Opinion
CIVIL ACTION NUMBER 04-336, SECTION "L" (2)
May 19, 2004
ORDER REASONS
Pending before the Court is the motion of Defendant Thomas S. Venable to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6). It appears to the Court that the amount in controversy has not been satisfied, and the Court thus is without subject matter jurisdiction. Accordingly, the Defendant's motion to dismiss is DENIED WITHOUT PREJUDICE, and the matter is hereby REMANDED to the Civil District Court for the Parish of Orleans, State of Louisiana.
I. Background
Plaintiff Ernest Smith brought suit against Defendants Thomas Venable, Chubb Life Insurance Co., and Jefferson Pilot Securities Corp. in Civil District Court for the Parish of Orleans in September 2000. The Plaintiff alleges that on August 5, 1993, Defendant Thomas S. Venable contacted him to sell an "annuity life" policy. On that same date, the Plaintiff claims that he provided the Defendant with a check for $30,000 to be used as a deposit in the annuity.
Instead of depositing the check in an annuity account, the Plaintiff claims that the Defendant sold him a term life insurance policy and used the $30,000 to pay the policy's monthly premiums. The Plaintiff claims to have learned that the Defendant sold him a life insurance policy on September 9, 1999. The Plaintiff brought suit to recover damages in Civil District Court.
Defendant Thomas Venable was not served with the Plaintiff's petition until January 10, 2004. On February 6, 2004, the Defendant removed the matter to the United States District Court for the Eastern District of Louisiana under 28 U.S.C. § 1441 based on federal diversity jurisdiction. The Defendant's notice of removal asserted that more than $75,000 was in controversy was at issue because the face value of the disputed insurance policy was $120,000.
II. Law Analysis
The federal district courts are courts of limited jurisdiction. A district court must dismiss any action where subject matter jurisdiction appears to be lacking. Fed.R.Civ.Pro. 12(h)(3); Burge v. Parish of St. Tammany, 187 F.3d 452, 466 (5th Cir. 1999) (noting that the district courts may question subject matter jurisdiction sua sponte).
The Defendant removed the matter to federal court based on diversity of citizenship, and it is thus the Defendant's burden to establish subject matter jurisdiction. The Fifth Circuit has repeatedly articulated the analytical framework for assessing the amount in controversy in those matters that are removed from Louisiana state courts where no amount of damages is asserted:
[T]he removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds $75,000. 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."Luckett v. Delta Airlines, Inc., 171 F.3d 295, 298 (5th Cir. 1999) (internal citations omitted); see also White v. FCI USA, Inc., 319 F.3d 672, 675 (5th Cir. 2003); Simon v. Wal-Mart Stores, Inc., 193 F.3d 848, 850 (5th Cir. 1999).
The Plaintiff's state court complaint did not specify an amount of damages, and it is not "facially apparent" from either the Plaintiff's complaint or the petition for removal that the amount in controversy exceeds $75,000. In fact, the Plaintiff's complaint suggests that the jurisdictional amount has not been satisfied. The Plaintiff's damages arise from his allegation that the Defendant incorrectly invested $30,000 in a term life insurance policy rather than depositing the funds in an annuity. Likewise the factual information contained in the Defendant's notice of removal fails to establish the amount in controversy. The notice of removal merely asserts, "[t]he amount in controversy exceeds $75,000, as the face amount of the insurance product at issue herein is $120,000." (Rec. Doc. No. 1, ¶ 4.)
The Plaintiff's claim does not seek to obtain the proceeds of the $120,000 term life insurance policy, a policy that the Plaintiff claims was incorrectly issued. The face value of the life insurance policy thus is not relevant to the determination of the amount in controversy. Because the removing Defendant has failed to demonstrate by a preponderance of the evidence that section 1332's amount in controversy requirement has been satisfied, the Court lacks subject matter jurisdiction.
II. Conclusion
The Defendant removed the matter to this Court based on federal diversity jurisdiction. It appears to the Court that the amount in controversy requirement set forth in 28 U.S.C. § 1332 has not been satisfied. The Court lacks subject matter jurisdiction to consider this case further. Accordingly, the Defendant's motion to dismiss is DENIED WITHOUT PREJUDICE, and the matter is hereby REMANDED to the Civil District Court for the Parish of Orleans, State of Louisiana.