Butler v. Batchelor

1
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
TEXARKANA DIVISION
DEAN BUTLER 	PLAINTIFF
doing business as
Hope Physical Therapy Center
v. 	Civil No. 4:24-cv-04053
WADE BATCHELOR 	DEFENDANT
REPORT AND RECOMMENDATION
OF THE UNITED STATES MAGISTRATE JUDGE
Before the Court is Plaintiff’s Motion to Remand. ECF No. 7. Defendant has responded
to the Motion. ECF No. 9. This matter has been referred to the undersigned, and it is now ripe for
consideration.
1. 	Background:
Plaintiff filed his Complaint in the Circuit Court of Hempstead County, Arkansas, on April
5, 2024. 	ECF No. 3. 	Plaintiff’s claims arise from allegations of trade name infringement by
Defendant’s use of the business name Hope Physical Therapy and Sports Center. 	Id. In his
Complaint, Plaintiff seeks injunctive relief, damages for wrongful infringement upon the trade
name of Plaintiff, and all other relief that Plaintiff may be entitled. Id. In the Complaint, Plaintiff
did not allege a specific amount of damages.
On May 22, 2024, Defendant removed this matter to the United States District Court for
the Western District of Arkansas. ECF No. 2. In the Notice of Removal, Defendant stated that
this Court has subject matter jurisdiction over this case due to the facts that “this action is between
citizens of different states, and the matter in controversy exceeds $75,000, excluding of interest
and costs.” ECF No. 2, ¶ 6. Subsequently, on June 21, 2024, Plaintiff filed his Motion to Remand.
ECF No. 7. 	With his Motion to Remand, Plaintiff attached an Affidavit and stipulated that his
claims are for less than $75,000. Id.
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2. 	Applicable Law:
“Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of
Am., 511 U.S. 375, 377 (1994). A party may remove a case from state court only if the party shows
that the federal court has original jurisdiction over the case. 28 U.S.C. § 1441(a). Jurisdiction is
determined from the date of removal, and the United States Supreme Court has long held that
events occurring subsequent to removal may not oust a federal court of jurisdiction. St. Paul
Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289-91 (1938); see also Hatridge v. Aetna Cas.
& Sur. Co., 415 F.2d 809, 814 (8th Cir. 1969) (citing St. Paul Mercury Indem. Co., 303 U.S. at
292).
A party asserting diversity jurisdiction under 28 U.S.C. § 1332 bears the burden of proving,
by a preponderance of the evidence, that there is complete diversity and that the amount in
controversy is greater than $75,000. Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir. 2009); James
Neff Kramper Family Farm P’ship v. IPB, Inc., 393 F.3d 828, 831 (8th Cir. 2005). “Under the
preponderance standard, ‘[t]he jurisdictional fact . . . is not whether the damages are greater than
the requisite amount, but whether a fact finder might legally conclude that they are.” Bell, 557 F.3d
at 959 (quoting Kopp v. Kopp, 280 F.3d 883, 885 (8th Cir. 2002)) (emphasis in original).
In general, the amount demanded in the Complaint will be deemed to be the amount in
controversy. 28 U.S.C. § 1446(c)(2). However, a plaintiff’s valuation of his own claim is relevant
but not necessarily dispositive as to the amount in controversy. See In re Minn. Mut. Life Ins. Co.
Sales Practices Litig., 346 F.3d 830, 834-35 (8th Cir. 2003); Skinner v. Empire Express, Inc., No.
6:17-CV-6040, 2017 WL 3228124, (W.D. Ark. 2017) (finding that the amount in controversy was
less than the jurisdictional threshold even though the plaintiff had alleged that the amount sought
exceeded “the minimum requirements for jurisdiction in federal court based on diversity”).
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“Federal courts are to resolve all doubts about federal jurisdiction in favor of remand and
are strictly to construe legislation permitting removal.” Dahl v. R.J. Reynolds Tobacco Co., 478
F.3d 965, 968 (8th Cir. 2007) (internal quotations omitted). “If at any time before final judgment
it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28
U.S.C. § 1447(c).
3. 	Discussion:
Plaintiff argues this Court lacks jurisdiction to hear this case due to the amount in
controversy being less than the $75,000 required for diversity jurisdiction. ECF No. 7. As noted
above, in his original Complaint Plaintiff seeks injunctive relief and damages for wrongful
infringement upon the trade name of Plaintiff. Id.
