B. Diversity Jurisdiction Under 28 U.S.C. § 1332(a)(1)
As stated, removal under Section 1441(a) is proper if a Federal court to which the action is removed would have jurisdiction over the matter had it been filed there originally. GMC alleges jurisdiction pursuant to Section 1332(a)(1). Removal Petition, P 6. Subject matter jurisdiction under Section 1332(a)(1) is proper only in a civil action between citizens of different states "where the amount in controversy exceeds the sum or value of $ 50,000.00, exclusive of interest and costs. . . ." Section 1332(a)(1).
1. Class Action Issues
"In a Federal class action only the citizenship of the named class representatives must be diverse from that of the defendants." In re School Asbestos Litig., 921 F.2d 1310, 1317 (3d Cir. 1990) (citing Snyder v. Harris, 394 U.S. 332, 340, 22 L. Ed. 2d 319, 89 S. Ct. 1053 (1969)), cert. denied sub nom. United States Gypsum Co. v. Barnwell Sch. Dist. No. 45, 499 U.S. 976, 111 S. Ct. 1623 (1991).
In the instant matter, Garcia, the named plaintiff, alleges she is a citizen of the State of New Jersey. Complaint, P 4. GMC is a resident of Delaware and Michigan. Removal Petition, P 5; Affidavit of Sandra J. Donovan, P 2. Accordingly, there is diversity of citizenship between the parties in this matter.
In Zahn v. International Paper Co., 414 U.S. 291, 38 L. Ed. 2d 511, 94 S. Ct. 505 (1973), a class action brought under Section 1332(a)(1), the Court reaffirmed the established rule that each plaintiff in the class must independently satisfy the amount-in-controversy requirement. Id. at 301-02; see Packard v. Provident Nat'l Bank, 994 F.2d 1039, 1045 (3d Cir.), cert. denied sub nom. Upp v. Mellon Bank, N.A., 126 L. Ed. 2d 373, U.S. , 114 S. Ct. 440 (1993); Asbestos Litigation, 921 F.2d at 1315.
GMC argues that the amount-in-controversy inquiry is only appropriate as to Garcia, the named plaintiff, because no plaintiff class has yet been certified. Opp. Brief at 7. It further argues: "'Class actions are not created by mere allegations in a complaint.'" Id. (quoting Shelton v. Pargo, Inc., 582 F.2d 1298, 1304 (4th Cir. 1978)). Neither logic nor the case law supports this argument. On the one hand, GMC argues that the Complaint meets the amount-in-controversy requirement, asserting that allegations in the Complaint must be accepted unless it appears "'to a legal certainty'" that Garcia cannot recover more than $ 50,000.00. Opp. Brief at 8 (quoting St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289, 82 L. Ed. 845, 58 S. Ct. 586 (1938)). On the other hand, GMC argues that the allegations in the Complaint concerning the class of Putative Plaintiffs should be ignored. GMC contends that: "Notwithstanding plaintiff's aspirations to class status, this case is not now a class action, and will not be unless and until this Court certifies it as such. . . . Jurisdiction over plaintiff's claim, accordingly, is to be evaluated as in an individual action." Opp. Brief at 7. GMC cannot have it both ways: If GMC seeks to extend the St. Paul rationale to one part of the amount-in-controversy inquiry, it makes sense to apply it to a related part of the analysis.
Likewise, the case law cited by GMC is unavailing.
The courts that have considered the issue have held that a suit should be treated as a class action for purposes of Federal jurisdiction whether or not the class has been certified. Eagle v. American Tel. & Tel. Co., 769 F.2d 541, 545 n.1 (9th Cir. 1985), cert. denied, 475 U.S. 1084, 89 L. Ed. 2d 721, 106 S. Ct. 1465 (1986); City of Inglewood v. City of Los Angeles, 451 F.2d 948, 951 (9th Cir. 1971); Visintine v. SAAB Auto. A.B., 891 F. Supp. 496, 497 n.3. (E.D.Mo. 1995); Fountain v. Black, 876 F. Supp. 1294, 1297 n.5 (S.D.Ga. 1994); Mayo v. Key Fin. Svcs., Inc., 812 F. Supp. 277, 278 n.1 (D.Mass. 1993); Lailhengue v. Mobil Oil Corp., 775 F. Supp. 908, 911 (E.D.La. 1991); Craig v. Congress Sportswear, Inc., 645 F. Supp. 162, 163 n.1 (D.Me. 1986).
GMC argues that Section 1367 overrules Zahn, thereby precluding an inquiry into whether the Putative Plaintiffs each satisfy the amount-in-controversy requirement. Opp. Brief at 13. Section 1367 provides for supplemental jurisdiction over claims that form part of the same case or controversy over which a Federal court has original jurisdiction. "Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties." Section 1367.
