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Rosas v. Hearn

United States District Court, W.D. North Carolina, Charlotte Division

December 17, 2019

KIM ROSAS et. al., Plaintiffs,
v.
AMANDA HEARN et. al., Defendants.

          MEMORANDUM AND RECOMMENDATION AND ORDER

          DAVID S. CAYER JUDGE.

         THIS MATTER is before the Court on “Plaintiffs' Motion to Remand” (document #3) and “Defendants' Motion to Dismiss …” (document #7), as well as the parties' briefs and exhibits.

         This matter has been referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1) and these Motions are ripe for disposition.

         In their “Motion for Extension of Time to Answer …” (document #13), Defendants represent that they agreed to withdraw their Motion to Dismiss in exchange for Plaintiffs' consent to the extension of time. On December 13, 2019, the Court granted the extension. Accordingly, “Defendants' Motion to Dismiss …” (document #7) is administratively denied as moot without prejudice.

         Having fully considered the arguments, the record, and the applicable authority, the undersigned respectfully recommends that Plaintiffs' Motion to Remand be denied as discussed below.

         I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         On October 28, 2019, Plaintiffs filed their verified Complaint in Mecklenburg County Superior Court. Plaintiffs are North Carolina citizens and Defendants are citizens of Ohio. Plaintiffs assert eleven claims for relief. Six of the claims seek injunctive and declaratory relief concerning an alleged partnership, including an accounting, dissolution and winding up. In their claims for breach of partnership agreement, breach of fiduciary duty, conversion, and constructive fraud, Plaintiffs allege that they are entitled to recover “in excess of $25, 000” for each claim. Document #1-3. Plaintiffs assert a claim for unfair and deceptive trade practices seeking treble damages and attorneys' fees. Plaintiffs also seek punitive damages.

         On November 5, 2019, Defendants removed the state court action to the United States District Court for the Western District of North Carolina alleging diversity subject matter jurisdiction.

         On November 6, 2019, Plaintiffs filed their Motion to Remand arguing that “Defendants' removal cannot be based solely upon the boilerplate jurisdictional prayer … for damages ‘in excess of $25, 000.'” Plaintiffs' “Memorandum …” at 2 (document #4).

         II. DISCUSSION

         The existence of subject matter jurisdiction is a threshold issue. When a removed case lacks a proper basis for subject matter jurisdiction, it must be remanded. Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 96 (1998); Jones v. American Postal Workers Union, 192 F.3d 417, 422 (4th Cir. 1999); Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999). The requirements are so absolute that “[n]o party need assert [a lack of subject matter jurisdiction]. No. party can waive the defect, or consent to jurisdiction. No. court can ignore the defect; rather a court, noticing the defect, must raise the matter on its own.” Wisconsin Dept. of Corrections v. Schacht, 524 U.S. 381, 389 (1998) (internal citations omitted). See also Ashcroft v. Iqbal, 129 S.Ct. 1937, 1945 (2009) (“Subject-matter jurisdiction cannot be forfeited or waived and should be considered when fairly in doubt”) (citing Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006); United States v. Cotton, 535 U.S. 625, 630 (2002)); Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982).

         The party asserting federal jurisdiction has the burden of proving that subject matter jurisdiction exists. See, e.g., Lovern v. Edwards, 190 F.3d 648, 654 (4th Cir. 1999); Richmond, Fredericksburg & Potomac R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991); Norfolk Southern Ry. Co. v. Energy Dev. Corp., 312 F.Supp.2d 833, 835 (S.D.W.Va. 2004). Any doubts about removal must be resolved in favor of remand. Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994) (“Because removal jurisdiction raises significant federalism concerns, [courts] must strictly construe removal jurisdiction. If federal jurisdiction is doubtful, a remand is necessary”) (citations omitted); Griffin v. Holmes, 843 F.Supp. 81, 84 (E.D. N.C. 1993); Storr Office Supply v. Radar Business Systems, 832 F.Supp. 154, 156 (E.D. N.C. 1993).

         A defendant may remove a case to federal district court if the court has original jurisdiction. 28 U.S.C. § 1441; Dixon v. Coburg Dairy, 369 F.3d 811, 816 (4th Cir. 2004). A case falls within a district court's diversity jurisdiction only if diversity of citizenship among the parties is complete and the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332(a); Carden v. Arkoma Associates, 494 U.S. 185, 187 (1990); Strawbridge v. Curtiss, 3 Cranch 267 (1806). It is undisputed that there is complete diversity of citizenship between Plaintiffs and Defendants.

         When jurisdiction is predicated upon diversity of citizenship and the complaint does not allege a specific amount of damages but instead seeks “in excess” of a certain dollar amount, the party asserting jurisdiction must prove by a preponderance of the evidence that the amount in controversy requirement has been met. 28 U.S.C. §1446(c)(2)(A); Momin v. Maggiemoo'sInternational ...


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