March 2014 Bad Faith Cases: Court Remands After Defendant Fails To Provide Evidence Establishing Amount In Controversy To Requisite Legal Certainty (Western District)

In Brewer v. GEICO, plaintiff filed suit appealing an arbitration award, seeking damages for personal injury suit and bad faith. The insurer removed the case to federal court just before the pre-trial conference took place.  Plaintiff filed a motion to remand, arguing his case did not meet the amount in controversy requirement, and therefore the Western District lacked subject matter jurisdiction.  Plaintiff informed the district court he would be willing to sign a stipulation that the combined award would not exceed $75,000.  The insurer indicated it was not willing to consent to remand because it preferred the availability of a jury trial in federal court.

The court applied the “legal certainty” test to plaintiff’s motion, under which courts will remand only where, on the face of the pleadings, it is apparent to a legal certainty that the plaintiff cannot recover the amount claimed by the removing party.  The burden of demonstrating the case is properly before the court is placed on the removing party.  The insurer argued the court should disregard plaintiff’s proposed stipulation, because the federal jurisdiction question is to be answered by looking at the face of the complaint, not any post-removal stipulations.  Rather than present evidence as to the extent of plaintiff’s injuries, plaintiff’s counsel’s hourly rates or potential attorney fees that might accumulate, or case law demonstrating similar plaintiffs recovered in excess of $75,000, defendants asserted only a “good faith belief” that the award would exceed $75,000.  The court found a mere good faith belief insufficient to establish the requisite “legal certainty” that plaintiff’s complaint met the amount in controversy.  Based on this finding, the court remanded the case to state court.

Date of Decision: January 22, 2014

Brewer v. GEICO, Civil Action No. 13-1809, 2013 U.S. Dist. LEXIS 7531 (W.D. Pa. Jan. 22, 2014) (Fischer, J.)