IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

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No. 91-7064

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NATIONAL UNION FIRE INSURANCE CO.

OF PITTSBURGH, PENNSYLVANIA,

Plaintiff-Appellant,

VERSUS

BARBARA L. (LILLIAN) RUSSELL,

Defendant-Appellee.

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No. 91-7072

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SOCORRO RODRIGUEZ,

Plaintiff-Appellee,

VERSUS

NATIONAL UNION FIRE INSURANCE CO.

OF PITTSBURGH, PENNSYLVANIA,

Defendant-Appellant.

_________________________

Appeals from the United States District Court

for the Northern District of Texas

_________________________

(September 8, 1992)
 

1 "The district courts shall have original jurisdiction of all civil

actions where the matter in controversy exceeds the sum or value of $50,000,

exclusive of interest and costs". 28 U.S.C. § 1332(a).

2

Before WISDOM, SMITH, and EMILIO M. GARZA, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

At issue here is the determination of jurisdictional amount,

for purposes of diversity jurisdiction, under Texas's scheme for

disbursing workers' compensation and medical benefits. In Texas,

the Texas Workers' Compensation Commission (TWCC) holds a hearing

on each claim, then makes an award. If either party is not satisfied with the award, it may bring the case to court. Once suit is

filed, the award is automatically "set aside," and liability is

litigated de novo. Tex. Rev. Civ. Stat. Ann. art. 8307, § 5

(workers' compensation) (repealed Jan. 1, 1991). Both of these

consolidated cases arise from an insurer's bringing suit in district court to set aside a TWCC award. In each case, the district

court dismissed for want of the requisite amount in controversy to

invoke diversity jurisdiction.1 Finding that the workers in these

two cases have not shown to a legal certainty that the amount in

controversy is less than $50,000, we reverse and remand for trial.

I.

A. No. 91-7064.

Barbara Russell was injured while lifting a bolt of cloth in

the course of her employment at Wal-Mart. National Union Fire

Insurance Co. of Pittsburgh, Pennsylvania (National Union), is the

workers' compensation insurer for Wal-Mart; it paid some benefits
3

to Russell and then began to dispute the extent of her disability.

At a TWCC hearing, Russell claimed total and permanent disability.

The TWCC awarded her $8,727.20. 

Russell is a citizen of Texas, and National Union is a citizen of Pennsylvania. National Union brought a diversity suit in

the Northern District of Texas, thereby setting aside the TWCC

award. The district court found that, as a matter of law, the

amount in controversy was the amount of the TWCC award, in this

case $8,727.20, and dismissed for lack of jurisdiction.

B. No. 91-7072.

Socorro Rodriguez injured his back when he slipped and fell

in the course of his employment at St. Paul Medical Center in

Dallas. National Union was the workers' compensation insurer for

St. Paul; it paid $26,829.06 in medical benefits and $19,286.40 in

indemnity benefits. Rodriguez claimed permanent disability, but

National Union believed he would not be permanently disabled if he

would submit to lumbar surgery. 

Rodriguez was scheduled for this surgery three times and

cancelled it each time. National Union refused to pay further

disability or medical payments for Rodriguez if he did not submit

to the surgery. A TWCC hearing was held, and the TWCC awarded

Rodriguez $49,057.83.

Rodriguez is a citizen of Texas, and National Union is a

citizen of Pennsylvania. National Union brought a diversity suit

in the Northern District of Texas, thereby setting aside the TWCC
 

2 See also Foret v. Southern Farm Bureau Life Ins. Co., 918 F.2d 534,

537 (5th Cir. 1990); Opelika Nursing Home v. Richardson, 448 F.2d 658, 667

(5th Cir. 1971). Realignment of the parties does not alter this result, as

jurisdiction is determined when the suit commences. See St. Paul Mercury, 303

U.S. at 288.

