West Bend Elevator, Inc. v. Rhone-Poulenc S.A.
| Decision Date | 15 September 2000 |
| Docket Number | No. 00-CV-0701.,00-CV-0701. |
| Citation | 140 F.Supp.2d 963 |
| Parties | WEST BEND ELEVATOR, INC., on behalf of itself and all others similarly situated, Plaintiffs, v. RHONE-POULENC S.A., Rhone-Poulenc AG Company, Inc., Rhone-Poulenc Animal Nutrition, Inc., Degussa-Huls AG, Degussa-Huls Corporation, Mitsui & Co. U.S.A., Inc., Mitsui & Co. Ltd., Nippon Soda Company, Ltd., and Novus International, Inc. Defendants. |
| Court | U.S. District Court — Eastern District of Wisconsin |
Timothy J. Algiers, James R. Danaher, O'Meara Eckert Pouros & Gouring, West Bend, WI, Todd R. Seelman, Diel & Seelman PC, Denver, CO, Isaac Diel, Diel & Seelman, Kansas City, MO, for Plaintiff: West Bend Elevator, Inc.
David M. Balabanian, McCutchen Doyle Brown & Enersen, San Francisco, CA, Kelly A. Hardy, Quarles & Brady, Madison, WI, Deborah P. Herman, Melissa J. Nandi, Jones Day Reavis & Pogue, Cleveland, OH, W. Stuart Parsons, Quarles & Brady, Milwaukee, WI, for Defendants: Rhone-Poulenc SA Rhone-Poulenc AG Co. Rhone-Poulenc Animal Nutrition, Inc.
John M. Clear, Bryan Cave, E. Perry Johnson, Jeffrey S. Russell, St. Louis, MO, Frank L. Steeves, John P. Rocco, Crivello Carlson Mentkowski & Steeves, Milwaukee, WI, for Defendant: Novus International.
James W. Greer, Jr., Ann M. Maher, Whyte Hirschboeck Dudek SC, Milwaukee, WI, Peter E. Halle, Tara L. Reinhart, John M Truong, Morgan Lewis & Bockius, Washington, DC, for Defendant: Degussa-Huls Corporation.
Jeffrey T. Thomas, Craig H. Millet, Kevin Roosevelt, Gibson Denn & Crutcher, Irvine, CA, for Defendant: Nippon Soda Company, Ltd.
DECISION AND ORDER
Plaintiff West Bend Elevator, Inc., a Wisconsin corporation, sues defendants, all non-Wisconsin corporations that manufacture and distribute an amino acid known as methionine, which is used in animal feed. Plaintiff brought the action in state court alleging that defendants violated Wisconsin anti-trust law by illegally fixing the price of methionine during the period between 1985 and 2000. Plaintiff sued on its own behalf and as a representative of a class consisting of Wisconsin entities that indirectly purchased methionine manufactured by the defendants or their co-conspirators since January 1, 1985.
Plaintiff alleges that each of the defendants is liable to it and to class members for an unspecified amount of compensatory damages and, pursuant to Wis. Stat. Ch. 133, for treble damages, injunctive relief and attorney fees. Pursuant to 28 U.S.C. §§ 1441(a) and 1446 defendants removed the action to this court under 28 U.S.C. § 1331 based on diversity of citizenship. Plaintiff now moves remand to state court. Plaintiff concedes that the parties are diverse but argues that the court lacks subject matter jurisdiction because the amount in controversy is less than $75,000.
A state court defendant may remove an action to federal court if the action could have been initiated in federal court. 28 U.S.C. § 1441(a). The removal statute is strictly construed against removal, and all doubt is resolved in favor of remand. Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir.1993); see also Milwaukee Carpenter's Dist. Council Health Fund v. Philip Morris, Inc., 70 F.Supp.2d 888, 892 (E.D.Wis.1999). The burden of showing that federal jurisdiction exists falls on the party seeking a federal forum. Chase v. Shop `N Save Warehouse Foods, Inc., 110 F.3d 424, 427 (7th Cir.1997). When a plaintiff files suit in federal court, the amount in controversy claimed by the plaintiff in good faith generally will be determinative on the issue of jurisdictional amount, unless it appears to a legal certainty that the claim is for less than that required by the rule. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 82 L.Ed. 845 (1938); NLFC, Inc. v. Devcom Mid-America, Inc., 45 F.3d 231, 237 (7th Cir.1995). "But if the court's jurisdiction is challenged as a factual matter," id., the proponent of federal jurisdiction must support its jurisdictional allegations with "competent proof," McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 179, 56 S.Ct. 780, 80 L.Ed. 1135 (1936); see Rexford Rand Corp. v. Ancel, 58 F.3d 1215, 1218 (7th Cir.1995). This means that a defendant in a diversity removal action must offer evidence proving "`to a reasonable probability that jurisdiction exists.'" Gould v. Artisoft, Inc., 1 F.3d 544, 547 (7th Cir.1993); (quoting Shaw v. Dow Brands, Inc., 994 F.2d 364, 366 & n. 2 (7th Cir.1993)).
