Benney v. QuikTrip Corp., No. 09-4077-CV-W-FJG, 2010 WL 5463252 (W.D. Mo. Dec. 29, 2010).
A District Court in Missouri declined to dismiss the complaint without prejudice holding that post removal amendments causing the amount in controversy to fall below $5 million does not divest the federal court of jurisdiction under CAFA.
The plaintiff, Greg Benney, for himself and on behalf of all customers of QuikTrip Corporation, filed a class action in the state court seeking damages and injunctive relief under the Missouri Merchandising Practices Act, R.S. Mo. § 407.020, based on QuikTrip’s representation of its regular gasoline as being labeled with a lower-than-actual octane rating to induce purchase of higher priced gasoline.
QuikTrip removed the case to federal court pursuant to CAFA and diversity jurisdiction. The plaintiff then filed a Second Amended Complaint (“SAC”), adding a second Missouri plaintiff, Gary Abram, eliminating all damage claims, and seeking only injunctive relief and attorneys’ fees pursuant to R.S. Mo. § 407.025.
Accordingly, the plaintiffs filed a motion to allow dismissal without prejudice under Fed. R. Civ. P. 41(a)(2), on the basis that the District Court had been divested of jurisdiction under CAFA. In their SAC, the plaintiffs abandoned the damages claims previously asserted, thus causing the amount in controversy to fall below $5 million. Alternatively, the plaintiffs requested the option to dismiss the claims individually with prejudice.
The Court noted that once a complaint is properly removed to federal court under CAFA, the federal court’s jurisdiction cannot be ousted by later events. Thus, for example, changes in the amount in controversy after the complaint has been removed would not subject a lawsuit to be remanded to state court.
The Court found that at the time of removal, the plaintiff and QuikTrip were citizens of different states and the plaintiff sought damages in excess of $5 million; therefore, the Court’s jurisdiction pursuant to 28 U.S.C. 1332(d)(2)(A) upon removal was proper. The Court thus observed that the plaintiffs’ subsequent reduction in the amount in controversy below $5 million did not divest the Court of proper subject matter jurisdiction.
Next, the Court declined to dismiss the action without prejudice finding that QuikTrip would be prejudiced by a voluntary dismissal at this stage of the litigation. The Court noted that after QuikTrip removed this case, the plaintiffs had amended their complaint and moved for class certification, and QuikTrip had twice moved for summary judgment. Thus, both parties had expended considerable resources in prosecuting and defending this action. Apart from arguing that the SAC caused the amount in controversy to fall below $5 million, the plaintiffs had offered no other reason to support voluntary dismissal of their case. As a party may not dismiss simply to avoid an adverse decision or seek a more favorable forum, the Court found that squandering of judicial resources and legal prejudice to QuikTrip would result if the action were dismissed without prejudice.
Accordingly, the Court directed the plaintiffs to withdraw their request for voluntary dismissal and proceed with their cause of action