Bond v. Zale Del., Inc.

ASHLEY BOND, Plaintiff, v. ZALE DELAWARE, INC., d/b/a ZALES JEWELERS, Defendant.

CIVIL ACTION NO. 1:16CV43

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF WEST VIRGINIA

May 17, 2016

(Judge Keeley)

MEMORANDUM OPINION AND ORDER GRANTING THE PLAINTIFF'S MOTION TO REMAND [DKT. NO. 12] AND REMANDING THE CASE

On February 9, 2016, the plaintiff, Ashley Bond ("Bond"), on her own behalf and that of a class of similarly situated individuals, sued Zale Delaware, Inc., d/b/a Zales Jewelers ("Zales"), in the Circuit Court of Harrison County, West Virginia, alleging a violation of the West Virginia Wage Payment and Collection Act ("WCPA"), W. Va. Code § 21-5-1 (Dkt. No. 1 at 2). Zales removed the case to this Court on March 18, 2016 (Dkt. No. 1).

On April 18, 2016, Bond filed a motion to remand, arguing that Zales had ignored the binding stipulation in her complaint barring her from recovering damages in excess of $75,000 (Dkt. No. 13). She also contended that Zales failed to provide any evidence that the jurisdictional minimum had been satisfied. For the reasons that follow, the Court GRANTS Bond's motion and REMANDS the case to the Circuit Court of Harrison County.

BACKGROUND

Bond worked for Zales as a manager and consultant until her employment was "involuntarily terminated" on December 7, 2013 (Dkt. No. 1-3 at 2). Under the version of the WPCA in effect at that time, Zales was obligated to pay all discharged employees wages owed in full by the next regular payday or four business days, whichever came first.¹ Id. at 1-2. Zales paid Bond all of her wages on December 26, 2013, which was outside the time period mandated by the WPCA. Id. at 2.

On February 9, 2016, Bond filed her complaint in state court as a putative class action (Dkt. No. 1-3). Zales removed the case to this Court on March 18, 2016, invoking diversity jurisdiction (Dkt. No. 1). Bond, a West Virginia citizen, is fully diverse from Zales, a Delaware corporation with its principal place of business in Texas. Id. at 3. Zales contends that the Court should disregard Bond's stipulation in the complaint that she does not seek more than $75,000 because "she seeks liquidated damages including attorneys fees, which have a value of more than $75,000." Id. at 4.

With her complaint, Bond filed a motion for class certification (Dkt. No. 5), which she later sought to withdraw (Dkt. No. 8). The Court granted Bond's motion and allowed her to withdraw the motion for class certification on April 11, 2016 (Dkt. No. 11).

Bond then moved to remand on April 18, 2016, contending that (1) her binding stipulation bars her from recovering in excess of $75,000; (2) Zales failed to provide any evidence that she has met the $75,000 jurisdictional requirement in her individual capacity; (3) Zales solely relies on WPCA class action final approval orders in other cases that have no bearing on the damages in this case; (4) only a pro rata portion of attorneys' fees could be attributed to her; and (5) attorneys' fees in the early stages of class action litigation are too speculative to consider for jurisdictional purposes (Dkt. No. 13 at 1).

In opposing Bond's motion, Zales contended that (1) attorneys' fees for the entire class can be attributed to the class representative; (2) Bond's stipulation is not binding; and (3) Bond cannot bind the entire class and potential class counsel with her stipulation (Dkt. No. 14 at 2-3). On May 12, 2016, Bond filed a reply that reiterated the failure of Zales to provide any actualevidence that the amount in controversy exceeds $75,000 (Dkt. No. 17).

APPLICABLE LAW

The district court has original jurisdiction of civil actions between citizens of different states where the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a)(1). To be a "citizen" of a state, a natural person must be both a citizen of the United States and be domiciled within the state. Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 828 (1989). A person is domiciled in a state where he is physically present and intends to remain. Mississippi Band of Choctaw Indians v. Holyfield, 490 U.S. 30, 48 (1989).

The Court determines a corporation's citizenship based on the location of its principal place of business and its state of incorporation. 28 U.S.C. § 1332(c)(1); see Hertz Corp. v. Friend, 559 U.S. 77, 80 (2010). Ordinarily, the Court determines whether the amount in controversy exceeds $75,000 based on the allegations and relief sought on the face of the plaintiff's well-pleaded complaint. See JTH Tax, Inc. v. Frashier, 624 F.3d 635, 648 (4th Cir. 2010)(citing Wiggins v. North Am. Equitable Life Assurance Co., 644 F.2d 1014, 1016 (4th Cir. 1981)).

