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Jersey Subs, Inc. v. Sodexo America, LLC

United States District Court, N.D. West Virginia

January 15, 2019




         On or about September 13, 2018, Jersey Subs, Inc. and Dana Papanicolas ("Plaintiffs") filed a Complaint in the Circuit Court of Monongalia County, West Virginia, against Sodexo America, LLC and Lara Bealko ("Defendants"). Defendants filed a Petition for Removal on October 9, 2018, arguing that diversity jurisdiction exists (Dkt. No. 1). On October 30, 2018, Plaintiffs filed a Motion for Remand (Dkt. No. 10) and Memorandum in Support (Dkt. No. 11) . On November 13, 2018, Defendants filed a response to Plaintiffs' motion (Dkt. No. 18). The Court now DENIES Plaintiffs' Motion for Remand (Dkt. No. 10) .

         I. BACKGROUND

         Plaintiffs' Complaint stems from the operation of a concession stand subcontracted through Defendants at Milan Puskar Stadium on the campus of West Virginia University. After Plaintiffs used a specific stadium location from 2002 to 2016, Defendants provided them with a new location for the 2017 football season. Plaintiffs claim they were damaged when Defendants supplied them with inadequate equipment/signage, placed Plaintiffs' stand next to a competing stand, and, in the presence of a third party, accused Plaintiffs of assisting the theft of Defendants' property. The Complaint alleges the following: (1) Tortious Interference with Contract, and (2) Defamation of Character: Slander Per Se (Dkt. No. 1-1) . Plaintiffs request compensatory and punitive damages but do not cite a specific amount of damages in their Complaint.

         In their Petition for Removal, Defendants allege diversity jurisdiction exists because (1) the parties are diverse, and (2) the relief requested by Plaintiffs, if awarded, would be greater than the minimum requirement of $75, 000 (Dkt. No. 1) . In Plaintiffs' Motion for Remand, they argue that Defendants cannot establish that the $75, 000 threshold is met (Dkt. No, 11). Plaintiffs do not dispute that complete diversity among the parties is present. In Defendants' response, they reiterate their position that relief, if awarded, would be greater than $75, 000. They note that Plaintiffs sent a $20, 000 demand letter for reputational damages while also demanding punitive damages (which may be awarded in amounts up to $500, 000 or four (4) times the amount of actual damages, whichever is greater} (Dkt. No. 18).


         When an action is removed from state court, a federal district court must determine whether it has original jurisdiction over the plaintiff's claims. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). "Federal courts are courts of limited jurisdiction. They possess only that power authorized by the Constitution and statute, which is not to be expanded by judicial decree." Id. at 377.

         "Removal statutes are strictly construed against the party seeking removal, and the burden of establishing jurisdiction rests on that party." Ryan Envtl., Inc. v. Hess Oil Co., 718 F.Supp.2d 719, 722 (N.D. W.Va. 2010) (citation omitted). "Because removal jurisdiction raises significant federalism concerns, [courts] must strictly construe removal jurisdiction." Mulcahey v. Columbia Organic Chemicals Co., 29 F.3d 148, 151 (4th Cir. 1994) (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941)). If federal jurisdiction is doubtful, remand is appropriate. In re Business Men's Assur. Co. of America, 992 F.2d 181, 183 (8th Cir.1993); Cheshire v. Coca-Cola Bottling Affiliated, Inc., 758 F.Supp. 1098, 1102 (D.S.C.1990). "Nonetheless, removal should be 'fair to both plaintiffs and defendants alike' because the right of removal is 'at least as important as the plaintiff's right to the forum of his choice.' McKinney v. Bd. of Trs. of Mayland Cmty. Coll., 955 F.2d 924, 927 (4th Cir.1992)." Carter v. Hitachi Koki U.S.A., Ltd., 445 F.Supp.2d 597, 600 (E.D. Va. 2006) .

         Federal courts have original jurisdiction over two types of cases: those involving federal questions under 28 U.S.C. § 1331 and those involving diversity of citizenship under 28 U.S.C. § 1332. When a party seeks to remove a case based on diversity of citizenship under 28 U.S.C. § 1332, that party bears the burden of establishing that "the amount in controversy exceeds the sum or value of $75, 000, exclusive of interests and costs, and is between citizens of different states." 28 U.S.C. § 1332 .

         Generally, § 1332 requires complete diversity among parties, which means that the citizenship of all defendants must be different from the citizenship of all plaintiffs. See Caterpillar, Inc. v. Lewis, 519 U.S. 61, 68 (1996) . For purposes of diversity of citizenship jurisdiction under 28 U.S.C. § 1332, "an unincorporated association shall be deemed to be a citizen of the State where it has its principal place of business and the State under whose laws it is organized." 28 U.S.C. § 1332(d) (10) .

         When a complaint does not contain a specific amount in controversy and the defendant files a notice of removal, "the defendant bears the burden of proving that the claim meets the requisite jurisdictional amount," and "the Court may consider the entire record" to determine whether that burden was met. Elliott v. Tractor Supply Co., No. 5:14CV88, 2014 WL 4187691, at *2 (S.D. W.Va. Aug. 21, 2014) (citing Mullins v. Harry's Mobile Homes, Inc., 861 F.Supp. 22, 23 (S.D. W.Va. 1994)). If the defendant sufficiently proves by a preponderance of the evidence that the amount in controversy exceeds $75, 000 and the parties are diverse, then removal is proper. Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 553 (2014).

         In order to be operative, a disclaimer of recovery must be "a formal, truly binding, pre-removal stipulation signed by counsel and his client explicitly limiting recovery." McCoy v. Erie Ins. Co., 147 F.Supp.2d 481, 485 (S.D. W.Va. 2001) (emphasis added); see also Virden v. Altria Group, Inc., 304 F.Supp.2d 832, 947 (N.D. W.Va. 2004) ("Therefore, absent a binding stipulation signed by [the plaintiff] that he will neither seek nor accept damages in excess of $75, 000, the Court must independently assess whether the defendants proven by a preponderance of the evidence that [the plaintiff's] complaint seeks damages in excess of $75, 000.") .


         Based on the applicable standards and the record before the Court, it is clear that Defendants have met their burden to prove that diversity jurisdiction exists. As discussed below, all plaintiffs are diverse from all ...

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