On the issue of whether Defendant has proven by a preponderance of the evidence that the
requirements for federal diversity jurisdiction have been met, it is noted that the parties do not
dispute there is complete diversity of parties. Plaintiff Dean Butler, a resident of Arkansas, and
Defendant Wade Batchelor, a resident of Texas. Therefore, there is complete diversity of parties.
As for the amount in controversy, Plaintiff has, subsequent to the removal of the case,
stipulated that his claim is for less than $75,000, however, that stipulation is not determinative of
this Court's jurisdiction. See Keith v. Clark American Checks, Inc., 261 F.Supp 2d 419 (W.D.N.C.
2003). Jurisdiction is determined from the date of removal, and the United States Supreme Court
has long held that events occurring subsequent to removal may not oust a federal court of
jurisdiction. St. Paul Mercury Indemnity Co., v. Red Cab Co., 303 U.S. 283, 289-91 (1938); see
also Hatridge v. Aetna Cas. & Sur. Co., 415 F.2d 809, 814 (8th Cir. 1969) (citing St. Paul Mercury
Indem. Co., 303 U.S. at 292). Therefore, the relevant inquiry is whether the amount in controversy
was greater than $75,000 when the action was removed. 	See Kaufman v. Costco Wholesale
Corp., 571 F. Supp. 2d 1061 (D. Minn. 2008); Gilmer v. Walt Disney Co., 915 F. Supp. 1001, 1011
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(W.D. Ark. 1996) (since jurisdiction is based on record at time of removal, post-petition affidavits
are allowable only if relevant to that time).
To determine if the amount in controversy requirement has been satisfied, the Court looks
to the face of the state pleadings. See Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 353 (1961).
In this matter, Plaintiff’s Complaint is silent as too alleged amounts of damage. Defendant, in his
Notice of Removal, argues his costs of complying with injunctive relief, in the form current and
new signage and advertising, to be more than $30,000. 	ECF No. 2. 	While Defendant argues
the amount in controversy should include the cost to him of injunctive relief, the Eighth Circuit
precedent requires the district court to rely solely on the plaintiff's viewpoint in meeting the
requisite 	amount. 	Smith 	v. 	Amer. 	States 	Pref. 	Ins. 	Co., 249 	F.3d 	812,
813 (8 th Cir.2001). The amount in controversy in a suit for injunctive relief is measured by the
value to the plaintiff of the right sought to be enforced. See Burns v. Massachusetts Mutual Life
Ins. Co., 820 F.2d 246, 248 (8 th Cir.1987). Defendant’s remaining proof of amount in controversy
is purely speculative and does not establish by a ponderance of evidence that the amount in
controversy exceeds $75,000. 	Additionally, Plaintiff’s affidavit stipulating that damages are
limited to less than $75,000 provides some evidence that the claim at the time of the removal was
for less than the jurisdictional amount. See Boone v. State Farm Mut. Auto. Ins. Co., No. 1:15-
CV-1047, 2015 WL 4977193, (W.D. Ark. 2015)
Therefore, Defendant has failed to carry his burden of proving by a preponderance of the
evidence that this Court has subject matter jurisdiction. Because this Court lacks subject matter
jurisdiction in the present case, this matter should be remanded to state court.
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4. 	Conclusion:
Based upon the foregoing, the Court recommends Plaintiff’s Motion to Remand (ECF No.
7) be GRANTED and that the action be remanded to the Circuit Court of Hempstead County,
Arkansas for further adjudication.0F
1
The Parties have fourteen (14) days from receipt of this Report and Recommendation
in which to file written objections pursuant to 28 U.S.C. § 636(b)(1). The failure to file timely
objections may result in waiver of the right to appeal questions of fact. 	The Parties are
reminded that objections must be both timely and specific to trigger de novo review by the
district court. See Thompson v. Nix, 897 F.2d 356, 357 (8th Cir. 1990).
DATED this 10th day of September 2024.
/s/ 	Barry A. Bryant
HON. BARRY A. BRYANT
U.S. MAGISTRATE JUDGE
1 Also before this court is Plaintiff’s Motion to Set Aside Default. ECF No. 11. Having found no subject matter
jurisdiction, the Court recommends that the Clerk’s Entry of Default (ECF No. 10), be set aside and Plaintiff’s
Motion to Set Aside (ECF No. 11) be denied as moot.
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