United States District Court, E.D. Pennsylvania
July 19, 2004.
JEFFREY PRESS, INC., Plaintiff,
HARTFORD CASUALTY INSURANCE COMPANY, Defendant.
The opinion of the court was delivered by: ANITA BRODY, District Judge
EXPLANATION AND ORDER
The plaintiff, Jeffrey Press, Inc., has filed a motion to
remand this declaratory judgment action against defendant,
Hartford Casualty Insurance Company, back to the Court of Common
Pleas of Lehigh County. For the following reasons, plaintiff's
motion to remand is denied.
I. FACTS AND PROCEDURAL HISTORY
On June 25, 2003, E.L. Meal Enterprises, Inc. ("Meal
Enterprises"), on behalf of itself and others, filed a class
action complaint in the Court of Common Pleas of Lehigh County,
Pennsylvania against Jeffrey Press, Inc., seeking damages and
injunctive relief for alleged violations of the Telephone
Consumer Protection Act of 1991 ("TCPA"), 47 U.S.C. § 227, and
related Federal Communications Commission ("FCC") regulations.
The prayer for relief includes, inter alia, requests for (1)
certification of the class action; (2) statutory damages awards
of $500 dollars to each class member, and (3) treble damages, if
applicable, raising the awards of each member up to $1500
dollars. Furthermore, the complaint avers that "[p]laintiff
believes that [there are] thousands of Class members." (Meal Compl. at ¶ 22.)
On April 16, 2004, Jeffrey Press, Inc. [hereinafter
"plaintiff"] filed a declaratory judgment action, also in the
Court of Common Pleas of Lehigh County, against Hartford Casualty
Insurance Company [hereinafter "defendant"]. The complaint
alleges that defendant issued a liability insurance policy to
plaintiff, which was in effect at the time Meal Enterprises filed
its class action against plaintiff. Plaintiff further alleges
that, pursuant to the rights and duties of the parties under that
policy, defendant must provide a defense and indemnification to
plaintiff in the class action brought by Meal Enterprises.
On May 21, 2004, defendant filed a notice of removal to the
Eastern District of Pennsylvania, asserting federal diversity
jurisdiction under 28 U.S.C. § 1332. In response, on June 8,
2004, plaintiff filed a motion to remand the matter to Lehigh
County. In its motion to remand, plaintiff argues that the
federal courts lack subject matter jurisdiction because the
amount in controversy requirement has not been met.
II. STANDARD OF REVIEW
In evaluating a motion to remand, the burden of establishing
the existence of original jurisdiction in the federal courts is
on the removing party. See Batoff v. State Farm Ins. Co.,
977 F.2d 848, 851 (3d Cir. 1992). This allocation of the burden is
consistent with the general proposition that "removal statutes
`are to be strictly construed against removal and all doubts
should be resolved in favor of remand'" Steel Valley Auth. v.
Union Switch & Signal Div., 809 F.2d 1006, 1012 n. 6 (3d Cir.
1987) (quoting Abels v. State Farm Fire & Casualty Co.,
770 F.2d 26, 29 (3d Cir. 1985)); USX Corp. v. Adriatic Ins. Co.,
345 F.3d 190, 206 n. 12 (3d Cir. 2003) (noting that "we are
mindful that courts construe removal statutes strictly with all
doubts resolved in favor of remand").
A district court has subject matter jurisdiction over state law
claims if there is complete diversity of citizenship between the
parties and the amount in controversy exceeds $75,000, exclusive
of interests and costs. 28 U.S.C. § 1332. Because the parties do
not dispute diversity of citizenship,*fn1 the sole issue to
be addressed is whether the jurisdictional amount in controversy
requirement has been satisfied, and, therefore, whether the
federal courts properly have diversity jurisdiction over this
matter pursuant to 28 U.S.C. § 1332.
A. Determining the amount in controversy in a declaratory
"A district court's determination as to the amount in
controversy must be based on the `plaintiff's complaint at the
time [the] petition for removal was filed.'" Werwinski v. Ford
Motor Co., 286 F.3d 661, 666 (3d Cir. 2002) (quoting Steel
Valley Auth., 809 F.2d at 1010). "In actions seeking declaratory
judgment . . . the amount in controversy is measured by the value
of the object of the litigation." Hunt v. Wash. St. Apple
Advertising Comm'n., 432 U.S. 333, 347 (1977); see also 14B
Charles A. Wright, A. Miller, & E. Cooper, Federal Practice and
Procedure § 3702 (3d ed. 1998) ("It is well-established by
numerous judicial decisions by the Supreme Court, the court of
appeals, and countless district courts that the amount in
controversy for jurisdiction purposes is measured by the direct
pecuniary value of the right that the plaintiff seeks to enforce
or protect or the value of the object that is the subject matter
of the suit."). Specifically, when the complaint is for a
declaratory judgment, as opposed to specific monetary relief, the amount in controversy requirement can be satisfied by
looking to the underlying suit. See Manze v. State Farm Ins.
