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Pitts v. Ram Partners, LLC

United States District Court, M.D. Alabama, Eastern Division

November 5, 2018

DEBORAH PITTS, Plaintiff,
v.
RAM PARTNERS, L.L.C., Defendant.

          OPINION AND ORDER

          SUSAN RUSS WALKER UNITED STATES MAGISTRATE JUDGE

         This matter is before the court on plaintiff's motion to remand (Doc. 4), which is opposed by defendant Ram Partners, LLC. This case was initially assigned to the undersigned as presiding judge, and the parties subsequently consented in writing to the exercise of final dispositive jurisdiction by the Magistrate Judge pursuant to 28 U.S.C. § 636(c) and Federal Rule of Civil Procedure 73(a). (Docs. 10, 11). The motion to remand has been briefed and taken under submission without oral argument. For the reasons stated herein, the plaintiff's motion to remand is due to be denied without prejudice.

         I. Background and facts[1]

         Plaintiff initiated this suit on July 26, 2017 by filing a complaint in the Circuit Court for Chambers County, Alabama. Doc. 1-1 at 4. Plaintiff was a lessee and resident of defendant Ram Partners, doing business as The Apartments at the Venue. Id. at 5. Plaintiff's complaint alleges that, as a result of Ram Partners' negligent and willful conduct, she suffered injuries resulting in physical and mental suffering, past and future medical expenses, and lost wages. Id. at 5-8. Plaintiff also seeks punitive damages. Id. Plaintiff does not specify in her complaint the amount of damages she intends to claim and does not otherwise make a demand. Id. at 4-8.

         When plaintiff filed her complaint, plaintiff also served summons on defendant. Id. at 11-13. Defendant answered the complaint on September 8, 2017. Id. at 14-24. On September 29, 2017, defendant served interrogatories and a request for production on plaintiffs. Id. at 26-43. On November 20, 2017, plaintiff responded to defendant's interrogatories and written discovery request. Id. at 44. On December 13, 2017, defendant's counsel transmitted correspondence to plaintiff's counsel asking for clarification of plaintiff's responses to interrogatories and requesting a settlement demand. Doc. 1-2. On December 18, 2017, plaintiff's counsel responded to defendant's counsel, stating that plaintiff's income loss was $24, 396.18 and her out-of-pocket medical expense was $20, 324.14, and demanding a settlement in the amount of $250, 000 to resolve plaintiff's claim in its entirety. Doc. 1-3. Defendant filed its notice of removal, which is premised on diversity jurisdiction, on January 17, 2018. Doc. 1.

         II. The parties' positions

         In its notice of removal, defendant argues that while the parties are diverse, this case was not originally removable because it was not clear that the amount in controversy was in excess of $75, 000. Doc. 1 at 1-5. According to defendant, the case became removable on December 18, 2017 - the date on which plaintiff's counsel made a settlement demand of $250, 000. Id. at 8. Defendant argues that plaintiff's settlement demand constituted an “other paper, ” as contemplated by 28 U.S.C. § 1446(b), and that receipt of this “other paper” triggered the 30-day time period for removal. Id. at 7-8. Defendant attached the settlement demand to its notice of removal. Doc. 1-3.

         Plaintiff's motion to remand does not dispute the amount in controversy or the timeliness of the defendant's notice of removal. Plaintiff argues that the case is due to be remanded because the complaint does not establish diversity of citizenship. Doc. 4 at 2. Plaintiff argues that defendant has members who are citizens of Alabama. Doc. 4 at 3.

         Defendant argues in response to plaintiff's motion to remand that it is a limited liability company with four individual human members who are all domiciled in the state of Georgia. Doc. 8. Defendant further contends that plaintiff's settlement demand of $250, 000 clearly establishes that the amount in controversy exceeds $75, 000, and that the removal was timely. Id. Defendant attaches an affidavit from Martha Logan, a member of Ram Partners, to its response to plaintiff's motion to remand, which states that each of Ram Partners' four members are domiciled in the state of Georgia. Doc. 8-1.

         III. Legal standards

         “It is by now axiomatic that the inferior courts are courts of limited jurisdiction. They are ‘empowered to hear only those cases within the judicial power of the United States as defined by Article III of the Constitution,' and which have been entrusted to them by a jurisdictional grant authorized by Congress.” Griffith v. Wal-Mart Stores East, L.P., 884 F.Supp.2d 1218, 1221 (N.D. Ala. 2012) (citing Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 409 (11th Cir.1999)). “[B]ecause removal jurisdiction raises significant federalism concerns, federal courts are directed to construe removal statutes strictly.” Id. (citing Univ. of S. Ala., 168 F.3d at 411).

         The removing party has the burden of establishing subject matter jurisdiction. Griffith, 884 F.Supp.2d at 1221. “[B]ecause the jurisdiction of federal courts is limited, the Eleventh Circuit Court of Appeals favors remand of cases that have been removed where federal jurisdiction is not absolutely clear.” Id. (quoting Lowe's OK'd Used Cars, Inc. v. Acceptance Ins. Co., 995 F.Supp. 1388, 1389 (M.D. Ala.1998)). “In fact, removal statutes are to be strictly construed, with all doubts resolved in favor of remand.” Id. (quoting Lowe's, 995 F.Supp. at 1389).

