Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-00455/USCOURTS-azd-2_11-cv-00455-1/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1441 Petition for Removal- Tort/Non-Motor Vehicle

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Henry Carter Metcalf, 

Plaintiff, 

vs.

Southwest Gas Corporation, 

Defendant.

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No. CV-11-0455-PHX-JAT

ORDER

Pending before the Court is Plaintiff’s Motion to Remand to State Court. (Doc. 43).

Defendant filed a response on February 27, 2012 (Doc. 47), and Plaintiff replied on March

5, 2012. (Doc. 48). For the reasons that follow, the Court now grants the Motion.

I. BACKGROUND

Plaintiff initially filed suit against Defendant in state court, alleging that Defendant

caused a gas leak near his house that resulted in injury to Plaintiff. On March 8, 2011,

Defendant removed the case to this Court, alleging that the amount in controversy exceeded

$75,000 and that diversity of citizenship existed between Plaintiff and Defendant. (Doc. 1

at 2). Defendant filed a Motion to Dismiss (Doc. 24), which was denied. Thereafter, the

parties proceeded to discovery and engaged in pre-trial litigation. On February 10, 2012,

Plaintiff moved to remand the case to state court, asserting that Defendant failed to carry its

legal burden to show that the amount in controversy more than likely exceeded $75,000.

Case 2:11-cv-00455-JAT Document 51 Filed 06/14/12 Page 1 of 7
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II. LEGAL STANDARD

A. The Diversity Jurisdiction Statute

Pursuant to 28 U.S.C. § 1332, “district courts shall have original jurisdiction of all

civil actions where the matter in controversy exceeds the sum or value of $75,000,

exclusive of interests and costs, and is between . . . citizens of different States[.]”

28 U.S.C. § 1332(a)(1).

B. The Removal Statute

The removal statute, 28 U.S.C. § 1441, provides, in pertinent part: “[A]ny civil action

brought in a State court of which the district courts of the United States have original

jurisdiction, may be removed by the defendant . . . to the district court of the United States

for the district and division embracing the place where such action is pending.” 28 U.S.C.

§ 1441(a); see Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987) (“Only . . . actions that

originally could have been filed in federal court may be removed to federal court by the

defendant.”). Courts strictly construe the removal statute against removal jurisdiction. See

Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941); Gaus v. Miles, Inc., 980

F.2d 564, 566 (9th Cir. 1992); see also Mesa Indus., Inc. v. Eaglebrook Prods., Inc., 980

F. Supp. 323, 324 (D. Ariz. 1997).

There is a “strong presumption” against removal, and “[f]ederal jurisdiction ‘must be

rejected if there is any doubt as to the right of removal in the first instance.’” Duncan v.

Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996) (quoting Gaus, 980 F.2d at 566); see Mesa

Indus., 980 F. Supp. at 324. “The ‘strong presumption’ against removal jurisdiction means

that the defendant always has the burden of establishing that removal is proper.” Gaus, 980

F.2d at 566; see Prize Frize, Inc. v. Matrix (U.S.) Inc., 167 F.3d 1261, 1265 (9th Cir. 1999)

(“The burden of establishing federal jurisdiction is on the party seeking removal, and the

removal statute is strictly construed against removal jurisdiction.”) (citing Emerich v. Touche

Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988)); Duncan, 76 F.3d at 1485 (stating that

“defendant[] has the burden of establishing that removal was proper”); Lew v. Moss, 797 F.2d

747, 749 (9th Cir. 1986) (“[T]he party asserting diversity jurisdiction bears the burden of

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proof.”).

C. The Removing Defendant Has the Burden of Establishing the

Amount in Controversy Requirement by a Preponderance of the

Evidence

“In a removed case, . . . the plaintiff chose a state rather than federal forum. Because

the plaintiff instituted the case in state court, ‘there is a strong presumption that the plaintiff

has not claimed a large amount in order to confer jurisdiction on a federal court[.]’” Singer v.

State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 375 (9th Cir. 1997) (quoting St. Paul Mercury

Indem. Co. v. Red Cab Co., 303 U.S. 283, 290 (1938)). “Where the complaint does not

demand a dollar amount, the removing defendant bears the burden of proving by a

preponderance of the evidence that the amount in controversy exceeds [$75,000].” Id. at 376

(citing Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir. 1996); see Gibson v.

