Stell v. Gibco Motor Express, LLC

• Decision Date: 09 May 2016
• Docket Number: No. 3:15-cv-1105-DRH-DGW,3:15-cv-1105-DRH-DGW
• Parties: JOHN STELL and CHARLES WILLIAMS, JR., on behalf of themselves individually and as class representatives on behalf of similarly situated employees,, Plaintiffs, v. GIBCO MOTOR EXPRESS, LLC, Defendant.
• Court: U.S. District Court — Southern District of Illinois

JOHN STELL and CHARLES WILLIAMS, JR.,on behalf of themselves individually and as class representativeson behalf of similarly situated employees,, Plaintiffs, v. GIBCO MOTOR EXPRESS, LLC, Defendant.

No. 3:15-cv-1105-DRH-DGW

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ILLINOIS

May 9, 2016

ORDER

HERNDON, District Judge:

I. INTRODUCTION

This matter is before the Court on the plaintiffs' motion to remand (Doc. 26). For the following reasons, plaintiffs' motion to remand is GRANTED.

II. BACKGROUND

A. The Present Litigation

On August 28, 2015, plaintiffs, John Stell and Charles Williams, Jr., on behalf of themselves individually and as class representatives on behalf of similarly situated employees, filed a putative class action against defendant, Gibco Motor Express, LLC ("Gibco"). Plaintiffs allege Gibco failed to pay its employees overtime wages at time and a half for all hours worked over 40 hours a week in violation of the Illinois Wage Payment and Collection Act and in breach of Gibco's Employee Handbook. Plaintiffs estimate the class includes approximately 150 employees with aggregate damages amounting to approximately $400,000 (Doc. 1-1 ¶ 28; Doc. 35 p. 6). Plaintiffs John Stell and Charles Williams, Jr. are citizens of the State of Illinois. Gibco Motor Express, LLC is a citizen of the state of Indiana (Doc. 7 ¶ 6). On October 6, 2015, Gibco removed the above captioned matter to federal court pursuant to 28 U.S.C.A. §§ 1332(a) and 1441.

Presently pending is plaintiffs' motion to remand to state court. Plaintiffs' primary argument is that, because this is a putative class action, Gibco may not remove this case pursuant to Section 1332(a) (traditional diversity jurisdiction). Instead, plaintiffs insist, jurisdiction is only present if the jurisdictional requirements set forth in Section 1332(d)(2), otherwise known as the Class Action Fairness Act ("CAFA"), are satisfied. Plaintiffs argue that Gibco fails to establish that the amount in controversy exceeds CAFA's jurisdictional requirement of $5,000,000.00 and therefore, the above-captioned matter should be remanded to state court.

Gibco does not allege that the jurisdictional requirements of CAFA are present. Instead, Gibco's jurisdictional argument focuses entirely on traditional diversity jurisdiction.

B. Related Action Previously Filed in the Southern District of Illinois

This action is the progeny of a similar action against Gibco that was originally filed in the Southern District of Illinois in February 2012. See, Tyrone Ross v. Gibco Motor Express, LLC, Case No. 3:12-cv-00184-JPG-SCW ("Ross Action"). The Ross Action was filed directly in the Southern District of Illinois pursuant to CAFA. In October 2014, the presiding judge issued a show cause order directing the plaintiff show cause why the case should not be dismissed for failure to meet CAFA's amount in controversy requirement (Ross Action Doc. 89). The plaintiff was given 30 days to correct the jurisdictional defect. Id. In response, the plaintiff stated he did not believe there were sufficient grounds to assert the aggregated amount in controversy exceeds the jurisdictional requirement of $5,000,000.00 (Ross Action Doc. 90). Accordingly, the plaintiff asked the Court to dismiss the action without prejudice for lack of subject matter jurisdiction.

Plaintiffs' contend Gibco wrongfully removed this action because of the prior dismissal in the Ross Action. However, the Ross Action was voluntarily dismissed by the plaintiff because the plaintiff agreed CAFA jurisdiction did not exist. Gibco has removed the present action under the traditional diversity statute. As is explained more fully below, traditional diversity jurisdiction and CAFA jurisdiction are separate bases for subject matter jurisdiction. The fact that CAFA jurisdiction is lacking does not mean that traditional diversity jurisdiction is also lacking. Moreover, in the Ross Action, the plaintiff, as the proponent of federal jurisdiction, carried the burden of establishing jurisdiction. The plaintiffin the Ross Action concluded he could not carry this burden and elected to seek a voluntary dismissal.

III. LAW AND ANALYSIS

A. Removal

"[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 defendant or 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). The removal statute is to be interpreted narrowly, and any doubt regarding jurisdiction should be resolved in favor of the states. Schur v. L.A. Weight Loss Ctrs, Inc., 577 F.3d 752, 758 (7th Cir. 2009).

