United States District Court, W.D. Kentucky, Louisville Division
MEMORANDUM OPINION AND ORDER
REBECCA GRADY JENNINGS DISTRICT JUDGE.
Tanya Offutt brought this action against Kemper Corporation
(“Kemper”) in Jefferson County Circuit Court
alleging race discrimination under the Kentucky Civil Rights
Act and retaliation under KRS 344.280. [DE 1-1, Compl. at
¶¶ 8-11]. Kemper removed the case to this Court
based on diversity-of-citizenship jurisdiction. [DE 1 at
¶ 4]. Offutt moved to remand. [DE 5]. Kemper then filed
a Motion to Dismiss and Compel Arbitration and for Reasonable
Fees and Costs [DE 7], and Offutt moved to stay the
Court's ruling on Kemper's Motion until it resolved
the Motion to Remand [DE 8]. These matters are ripe for
judgment. For the reasons below, the Court GRANTS
Offutt's Motion to Remand; DENIES AS MOOT Kemper's
Motion to Dismiss and Compel Arbitration and for Reasonable
Fees and Costs; and DENIES AS MOOT Offutt's Motion to
is an African-American woman who was previously employed by
Kemper. [DE 1-1 at ¶ 4]. Offutt claims that while
working for Kemper, she was subjected to racial harassment
and discrimination that caused severe anxiety. Id.
at ¶ 5. Offutt alleges that the harassment continued
even after she complained to Kemper and that Kemper treated
her less favorably than her Caucasian counterparts.
Id. at ¶ 6.
filed suit in Jefferson County Circuit Court alleging race
discrimination and unlawful retaliation. Id. at
¶ ¶ 8 ¶11. The Complaint states that
“[t]he 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 ¶
after Offutt filed her Complaint, and without completing any
discovery, Kemper removed the case to this Court based on
diversity-of-citizenship jurisdiction. [DE 1 at ¶ 4].
Offutt then moved to remand, claiming that this Court lacks
jurisdiction because the amount in controversy is less than
$75, 000. [DE 5 at 29]. Offutt attached a stipulation to her
Motion affirming that she will neither seek nor accept any
relief equal to or greater than $75, 000. [DE 5-1 at 31].
Kemper responded that Offutt's post-removal stipulation
does not destroy diversity jurisdiction, and the Court should
therefore deny the Motion to Remand. [DE 6 at 34].
Standard of Review
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. 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).
does not dispute that complete diversity of citizenship
exists between the parties. [DE 5 at 29]. Rather, she
disputes only whether the amount-in-controversy requirement
is satisfied. Id. Thus, the question for the Court
is whether Kemper properly removed the action in the first
instance based on the amount-in-controversy at the time of
removal, and if so, whether Offutt's post-removal
stipulation destroys diversity jurisdiction.
Amount in Controversy
courts “conduct a fair reading” of the complaint
to determine whether the amount in controversy satisfies 28
U.S.C. § 1332(a)'s requirements. 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 in regard to the amount-in-controversy
threshold. First, Kentucky's Rules of Civil Procedure
prohibit a plaintiff from making a specific demand for
damages in the complaint. Ky. R. Civ. P. 8.01(2). 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).
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.
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.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 ...