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Belew v. Seco Architectural Systems Inc.

United States District Court, E.D. Tennessee, Knoxville Division

January 25, 2017

GARY D. BELEW, Plaintiff,


          Thomas W. Phillips United States District Judge.

         This matter is before the Court on Plaintiff's Motion to Remand [doc. 6], Plaintiff's Brief in Support of the Motion to Remand [doc. 7], and Defendant's Response in Opposition [doc. 11]. For the reasons herein, the Court will deny Plaintiff's motion.

         I. Background

         Plaintiff Gary D. Belew (“Mr. Belew”) initiated this action in the Circuit Court for Campbell County, Tennessee, claiming employer discrimination under the Tennessee Human Rights Act (“THRA”), Tenn. Code Ann. § 4-21-401 [Compl. doc. 1-1, at 5]. Specifically, Mr. Belew alleges that, in March 2016, Defendant Seco Architectural Systems, Inc. (“Seco”), his former employer, terminated him “when [his] ability to obtain other employment was diminished because of his age” and replaced him with employees “much younger.” [Id.]. Mr. Belew's alleged “sustained damages” consist of a “loss of future earnings, employment benefits, and personal injuries [from] humiliation and embarrassment.” [Id. at 6]. Mr. Belew seeks “compensatory damages, inclusive of costs and attorney's fees under the law and evidence not to exceed Seventy-Two Thousand, Five Hundred Dollars ($72, 500.00).” [Id.]. He also requests “such further and general relief to which he may be entitled under the law.” [Id. at 7].

         Based on diversity of citizenship jurisdiction, Seco removed this action to this Court under 28 U.S.C. § 1441(a). [Notice of Removal, doc. 1, at 1-5]. In doing so, Seco claims, in its Notice of Removal, that the amount in controversy exceeds $75, 000, exclusive of interests and costs. [Id. ¶ 7]. Seco backs this claim with two assertions:

At the time of his separation from SECO on March 14, 2016, Plaintiff earned an annual salary of $43, 680.00 per year and was eligible for employee benefits. Assuming a trial date set to begin in 20 months (roughly 22 months from Plaintiff's termination), Plaintiff would be entitled to more than $75, 000 in back pay at the time of trial.
In addition to Plaintiff's claim for back pay, Plaintiff may seek compensatory damages for future pecuniary losses and nonpecuniary losses (including emotional pain, suffering, inconvenience, mental anguish, and loss of enjoyment of life). Pursuant to Tenn. Code. Ann. § 4-21-313(a)(3), these damages may total up to $100, 000, given that SECO employs more than 100 employees.

[Id. ¶¶ 13-14 (citations omitted)]. Mr. Belew now moves this Court to remand this action, arguing that federal subject matter jurisdiction is absent. In particular, the parties dispute whether the amount in controversy exceeds 75, 000, exclusive of interests and costs, under 28 U.S.C. § 1332(a). [See Pl.'s Br. at 5-12; Def.'s Resp. at 1-6].

         II. Subject Matter Jurisdiction

         The federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). “Just as a criminal defendant is presumed innocent until the government proves him guilty, a case is presumed to fall outside a federal court's jurisdiction until a litigant proves otherwise.” May v. Wal-Mart Stores, Inc., 751 F.Supp.2d 946, 950 (E.D. Ky. 2010); see Patsy v. Bd. of Regents, 457 U.S. 496, 525 n.10 (1982) (Powell, J., dissenting). (“[B]ecause it would not simply be wrong but indeed would be an unconstitutional invasion of the powers reserved to the states if the federal courts were to entertain cases not within their jurisdiction, the rule is well settled that the party seeking to invoke the jurisdiction of a federal court must demonstrate that the case is within the competence of that court.” (quotation omitted)). Under § 1332(a), diversity of citizenship jurisdiction requires an amount in controversy that exceeds $75, 000, exclusive of interest and costs. A party invoking diversity jurisdiction must allege that the cause of action satisfies the jurisdictional amount in controversy, Mitan v. Int'l Fid. Ins. Co., 23 F. App'x 292, 297 (6th Cir. 2001), including in cases that arrive in federal court by removal, Dart Cherokee Basin Operating Co. v. Owens, 135 S.Ct. 547, 551 (2014).

         III. Analysis

         A defendant initiates removal by filing a notice of removal, which must contain “a short and plain statement of the grounds for removal.” 28 U.S.C. § 1446(a). Under 28 U.S.C. § 1446(c)(2), when a defendant removes a civil case from state court to federal court based on diversity jurisdiction, “the sum demanded in good faith in the initial pleading shall be deemed to be the amount in controversy.” See Dart Cherokee Basin, 135 S.Ct. at 551 (“If the plaintiff's complaint, filed in state court, demands monetary relief of a stated sum, that sum, if asserted in good faith, is ‘deemed to be the amount in controversy.'” (quoting id.)); St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1938) (stating that, in the context of removal, “the sum claimed by the plaintiff controls if the claim is apparently made in good faith” (footnotes omitted)). “Generally, because the plaintiff is ‘master of the claim, ' a claim specifically less than the federal requirement should preclude removal.” Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 871 (6th Cir. 2000) (quotation omitted)).

         In some situations, however, even when a plaintiff demands a specific sum in an initial pleading and that sum is less than the federal threshold, remand is improper. The Sixth Circuit, in a case whose removal was based on diversity jurisdiction, has counseled courts not to remand an action when a state's laws permit a plaintiff “to recover damages in excess of what she prayed for.” Id. at 873. Specifically, when a state's rules of civil procedure contain an analog to Federal Rule of Civil Procedure 54(c), which permits “relief to which each party is entitled, even if the party has not demanded that relief, ” a plaintiff's demand for a particular sum less than $75, 000 is not always determinative. Rogers, 230 F.2d at 871. In constructing this exception to the notion that the plaintiff is the “master of the claim, ” id. (quotation omitted), the Sixth Circuit explained its rationale:

[S]tate counterparts to Rule 54(c) . . . might enable a plaintiff to claim in his or her complaint an amount lower than the federal amount-in-controversy requirement in an attempt to defeat federal jurisdiction, while actually seeking and perhaps obtaining damages far in excess of the federal requirement. Thus, courts have considered allowing removal where the defendant establishes a “substantial likelihood” or “reasonable probability” that the plaintiff intends to seek damages in excess of the federal amount-in-controversy ...

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