Kephart v. Rotech Healthcare Inc.
2:15-cv-00859
D. Nev.Dec 7, 2015Background
- Kepharts sue Rotech Healthcare, Inc. and Principal Medical Equipment d/b/a VitalCare in Nevada state court for negligence and product-liability-based claims arising from an oxygen tank falling on John Kephart.
- Rotech is a Delaware corporation with principal place of business in Florida; Principal Medical Equipment is a Florida corporation with principal place of business in Florida.
- A Doe VitalCare employee allegedly delivered the tank in April 2013 and the tank allegedly caused chemical burns to John and Thelma Kephart.
- Defendants removed to federal court asserting diversity of citizenship and an amount in controversy exceeding $75,000.
- Amended complaint seeks general, special, compensatory, punitive damages, medical costs, future medical costs, and attorneys’ fees; defendants burdened to show jurisdictional amount.
- Court remands to Nevada state court, finding diversity exists but the amount in controversy is not proven to exceed $75,000.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether complete diversity exists between the parties | Kepharts contend Rotech and Principal are Nevada domiciliaries | Rotech and Principal are citizens of Florida, not Nevada | Diversity satisfied; Nevada not domicile for these defendants |
| Whether the amount in controversy exceeds $75,000 | Damages exceed $75,000 in total | Plaintiffs’ allegations suffice to reach threshold | Remand required; defendants failed to prove amount exceeds $75,000 |
| Whether the Doe VitalCare employee destroys diversity | Doe resides in Nevada, potentially destroying diversity | Citizenship of fictitious defendants disregarded for diversity purposes | Doe does not destroy diversity; fictitious defendants disregarded |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375 (U.S. 1994) (establishes subject-matter jurisdiction presumption and sua sponte remand authority)
- Gaus v. Miles, 980 F.2d 564 (9th Cir. 1992) (burden and procedure for removal jurisdiction challenges)
- St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (U.S. 1938) (preponderance standard for amount in controversy in removal cases)
- Valdez v. Allstate Ins. Co., 372 F.3d 1115 (9th Cir. 2004) (applies preponderance standard to amount in controversy; supports complainer burden)
- Sanchez v. Monumental Life Ins. Co., 102 F.3d 395 (9th Cir. 1996) (confirms that conclusory allegations do not establish jurisdictional amount)
- Cowan v. Central Reserve Life of North America Ins. Co., F. Supp. 2d 64 (D. Nev. 1989) (affirms careful consideration of removal jurisdiction and thresholds)