Albright v. R. J. Reynolds Tobacco Co.

531 F.2d 132

• Court: Court of Appeals for the Third Circuit
• Decided: February 13, 1976
• Docket: Nos. 75-1606, 75-1607, 75-2188 and 75-2189
• Status: Published

Opinions

OPINION OF THE COURT

ALDISERT, Circuit Judge.

The principal question for decision is whether a diversity case, originated in state court and otherwise properly removed to federal court pursuant to 28 U.S.C. § 1441¹ must be remanded because of a prior determination in a parallel case, originated in federal court, that an identical claim did not satisfy the $10,000 federal jurisdictional threshold of 28 U.S.C. § 1332.² The district court denied plaintiff’s motion to remand, exercised federal jurisdiction, and dismissed the case as barred by the state statute of limitations. We affirm.

The litigation arises out of the claim of Charles Albright³ that R. J. Reynolds Tobacco Company is liable to him for cancer and related sicknesses allegedly caused by the company’s products. The controversy has been in litigation for more than 10 years; claims have been asserted in state and federal courts; and the matter has been in this court before. Albright v. R. J. Reynolds Tobacco Co., 350 F.Supp. 341 (W.D.Pa.1972), aff’d, 485 F.2d 678 (3d Cir. 1973), as modified, 3d Cir., No. 72-2105, Nov. 23, 1973, cert. denied, 416 U.S. 951, 94 S.Ct. 1961, 40 L.Ed.2d 301 (1974). Factual details are set forth in the district court opinion, supra, and need not be repeated here.

Plaintiff commenced three actions in 1965, two in the Pennsylvania state court and one in federal court. Because Pennsylvania practice did not permit joinder of tort and contract in one complaint, plaintiff filed two actions in the Court of Common Pleas of Allegheny County, Pennsylvania— one in trespass and one in assumpsit — by filing praecipes for writs of summons. Although plaintiff had the writs reissued once, in 1967, the writs were not served and plaintiff took no further action in the state court until 1974, seven years later. Shortly after initiating the state court action in 1965, plaintiff filed a complaint in the United States District Court for the Western District of Pennsylvania, alleging diversity of citizenship and an amount in controversy in excess of $10,000. He lost in federal court: the district court dismissed the complaint, inter alia, because the court was “convinced to a legal certainty that the evidentiary material submitted will not support a claim in excess of the jurisdictional minimum of $10,000.” 350 F.Supp. at 352. We affirmed on that ground, 485 F.2d 678 (3d Cir. 1973), as modified, 3d Cir., No. 72-2105, Nov. 23, 1973, and certiorari was denied on April 15, 1974, 416 U.S. 951, 94 S.Ct. 1961, 40 L.Ed.2d 301. See Nelson v. Keefer, 451 F.2d 289 (3d Cir. 1971). Thereafter plaintiff sought to rejuvenate his action in the state court.

On May 15, 1974, plaintiff had the original writs of 1965 reissued; they were served on defendant on May 22. Praecipes to reissue the writs alleged that the amount in controversy exceeded $10,000. Based on this allegation, and diversity of citizenship, defendant removed to the United States District Court for the Western District of Pennsylvania on June 20, 1974. Four days later plaintiff filed complaints in trespass and assumpsit in the state court, each complaint demanding judgment in excess of $3,000 only. It is undisputed that these complaints state the identical claim previously considered by the federal court and adjudged insufficient as a matter of law to meet the $10,000 jurisdictional requirement. Plaintiff asserts that his evidence is also the same. Appellant’s Brief at 8.

In the district court, the plaintiff moved to remand to the state court, arguing in essence that the district court was bound to be consistent: having previously determined as a matter of law that the identical claim did not satisfy the $10,000 jurisdictional requirement, the court could not now take jurisdiction of the case on removal. Furthermore, plaintiff argued, the complaints subsequently filed in the removed cases sought recovery in excess of $3,000 only. The defendant, for its part, opposed the motion to remand and moved for summary judgment on the grounds that the claim was barred' by the statute of limitations, prior accord and satisfaction, and res judicata.

