Rgi Events & Pub. Relations, LLC v. Al Qurm Mgmt. Consultancy

• Decision Date: 26 February 2019
• Docket Number: Civil Action No. 18-1828 (BAH)
• Parties: RGI EVENTS & PUBLIC RELATIONS, LLC, Plaintiff, v. AL QURM MANAGEMENT CONSULTANCY, et al., Defendants.
• Court: U.S. District Court — District of Columbia

RGI EVENTS & PUBLIC RELATIONS, LLC, Plaintiff, v. AL QURM MANAGEMENT CONSULTANCY, et al., Defendants.

Civil Action No. 18-1828 (BAH)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

February 26, 2019

Chief Judge Beryl A. Howell

MEMORANDUM OPINION AND ORDER

This removed action raises D.C. contract and tort law claims related to event planning services that the plaintiff, RGI Events & Public Relations, LLC ("RGI"), provided to defendant Al Qurm Management Consultancy ("AQC"), a corporation, and two of AQC's employees, Bassma El-Afghani and Maria Chin (the "Individual Defendants"). See Compl., ECF No. 1-1; Defs.' Resp. to Order to Show Cause ("Defs.' Resp. to Order") ¶ 2, ECF No. 27. As discussed below, this Court lacks jurisdiction to review the merits of those claims. Accordingly, this action shall be remanded to the Superior Court of the District of Columbia ("D.C. Superior Court").

I. BACKGROUND

RGI initially filed this action in D.C. Superior Court against three defendants—AQC, a corporation, and two AQC employees, Bassma El-Afghani and Maria Chin—asserting D.C. law claims for breach of contract, misappropriation of trade secrets, and tortious interference with business relations. See Compl.; Defs.' Resp. to Order ¶ 2. The defendants removed the case to this Court, see Notice of Removal, ECF No. 1, which removal RGI did not contest.

Subsequently, defendant AQC filed counterclaims against RGI, as well as a third-party complaint against Rachael Glaws, the sole member of RGI, and two others. See AQC's Answer, Third-Party Compl., and Countercls., ECF No. 6; AQC's Suppl. Countercls. with Exs., ECF No. 9. The Individual Defendants also filed a third-party complaint against Ms. Glaws. See Individual Defs.' Third-Party Compl., ECF No. 7. The parties then filed several dispositive motions against each other. Specifically, pending before the Court are (1) the Individual Defendants' Joint Motion to Dismiss RGI's Complaint, ECF No. 8; (2) RGI's Motion for Judgment on the Pleadings, ECF No. 12; and (3) RGI and Rachael Glaws's Joint Motion to Dismiss Defendants' Counterclaims and Third Party Complaints, or a Motion for Summary Judgment in the Alternative, ECF No. 14.

The Court, in reviewing the parties' filings, questioned its subject matter jurisdiction sua sponte and ordered the defendants, which bear the burden of pleading jurisdiction in this removed action, to show cause why the Court has diversity jurisdiction under 28 U.S.C. § 1332. See Min. Order (Feb. 9, 2019). The defendants submitted a sparse response totaling three paragraphs. See Defs.' Resp. to Order. RGI did not file any opposition. For the reasons explained below, upon consideration of the defendants' response and the entire record, the Court concludes jurisdiction is lacking. Thus, this action is remanded to D.C. Superior Court, and the pending motions are denied as moot.

II. LEGAL STANDARD

"[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by . . . the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). "When it appears that a district court lacks subject matter jurisdiction over a case that has been removed from a state court, the district court must remand the case . . . , and the court's order remanding the case to the state court whence it came 'is not reviewable onappeal or otherwise.'" Republic of Venezuela v. Philip Morris Inc., 287 F.3d 192, 196 (D.C. Cir. 2002) (citing 28 U.S.C. § 1447(c) and quoting id. § 1447(d)). Due to the statutory prohibition of appellate review of remanded cases, the legal standard for removal has largely been developed by the district courts.

The defendants, as the parties seeking the exercise of federal court jurisdiction over this removed case, "bear[] the burden of pleading" the basis for jurisdiction. Novak v. Capital Mgmt. & Dev. Corp., 452 F.3d 902, 906 (D.C. Cir. 2006) (internal quotation marks and citation omitted); Apton v. Volkswagen Grp. of Am., Inc., 233 F. Supp. 3d 4, 11 (D.D.C. 2017). If the defendants are unable to make this showing, a "court must remand the case." Johnson-Brown v. 2200 M Street LLC, 257 F. Supp. 2d 175, 177 (D.D.C. 2003) (citing 28 U.S.C. § 1447(c)).

"In light of the significant federalism concerns involved, this court 'strictly construes the scope of its removal jurisdiction.'" Moses v. SunTrust Mortg., Inc., No. 11-cv-00822 (BJR), 2012 WL 113375, at *2 (D.D.C. 2012) (quoting Breakman v. AOL LLC, 545 F. Supp. 2d 96, 100 (D.D.C. 2008)); accord Wells Fargo Bank, N.A. v. Wilson, No. 18-cv-2381 (RC), 2019 WL 340717, at *1 (D.D.C. Jan. 28, 2019). Even "[w]here the need to remand is not self-evident, the court must resolve any ambiguities concerning the propriety of removal in favor of remand." Animal Legal Def. Fund v. Hormel Foods Corp., 249 F. Supp. 3d 53, 56 (D.D.C. 2017) (internal quotation marks omitted) (quoting Johnson-Brown, 257 F. Supp. 2d at 177).

