Filed: Jan. 13, 2012
Latest Update: Feb. 22, 2020
Summary: OPK BIOTECH LLC, et al. However, the state, court, after hearing from OPK's counsel, denied Abdel-Aleem's, motion for attorney's fees and costs, finding that neither Biopure, nor OPK had prosecuted the suit in bad faith and that their claims, were neither insubstantial nor frivolous.complaint.
United States Court of Appeals
For the First Circuit
No. 11-1373
SALAH ABDEL-ALEEM,
Plaintiff, Appellant,
v.
OPK BIOTECH LLC, et al.
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Richard Stearns, U.S. District Judge]
Before
Boudin, Stahl, and Thompson, Circuit Judges.
Mohamad Saleh Ahmad and Yussuf Abdel-Aleem, on brief for
appellant.
Michael S. Rabieh, Lichten & Liss-Riordon, P.C., on brief for
appellee.
January 13, 2012
STAHL, Circuit Judge. Salah Abdel-Aleem (Abdel-Aleem)
was the defendant in a Massachusetts state court lawsuit prosecuted
by OPK Biotech LLC. Alleging Massachusetts state law claims of
abuse of process and intentional and negligent infliction of
emotional distress as a result of that suit, Abdel-Aleem brought an
action claiming diversity jurisdiction against OPK Biotech LLC, its
CEO, Zafiris Zafirelis, and its registered manager, Alexander
Pugachev (collectively, OPK)1 in federal district court. The
district court dismissed the complaint for lack of subject matter
jurisdiction, holding that Abdel-Aleem had failed to adequately
allege the minimum amount in controversy. We affirm.
I. Facts & Background
On January 1, 2005, Abdel-Aleem began consulting for
Biopure Corporation (Biopure). On August 1, 2005, Abdel-Aleem and
Biopure executed an Employment Agreement Concerning the Protection
of Company Property and the Arbitration of Legal Disputes
(Employment Agreement). The Employment Agreement included a
provision prohibiting Abdel-Aleem from disclosing confidential or
proprietary information to third parties, as well as a non-
competition covenant effective during his employment with Biopure
and for two years thereafter. On July 28, 2006, after what Abdel-
1
Abdel-Aleem is also suing Does 1-10, "unknown natural
persons who are responsible for [his] damages."
-2-
Aleem characterizes as "fundamental differences" with Biopure's
CEO, Abdel-Aleem left the company.
Beginning in January 2007, Abdel-Aleem began consulting
for IKOR Life Sciences (IKOR). On June 29, 2007, Biopure filed
suit against Abdel-Aleem in Massachusetts state court, alleging
that in his work for IKOR, Abdel-Aleem had breached the Employment
Agreement's confidentiality provision and its non-competition
covenant.2 On February 12, 2008, the state court entered a
protective order limiting the use of material obtained through
discovery containing confidential information or trade secrets of
the plaintiff, defendant, and third parties.
Biopure filed for Chapter 11 bankruptcy in July 2009, and
in September 2009, sold its assets to OPK, including its interest
in the suit against Abdel-Aleem. On March 8, 2010, before OPK
moved to substitute itself as plaintiff, the state court dismissed
Biopure's complaint without prejudice for failure to prosecute.3
Over the course of several months beginning in June 2010, OPK and
Abdel-Aleem attempted to forge an agreement in which OPK offered to
release the claims against Abdel-Aleem in exchange for any material
that he had produced during discovery that was subject to the
2
The suit also included claims under Massachusetts law for
misappropriation of trade secrets and business information.
3
At around the same time, in March 2010, Abdel-Aleem was
diagnosed with Parkinson's disease and has since experienced a
deterioration in his health.
