The opinion of the court was delivered by: BY THE COURT; J. CURTIS JOYNER
Presently before the Court is the motion of defendant First Fidelity Bank, N.A. Pennsylvania, to dismiss the consolidated complaint of plaintiffs Alfred B. Lewis, Jr., Alfred B. Lewis, III and H. Gibson Henry,
pursuant to Rules 12(b)(1), 12(b)(6), 12(b)(7) and 12(h)(3) of the Federal Rules of Civil Procedure. Plaintiffs instituted the present action against defendant on behalf of themselves and a putative class of fiduciary account beneficiaries, claiming that they were beneficiaries of various trusts administered by defendant.
The basis of plaintiffs' complaint was that defendant was violating its fiduciary duties by charging unreasonable "sweep fees,"
and that this amounted to double-dipping, waste and mismanagement of the fiduciary assets.
In their complaint, plaintiffs invoked jurisdiction pursuant to 28 U.S.C. § 1331, § 1332 and § 1367. Plaintiffs alleged violations of the National Bank Act, 12 U.S.C. § 92a ("NBA"), as well as violations of its regulations, 12 C.F.R. § 9.15(a) (compensation of banks) and 12 C.F.R. § 9.18(b)(12) (collective investment). Plaintiffs also alleged violations of applicable Pennsylvania trust law, 20 Pa.C.S.A. § 7315.1, breach of contract and breach of fiduciary duty. Plaintiffs sought removal of defendant as the corporate fiduciary with respect to each fiduciary account, an injunction with respect to any future assessment of unreasonable sweep fees, as well as the return of all unreasonable sweep fees previously assessed against the accounts by defendant.
Defendant now seeks dismissal of the complaint for the following reasons. First, plaintiffs have failed to state a claim upon which relief can be granted because there is no private right of action under the NBA. Second, this Court lacks diversity jurisdiction because the amount in controversy does not exceed $ 50,000. Third, regardless of whether plaintiffs can satisfy the jurisdictional requirements, the probate exception deprives this Court of jurisdiction. Fourth, plaintiffs have failed to join an indispensable party in this case. Finally, defendant asserts that this Court should abstain from entertaining this action because its issues fall within the special expertise of the Orphan's Court Division of the Pennsylvania Court of Common Pleas.
I. Diversity Jurisdiction
Defendant seeks dismissal of plaintiffs' complaint on the basis that this Court lacks diversity jurisdiction because the amount in controversy does not exceed $ 50,000. Defendant claims that because plaintiffs are only seeking return of the excessive sweep fees, diversity jurisdiction is not met because the sweep fees charged to the trusts of each plaintiff does not amount to $ 50,000. Defendant provides evidence that since defendant began charging sweep fees, the total amount of sweep fees charged to the trust of plaintiff Alfred B. Lewis, Jr. does not exceed $ 10,000 to $ 15,000. It further provides evidence that plaintiff Alfred B. Lewis, III is not an income beneficiary of any trust administered by defendant.
On the contrary, plaintiffs argue that the amount in controversy is satisfied because it is the value of each individual trust which must be measured, rather than the amount of sweep fees assessed against each individual trust. Plaintiffs further provide evidence that the total value of the fiduciary account corpus of which plaintiffs are beneficiaries was $ 5,655,984.00 on July 15, 1993.
In deciding a motion to dismiss for lack of subject matter jurisdiction, the party asserting jurisdiction bears the burden of showing that the requirements for jurisdiction have been met. Packard v. Provident Nat'l Bank, 994 F.2d at 1045. In class actions, each member of the class must claim that the jurisdictional amount has been met. Id. (citing Zahn v. Internat'l Paper Co., 414 U.S. 291, 301, 94 S. Ct. 505, 512, 38 L. Ed. 2d 511 (1973)). Moreover, aggregation of claims is not allowed where each class member claims an individual injury, such as a unique amount, that in theory must be proved separately. Packard, 994 F.2d at 1050 n.14.
It is clear in the present case that plaintiffs have not adequately sustained their burden of proof regarding the amount in controversy. This conclusion is evidenced by the similarity of this case to the facts in Packard. In Packard, plaintiffs brought a class action against the trustee of various trusts alleging that the sweep fees it charged were unreasonable and in violation of its fiduciary duty. Plaintiffs sought compensatory and punitive damages, and to enjoin the defendant from collecting any sweep fees in the future.
In determining that diversity jurisdiction was not satisfied because plaintiffs failed to meet the amount in controversy, the court first noted that nowhere in the complaint did plaintiff Upp or any other class member allege that they were entitled to more than $ 50,000 in compensatory damages. It further noted that the actual return of the sweep fees collected would only amount to approximately $ 4,000. Finally, the court concluded that punitive damages were not recoverable against a trustee under Pennsylvania law, therefore, the case must be dismissed for lack of jurisdiction.
Recently, Packard was followed by Judge Buckwalter in In Re Corestates Trust Fee Litigation, 837 F. Supp. 104, 1993 U.S. Dist. LEXIS 15415, 1993 WL 459968 (E.D. Pa. 1993). In Corestates, plaintiffs (whose claims were consolidated) sought the same remedies as the plaintiffs in Packard except that in Corestates, plaintiffs also sought removal of defendant as corporate fiduciary of the trusts. Judge Buckwalter dismissed the case for lack of diversity ...