Summary
noting that jurisdictional discovery was permitted so that the identity of defendants and amount-in-controversy could be determined for diversity jurisdiction
Summary of this case from Mid City Tower, LLC v. Certain Underwriter's at Lloyd's, LondonOpinion
Civil Action No. 01-2659, Section "C" (4).
November 6, 2001.
MINUTE ENTRY
Before the Court is Plaintiffs Motion to Remand. After reviewing the arguments of counsel, the record, and the applicable law, IT IS ORDERED that the Court shall defer its decision on this motion pending the completion of limited discovery and submission of supplemental memoranda.
Background
Plaintiff commenced this action on July 24, 2001 by filing a Petition in the Twenty-Fifth Judicial District Court for the Parish of Plaquemines, State of Louisiana, alleging that from roughly June 7, 1999, through August 27, 2000, Defendants, inter alia, conducted dredging and wheelwashing in removing certain pipeline bulkheads and crossed Plaintiffs oyster lease. These activities, Plaintiff alleges, caused, inter alia, excessive siltation, damage to oysters and destruction of the lease so as to make it unsuitable for oyster cultivation. See Petition at ¶¶ 6, 12, 13. Plaintiff now seeking damages and other relief for these activities. See Petition.
Plaintiff admits in the Petition that he does not know the actual identity of the other Defendants, ABC Towing Co. ("ABC") and XYZ Construction Co. ("XYZ"), but he does allege in his Brief on Jurisdiction that the named fictitious defendants include Louisiana citizens. See Rec. Doc. 6 at 3.
Pursuant to 28 U.S.C. § 1441, Defendant Gulf South Pipeline Co., LP ("Gulf South") removed the case to federal court on September 4, 2001, invoking diversity jurisdiction. See Rec. Doc. 1. Gulf South argues that jurisdiction is appropriate because the parties whose identities are now known establish complete diversity and the amount in controversy exceeds $75,000. Analysis
Gulf South claims in its Answer that the other defendants are fictitious and named to defeat diversity jurisdiction. See Rec. Doc. 2 at 2.
The parties may neither consent to nor waive federal subject matter jurisdiction. See Simon v. Wal-Mart Stores, Inc., 193 F.3d 848 (5th Cir. 1999). Where jurisdiction is premised on diversity of citizenship, first, the parties must be diverse and second, the amount in controversy must exceed $75,000. See 28 U.S.C. § 1332 (a).
First, Plaintiff asserts that ABC and XYZ include Louisiana citizens, thus destroying complete diversity, but that Plaintiff does not know their true identities. Plaintiff further alleges that Defendants know the true names of these parties but have not divulged this information.
"When the jurisdiction of a federal court is challenged, that court has a duty to make the inquiries necessary to establish its own jurisdiction." See Foret v. S. Bureau Life Ins. Co., 918 F.2d 534, 537 (5th Cir. 1991) (citing Opelika Nursing Home, Inc. v. Richardson, 448 F.2d 658, 666 (5th Cir. 1971)). "Since there is `no statutory direction for procedure upon an issue of jurisdiction, the mode of its determination is left to the trial court.'" Opelika, 448 F.2d at 667 (quoting Gibbs v. Buck, 307 U.S. 66, 71-72, 59 S.Ct. 725, 729, 83 L.Ed. 1111 (1938)).
Given this Court's duty to inquire as to its jurisdiction over the case, its discretion in determining the method for that inquiry, and Plaintiffs apparently good-faith assertion that Gulf South, not Plaintiff knows the actual identity of ABC and XYZ, the Court finds that limited discovery is appropriate to determine ABC's and XYZ's true identity.
The other jurisdictional issue here is whether this case satisfies the amount-in-controversy requirement. The removing defendant must prove by a preponderance of the evidence that the jurisdictional minimum exists. See Simon, 193 F.3d at 850. This showing may be made by either: (1) demonstrating that it is apparent on the face of the complaint that the claims are likely to exceed $75,000; or (2) setting forth the facts in controversy that support a finding of the jurisdictional minimum. See id.
Gulf South has failed to demonstrate, based on the face of the Petition that the claims are likely to exceed $75,000, only conclusorily asserting the requisite jurisdictional minimum. Gulf South submits, however, that it can satisfy the requirement by offering summary-judgment-type evidence, as permitted under Allen v. R H Oil Gas Co., 63 F.3d 1326, 1336 (5th Cir. 1995). Gulf South states, however, that it has not had sufficient time to develop this evidence and/or requires discovery to do so.
"The trial court is not required to follow any set procedure in determining whether the jurisdictional amount has been satisfied. `[T]he blueprint of the method of determining the length and breadth of the amount in controversy is entirely within the discretion of the trial court.'" Foret, 918 F.2d at 537 (quoting Opelika, 448 F.2d at 667).
Given, first, the Court's discretion in selecting the method for the amount-in-controversy inquiry and second, that discovery in any event must take place regarding the diversity issue, the Court finds that, without more, limited discovery also is appropriate to determine whether the amount-in-controversy requirement has been met. Conclusion
Plaintiff submits in its Brief on Jurisdiction that he stipulates that his claim is worth less than $75,000, exclusive of costs and interest. See Rec. Doc. 6 at 1. Once a defendant satisfies his burden of showing the requisite amount in controversy, a plaintiff may defeat jurisdiction by showing to a "legal certainty" that the amount in controversy will not satisfy the jurisdictional requirements. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 82 L.Ed. 845 (1938). Parties seeking to prevent removal may meet this legal certainty standard by offering a binding stipulation to prove to a legal certainty that recovery will not exceed the jurisdictional minimum, but that stipulation must be filed in the state court before removal occurs. See De Aguilar v. Boeing Co., 47 F.3d 1404, 1412 (5th Cir. 1995); See also 14C Wright, Miller, Cooper, Fed. Prac. Proc.: Jurisdiction 3d § 3726 (1998). Putting to one side the question of whether it is appropriate for Plaintiff to use such a stipulation to defeat jurisdiction before Gulf South establishes the amount-in-controversy requirement, nothing in the record shows that Plaintiff filed the stipulation before removal occurred. As such, Plaintiff has not satisfied the legal certainty standard that the jurisdictional minimum does not exist.
For the foregoing reasons, it is therefore ORDERED that:
(1) the parties shall conduct limited discovery to determine whether the complete diversity and the amount-in-controversy requirements exist to establish diversity jurisdiction. Any written discovery shall be propounded seven days from the date of this order and answered two weeks thereafter. All other discovery shall be completed within 45 days of the date of this order.
(2) based on both current knowledge and information produced from this discovery, the parties shall submit supplemental memoranda addressing the issues in Plaintiffs motion by January 2, 2002, at 4:30 p.m.