Roth v. Inspectorate Am. Corp.

• Decision Date: 15 September 2020
• Docket Number: CIVIL ACTION NO. 19-876-SDD-SDJ
• Parties: ALAN E. ROTH v. INSPECTORATE AMERICA CORPORATION
• Court: U.S. District Court — Middle District of Louisiana

ALAN E. ROTH v. INSPECTORATE AMERICA CORPORATION

CIVIL ACTION NO. 19-876-SDD-SDJ

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA

September 15, 2020

NOTICE

Please take note that the attached Magistrate Judge's Report and Recommendation has been filed with the Clerk of the United States District Court for the Middle District of Louisiana.

Under 28 U.S.C. § 636(b)(1), you have 14 days from receipt of this Notice to file written objections to the proposed findings of fact and conclusions of law in the Magistrate Judge's Report. A failure to object will constitute a waiver of your right to attack the factual findings on appeal.

ABSOLUTELY NO EXTENSION OF TIME SHALL BE GRANTED TO FILE

WRITTEN OBJECTIONS TO THE MAGISTRATE JUDGE'S REPORT.

Signed in Baton Rouge, Louisiana, on September 15, 2020.

/s/_________

SCOTT D. JOHNSON

UNITED STATES MAGISTRATE JUDGE

MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

Before the Court is a Motion to Remand (R. Doc. 5) filed by Plaintiff, Alan E. Roth. Defendant, Inspectorate America Corporation, filed an Opposition (R. Doc. 6) to the Motion and later a Supplemental Opposition (R. Doc. 16). Having reviewed the parties' filings and the applicable law, the Court recommends that Plaintiff's Motion to Remand (R. Doc. 5) be denied.

I. BACKGROUND

On November 22, 2019, Plaintiff sued Defendant in state court alleging it violated Louisiana's Wage Payment Act, La. Rev. Stat. § 23:631, by failing to pay him $19,687.37 in "wages" following his termination, despite Plaintiff's prior demands for payment. (R. Doc. 1-1 at 5); (R. Doc. 1-1 at 9-10) (April 16, 2019 letter demanding $20,187.37 — $19,687.37 in "back pay owed" and $500 in attorney's fees). In addition to unpaid wages, Plaintiff is seeking penalties and attorney's fees pursuant to La. Rev. Stat. § 23:632,¹ for Defendant's failure to comply with hisdemands for payment. (R. Doc. 1-1 at 5-6). Finally, Plaintiff alleges he is entitled to "recovery from Defendant for the intentional or negligent acts [it] committed . . . and injuries sustained" by Plaintiff. (R. Doc. 1-1 at 6-7). Within 30 days of service, Defendant removed the suit to federal court based on diversity jurisdiction. (R. Doc. 1).

The Notice of Removal makes clear that all parties are completely diverse² and suggests that the amount in controversy exceeds $75,000 because Plaintiff is seeking: (a) $19,687.37 in unpaid wages ($19,320) and withheld insurance premiums ($387.37) under La. Rev. Stat. § 23:631 (R. Doc. 1-1 at 4-5, 9-10); (b) $28,980 in estimated statutory penalties under La. Rev. Stat. § 23:632³; (c) attorney's fees under La. Rev. Stat. § 23:632; and (d) injuries caused by Defendant's alleged torts (R. Doc. 1 at 2-3). See La. Rev. Stat. § 23:631(A)(1)(a) (following employee's termination or resignation, final wages must be paid by the next regular payday or within 15 days,whichever comes first); La. Rev. Stat. § 23:632 (imposing penalty of up to "ninety days wages," in addition to attorney's fees, for violations of La. Rev. Stat. § 23:631).

On January 14, 2020, Plaintiff filed a Motion to Remand (R. Doc. 5), alleging the amount in controversy does not exceed $75,000, because "Plaintiff did not request a jury trial in the State Court action and his request for repayment of wages was $20,187.37." (R. Doc. 5-1 at 4). Plaintiff relies almost exclusively on the April 16, 2019 letter attached to his Petition,⁴ in which he demands the following payment under La. Rev. Stat. § 23:631 (wages after termination):

Unpaid Wages .............................................. $19,687.37

Attorney Fees ................................................ $500.00

TOTAL DUE AS OF TODAY ................................ $20,187.37

(R. Doc. 1-1 at 10). Based on this letter, Plaintiff suggests "Defendant had knowledge of the amount in controversy as being $20,187.37 prior to the filing of the petition." (R. Doc. 5-1). Plaintiff, however, ignores his remaining allegations and claims for relief. But like Defendant, he does not question the existence of complete diversity between the parties.

Defendant initially opposed the Motion to Remand on February 3, 2020, primarily relying on "Plaintiff's Petition," including the factual allegations regarding his rate of pay and unpaid wages, in addition to "relevant case law." (R. Doc. 6). But it later filed a Supplemental Opposition (R. Doc. 16) after receiving Plaintiff's Initial Disclosures on February 20, 2020, in which Plaintiff provided a computation of damages well in excess of $75,000. (R. Doc. 16-1).

