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Davis v. Cotiviti, LLC

United States District Court, W.D. Kentucky, Louisville Division

March 25, 2019

KELLY DAVIS Plaintiff
v.
COTIVITI, LLC Defendant

          MEMORANDUM OPINION AND ORDER

          REBECCA GRADY JENNINGS, DISTRICT JUDGE UNITED STATES DISTRICT COURT

         Plaintiff Kelly Davis brought this action against Defendant Cotiviti, LLC (“Cotiviti”) in Jefferson County Circuit Court alleging race discrimination and a hostile work environment under the Kentucky Civil Rights Act and retaliation under KRS § 344.280. [DE 1-3, Compl. at ¶ 8-11]. Cotiviti removed the case to this Court on diversity-of-citizenship jurisdiction. [DE 1 at ¶ 4]. Davis now moves to remand the case back to Jefferson County Circuit Court. [DE 6]. Briefing is complete, and the matter is ripe for judgment. [See DE 10]. Having considered the parties' filings and the applicable law, the Court GRANTS Davis's Motion.

         BACKGROUND

         Davis is an African-American woman employed by Cotiviti. [DE 1-3 at ¶ 4]. Davis claims that while working for Cotiviti, she faced racial harassment and discrimination that caused severe anxiety. Id. at ¶ 5. Davis alleges that the harassment continued even after she complained to Cotiviti and that Cotiviti treated her less favorably than her Caucasian counterparts. Id. at ¶ 6.

         Davis sued in Jefferson County Circuit Court alleging race discrimination, a hostile work environment, and unlawful retaliation. Id. at ¶ 8-11. The Complaint states that “the amount in controversy exceeds the jurisdictional limit of [Jefferson County Circuit Court], but is less than $75, 000 inclusive of fees, punitive damages, and the fair value of any injunctive relief.” Id. at ¶ 3.

         Less than thirty days after Davis filed her Complaint, and without completing any discovery, Cotiviti removed the case to this Court based on diversity-of-citizenship jurisdiction. [DE 1 at ¶ 4]. Davis now moves to remand, claiming that this Court lacks jurisdiction because the amount in controversy is less than $75, 000. [DE 6 at 39]. Davis attached a stipulation to her Motion affirming that she will neither seek nor accept any relief equal to or greater than $75, 000. [DE 6-1 at 41]. Cotiviti responds that Davis's stipulation is a “legally insufficient attempt to avoid litigating this case in a federal forum.” [DE 10 at 58].

         DISCUSSION

         A. Standard of Review.

         Removal to federal court is proper for “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). Diversity jurisdiction gives “[t]he district courts . . . original jurisdiction [over] all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between . . . citizens of different states.” 28 U.S.C. § 1332(a), (a)(1). A defendant removing a case has the burden of proving jurisdiction. See Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921). The determination of federal jurisdiction in a diversity case should be made at the time of removal. Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 872 (6th Cir. 2000).

         Davis does not dispute that complete diversity of citizenship exists between the parties. [DE 6 at 39]. Rather, she disputes only whether the amount in controversy requirement is satisfied and, if so, whether Davis's post-removal stipulation destroys diversity jurisdiction. Thus, the question for the Court here is whether the action was properly removed by the Defendant in the first place based on the amount in controversy at the time of removal.

         B. Amount in Controversy.

         Generally, courts “conduct a fair reading” of the complaint to determine whether the amount in controversy satisfies the requirements of 28 U.S.C. § 1332(a). Hayes v. Equitable Energy Res. Co., 266 F.3d 560, 573 (6th Cir. 2001). Because the plaintiff is “master of the claim, ” a claim explicitly less than the federal requirement will typically preclude removal. Rogers, 230 F.3d at 872 (quoting Gafford v. General Elec. Co., 997 F.2d 150, 157 (6th Cir. 1993)). Two rules of Kentucky civil procedure complicate the question of proper removal to federal court when considering the amount-in-controversy threshold. First, Ky. R. Civ. P. 8.01(2) prohibits a plaintiff from making a specific demand for damages in his or her complaint. In such cases, “the defendant may assert the amount in controversy in the notice of removal.” Jenkins v. Delta Air Lines, Inc., No. 3:18-CV-244-CRS, 2018 WL 6728571, at *2 (W.D. Ky. Dec. 21, 2018). And the defendant must establish by a preponderance of the evidence that the amount in controversy exceeds $75, 000 at the time of removal. Id. (citing Rogers, 230 F.3d at 872).

         Second, Ky. R. Civ. P. 54.03 states that “[e]xcept as to a party against whom a judgment is entered by default for want of appearance, 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.” This enables a plaintiff to claim in his or her complaint an amount lower than the federal amount-in-controversy threshold but still seek and recover damages exceeding the amount prayed for. Rogers, 230 F.3d at 871. In such situations, the removing defendant must show that it is “more likely than not” that the plaintiff's claims meet the amount-in-controversy requirement at the time of removal. Gafford, 997 F.2d at 158.

         To establish the jurisdictional threshold, “[a] defendant drawn into a Kentucky court would be wise to engage in pre-removal discovery to clarify the amount in controversy.” Shannon v. PNC Bank, N.A., No. 3:14-CV-00421-CRS, 2015 WL 3541850, at *3 (W.D. Ky. June 2, 2015). Evidence of the amount of damages can be obtained through pre-removal interrogatories or requests for admissions.[1]Id.; see also Sanders v. Print Fulfillment Servs., LLC, No. 3:17CV-245-CRS, 2017 WL 2624550, at *3 (W.D. Ky. June 16, 2017). That said, the defendant's failure to conduct pre-removal ...


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