4

award. Rodriguez filed a motion to dismiss, arguing that his

counterclaim asserted a claim for less than $50,000. Before ruling on the motion, the district court realigned the parties pursuant to Texas law, so that Rodriguez is now the plaintiff. The

court then held that the amount alleged in Rodriguez's counterclaim determined the amount in controversy; since this was less

than $50,000, the court dismissed for want of jurisdiction. 

II.

The general federal rule has long been to decide

what the amount in controversy is from the complaint

itself, unless it appears or is in some way shown that

the amount stated in the complaint is not claimed "in

good faith." In deciding this question of good faith we

have said that it "must appear to a legal certainty that

the claim is really for less than the jurisdictional

amount to justify dismissal." 

Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 353 (1961) (quoting

St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89

(1961)).2 In Hardware Mut. Casualty Co. v. McIntyre, 304 F.2d

566, 569-70 (5th Cir.), cert. denied, 371 U.S. 878 (1962), this

court interpreted Horton and held that, under the Texas workers'

compensation scheme, if the insurance company claims an amount

supporting jurisdiction, "federal jurisdiction exists unless the

insured denies the allegation that he will seek more than [the

jurisdictional minimum] in the court action and makes an affirma-
 

3 The McIntyre court declined to determine jurisdictional amount either

by the award of the TWCC or by the original amount the employee requested from

the TWCC. 

 

4 National Union has asked us to declare McIntyre obsolete in the wake

of Northbrook Nat'l Ins. Co. v. Brewer, 493 U.S. 6 (1989). The McIntyre

court supported its holding that the countercomplaint is crucial to determining jurisdiction by reasoning that the employee's complaint is the only real

complaint in the case. The Court in Northbrook, id. at 10, has called this

reasoning into question: "Although the employee in an action brought by the

insurer retains some characteristics of a plaintiff at trial, such an action

is still inescapably one by, not against, the insurer." Our finding of jurisdiction in these two cases does not conflict with McIntyre, which is factually

distinguishable. Therefore, we decline to address McIntyre's continuing validity after Northbrook.

 

5 Both parties admit that this amount will be reduced by the benefits

already paid by National Union ($19,286.40) if judgment is for Rodriguez, as

National Union is entitled to a credit for the amount of indemnity benefits

already paid. See Charter Oak Fire Ins. Co. v. Pierce, 702 S.W.2d 259, 260

5

tive claim for compensation for a sum which does not exceed [the

jurisdictional minimum]."3 If the employee counterclaims for less

than the minimum jurisdictional amount, "it then becomes clear to

a legal and mathematical certainty that the amount in controversy

is less than the jurisdictional requisite." Id. at 570.

We now apply this standard to the two cases at hand.4 In No.

91-7064, Russell alleges that the amount in controversy is less

than $50,000 and asks in her counterclaim, for "all sums due her

under the Texas Worker's Compensation Act for any temporarily

[sic] total disability and/or for her impaired wage earning capacity." She also prays for past and future medical expenses. The

counterclaim is vague as to the amount requested and thus does not

show to a legal certainty that the amount in controversy does not

exceed $50,000. 

In No. 91-7072, Rodriguez alleges that the amount in controversy is less than $50,000 and asks, in his counterclaim, for

compensation benefits in the amount of $48,845.12.5 The McIntyre
(Tex. App. )) Dallas 1985, writ ref'd n.r.e.).

 

6 National Union suggests that the estimated value of future medical

benefits should be included in the amount in controversy. We need not address

this assertion in light of our conclusion that the jurisdictional amount is

satisfied.

6

court assumed that the employee's counterclaim would contain all

issues in controversy. That assumption does not hold true in

No. 91-7072. 

Rodriguez's counterclaim contains no mention of medical benefits. National Union apparently has paid $26,829.06 in medical

benefits, however, and requests refund or credit for this sum.6

Although the district court may not award future medical benefits,

see art. 8307, § 5, it of course may set aside a past award.

These benefits logically are part of the "amount in controversy,"

and Rodriguez has not refuted that claim. Therefore, it does not

appear to a legal certainty that the amount in controversy is less

than $50,000. 

REVERSED and REMANDED for trial.