White, John B.

English

bepress Legal Repository

Federal Removal -- Jurisdictional Amount

University of Miami School of Law

University of Miami Law SchoolInstitutional RepositoryUniversity of Miami Law Review7-1-1961Federal Removal -- Jurisdictional AmountJohn B. WhiteFollow this and additional works at: http://repository.law.miami.edu/umlrThis Case Noted is brought to you for free and open access by Institutional Repository. It has been accepted for inclusion in University of Miami LawReview by an authorized administrator of Institutional Repository. For more information, please contact library@law.miami.edu.Recommended CitationJohn B. White, Federal Removal -- Jurisdictional Amount, 15 U. Miami L. Rev. 415 (1961)Available at: http://repository.law.miami.edu/umlr/vol15/iss4/7CASES NOTEDadopted the view that repairing of a roof is an inherently dangerous task,the court's holding that the lessor "was under a duty to see that noinjury would be sustained by the tenant in the making of the repairs"cannot be upheld. The court has made the landlord an absolute insurer foreverything done by the contractor within the scope of his employment. It issubmitted that if the court meant to do this, it should have stated whatit was doing in unequivocal terms, rather than attempting to justify aresult by citing Florida cases which do not support the view adopted bythe court.REUBEN M. SCHNEIDERFEDERAL REMOVAL - JURISDICTIONAL AMOUNTThe plaintiff, a longshoreman and citizen of Florida, filed suit ina Florida circuit court to recover damages allegedly due to the negligenceof the defendant, or to the unseaworthiness of the defendant's vessel.The complaint alleged that the defendant was a Connecticut corporationwith an office and principal place of business' in Florida, and demandeddamages in excess of 5,000 dollars. 2 Defendant removed the action toa federal district court alleging the requisite diversity and jurisdictionalamount in the petition for removal. The plaintiff moved to remand,claiming the ad damnum clause of the complaint did not meet the federaljurisdictional requirement, but the motion was denied. A jury trialresulted in a verdict for the defendant. On appeal, held, reversed andremanded: a complaint demanding damages in excess of 5,000 dollarsis not removable from a state court to a federal court in the absenceof affirmative proof that the damages claimed exceed 10,000 dollars.Gaitor v. Peninsular & Occidental S.S. Co., 287 F.2d 252 (5th Cir. 1961).A civil action brought in a state court may generally be removed bythe defendant to a federal district court, provided the federal court couldhave had jurisdiction originally.a The right to remove is one granted by1. "For the purposes of this section and section 1441 of this title, a corporationshall be deemed a citizen of any State by which it has been incorporated and of theState where it has its principal place of business." 28 U.S.C. § 1332(c) (1958). Theissue of diversity of citizenship was not raised prior to trial. The issue was raisedon appeal but was not ruled upon as other grounds were present to reverse and remandthe action.2. The Circuit Court for Dade County, Florida has jurisdiction of all actions atlaw provided the amount in controversy exceeds the sum of $5,000. FLA. CONST., art. 5,§ 6(3); FLA. STAT. § 33.02 (1959). See note 23 infra.3. American Fire & Cas. Co. v. Finn, 341 U.S. 6 (1951); Gold-Washing & WaterCo. v. Keyes, 96 U.S. 199 (1877); Delpit v. United States Shipping Board EmergencyFleet Corp., 19 F.2d 60 (9th Cir. 1927); City of Corbin v. Varden, 18 F. Supp. 531(E.D. Ky. 1937); Belcher v. Aetna Life Ins. Co., 3 F. Supp. 809 (W.D. Tex. 1933).1961]UNIVERSITY OF MIAMI LAW REVIEWstatute and is geared generally" to original jurisdiction, which requiresthe amount in controversy to be "in excess of $10,000.00 exclusive ofinterest and costs." 