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Scaife v. CSX Transportation, Inc.

United States District Court, W.D. Pennsylvania

July 25, 2019

ROBERT SCAIFE, husband, DIANE SCAIFE, wife, ROBERT SCAIFE, III, Plaintiffs,
v.
CSX TRANSPORTATION, INC., Defendant.

          MEMORANDUM OPINION

          KIM R. GIBSON UNITED STATES DISTRICT JUDGE.

         I. Introduction

         Before the Court is Plaintiffs Robert Scaife, Diane Scaife, and Robert Scaife, Ill's (collectively, "Plaintiffs") Motion to Remand. (ECF No. 9.) This Motion has been fully briefed and is ripe for disposition. (See ECF Nos. 10, 13, 16.)

         For the reasons that follow, Plaintiffs' Motion is GRANTED IN PART and DENIED IN PART.

         II. Venue[1]

         Because this action was originally filed in the Court of Common Pleas of Bedford County, Pennsylvania, venue is proper in the Western District of Pennsylvania pursuant to 28 U.S.C. § 1441(a). See Polizzi v. Cozvles Magazines, Inc., 345 U.S. 663, 666 (1953) (explaining that the proper venue of a removed action is "the district court of the United States for the district and division embracing the place where such action is pending").

         III. Background[2]

         On March 19, 2019, Plaintiffs filed a Complaint in Civil Action in the Court of Common Pleas of Bedford County, Pennsylvania (the "Common Pleas Court"). (See ECF No. 1-2.) Plaintiffs bring negligence and loss-of-consortium claims against Defendant CSX Transportation, Inc. ("Defendant") based on a train derailment that allegedly injured Plaintiffs. (See id.) Plaintiffs seek damages for medical expenses, pain and suffering, loss of earnings/earning capacity, and emotional harm, as well as punitive damages. (Id. at 16-20.) Plaintiffs Robert Scaife and Robert Scaife, III, demand damages "in an amount within the jurisdictional limits of a Board of Arbitrators of [the Common Pleas Court]." (Id.) Plaintiff Diane Scaife demands damages within the same jurisdictional limits for her loss-of-consortium claim, but demands damages "in an amount in excess of the jurisdictional limits of a Board of Arbitrators of [the Common Pleas Court]" for her negligence claim. (Id. at 17, 19.)

         On April 15, 2019, Defendant timely filed a Notice of Removal, removing Plaintiffs' action to this Court pursuant to 28 U.S.C. §§ 1441 and 1446. (See ECF No. 1.) Defendant alleges that removal is proper based on 28 U.S.C. § 1332(a) because there is complete diversity between the parties and the amount-in-controversy requirement is met. (Id. ¶¶ 12-33.) Defendant claims that because Plaintiffs allege severe injuries and seek punitive damages, Defendant has sustained its burden of establishing by a preponderance of the evidence that the amount in controversy exceeds $75, 000. (Id. ¶¶ 27-33.)

         Plaintiffs filed the pending Motion to Remand and Brief in Support on May 8, 2019. (ECF Nos. 9, 10.) Plaintiffs do not dispute that they are completely diverse from Defendant. (ECF No. 9 ¶¶ 5-6.) However, they assert that the amount-in-controversy requirement for federal diversity jurisdiction is not met. (Id. ¶ 7; ECF No. 10 at 3-7.)

         Plaintiffs explain that they seek damages "in an amount within the jurisdictional limits of a Board of Arbitrators of [the Common Pleas Court]." (ECF No. 9 ¶¶ 8-9; ECF No. 10 at 5.) The Common Pleas Court's local rules state that when the amount in controversy is $25, 000 or less, the case will be submitted to and decided by a Board of Arbitrators. (ECF No. 9 ¶ 10; ECF No. 10 at 2, 5.) Because Plaintiffs refer to the Common Pleas Court's compulsory-arbitration limit, Plaintiffs claim that they each seek damages below $25, 000. Plaintiffs argue that by limiting their claimed damages below the federal jurisdictional threshold, the burden is on Defendant to show to a legal certainty that the amount in controversy exceeds $75, 000. (ECF No. 9 ¶¶ 12-13; ECF No. 10 at 3-5; ECF No. 16 at 2.) Plaintiffs assert that Defendant failed to meet this burden. (ECF No. 10 at 1, 5.)

