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J.B. Hunt Transport, Inc v. Liverpool Trucking Company

June 7, 2012


The opinion of the court was delivered by: (Judge Conner)


Presently before the court is defendant Liverpool Trucking Company's ("Liverpool") Motion to Remand to State Court or to Stay (Doc. 16) the above-captioned action. Liverpool contends that the court lacks proper subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a) because the amount in controversy does not exceed $75,000. Liverpool, therefore, requests this matter to be remanded to state court, or, in the alternative, stayed pending the resolution of two state workers' compensation claims. For the reasons that follow, the court will deny the motion.

I. Statement of Facts and Procedural History

This case stems from an Outsource Carrier Agreement ("Agreement") between J.B. Hunt Transport, Inc. ("J.B. Hunt") and Liverpool dated February 29, 2008. (See Doc. 15, Ex. A). Pursuant to the Agreement, Liverpool contracted to perform certain transportation services for J.B. Hunt. (Id.). Within the Agreement's extensive provisions, Section 2.1 establishes Liverpool's role as an "independent contractor." (Id.). Pursuant to Section 2.2 Liverpool agreed to "assume[] full responsibility and liability for the payment of . . . worker's compensation . . . with respect to persons engaged in the performance of said transportation services." (Id.)

On February 29, 2008, J.B. Hunt and Liverpool executed a Hold Harmless Covenant for Workers' Compensation ("Covenant"). (Doc. 15, Ex. B). Signed and dated by Liverpool management, the Covenant specifies that "no certificate evidencing workers' compensation and employers' liability coverage will be furnished to Hunt" due to an exemption from coverage provided by state and federal law. (Id.). The Covenant also states that Liverpool agrees to fulfill the Agreement's terms and conditions regarding the procurement of workers' compensation should it not be exempt from coverage. (Id.). Finally, the Covenant states that, absent obtaining the required coverage, Liverpool "assumes full and complete responsibility for compensation of any and all work-related injury occurring to any of its personnel during the term of the Agreement." (Id.).

On August 16, 2010, Awad Idries ("Idries") was operating a truck for Liverpool. (Doc. 15 ¶ 13, Ex. C). In the course of two deliveries for J.B. Hunt customers, Idries was involved in a motor vehicle accident resulting in the loss of his left arm. (Id. at ¶ 14). On April 13, 2011, Idries filed a Claim Petition with the Commonwealth of Pennsylvania Bureau of Workers' Compensation ("Bureau"), seeking benefits and listing J.B. Hunt as his statutory employer. (Doc. 15, Ex. E). Idries claims that he is statutorily entitled to at least $78,620. (Doc. 15 ¶ 28). J.B.

Hunt also claims that it has expended $6,000 in legal fees in defending the workers' compensation claim. (Id. at ¶ 29).

On May 14, 2011, Dane Merritt ("Merritt") was operating a truck for Liverpool. (Doc. 15 ¶ 16, Ex. F). Like Idries, Merritt was making deliveries for J.B. Hunt customers when he became involved in a motor vehicle accident resulting in several serious injuries.*fn1 On June 9, 2011, Merritt filed a Claim Petition with the Bureau, listing Liverpool as his statutory employer. (Doc. 15, Ex. G). Merritt claims lost wages totaling $365,000 and is seeking payment for medical bills and legal fees. (Doc. 15 ¶ 30, Ex. B). Thereafter, the Bureau's Uninsured Employer Guaranty Fund filed a petition for Joinder of Additional Defendant, J.B. Hunt, averring that J.B. Hunt is the statutory employer of Merritt pursuant to Section 302(a) of the Pennsylvania Workers' Compensation Act. (Doc. 15, Ex. H).

On September 20, 2011, J.B. Hunt instituted this action against Liverpool, invoking the court's diversity jurisdiction and alleging that Liverpool breached the Agreement with J.B. Hunt. (Doc. 1). On December 15, 2011, J.B. Hunt filed an amended complaint. (Doc. 15). J.B. Hunt seeks damages resulting from breach of contract and a declaratory judgment finding that Liverpool has an obligation to defend and indemnify J.B. Hunt in the workers' compensation matters. (Doc. 15 ¶ 32). On December 23, 2011, Liverpool filed the instant motion to remand the matter to state court, or, in the alternative to stay the suit pending resolution of the claims before the Bureau. (Doc. 16). Liverpool argues that the matter in controversy will not exceed $75,000 as required in federal diversity cases. See 28 U.S.C. § 1332(a). The motion has been fully briefed and is ripe for disposition.

II. Standard of Review

For a plaintiff to establish diversity jurisdiction, the amount in controversy must exceed $75,000 exclusive of interest and costs. 28 U.S.C. § 1332(a). The United States Supreme Court established the prevailing standard by which federal courts must consider a challenge to the amount in controversy requirement:

The rule governing dismissal for want of jurisdiction in cases brought in the federal court is that, unless the law gives a different rule, the sum claimed by the plaintiff controls if the claim is apparently made in good faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal.

St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938). When applying this standard, federal courts must be certain that the jurisdictional threshold cannot be met before dismissal is appropriate. See, e.g., Columbia Gas Transmission Corp. v. Tarbuck, 62 F.3d 538, 541 (3d Cir. 1995); Nelson v. Keefer, 451 F.2d 289, 293 (3d Cir. 1971); Jaconski v. Avisun Corp., 359 F.2d 931(3d Cir. 1966) ("[The test] is whether it appears to a 'legal certainty' that he cannot recover an amount above the jurisdictional minimum."). This inquiry involves "minimal scrutiny" of the plaintiff's claims without consideration of the "legal ...

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