Navigating Removal Jurisdiction

• Year: 2025
• Citation: Vol. 30 No. 3 Pg. 0014
• Pages: 0014

Navigating Removal JurisdictionNo. Vol. 30 No. 3 Pg. 14Georgia Bar JournalFebruary, 2025

The Legal

Navigating Removal Jurisdiction

Daniel Headrick

Get oriented with the major issues in removals based on diversity jurisdiction in the Eleventh Circuit.

BY DANIEL HEADRICK

Years ago, I was tasked with my first removal.

Simple, I thought. I just need to make sure the parties are diverse and there is more than $75,000 at issue. I should have been terrified given the complexity of removal jurisdiction coupled with my almost complete ignorance of the topic. Looking back on those days of naivete, I realize that having a curiosity about the law is much better than assuming how easy it might be to get something done. I got the case removed, but what I learned was how much I didn't know about removal. Turns out there are divisions in federal court.^[1] I don't think they went over that in law school.

This article will orient you to the major issues in removals based on diversity jurisdiction in the Eleventh Circuit. Let's begin with the basics using a hypothetical new case: You get an email attaching a new personal injury complaint filed in Cobb County Superior Court. The state court action pending in Cobb County already tells us where tofile the removal: in the U.S. District Court for the Northern District of Georgia in the Atlanta Division.^[2] The plaintiff is an individual from Georgia and there are two defendants: a foreign LLC and an individual from Texas. The complaint does not list a specific monetary demand.^[3]You immediately wonder: can I remove this case? At first blush, you remember your Civ Pro class and the diversity jurisdiction statute, and you think sure, I can remove this ... the parties are diverse and the amount in controversy is probably more than $75,000. Buckle up.

Recall that the diversity jurisdiction statute provides that" [t]he district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of 875,000, exclusive of interest and costs, and is between ... [c]itizens of different States."^[4]However, this statute provides us with no guidance about what to do when the complaint does not ask for a specific monetary amount. Nor does this statute help us to determine the citizenship of an LLC, although it does for a corporation and an insurer.^[5] This is why you went to law school: so you can read all those decisions that tell us what to do when Congress was vague. Let's start with the amount in controversy.

Amount in Controversy

Establishing the amount in controversy is bizarre because the plaintiff typically argues that his case is worth less than the defendant claims, while the defendant argues that the case is worth more than the plaintiff claims. In the Eleventh Circuit, in cases such as our hypothetical where "the plaintiff has not pled a specific amount of damages, the removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional requirement."^[6] Well, how in the world do you sustain that burden? Start with the complaint itself. Are there allegations of serious bodily injury? Disfigurement? Permanent disability? Emotional distress? All of these, especially when combined, can help move the needle. However, "[a] conclusory allegation in the notice of removal that the jurisdictional amount is satisfied, without setting forth the underlying facts supporting such an assertion, is insufficient to meet the defendant's burden."^[7] A plaintiff wishing to avoid federal court may be intentionally vague, which means that unless the defendant has some extrinsic evidence, he may not be able to satisfy his burden of proof for the amount in controversy.

Establishing the amount in controversy is bizarre because the plaintiff typically argues that his case is worth less than the defendant claims, while the defendant argues that the case is worth more than the plaintiff claims.

In most cases, the plaintiff will have submitted some kind of pre-suit demand. What if the plaintiff had demanded S 100,000 in a settlement offer before filing suit? You can certainly try to include that as an exhibit to your removal petition, but beware: there is conflicting case law concerning whether settlement demands in excess of S75,000 satisfy the amount in controversy requirement.^[8] For example, in Webb v. Dollar Tree Stores, Inc., the plaintiff made a 5500,000 pre-suit demand on which the removing defendant relied to satisfy the amount in controversy because the complaint did not include amounts in excess of 875,000.^[9] The Southern District of Georgia remanded the case because it believed this demand was "more properly construed as posturing as opposed to a reasonable assessment of' the plaintiffs claim based in part on the lack of specificity about the injuries and damages in the letter.^[10]

