Rueter v. Club Fitness, Inc.

TRACI RUETER, Plaintiff, v. CLUB FITNESS, INC., Defendant.

Case No. 3:20 -CV-00030 -MAB

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ILLINOIS

June 23, 2020

MEMORANDUM AND ORDER

BEATTY, Magistrate Judge:

Currently before the Court are Defendant Club Fitness, Inc.'s amended motion to dismiss for lack of jurisdiction (Doc. 8) and Plaintiff Traci Rueter's motion to remand (Doc. 14). Plaintiff also submitted a request for jurisdictional discovery, contained in her response to Defendant's motion to dismiss, to determine whether the Court has personal jurisdiction over the parties (Doc. 16, p. 7). For the reasons set forth below, Defendant's motion to dismiss for lack of jurisdiction is DENIED. Similarly, Plaintiff's motion to remand is also DENIED. Plaintiff's request for jurisdictional discovery is DENIED AS MOOT.

PROCEDURAL AND FACTUAL BACKGROUND

Plaintiff filed this case in the Third Judicial Circuit of Madison County, Illinois on August 15, 2019 alleging six causes of action for breach of contract, specific performance, the Sale Representative Act, the Wage Payment and Collection Act, fraud, and promissory estoppel stemming from Plaintiff's employment at and termination from Defendant's company (Doc. 1-1).

Defendant is a regional gym and health center that operates approximately twenty-three gym and health centers in Illinois and Missouri (Doc. 1-1, p. 1). Defendant contacted Plaintiff on or around October 2016 to see if Plaintiff would leave her employer, Gold's Gym, to work for Defendant as a Corporate Account Manager ("CAM") (Doc. 1-1, p. 2). In the CAM position, Plaintiff solicited and procured business for Defendant in exchange for a commission paid by Defendant (Doc. 1-1, p. 2).

On or around February 2017, Defendant and Plaintiff entered into a contract outlining Plaintiff's position. Defendant agreed to pay Plaintiff a commission of $20.00 per corporate employee and $10.00 per corporate "family ad-on" on all corporate memberships received from Plaintiff's procured business (Doc. 1-1, p. 2). By May 2017, Plaintiff alleges she was owed $2,500.00 for her work, which Defendant paid (Doc. 1-1, p. 2). By the end of June 2017, Plaintiff alleges she was owed $4,550.00, but was only paid $3,319.00. In July 2017, Plaintiff claims that she was owed $5,810.00, but was only paid $4,270.00. Plaintiff alleges this pattern of being paid less than she was owed by Defendant continued through June 2018 when her employment with Defendant ended (Doc. 1-1, pp. 2-4).

Defendant removed this case from the Circuit Court of Madison County on January 8, 2020 based on complete diversity jurisdiction pursuant to 28 U.S.C. § 1441 and 28 U.S.C. § 1332(a) (Doc. 1). In its notice of removal, Defendant outlined that Plaintiff is a citizen of Illinois while Defendant is incorporated in Missouri with its principal place ofbusiness also in Missouri, so complete diversity exists between the parties (Doc. 1, p. 2). To satisfy the amount in controversy requirement of diversity jurisdiction, Defendant highlighted that Plaintiff requested damages for "commissions owed," as well as attorneys' fees and the cost of the lawsuit. In her complaint, Plaintiff requested an unspecified amount exceeding $50,000 in damages (Doc. 1-1). Defendant, based on the complaint, calculated that the total Plaintiff seeks is upwards of $79,360.000 (Doc. 1-1, pp. 3-4).

On January 13, 2020, Defendant filed an amended motion to dismiss for lack of jurisdiction requesting the Court dismiss this action for lack of personal jurisdiction pursuant to Rule 12(b)(2) (Doc. 8, p.1). On February 5, 2020, Plaintiff filed a motion to remand this case to state court, arguing that the amount in controversy is not more than $75,000 (Doc. 14). Plaintiff filed a response to Defendant's motion to dismiss on February 18, 2020 (Doc. 16). Soon after, on March 2, 2020, Defendant filed a reply to Plaintiff's response to the motion to dismiss (Doc. 17).

ANALYSIS

Before the Court are the two threshold issues of subject matter jurisdiction and personal jurisdiction. Both personal jurisdiction and subject matter jurisdiction are essential elements of a district court's jurisdiction and must be firmly established before a district court can determine the merits of the case. Subject matter jurisdiction is the court's authority over the category of the claim while personal jurisdiction relates to the court's authority over the parties themselves. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 577 (1999). While subject matter jurisdiction has typically been thought to be morefundamental, personal jurisdiction must also be established because "without which, the court is powerless to proceed to an adjudication." Ruhrgas, 526 U.S. at 584 (quoting Employers Reinsurance Corp. v. Bryant, 299 U.S. 374, 382 (1937)). There is no jurisdictional hierarchy as to whether subject matter or personal jurisdiction must be adjudicated first. Ruhrgas, 526 U.S. at 588-599.

