United States District Court, E.D. Kentucky, Southern Division, London
STEPHEN E. HOOP, Plaintiff,
WAL-MART STORES EAST, L.P., and STANLEY BLACK & DECKER, INC. Defendants.
MEMORANDUM OPINION & ORDER
GREGORY F. VAN TATENHOVE, District Judge.
Stephen Hoop claims that the automatic doors at his local Wal-Mart store closed on him unexpectedly, causing him injuries. As a result, he asserts a premises liability claim against Wal-Mart and a products liability claim against Stanley Black & Decker in Clay Circuit Court to recover damages from these injuries. Hoop has sent some mixed signals, however, as to how much he seeks to recover in damages. Wal-Mart and Stanley removed the case, and the present issue before this Court is whether the amount in controversy is sufficient to support federal jurisdiction. Because the Court finds that Hoop's pre-removal stipulation in state court unequivocally limited the recovery in this case to an amount that is below the federal jurisdictional requirement, Hoop's motion shall be GRANTED and this case shall be REMANDED to Clay Circuit Court.
Hoop filed his complaint on May 4, 2011, but did not at that time provide specific information about the amount of damages he sought to collect as a result of his injuries. [R. 1-1 at 2-3]. On June 7, Hoop entered a stipulation into the state court record stating that he, "stipulates and agrees that the amount in controversy herein is less than $75, 000.00, " and that he, "does not seek and will not accept, if awarded, any amount of $75, 000.00, or greater." [R. 1-1 at 35]. However, on May 24, 2013, in response to interrogatories served by the Defendants, Hoop stated, "I intend to request $500, 000.00 of the jury at the trial of this case." [R. 1-1 at 98]. During his deposition, he confirmed under oath that he was seeking this amount in damages. [R. 6-2 at 5]. Based on these assertions, Wal-Mart and Stanley removed the case to this Court on June 6, less than thirty days from the receipt of Hoop's interrogatory. [R. 1]. The next day Hoop filed his one-paragraph motion to remand, in which he referred to the previous stipulation that the amount in controversy was less than $75, 000. [R. 4]. Later, after the motion to remand had been fully briefed, Hoop filed a supplemental interrogatory in the record, wherein he states that, "[w]hile Plaintiff feels that he was damaged in the amount of $500, 000.00, he stipulated that the amount in controversy is less than $75, 000 and he will not seek or accept any amount greater than $74, 999.99 in this civil action." [R. 7]. Wal-Mart and Stanley have responded in opposition to this supplemental interrogatory, arguing that the relevant inquiry is the amount in controversy at the time of removal. As both of the arguments of the parties are now fully developed, this matter is now ripe for review.
A defendant may remove a civil action brought in state court to federal court only if the action is one over which the federal court could have exercised original jurisdiction. See 28 U.S.C. §§ 1441, 1446. This Court has original "diversity" jurisdiction over all civil actions when "the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and the dispute is between" parties who are "citizens of different states." See 28 U.S.C. § 1332(a)(1). The removing defendant bears the burden of showing that removal was proper. Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 871 (6th Cir. 2000) (citing Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921)). Because federal courts are courts of limited jurisdiction, any doubts regarding federal jurisdiction should be strictly construed in favor of remanding the case to state court. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-109 (1941); Her Majesty The Queen In Right of the Province of Ontario v. City of Detroit, 874 F.2d 332, 339 (6th Cir. 1989).
These basic rules seem simple enough, but the various strategic maneuvers employed by parties to secure a certain forum often give rise to interesting jurisdictional questions. It has long been noted that the plaintiff, as "master of the claim, " is not only empowered to make the initial choice of forum, but may also take certain proactive steps to preclude removal from that forum. Rogers, 230 F.3d at 871 (citing Gafford v. General Elec. Co., 997 F.2d 150, 157 (6th Cir.1993)). Nearly a hundred years ago, in Iowa Central Ry. Co. v. Bacon, a plaintiff claimed that he had been damaged in the amount of $10, 000, but requested relief in the amount of $1, 990, which was $10 shy of the $2, 000 amount-in-controversy requirement in place at the time. 236 U.S. 305 (1915). In addressing the issue of subject matter jurisdiction, the Supreme Court stated, "[t]he prayer for recovery was for $1, 990, and consequently the amount required to give jurisdiction to the Federal court was not involved. The filing of the petition and bond did not, therefore, effect a removal of the case." Id. at 310.