         Plaintiffs disagree with the preponderance-of-the-evidence standard on which Defendant relies to establish the amount in controversy. (ECF No. 9 ¶¶ 14-16; ECF No. 10 at 1, 5-6.) Further, Plaintiffs argue that even if the preponderance-of-the-evidence standard applies, Defendant improperly relies on "pure speculation, inferences, and assumptions about the amount in controversy to meet the lower preponderance standard." (ECF No. 9 ¶ 17; ECF No. 10 at 6.)

         Moreover, according to Plaintiffs, they stated in their Complaint that their claims do not exceed the compulsory-arbitration limit because Pennsylvania law requires a plaintiff to state whether the amount of damages claimed exceeds the jurisdictional amount requiring arbitration referral. (ECF No. 10 at 7.) Therefore, Plaintiffs claim that they did not err in limiting punitive damages to below the arbitration limit because Pennsylvania law requires such a limitation. (Id.)

         Finally, Plaintiffs argue that removal statutes must be strictly construed against removal and doubts must be resolved in favor of remand. (Id.)

         Plaintiffs request that the Court grant Plaintiffs costs, expenses, and attorney's fees under 28 U.S.C. § 1447(c). (Id. at 1.)

         Defendant filed its Brief in Opposition on May 28, 2019. (ECF No. 13.) In its Brief, Defendant claims that the amount in controversy is calculated through a reasonable reading of the complaint. (Id. at 2, 5.) If this reasonable reading reveals that the amount in controversy exceeds $75, 000, the party challenging federal jurisdiction has the burden of establishing to a legal certainty that the amount-in-controversy requirement is not met. (Id. at 2.) Here, because Plaintiffs allege severe injuries, pain, suffering, and mental anguish, and significant medical expenses, as well as seeking punitive damages, attorney's fees, interest, and costs, a reasonable reading of the Complaint shows that the amount-in-controversy requirement is met. (Id. at 2, 5-7.) Thus, the burden is on Plaintiffs to establish to a legal certainty[3] that the amount-in-controversy requirement is not met, which Defendant claims Plaintiffs have not done. (Id. at 7-9.)

         Further, Defendant argues that a plaintiff cannot avoid federal jurisdiction by capping his damages to meet state-court arbitration limits because he can seek damages in excess of his cap following arbitration. (Id. at 2, 4, 8.)

         Defendant also asserts that Plaintiffs are not entitled to costs and attorney's fees incurred as a result of removal because Defendant had an objectively reasonable basis for seeking removal. (Id. at 9.)

         On June 6, 2019, Plaintiffs filed a Reply Brief in order to clarify that their Complaint expressly limits their recovery to an amount below the federal jurisdictional threshold by incorporating the $25, 000 Common Pleas Court arbitration limit. (ECF No. 16 at 1.) Plaintiffs attached a Declaration stating that the damages sought in the Complaint for each Plaintiff are limited to an amount less than $75, 000. (Id.; ECF No. 16-1 ¶ 3.) Further, Plaintiffs noted that they are willing to enter into a binding stipulation with Defendant that each Plaintiffs' damages are limited to an amount less than $75, 000. (ECF No. 16 at 2.)

         IV. Legal Standard

         "Removal of cases from state to federal courts is governed by 28 U.S.C. § 1441." Samuel-Bassett v. KIA Motors Am., Inc., 357 F.3d 392, 396 (3d Cir. 2004). Pursuant to § 1441, a defendant may remove "any civil action brought in a State court of which the district courts of the United States have original jurisdiction."[4] 28 U.S.C. § 1441. Under the diversity-jurisdiction doctrine applicable here, federal district courts have original jurisdiction over civil actions between citizens of different states where the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332(a).

         The procedures for removal of civil actions are found in 28 U.S.C. § 1446. Under § 1446, a defendant desiring to remove a civil action from state court to federal court shall file a notice of removal in the appropriate federal district court that contains "a short and plain statement of the grounds for removal." 28 U.S.C. § 1446(a). "By design, § 1446(a) tracks the general pleading requirement stated in Rule 8(a) of the Federal Rules of Civil Procedure." Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 553 (2014). "Congress, by borrowing the familiar short and plain statement standard from Rule 8(a), intended to simplify the pleading requirements for removal and to clarify that courts should apply the same liberal rules [to removal allegations] that are applied to other matters of pleading." Id. (alterations in original) (citations and quotations omitted).

         Following the filing of a notice of removal, "[a] motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a)." 28 U.S.C. § 1447(c). "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded."[5] Id. "An order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." Id.

         V. ...


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