Co., 817 F.2d 1062 (3d Cir. 1987) (holding that, in a proceeding
to compel arbitration, the underlying action can satisfy the
requisite jurisdictional amount); see also Jumara v. State
Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995) (holding that, in a
suit to compel appointment of an arbitrator, the underlying cause
of action determines the amount in controversy); see also
Miller v. Liberty Mut. Group, 97 F. Supp.2d 672, 675-76
(W.D.Pa. 2000) (noting that, in accordance with Manze and
Jumara, the amount in controversy requirement is satisfied in
declaratory relief actions by looking to the underlying suit).
Although Manze and Jumara arise in the context of arbitration
disputes, both cases are useful illustrations of the above
In Manze, an insured filed a petition to appoint a neutral
arbitrator for purposes of resolving the insured's bad-faith
claim against an insurer. The insurer removed the action from
Pennsylvania state court, and the insured sought a remand on the
ground that the amount in controversy requirement had not been
met for purposes of federal jurisdiction. Because the action did
not seek monetary damages, the Third Circuit looked to the
underlying suit to determine whether the necessary amount in
controversy had been met. Manze, 817 F.2d at 1068. Considering
the fact that the limit on the insurance policy was $15,000 and
that the insured never claimed less than $10,000*fn2 in the
underlying suit, the Third Circuit concluded that the motion to
remand should be denied because the possible award involved more
than the jurisdictional amount. Id.
In Jumara, the Third Circuit reaffirmed its holding in
Manze, recognizing that the amount in controversy in an arbitration suit or other action not
explicitly seeking monetary relief, such as a declaratory
judgment is decided by the underlying cause of action. 55 F.3d
at 877; Miller, supra. Specifically, in Jumara, insureds
sought $200,000 in benefits in the underlying complaint. Since it
could not be said that the possible award recovered by the
insureds would be less than $50,000,*fn3 the Third Circuit
denied remand, holding that "[i]ndeterminancy of the amount to be
recovered is . . . not sufficient to defeat diversity
jurisdiction, and so it is immaterial that the Jumaras might
eventually recover less than $50,000 from State Farm." Id.
Moreover, the Third Circuit explained that in looking at the
underlying suit, "the allegations on the face of the complaint
control . . . unless it appears `to a legal certainty the claim
is really for less than the jurisdictional amount . . .'" Id.
(quoting Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 353
(1961) (quoting St. Paul Mercury Indem. Co. v. Red Cab Co.,
303 U.S. 283, 289 (1938))).
B. Determining the amount in controversy in the instant
In the instant action, plaintiff essentially contends that
there is no amount in controversy because the only specific
relief outlined in the complaint for declaratory judgment is a
determination of the rights and duties of the parties pursuant to
the insurance policies issued by defendant. (Pl.'s Br. In Supp.
of Mot. to Remand at 2.) Plaintiff's argument is clearly refuted
by Manze and Jumara.*fn4 See Section III.A., supra.
Rather, since this is a declaratory judgment action, I must look to the complaint in the underlying suit upon
which the declaratory action is premised to determine the
applicable amount in controversy. For the purposes of this case,
the underlying suit is Meal Enterprises' pending class action
against plaintiff in state court.
Plaintiff argues that, on its face, as viewed at the time of
removal, Meal Enterprises' complaint only seeks damages for a
single TCPA violation in the sum of $500. (Pl.'s Br. In Supp. of
Mot. to Remand at 3.) This assertion, however, is contradicted by
the "Prayer for Relief" in the complaint in the underlying action
that plainly seeks certification and damages for an entire class
whose rights were allegedly violated by plaintiff under the TCPA.
See, e.g., Werwinski, 286 F.3d at 666-67 ("Appellants'
erroneous assertion that their complaint does not claim damages
. . . is belied, however, by their complaint's `Prayer for
Relief.'") Although the class has not yet been certified, the
complaint alleges that the projected class numbers in the
thousands. (Meal Compl. at ¶ 22.) "The allegations on the face of
the complaint," therefore, reveal that the damages being sought
are likely in excess of $75,000.*fn5 Jumara, 55 F.3d at
877. In sum, it cannot be said "to a legal certainty" that the class
in the underlying suit will not be certified and that the claim
will fall below the jurisdictional amount.*fn6 Id.
Defendant has satisfied its burden as the removing party of
establishing the existence of diversity jurisdiction in the
Plaintiff's motion to remand to the Court of Common Pleas of
Lehigh County is denied. ORDER
AND NOW, this ____ day of July 2004, it is ORDERED that
plaintiff's motion to remand (Docket Entry # 5) is DENIED.