-3-
protective order. In turn, Abdel-Aleem requested indemnification
against any potential lawsuit brought against him by IKOR. OPK
refused to so indemnify, and when the parties were unable to come
to an agreement, OPK moved to substitute itself for Biopure, and
Biopure moved to vacate the judgment of dismissal. The state court
granted both motions on February 25, 2011. On March 7, 2011,
Abdel-Aleem moved for summary judgment in the state court action.4
The next day, March 8, 2011, Abdel-Aleem filed a
complaint (First Complaint) in the United States District Court for
the District of Massachusetts, alleging that OPK's prosecution of
the state court suit against him constituted an abuse of process
under Massachusetts state law. The suit also sought to enjoin the
state court proceedings. Abdel-Aleem claimed diversity
jurisdiction.5 In describing his damages in his First Complaint,
Abdel-Aleem stated that "the amount of [sic] controversy exceeds,
exclusive of interest and costs, the amount of ($75,000), pursuant
to 28 U.S.C. § 1332," that, as a result of OPK's allegedly tortious
actions, "[d]amages have resulted including emotional distress,"
4
On July 28, 2011, the state court granted summary judgment
to Abdel-Aleem, which OPK did not oppose. However, the state
court, after hearing from OPK's counsel, denied Abdel-Aleem's
motion for attorney's fees and costs, finding that neither Biopure
nor OPK had prosecuted the suit in bad faith and that their claims
were neither insubstantial nor frivolous.
5
Because the issue of the minimum amount in controversy under
28 U.S.C. § 1332 is dispositive, we do not reach or discuss
diversity of citizenship.
-4-
and that Abdel-Aleem "ha[d] suffered damage, loss and harm,
including but not limited to his reputation, his emotional
tranquility, and privacy."
On March 28, 2011, OPK moved to dismiss Abdel-Aleem's
complaint. OPK first argued that Abdel-Aleem had failed to state
a claim upon which relief could be granted pursuant to Federal Rule
of Civil Procedure 12(b)(6), as OPK had never caused process to
issue against him and thus could not be liable for abuse of
process. Second, OPK argued Abdel-Aleem's complaint must be
dismissed for lack of subject matter jurisdiction under Federal
Rule of Civil Procedure 12(b)(1) because Abdel-Aleem had not
sufficiently supported his allegation that the amount in
controversy was over $75,000, the jurisdictional minimum under
28 U.S.C. § 1332.
Thereafter, Abdel-Aleem filed an amended complaint
(Amended Complaint) on April 5, 2011, reiterating the claim for
abuse of process and adding claims for intentional and negligent
infliction of emotional distress. This time, Abdel-Aleem alleged
that the amount in controversy was "at least $1,000,000." Abdel-
Aleem continued to generally allege "emotional distress." For his
abuse of process claim, Abdel-Aleem again described his damages as
"loss and harm, including but not limited to his reputation, his
emotional tranquility, and privacy." He alleged that his damages
resulting from the intentional infliction of emotional distress
-5-
claim were that OPK's conduct "caused him to lose his job, spend
thousands of dollars in legal fees, and endure enormous amounts of
physical and mental anguish." Abdel-Aleem further alleged that
"[n]o reasonable individual could endure the physical and mental
stress that Defendants have inflicted upon [him]." For the
negligent infliction of emotional distress claim, he alleged
"continued suffering of physical and emotional distress," that
"[a]ny reasonable person subject to Defendants' tortious behavior
would have suffered both physical and mental anguish as a result of
Defendants' actions," and that OPK's conduct caused him to "suffer
by forcing him to choose between two daunting alternatives":
defending against the "frivolous" lawsuit or releasing confidential
information.
After considering the Amended Complaint, the district
court granted OPK's motion to dismiss,6 holding that Abdel-Aleem
had not "set forth sufficient facts to show that the amount in
controversy exceeds the jurisdictional threshold established by
28 U.S.C. § 1332(a)." Abdel-Aleem v. OPK Biotech LLC,
No. 11-10397-RGS, 2011 WL 1304642, at *1 (D. Mass. Apr. 6, 2011).
Abdel-Aleem timely appealed.
6
In allowing the motion to dismiss, the district court held
that Abdel-Aleem's request for an injunction was moot. Abdel-Aleem
v. OPK Biotech LLC, No. 11-10397-RGS, 2011 WL 1304642, at *1
(D. Mass. Apr. 6, 2011).
-6-
II. Discussion
We review de novo a district court's dismissal for lack
of subject matter jurisdiction. Stewart v. Tupperware Corp., 356
F.3d 335, 337 (1st Cir. 2004). Abdel-Aleem attempts to establish
the district court's original jurisdiction under a diversity
theory, as the federal "district courts shall have original
jurisdiction of all civil actions where the matter in controversy
exceeds the sum or value of $75,000, exclusive of interest and
costs, and is between . . . citizens of different states."
