Samuel-Bassett v. Kia Motors America, Inc.

Decision Date05 February 2004
Docket NumberNo. 03-1427.,03-1427.
Citation357 F.3d 392
PartiesShamell SAMUEL-BASSETT, on behalf of herself and all others similarly situated, Appellees v. KIA MOTORS AMERICA, INC., Appellant.
CourtU.S. Court of Appeals — Third Circuit

Joseph Kernen, (Argued), Neal Walters, Piper Rudnick, LLP, Philadelphia, for Appellant.

Michael D. Donovan, (Argued), David A. Searles, Donovan Searles, LLC, Philadelphia, James A. Francis, Francis & Mailman, P.C., Philadelphia, Alan M. Feldman, Feldman Shepherd, Wohlgelernter & Tanner, Philadelphia, for Appellees.

Before McKEE, SMITH and WEIS, Circuit Judges.

OPINION

WEIS, Circuit Judge.

In this diversity removal case involving a claim of a defect in an automobile, the District Court adopted the purchase price of the car as the overriding factor in assessing the jurisdictional amount in controversy. No allowance was made for the value of the car with the defect, nor was any reduction made for the plaintiff's use of the vehicle. Finding the record inadequate for determining the amount in controversy, we will remand for further proceedings.

The plaintiff purchased a model year 2000 KIA Sephia automobile on October 27, 1999. Dissatisfied with the performance of the car, she filed a class action against the manufacturer, Kia, in the Court of Common Pleas of Philadelphia County, Pennsylvania on January 17, 2001. The complaint alleges that because of a design defect in the braking system, plaintiff returned the car for repairs on five separate occasions between January 12, 2000 and August 22, 2000. In four instances, the brake rotors and pads had to be replaced even though the vehicle had been driven less than 17,000 miles.

Despite her requests for rescission of the purchase contract, or correction of the braking problem, she asserts the defendant failed to meet its obligations. The complaint asks for certification of a class consisting of Pennsylvania residents who purchased or leased KIA Sephia model automobiles in the years before she filed the suit.

The defendant removed the case to the Eastern District of Pennsylvania on February 12, 2001 asserting diversity between the parties and an amount in controversy exceeding $75,000. The District Court denied the plaintiff's motion to remand, rejecting her post-removal assertion that she did not seek damages in excess of $74,999. Samuel-Bassett v. Kia Motors Am., Inc., 143 F. Supp 2d. 503 (E.D.Pa.2001).

Following further proceedings, the Court certified a class consisting of residents of Pennsylvania who purchased or leased model years 1997-2001 KIA Sephia automobiles for personal, family or household purposes. Samuel-Bassett v. Kia Motors Am., Inc., 212 F.R.D. 271 (E.D.Pa. 2002). Pursuant to Federal Rule of Civil Procedure 23(f), we granted defendant's petition to appeal the class certification order.

I. Jurisdiction

Rule 23(f) provides that a Court of Appeals, in its discretion, may permit an appeal from an order of the District Court granting class certification. The scope of this review is a narrow one. See McKowan Lowe & Co., Ltd. v. Jasmine, Ltd., 295 F.3d 380, 390 (3d Cir.2002)(the Advisory Committee notes "explicitly describe Rule 23(f) as not extending to any other type of order, even where that order has some impact on another portion of Rule 23").

Although the appeal in this case is limited to the certification issue, we are obliged to examine subject matter jurisdiction. Generally speaking, an interlocutory order on jurisdiction per se by the District Court is not appealable. Harrison v. Nissan Motor Corp. In USA, 111 F.3d 343, 347 (3d Cir.1996). However, the fact that review under Rule 23(f) is restricted does not relieve the court from the duty of inquiry into its jurisdiction. See, e.g., Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986); Mitchell v. Maurer, 293 U.S. 237, 244, 55 S.Ct. 162, 79 L.Ed. 338 (1934); Employers Ins. of Wausau v. Crown Cork & Seal Co., 905 F.2d 42, 45 (3d Cir.1990). Even if the parties have not raised the issue, a Court of Appeals should examine its authority sua sponte during its review of the case. See, e.g., Medlin v. Boeing Vertol Co., 620 F.2d 957, 960 (3d Cir.1980); Kessler v. Nat'l Enters., 347 F.3d 1076 (8th Cir.2003) ($1,666,626.26 judgment vacated for lack of jurisdiction after three appeals on various issues).

In the case before us, the parties did not brief the amount in controversy, but did address the subject in supplemental submissions filed in response to our request. However, the parties would have us address the certification issue before scrutinizing subject matter jurisdiction. In Amchem Products, Inc. v. Windsor, 521 U.S. 591, 612, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997), the Supreme Court concluded that because the class certification rulings were dispositive as to all parties it would address them first rather than the jurisdictional challenges. Some of the Amchem class members unquestionably satisfied the jurisdictional monetary floor. Thus, the certification issues common to all were logically antecedent and merited priority because they applied to all members of the class, whereas the question as to the amount in controversy concerned only some of the members.

