Veterans Brothers No. 126, L.L.C. v. 7-Eleven, Inc., No. 2:2016cv00272 - Document 42 (E.D. La. 2016)
Court Description: ORDER AND REASONS denying 25 Motion by plaintiff Avondale Brothers No. 128 L.L.C. to Remand to State Court. Signed by Judge Sarah S. Vance on 7/1/16. (Reference: 16-2034)(jjs)
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Veterans Brothers No. 126, L.L.C. v. 7-Eleven, Inc. Doc. 42 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA AVONDALE BROTHERS NO. 128, L.L.C. CIVIL ACTION VERSUS NO: 2:16-CV-0 20 34 SEI FUEL SERVICES, INC. SECTION: R ORD ER AN D REASON S Defendant SEI Fuel Services, Inc. rem oved plaintiff Avondale Brothers No. 128 L.L.C.’s state-court action on March 1o, 20 16. 1 Plaintiff now m oves the Court to rem and the action, arguing that the am ount in controversy does not m eet the jurisdictional m inim um under 28 U.S.C. § 1332. 2 For the following reasons, the Court denies the m otion. I. BACKGROU N D Plaintiff Avondale Brothers No. 128, L.L.C., a convenience and fuel store, filed this action in the Twenty-Fourth J udicial District Court for the Parish of J efferson seeking a declaratory judgment that it is not bound by an 1 2 See R. Doc. 1. R. Doc. 25-1 at 4. Dockets.Justia.com alleged fuel supply contract with defendant SEI Fuel Services, Inc. 3 Defendant contends that it acquired from a third party the exclusive contractual right to sell fuel to the Avondale Brothers store. 4 Plaintiff disputes the continuing validity of the contract. 5 On March 10 , 20 16, defendant rem oved the action to this Court on the basis of diversity jurisdiction. 6 On April 5, 20 16, plaintiff m oved to rem and the action on the grounds that defendant has not established that the am ount in controversy exceeds $ 75,0 0 0 . 7 Plaintiff argues that any harm defendant m ight suffer in this litigation is m itigated by the fact that plaintiff is continuing to perform under the disputed contract pending final resolution of this case. 8 Defendant opposes the m otion, asserting that, plaintiff’s present com pliance with the disputed contract notwithstanding, the exclusive distribution right created by the fuel supply contract is worth well over $ 75,0 0 0 . 9 In support, defendant subm its the affidavit of its Director of 3 See R. Doc. 1-1 at 2. R. Doc. 26 at 1; see also R. Doc. 1-1 at 1. 5 R. Doc. 1-1 at 1. 6 R. Doc. 1 at 5. 7 See R. Doc. 25; see also R. Doc. 25-1 at 4. 8 See R. Doc. 25-1 at 5. 9 See R. Doc. 26. 4 Adm inistration and Controls, Barry Bailey. 10 Citing the disputed contract’s requirement that plaintiff purchase from defendant a m inim um of 1,40 3,358 gallons of gasoline per year, 11 Bailey values the rem aining gasoline and m otor fuel proceeds attributable to the Avondale Brother’s store at $ 360 ,0 0 0 . 12 Bailey also values the proceeds attributable to the five-year renewal term at $ 270 ,0 0 0 . 13 Finally, Bailey states that if defendant loses its alleged contractual right to supply fuel to plaintiff it will incur a de-branding penalty of $ 889,614.85. 14 In total, Bailey alleges an am ount in controversy of $ 1,519,614.85. 15 II. LEGAL STAN D ARD A defendant m ay generally rem ove a civil action filed in state court if the federal court has original jurisdiction over the action. See 28 U.S.C. § 1441(a). The removing party bears the burden of showing that federal jurisdiction exists. See Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995). In assessing whether rem oval is appropriate, the Court is guided 10 See R. Doc. 26-1. at 26. 12 Id. at 2 13 Id. 14 Id. 15 Id. 11 Id. by the principle, grounded in notions of com ity and the recognition that federal courts are courts of lim ited jurisdiction, that rem oval statutes should be strictly construed. See, e.g., Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720 , 723 (5th Cir. 20 0 2). While the Court m ust rem and the case to state court if at any tim e before final judgm ent it appears that it lacks subject m atter jurisdiction, the Court's jurisdiction is fixed as of the tim e of rem oval. See 28 U.S.C. § 1447(c); Doddy v. Oxy USA, Inc., 10 1 F.3d 448, 456 (5th Cir. 1996). III. D ISCU SSION Defendant has asserted federal jurisdiction based on diversity of citizenship. See 28 U.S.C § 1332. Diversity jurisdiction exists only when the parties are citizens of different states, and the am ount in controversy exceeds $ 75,0 0 0 . W hite v. FCI USA, Inc., 319 F.3d 672, 674 (5th Cir. 20 0 2). Because plaintiff does not dispute that the parties are citizens of different states, the Court need consider only whether the am ount in controversy exceeds the jurisdictional m inim um . Regarding the amount in controversy, plaintiff does not identify a specific am ount of dam ages in his petition. As am ended by the Federal Courts J urisdiction and Venue Clarification Act of 20 11, 28 U.S.C. § 1446 provides that the sum dem anded in good faith in the initial pleading shall serve as the am ount in controversy. 