28 U.S.C. § 1332(a)(1).
The federal plaintiff carries the burden to establish
that the minimum amount in controversy has been met. Stewart, 356
F.3d at 338. "[T]he sum claimed by the plaintiff controls if the
claim is apparently made in good faith. It must appear to a legal
certainty that the claim is really for less than the jurisdictional
amount to justify dismissal."
Id. at 338 (quoting St. Paul Mercury
Indem. Co. v. Red Cab Co.,
303 U.S. 282, 288-89 (1938)). Good
faith is measured objectively; "[t]he question . . . is whether to
anyone familiar with the applicable law this claim could
objectively have been viewed as worth" more than the jurisdictional
minimum. Coventry Sewage Assoc. v. Dworkin Realty Co.,
71 F.3d 1,
6 (1st Cir. 1995) (quoting Jiminez Puig v. Avis Rent-a-Car Sys.,
574 F.2d 37, 40 (1st Cir. 1978)).
-7-
A plaintiff's "'general allegation of damages that meet
the amount requirement suffices unless questioned by the opposing
party or the court.'" Stewart, 356 F.3d at 338 (quoting Spielman
v. Genzyme Corp.,
251 F.3d 1, 5 (1st Cir. 2001)). However, once
the opposing party has questioned the amount, "'the party seeking
to invoke jurisdiction has the burden of alleging with sufficient
particularity facts indicating that it is not a legal certainty
that the claim involves less than the jurisdictional amount.'"
Id.
(quoting Spielman, 251 F.3d at 5). This burden may be met by
amending pleadings or submitting affidavits. Dep't of
Recreation & Sports of P.R. v. World Boxing Ass'n,
942 F.2d 84, 88
(1st Cir. 1991).
Here, OPK has challenged Abdel-Aleem's assertion of the
amount in controversy. Thus, the burden has shifted to him to
allege with "sufficient particularity" facts that in some way
support the contention that there is more than $75,000 at stake.
See id. at 90 (holding that the proponent of diversity jurisdiction
has the "burden of supplying specific factual allegations to
support the amount in controversy requirement"). In his First
Complaint, Abdel-Aleem stated no amount in controversy, alleging
only that it was in excess of the minimum, and gave only the most
general description of his damages.7 Even though Abdel-Aleem was
7
Abdel-Aleem alleged that "[d]amages have resulted including
emotional distress" and that he "ha[d] suffered damage, loss and
harm, including but not limited to his reputation, his emotional
-8-
warned of OPK's opposition by its Rule 12(b)(1) motion to dismiss,
he added only further generalizations to the description of his
damages in the Amended Complaint,8 which did not provide any
specifics or basis for the alleged amount in controversy. See
Diefenthal v. Civil Aeronautics Bd., 681 F.2d 1039, 1053 (5th Cir.
1982) (where "party invoking the court's jurisdiction" was "put on
notice . . . by [the defendant's] motion to dismiss for lack of
jurisdiction, that they needed to show some basis for the amount of
damages they claimed," failure to do so resulted in proper
dismissal by the district court).
Abdel-Aleem provided no substantiation for or valuation
of any of the economic, emotional or physical damages he alleged in
his Amended Complaint. In particular, though Abdel-Aleem alleged
that the filing of the state court lawsuit caused him to lose his
job, he set forth no facts in support of this claim. Indeed, not
only did Abdel-Aleem offer no lost wages valuation, he did not even
indicate what job he lost or the circumstances surrounding the
loss. Similarly, Abdel-Aleem did nothing to substantiate his claim
tranquility, and privacy."
8
In his Amended Complaint, Abdel-Aleem repeated the
description of damages for his abuse of process claim from the
First Complaint, and added that OPK's alleged intentional
infliction of emotional distress "caused him to lose his job, spend
thousands of dollars in legal fees, and endure enormous amounts of
physical and mental anguish," which "[n]o reasonable individual
could endure." and that their negligent infliction of emotional
distress caused "continued suffering of physical and emotional
distress."