The district court denied plaintiff’s motion to remand and dismissed the claim as barred by the statute of limitations without considering the other grounds of defendant’s motion. Plaintiff has appealed from the final judgment pursuant to 28 U.S.C. § 1291, but challenges only the denial of his motion to remand. Brief for Appellant at 2. A denial of a motion to remand is properly reviewable on appeal from a final judgment. American Fire & Casualty Co. v. Finn, 341 U.S. 6, 71 S.Ct. 534, 95 L.Ed. 702 (1951); C. Wright, Federal Courts § 41, at 147 (2d ed. 1970).

I.

We agree with the district court that St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845 (1938), properly controls the calculation of jurisdictional amount, and that the $10,-000 requirement was satisfied. It may seem anomalous that a court can say a claim is not worth $10,000 and then say it is. However, the determination in one instance was made in a case originated in federal court; in the other instance the determination was made in an action removed to federal court. St. Paul Mercury Indemnity makes clear the very different standards applicable. In an action originated in federal court, the court must strike a difficult balance where unliquidated damages are involved: a plaintiff’s frivolous claim cannot be decisive to establish the jurisdiction of the court, yet jurisdiction cannot be made to depend on the final outcome of the case. C. Wright, Federal Courts § 33, at 111 (2d ed. 1970). St. Paul Mercury Indemnity Co. explains why the determination of the amount in controversy in a removed case is not so difficult:

In a cause instituted in the federal court the plaintiff chooses his forum. He knows or should know whether his claim is within the statutory requirement as to amount. His good faith in choosing the federal forum is open to challenge not only by resort to the face of his complaint, but by the facts disclosed at trial, and if from either source it is clear that his claim never could have amounted to the sum necessary to give jurisdiction there is no injustice in dismissing the suit. . In such original actions it may also well be that plaintiff and defendant have colluded to confer jurisdiction by the method of the one claiming a fictitious amount and the other failing to deny the veracity of the averment of amount in controversy. Upon disclosure of that state of facts the court should dismiss.

A different situation is presented in the ease of a suit instituted in a state court and thence removed. There is a strong presumption that the plaintiff has not claimed a large amount in order to confer jurisdiction on a federal court or that the parties have colluded to that end. For if such were the purpose suit would not have been instituted in the first instance in the state but in the federal court. It is highly unlikely that the parties would pursue this roundabout and troublesome method to get into the federal court by removal when by the same device the suit could be instituted in that court. Moreover, the status of the case as disclosed by the plaintiff’s complaint is controlling in the case of a removal, since the defendant must file his petition before the time for answer⁴ or forever lose his right to remove. Of course, if, upon the face of the complaint, it is obvious that the suit cannot involve the necessary amount, removal will be futile and remand will follow. But the fact that it appears from the face of the complaint that the defendant has a valid defense, if asserted, to all or a portion of the claim, or the circumstance that the rulings of the district court after removal reduce the amount recoverable below the jurisdictional requirement, will not justify remand. And though, as here, the plaintiff after removal, by stipulation, by affidavit, or by amendment of his pleadings, reduces the claim below the requisite amount, this does not deprive the district court of jurisdiction.

303 U.S. at 290-92, 58 S.Ct. at 591 (original footnotes omitted).

We find this analysis clear and controlling. Here, it was the status of the case as disclosed by plaintiff’s state court praecipes that controlled; plaintiff did not file his complaints reducing the amount claimed until after removal. It is settled that “[gjenerally the right of removal is decided by the pleadings, viewed as of the time when the petition for removal is filed”, C. Wright, Federal Courts § 38, at 134 (2d ed. 1970) (citing cases), and that “events occurring subsequent to removal which reduce the amount recoverable, whether beyond the plaintiff’s control or the result of his volition, do not oust the district court’s jurisdiction once it has attached.” St. Paul Mercury Indemnity Co. v. Red Cab Co., supra, 303 U.S. at 293, 58 S.Ct. at 592. 1 W. Barron & A. Holtzoff, Federal Practice and Procedure § 101, at 464 (Wright ed. 1961) (citing cases). A fortiori, the filing of a pleading reducing the amount claimed could not oust the district court of jurisdiction.

