Poore v. American-Amicable Life Insurance Co. of Texas

125 F. Supp. 2d 1378, 2000 U.S. Dist. LEXIS 18816, 2000 WL 1901632
CourtDistrict Court, S.D. Georgia
DecidedDecember 20, 2000
DocketCV 498-259
StatusPublished
Cited by1 cases

This text of 125 F. Supp. 2d 1378 (Poore v. American-Amicable Life Insurance Co. of Texas) is published on Counsel Stack Legal Research, covering District Court, S.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Poore v. American-Amicable Life Insurance Co. of Texas, 125 F. Supp. 2d 1378, 2000 U.S. Dist. LEXIS 18816, 2000 WL 1901632 (S.D. Ga. 2000).

Opinion

ORDER

NANGLE, District Judge.

On September 6, 2000, this Court ordered the parties in this case to brief the issue of whether this Court had subject matter jurisdiction at the time of removal. Order dated September 6, 2000. (Doc. 28). After carefully reviewing the parties responses (Does. 29, 31, 36, 37, and 38), all relevant case law and scholarship on this issue, this Court concludes that it had subject matter jurisdiction at the time of removal. Therefore, this Court’s remand order dated July 21, 1999 (Doc. 24) is rescinded and this matter shall proceed in this Court.

I. BACKGROUND

The above-captioned case involves an obvious example of forum shopping on behalf of the plaintiffs. The plaintiffs filed this case in Liberty County Superior Court on October 19, 1998. Def.’s Notice Removal, Ex. A., Compl. at 1 (Doc. 1). The suit is a purported nationwide class action concerning defendant’s allegedly fraudulent scheme of selling and marketing life insurance policies with annuity riders. Specifically, plaintiffs allege that defendant made these sales without disclosing the true na *1379 ture of the' products or the risks associated with them. Mem. Law Supp. Pis.’ Mot. Remand at 1. (Doc. 14). Plaintiffs requested compensatory and punitive damages, rescission of the policies, restitution, and injunctive relief in their original complaint, but asserted that this relief would amount to less than $75,000 per class member. Def.’s Notice Removal, Ex. A., Compl. at 2.

Defendant filed its notice of removal on November 12, 1998, alleging diversity jurisdiction as the basis of removal. Id. at 3. On November 25, 1998, plaintiffs filed a motion for leave to amend their complaint, which this Court granted on December 7, 1998. Order dated December 7, 1998 (Doc. 11). Clearly in an attempt to avoid litigating this case in federal court, the plaintiffs dropped the claims for punitive damages and injunctive relief in the amended complaint. Am. Class Action Compl. at 15. (Doc. 12). On December 15, 1998, the plaintiffs moved to remand this action to Georgia state court. Pis.’ Mot. Remand. (Doc. 13). This Court granted that motion and ordered the case remanded to state court on July 21, 1999. Order dated July 21,1999 (Doc. 24).

Defendants appealed the remand order to the United States Court of Appeals for the Eleventh Circuit. On July 20, 2000, the Eleventh Circuit held that subject matter jurisdiction is to be determined as of the time of removal and remanded the case to this Court to determine “whether [this Court] had subject matter jurisdiction at the time of removal.” Poore v. American-Amicable Life Ins. Co. of Tex., 218 F.3d 1287, 1292 (11th Cir.2000).

II. ARGUMENTS

28 U.S.C. § 1332(a) 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 $75,000, exclusive of interest and costs, and is between — (1) citizens of different States .... ” Plaintiffs are citizens of Georgia and defendant is a citizen of Texas and thus, the parties are completely diverse. Def.’s Notice of Removal at 2; Compl. at 2-3. At issue, however, is whether or not the amount in controversy exceeds $75,000, exclusive of interest and costs.

Plaintiffs contend that this Court lacked subject matter jurisdiction at the time of removal because no plaintiff alleges damages in excess of $75,000, exclusive of costs and interests. Pis.’ Mem. Law Regarding Subject Matter Jurisdiction at 3-10 (Doc. 29). Therefore, according to plaintiffs’ argument, no plaintiff meets the amount in controversy requirement of diversity jurisdiction, 28 U.S.C. § 1332, and so the entire case should be remanded to state court.

Defendants assert that at least the named plaintiff Bias meets the amount in controversy requirement necessary for this Court to have subject matter jurisdiction. Def.’s Mem. Law Regarding Subject Matter Jurisdiction at 3-9 (Doc. 31). Defendant further contends that the Court may exercise supplemental jurisdiction over the remaining class members who do not meet the amount in controversy requirement and adjudicate the entire ease. Id. at 9-12.

The question presented is one of first impression in this Circuit and requires this Court to decide whether the Judicial Improvements Act of 1990, Pub.L. 101-650, Title III, § 310(a), 104 Stat. 5113 (codified as 28 U.S.C. § 1367), legislatively overrules the Supreme Court’s holding in Zahn v. International Paper Co., 414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973). 1 The *1380 Court concludes that it does. By resolving this issue, the Court hopes to avoid the “most wasteful type of litigation — fights over jurisdiction.” Thomas C. Arthur and Richard D. Freer, Close Enough for Government Work: What Happens When Congress Doesn’t Do Its Job, 40 EmoRY L.J. 1007,1007 (1991). 2

III. ANALYSIS

A. Diversity Jurisdiction in Class Actions

The Supreme Court has sent conflicting signals regarding invocation of diversity of citizenship jurisdiction in a class action. In Supreme Tribe of Ben-Hur v. Cauble, the Supreme Court held that the citizenship of the representative and not the class members is the only relevant citizenship for determining diversity. 255 U.S. 356, 365-67, 41 S.Ct. 338, 65 L.Ed. 673 (1921). In Zahn v. International Paper Co., however, the Supreme Court held that every member of the class must satisfy the amount in controversy requirement in a diversity case. 414 U.S. at 301, 94 S.Ct. 505.

Thus, prior to the amendment of the supplemental jurisdiction statute, 28 U.S.C. § 1367, in 1990, the law of diversity jurisdiction in class actions suggested that the first prong of diversity jurisdiction— complete diversify of citizenship — was not necessary for every class member, but the second prong — the amount in controversy requirement — was necessary for every class member.

In 1990, Congress enacted § 1367, which provides:

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Bluebook (online)
125 F. Supp. 2d 1378, 2000 U.S. Dist. LEXIS 18816, 2000 WL 1901632, Counsel Stack Legal Research, https://law.counselstack.com/opinion/poore-v-american-amicable-life-insurance-co-of-texas-gasd-2000.