However, in Ray v. GPR Hosp. LLC, the Northern District of Georgia considered a post-removal 8150,000 settlement demand and concluded that the amount in controversy had been met, in part, based on that demand.^[11] In Ray, the plaintiff did not file the motion for remand until five months after removal, opening the door for the court to consider a settlement demand that was made after removal.^[12]Typically, courts are constrained to review whether jurisdiction existed at the time of removal.^[13] However, one exception is if the plaintiff files a motion for remand more than 30 days after the defendant files the notice of removal.^[14]

I suppose the takeaway for plaintiffs is: don't delay your motion for remand and understand that a defendant may use your settlement demand—which would otherwise be inadmissible—to remove your case. Vagueness in settlement offers helps a plaintiff stay in state court. If you don't want to get removed, don't make the defendant's removal case for them. The takeaway for defendants is: you need more than conclusory allegations and speculation to satisfy the amount in controversy.

What about stipulations? Can the parties stipulate to jurisdiction in federal court for purposes of diversity jurisdiction? Generally speaking, no. Of course, plenty have tried only to find themselves back in state court sua sponte. As the Eleventh Circuit once said: "[b]ecause jurisdiction cannot be conferred by consent, the district court should be leery of any stipulations the parties offer concerning the facts related to jurisdiction."^[15] Even in cases where—oddly—the parties stipulate to a remand, a reviewing court is still going to go through the amount in controversy analysis and refuse to engage in "rubber-stamping their proposed order."^[16]Another variant features cases where a party stipulates that the plaintiff will not seek damages in excess of $75,000.^[17] Even here, there is no rubber stamping.

Is it possible to use requests for admission to establish the amount in controversy in the absence of a clear monetary demand? It seems unlikely if that is all you have. The plaintiff in a Southern District of Georgia case denied several requests that were aimed at limiting damages to $75,000.^[18] The court noted that "Courts in the Eleventh Circuit are split on whether a plaintiffs denial of a defendant's requests for admissions is sufficient to establish jurisdiction or to otherwise put the defendant on notice of the amount in controversy."^[19] Although the issue in this case was actually whether the notice of removal was timely filed, this case is a great resource for reviewing cases on both sides of the spectrum on the relevance of requests for admission. The takeaway for practitioners is: don't bank on requests for admission as the sole ground for your removal petition in the Eleventh Circuit. You are going to need more.

Back to our hypothetical case: let's say you have no settlement offer but you have a counterclaim. Can you use your counterclaim to get over the jurisdictional amount? No.^[20] Nice try. Because counterclaims are not part of the plaintiffs complaint, "[28 U.S.C. §] 1441(a) thus does not permit removal based on counterclaims at all, as a counterclaim is irrelevant to whether the district court had 'original jurisdiction' over the civil action" "as defined by the plaintiffs complaint."^[21]Can you use the plaintiff s request for punitive damages? Yes.^[22] What about a demand for attorney's fees by the plaintiff, may that be included in the amount in controversy? Yes, with important caveats. First, "the general rule is that attorneys' fees do not count toward the amount in controversy unless allowed for by statute or contract."^[25] Second, most district courts in the Eleventh Circuit will only allow the attorney fee amounts incurred up to the notice of removal, as the amount in controversy is determined at that time.^[24]In other words, you can't bank on future attorney fees to get over the threshold.

One final scenario: what if our hypothetical complaint had disclaimed damages in excess of $75,000 or otherwise specifically claimed a monetary amount that was less than $75,000? In that case, the burden of proof is higher. A "removing defendant must prove to a legal certainty that plaintiffs claim must exceed [$75,000]."^[

25

]As the Eleventh Circuit has clarified, the proof that may be offered in support of this burden may go well beyond the face of the complaint, but it must be limited to "jurisdictional facts that support removal ... at the time of the removal."^[26] You may still offer evidence discovered after removal, but such evidence has to relate back to the jurisdictional amount at the time of removal.^[27] Suffice it to say that you are going to need something fairly convincing to meet this high evidentiary standard, and pre-suit settlement offers are not likely to cut it.^[28]

Citizenship Issues

Imagine with me that you have now explored your best "amount in controversy" argument as outlined...