It is precisely at this point where we and Judge Hunter part company. He does not agree with what we consider a clear statement in St. Paul Mercury Indemnity Co. Instead, characterizing it as ambiguous dictum (Dissenting Op. at 139) he expresses the view: “In sum, I believe that the law is that in a removal case, just as in an original case, jurisdiction is to be determined as of the time the action first reaches the district court, but that the court can and indeed must reassess jurisdiction as the case proceeds.” (Dissenting Op. at 140.)

Considering the Supreme Court’s stated rationale, 303 U.S. at 290-92, 58 S.Ct. 586, heretofore set forth at length, we find the rule of the controlling case neither ambiguous⁵ nor dictum.⁶

The unusual aspect of this case is that the same judge⁷ had previously determined as a matter of law that the identical claim did not satisfy the $10,000 requirement. Plaintiff argues that the district judge in considering the removed cases was obliged to take judicial notice of his prior determination of the companion federal case. While this argument has certain visceral appeal, it cannot withstand legal scrutiny. In unliquidated damage cases, the determination of the amount in controversy is necessarily an imprecise calculation. It does not involve an objective fact, it involves a legal estimation, drawing on available evidence and with consideration for the procedural posture of the case. The standards for making the determination in an action originated in federal court are imprecise and difficult, Nelson v. Keefer, supra. But as St. Paul Mercury Indemnity Co. indicates, it is not unreasonable to apply different, simpler standards to a removed case: there is little danger of a frivolously high claim to invoke improperly federal jurisdiction, and there is a need for certainty to allow the defendant to decide promptly whether to remove. Different standards may compel different results.

Plaintiff asks, in effect, that we engraft onto the St. Paul Mercury Indemnity Co. rule an exception to cover tne particular facts of this case. We decline to do so for several reasons. First, the logic of that case is compelling and, even if it were not, we are not free to disagree with it. Second, plaintiff has suggested no workable formulation of the exception he urges and no principle upon which such an exception could rest. Here the prior determination of insufficient amount in controversy was by the same judge. Would that be a necessary element of the exception we are asked to announce? Or would a prior decision of the same court suffice? Would the two claims have to be identical? Or would substantial similarity suffice? “[T]he main constituent of the judicial process is precisely that it must be genuinely principled, resting with respect to every step that is involved in reaching judgment on analysis and reasons quite transcending the immediate result that is achieved.” Wechsler, Toward Neutral Principles of Constitutional Law, 73 Harv.L.Rev. 1, 15 (1959). Plaintiff has exposed no principle lurking here upon which to rest the exception he urges, and we decline to announce a rule of law that would be sui generis in application.

II.

A third reason we decline to announce the exception urged is that we are not moved by the equities of plaintiff’s case: the claim was time-barred under Pennsylvania law prior to removal. Plaintiff concedes as much and, in fact, has not appealed the district court’s judgment that the claim is barred by the statute of limitations. The only real question is whether the claim will be dismissed as time-barred by the federal court or the state court. Not only are we reluctant to generate the expenditure of additional state judicial resources by a remand under such circumstances, but we see no purpose in it. In a diversity case, a federal court is bound to apply the same statute of limitations that the coordinate state court would apply. Guaranty Trust Co. v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945); see Day and Zimmerman, Inc. v. Challoner, 423 U.S. 3, 96 S.Ct. 167, 46 L.Ed.2d 3, 44 U.S. L.W. 3262 (1975) (per curiam).

Plaintiff’s original praecipes were filed on August 24, 1965. Under Pennsylvania law, plaintiff was obliged to serve the writs of summons within 30 days, Pa.R. Civ.P. 1009(a), or seek reissuance of the writs within the period of the applicable statute of limitations. Yefko v. Ochs, 437 Pa. 233, 263 A.2d 416 (1970); Zarlinsky v. Laudenslager, 402 Pa. 290, 167 A.2d 317 (1961). Two years is the applicable limitations period in trespass, 12 P.S. § 34; four years is the applicable period in assumpsit, 12A P.S. § 2-725. Plaintiff was obviously aware of the necessity for seeking reissuance of the writs because he did so on May 22, 1967. This kept his claim alive for a further period measured by the applicable statute of limitations. Hence, he had until May 22,1969, to reissue the writ in trespass, and until May 22, 1971, to reissue the writ in assumpsit. He did not reissue either writ until May 15, 1974. Therefore, the claims were time-barred under Pennsylvania law, and would have been dismissed by a Pennsylvania court. A federal court in a removed diversity case is bound to do the same. Witherow v. Firestone Tire & Rubber Co., 530 F.2d 160 (3d Cir., No. 75-1514, filed Jan. 26, 1976).

