United States District Court, E.D. Missouri, Eastern Division
ANDREW L. SCHLAFLY, Plaintiff,
EAGLE FORUM, et al, Defendants.
MEMORANDUM AND ORDER
A. ROSS UNITED STATES DISTRICT JUDGE.
matter is before the Court on Plaintiff Andrew Schlafly's
motion to remand (Doc. 27). Defendant Eagle Forum opposes the
motion. The matter is fully briefed and ready for
disposition. For the reasons set forth below, the Court will
deny the motion.
filed this action seeking injunctive and declaratory relief
in St. Louis County on January 19, 2017. At issue in the
complaint is a Board meeting called in alleged
violation of Eagle Forum's Bylaws with the purpose of
removing three Board members, including Plaintiff. (Doc. 8,
Complaint ("Compl."), at ¶ 9). Plaintiff seeks
a court order issuing a temporary restraining order and
preliminary injunction enjoining the individual Defendants
from taking any action not authorized by the Bylaws, and
specifically enjoining the individual Defendants from holding
or participating in a special meeting on January 28, 2017, or
at any time other than the annual meeting of membership if
the meeting is for the purpose of removing a Board member.
Id. at ¶¶ 23-51). He also seeks a
declaratory judgment providing that the planned special
meeting scheduled for January 28, 2017, is (now was) in
violation of the Bylaws and is ultra vires, and that the
individual Defendants are acting in bad faith. (Id.
at ¶¶ 52-57).
January 25, 2017, Defendants removed the action to this Court
on the basis of diversity jurisdiction, 28 U.S.C. §
1332. In support, Defendants claim that the parties are
diverse in citizenship and that the object of the litigation,
the value of Eagle Forum, exceeds $75, 000. (Doc. 1 at
¶¶ 10-12). Plaintiff moves to remand the case to
state court, arguing that the value of the relief sought by
Plaintiff is significantly less than $75, 000 because he does
not seek monetary damages, nor does he seek the assets of
Eagle Forum. (Doc. 27-1 at 3-4).
action is removable to federal court if the claims originally
could have been filed in federal court. 28 U.S.C. §
1441; In re Prempro Products Liability Litigation,
591 F.3d 613, 619 (8th Cir. 2010). The defendant bears the
burden of establishing federal jurisdiction by a
preponderance of the evidence. Altimore v. Mount Mercy
Coll., 420 F.3d 763, 768 (8th Cir. 2005). A case must be
remanded if, at any time, it appears that the district court
lacks subject-matter jurisdiction. 28 U.S.C. § 1447(c);
Fed.R.Civ.P. 12(h)(3). Any doubts about the propriety of
removal are resolved in favor of remand. Wilkinson v.
Shackelford, 478 F.3d 957, 963 (8th Cir. 2007).
in this case was premised on diversity jurisdiction, which
requires an amount in controversy greater than $75, 000 and
complete diversity of citizenship among the litigants. 28
U.S.C. § 1332(a). '"In actions seeking
declaratory or injunctive relief, it is well established that
the amount in controversy is measured by the value of the
object of the litigation.'" James Neff Kramper
Family Farm P'ship v. IBP, Inc., 393 F.3d 828, 833
(8th Cir. 2005) (quoting Hunt v. Wash. State Apple Adver.
Comm 'n, 432 U.S. 333, 347 (1977)); see Usery v.
Anadarko Petroleum Corp., 606 F.3d 1017, 1018 (8th Cir.
2010) ("We have held repeatedly that in a suit for
declaratory or injunctive relief the amount in controversy is
the value to the plaintiff of the right that is in
Plaintiff seeks both injunctive and declaratory relief.
