70 The Alabama Lawyer 121 (2009). Removal Under Lowery v. Alabama Power Co.

• Author: BY J. BRANNON MANER

The Alabama Lawyer

2009.

70 The Alabama Lawyer 121 (2009).

Removal Under Lowery v. Alabama Power Co

Removal Under Lowery v. Alabama Power Co.,483 F. 3d 1184 (11th Cir. 2007), cert. denied sub nom.Hanna Steel Corp. v. Lowery, ___ U.S. ___, 128 S. Ct. 2877, ___ L. Ed. 2d ___ (2008)BY J. BRANNON MANERAs most practitioners are aware, proper removal of an action from Alabama state courts to Alabama federal courts based on diversity jurisdiction under 28 U.S.C. § 1332 is not as simple as it used to be. These days, a removing defendant must have all of its ducks in a row in order to successfully remove a case. The Eleventh Circuit's holding in Lowery v. Alabama Power Co., 483 F. 3d 1184 (11th Cir. 2007), cert. denied sub nom. Hanna Steel Corp. v. Lowery, ____ U.S. ____, 128 S. Ct. 2877, ____ L. Ed. 2d ____ (2008), substantially narrowed the evidence that a district court may consider in determining whether the amount in controversy exceeds the jurisdictional minimum required for diversity jurisdiction. This article discusses the effects of Lowery and its application by the federal courts sitting in the state of Alabama.

Removal - Procedurally

"Any civil case filed in state court may be removed by the defendant to federal court if the case could have been brought originally in federal court." Tapscott v. MS Dealer Serv. Corp., 77 F. 3d 1353, 1356 (11th Cir. 1996) (citing 28 U.S.C. § 1441(a)), abrogated on other grounds by Cohen v. Office Depot, Inc., 204 F. 3d 1069 (11th Cir. 2000). Under 28 U.S.C. §§ 1331 and 1332, removal is premised either on federal-question jurisdiction or diversity jurisdiction. For the purposes of this article, only diversity jurisdiction under 28 U.S.C. § 1332(fn1) will be addressed.

Federal courts may exercise diversity jurisdiction over all civil actions where the amount in controversy exceeds $75,000, exclusive of interest and costs, and the action is between citizens of different states. 28 U.S.C. § 1332(a), 28 U.S.C. § 1441(a) ("(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending. For purposes of removal under this chapter, the citizenship of defendants sued under fictitious names shall be disregarded."). However, "[b]ecause removal jurisdiction raises significant federalism concerns, federal courts are directed to construe removal strictly [i]ndeed, all doubts about jurisdiction should be resolved in favor of remand to state court." Univ. of S. Ala. v. Am. Tobacco Co., 168 F. 3d 405, 411 (11th Cir. 1999) (internal citations omitted). "Accordingly, when a federal court acts outside its statutory subject-matter jurisdiction, it violates the fundamental constitutional precept of limited federal power." Id. at 409. "Simply put, once a federal court determines that it is without subject matter jurisdiction, the court is powerless to continue." Id. at 410 (citing Ex parte McCardle, 74 U.S. 506, 19 L. Ed. 264 (1868)). Otherwise, a party could "work a wrongful extension of federal jurisdiction and give district courts power the Congress denied them." Jackson v. Seaboard Coast Line R.R., 678 F. 2d 992, 1000-01 (11th Cir. 1982) (quoting Am. Fire & Cas. Co. v. Finn, 341 U.S. 6, 18, 71 S. Ct. 534, 95 L. Ed. 702 (1951)).

Generally, a notice of removal must "be filed within thirty days after the receipt by the defendant of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based." 28 U.S.C. § 1446(b).(fn2) However, if a determination of jurisdiction cannot be made by the face of the complaint or documents attached thereto, "a notice of removal may be filed within thirty days after receipt by the 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." Id. After removal to federal court, a party may move to remand the cause to state court based on any defect in the removal, including lack of subject-matter jurisdiction. 28 U.S.C. § 1447(c).(fn3) A motion to remand based on a procedural defect in the removal must be made within 30 days after the filing of the notice of removal. Id. However, "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." Id.

Proving the Amount in Controversy

The Eleventh Circuit has made it very clear that "in the removal context where damages are unspecified, the removing party bears the burden of establishing the jurisdictional amount by a preponderance of the evidence." Lowery, 483 F. 3d at 1208 (citing Tapscott v. MS Dealer Serv. Corp., 77 F. 3d 1353, 1356-57 (11th Cir. 1996) (adopting the "preponderance of the evidence" standard after examining the various burdens of proof in different factual contexts), overruled on other grounds, Cohen v. Office Depot, Inc., 204 F. 3d 1069, 1072 (11th Cir. 2000). Therefore, "the removing defendant must establish the amount in controversy by '[t]he greater weight of the evidence, [a] superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline fair and impartial mind to one side of the issue rather than the other." Lowery, 483 F. 3d at 1209 (quoting Black's Law Dictionary 1220 (8th ed. 2004)). While proving the amount in controversy has historically seemed easy for most removing defendants, that is no longer the case under Lowery and a series of related cases.

a. The Underlying Case of Lowery v. Ala. Power Co., 483 F. 3d 1184 (11th Cir. 2007), cert. denied sub nom. Hanna Steel Corp. v. Lowery, ____ U.S. ____, 128 S. Ct. 2877, ____ L. Ed. 2d ____ (2008).

On January 24, 2003, Katie Lowery and eight other individual plaintiffs filed suit in Jefferson County Circuit Court against 12 industrial and manufacturing plants and 120 fictitious entities for discharging particulates and gases into the air and ground water of Jefferson County, Alabama. Id. at 1187. Plaintiffs originally demanded recovery for compensatory and punitive damages of $1,250,000 per plaintiff. Id. at 1188. However, the plaintiffs later amended their complaint three times, adding more than 400 plaintiffs and amending their prayer for relief removing any specific monetary amount the plaintiffs were claiming. Id. On July 17, 2006, defendant Alabama Power Co. filed a notice of removal under the "mass action" provision of the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d)(11), removing the action to the United States District Court for the Northern District of Alabama Id. In its removal, Alabama Power asserted that each of the plaintiffs' claims exceeded the jurisdictional minimum of $75,000, and the claims totaled in excess of $5,000,000. CAFA's minimum aggregate amount in controversy for diversity jurisdiction.(fn4) Id.

Plaintiffs filed a motion to remand the case to the Jefferson County Circuit Court asserting that Alabama Power failed to meet its burden of establishing federal jurisdiction because nothing in the notice of removal or the amended complaint indicated the specific amount of damages the plaintiffs were actually claiming. Id. at 1189. Alabama Power filed a supplement to its notice of removal on August 4, 2006, stating that federal jurisdiction had been established because the case involved more than 100...