5 This jurisdictional amount applies both in cases offederal questions6 and those based on diversity of citizenship.7 Theright to remove is generally controlled by the complaint 8 viewed as ofthe time when the petition for removal is filed. 9 The petition must befiled within twenty days after receipt by the defendant of a copy ofthe initial pleading setting forth the claim for relief.10 If the case statedby the initial pleading is not removable, the defendant may subsequentlyremove within twenty days after receipt of an "amended pleading,motion, order or other paper from which it may first be ascertainedthat the case is one which is or has become removable.""1The preceding statute is the result of case decisions 12 and was codifiedonly recently.' 3 The statute requires the record of the action to bethe sole source from which the court will ascertain whether a casenot removable originally has become removable after the initial pleading. 44. Special renoval provisions with independent requirements are contained in28 U.S.C. § 1442 (1958) (federal officers sued or prosecuted); 28 U.S.C. § 1443(1958) (civil rights cases); and 28 U.S.C. § 1444 (1958) (foreclosure action againstthe United States).5. In the event the plaintiff recovers less than the sum or value of $10,000, thedistrict court may deny costs to the plaintiff and, in addition, may impose costs onthe plaintiff. 28 U.S.C. § 1331(b); § 1332(b) (1958).6. 28 U.S.C. § 1331 (1958).7. 28 U.S.C. § 1332 (1958).8. St. Paul Mercury Inden. Co. v. Red Cab Co., 303 U.S. 283 (1938); McLeodv. Cities Service Gas Co., 233 F.2d 242 (10th Cir. 1956); Smith v. Southern Pac. Co.,187 F.2d 397 (9th Cir.), cert. denied, 342 U.S. 823 (1951); Cipriano v. MonarchLife Ins. Co., 138 F. Supp. 50 (D.R.I. 1956); McCracken v. Brown & Root, Inc.,101 F. Supl. 180 (W.D. Ark. 1951); Department Store Service Inc. v. "John Doe",98 F. Supp. 870 (E.D.N.Y. 1951).9. The right of removal has existed since the original Judiciary Act of 1789. Thisact gave the circuit court diversity jurisdiction and also provided for removal, on thebasis of diversity, of state actions. Act of Sept. 24, 1789, ch. 20, § 12, 1 Stat. 73, 79.Removal under the present statutes is effected by the defendant filing a petition andbond in the federal court, filing in the state court a copy of the petition, and givingprompt written notice to all adverse parties. 28 U.S.C. § 1446 (1958).10. If the initial pleading is not required to be served on the defendant, and hasbeen filcd in court, then the twenty day period starts on the date of service of summons,or whichever period is shorter. 28 U,S.C. § 1446(b) (1958).11. 28 U.S.C. § 1446(b) (1958).12. Fritzlen v. Boatmen's Bank, 212 U.S. 364 (1909); Powers v. Chesapeake &0. Ry., 169 U.S. 92 (1898); Ayers v. Watson, 113 U.S. 594 (1885). Accord, Remingtonv. Central Pac. R.R., 198 U.S. 95 (1905); Cobleigh v. Epping Brick Co., 85 F. Supp.862 (D.N.l-l. 1949); Higgins v. Yellow Cab Co., 68 F. Supp. 453 (N.D. I11. 1946).13. 28 U.S.C. § 1446(b) (1958).14. Evangelical Lutheran Church v. Stanolind Oil & Gas Co., 251 F.2d 412(8th Cir. 1958); McLeod v. Cities Service Gas Co., 233 F.2d 242 (10th Cir. 1956):Ellis v. Davis, 4 F.2d 323 (5th Cir. 1925); Putterman v. Daveler, 169 F. Supp. 125(D. Del. 1958); Rosario v. Waterman S.S. Corp., 158 F. Supp. 537 (S.D.N.Y. 1957);Youngson v. Lush, 96 F. Supp. 285 (D. Neb. 1951); Doggett v. Hunt, 93 F. Supp. 426(S.D. Ala. 1950); lutson v. Imperial Royalties Co., 134 Kan. 378, 5 P.2d 825 (1931)."