         The district court must “review the propriety of removal on the basis of the removing documents.” Lowery v. Ala. Power Co., 483 F.3d 1184, 1211 (11th Cir. 2007). Removing documents include “all documents before the court when it reviews the propriety of removal” that are relevant to making such assessments. Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 773 n.28 (11th Cir. 2010)(citing Sierminski v. Transouth Fin. Corp., 216 F.3d 945, 949 (11th Cir. 2000)(“We align ourselves with our sister circuits in adopting a more flexible approach, allowing the district court when necessary to consider post-removal evidence in assessing removal jurisdiction.”)). See also Travaglio v. Am. Express Co., 735 F.3d 1266, 1269 (11th Cir. 2013)(“we need not vacate a decision on the merits if the evidence submitted during the course of the proceedings cures any jurisdictional pleading deficiency by convincing us of the parties' citizenship”)(considering evidence establishing diversity of citizenship); Williams v. Best Buy Co., 269 F.3d 1316 (11th Cir. 2001)(“Where the pleadings are inadequate, we may review the record to find evidence that diversity jurisdiction exists.”). “If that evidence is insufficient to establish that removal was proper or that jurisdiction was present, neither the defendants nor the court may speculate in an attempt to make up for the notice's failings.” Lowery, 483 F.3d at 1214-15.

         However, the court is not limited only to the evidence on record, and “a defendant may add post-removal evidence of jurisdiction to the record when that evidence is otherwise admissible.” Pretka, 608 F.3d at 773 (considering evidence establishing the amount in controversy requirement and citing Lowery, 483 F.3d at 1218-21)(emphasis in original). Further, so long as the removal is procedurally proper, “[d]efendants may introduce their own affidavits, declarations, or other documentation.” Id. at 755 (citing Miedema v. Maytag Corp., 450 F.3d 1322, 1330 (11th Cir. 2006); Williams, 269 F.3d at 1319; Sierminski, 216 F.3d at 949; Fowler v. Safeco Ins. Co. of Am., 915 F.2d 616, 617 (11th Cir. 1990)). While the Eleventh Circuit has cautioned that “post-removal discovery disrupts the careful assignment of burdens” and that such discovery may “impermissibly lighten[] the defendant's burden of establishing jurisdiction, Lowery, 483 F.3d at 1217-18, where there is incomplete development of the record as to whether jurisdiction exists, the court has repeatedly directed district courts to make further factual findings. See Rolling Greens MHP, L.P. v. Comcast SCH Holdings, L.L.C., 374 F.3d 1020, 1023 (11th Cir. 2004)(remanding to the district court “for the limited purpose of determining whether diversity jurisdiction exists”); Leonard v. Enter. Rent a Car, 279 F.3d 967. 972 (11th Cir. 2002)(“[w]here, however, it is unclear whether the jurisdictional amount has been satisfied, due to an incomplete development of the record by the district court, the proper course of action is to remand the case for factual findings on the actual amount in controversy.”); Williams, 269 F.3d at 1321 (“where the notice of removal asserts that jurisdictional amount and the plaintiff does not challenge that assertion in the district court, we will remand the case to the district court for factual findings on the amount in controversy if the amount in controversy cannot clearly be determined by a review of the record”). Accord Lowery, 483 F.3d at 1215 n.69 (distinguishing its refusal to allow post-removal discovery from the circumstances in Williams). Any jurisdictional facts supporting removal “must be judged at the time of the removal, and any post-petition affidavits are allowable only if relevant to that period of time.” Id. at 949 (quoting Allen v. R&H Oil Co., 63 F.3d 1326, 1335 (5th Cir. 1995)).

         A. Timeliness

         Removal is governed by 28 U.S.C. § 1446, which “contemplates two ways that a case may be removed based on diversity jurisdiction.” Moore v. Wal-Mart Stores East, LP, 2015 WL 5813164 *4 (M.D. Ala. 2015)(report and recommendation adopted). “The first way (formerly referred to as ‘first paragraph removals') involves civil cases where the jurisdictional grounds for removal are apparent on the face of the initial pleadings.” Id. (quoting Griffith, 884 F.Supp.2d at 1223). See also 28 U.S.C. §1446(b)(1)(2012).[2] “The second way (formerly referred to as ‘second paragraph removals') contemplates removal where the jurisdictional grounds later become apparent through the defendant's receipt of ‘an amended pleading, motion, order, or other paper from which it may first be ascertained that the case is one which is or has become removable.'” Id. (quoting Griffith 844 F.Supp.2d at 1223). See also 28 U.S.C. § 1446(b)(3)(2012). “Demand letters, settlement offers, and even emails estimating damages may constitute ‘other paper.'” Lee v. Lilly Trucking of Virginia, Inc., 2012 WL 960989 *2 (M.D. Ala. 2012); see 28 U.S.C. § 1446(c)(3)(2012) (“If the case stated by the initial pleading is not removable solely because the amount in controversy does not exceed the amount specified in 1332(a), information relating to the amount in controversy in the record of the State proceeding, or in responses to discovery, shall be treated as an ‘other paper' under subsection (b)(3).”). For a second paragraph removal to be timely, it must be filed “within thirty days after receipt by the defendant . . .from which it may be first ascertained that the case is one which is or has become removable.” 28 U.S.C. § 1446(b)(3)(2012). As explained by the court in Lowery:

Under the second paragraph, a case becomes removable when three conditions are present: there must be (1) “an amended pleading motion, order or other paper, ” which (2) the defendant must have received from the plaintiff (or from the court, if the document is an order), and from which (3) the ...

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