United States District Court, N.D. Alabama, Eastern Division
MEMORANDUM OPINION AND ORDER
OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE.
case stems from a dispute concerning assignment of a lease
made between Community Foundation of North Alabama and
Anniston HMA, which is fully guaranteed by Health Management
Associates. The Foundation sued AHMA in the Circuit Court of
Calhoun County, Alabama, seeking a declaratory judgment that
the lease had already been assigned and asking for an
injunction against AHMA proceeding to arbitration. The
Foundation then moved to remand the case back to state court
based on insufficient amount in controversy. (Doc. 4).
Because the court finds it has subject matter jurisdiction
over this matter, the court DENIES the Foundation's
Foundation is a non-profit organization that operates as a
testamentary trust whose purpose is to establish a hospital
to serve the local community. In 2008, the Foundation and
AHMA executed a 40-year lease of the hospital established by
the trust. The rent per year under the lease was $600, 000.
HMA fully guaranteed the lease.
November 2016, AHMA and The Health Care Authority of
Anniston, which operates as Regional Medical Center
(“RMC”), began negotiations to structure a deal
where AHMA would sell its assets, including the lease with
the Foundation, to RMC. AHMA and RMC drafted an Asset
Purchase Agreement to that effect, which was agreed to on
March 3, 2017 and closed on May 1, 2017.
lease specifies that assignments are not permitted unless
specific conditions are satisfied. If the Foundation consents
to the assignment, Section 17.4 allows the lease to be
assigned without recourse against AHMA or HMA. Section 17.5
allows the lease to be assigned without the Foundation's
consent, so long as AHMA and HMA remained fully obligated
under the lease.Finally, Section 17.6 provides that if the
Foundation declines to consent under Section 17.4, the
question of the assignability of the lease could be submitted
April 5, 2017, AHMA and HMA asked the Foundation for consent
to assign the lease to RMC. On April 27, the Foundation's
Board met and declined the request. The next day, AHMA and
HMA served the Foundation with a demand for arbitration under
Section 17.6 of the lease. On May 3, the Foundation sued in
Calhoun County Circuit Court seeking a declaratory judgment
that the lease had already been assigned under Section 17.5
on May 1, 2017, when the APA closed, and requested an
injunction preventing AHMA and HMA from pursuing arbitration.
AHMA and HMA removed the action on the same day it was filed.
Foundation's request, the court set a hearing for May 4
on its request for emergency relief. Barely over half an hour
before the hearing, the Foundation filed a motion to remand.
(Doc. 4). Because the Foundation challenged the court's
subject matter jurisdiction, the court acknowledged at the
hearing that its jurisdiction had to be resolved before it
could address the Foundation's request for emergency
relief. Thus, the court set a briefing schedule on the motion
to remand, which is now under submission.
next day, AHMA and HMA offered the Foundation $75, 001 for
consent to assign the lease. The offer expired on May 8
without the Foundation accepting it.
STANDARD OF REVIEW
with the limited nature of federal jurisdiction, the party
seeking a federal venue must establish the federal
venue's jurisdictional requirements. See Lujan v.
Defenders of Wildlife, 504 U.S. 555, 561 (1992). In the
removal context, the removing defendant must establish the
court's jurisdiction. Miedema v. Maytag Corp.,
450 F.3d 1322, 1328 (11th Cir. 2006). When the plaintiff has
not specified the amount of damages in the complaint, the
removing defendant must establish the jurisdictional amount
by a preponderance of the evidence. See Dart Cherokee
Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 554
Foundation cites authority that a removing party must prove
the amount in controversy to “a legal certainty.”
See (Doc. 4 at 3). However, the 2012 amendment to
the removal procedure statute lowers that standard, even if
the complaint contains a sum demanded in good faith.
See 28 U.S.C. 1446(c)(2)(B) (“[R]emoval of the
action is proper on the basis of an amount in controversy
asserted under subparagraph (A) if the district court finds,
by the preponderance of the evidence, that the
amount in controversy exceeds the amount specified in section
1332(a)”); see also Dart Cherokee, 135 S.Ct.
at 554 (“This provision, added to § 1446 as part
of the Federal Courts Jurisdiction and Venue Clarification
Act of 2011 (JVCA), clarifies the procedure in order when a
defendant's assertion of the amount in controversy is
challenged. In such a case, both sides submit proof and the
court decides, by a preponderance of the evidence, whether
the amount-in-controversy requirement has been
satisfied.”). And even prior to the amendment, when a
sum was not requested in the complaint, the defendant bore
the burden of demonstrating by a preponderance of evidence
that the amount in controversy was met. See Tapscott v.
MS Dealer Serv. Corp., 77 F.3d 1353, 1356-57 (11th Cir.
and HMA removed this case on the basis of diversity
jurisdiction. The sole question before the court is whether
the value of the declaratory and injunctive relief the
Foundation seeks exceeds ...