Opinion
CIVIL ACTION NO. 01-3327
February 28, 2001
CIVIL ACTION
Before the Court is a Motion to Remand filed by plaintiff Kim Saacks (Document No. 6). The parties have waived oral argument and this matter was submitted for the Court's consideration on the parties' memoranda. The Court, having considered the memoranda filed, the Court record, the law and applicable jurisprudence, is fully advised in the premises and ready to rule.
ORDER AND REASONS
I. BACKGROUND:
This action arises out of a claim filed by plaintiff Kim Saacks on September 18, 2001 in Civil District Court for Orleans Parish alleging that defendant, Mohawk Corporation ("Mohawk"), breached an employment contract with her. In her pleading, plaintiff set forth a wage claim in the amount of $10,306 and a penalty claim in the amount of $18,692, together with the attorney fees and all costs of the proceedings. Defendant removed this action to this Court based on diversity of citizenship under 28 U.S.C. § 1447. Defendant argued that Plaintiff's complaint also contains a claim under Louisiana employment discrimination law and that accordingly, the total claims alleged by plaintiff are likely to exceed the jurisdictional amount in controversy, making removal to this Court proper. Plaintiff then filed a Motion to Remand and Request for Attorneys' Fees, submitting that this Court lacks subject matter jurisdiction because defendant failed to establish by a preponderance of the evidence that the amount in controversy exceeds $75,000 and because defendant's removal of this case was not timely. Both parties also filed subsequent memorandums n response to the Motion to Remand.
II. ARGUMENTS OF THE PARTIES
A. Plaintiff's Memorandum in Support of the Motion to Remand and Request for Attorney's Fees and Costs.
Plaintiff bases her motion to remand for lack of subject matter jurisdiction on two principal arguments: 1) defendant has failed to establish by a preponderance of the evidence that the jurisdictional amount in controversy exceeds $75,000 and 2) defendant failed to remove this case in a timely fashion pursuant to 28 U.S.C. § 1446 (b).
In her original pleading, plaintiff alleged an amount in controversy totaling approximately $45,692.00, including $27,000 for a wage claim and $18,692 in penalty fees. Defendant submits that plaintiff's complaint contains a claim under Louisiana discrimination law which could entitle plaintiff to recover as much as $30,000 and warrant the jurisdiction of this Court. However, plaintiff strongly denies having made such a claim in her pleading and argues that the mention of alleged sexual discrimination action while employed by defendant is only presented as part of a statement of the facts of the case and not intended in any way to state a cause of action for discrimination. Accordingly, the amount in controversy does not include a claim for alleged discrimination and cannot be said to reach more than $75,000.
Plaintiff also maintains that defendant failed to timely remove this action pursuant to 28 U.S.C. § 1446 (b). According to plaintiff, a copy of the original pleading filed by plaintiffs counsel was sent by certified mail to defendant on September 4, 2001. Because defendant's attorney acknowledged receipt of the letter demanding the payment of wages and accompanying lawsuit on September 14, 2001, the thirty-day period in which to remove the action commenced on this date. Defendant failed to file a notice of removal until November 5, 2001, well after the thirty days had expired. and therefore removal of this action is not timely.
Although defendant submits that the initial copy of the pleading mailed by Plaintiff on September 4. 2001. was merely a "courtesy copy" and not a service of process, plaintiff emphasizes that section 1446(b) and Fifth Circuit case law both recognize the commencement of the thirty-day period through the receipt of any relevant writing by the defendant. Jernigan v. Ashland Oil Inc., 989 F.2d 812, 815 (5th Cir. 1993)("[t]he thirty days is measured from the receipt of whatever writing . . . .constitutes first notice."). Thus, the fact that the initial copy mailed to defendant was not a formal service of process does not preclude the tolling of the thirty-day removal period and defendant failed to comply with this requirement.
Plaintiff also requests that Mohawk Corporation be required to pay attorneys' fees based on it's bad faith conduct in this litigation. Plaintiff relies in part on 28 U.S.C. § 1447 (c) which permits a court to award the payment of any costs, including attorney fees, incurred as a result of a defective removal. Also, plaintiff asserts that defendant has acted in bad faith by falsely including an employment discrimination claim in it's interpretation of plaintiffs pleading in order to satisfy the jurisdictional amount necessary for removal. Furthermore, defendant has acted in bad faith by attempting to evade the thirty-day removal deadline and trying to preclude opposing counsel from receiving the "Petition for Removal" containing defendant's allegations as required. Although defendant to led both a "Notice of Removal" as well as a "Petition for Removal" with this Court, Defendant only mailed to plaintiff a copy of the "Notice of Removal" in order that plaintiff would not be able to respond to defendant's allegations contained in the "Petition for Removal." Plaintiff asserts that this knowingly deceitful conduct warrants an awarding of attorneys' fees by this Court. See Chambers v. NASCO. Inc. 111 S.Ct. 2123, U.S. La., 1991.