B. CAFA Does Not Replace Traditional Diversity Jurisdiction

CAFA established a new form of diversity-based subject matter jurisdiction for class actions with 100 or more class members, minimal diversity, and a $5 million aggregate amount in controversy. Despite the plaintiffs arguments to the contrary, CAFA does not supplant traditional diversity jurisdiction; it supplements it. As explained in Newberg:

CAFA does not replace the basic diversity requirements; it supplements them. That means that a class action case not arising under federal law can be lodged in federal court if it meets either the basic diversity requirements or CAFA's requirements.

2 W. Rubenstein, Newberg on Class Actions § 6:6 (5th ed.) (emphasis in original).¹

As commentators and other courts have observed, nothing in the text of Section 1332(d) purports to supplant or restrict the traditional diversity jurisdiction conferred under Section 1332(a). Absent such an express provision, the Court cannot conclude that CAFA is now the exclusive means for establishing subject matter jurisdiction over class actions. See Lu Junhong v. Boeing Co., 792 F.3d 805, 818 (7th Cir. 2015) ("A law granting one sort of jurisdiction does not implicitly negate others."). Indeed, CAFA's primary objective is to expand federal subject matter jurisdiction over class actions. See Addison Automatics, Inc. v. Hartford Cas. Ins. Co., 731 F.3d 740, 744 (7th Cir. 2013). To hold that CAFA supplants traditional diversity jurisdiction would be inconsistent with this objective.

Additionally, there are numerous post-CAFA decisions, including decisions from the Seventh Circuit Court of Appeals, which indirectly² demonstrate traditional diversity jurisdiction remains a viable basis for removal of classactions. See e.g., Avila v. CitiMortgage, Inc., 801 F.3d 777, 781 n.3 (7th Cir. 2015) (noting that jurisdiction was present under both § 1332(a) and § 1332(d), in post-CAFA putative class action); Hart v. FedEx Ground Package Sys. Inc., 457 F.3d 675, 676-77 (7th Cir. 2006) ("Because [the class representative] too is a citizen of Pennsylvania, in the absence of CAFA nothing would support federal subject-matter jurisdiction over these claims. That is because § 1332 requires 'complete diversity,' meaning that no plaintiff may be from the same state as any defendant, and in class actions only the citizenship of the named plaintiff counts.");³ County of Nassau, N.Y. v. Hotels.com, LP, 577 F.3d 89, 93 (2d Cir. 2009) (remanding for further jurisdictional analysis and noting that general diversity jurisdiction might exist even if CAFA jurisdiction does not).⁴

In summary, the Court finds CAFA does not prevent federal courts from exercising jurisdiction over class actions that fall within the parameters of the traditional diversity jurisdiction provision found in § 1332(a). Rather, CAFA provides parties with an alternative to traditional diversity jurisdiction. Thus, the Court may exercise jurisdiction over this case if the requirements of traditionaldiversity jurisdiction are met.⁵ In making that assessment, the Court applies Seventh Circuit precedent regarding the exercise of traditional diversity jurisdiction over class actions.

C. Traditional Diversity Jurisdiction is Lacking

Class actions are removable under traditional diversity if there is complete diversity of citizenship between the class representatives and the defendants, that is, no class representative is a citizen of the same state as any defendant, and the required amount in controversy is met. See 28 U.S.C. § 1332(a)(1); 28 U.S.C. § 1367; Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 125 S.Ct. 2611, 2620-21, 162 L.Ed.2d 502 (2005); Synfuel Techs., Inc. v. DHL Express (USA), Inc., 463 F.3d 646, 651-52 (7th Cir.2006); Rubel v. Pfizer Inc., 361 F.3d 1016, 1017 (7th Cir.2004); Garbie v. DaimlerChrysler Corp., 211 F.3d 407, 409, 410 (7th Cir.2000); In re Brand Name Prescription Drugs Antitrust Litig., 123 F.3d 599, 607 (7th Cir.1997); Stromberg Metal Works v. Press Mech., Inc., 77 F.3d 928, 930-33 (7th Cir.1996).

Here, complete diversity is unquestionably present. The only issue is whether the amount in controversy is met. At the outset, the Court rejects the contention that plaintiffs' claims may be aggregated in order to meet the amount in controversy requirement. As a general rule, putative class members' individualdamages cannot be aggregated to reach the required amount in controversy. In re Brand Name Prescription Drugs Antitrust Litigation, 123 F.3d 599, 607 (7th Cir. 1997). There is, however, one exception to the general rule. Under this exception, "[i]f two or more plaintiffs unite to enforce a single right or title in which they have a common and undivided interest, the amount in controversy is the aggregate in which they each have their undivided share." Id. at 608. Gibco insists the exception applies because the putative class members' claims arise from the same alleged agreement. Gibco's argument misses the mark.

In assessing whether aggregation is permitted, the question is whether the putative class members' claims are "separate and distinct" or "common and undivided." Griffith v. Sealtite Corp., 903 F.2d 495, 496 (7th Cir. 1990). Claims are "common and undivided" only when there is...