Later, in the seminal case of St. Paul Mercury Indem. Co. v. Red Cab Co., the Supreme Court noted that, if the plaintiff, "does not desire to try his case in the federal court he may resort to the expedient of suing for less than the jurisdictional amount, and though he would be justly entitled to more, the defendant cannot remove." 303 U.S. 283, 294 (1938). In discussing how this might be practically accomplished, the Court noted that, "an amendment in the state court reducing the claim below the jurisdictional amount before removal is perfected is effective to invalidate removal and requires a remand of the cause." St. Paul Mercury Indem. Co., 303 U.S. at 294 n. 25 (citations omitted).
However, a plaintiff's ability to secure his choice of forum, and even a defendant's ability to discover the amount in controversy, is more difficult in states like Kentucky, where the rules of civil procedure expressly limit the extent to which plaintiffs can articulate a specific dollar amount that they seek to recover. See Ky. R. Civ. P. 8.01(2) ("In any action for unliquidated damages the prayer for damages in any pleading shall not recite any sum as alleged damages other than an allegation that damages are in excess of any minimum dollar amount necessary to establish the jurisdiction of the court...."). Further, Kentucky Rule of Civil Procedure 54.03 provides that, "every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings. " Ky. R. Civ. P. 54.03 (emphasis added). Thus, even if a plaintiff could indicate the amount of damages sought in his complaint, that would would serve as no guarantee to a defendant that the Kentucky courts would not ultimately award the plaintiff with a recovery in excess of that amount. In light of these rules, it is not surprising to find that Hoop's complaint is silent as to the specific amount of relief he seeks to recover.
A recent amendment to 28 U.S.C. § 1446 addresses the proper method to ascertain the amount in controversy in states where one or both of these procedural rules make that determination more difficult. When "the State practice either does not permit demand for a specific sum or permits recovery of damages in excess of the amount demanded, " removal is appropriate if "the district court finds, by the preponderance of the evidence, that the amount in controversy exceeds the amount specified in section 1332(a). 28 U.S.C. § 1446(c)(2)(B); see also, MacKenzie v. GGNSC Stanford, LLC, CIV.A. 13-344-KSF, 2013 WL 6191853 at *2 (E.D. Ky. Nov. 26, 2013); Proctor v. Swifty Oil Co., Inc., 2012 WL 4593409, *2 (W.D.Ky. Oct. 1, 2012). Thus, because the burden is on the defendants seeking removal, in order to defeat Hoop's motion to remand, Wal-Mart and Stanley must show by a preponderance of the evidence that the amount in controversy in this case exceeds this Court's jurisdictional minimum of $75, 000.
Toward that end, Wal-Mart and Stanley indicate that Hoop admitted in his interrogatories that he "intend[ed] to demand or request $500, 000.00 of the jury at the trial of this case." [R. 1-1 at 98]. Further, during his deposition, Hoop affirmed that he intended to seek $500, 000 from the jury in this case. [R. 6-2 at 5]. There can be no doubt that such an admission would generally be sufficient to show that it is more likely than not that the plaintiff's claim meets the amount in controversy requirement. See Sanford v. Gardenour, 225 F.3d 659, 2000 WL 1033025, at *3 (6th Cir. 2000) (unpublished table decision) ("In fact, in their Rule 26 disclosures, they sought in excess of $500, 000 in actual and punitive damages in federal court. Thus, by their own admission, their claim is worth more than the minimum jurisdictional amount.").
However, well before Hoop indicated that he would seek relief in the amount of half a million dollars, he filed a unilateral stipulation into the state court record that stated otherwise:
Comes the Plaintiff, by and through counsel, and hereby stipulates and agrees that the amount in controversy herein is less than $75, 000.00. Plaintiff does not seek and will not accept, if awarded, any amount of $75, 000.00, or greater.
[R. 1-1 at 35]. This stipulation was signed by Hoop and filed by his counsel about a month after the entry of the complaint. The question at the heart of this matter is what is the effect of this unilateral, pre-removal stipulation? If by filing this stipulation in the record, Hoop legally bound himself to seeking and recovering relief in an amount below the federal jurisdictional requirement, his later statements to the contrary would seem to be irrelevant. That is to say, if the stipulation made it so that he could not recover more than $74, 999.99, then so long as the ...