II. APPLICABLE LAW

A defendant may remove "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). When original jurisdiction is based on diversity of citizenship, the cause of action must be between "citizens of different States" and the amount in controversy must exceed the "sum or value of $75,000, exclusive of interest and costs." 28 U.S.C. § 1332(a)-(a)(1). Subject matter jurisdiction must exist at the time of removal to federal court, based on the facts and allegations contained in the complaint. St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998) ("jurisdictional facts must be judged as of the time the complaint is filed").

If removal is based on diversity jurisdiction, then "the sum demanded in good faith in the initial pleading shall be deemed to be the amount in controversy." 28 U.S.C. § 1446(c)(2). But relevant here,⁵ if the "State practice . . . permits the recovery of damages in excess of the amount demanded," removal is proper "if the district court finds, by the preponderance of the evidence, that the amount in controversy exceeds [$75,000]." 28 U.S.C. § 1446(c)(2)(A)(ii)-(B). The burden of proof is on the removing defendant to establish that the amount in controversy has been satisfied. Luckett v. Delta Airlines, Inc., 171 F.3d 295, 298 (5th Cir. 1999). The defendant can meet this burden by either (1) demonstrating that it is facially apparent that the claims are likely above $75,000, or (2) setting forth facts in controversy that support a finding of the jurisdictional minimum. Id. If the defendant can produce sufficient evidence that the amount in controversy exceeds the jurisdictional threshold, the plaintiff can defeat diversity jurisdiction only by showingto a legal certainty that the amount in controversy does not exceed $75,000. See Grant v. Chevron Phillips Chem. Co., 309 F.3d 864, 869 (5th Cir. 2002).

III. ANALYSIS

Because the parties' filings confirm the existence of complete diversity (R. Doc. 1-1 at 3) (Plaintiff is a citizen of Louisiana), (R. Doc. 1-2) (Defendant is a citizen of both Delaware and Texas), the only issue before the Court is whether the amount in controversy exceeds $75,000. See 28 U.S.C. § 1332(a).

A. Amount in Controversy is Not Facially Apparent

At the time of removal, Defendant suggested the amount in controversy was facially apparent, relying on "Plaintiff's Petition," including his alleged rate of pay and unpaid wages, as well as "relevant case law." (R. Doc. 6); (R. Doc. 1 at 2-3). Plaintiff's Petition can be divided into two claims — wage violations and torts — which may be aggregated for determining the amount in controversy. See Diefenthal v. C.A.B., 681 F.2d 1039, 1053 n.15 (5th Cir. 1982) ("Each [plaintiff] may aggregate his tort and contract claims in order to satisfy the [] jurisdictional minimum."); Pearson v. Nat'l Soc. of Pub. Accountants, 200 F.2d 897, 898 (5th Cir. 1953) ("That the claims may also be aggregated to make up the jurisdictional amount in a case such as this is too clear for comment."). The Court reviews the allegations relevant to both claims below in considering whether the amount in controversy is facially apparent.

First, Plaintiff alleges Defendant violated the Louisiana Wage Payment Act (LWPA) by failing to pay his final wages following his termination (R. Doc. 1-1 at 5-6). See La. Rev. Stat. § 23:631(A)(1)(a) ("Upon the discharge of any . . . employee . . . it shall be the duty of the [employer] . . . to pay the amount then due under the terms of employment, . . . [by] the next regular payday or no later than fifteen days following the date of discharge, whichever occurs first."). For this,Plaintiff seeks his past due wages, penalties and attorney's fees (R. Doc. 1-1 at 6). See La. Rev. Stat. § 23:632(A), (C) (relevant here, "any employer who fails . . . to comply . . . shall be liable . . . for ninety days wages").

Plaintiff does specifically claim $19,687.37 in past due under the LWPA, but he does not plead a specific amount of either penalties or attorney's fees. Defendant however estimates that $28,980 is potentially due in penalties under La. Rev. Stat. § 23:632(A), based on 90 days of pay at Plaintiff's daily rate of $322.00. (R. Doc. 1 at 3) (calculating penalty of $322 per day for 90 days, based on Plaintiff allegedly earning $3,220 for 2 weeks of work (assuming 5 workdays per week, then $3,220/10 workdays = $322 per day)); (R. Doc. 1-1 at 5-6) (Plaintiff allegedly paid $3,220 for 2 weeks of work). Significantly, Plaintiff does not challenge Defendant's penalty calculation or the underlying daily rate. See Robinson v. BASF Corp., 2017 WL 5077703, at *4 (M.D. La. Oct. 13, 2017) (considering plaintiff's failure to challenge employer's estimate of penalties under the LWPA in reaching the amount in controversy).

While the figures above are based on facts alleged in the Petition, Defendant's remaining estimates of attorney's fees and compensatory tort damages are not. Under the LWPA, "[a]n award of reasonable attorney fees is mandatory in the event an employee brings a well-founded suit for unpaid wages, even if penalty wages are not due, and suits in which the recovery of back wages are granted are considered well-founded." Chesterfield v. Genesis Hospice, L.L.C., 137 So.3d 22, 25 (La. App. 1 Cir. 2013). The Court therefore "must include attorney's fees"...