United States District Court, N.D. Texas, Dallas Division
MEMORANDUM OPINION AND ORDER
Lindsay United States District Judge
the court are Plaintiff TruePoint Communications, LLC's
(“TruePoint” or “Plaintiff”) Motion
for Entry of Default Judgment (Doc. 15), filed March 15,
2019; and Defendant Unique Beverage Company, LLC's
(“Unique” or “Defendant”) Motion to
Set Aside Entry of Default (Doc. 22), filed March 27, 2019.
The court determines that it cannot rule on
these motions because subject matter jurisdiction over this
action is lacking. Defendant has not shown by a preponderance
of the evidence that the amount in controversy exceeds $75,
000, exclusive of interest and costs. For the reasons herein
set forth, the court remands this action to
the 116th Judicial District Court of Dallas County, Texas.
December 21, 2018, Unique removed this action to federal
court. Unique contends that complete diversity of citizenship
exists between the parties and that the amount in
controversy, exclusive of interest and costs, exceeds $75,
000. Initially, Unique did not set forth the necessary
allegations to establish its citizenship and the citizenship
of TruePoint. To ensure that jurisdiction existed to
entertain this action, on February 15, 2019, the court
ordered Unique to file an amended Notice of Removal
addressing the pleading deficiencies identified by the court
by March 15, 2019. Unique complied, and filed Defendant
Unique's Beverage Company, LLC's Amended Notice of
Removal (Doc. 8) on February 27, 2019. The Amended Notice
sufficiently set forth allegations establishing that the
parties are completely diverse. Also, Unique submitted
“evidence” that it contends establishes that the
amount-in-controversy requirement has been met. For the
reasons that follow, the court disagrees.
Subject Matter Jurisdiction
federal court has subject matter jurisdiction over civil
cases “arising under the Constitution, laws, or
treaties of the United States, ” and over civil cases
in which the amount in controversy exceeds $75, 000,
exclusive of interest and costs, and in which diversity of
citizenship exists between the parties. 28 U.S.C.
§§ 1331, 1332. Federal courts are courts of limited
jurisdiction and must have statutory or constitutional power
to adjudicate a claim. Kokkonen v. Guardian Life Ins.
Co., 511 U.S. 375, 377 (1994) (citations omitted);
Home Builders Ass'n of Miss., Inc. v. City of
Madison, 143 F.3d 1006, 1010 (5th Cir. 1998). Absent
jurisdiction conferred by statute or the Constitution, they
lack the power to adjudicate claims and must dismiss an
action if subject matter jurisdiction is lacking.
Id.; Stockman v. Federal Election
Comm'n, 138 F.3d 144, 151 (5th Cir. 1998) (citing
Veldhoen v. United States Coast Guard, 35 F.3d 222,
225 (5th Cir. 1994)). A federal court must presume that an
action lies outside its limited jurisdiction, and the burden
of establishing that the court has subject matter
jurisdiction to entertain an action rests with the party
asserting jurisdiction. Kokkonen, 511 U.S. at 377
(citations omitted). “[S]ubject-matter jurisdiction
cannot be created by waiver or consent.” Howery v.
Allstate Ins. Co., 243 F.3d 912, 919 (5th Cir. 2001).
courts may also exercise subject matter jurisdiction over a
civil action removed from a state court. Unless Congress
provides otherwise, a “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
defendants, to the district court of the United States for
the district and division embracing the place where such
action is pending.” 28 U.S.C. § 1441(a).
federal court has an independent duty, at any level of the
proceedings, to determine whether it properly has subject
matter jurisdiction over a case. Ruhgras AG v. Marathon
Oil Co., 526 U.S. 574, 583 (1999)
(“[S]ubject-matter delineations must be policed by the
courts on their own initiative even at the highest
level.”); McDonal v. Abbott Labs., 408 F.3d
177, 182 n.5 (5th Cir. 2005) (A “federal court may
raise subject matter jurisdiction sua
sponte.”) (citation omitted).
of citizenship exists between the parties only if each
plaintiff has a different citizenship from each defendant.