We conclude: (1) that the $10,000 requirement of 28 U.S.C. § 1332 was satisfied as of the date the petition for removal was filed — the district court, therefore, properly entertained jurisdiction and properly denied plaintiff’s motion to remand; and (2) that, having thus taken cognizance of the case, the district court properly granted defendant’s motion to dismiss the claim as barred by Pennsylvania’s statute of limitations.

III.

It remains only to consider plaintiff’s argument, apparently premised on due process, that the district court’s decision deprives him of his right to trial in the state court. This argument is without merit. Characterizing the writs of summons as “protective” writs (Appellant’s Brief at 7) hardly suffices to convince us that plaintiff’s action was not time-barred. The Pennsylvania statute of limitations was not tolled by the filing or during the pendency of the claim in federal court. McSparren v. Weist, 402 F.2d 867, 876 (3d Cir. 1968), cert. denied, 395 U.S. 903, 89 S.Ct. 1739, 23 L.Ed.2d 217 (1969); Overfield v. Pennroad Corp., 146 F.2d 889, 898 (3d Cir. 1944). Pennsylvania has a very simple procedure whereby a litigant in these circumstances can protect his state court action indefinitely: timely reissuance of timely issued writs. Plaintiff was obviously aware of this procedure when he procured reissuance in 1967, but, thereafter, he neglected the procedure and his claim lapsed. A statute of limitations inherently deprives a tardy litigant of any right to trial he might have had. On this point, we wholly agree with the district court’s observation:

The requirements of reasonable procedural rules and the substantive law of statutes of limitations which bar commencement of an action after a stated period of time do not infringe upon the requirement of due process. It would appear that the defendant has also certain rights, including the right, at some stage, to be free from further litigation.

The judgment of the district court denying the motion to remand and dismissing the claim as barred by the statute of limitations will be affirmed.

1 . § 1441. Actions removable generally

(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.

(b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought. . . .

2 . § 1332. Diversity of citizenship; amount in controversy;

(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs, and is between—

(1) citizens of different States;

(2) citizens of a State, and foreign states or citizens or subjects thereof; and

(3) citizens of different States and in which foreign states or citizens or subjects thereof are additional parties. . . .

3 . Charles Albright died in 1965 and his widow was substituted as plaintiff. Mrs. Albright died in 1973 and Mr. Albright’s son, Charles M. Albright, was substituted as plaintiff. We shall refer simply to the plaintiff.

4 . The time for filing the removal petition has been changed. Defendant now has 30 days from receipt of the initial pleading, or from service of the summons if the initial pleading is filed and not served. Alternatively, if “the case stated by the initial pleading is not removable”, defendant has 30 days from receipt of the legal paper “from which it may first be ascertained that the case is one which is or has become removable.” 28 U.S.C. § 1446(b). See generally P. Bator, P. Mishkin, D. Shapiro & H. Wechsler, Hart & Wechsler’s The Federal Courts and the Federal System 1203-04 (2d ed. 1973).

5 . “If the language be clear it is conclusive. There can be no construction if there is nothing to construe.” United States v. Hartwell, 73 U.S. (6 Wall.) 385, 396, 18 L.Ed. 830 (1868).

6 . Although what is or is not dictum may, like beauty, be in the eye of the beholder, see Comment, Dictum Revisited, 4 Stan.L.Rev. 509 (1952), Rupert Cross offers a formulation that should not be too controversial: “[A]n obiter dictum is a ‘statement of law in the opinion which could not logically be a major premise of the selected facts of the decision.’ ” R. Cross, Precedent in English Law 80 (2d ed. 1968).

7 . Judge Weber heard the original federal court case. 350 F.Supp. 341 (W.D.Pa.1972). Rule 35(E) of the Rules of Court for the Western District of Pennsylvania provides that related cases shall be assigned to the same judge. Accordingly, Judge Weber also heard the instant case.