-9-
for legal fees. While attorney's fees are normally excluded from
an amount in controversy determination absent a statute or contract
providing for such fees, see Spielman, 251 F.3d at 7, fees for
defending the underlying lawsuit in a Massachusetts abuse of
process action are considered compensatory damages and not
attorney's fees, see Millennium Equity Holdings, LLC v. Mahlowitz,
925 N.E.2d 513, 528 (Mass. 2010). Thus, Abdel-Aleem's claim for
legal fees is part of our amount in controversy analysis. That
being said, he gave us nothing to go on other then to say that he
spent "thousands of dollars." This does not qualify as sufficient
particularity.9 See, e.g., Dep't of
Recreation, 942 F.2d at 90
(finding that because plaintiff failed to include an estimate of
attorney's fees on the record, there was no basis for the court to
conclude that the amount in controversy requirement had been met).
As for Abdel-Aleem's claims of physical and mental anguish, he
speaks only in general terms (mainly parroting the elements of the
torts he alleges) and offers no particulars, either facts or
numbers, from which we can glean that there is more than $75,000 at
stake.
Abdel-Aleem's lack of substantiation contrasts with our
cases upholding diversity jurisdiction on the basis of the minimum
9
We do not go so far as to say that a plaintiff, responding
to a challenge to the amount in controversy, must always set forth
the specific amount of attorney's fees claimed. However, based on
the facts at hand, the phrase "thousands of dollars" (which denotes
a vast range of amounts) is not sufficient.
-10-
amount in controversy. See, e.g., Stewart, 356 F.3d at 338 (in
response to defendant's challenge to amount in controversy,
plaintiffs met burden by supplying written interrogatories and
multiple medical reports describing and documenting injuries);
Hardemon v. City of Boston,
144 F.3d 24, 26 (1st Cir. 1998) (amount
in controversy was sufficiently established based on affidavit
attached to amended complaint itemizing lost wages and other
damages claimed). While we do not suggest that Stewart and
Hardemon set the minimum standard for establishing the amount in
controversy when it is challenged, we expect something more than
bald statements and round numbers.
Abdel-Aleem's amendment adding "at least $1,000,000" as
the alleged amount in controversy, which the district court
described as "what appears to be an imaginary number," does not
help him meet his burden. Abdel-Aleem, 2011 WL 1304642, at *1 n.1.
While we must "give due credit to the good faith claims of the
plaintiff, a court would be remiss in its obligation if it accepted
every claim of damages at face value . . . . Jurisdiction is not
conferred by the stroke of a lawyer's pen. When challenged, it
must be adequately founded in fact."
Diefenthal, 681 F.2d at 1052.
Here, Abdel-Aleem has not provided any facts or substantiation to
show with sufficient particularity that his case is worth more than
$75,000, let alone the claimed $1,000,000. See Dep't of
Recreation, 942 F.2d at 90 (where no specific factual allegations
-11-
were provided, the record did not show "that there [was] any amount
in controversy . . . , much less one in excess of the . . .
threshold").
Even if Abdel-Aleem had provided facts supporting his
claimed amount in controversy with sufficient particularity, he
could not meet the objective good faith standard, under which he
must show that "to anyone familiar with the applicable law this
claim could objectively have been viewed as worth" more than the
jurisdictional minimum. Coventry Sewage, 71 F.3d at 6. Though
Abdel-Aleem provides no details substantiating the value of his own
claim, he attempts to establish that his claimed amount in
controversy is made in objective good faith based on comparison to
other similar claims. However, no case Abdel-Aleem cites is
similar to his, and many of his cited cases stand for a proposition
contrary to his description.
While "'federal courts must . . . look to state law to
determine the nature and extent of the right to be enforced in a
diversity case,'" Stewart, 356 F.3d at 339 (quoting Horton v.
Liberty Mut. Ins. Co.,
367 U.S. 348, 352-53 (1961)), the cases
Abdel-Aleem cites have nothing to do with the extent of damages
awarded in similar cases, and do not help us determine the extent
or value of his rights. Some cases Abdel-Aleem cites are
procedurally dissimilar and do not involve any calculation of
-12-
damages.10 Other cases he cites resemble OPK's state claim against
him, and may define the extent of OPK's right, but have nothing to
do with the value of an abuse of process or emotional distress
claim.11
The only case Abdel-Aleem cites which is arguably similar
to his claim is Brooks Automation, Inc. v. Blueshift Technologies,
10
Abdel-Aleem argues that Sheldon v. Khanal, No. 07-2112-KHV,
2007 WL 4233628 (D. Kan. Nov. 10 2007), "affirmed plaintiffs'
subject matter jurisdiction with respect to the Abuse of Process
Count" based on general damages estimates; in fact, the court in
Sheldon was willing only to give preliminary consideration to the
abuse of process claim (as opposed to other claims which contained
no damages estimates at all and which the court disregarded
outright) before ordering the plaintiff to show cause as to why the
claim should not be dismissed as a matter of law.
