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Bell American Group, LLC v. Ellis

United States District Court, E.D. Missouri, Eastern Division

July 12, 2018

BELL AMERICAN GROUP, LLC, Petitioner,
v.
ROXANNA ELLIS, Respondent.

          MEMORANDUM AND ORDER

          RONNIE L. WHITE UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Respondent's Motion to Dismiss Petitioner's Petition to Compel Arbitration and for Injunctive Relief for Lack of Jurisdiction and Failure to State a Claim (ECF No. 12). This matter is fully briefed and ready for disposition.

         LEGAL STANDARD

         "Federal courts are courts of limited jurisdiction. The requirement that jurisdiction be established as a threshold matter springs from the nature and limits of the judicial power of the United States and is inflexible and without exception." Godfrey v. Pulitzer Pub. Co., 161 F.3d 1137, 1141 (8th Cir. 1998) (internal citations and quotations omitted); Kessler v. Nat'l Enterprises, Inc., 347 F.3d 1076, 1081 (8th Cir. 2003). When the two parties to an action are citizens of different states, a federal district court's jurisdiction extends to "all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs." 28 U.S.C. § 1332(a); Kopp v. Kopp, 280 F.3d 883, 884 (8th Cir. 2002).

         "[A] complaint that alleges the jurisdictional amount in good faith will suffice to confer jurisdiction, but the complaint will be dismissed if it 'appear[s] to a legal certainty that the claim is really for less than the jurisdictional amount.'" Larkin v. Brown, 41 F.3d 387, 388 (8th Cir. 1994) (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 82 L.Ed. 845 (1938)). "The legal certainty standard is met where the 'legal impossibility of recovery [is] so certain as virtually to negative the plaintiffs good faith in asserting the claim.'" Schubert v. Auto Owners Ins. Co., 649 F.3d 817, 822 (8th Cir. 2011) (quoting JTH Tax, Inc. v. Frashier, 624 F.3d 635, 638 (4th Cir.2010) (internal quotation marks and citation omitted)); see also Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 353, 81 S.Ct. 1570, 6 L.Ed.2d 890 (1961) ("The general federal rule has long been to decide what the amount in controversy is from the complaint itself, unless it appears or is in some way shown that the amount stated in the complaint is not claimed 'in good faith.'"). "If the defendant challenges the plaintiffs allegations of the amount in controversy, then the plaintiff must establish jurisdiction by a preponderance of the evidence." Kopp, 280 F.3d at 884-85 (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 188-89, 56 S.Ct. 780, 80 L.Ed. 1135 (1936); see also Federated Mut. Implement and Hardware Ins. Co. v. Steinheider, 268 F.2d 734, 737-38 (8th Cir. 1959)). Thus, "[t]he district court has subject matter jurisdiction in a diversity case when a fact finder could legally conclude, from the pleadings and proof adduced to the court before trial, that the damages that the plaintiff suffered are greater than $75, 000." Kopp, 280 F.3d at 885.

         BACKGROUND

         On November 3, 2017, Petitioner Bell American Group, LLC d/b/a Taco Bell ("Petitioner" or "Taco Bell") filed a Petition to Compel Arbitration and for Injunctive Relief in Aid of Arbitration (ECF No. 1) in this Court. Petitioner seeks an Order (1) compelling Respondent Roxanna Ellis ("Respondent" or "Ellis") to submit to binding arbitration all disputes between Petitioner and Respondent pursuant to their arbitration agreement in the Receipt of Dispute Resolution Program and Agreement to Abide by Dispute Resolution Program entered into on August 14, 2013 ("Arbitration Agreement"); and (2) enjoining Ellis from initiation, maintaining or pursuing any claims in contravention of the Arbitration Agreement, including, but not limited to, the action filed by Ellis in the 21st Judicial Circuit Court of St. Louis County, Missouri, captioned Elllis v. Chris Count, et al, Case Number 17SL-CC01876 (hereinafter the "State Court Action"). See Petition to Compel Arbitration and Injunctive Relief in Aid of Arbitration (hereinafter "Complaint"), ECF No. 1. Ellis's State Court Petition seeks actual damages in excess of $25, 000 and punitive damages, together with the maximum rate of interest allowed by law, cost of suit, and attorneys' fees in each of the four counts asserted. (Complaint, ¶7). Taco Bell argues that the total of all of relief sought in the State Court Petition is in excess of $75, 000. (Id.) In her State Court Action, Ellis alleges she was terminated based upon disability (scoliosis) discrimination.[1]