[Tihe language of the Statute requires that the record of the Court from which removalis sought is the sole source from which to ascertain whether a case originally not removablehas become removable." Putterman v. Daveler, supra at 129. See also Ellis v. Davis,supra at 323, where the court in referring to the record stated, "As pointed out by[VOL. XVCASES NOTEDThe time period for removal at a later period in the proceedings iskeyed to receipt by the defendant of a paper15 supplying the necessaryfacts for removal. 16 The burden of proof rests upon the removingdefendant to show that the jurisdictional facts existed at the time ofremoval 7 should the plaintiff test the right of removal by a motion toremand.' 8 While the amount set forth in the complaint is controlling,' 9some federal courts have retained jurisdiction when the allegations ofthe complaint showed the amount in controversy to be in excess of10,000 dollars, although the plaintiff prayed for judgment in an amountless than 10,000 dollars.20 But the plaintiff does have the right to waivepart of the claim so as to have the action remain in the state court.21The instant case demonstrates the principle that removal statuteswill be construed strictly.22 The original complaint filed in the state courtthe defendant in error, the court is not confined to the allegations of the petition forremoval, if the record otherwise discloses a case of which the federal court hasjurisdiction."15. 28 U.S.C. § 1446(b) (1958).16. A few cases have permitted removal when the requisite jurisdictional factswere established from oral motions. Fred. Olsen & Co. v. Moore, 162 F. Supp. 82(N.D. Cal. 1958); Waldron v. Skelly Oil Co.. 101 F. Supp. 425 (E.D. Mo. 1951).17. McNutt v. General Motors Acceptance Corp., 298 U.S. 178 (1936); Carsonv. Dunham, 121 U.S. 421 (1887); Gold-Washing & Water Co. v. Keyes, 96 U.S. 199(1877); Davenport v. Procter & Gamble Mfg. Co., 241 F.2d 511 (2d Cir. 1957); Wellsv. Missouri Pac. Ry., 87 F.2d 579 (8th Cir. 1937).18. 28 U.S.C. § 1447 (1958). When an issue is joined upon the averments offact in a removal petition, application should be made to the court to fix the procedureto be followed in determining such issues of fact, whether by affidavit, oral testimony,depositions, or otherwise. Philipbar v. Derby, 85 F.2d 27 (2d Cir. 1936); Mapes v. Shaub,54 F.2d 419 (M.D. Pa. 1931).19. American Fire & Cas. Co. v. Finn, 341 U.S. 6 (1951); Evangelical LutheranChurch v. Stanolind Oil & Gas Co., 251 F.2-d 412 (8th Cir. 1958); Crockett v.Overfield, 22 F. Supp. 915 (E.D. Idaho 1938).20. Capps v. New Jellico Coal Co., 87 F. Supp. 369 (E.D. Tenn. 1950);Campbell v. Jordan, 73 F. Supp. 318 (E.D.S.C. 1947); Burmon & Bolonsky, Inc. v.Luckenbach S.S. Co., 39 F.2d 619 (D. Mass. 1930). The ad damnum averments ofthe complaint constitute the matter in controversy and determine the jurisdiction ofthe court regardless of the prayer of the complaint. Campbell v. Jordan, supra. But cf.Stuart v. Creel, 90 F. Supp. 392 (S.D.N.Y. 1950) in which plaintiff sued for $1,497.53and the averments of the complaint indicated the amount in controversy exceeded$6,000. The court stated at 393: "fW]hile the Court may look behind a mere allegationof the jurisdictional amount in a complaint to determine from the averments in thecomplaint whether the plaintiff could possibly recover $3,000 or more, the court cannotincrease the amount prayed for in the complaint, which in this case seeks a moneyjudgment for only $1,497.53."21. Journal Pub. Co. v. General Cas. Co., 210 F.2d 202 (9th Cir. 1954); Bradyv. Indemnity Ins. Co. of No. America, 68 F.2d 302 (6th Cir. 1933); Lorensen v.Jenney Mfg. Co., 158 F. Supp. 928 (D. Mass. 1958); Fleming v. Perkins, 202 Okla.217, 212 P.2d 122 (1949). "Should she assert claim for a larger amount beforejudgment, the cause could then be removed to the federal court." Brady v. IndemnityIns. Co. of No. America, supra at 303-4.22. Graves v. Corbin, 132 U.S. 571 (1890); Maurer v. International TypographicalUnion, 139 F. Supp. 337 (E.D. Pa. 