III. DISCUSSION

The defendants contend that this action is properly removed, based on diversity jurisdiction under 28 U.S.C. § 1332. Notice of Removal ¶ 3.¹ Section 1332 provides that federalcourts have "original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interests and costs, and is between . . . citizens of a State and citizens or subjects of a foreign state." Id. § 1332(a)(2). Thus, subject matter jurisdiction over any action raised in diversity must satisfy a two-prong inquiry: the amount in controversy must exceed $75,000, and the litigants must be diverse from one another. See id. The defendants have not sufficiently pleaded either requirement, neither of which is apparent on the face of the Complaint.

A. Amount in Controversy

Diversity jurisdiction requires that the "the matter in controversy exceeds the sum or value of $75,000." Id. § 1332(a). RGI's Complaint includes three counts for damages. Compl. ¶¶ 28-52. Count I seeks $38,655.33 for a breach of contract claim against AQC only. Id. ¶¶ 28-32. Counts II and III—for misappropriation of trade secrets and tortious interference with business relations, respectively—include claims against all three defendants. Id. ¶¶ 33-52. For each of these latter two counts, damages are "in excess of $50,000." Id. ¶¶ 43, 52. Thus, none of RGI's claims exceed $75,000.

Undaunted, the defendants argue for two amount-in-controversy calculations, based on aggregation of RGI's claims, to satisfy the $75,000 threshold. In the defendants' view, aggregated damages for (1) RGI's claims against AQC, in Counts I through III, equal "at least $138,655.33," Notice of Removal ¶ 3; and (2) the claims against all three defendants, in Counts II and III, exceed $100,000, Defs.' Resp. to Order ¶ 3. Each calculation is reviewed in turn.

First, the defendants initially argued, in a single sentence and without legal authority, that the amount-in-controversy requirement is met because "the Plaintiff has alleged damages in the amount of at least $138,655.33." Notice of Removal ¶ 3. Although the defendants' cursory explanation fails to indicate which aggregation rule justifies using this amount, the defendants appear to have aggregated all of RGI's claims against AQC in Counts I through III.

A plaintiff's claims "against a single defendant" may be aggregated to satisfy the $75,000 jurisdictional threshold. Gordon v. Aetna Life Ins. Co., 467 F.2d 717, 725 n.13 (D.C. Cir. 1971) (emphasis and internal quotation marks omitted) (quoting Snyder v. Harris, 394 U.S. 332, 335 (1969)); accord Organic Consumers Ass'n v. R.C. Bigelow, Inc., 314 F. Supp. 3d 344, 350 (D.D.C. 2018). Aggregating RGI's claims against AQC, however, does not result in an amount in controversy above $75,000. Count I seeks $38,655.33 from AQC, Compl. ¶ 32, and the remaining two Counts, which include claims against all three defendants, do not specify a separate amount in controversy for the claims against AQC, see id. ¶¶ 33-52. Therefore, the aggregated amount in controversy for RGI's claims against AQC is unknown. See McIntosh v. Gilley, 753 F. Supp. 2d 46, 62 (D.D.C. 2010) ("[J]urisdiction under section 1332(a) can only be sustained against those defendants whose respective controversies individually involve matters exceeding the jurisdictional amount." (internal quotation marks and citation omitted)); see also Middle Tenn. News Co. v. Charnel of Cincinnati, Inc., 250 F.3d 1077, 1081 (7th Cir. 2001) (denying aggregation for a plaintiff's multiple claims against a defendant because the plaintiff had not "alleged a separate amount in controversy against" the defendant).

Second, after the Court questioned the defendants' initial aggregation theory and ordered the defendants to clarify why aggregation is permissible, see Min. Order (Feb. 9, 2019) ¶ 3, the defendants submitted a bare, one-paragraph explanation, Defs.' Resp. to Order ¶ 3. This time,the defendants claimed that the amount-in-controversy requirement may be satisfied by aggregating Counts II and III, for more than $50,000 each, because these counts include misappropriation and tortious interference claims against all three defendants. Id.

This aggregation theory suffers a fatal flaw, however. "Claims against multiple defendants can be aggregated only when the defendants are jointly liable to the plaintiff." GenopsGroup LLC v. Pub. House Invs. LLC, 67 F. Supp. 3d 338, 342 (D.D.C. 2014) (collecting cases); accord Theus v. Ally Fin., Inc., 98 F. Supp. 3d 41, 46 (D.D.C. 2015); McIntosh, 753 F. Supp. 2d at 62; Rogers v. Nathan, 721 F. Supp. 1393, 1394 (D.D.C. 1989). Removing defendants may demonstrate joint liability by, for example, pointing out that the plaintiff "seek[s] to hold defendants jointly liable," or providing "indicia of corporate relationship" between the defendants to show joint liability will attach. GenopsGroup LLC, 67 F....