Santee v. Encore Receivable Management, Inc.
| Decision Date | 21 December 2007 |
| Docket Number | No. EP-07-CV-341-PRM.,EP-07-CV-341-PRM. |
| Citation | 527 F.Supp.2d 591 |
| Parties | Laurel SANTEE, Plaintiff, v. ENCORE RECEIVABLE MANAGEMENT, INC. and International Fidelity Insurance Company, Defendants. |
| Court | U.S. District Court — Western District of Texas |
Judge. On this day, the Court considered Plaintiff Laurel Santee's "Opposed Motion to Remand to State Court and Brief in Support," filed on October 30, 2007; Defendants Encore Receivable Management, Inc. and International Fidelity Insurance Company's "Reply to Plaintiffs Motion to Remand to State Court," filed on November 7, 2007; Plaintiffs "Reply to Defendants' Reply [sic] [Response] to Plaintiffs Motion to Remand to State Court and Brief in Support," filed on November 14, 2007; and the oral arguments made by the parties at a hearing on November 30, 2007, in the above-captioned cause. After due consideration, the Court is of the opinion that the case should be remanded for the reasons set forth below.
Plaintiff is a citizen and resident of Texas. Defs' Not. of Removal 3. Defendant Encore Receivable Management Inc. is a Kansas corporation with its principal place of business in Kansas. Id. Defendant International Fidelity Insurance Company is a New Jersey corporation with its principal place of business in New Jersey. Id.
Plaintiff filed suit on May 5, 2006, in the 346th Judicial District Court of El Paso County, Texas, alleging that Defendants (1) violated Chapter 392 of the Texas Finance Code, (2) violated her right to be free from unreasonable collection efforts, and (3) violated her right to be free from an invasion of privacy. Pl.'s Orig. Pet. and Req. for Disclosure, 4-5.1 In a series of amended petitions, Plaintiff brought forth additional claims: that Defendants (1) violated the Texas Deceptive Trade Practices Act, (2) violated the Federal Telephone Consumer Protection Act, 47 U.S.C. § 227, ("TCPA"),2 (3) violated Section 34.47 of the Texas Business and Commerce Code, and (4) were negligent. Pl.'s Seventh Amended Pet. 4-10.3
Defendants filed a "Notice of Removal" on October 9, 2007. Plaintiff filed the instant Motion on the ground that Defendants' "Notice of Removal" was filed outside the statutory limit for such a filing, and asks the Court to remand the case. Pl.'s Mot. 6. She also seeks recovery of attorneys' fees and costs incurred as a result of Defendants' removal. Id. at 1.
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) (Lexis 2007). District courts have original jurisdiction over suits in which the requirements for diversity jurisdiction exist. 28 U.S.C. § 1332 (Lexis 2007). However, there is a presumption against the existence of federal jurisdiction, and "the burden of establishing federal jurisdiction rests on the party seeking the federal forum." Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir.2001). This burden "extends not only to demonstrating a jurisdictional basis for removal, but also necessary compliance with the requirements of the removal statute." Blanchard v. Wal-Mart Stores, Tex., LP, 368 F.Supp.2d 621, 623 (E.D.Tex.2005) (internal quotations omitted).
When a plaintiff chooses to file suit in state court, a defendant may generally remove the case to federal court if there is complete diversity of citizenship among the parties and the amount in controversy exceeds $75,000. 28 U.S.C. §§ 1332, 1441(a). A defendant must also satisfy certain procedural requirements. Blanchard, 368 F.Supp.2d at 623. Most relevant to the instant inquiry is 28 U.S.C. § 1446(b), which sets forth that,
[i]f the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant ... of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is One which has become removable, except that a case may not be removed on the basis of [diversity jurisdiction] more than 1 year after commencement of the action.
28 U.S.C. § 1446(b) (emphasis added). Any doubts as to the propriety of removal jurisdiction should be resolved in favor of remand. Acuna v. Brown & Root Inc., 200 F.3d 335, 339 (5th Cir.2000).
Plaintiff argues that the case should be remanded because the Notice of Removal was filed outside of the one year limit set forth in § 1446(b), and the Notice of Removal was filed more than thirty days after Defendants received "a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which has become removable," in violation of the thirty day limit set forth in § 1446(b).4 Pl.'s Mot. 6-8.
