United States District Court, D. South Carolina, Florence Division
James River Insurance Company, individually and a/a/o The Caravelle Resort Owners Association, Inc., Plaintiff,
William Kramer & Associates, LLC, Defendant.
Bryan Harwell United States District Judge
matter is before the Court on Plaintiff's motion to
remand. See ECF No. 13. The Court grants the motion
for the reasons herein.
commenced this action by filing a complaint in state court on
May 4, 2017. See Complaint [ECF No. 1-1]. In its
complaint, Plaintiff alleges it and three other companies
insured property located in Myrtle Beach, South Carolina.
Id. at ¶¶ 7, 9-10. Two companies provided
primary insurance of $10 million, while Plaintiff and another
company provided excess insurance of approximately $34
million. Id. at ¶¶ 9-10. The Myrtle Beach
property sustained damage from Hurricane Matthew in October
2016, and Defendant was hired to investigate and administer
the ensuing insurance claims. Id. at ¶¶ 8,
12, 14. Ultimately, the $10 million primary coverage was
exhausted, and Plaintiff and the other excess insurer agreed
to pay approximately $13.5 million in excess
coverage-consequently, Plaintiff paid over $6.7 million in
excess coverage. Id. at ¶¶ 1, 17.
Plaintiff alleges that it is “entitled to unfettered
access to [Defendant]'s adjustment file, ” but that
Defendant “refuses to provide [Plaintiff] with access
to its file, ” “presumably to conceal how the
primary policy limits of $10, 000, 000 were
squandered.” Id. at ¶¶ 1, 19.
Plaintiff asserts claims for injunctive relief and breach of
contract, and it seeks as relief “[a]n injunction
requiring [Defendant] to produce its entire file for the
Hurricane Matthew Claim[.]” Id. at p. 8.
Besides this injunctive relief, Plaintiff also seeks
“all other actual, consequential, incidental, and
compensatory damages to which [Plaintiff] is entitled.”
removed the action to this Court asserting federal diversity
jurisdiction was available under 28 U.S.C. §
1332. See ECF No. 1. Plaintiff filed
the instant motion to remand, and Defendant filed a response
in opposition. See ECF Nos. 13 & 18.
Additionally, the Court entered a Sua Sponte Text Order to
Show Cause stating:
Defendant bases federal jurisdiction upon diversity
jurisdiction pursuant to § 1332. However, the Plaintiff
did not specify any monetary amount of damages or clearly
allege the jurisdictional amount in the Complaint, and the
Defendant's notice of removal fails to allege facts
adequate to establish that the amount in controversy exceeds
the jurisdictional amount. Additionally, Plaintiff has filed
a motion to remand arguing the amount in controversy is not
met. Thus, the amount in controversy is unclear, and this
Court may lack diversity jurisdiction.
ECF No. 16. The parties filed responses to the Court's
show cause order. See ECF Nos. 18 & 20.
argues the Court must remand this case because the amount in
controversy is less than $75, 000, and therefore diversity
jurisdiction is lacking. The Court agrees.
party seeking to remove a case to federal court bears the
burden of establishing federal subject matter jurisdiction.
Mulcahey v. Columbia Organic Chemicals Co., 29 F.3d
148, 151 (4th Cir. 1994). Thus, Defendant bears the burden to
establish federal jurisdiction is proper in this case.
“Because removal jurisdiction raises significant
federalism concerns, ” the Court “must strictly
construe removal jurisdiction. If federal jurisdiction is
doubtful, a remand is necessary.” Id.
(internal citation omitted).
court defendants may remove a civil action to federal
district court if it has original subject matter jurisdiction
over the action. 28 U.S.C. § 1441(a). District courts
have original jurisdiction over actions between citizens of
different states in which the amount in controversy exceeds
$75, 000, exclusive of interest and costs. 28 U.S.C. §
1332(a)(1). “The removability of a case ‘depends
upon the state of the pleadings and the record at the time of
the application for removal.'” Francis v.
Allstate Ins. Co., 709 F.3d 362, 367 (4th Cir. 2013)
(quoting Alabama Great S. Ry. Co. v. Thompson, 200
U.S. 206, 216 (1906)). “If diversity of citizenship,
under 28 U.S.C. § 1332(a), provides the grounds for
removal, then ‘the sum demanded in good faith in the
initial pleading shall be deemed to be the amount in
controversy.'” Id. (quoting 28 U.S.C.
§ 1446(c)(2)). “If a complaint does not allege a
specific amount of damages, the removing defendant must prove
by a preponderance of the evidence that the amount in
controversy exceeds $75, 000.” Id. (internal
quotation marks and alteration omitted). “[A] claim not
measurable in ‘dollars and cents' fails to meet the
jurisdictional test of amount in controversy.”
McGaw v. Farrow, 472 F.2d 952, 954 (4th Cir. 1973).
plaintiff seeks injunctive relief, “‘the amount
in controversy is measured by the value of the object of the
litigation.'” Francis, 709 F.3d at 367
(quoting Hunt v. Washington State Apple Advert.
