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Cquentia Series, LLC v. American Healthway, LLC

United States District Court, N.D. Texas, Fort Worth Division

September 5, 2017

CQUENTIA SERIES, LLC, et al., Plaintiffs,
AMERICAN HEALTHWAY, LLC, et al., Defendants.



         Came on for consideration the joint motion of plaintiffs, Cquentia Series, LLC ("Cquentia"), and Diagnostic Lab Direct Series, LLC ("DLD"), to remand. The court, having considered the motion, the response of defendants, American Healthway, LLC, and TAC Diagnostics, LLC, the reply, the record, and applicable authorities, finds that the motion should be granted.

         I. Background

         On July 7, 2016, plaintiffs filed their original petition in the 96th Judicial District Court of Tarrant County, Texas. In it, they allege:

         DLD provides billing for ancillary services to hospitals and, in early 2016, was assisting a client search for a laboratory services provider. Defendants learned of the search and contacted Cquentia to discuss a possible arrangement with DLD. The parties met twice, but did not reach an agreement. Cquentia and DLD ultimately entered into an agreement between themselves regarding laboratory services. Defendants demanded a fee for alleged past services and offers and counter-offers were exchanged, but no agreement was reached. Ultimately, defendants demanded a 10% interest in any deal between plaintiffs or, alternatively, a separate services contract for a 5% commission on profits (which plaintiffs say is likely illegal). Doc.[1] 9 at 16-17.

         Plaintiffs seek declaratory judgment that no enforceable contract exists between them and defendants. Doc. 9 at 17.

         On July 7, 2017, defendants filed their notice of removal, bringing the action before this court. Doc. 1. Defendants said that the notice was filed within thirty days of their receipt of a paper from which it could be ascertained that the case was or had become removable. Defendants alleged that diversity jurisdiction exists and also said that the court has federal question jurisdiction because a federal statute is at issue in parallel litigation in Florida. Doc. 9 at 3.

         II. Grounds of the Motion

         Plaintiffs maintain that neither diversity nor federal question jurisdiction exists. In particular, they say that defendants have not established that the amount in controversy-exceeds $75, 000; defendants have not established that the parties are diverse; and, a federal question is not presented by this action.

         III. Applicable Legal Principles

Federal courts are courts of limited jurisdiction. . . . It is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction.

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)(citations omitted). Removal is proper if the action is one over which the federal court possesses subject matter jurisdiction. 28 U.S.C. § 1441(a). The removing party bears the burden of showing that federal jurisdiction exists and that removal was proper. Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). The court considers the claims in the state court petition as they existed at the time of removal, construing any ambiguities against removal and in favor of remand. Id. (citing Cavallini v. State Farm Mut. Auto. Ins. Co., 44 F.3d 256, 264 (5th Cir. 1995); Acuna v. Brown & Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000)).

         Generally, a plaintiff is the master of his complaint, Holmes Grp., Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 831 (2002), and the sum sought by the plaintiff in good faith is deemed to be the amount in controversy. 2 8 U.S.C. § 1446(c)(2). A plaintiff can avoid removal of his case to federal court by suing for less than the jurisdictional amount, even though he would justly be entitled to more. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 294 (1938).

         In an action for declaratory relief, the amount in controversy is the value of the right to be protected or the extent of the injury to be prevented. Webb v. Investacorp, Inc., 89 F.3d 252, 256 (5th Cir. 1996); Leininger v. Leininqer, 705 F.2d 727, 729 (5th Cir. 1983). Thus, in a case like this, where plaintiffs claim that a contract does not exist, the question is how much plaintiffs stand to gain by avoiding liability under the contract. See, e. g., Yor-Wic Constr. Co. v. Engineering Design Techs., Inc., No. 17-0224, 2017 WL 3447808 (W.D. La. Apr. 19, 2017); Franklin Cty. Mem. Hosp. v. Horizon Mental Health Mgmt., Inc., Mo. 3:06CV423HTW-LRA, 2007 WL 781843 (S.D.Miss. Mar. 13, 2007). In other words, would plaintiffs owe defendants more than $75, 000 if defendants owned 10% of the business undertaken between Cquentia and DLD? Or, would the amount in ...

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