Plaintiff asserts that the one year limit set forth in § 1446(b) is applicable, that Defendants removed the case "well over one year after [it] was filed," and "substantial progress has been made on the case in state court." Id. at 8. She argues Defendants acted in bad faith and "had no objectively reasonable basis to remove this case to federal court." Id. at 1. Plaintiff notes that Defendants seek an equitable exception to the one year limit, but asserts that Defendants do not demonstrate such an exception is warranted in part because they failed to remove the case within thirty days of learning the amount in controversy exceeds $75,000. Pl.'s Reply to Defs' Resp. to Pl.'s Mot. 4.
Plaintiff argues Defendants had notice that the amount in controversy exceeds $75,000 more than thirty days before they filed their "Notice of Removal." Pl.'s Mot. 7. Plaintiff submits Defendants received her "Sixth Amended Original Petition and Request for Disclosure" 120 days before they removed the case. Id. Therein, Plaintiff requested damages of $500 or $1,500 for each telephone call she received from Defendants. Pl.'s Sixth Am. Pet. 8-9. Defendants sent a document entitled "Responses to Plaintiff's Seventh Set of Discovery Requests," to Plaintiff on May 18, 2007, in which they admit calling Plaintiff 220 times. Pl.'s Mot.App. 12. Plaintiff asserts that her Sixth Amended Petition, in conjunction with Defendants' admission with respect to the number of calls, demonstrates the amount in controversy is, at a minimum, $110,000.5 Id. at 7.
Plaintiff also sets forth that the amount in controversy could have been determined from her "Fourth Supplement to Plaintiff's Responses and Objections to Defendants' Interrogatories and Requests for Production of Documents," sent via certified mail, return receipt requested, to Defendants' attorney on June 18, 2007, wherein she sought a minimum range of damages of $110,000 to $300,000.6 Id. at 7. Further, she submits a letter, dated August 7, 2007, from Defendants' attorney to her attorney in which Defendants' attorney writes that he understood Plaintiff to be seeking damages of $421,000 to $1,200,000. Id. App. 40. Finally, she submits a letter, dated August 8, 2007, and sent from Plaintiff's attorney to Defendants' attorney, seeking "a minimum range of damages of $110,000 to $330,000." Id. App. 49.
Defendants concede they removed the cause more than one year after the commencement of the state court action. Defs' Resp. to Pl.'s Mot. 1. However, they argue that an equitable exception to the one year limit on filing a removal notice in a diversity case is warranted because Plaintiff acted in bad faith. Id. at 7. They further assert that they removed the case "within thirty (30) days of receiving adequate written information enabling [them] to intelligently ascertain that this case is one that became removable."7 Id.
Defendants assert that Plaintiff "engaged in deceitful forum manipulation designed to prevent Defendants an opportunity [sic] to assert the statutory right to remove." Id. at 2. They assert that Plaintiff s pleadings, "from the original complaint through the Fifth Amended Complaint, affirmatively stated that the amount in controversy did not exceed $75,000." Id. at 5 (emphasis in original). They admit receiving pleadings and other documents as early as June 11, 2007, that did not expressly limit the amount in controversy to less than $75,000, but assert those documents did not make clear that the case was removable. Id. at 2-3. Defendants argue that Plaintiff's "deceitful forum manipulation" resulted in their being unaware that the amount in controversy exceeds $75,000 until September 13, 2007, and so the removal notice filed on October 9, 2007, was within the 30 day limit set forth in § 1446(b). Id. at 2.
There is no dispute that the parties are diverse, that the amount in controversy exceeds $75,000, or that Defendants' "Notice of Removal" was filed more than one year after the case was initially filed. Accordingly, Defendant's removal does not comply with the one year limit set forth in § 1446(b). However, that limit is subject to equitable exception "[w]here a plaintiff has attempted to manipulate the statutory rules for determining federal removal jurisdiction, thereby preventing the defendant from exercising its rights." Tedford v. Warner-Lambert Co., 327 F.3d 423, 428-29 (5th Cir.2003). In Tedford, the plaintiff joined a non-diverse party three hours after receiving notice that the defendant planned to remove the case, and then nonsuited the non-diverse defendant shortly before the expiration of one year after filing the original claim, without notifying the diverse defendant of such nonsuit. Id. at 427. The defendant did not learn the non-diverse defendant was nonsuited...
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