Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-arwd-6_05-cv-06048/USCOURTS-arwd-6_05-cv-06048-0/pdf.json

Parties Involved:
Textured Coatings of America, Inc.
Defendant
Sandra Webb
Plaintiff
Sheila Whitten
Plaintiff

Document Text:

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IN THE UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF ARKANSAS

HOT SPRINGS DIVISION

SHEILA WHITTEN and SANDRA WEBB

Individually and as Class Representatives

On Behalf of all Similarly Situated Persons, PLAINTIFFS

v. No. 05-6048

TEXTURED COATINGS OF AMERICA, INC. DEFENDANT

ORDER

Currently before the Court is Plaintiffs’ Motion to Remand

(Doc. 7) and Defendant’s Response (Doc. 12). Plaintiffs dispute

the existence of jurisdiction and contend the amount in controversy

does not exceed $75,000. (Doc. 7). For the reasons that follow,

Plaintiffs’ Motion to Remand (Doc. 7) is GRANTED.

Generally, “federal courts, as opposed to state trial courts

of general jurisdiction, are courts of limited jurisdiction marked

out by congress.” Aldinger v. Howard, 427 U.S. 1, 15, 96 S.Ct.

2413, 49 L.Ed.2d 276 (1976). Federal courts must strictly construe

the federal removal statute, and resolve any ambiguities about

federal jurisdiction in favor of remand. Transit Casualty Co. v.

Certain Underwriters at Lloyd’s of London, 119 F.3d 619, 625 (8th

Cir. 1997). A defendant in state court may remove the case to

federal court if the defendant can demonstrate that the federal

court has original jurisdiction over the case. 28 U.S.C. §

1441(a). This requirement is met in one of two ways: (1) the case

in question involves a federal question, (2) diversity jurisdiction

exists. In a case where the plaintiff’s pleadings do not allege a

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federal question “the matter in controversy [must exceed] the sum

or value of $75,000, exclusive of interest and costs, and [must

involve] citizens of different states.” 28 U.S.C. § 1332(a). The

party invoking federal jurisdiction must prove the requisite amount

by a preponderance of the evidence. James Neff Kramper Family Farm

P’ship v. IBP, Inc., 393 F.3d 828, 831 (8 Cir. 2005). This rule th

applies even in a removed case where the party invoking

jurisdiction is the defendant. Id. In the present case, it is not

disputed that diversity of citizenship exists and the only issue is

whether the $75,000 statutory minimum is met.

I. Procedural History

The Plaintiffs instituted this action in state court on their

behalf and for all persons and/or entities who own real property or

structures in the United States on which Tex-Cote Classic System

(hereinafter “Tex-Cote”) manufactured by the Defendant was applied.

Tex-Cote is a coating product that comes with a “lifetime” warranty

against cracking, peeling, chipping and other defects. Plaintiffs

allege that Tex-Cote is defective in numerous ways. Plaintiffs

assert claims against Defendant for breach of implied warranty of

merchantability, breach of express warranty, strict products

liability, marketing defect/failure to warn, unjust enrichment and

fraud. Plaintiffs seek to certify the action as a class action and

to recover for themselves and the other putative class members

money damages, injunctive relief, prejudgment interest,

postjudgment interest, reasonable attorneys’ fees, costs and any

other relief the Court deems just. Plaintiffs are not seeking

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punitive damages, or any form of exemplary damages on behalf of

themselves or the class. Plaintiffs estimate the cost of removing

the Tex-Cote from their homes and replacing it with another coating

will be $15,000. In each and every instance the Plaintiff states

that they are seeking less than $75,000 total recovery, inclusive

of all interests, costs and attorneys’ fees. 

Defendant removed the action from state court to this Court

asserting the existence of diversity jurisdiction under 28 U.S.C.

1332(a) (Doc. 1) and filed a Supplemental Notice of Removal (Doc.

5). Plaintiffs filed a Motion to Remand (Doc. 7) contending that

Defendant failed to demonstrate that the amount-in-controversy with

respect to any named Plaintiff in this case was satisfied.

Defendant in its Response to Plaintiff’s Motion to Remand (Doc. 11)

states that the jurisdictional amount was satisfied because

Plaintiffs seek injunctive relief that will cost Defendant in

excess of $75,000 to implement.

II. Amount in Controversy

Plaintiffs’ Complaint states that they seek less than $75,000

total recovery for each Plaintiff and/or Class Member. (Compl. ¶

48). Plaintiffs state that their damages are an aggregate of

restitution, remediation, money damages, injunctive relief,

reasonable attorneys’ fees, pre- and post-judgment interest, costs

and any other relief the Court deems just. (Compl. ¶ 49).

