Ard v. Transcontinental Gas Pipe Line Corp.

138 F.3d 596, 1998 WL 153543
CourtCourt of Appeals for the Fifth Circuit
DecidedApril 20, 1998
DocketNo. 97-30148
StatusPublished
Cited by21 cases

This text of 138 F.3d 596 (Ard v. Transcontinental Gas Pipe Line Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ard v. Transcontinental Gas Pipe Line Corp., 138 F.3d 596, 1998 WL 153543 (5th Cir. 1998).

Opinion

W. EUGENE DAVIS, Circuit Judge:

Geraldine Ard and approximately 350 other plaintiffs challenge the district court’s order refusing to remand this case to the state court.’ The district court determined that the § 1332 jurisdictional amount was met by aggregating the punitive damage claims. We reverse and remand for further proceedings consistent with this opinion.

I.

Geraldine Ard initially filed suit against Transcontinental Gas Pipe Line Corporation (Transco) in Louisiana state court for damages she suffered as a result of a natural gas pipeline explosion. The natural gas pipeline was owned and operated by Transco in St. Helena Parish. Approximately 350 individuals, including several minors, permissively joined Ard’s suit as plaintiffs. The Plaintiffs sought both compensatory and punitive damages.' The Plaintiffs submitted affidavits to the state court executed by each individual plaintiff which stipulated that each of then-claims was less than $50,000, and that they [600]*600would not attempt to recover an amount in excess of $50,000. In an ex parte order, the state court accepted the stipulations and directed that they were considered binding on each plaintiff.

Transco removed the case to federal district court, asserting jurisdiction based on diversity of citizenship under 28 U.S.C. § 1332. The Plaintiffs moved to remand the case to state court, alleging that the jurisdictional amount was not satisfied due to the state court “stipulations” regarding damages. Transco argued that the punitive damages of all plaintiffs could, be aggregated for purposes of determining the amount in controversy under § 1332. In the alternative, Transco argued that the Plaintiffs’ affidavits limiting their recovery were legally insufficient, or in the further alternative, that at least one plaintiff’s claim exceeded $50,000 and the court was able to exercise supplemental jurisdiction over the remaining claims.

The district court denied the Plaintiffs’ Motion to Remand, on grounds that the punitive damage claims of all Plaintiffs could be aggregated for purposes of determining the amount in controversy. The district court concluded that the aggregated amount exceeded the $50,000 jurisdictional requirement.1 The district court then certified its interlocutory order denying the motion to remand as suitable for appeal under 28 U.S.C. § 1292(b). On February 12, 1997, this court granted the Plaintiffs’ Petition for Permission to Appeal the interlocutory order.

II.

This court’s jurisdiction derives from the district court’s certification of its interlocutory order denying the motion to remand as suitable for appeal under 28 U.S.C. § 1292(b). Our jurisdiction is therefore limited to the review of the district court’s determination that the plaintiffs’ punitive damage claims can be aggregated for the purpose of determining jurisdictional amount.

A district court’s denial of a motion to remand is reviewed de novo. Vasquez v. Alto Bonito Gravel Plant Corp., 56 F.3d 689, 692 (5th Cir.1995).

Although the Supreme Court has never considered whether punitive damage claims from separate plaintiffs may be aggregated for determinations of jurisdictional amount, it has considered whether claims in general can be aggregated. ¿>ee l4A Wright, Miller and Cooper, Federal Practice and Procedure § 3705 (1985). In Snyder v. Harris, the Court considered “whether separate and distinct claims presented by and for various claimants in a class action may be added together to provide the $10,000 jurisdictional amount in controversy.” 394 U.S. 332, 333, 89 S.Ct. 1053, 1055, 22 L.Ed.2d 319 (1969). The Snyder Court upheld the settled rule that “the separate and distinct claims of two or more plaintiffs cannot be aggregated in order to satisfy the jurisdictional amount requirement.” Id. at 335, 89 S.Ct. at 1056. The Court reaffirmed this principle in later cases. See, e.g., Zahn v. International Paper Co., 414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973) (reaffirming Snyder and expanding the nonaggregation rule such that each plaintiff must independently reach the jurisdictional amount).2

The circuits have not taken a consistent position on this question of whether the punitive damages claimed by multiple plaintiffs can be aggregated, and the entire amount allocated to each plaintiff, for the purpose of determining jurisdictional amount. The Second Circuit held that punitives may not be aggregated because “the class members’ claims are ‘separate and distinct.’ ” Gilman v. BHC Securities, Inc., 104 F.3d 1418, 1430 (2d Cir.1997)). The Seventh Circuit followed the same reasoning in Anthony v. Security [601]*601Pacific Financial Services, 75 F.3d 311 (7th Cir.1996). The panel concluded that “[t]he plaintiffs in this case would have to recover on average at least $47,118.36 in punitive damages to satisfy 28 U.S.C. § 1332.” Id. at 315. It is clear, therefore, that the panel rejected the possibility of aggregating the plaintiffs’ punitive damage claims in order to satisfy the jurisdictional amount requirement.3

The Eleventh Circuit reached the opposite result in Tapscott v. MS Dealer Service Corp. 77 F.3d 1353 (11th Cir.1996). In Tapscott, it held that due to the nature of punitive damages under Alabama law and the particular facts at issue, punitive damages were properly aggregated. Id. at 1358-59.

Two panels in our own circuit took different approaches to deciding whether to aggregate punitive damages and reached different results. In Lindsey v. Alabama Telephone Co., the plaintiffs brought a class action under Alabama law against two telephone companies. 576 F.2d 593, 593 (5th Cir.1978). The plaintiff class alleged that the defendants wrongfully collected deposits by threatening to discontinue service, wrongfully discontinued services, and misrepresented their authority to charge deposits. Id. at 593. The panel’s jurisdictional analysis began with a recitation of the Supreme Court rule that the claims of class plaintiffs may not be aggregated to satisfy the jurisdictional amount. Id. at 594 (citing Snyder v. Harris, 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969)).

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138 F.3d 596, 1998 WL 153543, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ard-v-transcontinental-gas-pipe-line-corp-ca5-1998.