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Offutt v. Kemper Corp.

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

March 29, 2019

TANYA OFFUTT Plaintiff
v.
KEMPER CORPORATION Defendant

          MEMORANDUM OPINION AND ORDER

          REBECCA GRADY JENNINGS DISTRICT JUDGE.

         Plaintiff 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 Stay.

         BACKGROUND

         Offutt 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.

         Offutt 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 ¶ 3.

         Shortly 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].

         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. 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).

         Offutt 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.

         B. Amount in Controversy

         Generally, 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).

         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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