458 F.Supp.3d 591
W.D. Tex.2020Background
- Plaintiffs Robert and Joanne Medina sued Allstate in Texas state court for wind and water damage to their home, asserting breach of contract, unfair settlement practices, misrepresentation, prompt payment violations, and breach of good faith.
- Plaintiffs sought unspecified damages (compensatory, mental anguish, exemplary/punitive, treble under Texas Ins. Code), but their petition included a Rule 47-style statement limiting "only monetary relief of $75,000.00 or less."
- Allstate removed under diversity jurisdiction alleging the amount in controversy exceeds $75,000, then moved to partially dismiss fraud-related claims under Rule 9(b)/12(b)(6).
- Plaintiffs moved to remand for lack of subject-matter jurisdiction and submitted a post-removal stipulation agreeing not to seek or accept more than $75,000.
- The court examined whether the Rule 47 damage-limiting statement was made in good faith and whether Allstate met its burden to show by a preponderance of the evidence that the amount in controversy exceeded $75,000.
- The court concluded the pleading limitation was not made in good faith (per De Aguilar principles) but found Allstate failed to show by a preponderance that the jurisdictional amount was likely satisfied; remand was therefore granted and Allstate's motion to dismiss was denied as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal diversity jurisdiction exists (amount in controversy > $75,000) | Medina asserts damages limited to $75,000 or less (Rule 47 statement and post-removal stipulation) | Allstate contends complaint and damages categories make it facially apparent the case exceeds $75,000 | Remand granted: Allstate failed to prove by a preponderance that amount-in-controversy exceeded $75,000 |
| Validity / effect of plaintiffs' Rule 47 $75,000 limitation | The $75,000 limit shows plaintiff does not invoke federal jurisdiction | Allstate argues such a limitation can be manipulative and made in bad faith | Court: limitation was not made in good faith and is not dispositive, but remand still appropriate because defendant did not meet evidentiary burden |
| Whether defendant may rely on the face of the complaint to carry its burden | Plaintiffs say face of complaint is ambiguous and post-removal stipulation controls | Allstate says Fifth Circuit precedent allows relying on facially apparent claims to show amount in controversy | Court: defendant may sometimes rely on the complaint, but here the complaint was not facially sufficient to meet the preponderance standard |
| Effect of post-removal stipulation limiting recovery | Plaintiffs urge court to honor stipulation and remand | Allstate views post-removal stipulation with suspicion as possible after-the-fact tactic | Court: ambiguous pleadings are construed against removal; post-removal stipulation may clarify ambiguity and supports remand when defendant has not met its burden |
Key Cases Cited
- Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81 (U.S. 2014) (notice need only plausibly allege amount; when plaintiff contests amount, both sides submit proof under §1446)
- De Aguilar v. Boeing Co., 47 F.3d 1404 (5th Cir. 1995) (plaintiff's ad damnum not controlling if made in bad faith; defendant must prove amount-in-controversy by preponderance if plaintiff's claim is indeterminate)
- St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283 (U.S. 1938) (plaintiff's good-faith allegations generally control amount-in-controversy)
- Manguno v. Prudential Property & Casualty Ins. Co., 276 F.3d 720 (5th Cir. 2002) (defendant can show amount by facially apparent pleading or by summary-evidence)
- Robertson v. Exxon Mobil Corp., 814 F.3d 236 (5th Cir. 2015) (courts may make common-sense inferences from complaint when assessing amount-in-controversy)
- Mumfrey v. CVS Pharmacy, Inc., 719 F.3d 392 (5th Cir. 2013) (removal statute strictly construed and doubts resolved in favor of remand)
- Howery v. Allstate Ins. Co., 243 F.3d 912 (5th Cir. 2001) (party seeking federal forum bears burden of establishing jurisdiction)