Over the past decade, federal judges in Kentucky made known their growing preference for strictly construing the requirements for removal based on diversity jurisdiction. See, e.g., May v. Wal-Mart Stores, Inc., 751 F. Supp.2d 949 (E.D. Ky. 2010). Although the amount in controversy must exceed $75,000, plaintiffs’ complaints often do not disclose the amount of damages sought. Indeed, Kentucky’s civil rules actually prohibit them from doing so when the damages are unliquidated. See CR 8.01(2).
Not surprisingly, therefore, plaintiffs deploy a variety of tactics for dodging attempts to establish the amount in controversy until removal is no longer possible. A new Sixth Circuit case—Halsey v. AGCO Corp., et al., No. 17-6403 (6th Cir. Nov. 8, 2018)—warns plaintiffs who try to evade discovery on the amount in controversy that they do so at their peril. Even though Halsey is unpublished, it supplies a case law roadmap for out-of-state defendants seeking timely removal of a lawsuit when the damages claimed are not quantified.
Of course, Kentucky federal courts are not alone in expecting defendants to conduct state court discovery to establish the amount in controversy, but all defendants are understandably nervous about doing so. Nervousness gives way to paranoia when it appears obvious from the complaint that damages for the alleged injuries exceed $75,000. Nevertheless, plaintiffs use a variety of tactics to sidestep discovery aimed at the amount in controversy, such as saying it is “too early” for the plaintiff to ascertain the value of his or her compensatory damages claim.
The plaintiff in Halsey v. AGCO Corp. used just this tactic. But the district court not only refused to remand, defendants eventually obtained summary judgment. When plaintiff appealed the summary judgment, he also appealed denial of his motion to remand. The Sixth Circuit ruled that a plaintiff’s evasion of discovery can backfire and become evidence of meeting the amount in controversy requirement.
In Halsey, the plaintiff suffered serious injuries after a tractor rolled over him while he was bailing hay. He sued the manufacturers of the tractor and the tractor’s tire in Kentucky state court, requesting an unspecified amount of damages for medical expenses, lost wages, property damage, pain and suffering, and permanent impairment of earning capacity. One of the defendants sent discovery requests regarding the amount in controversy. Halsey eventually answered that his medical expenses were $42,105.36 but stated that he could not determine the amount of his pain and suffering until the parties completed discovery.
The defendant removed the case to the Eastern District of Kentucky, arguing that—more likely than not—the value of Halsey’s unliquidated pain and suffering claim exceeded $32,894.64—the additional amount needed to reach $75,000. When the district court denied the plaintiff’s motion to remand, the judge drew on four decades of experience in concluding that plaintiff’s pain and suffering claim would be much higher. The Sixth Circuit affirmed and provided a catalog of decisions to support its conclusion.
The Sixth Circuit reaffirmed that defendants do not face a “daunting burden” in proving the requirements for diversity jurisdiction. In Halsey, the fact plaintiff claimed $42,105.36 in past medical expenses made it obvious that the pain and suffering claim would be higher still. Moreover, the plaintiff refused to answer a request for admission asking whether he was seeking more than $75,000, asserting he could “neither admit nor deny” the request due to a “lack of information and knowledge.” This worked against him, as the Sixth Circuit held that the district court could properly infer from the plaintiff’s refusal to deny the request that he thought that his claims might be worth more than $75,000.
Whether the inference drawn from a plaintiff’s refusal to answer a request for admission is sufficient to establish the amount in controversy is not yet clear. The Sixth Circuit based its decision on the combination of the inference with the quantifiable evidence of the past medical expenses. It remains to be seen how much weight courts will afford the inference in the absence of other evidence of quantifiable damages.
Although unpublished, Halsey provides good ammunition for defendants. Defendants still bear the burden of establishing the amount in controversy by a preponderance of the evidence, but plaintiffs cannot safely avoid removal by refusing to answer straightforward discovery requests.
To read the Sixth Circuit’s entire opinion in Halsey v. AGCO Corp., et al., please click here.