Plaintiffs are not seeking punitive damages, or any form of

exemplary damages on behalf of themselves or the class. (Compl. ¶

48(f)). Plaintiffs expressly seek and stipulate to seek less than

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$75,000 total recovery, inclusive of all interests and costs, preand post-judgment interest, court costs, and attorneys’ fees.

(Compl. ¶ 49). Plaintiffs estimate it would cost $15,000 to remove

the Tex-Cote from their homes and replace it with another coating.

(Compl. ¶ 49). 

“As the party seeking removal and opposing remand, [defendant]

has the burden of establishing federal subject matter

jurisdiction.” McNutt v. General Motors Acceptance Corp., 298 U.S.

178, 189, 56 S. Ct. 780, 80 Led. 1135 (1936); Hatridge v. Aetna

Casualty & Surety Co., 415 F.2d 809, 814 (8 Cir. 1969); In re th

Business Men’s Assurance Company of America, 992, F.2d 181, 183 (8th

Cir. 1993). In a diversity case, where the complaint alleges no

specific amount of damages or an amount under the jurisdictional

minimum, the removing party must prove by a preponderance of the

evidence that the amount in controversy exceeds $75,000. See In re

Minnesota Mut. Life Ins. Co. Sales Practices Litig., 346 F.3d 830,

834 (8 Cir. 2003). Title 28 U.S.C. 1367 permits exercise of th

diversity jurisdiction over additional plaintiffs who fail to

satisfy minimum amount-in-controversy requirement, as long as other

elements of diversity jurisdiction are present and at least one

named plaintiff satisfies the amount-in-controversy requirement.

Exxon Mobil Corp. v. Allapattah Services, Inc., et al., 125 S.Ct.

2611, 2615, 162 L.Ed.2d 502 (2005)

Plaintiffs seek an injunction requiring Defendant to inform

consumers that no “lifetime warranty” truly exists, that the

product will crack, peel and fail on any surface after a period of

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In Smith, the Defendant alleged the district court’s 1

reliance on the single plaintiff perspective in determining the

amount in controversy, rather than considering the defendant’s

calculation of the amount in controversy, was discriminatory and

in violation of due process and equal protection rights. The

court stated it was not a violation of Defendant’s rights and was

in accordance with the law of this circuit. 

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time, that the use of Tex-Cote on wood will cause the product to

delaminate from wood, and that Tex-Cote will not prevent mildew as

advertised. (Compl. ¶ 47). Defendant contends the injunction

would require Defendant to create and implement a means of

identifying old and new customers to whom the injunction would

apply and to communicate information to those old and new

customers. Defendant argues the cost of the injunction would be in

excess of $75,000, regardless of whether a class is certified and

regardless of the size of any such class. (Doc. 5). Defendant

further alleges that removal, remediation, and replacement of the

siding of some potential class members would exceed $75,000, since

the cost of removing or installing the siding on any particular

structure depends upon its square footage. (Doc. 5). 

Defendant argues that the amount in controversy should include

the cost to the defendant of injunctive relief. We disagree for

Eighth Circuit precedent requires the district court to rely solely

on the plaintiff’s viewpoint in meeting the requisite amount.

Smith v. Amer. States Pref. Ins. Co., 249 F.3d 812, 813 (8 Cir. th

2001). The amount in controversy in a suit for injunctive relief 1

is measured by the value to the plaintiff of the right sought to be

enforced. See Burns v. Massachusetts Mutual Life Ins. Co., 820

F.2d 246, 248 (8 Cir. 1987). The value of the requested th

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injunctive relief from the Plaintiff’s perspective does not

approach the required jurisdictional minimum. For Plaintiff, the

value of the injunction is equal to the intangible benefit of

becoming a more informed consumer about the Defendant’s product and

this value would be well below the requisite $75,000. 

III. Conclusion

Defendant has not met the burden of proof showing an amount in

controversy in excess of $75,000. Therefore, this Court does not

have subject matter jurisdiction to hear the case. 

Title 28 U.S.C. § 1447(c) mandates that a case be remanded to

the state court from which it was removed whenever the district

court concludes that subject matter jurisdiction, which is based on

complete diversity, is nonexistent. Accordingly, Plaintiffs’

Motion to Remand (Doc. 7) is hereby GRANTED, and this case is

remanded to the Circuit Court of Clark County.

IT IS SO ORDERED this 7 day of October, 2005. th

/s/ Robert T. Dawson

Robert T. Dawson

United States District Judge

 

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