Source: http://www.pavlacklawfirm.com/blog/indiana-court-of-appeals-developments-in-litigation-can-allow-remand-for-failure-to-meet-amount-in-controversy-and-recovery-in-excess-of-75000
Timestamp: 2019-04-21 02:59:56+00:00

Document:
Today’s discussion takes to what may be a once-in-a-lifetime case in which a party successfully contended that the amount in controversy was less than $75,000 yet recovered a judgment for more than double that amount. As odd as that outcome may seem, as you will see, the perfect storm of events occurred in Harr v. Hayes to make that happen.
So, for jurisdiction to arise under § 1332(a)(1), you need to have complete diversity of citizenship—i.e., every plaintiff is from a different state than every defendant—and the amount in controversy must be at least $75,000.01. It is the latter requirement, the amount in controversy, that gives us the oddity of Harr.
3. Plaintiff further provides that diversity jurisdiction is not met in this matter because the amount in controversy does not exceed Seventy-Five Thousand Dollars ($75,000.00).
6. On December 16, 2015, Plaintiff submitted his first demand to Defendants in the amount of Seventy-Two Thousand, Five Hundred Dollars ($72,500.00).
7. Therefore, even if the citizenship of the parties is diverse, the requirements of diversity jurisdiction under 28 U.S.C. §1441 are not met because the amount in controversy does not exceed Seventy-Five Thousand Dollars ($75,000.00).
Having been sent back to state court, the Defendants then sought a ruling that the Plaintiff could not recover in excess of $75,000. They argued that the Plaintiff was bound by the doctrine of judicial estoppel to not recover more because he had represented to the federal court that the amount in controversy did not, in fact, exceed $75,000. Opposing that motion, the Plaintiff relied upon the order granting remand “and argued ‘the [district] Court order clearly demonstrates that the Defendants failed to meet their burden to demonstrate all of the elements necessary for federal court jurisdiction.’” In a subsequent filing, the Plaintiff explained that subsequent developments had increased the value of the case.
To the extent that any event after the date of removal can shed light on the jurisdictional question, the willingness to accept $ 60,000 supports a conclusion that the “controversy” exceeds $ 75,000. Rising-Moore did not offer to take $ 60,000 if a jury should decide in his favor and nothing otherwise; he wanted $ 60,000 with certainty, which implies that the stakes at trial comfortably exceed the minimum. Plaintiffs win about half of all tort suits that go to trial. If Rising-Moore had a 50% likelihood of a $ 120,000 verdict at trial, he would offer to accept $ 60,000 with certainty, which has the same expected value; both sides then could save legal expenses. If he is risk averse, he would be willing to accept less than half of the anticipated award: then an offer to take $ 60,000 might imply that the stakes were $ 150,000. If his lawyer had private knowledge suggesting that the chance of prevailing was less than 50%, then the anticipated verdict implied by the offer (if a jury found in plaintiff’s favor) would be even higher. So, for example, a risk-averse plaintiff who thought that he had a one-in-three chance of winning $ 200,000 at trial would take a sure $ 60,000 happily. Only if Rising-Moore were risk-neutral and had more than an 80% chance of winning a favorable verdict would the $ 60,000 offer imply that the full controversy is under $ 75,000. Given the district judge’s belief that Rising-Moore has no chance of prevailing before a reasonable jury, that hardly seems likely.
Here, Defendants have made no effort whatsoever to explain why they had a good faith belief, at the time of removal, that the amount in controversy exceeded $75,000, exclusive of interest and costs. Indeed, their only statement in the Amended Petition for Removal regarding the amount in controversy is that “the amount in controversy exceeds the sum or value of Seventy-Five Thousand Dollars ($75,000.00), exclusive of interest and costs.” Defendants do not point to any evidence to support their statement.
Further, [Plaintiff] specifically argues in the Motion to Remand that Defendants did not complete any pre-lawsuit discovery, and that removal was premature without such discovery. But Defendants do not respond to [his] argument at all, and still do not present any evidence in their response brief to support their belief that the amount in controversy exceeded $75,000, exclusive of interest and costs, at the time of removal. Instead, Defendants rely solely on post-removal events which, as discussed above, are irrelevant to the Court’s analysis regarding whether removal was proper in the first place. [Plaintiff] has challenged Defendants’ assertion that the amount in controversy exceeds $75,000, exclusive of interest and costs, and Defendants have failed to meet their burden of showing by a preponderance of evidence — evidence existing at the time of removal — that the amount in controversy requirement is met.