B. Defendant's Motion in Opposition to Plaintiff's Motion to Remand and Request for Attorney's Fees
In response to plaintiffs motion to remand, defendant argues initially that removal was timely because the tolling period did not commence until formal service of process on October 9, 2001. Defendant maintains that the copy originally sent to defendant in September was only a "courtesy copy" of the pleadings and as such, did not constitute the necessary formal service required to commence the thirty-day period. Defendant relies on the 1999 Supreme Court decision, Murphy Bros., Inc. v. Michetti Pipe Stringing. Inc. 526 U.S. 344, 119 S.Ct 1322, 143 L.Ed.2d 448 (1999) (defendant had received courtesy copy of complaint by fax but 30 day time limit did not begin to run until later service).
Defendant also alleges that plaintiffs claims total an amount more than $75,000 and make jurisdiction by this Court proper. Mohawk argues that plaintiff has actually included in her pleadings a possible cause of action for employment discrimination by stating that she was sexually harassed by a male client and later discharged by Mohawk. By including this information in her pleadings, Mohawk contends that plaintiff is alleging a discrimination lawsuit which could result in an award of damages amounting to $30,000 under Louisiana employment law. Defendant also refers to plaintiff's prayer for relief in which she requests "all general and equitable relief" from this Court, thus indicating that she may be entitled to further compensation beyond the wage claim and penalty claim totaling approximately $45,000. Defendant argues that Louisiana's fact pleading rules do not require specific statutory cites and therefore, the "mere recitation" in the pleadings of the facts of her alleged sexual harassment could give rise to a cause of action for employment discrimination. See Hughes v. Livingston Parish School Board, 459 So.2d 10 (La.App. 1 Cir), writ denied, 462 So.2d 1250 (1984).
Defendant additionally submits that if true, plaintiffs claims would "more probably than not" result in an award of at least $75,0000 because of the claim for employment discrimination defendant maintains is included in plaintiffs petition. Based on Saack's contractual wage claims, penalty damages, front and back pay for alleged discrimination, as well as any damages for mental anguish as a result of the discrimination, if plaintiff prevails, she would be entitled to compensation well-above the jurisdictional amount of $75,000. Defendant relies on Allen v. R H Oil Gas Co. 63 F.3d 1326, 1335 (5th Cir. 1995) for tile proposition that where a plaintiff does not plead a specific dollar amount, the removing party need only show that it is more likely than not that the plaintiff's claims will exceed the jurisdictional amount. Accordingly, removal of this action to this Court is proper.
Lastly, defendant states that even if counsel failed to properly serve plaintiff with the removal pleadings, the Court should not deprive defendant of jurisdiction because ultimately, plaintiff has not been prejudiced as a result of not receiving the "Petition for Removal." Defendant contends that failure to serve plaintiff with the complete removal papers was an alleged mailing mistake and Saack's counsel should not he able to use this alleged service error to its advantage.
III. CASELAW AND ANALYSIS
A. Jurisdictional Amount in Controversy
In this particular case. jurisdiction is asserted based upon diversity of citizenship. 28 U.S.C. § 1332. Subjedt matter jurisdiction may not be waived and "[i]f at any time before the final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447 (c). The removing party bears the burden of establishing that federal jurisdiction exists. De Aguilar v. Boeing Co., 47 F.3d 1404, 1408 (5th Cir.), cert. denied, 516 U.S. 865, 116 S.Ct. 180, L.Ed.2d 119 (1995). Further, "unless the law gives a different rule, the sum claimed by the plaintiff controls if tile claim is apparently made in good faith." Id. "When the plaintiffs complaint does not allege a specific amount of damages, the removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds [the jurisdictional amount]." De Aguilar, 47 F.3d at 1409,quoting De Aguilar v. Boeing Co. ("De Aguilar I"), 11 F.3d 55, 58 (5th Cir. 1993). However, the Fifth Circuit stated that the preponderance burden forces the defendant to do more than point to state law that might allow the plaintiff to recover more than what is pled. Id.
For purposes of determining jurisdiction, facts that support removal must be judged at the time of removal. Allen v. R H Oil Gas Co., 63 F.3d 1326, 1335 (1995). Any evidence submitted after the complaint has been filed is allowable only if relevant to the time of removal. Asociacion Nacional de Pescadores v. Dow Quimica de Colombis S.A., 988 F.2d 559 (5th Cir. 1993), cert denied 510 U.S. 1041, 114 S.Ct. 685, 126 L.Ed.2d 653 (1994);
The prevailing law in this area was summarized by the Fifth Circuit in the recent case of Luckett v. Delta Airlines, Inc., 171 F.3d 295. 298 (5th Cir. 1999) as follows:
Several Fifth Circuit decisions have established a clear analytical framework for resolving disputes concerning the amount in controversy. Plaintiffs in Louisiana state courts, by law. may not specify the numerical value of the damage claim. La. Code Civ. P. art. 893. In such a situation, the removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds $75,000. De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir. 1993). The defendant may make this showing in either of two ways: (1) by demonstrating that it is "facially apparent" that the claims are likely above $75,000, or (2) "by setting forth the facts in controversy — preferably in the removal petition, but sometimes by affidavit — that support a finding of the requisite amount." Allen v. R H Oil Gas Co., 63 F.3d 1326. 1335 (5th Cir. 1995) (emphasis in original).Luckett v. Delta Airlines. Inc., 171 F.3d 295, 298 (5th Cir. 1999).
