Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-02111/USCOURTS-azd-2_08-cv-02111-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Citizenship

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Plaintiffs’ request for oral argument is denied because the parties have fully briefed

the issues (see Dkt. ##7, 9, 13), and oral argument will not aid the Court’s decision. See Fed.

R. Civ. P. 78; Lake at Las Vegas Investors Group, Inc. v. Pacific. Dev. Malibu Corp., 933

F.2d 724, 729 (9th Cir. 1991); Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998).

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Thomas L. Propst and Sherry L. Propst,

husband and wife, 

Plaintiffs, 

vs.

David Michael Simon and Jane Doe

Simon, husband and wife; and New

London Associates, LLC, 

Defendants. 

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No. CV-08-2111-PHX-DGC

ORDER

On October 10, 2008, Plaintiffs Thomas and Sherry Propst filed a verified complaint

against David Simon and New London Associates, LLC in Arizona state court. Dkt. #1-2

at 19-33. Plaintiffs assert multiple counts against Defendants relating, inter alia, to an

allegedly fraudulent sale of securities by Defendants to Plaintiffs. Id. Defendants removed

the action to this Court. Dkt. #1. Plaintiffs have filed a motion to remand. Dkt. #7. For

reasons stated below, the Court will deny the motion.1

I. Removal and Remand Standards.

Pursuant to the removal statute, 28 U.S.C. § 1441, any civil action brought in state

court over which the federal district courts have original jurisdiction may be removed to the

Case 2:08-cv-02111-DGC Document 14 Filed 02/09/09 Page 1 of 3
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federal district court for the district where the action is pending. 28 U.S.C. § 1441(a). 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.” Gaus v. Miles, Inc.,

980 F.2d 564, 566 (9th Cir. 1992). “The ‘strong presumption’ against removal jurisdiction

means that the defendant always has the burden of establishing that removal is proper.” Id.

This burden is satisfied, however, where “the plaintiff claims a sum greater than the

jurisdictional requirement.” Id.

II. Motion to Remand.

Defendants assert that the Court has subject matter jurisdiction pursuant to 28 U.S.C.

§ 1332, which confers jurisdiction to adjudicate cases where the parties are diverse and the

amount in controversy exceeds $75,000. Dkt. #1, ¶¶ 2-7. Plaintiffs’ verified complaint

demands $50,000 in compensatory damages and punitive damages “of at least four times

their actual damages[.]” Dkt. #1 at 9-33, ¶ 92. Defendants argue that the amount in

controversy is therefore $250,000. Dkt. #9.

In their reply, Plaintiffs offer to withdraw their punitive damages claim and argue that

this would bring the amount in controversy below this Court’s jurisdictional minimum. Dkt.

#13 at 1-2. For jurisdiction purposes, however, the amount in controversy is determined as

of the time of removal. See St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 294

(1938). “[E]vents occurring subsequent to removal which reduce the amount recoverable,

whether beyond the plaintiff’s control or the result of his volition, do not oust the district

court’s jurisdiction once it has attached.” Id. at 293; see In re GMC Pickup Truck Fuel Tank

Prod. Liab. Litig., No. 93-1811, 1993 WL 147245, *2 (E.D. Pa. May 5, 1993) (withdrawal

of punitive damages claim after notice of removal was filed did not defeat diversity

jurisdiction).

Plaintiffs further argue that punitive damages are inherently speculative and that there

is no guarantee a jury will award them. Dkt. #7 at 2-3. The Court notes that Plaintiffs

request $50,000 in damages 10 separate times. Dkt. #1-2 at 19-33, ¶¶ 30, 36, 42, 48, 53, 58,

66, 74, 82, 88. Paragraph 92 of the verified complaint specifically requests “a punitive

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damages award of at least four times their actual damages[.]” Id. ¶ 92. While any damages

award ultimately will be in an amount “deemed appropriate by the trier of fact” (id.), the

issue for purposes of remand is the amount Plaintiffs have put in controversy.

It is true that a general prayer for punitive damages, by itself, may not be sufficient

to meet the defendant’s burden of proof. See Matheson v. Progressive Specialty Ins. Co., 319

F.3d 1089 (9th Cir. 2003) (finding that complaint seeking “‘in excess’ of $10,000 for

punitive damages” did not clearly satisfy jurisdictional minimum). In this case, however,

Plaintiffs’ verified complaint specifies the amount in controversy as “at least” $250,000.

Because Plaintiffs’ verified complaint “states damages in an amount sufficient to obtain

federal diversity of citizenship jurisdiction,” Sanchez, 102 F.3d at 402, the Court will deny

the motion to remand.

IT IS ORDERED that Plaintiffs’ motion to remand (Dkt. #7) is denied.

DATED this 9th day of February, 2009.

Case 2:08-cv-02111-DGC Document 14 Filed 02/09/09 Page 3 of 3