Chrysler Corp., 261 F.3d 927, 933 (9th Cir. 2001), cert. denied, 122 S. Ct. 903 (2002)

(internal citations omitted); see also Gaus, 980 F.2d at 566-67 (“If it is unclear what amount

of damages the plaintiff has sought, . . . then the defendant bears the burden of actually

proving the facts to support . . . the jurisdictional amount.”) (emphasis in original).

“Under this burden, the defendant must provide evidence establishing that it is ‘more

likely than not’ that the amount in controversy exceeds [$75,000].” Sanchez, 102 F.3d at

404. “[R]emoval ‘cannot be based simply upon conclusory allegations’ where the

[complaint] is silent” as to the dollar amount of damages the plaintiff seeks. Singer, 116 F.3d

at 377 (citing Allen v. R&H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995)). However,

the inquiry into the amount in controversy is not confined to the face of the complaint. See

Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1117 (9th Cir. 2004) (endorsing the Fifth Circuit’s

practice of considering facts presented in the removal petition as well as any “summaryjudgment-type evidence relevant to the amount in controversy at the time of removal.”).

III. Analysis

It is undisputed that Plaintiff and Defendant are citizens of different states as required

by 28 U.S.C. § 1332. Accordingly, the Court must determine whether the amount in

controversy exceeds $75,000.

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A. Motion to Remand

Plaintiff does not demand a particular dollar amount in his complaint. Thus, it is

Defendant’s burden to prove by a preponderance of the evidence that the amount in

controversy exceeds $75,000. Singer, 116 F.3d at 376. This requires that Defendant submit

evidence to show it is more likely than not that the amount in controversy exceeds $75,000.

Sanchez, 102 F.3d at 404. Defendant may submit summary-judgment-type evidence relevant

to the amount in controversy at the time of removal, but may not rely upon conclusory

allegations. Valdez, 372 F.3d at 1117.

Defendant submitted the following evidence to prove that the amount in controversy

exceeds $75,000: (1) the certificate regarding compulsory arbitration from Pinal County

Superior Court stating that Plaintiff sought more than $40,000 (Def. Ex. 2); (2) a letter from

Plaintiff’s counsel indicating a belief that Plaintiff’s damages would be a “big number” and

a willingness to settle for a “big number” (Def. Ex. 1); (3) the lack of response to

Defendant’s assumption in their letter of March 8, 2011, that Plaintiff was seeking more than

$75,000 in damages (Def. Ex. 3); (4) Plaintiff’s ‘stipulation’ that the case was a diversity

case in the parties’ Joint Case Management Plan (the “Plan”) (Doc. 9 at 4); and (5) Plaintiff’s

failure to previously raise the amount in controversy issue. As discussed below, this evidence

is not sufficient to prove by a preponderance of the evidence that the amount in controversy

in this case exceeded $75,000 at the time of removal.

First, the certificate regarding compulsory arbitration does nothing more than establish

that the amount in controversy is likely more than $40,000. See Super. Ct. Local Rules--Pinal

County, Rule 2.20 (requiring arbitration for claims under $40,000). The Court may consider

this certificate as a concession by Plaintiff of the amount that they are seeking for their claim.

See Ansley v. Metro. Life Ins. Co., 215 F.R.D. 575, 578 (D. Ariz. 2003) (citing Singer, 116

F.3d at 376). However, while the certificate establishes that Plaintiff is seeking an amount

that is more than $40,000 for their claim, the certificate does not prove that the amount in

controversy is greater than $75,000.

Second, the letter from Plaintiff’s counsel does not establish that the amount in

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controversy exceeds $75,000. “A settlement letter is relevant evidence of the amount in

controversy if it appears to reflect a reasonable estimate of the plaintiff’s claim.” Cohn v.

Petsmart, Inc., 281 F.3d 837, 840 (9th Cir. 2002) (internal citations and footnote omitted).

However, a “big number” need not be more than $75,000. Indeed, by using the term,

Plaintiff avoided the need to place a dollar value on his claim. Accordingly, the assertion that

Plaintiff’s claim is worth “a big number” is not specific enough to provide a reasonable

estimate of Plaintiff’s claim sufficient to support a finding that it is more likely than not that

Plaintiff’s claim exceeds $75,000.