1956); Rodriguez v. Union Oil Co., 121 F. Supp.824 (S.D. Cal. 1954). "[Flederal courts should guard with jealousy their doors whenlitigants seek to open them through removal procedures." Maurer v. InternationalTypographical Union, supra at 340.1961]UNIVERSITY OF MIAMI LAW REVIEWsought damages "in excess of $5,000.00. ''23 The federal appellate court castthe burden upon the removing defendant to prove affirmatively thatthe matter in controversy exceeded "the sum or value of $10,000.00" atthe time of removal.2 4 The defendant failed to produce any evidence asto the amount in controversy at the time of removal, thereby restrictingthe court to the allegations in the complaint. 25 The jurisdictional amountwas not apparent upon the face of the complaint and the action wasremanded. 20 The court succinctly stated that access to the federal courtsis not to be denied merely because the complaint is "couched in nebulousmathematical phraseology .... ,,2" The defendant may challenge the jurisdic-tional amount set forth in the complaint, and by an affirmative showingof the requisite amount, remain in the federal court .2  But the courtwill only admit proof which the parties had established at the time ofremoval, and will exclude any evidence offered as to jurisdictional amountwhich has been collected by the parties since the time of removal. 29If the action is remanded for failure of this proof, the action could beremoved a second time should the defendant receive a copy of anamended pleading, motion, order or other paper from which it maybe ascertained that the amount in controversy exceeds the requisitejurisdictional amount.30The opinion of the appellate court fails to articulate the techniquesto be utilized to show the amount in controversy.8 1 It would appear,however, that the defendant could serve interrogatories82 or requests for23. Florida has eliminated the ad daninum clause. See Committee Note, FLA.P. Civ. P. 1.8. The only statement of damages required is an allegation "of factsufficient to show the jurisdiction of the court." FLA. R. Civ. P. 1.8(b).24. See notes 14 and 19 supra.25. The action had been removed within twenty days after the filing of thecomplaint. No pleadings, motions or interrogatories were filed by the defendant in thestate court. Gaitor v. Peninsular & Occidental S.S. Co., 287 F.2d 252 (5th Cir. 1961).26. "We cannot construe the complaint's words "in excess of $5,000.00" as"exceed(ing) the sum or value of $10,000.00. Gaitor v. Peninsular & OccidentalS.S. Co., 287 F.2d 252, 254 (5th Cir. 1961).27. Id. at 255.28. The Supreme Court has approved the use of proofs when the complaint wasinsufficient for removal: "But if, from the face of the pleadings, it is apparent, to alegal certainty, that the plaintiff cannot recover the amount claimed, or if, from theproofs, the court is satisfied to a like certainty that the plaintiff never was entitled torecover that amount, and that his claim was therefore colorable for the purpose ofconferring jurisdiction, the suit will be dismissed." St. Paul Mercury Indem. Co. v.Red Cab Co., 303 U.S. 283, 289 (1938).29. A change in extrinsic circumstances after the institution of a suit will notcause it to become removable. Great Northern Ry. v. Alexander, 246 U.S. 276 (1918);Anaconda Copper Min. Co. v. Butte-Balaklava Copper Co., 200 Fed. 808 (D. Mont.19120. Fritzlen v. Boatmen's Bank, 212 U.S. 364 (1909); Pope v. Cheney, 22 Fed.177 (S.D. Iowa 1884).31. Gaitor v. Peninsular & Occidental S.S. Co., 287 F.2d 252 (5th Cir. 1961).32. Boone v. Southern Ry., 9 F.R.D. 60 (E.D. Pa. 1949); Frederick Hart & Co.v. Recordgraph Corp., 7 F.R.D. 43 (D. Del. 1947); Silk v. Sieling, 7 F.R.D. 576(E.D. Pa. 1947). A recent case permitted the interrogatories to be used as evidenceto show jurisdiction on a motion to remand even though they were not filed in thestate court nor part of the record. Gilardi v. Atchison, T. & S.F. Ry., 189 F. Supp.82 (N.D. I11. 