John Clay Respess, and Charles Keith Respess, Jr. d/b/a CKC Farms; Slades Creek Farm, LLC; Matt Respass; Stephen Keith Douglas; Harry Phelps, Jr.; Delbert Armstrong Farms, Inc.; Douglas Boyd, James Boyd, and Todd Boyd d/b/a 3-B Farms Partnership; and 3-B Farms, Inc. (collectively "plaintiffs"). (DE # 15.) The motions have been fully briefed and are ripe for disposition.
On 29 September 2015, plaintiffs filed this action against CPS in the Superior Court of Beaufort County, North Carolina, asserting a claim for violation of the North Carolina Unfair and Deceptive Trade Practices Act ("UDTPA"), N.C. Gen. Stat. § 75-1.1 et seq. (Compl., DE # 1-1.) Plaintiffs are farmers, operators, and owners of farming operations in and around Beaufort County. (Id. ¶ 10.) CPS is a Delaware corporation with its principal place of business in Loveland, Colorado. (Id. ¶ 9; Notice of Removal, DE # 1, ¶ 22.) The parties agree that CPS has numerous locations in North Carolina, including two agricultural supply stores located in Beaufort County: the Pantego store and the Belhaven store. (Compl., DE # 1-1, ¶ 9; Def.'s Mem., DE # 11, at 5.)
Plaintiffs allege that CPS violated the UDTPA in two ways. First, plaintiffs allege that the Belhaven store engaged in an unfair and deceptive practice by repeatedly charging plaintiffs excessive amounts for agricultural supplies in relation to other CPS locations during the four years preceding the filing of the complaint. (Id. ¶¶ 14, 16-27, 34.) Second, plaintiffs claim that the Belhaven store "recommended products which were not necessary and, in at least one instance, sold soy bean seeds which had been previously recalled resulting in an anemic crop and actual loss to one or more Plaintiffs." (Id. ¶ 28.) In the prayer for relief, each plaintiff seeks an award of no less than $25,000 in actual damages, treble damages, and attorneys' fees. (Id. ¶ 42a.) Each of the plaintiffs also seeks to recover punitive damages "in excess of $25,000." (Id. ¶ 42b.)
On 3 November 2015, CPS removed this action to this court pursuant to 28 U.S.C. §§ 1441 and 1446 on the basis of diversity of citizenship. (DE # 1.) Shortly after removing this action, CPS filed a motion to dismiss on 17 November 2015. (DE # 10.) On 29 November 2015, plaintiffs filed a motion to remand the case to North Carolina state court pursuant to 28 U.S.C. § 1447(c). (DE # 15.)
Because plaintiffs challenge the removal of this action to federal court, the court first considers the motion to remand. CPS removed this action on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332. (See DE # 1.) Federal district courts have original jurisdiction over civil actions in which the parties are of diverse citizenship and "the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs." 28 U.S.C. § 1332(a). Here, plaintiffs do not dispute that the parties are citizens of different states. Rather, plaintiffs argue that CPS has failed to meet its burden of demonstrating that the federal jurisdictional amount in controversy has been met. (Pls.' Mem., DE # 14, at 2-3.) Plaintiffs specifically contend that the removal of this action was improper because the amount in controversy is not clear on the face of the complaint. (Id.) Plaintiffs further assert that the principles of economy, convenience, fairness, and comity favor remanding this case to state court. (Id. at 4.)
Courts ordinarily determine the amount in controversy by examining "the status of the case as disclosed by the plaintiff's complaint." St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 292 (1938). The burden is on the party seeking removal to establish that the district court has original jurisdiction. Dixon v. Coburg Dairy, Inc., 369 F.3d 811, 816 (4th Cir. 2004). Where a plaintiff's complaint does not allege a specific amount in damages, the defendant need only prove by a preponderance of the evidence that the amount in controversy exceeds the requisite jurisdictional amount. Francis v. Allstate Ins. Co., 709 F.3d 362, 367 (4th Cir. 2013). "In order to satisfy the burden of preponderance of the evidence, [the] [d]efendant must show that it is more likely than not that the amount in controversy exceeds $75,000."Larsen v. Assurant, Inc., No. 3:09-CV-0038, 2009 WL 1676993, at * 1 (W.D.N.C. June 16, 2009). If the propriety of federal jurisdiction is doubtful, a remand is necessary. Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994).
