Sunday, March 17, 2013

Diversity Jurisdiction and "Fair Reading" of Complaint

“Fair Reading of the Complaint” Analysis Applied to
Determine Whether or Not Diversity Jurisdiction Exists
      In a recent decision, the U.S. District Court (E.D. Ky., Judge Caldwell) analyzed a complaint to determine whether or not the jurisdictional minimum of $75,000 in damages was being sought.  The parties being diverse, it was still necessary for diversity jurisdiction to exist that the jurisdictional minimum of damages exceeding $75,000 be sought.  Shupe v. Asplundh Corporation, 2013 WL 647504 (E.D. Ky. Feb. 21, 2013). 
      Shupe brought suit against Asplundh on claims including violation of her civil rights and sexual and age discrimination.  In accordance with the Kentucky Rules of Civil Procedure, she simply asserted that the amount of her damages exceeded the jurisdictional minimum of the Kentucky Circuit Court.  The parties being diverse based upon their citizenship, Asplundh asserted in its petition for removal that the amount in controversy exceeded $75,000.  Shupe, in response, filed a motion to remand and for attorney’s fees, alleging that “This court lacks jurisdiction because the amount in controversy does not exceed $75,000.”  In furtherance of that assertion, she submitted to the court her pre-litigation demand letter in which she offered to settle her claims for $60,000.
      Parsing the complaint, Judge Caldwell determined that the claim for “back pay alone would total more than $68,000 if trial occurs by September 2013.”  There were in addition claims for front pay, humiliation and embarrassment and attorney’s fees, “so these may be considered when determining the amount in controversy.”  In consequence:
Based on these combined damages – back pay, front pay, humiliation and embarrassment, and attorney’s fees – the Court is satisfied that the amount in controversy more likely than not meets the statutory requirement for federal jurisdiction.
Setting aside Shupe’s pre-litigation demand letter, the court found that they are “not especially strong evidence of the amount in controversy,” being rather negotiation documents.
      The court having denied her motion for remand, it as well denied her motion for attorney’s fees in connection therewith.

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