The circumstances here are quite different and we will follow the usual sequence of looking first to subject matter jurisdiction, which in this case is based on diversity of citizenship. 28 U.S.C. § 1332. Our standard of review is plenary. Packard v. Provident Nat'l Bank, 994 F.2d 1039, 1044 (3d Cir.1993).

Removal of cases from state to federal courts is governed by 28 U.S.C. § 1441. In diversity suits, the requirement of an amount in controversy exceeding $75,000 applies to removed cases as well as to litigation filed originally in the federal court. 28 U.S.C. § 1447(c) requires that, in removed cases, [i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.

In Meritcare Inc. v. St. Paul Mercury Insurance Co., 166 F.3d 214 (3d Cir.1999), we reviewed many of our opinions addressing the amount in controversy issue. Therefore, we will only briefly summarize the principles set forth in that case. It is important to bear in mind that parties may not confer subject matter jurisdiction by consent. See, e.g., United States v. Griffin, 303 U.S. 226, 229, 58 S.Ct. 601, 82 L.Ed. 764 (1938); Liberty Mut. Ins. Co. v. Ward Trucking Corp., 48 F.3d 742 (3d Cir.1995); United Indus. Workers v. Gov't of the Virgin Islands, 987 F.2d 162, 168 (3d Cir.1993).

28 U.S.C. § 1441 is to be strictly construed against removal, Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir.1990), so that the Congressional intent to restrict federal diversity jurisdiction is honored. This policy has always been rigorously enforced by the courts. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938).

II. Standard of Review

The party asserting jurisdiction bears the burden of showing that at all stages of the litigation the case is properly before the federal court. See Packard, 994 F.2d at 1045. Articulation of the standard to be applied and the extent of the burden to meet that requirement have caused some disparity in District Court opinions within this Circuit.

In Irving v. Allstate Indemnity Co., 97 F. Supp 2d. 653, 654 (E.D.Pa.2000), the District Court explained that "[c]ourts in the Third Circuit are unencumbered by consistency in their characterization of a defendant's burden of proving the amount in controversy on a motion to remand." In that case, the preponderance of the evidence standard was used.1

Other Courts have used a "reasonable probability" test, which requires the defendant to show that "a reasonable jury likely could value [the plaintiff's] losses at over $75,000." Chaparro v. State Farm Ins. Co., 1999 WL 961035, at *3-4 (E.D.Pa. 1999). In International Fleet Auto Sales, Inc. v. National Auto Credit & Agency Rent-A-Car, 1999 WL 95258, at *4 n. 7 (E.D.Pa.1999), the District Court equated the "reasonable probability" standard to the "legal certainty" approach. Several District Courts have applied the legal certainty standard. See, e.g., McDonough v. Crum & Forster Pers. Ins., 1992 WL 114951, at *3 (E.D.Pa.1992).2

The Middle District of Pennsylvania has employed a two-step process involving both parties. See Orndorff v. Allstate Ins. Co., 896 F.Supp. 173, 175 (M.D.Pa.1995)(adopting the approach taken by De Aguilar v. Boeing Co., 47 F.3d 1404, 1412 (5th Cir.1995)). Under this formula, if the defendant establishes a basis for asserting that the requisite amount in controversy has been met, the plaintiff must then prove "to a legal certainty that the claim is really for less than the jurisdictional amount" in order to support remand. Id.

Other versions have included: (1) the District Court "make[s] an independent appraisal of the value of the claim," Neff v. Gen. Motors Corp., 163 F.R.D. 478, 482 n. 5 (E.D.Pa.1995)(citing Angus v. Shiley Inc., 989 F.2d 142, 146 (3d Cir.1993)); Bishop v. Gen. Motors Corp., 925 F.Supp. 294, 299-300, 300 n. 6 (D.N.J.1996)(utilizing a similar standard); (2) adoption of the inverted legal certainty approach, in which the defendant must prove to a legal certainty that the plaintiff's damages are not less than $75,000, DiTullio v. Universal Underwriters Ins. Co., 2003 WL 21973324, at *3-*4 (E.D.Pa.2003); and (3) remanding a case "because ambiguity exists and doubt remains regarding the sufficiency of the amount in controversy." Stuessy v. Microsoft Corp., 837 F.Supp. 690, 692 (E.D.Pa.1993).

Many of the variations are purely semantical and we have found no case where the result would have been different had one of the variations described been used. However, we think it would be helpful if consistent language were used by the District Courts within this Circuit.

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