Comm'n, 432 U.S. 333, 347 (1977)); see also JTH
Tax, Inc. v. Frashier, 624 F.3d 635, 639 (4th Cir. 2010)
(“[R]equests for injunctive relief must be valued in
determining whether the plaintiff has alleged a sufficient
amount in controversy.”). The object may be valued from
either party's perspective-i.e., what the plaintiff
stands to gain, or what the defendant stands to lose. See
Dixon v. Edwards, 290 F.3d 699, 710 (4th Cir. 2002);
Gov't Emp. Ins. Co. v. Lally, 327 F.2d 568, 569
(4th Cir. 1964). In other words, the Court must consider the
monetary effect that a judgment would have on either party to
the litigation. Dixon, 290 F.3d at 710. The Fourth
Circuit has explained that courts “ascertain the value
of an injunction for amount in controversy purposes by
reference to the larger of two figures: the injunction's
worth to the plaintiff or its cost to the defendant.”
JTH Tax, 624 F.3d at 639.
the object of the litigation is Defendant's claims
adjustment file-more specifically, an injunction requiring
Defendant to produce this file. Defendant has not carried its
burden to prove the value of the file exceeds $75, 000.
Whether the file will lead to unfavorable evidence of
Defendant's adjustment practices is purely speculative at
this time, and if such evidence existed, it would be the
basis for a subsequent, different lawsuit. The only
monetary benefit or detriment that a judgment (i.e., an
injunction) in this lawsuit will have is the cost of
producing the file. See DiTolla v. Doral Dental
IPA of New York, 469 F.3d 271, 276 (2d Cir. 2006)
(observing that when “the remedy sought is equitable,
and not legal, a monetary value cannot be easily
assigned”). The benefit to Plaintiff of having the file
is purely speculative at this time because its contents are
unknown to both Plaintiff and the Court, and the cost to
Defendant of producing it (i.e., sending the original or
photocopying/scanning a copy) is negligible. See Grubb v.
Jos. A. Bank Clothiers, Inc., 2005 WL 1378721, at *9
(S.D. W.Va. June 2, 2005) (“In the case of injunctive
relief, this burden requires the defendant to quantify the
cost of compliance.”). If the Court granted the
requested injunctive relief, Plaintiff would simply recover
the adjustment file, and Defendant would simply bear the cost
of producing it. In short, there is nothing that suggests how
much Plaintiff would gain and Defendant would lose as a
result of the requested injunctive relief. See,
e.g., Macken ex rel. Macken v. Jensen, 333 F.3d
797, 799-801 (7th Cir. 2003) (holding the plaintiff's
demand for “an accounting and unredacted copies of the
trust documents” did not satisfy the
amount-controversy-requirement, and concluding that
“[n]ot until it becomes evident that the information in
these trust instruments is worth more than $75, 000 should
anyone knock on the federal court's door”);
DiTolla, 469 F.3d at 274-77 (citing Macken;
finding that although the plaintiff alleged in his complaint
that the defendants “‘fraudulently
bilked'” a healthcare reimbursement pool, it was
“mere speculation” as to whether damages would
exceed the jurisdictional requirement; and upholding the
district court's conclusion that “because [the
plaintiff] sought only information, and the value of that
information could not be estimated, [the defendants] had
failed to meet their burden of establishing federal
jurisdiction”); Sierp v. DeGreen Partners LP,
2015 WL 464338, at *3 (D. Ariz. Feb. 4, 2015)
(“Plaintiffs simply seek to inspect [the
defendants'] records. Although they may hope or even
expect to eventually bring additional claims for concrete
sums, the [c]ourt cannot say with any certainty that they
will do so.”); Ditolla v. Doral Dental IPA of New
York, LLC, 2006 WL 5618179, at *3 (E.D.N.Y. Apr. 21,
2006) (“Plaintiff in the instant case, like the
plaintiff in Macken, seeks information only. Because
Plaintiff has not, and apparently cannot estimate the value
of this information, Defendant fails to meet its burden of
establishing jurisdiction.”); Doe v. Montgomery
Cty., No. 8:01-cv-02267-DKC, at ECF No. 22 pp. 9-10 (D.
Md. Mar. 19, 2002) (finding an investigative file sought from
the defendants was the object of the litigation and did not
satisfy the amount-in-controversy requirement),
aff'd, 47 F. App'x 260, 261 (4th Cir. 2002).
attempts to prove the amount in controversy is satisfied by
relying on Plaintiff's allegations that the $10 million
primary coverage was “squandered, ” and that
Plaintiff had to pay over $6.7 million in excess
coverage.Compare Def.'s Resp. in Opp.
[ECF No. 18] at pp. 1-3, 7-8, with Complaint at
¶¶ 1, 17. However, these allegations simply explain
the reason why Plaintiff wants Defendant's adjustment
file-to determine whether such “squandering” even
happened. Significantly, Plaintiff has not alleged
that Defendant breached the contract by misadjusting the
Hurricane Matthew claim; instead, Plaintiff simply alleges
that Defendant's breach is its refusal to provide access
to the adjustment file, and that ...