AGRI-POWER, INC. d/b/a H&R AGRI-POWER Plaintiff
MAJESTIC JC, LLC, et al., Defendants.
MEMORANDUM OPINION AND ORDER
THOMAS B. RUSSELL, Senior District Judge.
This matter is before the Court upon Plaintiff Agri-Power, Inc.'s Motion to Remand. (Docket No. 5.) Defendants Majestic JC, LLC, Joseph Costner, and Robert Costner have responded, (Docket No. 6), and Plaintiff has replied, (Docket No. 7). This matter is now ripe for adjudication. For the reasons that follow, Plaintiff's Motion will be GRANTED and this action REMANDED to Christian Circuit Court.
This action arises from an agreement to purchase farm equipment. That agreement required Defendants to pay $30, 000 at the time of sale as a down payment. Plaintiffs state that Defendants paid the down payment with a check that was subsequently dishonored, but nonetheless took possession of the equipment and used it to harvest their crops. Plaintiff originally filed this action in Christian Circuit Court on February 22, 2013, claiming fraud, theft, and conversion, and seeking punitive damages based on Defendants' alleged fraudulent acts. Defendants removed this case on March 29, 2013, on the basis of diversity jurisdiction. (Docket No. 1.)
Plaintiff now moves to remand this action to Christian Circuit Court, arguing that the $75, 000 amount-in-controversy requirement under 28 U.S.C. § 1332(a) is not met. Plaintiff states that it seeks to recover only $24, 000 in compensatory damages, representing the expenses it incurred to recover possession of the equipment. Plaintiff also avers that it seeks punitive damages in an amount not to exceed $24, 000. Plaintiff also attaches a Stipulation to its instant Motion, in which it states that it will not accept a total damages award in excess of $50, 000. That Stipulation reads, in its entirety:
Plaintiff, Agri-Power, Inc., hereby stipulates that it seeks to recover from Defendants in this action approximately $24, 000.00 in compensatory damages, together with punitive damages not to exceed $24, 000.000. Agri-Power, Inc. will not accept an award of damages that exceeds $50, 000.00 in total, exclusive of interests and costs.
(Docket No. 5-2, at 1.) Plaintiff urges that because it has stipulated that its damages are below the requisite threshold for diversity jurisdiction, this Court lacks subject-matter jurisdiction and should remand this matter to Christian Circuit Court.
Defendants respond in opposition, arguing that Plaintiff's several claims more likely than not exceed the necessary amount for diversity jurisdiction. Defendants also argue that Plaintiff's Stipulation is equivocal and attempts to change, rather than clarify, the damages sought in Plaintiff's original Complaint.
"[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... to the district court... embracing the place where such action is pending." 28 U.S.C. § 1441(a). A federal district court has original diversity jurisdiction over an action between citizens of different states and where the amount in controversy exceeds $75, 000, exclusive of interest and costs. Id. § 1332(a).
A defendant seeking removal bears the burden of proving, by a preponderance of the evidence, that the amount-in-controversy requirement is satisfied. Hayes v. Equitable Energy Res. Co., 266 F.3d 560, 572 (6th Cir. 2001) (citing Gafford v. Gen. Elec. Co., 997 F.2d 150, 158 (6th Cir. 1993)). This standard, however, "does not place upon the defendant the daunting burden of proving, to a legal certainty, that the plaintiff's damages are not less than the amount-in-controversy requirement." Id. (quoting Gafford, 997 F.2d at 158). In determining whether a defendant has met its burden, the Court must look to the damages alleged at the time of removal. Id. at 573. Furthermore, the Sixth Circuit has expressly instructed: "When determining the jurisdictional amount in controversy in diversity cases, punitive damages must be considered... unless it is apparent to a legal certainty that such cannot be recovered." Id. at 572 (alteration in original) (quoting Holley Equip. Corp. v. Credit Alliance Corp., 821 F.2d 1531, 1535 (11th Cir. 1987)).
Thus, the Court is faced with two issues: (1) whether the amount in controversy exceeds $75, 000, and (2) whether Plaintiff's postremoval stipulation destroys the $75, 000 amount-in-controversy requirement for § 1332 jurisdiction.
A. The Amount in Controversy
The Court has addressed this first issue on multiple occasions and in a variety of factual circumstances. See, e.g., Winburn v. Metro. Direct Prop. & Cas. Ins. Co., 2007 WL 891865 (W.D. Ky. March 20, 2007); Shofner v. Mid-America Harborside Healthcare, 2007 WL 433118 (W.D. Ky. Feb. 5, 2007); Sparks v. Wal-Mart Stores, Inc., 2007 WL 101850 (W.D. Ky. Jan. 10, 2007). Despite the Court's familiarity with the issue, Congress recently amended the procedure for removing certain civil actions. See Federal Courts Jurisdiction and Venue Clarification Act of 2011, Pub. L. No. ...