Opinion
Civil Action No. 3:99-CV-2640-M.
May 12, 2000.
MEMORANDUM OPINION AND ORDER OF REMAND
On this date came before the Court the Plaintiff's Motion to Remand. Plaintiff claims that under the circumstances of this case, the Court does not have jurisdiction, because although the parties are of diverse citizenship, the amount in controversy does not satisfy the minimum jurisdictional amount under 28 U.S.C. § 1332 (a). The Court agrees. The Motion to Remand is therefore GRANTED, for the reasons detailed below.
The Plaintiff's Original Petition, filed in the state court, does not allege a specific dollar amount of damages. Instead, it purports to be a class action, seeking damages, statutorily enhanced damages, attorney's fees and costs for violations of TEX. INS. CODE § 22.55 and for breach of contract.
Although the Petition at p. 3 refers to TEX. INS. CODE § 21.21, no damages are sought under that statute, nor does the section of the Petition describing the Class Action Allegations even mention it.
Where the amount in controversy is not stated in the removed complaint, the removing defendant must prove by a preponderance of the evidence that the jurisdictional minimum is satisfied. Allen v. R H Oil Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995). Here, the defendant attempts to do so by urging that the attorney's fees to be recovered, if the purported class prevails, will exceed $75,000 and that the attorney's fees are to be "aggregated," rather than allocated pro rata to each putative class member, thereby satisfying the jurisdictional amount.
In so contending, the defendant relies primarily on Howard v. Globe Life Ins. Co., 973 F. Supp. 1412 (N.D. Fla. 1996). There, the court focused on the fact that, in class action lawsuits, the attorney's fees are paid directly to the lawyers and are not like compensatory damages "or other specific benefit[s] to an individual plaintiff" Id. at 1420. Thus, the court in Howard reasoned that a claim for attorney's fees should be "considered in the aggregate, without pro-ration." Id. Defendant argues that this Court should follow Howard and find that the attorney's fees likely to be awarded if the class is certified exceed the minimum jurisdictional amount, and should be aggregated.
However, at least two federal district courts in Texas have determined the issue as plaintiff urges here — finding that aggregation of presumed substantial fees under these circumstances is not appropriate. In Johnson v. Direct TV Inc., 63 F. Supp.2d 768, 770 (S.D. Tex. 1999), Judge Kent pointed out that it was not facially apparent that attorney's fees would exceed $75,000, and noted that the "evidence" of same needed to be more than the conclusory statements offered by the defendant. The court expressed the view that the amount of fees would likely exceed $75,000 if the class were certified, but noted that the fees could wind up being considerably less if the class were not certified. Id. Judge Kent further determined that attorney's fees associated with the prosecution of a Texas class action should not be attributed to the named representative for jurisdictional purposes. In so ruling, Judge Kent rejected the authority of In re Abbott Laboratories, 51 F.3d 524 (5th Cir. 1995), aff'd per curiam (by an equally divided court) sub nom. Free v. Abbott Laboratories, Inc., 120 S.Ct. 1578 (April 3, 2000), which interpreted a unique Louisiana statute that allowed only class representatives to collect attorney's fees. Id.
Judge Walter Smith reached a similar conclusion in Quebe v. Ford Motor Company, 908 F. Supp. 446 (W.D. Tex. 1995). In Quebe, the court concluded that attorney's fees for breach of contract, one of the claims urged in this case, would be awarded to both the named representatives and the unnamed class members and that such an approach reflects a legislative intent to distribute fees pro rata. Id. at 452. Aggregation was determined inappropriate, the minimum jurisdictional amount was thus not satisfied, and the case was remanded. Id. at 452-53.
This Court finds the reasoning of Judges Kent and Smith persuasive and equally applicable here. It is premature for this Court to now determine that attorney's fees will exceed the jurisdictional minimum, when such a determination is premised on a class certification which may or may not occur. Were the analysis as broad as the defendant urges, every class action asserted under a Texas statute providing for recovery of attorney's fees would be removable to federal court on the unsupported assumption that the class would be certified, and large fees awarded. This Court declines to adopt such an expansive view, and concludes that the defendant has not met its burden of establishing that the jurisdictional prerequisites are satisfied.
Finding that the defendant has not established the minimum amount in controversy, this Court concludes that it does not have jurisdiction under 28 U.S.C. § 1332 (a), that removal was improper, and that this case must be remanded to the 68th Judicial District Court of Dallas County, Texas. 28 U.S.C. § 1447 (c). However, although 28 U.S.C. § 1447 (c) provides for an award of costs and expenses upon remand, since the Fifth Circuit has not addressed this issue under Texas law, and other federal courts have resolved the issue differently, this Court concludes that an award of attorney's fees and costs in favor of the Plaintiff is not appropriate, and declines to award same.
SO ORDERED.