Third, Plaintiff’s failure to respond to Defendant’s assumption that Plaintiff was

seeking more than $75,000 in damages is not persuasive. Defendant cites two cases from this

district as authority for considering the refusal to agree that Plaintiff will not obtain an award

more than the amount in controversy as evidence of the actual amount in controversy. See

Ansley v. Metropolitan Life Ins. Co., 215 F.R.D. 575, 578 (D. Ariz. 2003); Del Real v.

Healthsouth Corp., 171 F. Supp. 2d 1041, 1043 (D. Ariz. 2001). “Plaintiffs, however, are

under no . . . obligation to announce, on their own accord, the amount in controversy.”

Gordon v. Allstate Ins. Co., CV-09-1828-PHX-MHM, 2010 WL 1949164 at *2 (D. Ariz.

May 13, 2010); see, e.g., Conrad Assocs. v. Hartford Acc. & Indem. Co., 994 F.Supp. 1196,

1199 (N.D. Cal. 1998) (“Defendant’s assertion that it is ‘conclusively established’ that the

amount in controversy in this case exceeds $75,000 by plaintiff’s refusal to stipulate that the

case is not worth $75,000 is not convincing.”). Defendant only argues that Plaintiff has not

affirmatively stated that he seeks less than $75,000, and fails to show any evidence that

Plaintiff refused to agree that he sought more. As such, Plaintiff’s lack of response to

Defendant’s assumption does not establish that the amount in controversy exceeds $75,000.

Fourth, Defendant argues that Plaintiff stipulated that the amount in controversy

exceeded $75,000 in the Plan. (Doc. 9 at 4). The Plan states “[t]his is a diversity case

pursuant to 38 [sic] U.S.C. § 1332.” Id. “[Factual stipulations are] binding and conclusive .

. ., and the facts stated are not subject to subsequent variation.” Christian Legal Soc’y

Chapter of the Univ. of California, Hastings Coll. of the Law v. Martinez, 130 S. Ct. 2971,

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2983 (2010) (quoting 83 C.J.S. Stipulations § 93 (2000)). However, the stipulation here is

legal, rather than factual; Plaintiff did not stipulate that he sought damages greater than

$75,000. Rather, he stipulated that there was “diversity” jurisdiction, which is a legal

conclusion based on underlying facts. “[A] defect in subject matter jurisdiction cannot be

stipulated to or waived.” Conrad Associates v. Hartford Acc. & Indem. Co., 994 F. Supp.

1196, 1199 (N.D. Cal. 1998); see Lively v. Wild Oats Markets, Inc., 456 F.3d 933, 942 (9th

Cir. 2006) (“A lack of subject matter jurisdiction . . ., is a non-waivable defect.”).

Accordingly, the Parties’ assertion in the Plan that this is a diversity case, is not binding for

the purpose of proving the amount in controversy to assert subject matter jurisdiction.

Further, even if the Court were to take the Plan as evidence of Plaintiff’s belief

regarding the amount in controversy at the time the parties filed the Plan with the Court, it

would not serve as evidence of the amount in controversy at the time of removal. Instead, it

might be indicative of the amount in controversy at the time the Plan was filed. Absent any

further evidence of the amount in controversy at the time of removal, Defendant has failed

to meet its burden of showing that the amount in controversy was greater than $75,000 when

this case was removed.

Further, Defendants argue that this case should not be remanded because Plaintiff

failed to previously raise the amount in controversy issue. “If at any time before final

judgment it appears that the district court lacks subject matter jurisdiction, the case shall be

remanded.” 28 U.S.C. § 1447(c). Although Plaintiff should have moved to remand earlier in

the litigation for the convenience of all parties and judicial economy, a lack of subject matter

jurisdiction necessitates remand whenever the issue is raised.

IV. CONCLUSION

In light of this Court’s duty to strictly construe the removal statute and Defendant’s

failure to support its allegations with sufficient evidence, the Court cannot conclude that

Defendant has proven by a preponderance of the evidence that the amount in controversy is

more likely than not $75,000.

Accordingly,

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IT IS ORDERED that Plaintiff’s Motion to Remand (Doc. 43) is granted.

IT IS FURTHER ORDERED that the Clerk of the Court remand this case to Pinal

County Superior Court.

IT IS FURTHER ORDERED that this Order does not undertake to rule on the

pending Motion for Summary Judgment (Doc. 49) and such motion shall remain pending

before the Superior Court judge.

DATED this 14th day of June, 2012.

Case 2:11-cv-00455-JAT Document 51 Filed 06/14/12 Page 7 of 7