Specifically, Plaintiff seeks an order from the Court
enjoining Defendants from taking any actions not authorized
by the Bylaws; from removing Board members at any time other
than the annual meeting of membership; and from holding a
special meeting on January 28, 2017 (now moot). (Compl. at
pg. 10). Plaintiff also requests that the Court enter a
declaratory judgment that the January 28, 2017 meeting is
(now was) in violation of the Bylaws and applicable law and
is ultra vires; and that the individual Defendants were
acting in bad faith. (Id. at pg. 11). Therefore, the
Court must determine the value of the object of the
litigation for the purpose of determining whether it has
subject matter jurisdiction over this action.
matter presents an issue of first impression, as the Court
has not found, nor have the parties identified, case law
directly on point. However, the Court finds instructive
general principles underlying suits filed by corporate
stockholders to enjoin acts by the board or corporate
where a shareholder suit seeks the enforcement of a
shareholder right, the value of that shareholder's stock
constitutes the amount in controversy. See Carey v.
Pennsylvania Enterprises, Inc., 876 F.2d 333, 337 (3d
Cir. 1989) (action to enjoin the implementation of a
corporate election by stockholder entitled to vote);
Weeks v. Am. Dredging Co., 451 F.Supp. 464, 466
(E.D. Pa. 1978) (action seeking order enforcing the right of
all shareholders to obtain a shareholder list); Myers v.
Long Island Lighting Co., 623 F.Supp. 1076, 1077
(E.D.N.Y. 1985) (action by preferred stockholder to enforce
bylaw provision requiring special election by preferred
in cases that do not involve the enforcement of individual
shareholder rights, courts have found that the value of the
right of the corporation sought to be protected, not the
value of the shareholder's individual interest thereof,
governs the jurisdictional amount. See Coleman v. Two
Guys from Harrison, Inc., 157 F.Supp. 224, 226 (E.D. Pa.
1957) (in suit seeking injunction of ultra vires acts of the
board that would impair the value of the corporation and, in
turn, impair the value of stock, the value of loss or damage
to the corporation constitutes the value of the litigation);
Johnson v. Ingersoll, 63 F.2d 86, 87 (7th Cir. 1933)
(holding that where a stockholder brings suit in cases where
corporate management refuses or fails to enforce corporate
rights, it was not necessary for the shareholder to show that
his private interest or damage satisfied the jurisdictional
threshold); Walsh v. Boston & Maine R.R., 87
F.Supp. 934, 934-35 (D. Mass. 1950) (the amount in
controversy was value of the railroad company itself because
the remedy sought in the action was to deprive the present
board of directors of the right to control the railroad
company); Hill v. Glasgow R. Co., 41 F. 610, 613
(C.C.D. Ky. 1888) (the potential financial impact of the
board's misappropriation satisfied the jurisdictional
threshold in action to "enforce corporate rights to
avert wrongs threatening the corporate interests");
c.f. Walker v. Waller, 267 F.Supp.2d 31, 33 (D.D.C.
2003) (in action seeking declaratory relief with respect to
the composition of the board and identification of the
officers of the corporation, "the right to govern a
corporation" did not place the entire worth of the
corporation in controversy). On other words, where a
shareholder brings a claim on behalf of a corporation, rather
than to enforce his individual shareholder rights, the courts
use the value of the corporation as a whole to determine the
amount in controversy.
the value of the litigation is the value of the assets of
Eagle Forum over which the Board has control. Plaintiff
brings this suit in his capacity as a Director and member of
Eagle Forum. (Compl. at ¶ 1). Plaintiff claims that he
"sued to object to an improper Board meeting, not to
recover any [monetary] damages." (Doc. 27-1 at 2).
However, although Plaintiff does not seek monetary relief,
his claims are similar to those brought by a shareholder
challenging an illegal board or illegal acts of a board.
See Harris v. Brown,6 F.2d 922, 924 (W.D. Ky. 1925)
("the amount involved for the purpose of testing the
jurisdiction of this court is the value of the property and
property rights of the defendant company for which the
plaintiff seeks protection"). Plaintiff has, since the
filing of this action, been removed from his position as a
Board member at a meeting he claims was called and held in
violation of the Bylaws. He seeks to enjoin future violations
of the Bylaws, as well as a declaration by the Court that the