"`Where both actual and punitive damages are recoverable under a complaint each must be considered to the extent claimed in determining the jurisdictional amount.'" Cadek v. Great Lakes Dragaway, Inc., 58 F.3d 1209, 1211 (7th Cir.1995) (quoting Bell v. Preferred Life Assurance Soc., 320 U.S. 238, 240, 64 S.Ct. 5, 88 L.Ed. 15 (1943)); see also Sharp Elec. Corp. v. Copy Plus, Inc., 939 F.2d 513, 515 (7th Cir.1991). Where punitive damages are required to satisfy the jurisdictional requirement in a diversity case, the first question is whether punitive damages are recoverable as a matter of state law. Anthony v. Security Pac. Fin. Servs., Inc., 75 F.3d 311, 315 (7th Cir.1996). If the answer is yes, the court has subject matter jurisdiction unless it is clear "beyond a legal certainty that the plaintiff would under no circumstances be entitled to recover the jurisdictional amount." Id. (internal quotation marks and citation omitted); see also Risse v. Woodard, 491 F.2d 1170, 1173 (7th Cir.1974). However, when a claim for punitive damages makes up the bulk of the amount in controversy, and may even have been colorably asserted solely to confer jurisdiction, the claim must be scrutinized closely. Anthony, 75 F.3d at 315. And, once again, where the basis for the punitive damage claim is challenged the proponent of federal jurisdiction must provide competent proof of the jurisdictional facts. Id.; see also Wellness Community-National v. Wellness House, 70 F.3d 46, 49 (7th Cir.1995).1
In a class action at least one named plaintiff must satisfy the jurisdictional minimum. In re Brand Name Prescription Drugs Antitrust Litig., 123 F.3d 599, 607 (7th Cir.1997). If it does, the unnamed class members can, by virtue of supplemental jurisdiction conferred on the federal district courts by 28 U.S.C. § 1367, piggyback on that plaintiff's claim. Id. In determining whether the jurisdictional amount is met, I generally look at plaintiff's state court complaint along with the record as a whole, and I am limited to considering the facts existing at the time of removal. Unified Catholic Sch. of Beaver Dam Educ. Ass'n v. Universal Card Servs. Corp., 34 F.Supp.2d 714, 717 (E.D.Wis.1999).
Plaintiff could have but did not specify an amount of damages in its complaint, presumably because it did not want the case removed to federal court. Wisconsin Statute § 802.02(1m) bars claimants from specifying damages in tort cases, but this is an antitrust case and the statute is inapplicable.2 Defendants argue that the jurisdictional minimum may reasonably be inferred from the complaint, which alleges (1) a fifteen year price-fixing conspiracy in a $1.3 billion per year industry, 88 percent of which is controlled by three defendants, and (2) that Wisconsin's agriculture industry extensively uses methionine. The allegations in the complaint, however, are very general, and defendants do not provide additional evidence concerning the damages that an individual plaintiff might reasonably expect to obtain. Defendants, for example, present no evidence of the dollar volume of methionine indirectly purchased by any Wisconsin plaintiff or what portion thereof might be attributable to the alleged antitrust conduct. Thus, defendants do not meet their burden of showing to a reasonable probability that compensatory damages will exceed $75,000.
Defendants also base their claim to federal jurisdiction on plaintiff's demand for treble damages. Wisconsin Statute § 133.18(1)(a), under which plaintiff proceeds, provides that a successful plaintiff "shall recover threefold the damages sustained by the person and the cost of the suit, including reasonable attorney fees." Further, under Wisconsin law treble damages are a type of punitive damages. See John Mohr & Sons, Inc. v. Jahnke, 55 Wis.2d 402, 409-11, 198 N.W.2d 363 (1972) (); Kink v. Combs, 28 Wis.2d 65, 80, 135 N.W.2d 789 (1965) (). Thus, plaintiff's demand for treble damages brings into play the previously stated jurisdictional principles relating to punitive damage claims.
In cases where punitive damages are required to satisfy the jurisdictional minimum I ask first whether punitive damages are recoverable under state law. Anthony, 75 F.3d at 315. As indicated above the answer to this question is yes. The relevant Wisconsin statute provides that a successful plaintiff shall receive treble damages. Under the jurisdictional principles previously set forth, because the plaintiff is entitled to punitive damages under state law, this court has subject matter jurisdiction unless it is clear beyond a legal certainty that plaintiff would under no circumstances be entitled to recover the jurisdictional amount. Id. Based on the allegations in the complaint I cannot conclude that it is clear beyond a legal certainty that plaintiff could not recover an amount exceeding the jurisdictional minimum. First, there is no statutory bar to plaintiff recovering damages exceeding $75,000. Second, nothing in plaintiff's factual allegations suggests that a plaintiff could not recover over $75,000. In fact, for an individual plaintiff to fail to exceed the...
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