Source: http://pa.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180327_0000897.MPA.htm/qx
Timestamp: 2019-04-20 04:39:13+00:00

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FindACase | Lasher v. Statoil USA Onshore Properties, Inc.
Lasher v. Statoil USA Onshore Properties, Inc.
Pending before the court is the plaintiffs motion to remand. (Doc. 12). Based upon the court's review of the motion and the materials related thereto, the plaintiff's motion will be granted.
By way of relevant background, the plaintiff filed the instant action on May 4, 2017 in the Susquehanna County Court of Common Pleas. (Doc. 1, Ex. A). On May 23, 2017, the defendant removed the action to this court on the basis of original diversity jurisdiction under 28 U.S.C. §1332(a), arguing that there is complete diversity between the parties and that the amount in controversy exceeds $75, 000 exclusive of interest and costs. (Doc. 1).
On June 20, 2017, the plaintiff filed the pending motion for remand, (Doc. 12), and filed a supporting brief on the following day, (Doc. 13). The plaintiff does not challenge that there is complete diversity between the parties. However, the plaintiff argues that the defendant has failed to demonstrate that the relief he seeks satisfies the amount in controversy requirement when measured at the time of removal. The defendant filed a brief in opposition to the motion for remand on July 21, 2017. (Doc. 17). On August 18, 2017, the plaintiff filed a reply brief in support of his motion for remand. (Doc. 24).
Because federal district courts are courts of limited jurisdiction, the removal statutes are strictly construed against removal, e.g., American Fire & Casualty Co. v. Finn, 341 U.S. 6 (1951); Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 (3d Cir.1992) (citations omitted); LaChemise Lacoste v. Alligator Co., 506 F.2d 339 (3d Cir.1974). If there are any doubts as to substantive and procedural jurisdictional prerequisites, they must be resolved in favor of remand, e.g., Abels v. State Farm Fire & Casualty Co., 770 F.2d 26, 29 (3d Cir.1985); Sterling Homes. Inc. v. Swope, 816 F.Supp. 319, 323 (M.D.Pa.1993). The removing defendant bears the heavy burden of persuading the court to which the state action was removed that it has jurisdiction under the removal statutes. Batoff, 977 F.2d at 851; Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir.1990), cert, denied, 498 U.S. 1085(1991).
Removal is strictly a statutory right and the statutory procedures to effect removal must be followed precisely. Lewis v. Rego Co., 757 F.2d 66, 68 (3d Cir.1985). Removability is to be determined "only by reference to the plaintiffs initial pleadings, " Swope, 816 F.Supp. at 323 (citations omitted), at the time of filing the petition for removal. Abels, 770 F.2d at 29.
Where the basis for removal is diversity of citizenship under 28 U.S.C. §1332, as in this case, "the congressional intent to restrict federal diversity jurisdiction [must be] honored." Meritcare Inc. v. St. Paul Mercury Ins. Co., 166 F.3d 214, 217 (3d Cir.1999) (citations omitted). Further, where an action is removed on the basis of diversity, the requisite diversity of citizenship and jurisdictional amount ordinarily must appear on the face of the complaint or the removal petition. See Levy v. Weissman, 671 F.2d 766, 767 (3d Cir.1982). Although "actual damages may not be established until later in the litigation, the amount in controversy is measured as of the date of removal, a practice similar to that in original jurisdiction where the inquiry is directed to the time when the complaint is filed . . . When it appears to a legal certainty that plaintiff was never entitled to recover minimum amount set for §1332, the removed case must be remanded even if the jurisdictional deficiency becomes evident only after trial." Meritcare, 166 F.3d at 217.
Where the complaint does not seek damages in a precise monetary amount, the district court may look to the notice of removal, and should make an independent evaluation of the claim from the record before it, i.e., the state court records starting with the complaint, and the removal notice. Angus v. Shiley Inc., 989 F.2d 142, 146 (3d Cir.1993).
In this regard, the Third Circuit clarified the amount in controversy test in Samuel-Bassett v. Kia Motors America. Inc., 357 F.3d 392 (3d Cir. 2004). Any factual disputes necessary to establish jurisdiction or the lack thereof must be resolved by the district court if the complaint and removal petition are insufficient to establish the amount with certainty. Id. It is the defendant's burden to demonstrate, by a preponderance of the evidence, facts upon which the district court may find that the amount meets or exceeds $75, 000. Id. at 397-98. In attempting to establish its burden, estimations of the amounts recoverable [under the state claims pleaded] must be realistic. Id. at 403.
When the relevant facts are not in dispute or findings have been made by the district court, the Third Circuit recommended that the court "adhere to the legal certainty test" cited in Meritcare Inc. v. St. Paul Mercury Ins. Co., 166 F.3d 214 (3d Cir.1999), and established by the United States Supreme Court in St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289 (1938). In Red Cab, the Supreme Court discussed the nature of a defendant's burden of proof in a removal case and stated that "the rule for determining whether the case involves the requisite amount as whether from the face of the pleadings, it is apparent, to a legal certainty, that the plaintiff cannot recover the amount claimed, or if, from the proofs, the court is satisfied to a like certainty that the plaintiff never was entitled to recover that amount." Samuel-Bassett, 357 F.3d at 397 (citing Red Cab, 303 U.S. at 289).
The plaintiff alleges that the instant action concerns the defendant's miscalculation of royalties it owes him on the sale of gas from his property pursuant to an oil and gas lease which covers a small parcel of approximately 36 acres of land in Susquehanna County, Pennsylvania. According to the plaintiff, the oil and gas lease requires the defendant to pay him royalties based on "sales proceeds actually received by [the defendant]" for actual sales of gas. The plaintiff alleges that the defendant breached the royalty payment term by transferring gas from the plaintiffs property to its affiliate Statoil Natural Gas LLC, ("SNG"), and by improperly calculating the royalties based on the price it assigns for bookkeeping for those transfers. In turn, the plaintiff alleges that SNG sells the gas to end users at significantly higher prices, with the profits flowing to the defendant's and SNG's parent, Statoil ASA, ("Statoil"). According to the plaintiff, the reduced royalty payments were part of a scheme to benefit the defendant's parent company at the plaintiff's expense.
The plaintiffs complaint further provides that the defendant has not charged deductions for post-production costs against the plaintiff's royalties and that an addendum to the lease contains a Market Enhancement Clause, ("MEC"), which prohibits deductions of post-production costs from royalty payments. While the plaintiff has received royalty payments, and while the defendant has not charged deductions for post-production services or transportation against those royalty payments, the plaintiff alleges that his royalty payments have been less than what he was entitled to because of the defendant's participation in the foregoing scheme to benefit its parent company.
Based upon his factual allegations, the plaintiff sets forth three counts in his complaint. The first count is for breach of contract based on the defendant's alleged breach of its obligation to calculate royalties based on sales proceeds actually received from sales of the gas to third parties, including end user markets. The plaintiff seeks actual damages in this count based on the difference between royalties calculated from the sales proceeds the defendant and SNG actually received from the sale of the gas to third parties and the allegedly artificial price the defendant used to calculate royalties paid to the plaintiff.

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