In the present case, this Court finds that jurisdiction is improper because plaintiff has not pled an amount in controversy above $75,000 as is necessary under 28 U.S.C. § 1332 and defendant has failed to show that it is "facially apparent" that the amount exceeds $75,000. In Plaintiff's Memorandum in Support of a Motion to Remand, she clearly outlined the facts in controversy set forth in tile pleadings which include a wage claim and a penalty claim along with attorney fees totaling an approximate amount of $45,692.00. Defendant asserts incorrectly that plaintiff is also making a claim under Louisiana discrimination law by including in her description of facts mention of the alleged sexual harassment suffered by plaintiff while employed by Mohawk Carpets.
However, mere mention of this alleged encounter in the statement of facts does not constitute an independent cause of action. Defendant cannot simply point to a state law which may allow the plaintiff to recover more than what has been plead as a grounds for jurisdiction. See De Aguilar, 47 F.3d at 1409. Because plaintiffs claims do not contain a claim under Louisiana discrimination law, tile addition by defendant of $30,000 to the original amount pled by Saacks is incorrect. Accordingly, defendant has failed to prove by a preponderance of the evidence that the jurisdictional amount exceeding $75,000 is present.
B. Timeless of Removal
The timeliness of removal to this Court is governed by 28 U.S.C § 1446(b) which states that:
if the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant. . .of a copy of an amended pleading, motion order or other paper from which it may be first be ascertained that the case is one which is or has become removable.Id. (emphasis added). The Fifth Circuit Court of Appeals has determined that a post-complaint letter concerning settlement terms comes within the meaning of "other paper" such that the thirty-day time period for removal begins upon receipt of the letter. See Addo v. Globe Life and Accident Insurance Co., 230 F.3d 759, 761 (5th Cir. 2000). See also: S.W.S. Erectors. Inc. v. Infax Inc., 72 F.3d 489, 494 (5th Cir. 1996) (holding that a deposition constituted "other paper"). Furthermore, the court inS.W.S. emphasized that "other paper" is sufficient to prompt notice of removal whereby the document is tile result of a voluntary act of a plaintiff which gives the defendant notice of changed circumstances which now support federal jurisdiction. Id. at 494. Lower courts in the Fifth Circuit have similarly held that a post complaint letter is sufficient to confer notice to the defendant for removal purposes. See e.g., Stramel v. GE Capital Small Business Finance Corp., 955 F. Supp. 65, 67 (E.D.Tex. 1997); Sunburst Bank v. Summit Acceptance Corp., 878 5. Supp. 77, 82 (S.D.Miss. 1990).
For the purposes of this case, this Court finds that defendant did not timely remove this case to federal court because defendant filed the removal notice after the thirty-day time period under 28 U.S.C. § 1446 (b) had expired. Although defendant maintains that removal was timely because the thirty-day period did not begin to run until formal service was received, this Court rejects this interpretation of the statute and finds that plaintiffs certified copy of the complaint mailed on September 4th 2001, was sufficient to toll the period for removal. See Jernigan v. Ashland Oil Inc., 989 F.2d 812, 815 (5th Cir. 1993) (holding that "[t]he thirty days is measured from receipt of whatever writing. . . constitutes first notice."). See also; Wright, Miller Cooper, Federal Practice and Procedure: Jurisdiction 2d § 3732 (the clear purpose [of 1446(b)] is to commence the running of the thirty-day period only after defendant receives actual notice that the case has become proper for removal, which may be communicated in a formal or informal manner.). Thus, because defendant failed to file the notice of removal within the thirty days from receipt of tile certified complaint, removal of this action to federal court is improper.
C. Claim for Attorneys' Fees
Plaintiff requests an award of attorneys' fees on the grounds that defendant has acted in bad faith by unreasonably delaying the proceedings through the filing of an improper notice of removal and subsequent motions in support of removal. The imposition of sanctions and attorneys' fees are governed by 28 U.S.C. § 1927 which states:
Any attorney who so multiplies the proceedings in any case unreasonably and vexatiously, may he required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct.
The Court finds that although the removal by defendant is unwarranted, it does not rise to the level of unreasonable or vexatious.
Accordingly,
IT IS ORDERED that the Motion to Remand filed on behalf of the plaintiff, Kim Saacks, be and the same is Hereby GRANTED. IT IS FURTHER ORDERED that the above-captioned matter, Case Number 01-3327, be, and the same is Hereby REMANDED to the Civil District Court for the Parish of Orleans, State of Louisiana.
IT IS FURTHER ORDERED that the Motion for Attorney Fees requested by plaintiff be DENIED.