Here, both parties agree that the complaint does not state the specific amount of damages sought in the action by the individual plaintiffs. Instead, the complaint states "plaintiffs have each been harmed in an amount in excess of $25,000," the sum required to file an action in North Carolina state court pursuant to N.C. Gen. Stat. § 1A-1, Rule 8(a)(2). (Compl., DE # 1-1, ¶ 37.) However, the complaint does specify that plaintiffs seek to recover treble damages, attorneys' fees, and punitive damages in connection with their UDTPA claim. (Id. ¶¶ 42a-b.) In addition, the complaint states "[p]laintiffs were charged excessive amounts for products which would total millions of dollars when viewed collectively over the relevant time frame of doing business with the Defendant." (Id. ¶ 17.) It was on the basis of these allegations concerning damages that CPS removed the case to this court. (See Not. of Removal, DE # 1, ¶¶ 24-30.)
From the face of the complaint, plaintiffs claim they each incurred at least $25,000 in damages due to CPS's unfair and deceptive trade practices. (Compl., DE # 1-1, ¶ 42a.) Because plaintiffs have asserted a claim under the UDTPA, each plaintiff would automatically be entitled to treble such damages ($75,000) if successful on this claim. See N.C. Gen. Stat. § 75-16; Pinehurst, Inc. v. O'Leary Bros. Realty, 338 S.E.2d 918, 924 (N.C. Ct. App. 1986) (). Similarly, each of the plaintiffs seeks to recover attorneys' fees, which may be awarded to the prevailing party in an unfair and deceptive trade practice suit. See N.C. Gen. Stat. § 75-16.1 (). Attorneys' fees, if awarded, would likely increase the amount recovered by each plaintiff beyond $75,000. See Missouri State Life Ins. Co. v. Jones, 290 U.S. 199, 202 (1933) ().
Plaintiffs also seek punitive damages in connection with their UDTPA claim. (Compl., DE # 1-1, ¶¶ 41-42.) However, North Carolina does not permit the recovery of punitive damages for violations of the UDTPA. See Landmar, LLC v. Wells Fargo Bank, N.A., No. 5:11-CV-00097-MOC, 2014 WL 333562, at *2 (W.D.N.C. Jan. 29, 2014) (); Pinehurst, 338 S.E.2d at 925 (). Plaintiffs do not state an independent tort to accompany their UDTPA allegations, therefore, they would not be entitled to an award of punitive damages.1 Consequently, plaintiffs' demand for punitive damages cannot be included in the amount in controversy.
Although plaintiffs cannot recover punitive damages under North Carolina law, it is facially apparent that plaintiffs' UDTPA claim could result in an award of treble damages and attorneys' fees in addition to actual damages. Viewing the aggregate amount of damages alleged in the complaint, each plaintiff's recovery would likely exceed $75,000. Accordingly, CPS has satisfied its burden of showing that it is more likely than not that the amount in controversy threshold has been met, and that removal on the basis of diversity jurisdiction is proper. Becausethe federal court's jurisdiction is based on diversity of citizenship, the court may not decline to decide plaintiffs' state-law claims. See Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 356 (1988) (). Therefore, plaintiffs' motion to remand must be denied.
The court next considers CPS's motion to dismiss plaintiffs' complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. Because this case is in federal court on diversity jurisdiction, North Carolina substantive law controls plaintiffs' state-law claims. Colgan Air, Inc. v. Raytheon Aircraft Co., 507 F.3d 270, 275 (4th Cir. 2007) (per curiam). The standard for a motion to dismiss, however, is a procedural matter controlled by federal law. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938); Hottle v. Beech Aircraft Corp., 47 F.3d 106, 109 (4th Cir. 1995) (...
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