28 U.S.C. § 1446(c)(2). If the initial pleading seeks nonm onetary relief, the notice of rem oval m ay assert the am ount in controversy, and rem oval is proper if the court finds, by a preponderance of the evidence, that the am ount of controversy exceeds $ 75,0 0 0 . 28 U.S.C. § 1446(c)(2)(A)(i);(B). This provision of section 1446 is consistent with the approach taken by the Fifth Circuit in requiring that the rem oving defendant prove by a preponderance of the evidence that the am ount in controversy exceeds $ 75,0 0 0 when plaintiffs do not request a specific am ount in dam ages. See W right Fam ily Inv., LLC v. Jordan Carriers, Inc., No. 12– CV– 0 826, 20 12 WL 2457664, at *1 (W.D. La. J une 25, 20 12) (citing Luckett v. Delta Airlines, 171 F.3d 295, 298 (5th Cir. 1999)); see also Grant v. Chevron Phillips Chem . Co., 30 9 F.3d 864, 868 (5th Cir. 20 0 2). Under Fifth Circuit jurisprudence, a defendant satisfies this burden either by showing that it is facially apparent that the plaintiff's claim s exceed the jurisdictional am ount or by setting forth the facts in dispute supporting a finding that the jurisdictional am ount is satisfied. Grant, 30 9 F.3d at 868 (citing Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995)). If the defendant m eets its burden of showing the requisite am ount in controversy, the plaintiff can defeat rem oval only by establishing with legal certainty that the claim s are for less than $ 75,0 0 0 . Id. (citing De Aguilar v. Boeing, 47 F.3d 140 4, 1412 (5th Cir. 1995)). In actions seeking declaratory or injunctive relief, the am ount in controversy is measured by the value of the object of the litigation. See Hunt v. W ashington State Apple Advertising Com m ission, 432 U.S. 333, 347 (1977); Leininger v. Leininger, 70 5 F.2d 727, 729 (5th Cir. 1983). As the Fifth Circuit holds, the object of the litigation is the value of the right to be protected or the extent of the injury to be prevented. See Texas Acorn v. Texas Area 5 Health Sy stem s Agency , Inc., 559 F.2d 10 19 (5th Cir. 1977). Here, the right to be protected is the contractual right to serve as the exclusive gasoline supplier for plaintiff’s convenience and fuel store. As plaintiff acknowledges in its state-court petition, the disputed fuel supply contract has an initial term of 15 years– seven of which still rem ain– and an option for an additional five-year renewal. 16 Given the value of the relevant com m odity and the exclusive nature of the contract, it is facially apparent that the am ount in controversy exceeds $ 75,0 0 0 . Any doubt as to the value of the disputed contract right is dispelled by evidence that defendant subm its in opposition to plaintiff’s rem and m otion. 16 See R. Doc. 1-1 at 1. In a sworn affidavit, defendant’s Director of Adm inistration and Control values the gasoline and m otor fuel proceeds attributable to plaintiff’s store under the rem aining initial term at $ 360 ,0 0 0 . 17 He also values the five-year renewal term proceeds at $ 270 ,0 0 0 and states that defendant will incur a $ 889,614.85 de-branding penalty if it loses the right to supply fuel to plaintiff under the disputed contract. 18 Adding these figures yields an am ount in controversy of over $ 1.5 m illion, 19 well in excess of the jurisdictional requirement. Plaintiff offers no evidence to rebut defendant’s valuation. Instead, plaintiff sim ply asserts that any harm defendant m ight otherwise sustain if plaintiff is deemed not to be bound by the fuel supply contract is m itigated by plaintiff’s promise to continue purchasing defendant’s fuel until this controversy is judicially resolved. 20 As noted, to determ ine the am ount in controversy in a declaratory judgm ent action, the Court looks to the value of the object of the litigation. See Hunt, 433 U.S. at 347. The object of this litigation is a m ulti-year fuel supply contract. That plaintiff is continuing to purchase fuel under the contract during the pendency of this litigation does 17 See R. Doc. 26-1 at 2. Id. 19 Id. 20 See R. Doc. 25-1 at 5. 18 not change the fact that a judgment on the contract’s validity will substantially im pact both parties’ bottom lines for years to com e. Thus, plaintiff’s argum ent fails to establish to a legal certainty that the am ount in controversy is less than $ 75,0 0 0 . See Grant, 30 9 F.3d at 868. Accordingly, plaintiff’s m otion to rem and is denied. IV. CON CLU SION For the foregoing reasons, the Court DENIES plaintiff’s m otion to rem and. 1st New Orleans, Louisiana, this _ _ _ _ _ _ _ day of J uly, 20 16. ___________________________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE
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