Perritt v. Westlake Vinlys Co., LP, 2013 WL 6451774 (M.D. La. Dec. 9, 2013).

A District Court in Louisiana granted the plaintiffs’ motions to remand holding that the mere potential for recovery in excess of the jurisdictional minimum was not sufficient to establish the amount in controversy, and that the defendants must show that it was more likely than not that the plaintiffs would recover more than the jurisdictional minimum.

Two groups of plaintiffs (“Hollins Action” and “Perritt Action”) brought an action seeking damages caused due to an explosion at the defendants’ facility in Geismar, Louisiana.  The plaintiffs in the Hollins action alleged that the explosion and resulting chemical release were caused by the defendant’s negligence, and claimed damages for personal injuries and symptoms due to the explosion and exposure to the released chemicals.  The Hollins petition stated that the damages of plaintiffs were less than $75,000, and the amount-in-controversy of the class sought was less than the requisite amount under CAFA.  The plaintiffs in the Perritt Action filed their action four days after the Hollins Plaintiffs against defendants, and their complaint matched the Hollins complaint word-for-word, but it did not indicate one way or the other whether the plaintiffs believed that their action met the requirements for federal subject matter jurisdiction.

The defendants removed each action to the federal court under 28 U.S.C. § 1441, asserting that the District Court had original subject matter jurisdiction pursuant to 28 U.S.C. § 1332 because there was complete diversity of citizenship between the plaintiffs and the properly joined defendants pursuant to 28 U.S.C. § 1332(c)(1) and each case satisfied the amount-in-controversy requirement pursuant to 28 U.S.C. § 1332(a).

At the very outset, the District Court determined that the complete diversity was met in each action as the plaintiffs were citizens of Louisiana, Tennessee, and Mississippi, and the defendants were based in Delaware, with a principal place of business in Texas.

The District Court, nevertheless remarked that the presence of the jurisdictional amount in either action was less obvious, therefore, the onus was on the defendants to establish by a preponderance of evidence that the amount-in-controversy exceeded $75,000.  The plaintiffs challenged the defendants’ contention that it was facially apparent that the amount-in-controversy exceeded $75,000.  The Perritt plaintiffs stated that their allegations of personal injuries, fear, fright, emotional, and mental anguish from exposure to the chemical release did not support that any individual plaintiff’s claim met or exceeded the jurisdictional threshold.  The Hollins plaintiffs pointed to their statement that each of their cases was worth less than $75,000.  The defendants pointed out that in their respective petitions, the plaintiffs alleged that toxic, noxious, and harmful chemical were released, including vinyl chloride, monomer, hydrochloric acid etc.  The defendants further noted that, because each complaint stated that this matter is appropriate for class treatment, the amount-in-controversy far exceeded the requisite jurisdictional threshold.

The District Court observed that the defendants’ argument showed that, potentially, the class treatment, total damages, and the injuries suffered by plaintiffs under Louisiana law would exceed the jurisdictional bare minimum.  However, under this inquiry, it was not sufficient for the defendants show a potential that the amount-in-controversy exceeded the jurisdictional threshold.  Accordingly, the District Court sided with the plaintiffs, finding it was impossible to conclude that it was facially apparent from the plaintiffs’ claims that the amount in controversy in either action was satisfied.

Additionally, the District Court observed that the test for determining whether the jurisdictional minimum is established is not whether plaintiffs in other chemical release cases recovered more than $75,000, or whether federal courts had previously determined that petitions were pleaded with sufficient specificity to establish the jurisdictional minimum.  Instead, the test is whether the defendant has established that it is ‘facially apparent’ that the claims probably exceed $75,000.  Because the plaintiffs’ claims in their petitions were vague, the District Court stated that the defendants failed to make that showing by a preponderance of the evidence.

Next, the District Court analyzed whether federal subject matter jurisdiction existed under federal class action jurisdiction under 28 U.S.C. § 1332(d).  Because the District Court’s analysis was limited to the claims as they existed at the time of removal, and because the plaintiffs’ petitions provided no reliable metric for determining the nature and extent of their damages or potential fees, the District Court stated that it could not reliably aggregate their potential claims to arrive at a sum in excess of $5,000,000.

Further, neither of the petitions indicated that the class the plaintiffs purported to represent contained more than the number of named plaintiffs in each action, and the defendants’ Notices of Removal did not demonstrate that the number of members of all proposed plaintiff classes in the aggregate was greater than 99, as required under §1332 (d).  Thus, the defendants also failed to establish federal class action jurisdiction. subject matter jurisdiction.

Accordingly, the District Court remanded the action to the state court.