. . . Defendants had every opportunity to explain why they believed at the time of removal that the amount of controversy exceeded $75,000, exclusive of interest and costs, but chose not to do so. Accordingly, the Court finds that the removal was improper and that remand to the Marion Superior Court is necessary.
This Court remains troubled by the notion that a party may represent to the U.S. District Court that the amount in controversy in a case is less than the jurisdictional requirement, and then, once remanded, that it exceeds that amount. However, neither party has pointed to any precedent which expressly prohibits such a practice. The parties submitted this matter to a jury in this Court for determination. The jury, as the trier of fact, determined that the Plaintiffs' damages totaled One Hundred Eight-Seven [sic] Thousand Five Hundred and 00/100 Dollars ($187,500.00). The Court finds that the jury’s verdict should not be disturbed.
As you would expect, the Defendants appealed.
Judicial estoppel is a judicially created doctrine that seeks to prevent a litigant from asserting a position that is inconsistent with one asserted in the same or a previous proceeding. Judicial estoppel is not intended to eliminate all inconsistencies; rather, it is designed to prevent litigants from playing “fast and loose” with the courts. The primary purpose of judicial estoppel is not to protect litigants but to protect the integrity of the judiciary. The basic principle of judicial estoppel is that, absent a good explanation, a party should not be permitted to gain an advantage by litigating on one theory and then pursue an incompatible theory in subsequent litigation. Judicial estoppel only applies to intentional misrepresentation, so the dispositive issue supporting the application of judicial estoppel is the bad-faith intent of the litigant subject to estoppel.
The Plaintiff made four arguments as to why judicial estoppel did not apply: “(1) [Plaintiff’s] motion to remand in federal court was not a pleading; (2) [Plaintiff] did not repudiate an earlier position; (3) the removal action was not part of the proceeding before the state trial court; and, (4) that at the time of removal, [Plaintiff’s] statement of the amount in controversy was not a material misrepresentation.” The first argument failed because the court found no support in confining the doctrine to pleadings—i.e., complaints, answers, counterclaims, and crossclaims—as opposed to all other court filings.
At the time of [Plaintiff’s] representations regarding the amount in controversy, [his] medical bills totaled only $3,500 and [he] submitted his first demand to the Defendants in the amount of $72,500. Although [he] was receiving ongoing medical treatment, it was not until after the case was remanded that [he] added his wife’s claim and he learned that he suffered an 8% permanent impairment.
Defendants removed this action without filing interrogatories as to the specific monetary damages claimed, or otherwise investigating the specific monetary amount. Therefore, in conjunction with his representations regarding the amount in controversy, [Plaintiff] argued that removal “was pre-mature in not having conducted discovery to investigate the amount of this claim or even inquire as to Plaintiff's demand.” Accordingly, we have no reason to believe that [he] intentionally misrepresented the amount in controversy or that [he] acted in bad faith.
As discussed in the context of judicial estoppel, it is a defendant’s burden to establish the amount in controversy at the time of removal. Although we have no doubt that a plaintiff is entitled to waive his or her right to recover more than the minimum amount in controversy, such waiver must occur prior to removal. Here, [Plaintiff’s] representations were made after the Defendants had removed the case and due to the context of [Plaintiff’s] argument regarding the Defendants’ failure to meet their burden and removal being premature, we are not convinced that [he] intended to relinquish a known right.
I do not think the procedural posture of Harr will soon be replicated. If I am proven wrong, there is at least clear authority to help guide future courts should the need arise.
Harr v. Hayes, ---N.E.3d---, No. 49A02-1711-CT-2595, 2018 Ind. App. LEXIS 240 (Ind. Ct. App. July 3, 2018) (Robb, J.), clarified on reh'g, 2018 Ind. App. LEXIS 283 (Aug. 15, 2018).
Hayes v. Harr, No. 1:15-cv-01880-JMS-TAB, 2016 U.S. Dist. LEXIS 6387, 2016 WL 233092 (S.D. Ind. Jan. 20, 2016) (Magnus-Stinson, J.).
Rising-Moore v. Red Roof Inns, Inc., 435 F.3d 813, 816–17 (7th Cir. 2006) (Easterbrook, J.).
Colin E. Flora, Federal Diversity Jurisdiction and the “Gaping Hole Problem”, Hoosier Litig. Blog(Jan. 25, 2013).

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