         On December 15, 2017, Ellis filed a Motion to Dismiss Petitioner's Petition to Compel Arbitration and for Injunctive Relief for Lack of Jurisdiction and Failure to State a Claim. (ECF No. 12). Therein, Ellis claims that there is no federal question jurisdiction under the Federal Arbitration Act ("FAA") and no diversity jurisdiction because the amount in controversy does not exceed $75, 000. See 28 U.S.C. §§1331, 1332.

         DISCUSSION

         I. Motion to Dismiss for Lack of Jurisdiction

         The only issue before this Court is whether Taco Bell has demonstrated that the amount in controversy exceeds $75, 000.[2] Both parties concede that there is complete diversity of citizenship between Taco Bell and Ellis.

         Taco Bell argues that Ellis's allegations in her state court Petition seeking actual damages, compensatory damages for emotional distress, punitive damages, prejudgment interest and attorney's fees establishes "at least by a preponderance of the evidence" that the amount in controversy exceeds $75, 000. (ECF No. 18 at 3). Taco Bell claims that "Missouri juries commonly award verdicts in excess of $75, 000 for non-pecuniary compensatory damages under the MHRA," even with a claim for garden variety emotional distress. (ECF No. 18 at 3). Taco Bell maintains that Ellis's claim for loss of pay and benefit damages is sufficient to demonstrate that the amount in controversy exceeds $75, 000. Taco Bell notes that Ellis's salary in 2014 was $34, 746, and her gross pay in 2015 was $22, 600.36 through October 27, 2015. (ECF No. 18 at 5). Taco Bell claims that Ellis's "unmitigated lost wages, alone, would be $60, 000" for the last two years, and will be three years, or $90, 000, by the time this case goes to trial in another year. (ECF No. 18 at 5).

         Taco Bell further asserts that Ellis's claim for punitive damages will push her damages claim above the $75, 000 threshold. (ECF No. 18 at 5-6). Taco Bell cites Kopp v. Kopp, 280 F.3d 883, 884 (8th Cir. 2002) as support for its proposition that punitive damages can be in excess of $75, 000 where the actual damages fall below the requisite amount. In Kopp, Ms. Kopp was attacked, restrained, and sexually assaulted in her own home by her ex-husband, Donald Kopp. The Eighth Circuit noted that "an award of damages of more than $75, 000 would not have to be set aside as excessive under Missouri law, nor would such an award be so 'grossly excessive' as to violate the due process clause of the United States Constitution." Id. at 886; see also Frump ex rel. Aubuchon v. Claire's Boutiques, Inc., No. 10-1106-CV-W-SWH, 2011 WL 1103055, at *4 (W.D. Mo. Mar. 22, 2011) ("If a plaintiff has authority under state law to seek punitive damages, however, the claim will generally satisfy the amount in controversy requirement because it cannot be stated to a legal certainty that the value of the plaintiffs claim is below the statutory minimum.") (internal citation omitted).

         Finally, Taco Bell maintains that Ellis's insistence that she is not seeking more than $75, 000 fails to demonstrate that Ellis's damages fall short of the statutory threshold. (ECF No. 18 at 7-8). Rather, Taco Bell states that Ellis's unwillingness to stipulate to receiving less than $75, 000 indicates that a jury might award her in excess of $75, 000. In particular, Taco Bell notes that Ellis's attorney's fees should be included when evaluating whether her claims meet the $75, 000 amount, and "[i]t is well ...


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