United States District Court, W.D. Louisiana, Monroe Division
A. DOUGHTY Judge
REPORT AND RECOMMENDATION
L. HAYES UNITED STATES MAGISTRATE JUDGE.
August 21, 2018, the undersigned entered an Order [doc. #11]
directing the parties to submit briefs on whether this Court
has subject matter jurisdiction to decide this matter.
Plaintiff Extreme Engine Service, LLC (“Extreme
Engine”) and Defendant Rotary Corporation
(“Rotary”) submitted their briefs on the issue.
For reasons assigned below, it is recommended that this Court
remand the case to state court.
Extreme Engine commenced this action against Rotary on May
22, 2018, by a filing a Petition for Damages in the 4th
Judicial District Court for the Parish of Ouachita, State of
Louisiana. [doc. #1-2]. According to the Petition, Extreme
Engine purchased parts and equipment from Rotary for retail
sale. In January 2018, Extreme Engine notified Rotary of
cessation of business and requested Rotary repurchase parts
on hand and in inventory. Extreme Engine alleges Rotary's
subsequent refusal violates La. R.S. § 51:481 et
seq. and seeks an order compelling Rotary to repurchase
the parts or, in the alternative, seeks damages, as well as
recovery of costs and attorney's fees.
27, 2018, Rotary removed this matter to federal court on the
basis of diversity jurisdiction, 28 U.S.C. § 1332(a).
(Notice of Removal, [doc # 1]). Rotary claimed removal is
proper because the parties are completely diverse in that
Extreme Engine is a Louisiana citizen and Rotary is a Georgia
citizen. Further, Rotary claimed “[i]t is apparent from
the Petition for Damages that the amount in controversy
exceeds $75, 000 when one considers the amount of inventory
involved and Plaintiff's claims . . ., which includes
attorney fees.” (Id. ¶ 14).
August 21, 2018, the undersigned entered an Order directing
the parties to submit briefs, together with supporting
evidence, sufficient to establish that the requisite
jurisdictional amount was in controversy at the time of
removal. Rotary submitted a brief arguing in the affirmative
[doc # 12], and Extreme Engine submitted a brief arguing in
the negative [doc # 13].
defendant may remove an action from state court to federal
court provided the federal court has subject matter
jurisdiction over the matter. Manguno v. Prudential Prop.
& Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002)
(citing 28 U.S.C. § 1441(a)). The party seeking to
assert jurisdiction bears the burden of proving its
existence. Stiftung v. Plains Mktg., L.P., 603 F.3d
295, 297 (5th Cir. 2010). Because federal courts are courts
of limited jurisdiction, a suit is presumed to lie outside
this limited jurisdiction unless the party invoking federal
jurisdiction establishes otherwise. Howery v. Allstate
Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001).
case, Rotary invoked federal jurisdiction on the basis of
diversity, which requires complete diversity of citizenship
between the parties and an amount in controversy greater than
$75, 000. 28 U.S.C. 1332(a). Courts ordinarily consult the
state court petition to determine the amount in controversy.
Manguno, 276 F.3d at 723. However, Louisiana law
prohibits parties from alleging a specific monetary amount.
Id. (citing La. Code Civ. Proc. art. 893).
“[W]hen the plaintiff's complaint does not allege a
specific amount of damages, the removing defendant must prove
by a preponderance of the evidence that the amount in
controversy exceeds the jurisdictional amount.”
Garcia v. Koch Oil Co. of Texas Inc., 351 F.3d 636,
638-39 (5th Cir. 2003). This requirement is fulfilled if
(1)“it is facially apparent” from the complaint
that plaintiff's “claims are likely above [$75,
000]” or (2) defendant sets forth facts in the removal
petition or an affidavit “that support a finding of the
requisite amount.” Id. (alteration in
original). If attorney's fees are permitted by a state
statute, they are included in calculating the amount in
controversy. Manguno, 276 F.3d at 723.
Rotary claims the value of Extreme Engine's inventory is
$42, 568.44. In support of this amount, Rotary submits (1) an
affidavit from its president stating the total value of the
parts; (2) a list, provided by Extreme Engine, of the parts;
and (3) a chart detailing the value of the parts based on
Rotary's 2017 valuation. [see doc. # 12-1].
Rotary also claims it would be required to pay shipping costs
or a sum equal to five percent of the current net price for
all parts returned under La. R.S. § 51:485.
Additionally, Rotary may bear the costs of appointing a
sheriff to inspect the parts and certify their acceptability.
Finally, Extreme Engine seeks costs and attorney's fees,
which are recoverable pursuant to La. R.S. § 51:483.
Rotary contends that the sum of the value of the inventory,
additional expenses, and costs and attorney's fees
exceeds $75, 000. [see doc. # 12].
Engine does not dispute Rotary's calculation of the value
of the inventory. However, Extreme Engine disagrees that the
additional costs and fees will cause the amount in
controversy to satisfy the jurisdictional requirement.
Extreme Engine calculated that five percent of the net price
of parts returned equals $2, 128.42. Further, Extreme Engine
does not anticipate that the possible additional costs,
including packing and loading the inventory, shipping, and
inspection and certification services, will be excessive.
Additionally, Extreme Engine submitted a sworn affidavit from
its lead attorney, Brady D. King II, who stated he expects
the total cost of this litigation will not exceed $15, 000.
Based on its own estimates, Extreme Engine contends Rotary
has not proven that the sum of the inventory, potential
costs, and fees satisfies the amount required for removal.
[see doc # 13].
estimate of damages falls far short of the jurisdictional
threshold. While Rotary has demonstrated it may be required
to pay $44, 696.86, it has failed to provide any calculation
for attorney's fees or other possible expenses. The
undersigned therefore concludes that Rotary has failed to
meet its burden of establishing the amount in controversy
requirement is satisfied.
while this Court's Order only questioned the amount in
controversy, Rotary has also failed to sufficiently allege
complete diversity as required by 28 U.S.C. § 1332(a).
When establishing diversity jurisdiction, the citizenship of
each party must be “distinctly and
affirmatively alleged.” Getty Oil Corp., a
Div. of Texaco v. Ins. Co. of N. Am., 841 F.2d 1254,
1259 (5th Cir. 1988). This rule requires “strict
adherence.” Id. A corporation is a citizen of
the state in which it is incorporated and the state in which
it has its principal place of business. Id. A
limited liability company is a citizen of every state in
which a member of its company ...