Getty Oil Corp. v. Insurance Co. of North America,
841 F.2d 1254, 1258 (5th Cir. 1988). Otherwise stated, 28
U.S.C. § 1332 requires complete diversity of
citizenship; that is, a district court cannot exercise
jurisdiction if any plaintiff shares the same citizenship as
any defendant. See Corfield v. Dallas Glen Hills LP,
355 F.3d 853, 857 (5th Cir. 2003) (citation omitted). Unique
has met its burden and established that the parties are
completely diverse, as Plaintiff and Defendant are citizens
of different states. Unique, however has not met the second
prong, that is, whether the amount in controversy exceeds the
jurisdictional threshold of $75, 000.
diversity purposes, the amount in controversy normally is
determined by the amount sought on the face of the
plaintiff's pleadings, so long as the plaintiff's
claim is made in good faith. 28 U.S.C. § 1446(c)(2);
Dart Cherokee Basin Operating Co., LLC v. Owens, 135
S.Ct. 547, 553 (2014) (citation omitted); St. Paul
Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 (5th
Cir. 1998); De Aguilar v. Boeing Co., 47 F.3d 1404,
1408 (5th Cir. 1995). Removal is thus proper if it is
“facially apparent” from the complaint that the
claim or claims asserted exceed the jurisdictional amount.
Allen v. R & H Oil & Gas Co., 63 F.3d 1326,
1335 (5th Cir.), reh'g denied, 70 F.3d 26 (5th
defendant's notice of removal need include only a
plausible allegation that the amount in controversy exceeds
the jurisdictional threshold.” Dart, 135 S.Ct.
at 554. Further, “[e]vidence establishing the amount is
required by § 1446(c)(2)(B) only when the plaintiff
contests, or the court questions, the defendant's
allegation.” Id. Although TruePoint does not
question the amount-in-controversy requirement, the court
does so because it has an independent duty at every stage of
the litigation to determine whether it has subject matter
jurisdiction over an action. Marathon Oil, 526 U.S.
at 583. Moreover, subject matter jurisdiction cannot be
created by consent of the parties. Howery, 243 F.3d
removed case, when the complaint or pleading does not state a
specific amount of damages and the allegations are challenged
by the plaintiff or questioned by the court, the defendant
must establish by a preponderance of the evidence that
“the amount in controversy exceeds the [$75, 000]
jurisdictional amount.” St. Paul Reinsurance,
134 F.3d at 1253. In such cases, “[t]he preponderance
burden forces the defendant to do more than point to a state
law that might allow the plaintiff to recover more
than what is pled. The defendant must produce evidence that
establishes that the actual amount of the claim will exceed
[the jurisdictional amount].” De Aguilar, 47
F.3d at 1412 (footnotes omitted). The test to be used by the
district court is “whether it is more likely than not
that the amount of the claim will exceed [the jurisdictional
amount].” St. Paul Reinsurance, 134 F.3d at
1253 n.13. As the Fifth Circuit has stated, “[t]he
district court must first examine the complaint to determine
whether it is ‘facially apparent' that the claims
exceed the jurisdictional amount. If it is not thus apparent,
the court may rely on ‘summary judgment-type'
evidence to ascertain the amount in controversy.”
Id. at 1253. If a defendant fails to establish the
requisite jurisdictional amount, the court must remand the
case to state court. If a defendant establishes that the
jurisdictional amount has been met, remand is appropriate
only if a plaintiff can establish “to a legal
certainty” that his recovery will not exceed the
jurisdictional threshold. In re 1994 Exxon Chemical
Fire, 558 F.3d 378, 387-88 (5th Cir. 2009).
doubts as to the propriety of the removal should be construed
strictly in favor of remand. Manguno v. Prudential Prop.
& Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).
“The burden of establishing subject matter jurisdiction
in federal court rests on the party seeking to invoke
it.” St. Paul Reinsurance, 134 F.3d at 1253
(footnote omitted). Accordingly, if a case is removed to
federal court, the defendant has the burden of establishing
subject matter jurisdiction; if a case is initially filed in
federal court, the burden rests with the plaintiff to
establish that the case “arises under” federal
law, or that diversity exists and that the amount in
controversy exceeds the jurisdictional threshold.