I. Subject Matter Jurisdiction

Before the Court addresses Defendant's motion to dismiss (Doc. 8), which goes to whether this Court has personal jurisdiction over the parties, the Court will first satisfy itself that the requirements of diversity jurisdiction are met and address Plaintiff's motion to remand (Doc. 14). In particular, the requirement that the amount in controversy exceeds $75,000 on the date of removal is at issue here. 28 U.S.C. § 1332(a). See BEM I, L.L.C. v. Anthropologie, Inc., 301 F.3d 548, 551 (7th Cir. 2002) ("Removal was proper only if the amount in controversy exceeded $75,000 on the date of removal."). See also McCready v. White, 417 F.3d 700, 702 (7th Cir. 2005) ("Ensuring the existence of subject-matter jurisdiction is the court's first duty in every lawsuit.").

The amount in controversy is "determined by an evaluation of the controversy described in the plaintiff's complaint and the record as a whole." Uhl v. Thoroughbred Tech. & Telecommunications, Inc., 309 F.3d 978, 983 (7th Cir. 2002) (citation omitted). It is "the amount required to satisfy the plaintiff's demands in full . . . on the day the suit was removed." Oshana v. Coca-Cola Co., 472 F.3d 506, 510-11 (7th Cir. 2006) (citation omitted).

As the party seeking to invoke federal diversity jurisdiction, Defendant bears the burden of showing by a preponderance of the evidence facts that suggest the amount incontroversy requirement is met. Oshana, 472 F.3d at 510-11 (citation omitted). A good-faith estimate of the stakes is acceptable if it is plausible and adequately supported by the evidence. Id.; Blomberg v. Serv. Corp. Int'l, 639 F.3d 761, 763 (7th Cir. 2011)

In evaluating the amount in controversy, the Court looks first to the allegations of Plaintiff's original complaint that was removed to federal court. See Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 276 (1977) ("'The sum claimed by the plaintiff controls if the claim is apparently made in good faith.'" (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938); Andrews v. E.I. Du Pont De Nemours & Co., 447 F.3d 510, 514-15 (7th Cir. 2006) ("Typically, we can rely on the amount alleged in the complaint to determine whether the amount in controversy is satisfied . . . .")).

Here, the original complaint details specific amounts of wages for the fifteen months, from April 2017 until June 2018, that Plaintiff was employed by Defendant (Doc. 1-1, pp. 2-4). When totaled, Plaintiff alleges she was owed approximately $126,980.00, but was only paid $47,620.00, with approximately $79, 360.00 owed in missing commission. While Plaintiff does not outline this specific amount in her original complaint, she requests, for each of her six claims, "an amount in excess of Fifty Thousand Dollars ($50,000.00), plus costs of suit" (Doc. 1-1, pp. 5-11). Additionally, in her motion to remand, Plaintiff admits that the amounts alleged for commissions owed in her original complaint exceed $75,000.00, but "agrees to not seek more than $75,000.000 in commissions owed so this is a matter rightfully remanded to state court" (Doc. 14, p. 3). Plaintiff attached a signed affidavit to support this point (Doc. 14-1).

Post-removal events to reduce the amount in controversy do not negate the establishment of a jurisdictionally sufficient amount at the time of removal. St. Paul, 303 U.S. at 289-90; Rising-Moore v. Red Roof Inns, Inc., 435 F.3d 813, 816 (7th Cir. 2006). Thus, even if a plaintiff makes an irrevocable promise after the case is removed to not accept more than the jurisdictional minimum, the Court would not be justified in remanding the case if federal jurisdiction existed at the time of removal St. Paul, 303 U.S. at 292-93; Rising-Moore, 435 F.3d at 816; In re Shell Oil Co., 970 F.2d 355, 356 (7th Cir. 1992) (per curiam). Furthermore, limiting a prayer for relief does not lower the amount in controversy because, under both federal and Illinois rules, a prayer for relief does not limit the awardable relief. See Fed. R. Civ. P. 54(c) ("Every...final judgment should grant the relief to which each party is entitled, even if the party has not demanded that relief in its pleadings"); 735 ILCS 5/2-604 (eff. To Dec. 31, 2019) ("the prayer for relief does not limit the relief obtainable"), repealed by Ill. Pub. A. 101-403 § and replaced by 735 ILCS 5/2-604.2(c) (eff. Jan. 1, 2020) ("the remedies requested from the court do not limit the remedies available.").

Here, Plaintiff's attempt to side-step federal jurisdiction post-removal by refusing to seek more than $75,000.00 is not sufficient for the Court to conclude it does not have subject matter jurisdiction over the parties. Plaintiff would have had to submit that affidavit before Defendant removed the case as no post-removal stipulation to limit the amount Plaintiff seeks is justification for remanding the case now as long as this Court had jurisdiction at the time of removal. To satisfy the amount in controversy requirements, all Defendant...