As GMC observes, the Fifth Circuit recently decided that under Section 1367, a district court can exercise supplemental jurisdiction over members of a class who do not meet the amount-in-controversy requirement, provided that the claims of the named plaintiffs satisfy the amount-in-controversy requirement. In re Abbott Labs., Inc., 51 F.3d 524, 529 (5th Cir.), reh'g denied, 65 F.3d 33 (1995). Faced with this issue, however, the Third Circuit decided not to disturb the Zahn holding. See Packard, 994 F.2d at 1045-46 & n.9 (observing that "several district courts . . . have refused to hold that Section 1367 overruled Zahn in a class action context") (citing cases). To date, Zahn and Packard remain good law in the Third Circuit. Accordingly, GMC must establish that each of the Putative Plaintiffs meets the amount-in-controversy requirement.
2. The Amount-In-Controversy Requirement
As stated, GMC argues that "'it must appear to a legal certainty that [Garcia's] claim is really for less than the jurisdictional amount to justify dismissal.'" Opp. Brief at 8 (quoting St. Paul, 303 U.S. at 289); see also Packard, 994 F.2d at 1046 ("When it appears to a legal certainty that the plaintiff was never entitled to recover the jurisdictional amount, the case must be dismissed. . . ."). On the other hand, Garcia argues that "at all stages of the litigation, it is the party asserting jurisdiction which bears the burden of demonstrating that the matter is properly before the Federal court." Moving Brief at 7 (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 80 L. Ed. 1135, 56 S. Ct. 780 (1936)). GMC's argument is accurate as to a diversity action commenced in Federal court, where a plaintiff has affirmatively alleged the jurisdictional amount. See Asbestos Litigation, 921 F.2d at 1315 ("The court is required only to dismiss those class members whose claims appear to a 'legal certainty' to be less than the jurisdictional amount.") (quoting St. Paul, 303 U.S. at 289). In the removal context, however, the law is less well-settled, particularly as here, where no amount in controversy has been alleged. See Complaint, P 38 ("The total amount of damages suffered by [Garcia] and [Putative Plaintiffs] . . . has not yet been fully ascertained at this time and will be proven at trial.")
Several standards have emerged for deciding the amount in controversy when a defendant removes a complaint seeking an unspecified amount of damages. Some courts have held that a removing defendant must prove "to a legal certainty" that the plaintiff's claims are not less than the jurisdictional minimum. See, e.g., Fountain, 876 F. Supp. at 1298-99; Mullins v. Harry's Mobile Homes, Inc., 861 F. Supp. 22, 23 (S.D.W.Va. 1994); Chouest v. American Airlines, Inc., 839 F. Supp. 412, 414 (E.D.La. 1993). Other courts have required removing defendants to prove the jurisdictional minimum by a preponderance of the evidence. See, e.g., De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir. 1993); Gafford v. General Elec. Co., 997 F.2d 150, 158 (6th Cir. 1993); Shaw v. Dow Brands, Inc., 994 F.2d 364, 366 & n.2 (7th Cir. 1993); Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th Cir. 1992). Finally, some courts require a removing defendant to show that there is a "reasonable possibility" that the amount in controversy meets the jurisdictional minimum. See, e.g., Ball v. Hershey Foods Corp., 842 F. Supp. 44, 47 (D.Conn.), aff'd, 14 F.3d 591 (2d Cir. 1993).
The Third Circuit has not decided the appropriate standard to apply in these circumstances. It has simply indicated that where a complaint does not request a precise monetary amount, the district court must make an independent inquiry into the value of the claims alleged. Angus v. Shiley, Inc., 989 F.2d 142, 146 (3d Cir. 1993). Further, "the general Federal rule is to decide the amount in controversy from the complaint itself." Id. at 145 (citing Horton v. Liberty Mutual Ins. Co., 367 U.S. 348, 353, 6 L. Ed. 2d 890, 81 S. Ct. 1570 (1961)); see Steel Valley, 809 F.2d at 1010. In such cases, the amount in controversy should be measured "by a reasonable reading of the value of the rights being litigated." Angus, 989 F.2d at 146 (citing Hunt v. Washington State Apple Advt. Comm'n, 432 U.S. 333, 347, 53 L. Ed. 2d 383, 97 S. Ct. 2434 (1977); Carey v. Pennsylvania Enters., Inc., 876 F.2d 333, 337 n.12 (3d Cir. 1989)).
A review of the facts under any standard indicates that the jurisdictional minimum cannot be met in this matter. GMC contends the $ 50,000.00 amount-in-controversy requirement has been met. GMC states:
Since under the New Jersey Consumer Fraud Statute, attorney fees to a prevailing individual plaintiff are available and damages may be trebled, the value of these damages, if proven, would exceed the $ 50,000.00 jurisdictional minimum for this court's jurisdiction based upon diversity of citizenship under [Section] 1332. In addition, plaintiff is seeking punitive damages on the common law claim of fraud and deceit.