When a complaint does not contain a specific amount in controversy, the defendant filing a notice of removal bears the burden of proving by a preponderance of the evidence that the claim meets the requisite jurisdictional amount. Francis v. Allstate Ins. Co., 709 F.3d 362, 367 (4th Cir. 2013). "[T]he Court may consider the entire record" to determine whether that burden has been met. Elliott v. Tractor Supply Co., No. 5:14CV88, 2014 WL 4187691, at *2 (S.D.W. Va. Aug. 21, 2014)(citing Mullins v. Harry's Mobile Homes, Inc., 861 F. Supp. 22, 23 (S.D.W. Va. 1994)). If the defendant proves by a preponderance of the evidence that the amount in controversy exceeds $75,000 and that the parties are diverse, then removal is deemed proper. Dart Cherokee, 135 S.Ct. at 553. Removal statutes are strictly construed against the party seeking removal, and the burden of establishing jurisdiction rests on the removing party. Mulcahey v. Columbia Organic Chem. Co., Inc., 29 F.3d 148, 151 (4th Cir. 1994).

ANALYSIS

I. Stipulation

In her motion to remand, Bond argues that the formal stipulation attached to her complaint limits her recovery to an amount below the jurisdictional minimum (Dkt. No. 13 at 4). Zales contends that Bond's stipulation is not binding because it isvague, and she failed to include a "sum-certain prayer for relief," as required in this District (Dkt. No. 14 at 4-5).

Courts generally treat the amount requested by the plaintiff in state court as the amount in controversy. See Hicks v. Herbert, 122 F. Supp. 2d 699, 701 (S.D.W. Va. 2000) (internal citations omitted). In states such as West Virginia, however, where recovery is not limited to the amount demanded, the general rule is not "fully satisfactory." Id. Therefore, a formal stipulation filed with a complaint can effectively limit the amount in controversy for jurisdictional purposes. McCoy v. Erie Ins. Co., 147 F. Supp. 2d 481, 485 (S.D.W. Va. 2001). Such a stipulation, however, must be (1) pre-removal, (2) signed by both counsel and client, (3) explicit in limiting recovery, and (4) filed contemporaneously with the complaint. As a fifth requirement, the complaint also "should contain the sum-certain prayer for relief." Id.

Bond's stipulation, filed at the same time as the complaint, states as follows:

23. With respect to Plaintiff's individual claims, Plaintiff and her counsel do not seek to recover in excess of $75,000, including an award of attorney's fees, exclusive of costs and interest.

24. With respect to Plaintiff's individual claims, to the extent any remedy is awarded in excess of $75,000, inclusive of attorney's fees, exclusive of costs and interest, Plaintiff and her counsel stipulate that they are not entitled to recover the excess amount.

25. This stipulation applies regardless of the form of the remedy awarded.

26. Plaintiff agrees to be bound by this stipulation throughout the pendency of this action.

Dkt. No. 1-1 at 9. Both Bond and her attorney signed the stipulation, which was indisputably filed pre-removal. Id. at 12, 13.

Bond's stipulation appears to meet at least three of the five requirements under McCoy. It was signed by both the client and attorney and filed pre-removal, contemporaneously with the complaint. Although Zales advances a colorable argument that Bond's stipulation is ambiguous because she does not limit recovery for the class claim,² the Court need not address that argument because it finds the stipulation insufficient for another reason; the complaint fails to include a sum certain prayer for relief (Dkt. No. 1-1 at 8, 9). See Nickerson v. Navy Fed. Credit Union, No. 3:15CV75, 2016 WL 55320, at *3 (N.D.W. Va. Jan. 4, 2016) (Groh, J.) (finding the stipulation insufficient to preclude removal because it did not contain the sum-certain prayer for relief required by federal courts in West Virginia). The Courtaccordingly finds that the stipulation, standing on its own, is insufficient to preclude removal, and therefore must attempt to discern the amount in controversy.

II. Amount in Controversy

Bond's complaint seeks damages on her own behalf as well as a class of similarly situated individuals based on Zales' failure to pay her wages within the WPCA's time period (Dkt. No. 1-1 at 8). Under the version of the WPCA in effect at the time of Bond's discharge, an employer who violates the WPCA must pay an employee "three times [the] unpaid amount as liquidated damages." W. Va. Code § 21-5-4(e) (2013). The WPCA also provides for costs and attorneys' fees. W. Va. Code § 21-5-12(b). Bond's complaint does not include claims for either punitive damages or injunctive relief. See Dkt. No. 1-1.

When several plaintiffs, including class action plaintiffs, assert separate and distinct demands in a single lawsuit, the amount involved in each separate controversy must meet the jurisdictional minimum. See Virden v. Altria Grp., 304 F. Supp. 2d 832, 847 (N.D.W. Va. 2004) (quoting Clark v. Paul Gray, Inc., 306 U.S. 583, 589 (1939) (internal quotation marks omitted)). In other words, class plaintiffs' claims "cannot be aggregated for purposesof meeting the minimum jurisdictional amount."³ Id. (citing Zahn v. Int'l Paper Co., 414 U.S. 291, 296 (1973)).

In the Fourth Circuit, however, courts use the supplemental jurisdiction statute to assume jurisdiction "over the claims...