1960).[VOL., XVCASES NOTEDadmissions33 requesting the plaintiff to state the amount of damages whichhe seeks to recover.34 The plaintiff ought to be bound by his answersor admissions and should be estopped to increase the amount of damagesabove 10,000 dollars during trial. 35 If the defendant fails to use thesediscovery devices (other jurisdictional requisites being present) he wouldbe deemed to have waived his right to remove, should the plaintiffduring trial in the state court seek to establish that the amount incontroversy exceeds 10,000 dollars. 30 This matter should be determined inthe pleading stage and not during trial since the statute speaks in termsof a paper filed during the pleading stage.37While this decision appears to be correct,38 it may tend to restrictthe removal privilege of the defendant in unliquidated damage actionsif the plaintiff is successful in avoiding the issue of damages during thepre-trial discovery period.3 9 The result is that many cases may proceed totrial based on an amount in controversy substantially below the federaljurisdictional amount but with the jury returning a verdict in excess ofthis amount. It is respectfully suggested that the Florida Supreme Courtconsider the advisability of amending the Florida Rules of Civil Procedureto require an ad damnum allegation in the complaint. 40 The submittedproposal would tend to eliminate the hazy area which presently existsbetween the federal removal statutes and the jurisdictional amount avermentsof the Florida Rules of Civil Procedure.JOHN B. WHITE33. The pleadings plus any admissions and undisputed evidence may be usedas evidence to establish requisite jurisdictional facts in a hearing upon a motion toremand. Scarborough v. Mountain States Tel. & Tel. Co., 45 F. Supp. 176 (W.D.Tex. 1942).34. Nor does the defendant waive the right to remove the action by filing anappearance, answering the complaint and serving notice to examine plaintiff in thestate court. Markantonatos v. Maryland Drydock Co., 110 F. Supp. 862 (S.D.N.Y. 1953).35. A survey of federal cases does not disclose any case adjudicating this precisepoint. But cf. Journal Pub. Co. v. General Cas. Co., 210 F.2d 202 (9th Cir. 1954);Brady v. Indemnity Ins. Co. of No. America, 68 F.2d 302 (6th Cir. 1933).36. Cf. Waldron v. Skelly Oil Co., 101 F. Supp. 425 (E.D. Mo. 1951); Ford v.Roxana Petroleum Corp., 31 F.2d 765 (N.D. Tex. 1929); Morgan's L. & T.R.R. & S.S.Co. v. Street, 57 Tex. Civ. App. 194, 122 S.W. 270 (1909).37. 28 U.S.C. § 1446(b) (1958). However some earlier cases have been heldremovable after the pleading stage and during the trial. Powers v. Chesapeake & 0.Ry., 169 U.S. 92 (1898); see cases cited in 76 C.J.S. Removal of Causes § 26 (1952).38. A substantial issue as to lack of diversity of citizenship was raised by plaintiffon appeal, in that the defendant corporation had a principal place of business in thestate wherein plaintiff resided. This issue was not decided in the opinion althoughit was argued with some fervor before the appellate court, according to the briefs ofthe parties. Gaitor v. Peninsular & Occidental S.S. Co., 287 F.2d 252 (5th Cir. 1961).See note 1 supra.39. The problem is apparent when one considers the difficulty of estimating painand suffering prior to trial. See Comment, Argument of Counsel -The Measure ofDamages For Pain and Suffering, 15 U. MIAMI L. REv. 85 (1960).40. FLA. R. CIv. P. 1.8(b).

https://repository.law.miami.edu/cgi/viewcontent.cgi?article=3370&amp;context=umlr

Federal Removal -- Jurisdictional Amount

Abstract

Similar works

Full text

Available Versions

bepress Legal Repository

University of Miami School of Law