Hurst v. Nissan North America, Inc., 2013 WL 2363083 (8th Cir. May 31, 2013).

Based upon the plaintiff’s proposed jury instructions for punitive damages, Nissan removed the action to the Western District of Missouri.  The District Court remanded the action to state court because the plaintiff’s petition did not request punitive damages, and there was no amendment to the complaint to seek punitive damages, thus punitive damages could not even be requested at trial.  Upon appeal, Nissan relied on 28 U.S.C. § 1446(b)(3), which provides that a notice of removal may be filed within 30 days after receipt by defendant of a copy of an “amended pleading, motion, order or other paper” from which it may first be ascertained that the case is one which is or has become removable, and argued that argued that the inclusion of the terms “motion” and “other paper” showed congressional intent not to make formal amendments a prerequisite to removal.  The Eight Circuit, however, opined that §1446 merely sets forth the procedural requirements for removal to federal court; it does not inform the substantive question of whether the action is removable in the first place.

The plaintiff, car owner, brought a state wide class action against Nissan North America, Inc. inMissouristate court alleging that certain cars manufactured by Nissan had defective dashboards.  The plaintiff sought compensatory damages and attorney fees and costs.

Nissan removed the action to the District Court under the CAFA, and the plaintiff sought remand to state court.  The District Court granted the plaintiff’s motion, holding that the amount in controversy fell short of the CAFA’s $5 million jurisdictional requirement.

Thereafter, three weeks before trial, the plaintiff’s counsel submitted proposed jury instructions for punitive damages.  Nissan again promptly removed the action to the District Court, contending that, considering the requested instruction for punitive damages, the CAFA’s amount in controversy requirement was now satisfied.  The District Court opined that because the plaintiff’s petition failed to adequately plead punitive damages, such damages were, underMissourilaw, unrecoverable at trial and thus CAFA’s amount in controversy requirement was not met.

On appeal, the Eighth Circuit affirmed the order of the District Court.

Although Nissan did not dispute the District Court’s conclusion that punitive damages may not be awarded unless they are specifically pleaded in the petition, it argued that the District Court erred in predicting that, because the plaintiff’s request for punitive damages was made on the eve of trial, the state court would necessarily deny a request to amend the petition to add a claim for punitive damages.

The Eighth Circuit remarked that Nissan’s argument was an attempt to “put the cart before the horse.”  The Eight Circuit stated that the jurisdictional consequence of a motion to amend to add punitive damages was neither before the District Court nor before it on appeal, as no motion had been made.  Further, the Eighth Circuit stated that the District Court’s order could not be interpreted as impermissibly speculating on what a state court may or may not do; rather, the District Court had properly considered whether the plaintiff had established to a legal certainty that, under state law, a fact-finder cannot award more than $5 million.

Construing Missouri law, the Eight Circuit agreed with the District Court that, at the time of removal, the case was not removable because it was legally impossible for the class to recover more than $5 million.

Accordingly, the Eight Circuit affirmed the District Court’s order of remand.

The final paragraph of the Court’s opinion is interesting.  The court stated

Nissan understandably felt ambushed by Hurst’s counsel. That counsel would propose jury instructions for punitive damages, having obtained a remand to state court because such damages were legally unrecoverable under Missouri law, strikes us as peculiar if not questionable behavior. On remand, should punitive damages find their way into the case for consideration by the jury (whether by formal amendment to the pleadings or otherwise), immediate removal would be timely and almost certainly proper.

Does this mean that once the state court judge approved the proposed jury instruction for punitives the case becomes removable?  I think the Eight Circuit is saying exactly that.   Take a look.   — JR