United States District Court, E.D. Kentucky, Southern Division, London
CONNIE L. HACKER, Plaintiffs,
AETNA LIFE INSURANCE COMPANY, Defendant.
MEMORANDUM OPINION & ORDER
GREGORY F. VAN TATENHOVE UNITED STATES DISTRICT JUDGE.
Connie L. Hacker brought this action in the Circuit Court of
Clay County, Kentucky, alleging breach of contract,
violations of Kentucky's Unfair Claims Settlement
Practices Act, violations of ERISA, and common law bad faith.
[R. 1-1.] Ms. Hacker seeks compensatory damages, as well as
punitive damages and reasonable attorney's fees.
Id. Defendant Aetna Life Insurance Company timely
removed this action to this Court [R. 1], and Ms. Hacker now
seeks to remand it. [R. 8.] For the following reasons, Ms.
Hacker's Motion to Remand [R. 8.] will be
Hacker became disabled and unable to return to work in March,
2017. [R. 1.] It was not until December, 2017, that the
Social Security Administration notified Ms. Hacker she
qualified as disabled per its policies. Id. In the
interim, Ms. Hacker applied for short-term and long-term
disability benefits with her insurer, Aetna. Id.
Aetna denied her claim for short term disability benefits,
and later her claim for long term disability benefits as
response to these denials, Ms. Hacker initiated this suit in
Clay County Circuit Court in December, 2017. Id. At
the time of filing, Ms. Hacker's back benefits, should
she be found entitled to them, were between $21, 000 and $23,
000. [See R. 1; R. 8.] In addition to these benefits
stemming from her breach of contract claim, Ms. Hacker seeks
in her complaint “reasonable attorney's fees,
” “an award for punitive damages to punish and
deter Defendant from similar conduct, ” and
“compensation for inconvenience and emotional pain and
suffering.” [R. 1.]
notice of removal, Aetna asserts that Ms. Hacker's claims
are easily in excess of $75, 000. [R. 1.] Aetna argues that
“emotional distress, compensatory damages and punitive
damages could easily reach above the jurisdictional minimum
on their own.” Id. Further, Aetna argues that
this Court should apply a multiplier to Ms. Hacker's back
benefits in order to estimate her unspecified damages claims.
Id. Ms. Hacker, in her Motion for Remand, argues
that Aetna has failed to offer competent proof that the
amount in controversy exceeds $75, 000 by a preponderance of
the evidence. [R. 8-1.]
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” those who are
“citizens of different states.” 28 U.S.C. §
1332(a)(1). In making this assessment, the Court considers
whether federal jurisdiction existed at the time of removal.
See Everett v. Verizon Wireless, Inc., 460 F.3d 818,
822 (6th Cir. 2006). Because federal courts are courts of
limited jurisdiction, “the removal statute should be
strictly construed, ” and any doubts should be resolved
in favor of remanding the case to state court. Eastman v.
Marine Mech. Corp., 438 F.3d 544, 549 (6th Cir. 2006);
see also Cole, 728 F.Supp. at 1307 (citations
Hacker and Aetna agree that they are diverse. [See
R. 1.] The principal dispute is whether the requisite $75,
000 amount in controversy has been met. [ See R. 8;
R. 9.] Where, as here, a plaintiff's complaint requests
an indeterminate amount in damages, the “Court places a
burden on a defendant seeking to remove an action to federal
court to show by a preponderance of the evidence that the
amount in controversy requirement has been met.”
Hayes v. Equitable Energy Res. Co., 266 F.3d 560,
572 (6th Cir. 2001). A defendant is not required to prove to
a legal certainty that a plaintiff's damages are greater
than $75, 000. Id. at 572. However, as this Court
has noted before, “when the complaint is silent as to
the amount in controversy, the defendant should engage in
discovery on that issue before removing the case.”
Coppola v. Wal-Mart Stores East, LP, 2016 U.S. Dist.
LEXIS 113599, *2 (E.D. Ky. Aug. 25, 2016).
Hacker alleges that, at the time of removal, she was owed
$21, 674 in past due benefits under her Aetna insurance
policy. [R. 8-1 at 2.] But Ms. Hacker seeks not only past due
benefits, but also punitive damages and reasonable
attorney's fees. [R.1-1 at 6.] In order to reasonably
estimate punitive damages, some courts have applied a
multiplier to the amount of compensatory damages sought.
See Hollon v. Consumer Plumbing Recovery Ctr., 417
F.Supp.2d 849 (E.D. Ky. 2006); Heyman v. Lincoln National
Life Ins. Co., 2017 WL 3274452 (W.D. Ky. 2017);
Fenton v. Speedway, LLC, 2013 U.S. Dist. LEXIS 77334
(E.D. Ky. 2013); Fisher v. May, 2012 U.S. Dist.
LEXIS 75388 (W.D. Ky. 2012). Similarly, Courts in
this Circuit have sometimes estimated attorney's fees by
valuing them as a percentage of total recovery. See
Carrollton Hosp., LLC v. Kentucky Insight Partners II,
LP, 2013 WL 5934638 (E.D. Ky. 2013); Hollon,
417 F.Supp.2d at 853. Aetna urges this Court both to apply
such a multiplier and valuate reasonable attorney's fees
as a percentage of total recovery.
Hacker argues that the use of such multipliers is purely
speculative, and that Aetna has not met its burden by a
preponderance of the evidence. [R. 8-1; R. 10.] This Court is
inclined to agree. Rather than mathematical formulas,
“[a] defendant's claims of the amount in
controversy must be supported by ‘competent proof,'
which can include affidavits, documents, or
interrogatories.” Ramsey v. Kearns, 2012 U.S.
Dist. LEXIS 22970, at *3 (E.D. Ky. Feb. 23, 2012) (citing
McNutt v. Gen. Motors Acceptance Corp., 298 U.S.
178, 189 (1936)). Kentucky Rule of Civil Procedure 8.01
allows a party against whom a claim is made for unliquidated
damages to obtain information as to the amount by use of
interrogatories. See Ky. R. Civ. P. 8.01. Surely
discovery responses fall under the umbrella of
“competent proof.” But, as Ms. Hacker notes in
her Reply, Aetna has not even attempted to use written
discovery to gauge the amount she seeks in punitive damages,
pain and suffering damages, or attorney's fees. [R. 9.]
many Courts have applied multipliers to estimate amount in
controversy, many others have required removing parties to
engage in discovery prior to removal, including this Court.
See, e.g., King v. Household Fin. Corp. II, 593
F.Supp.2d 958 (E.D. Ky. Jan. 16, 2009); Holland v.
Buffin, 2015 U.S. Dist. LEXIS 80242 (E.D. Ky. Jan. 16,
2015); Giffin v. Runyons, 2011 U.S. Dist. LEXIS
122092 (E.D. Ky. Oct 21, 2011). In diversity cases, the best
practice is for defendants to take advantage of state