Id. at 14-15.
Abdel-Aleem relies on Bala v. AOtec, Inc., No. 942623A,
1998 WL
1184165 (Mass. Super. Ct. June 2, 1998), for the proposition that
a party asserting an abuse of process counterclaim "prevailed" and
that "damages exceeded $75,000." In Bala, the party "prevailing"
was able to defeat a motion for summary judgment and proceed to
trial, but damages were nowhere mentioned by the court.
Id. at *5.
11
Abdel-Aleem relies on Aspect Software, Inc. v. Barnett, 787
F. Supp. 2d 118 (D. Mass. 2011), to argue that one may, under
Massachusetts law, plead punitive damages for violation of a non-
competition agreement. Not only is Abdel-Aleem's present abuse of
process claim entirely dissimilar, Aspect Software nowhere mentions
punitive damages. Rather, the case revolves around whether the
court will issue a preliminary injunction. This citation does not
in any way add to this court's understanding of the nature and
extent of the right Abdel-Aleem seeks to vindicate. Another case
Abdel-Aleem cites, Astro-Med, Inc. v. Nihon Kohden Am., Inc.,
591
F.3d 1 (1st Cir. 2009), similarly resembles OPK's state case
against him (albeit analyzing Rhode Island law), but is totally
inapposite to his claim here. The same is true of D.L. Anderson's
Lakeside Leisure Co. v. Anderson,
757 N.W.2d 803, 820-24 (Wis.
2008), another case involving a claim similar to OPK's state case,
where the Wisconsin Supreme Court held punitive damages were
appropriate in the context of a violation of a non-competition
agreement.
-13-
Inc., No. 05-3973-BLS2, 2006 WL 307948 (Mass. Super. Ct. Jan. 24,
2006). Abdel-Aleem offers Brooks Automation as an example of a
Massachusetts state case where a claim that the court deemed
similar to abuse of process resulted in an award of $627,900.
Id.
at *3. However, even assuming the abuse of process claim Abdel-
Aleem brings here is identical to the Chapter 93A claim for
tortious interference with business relations brought in Brooks
Automation,12 the type of award sought makes Brooks Automation
distinguishable. The award there was based on a specific unpaid
invoice, entirely dissimilar from that sought by Abdel-Aleem, which
would be largely for emotional and physical suffering.
Id. at *4.
Therefore, because he has not made any arguments that help us
define the nature and extent of his right, Abdel-Aleem has failed
to make an adequate showing of objective good faith behind his
allegation that his claim is worth more than $75,000, let alone
$1,000,000.
Saint Paul Mercury's standard for justifying dismissal,
that "[i]t must appear to a legal certainty that [a plaintiff's]
claim is really for less than the jurisdictional amount," might at
12
Abdel-Aleem asserts that, if his case is remanded, he will
seek to amend his complaint to add a claim under Mass. Gen. Laws
ch. 93A. However, as we determine the amount in controversy from
the "face of the pleadings" that were before the district court,
Coventry Sewage, 71 F.3d at 5 (quoting St. Paul
Mercury, 303 U.S.
at 289), we do not consider the possibility of a Chapter 93A claim
here. See also Dep't of
Recreation, 942 F.2d at 89 (where claim is
not spelled out in the pleadings, court will not consider it in the
amount in controversy determination).
-14-
first seem like a high threshold. Stewart, 356 F.3d at 338
(quoting St. Paul
Mercury, 303 U.S. at 289). However, it is still
our duty "to police the border of federal jurisdiction."
Spielman,
251 F.3d at 4. Where the opposing party has contested the alleged
amount in controversy, the "sufficient particularity" standard
requires something more than a plaintiff's conclusory statements.
Here, Abdel-Aleem was given the opportunity to amend his complaint,
but he still provided no factual support as to the value of his
claim. Further, in his argument before this court, he has not
provided any relevant case law from which we could determine his
objective good faith. We therefore affirm the district court's
dismissal for lack of subject matter jurisdiction.
III. Conclusion
Finding no error in the district court's determination
that the amount in controversy requirement was not met, we affirm.
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