HENRY COKE MORGAN, Jr., Senior District Judge.
This matter comes before the Court on Plaintiffs unopposed Motions for Leave to Amend, Doc. 10, and to Remand, Doc. 11. On June 3, 2010, the Court held a hearing on these motions and ruled from the bench. For the reasons explained herein, the Court GRANTED Plaintiff leave to amend, but DENIED remand to state court.
On February 8, 2010, Albert Hatcher ("Hatcher") filed a complaint in the Circuit Court for the City of Chesapeake alleging negligence on the part of Lowe's Home Centers ("Lowe's") based on a trip-and-fall that occurred on April 16, 2008. In short, the suit involves a claim for injuries sustained when Hatcher fell backwards over a flatbed merchandise cart that was placed behind him without warning. Id. The parties are diverse and the complaint specifically
On April 23, 2010, however, Hatcher moved to file an amended complaint reducing the amount of damages sought to $74,500 and a consequent remand to state court. Docs. 10 and 11. In support, Hatcher's counsel asserts that certain medical records, which predate Hatcher's fall in April 2008, "cast Plaintiffs relevant medical condition in a completely different light as it appears that the Plaintiff has significant pre-existing degenerative joint disease of the hip." Doc. 10 at 1. Hatcher now claims that over $80,000 of the $99,740 in total medical expenses are attributable to this pre-existing condition, and the newly calculated medical expenses of roughly $19,000 are "sufficient to justify [his] decision to reduce the amount in controversy below the jurisdictional amount." Doc. 11 at 5. Lowe's did not file a response to Hatcher's motions, but both parties later filed a Consent Order permitting Hatcher to reduce the amount in controversy to no more than $74,500. Lowe's accordingly agreed to remand the case back to the Circuit Court for the City of Chesapeake.
As a preliminary matter, the Court must first determine whether Lowe's correctly removed this case from state court. "Federal courts are not courts of general jurisdiction; they have only the power that is authorized by Article III of the Constitution and the statutes enacted by Congress pursuant thereto." Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986). If a federal court determines that it lacks subject matter jurisdiction over a case that has been removed from state court, it must remand that case back to state court. See 28 U.S.C. § 1447(c); Mulcahey v. Columbia Organic Chems. Co., Inc., 29 F.3d 148, 151 (4th Cir.1994) ("Because removal jurisdiction raises significant federalism concerns, we must strictly construe removal jurisdiction.").
Courts look to the record existing at the time the petition for removal was filed when addressing the propriety of removal. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-291, 58 S.Ct. 586, 82 L.Ed. 845 (1938). And, as a general rule, the amount in controversy in an action that is removed because of diversity of citizenship should be measured "at both the time of commencement [of the action in state court] and the time of removal." Sayers v. Sears Co., 732 F.Supp. 654, 656 (W.D.Va.1990). Here, it is undisputed that the existing record at the time of commencement and the time of removal triggered federal subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a). Hatcher is a Virginia resident, and Lowe's is a citizen of North Carolina. Doc. 1 at ¶¶ 5-6. The amount in controversy, as plainly stated in the complaint, Doc. 1, Ex. 1 at ¶ 6, and notice of removal, Doc. 1 at ¶ 4, exceeds $75,000.
Because removal to this Court was valid, the sole issue remaining is whether the parties' post-removal agreement to reduce the amount in controversy to $74,500 ousts this Court of federal diversity jurisdiction. It is clearly established, however, that a post-removal event—such as amending a complaint in order to reduce the amount in controversy below the jurisdictional limit—does not deprive a federal court of diversity jurisdiction. See St. Paul, 303 U.S. at 292, 58 S.Ct. 586 ("And though, as here, the plaintiff after removal, by stipulation, by affidavit, or by amendment of his pleadings, reduces the claim below the requisite amount, this does not deprive the district court of jurisdiction."); see also Porsche Cars N. Am., Inc. v. Porsche.net, 302 F.3d 248, 255-56 (4th Cir.2002) ("[A] court determines the existence of diversity jurisdiction at the time the action is filed, regardless of later changes in originally crucial facts such as the parties' citizenship or the amount in controversy." (citation and internal quotations marks omitted)); Brown v. East. States Corp., 181 F.2d 26, 27 (4th Cir.1950) (holding "the fact that plaintiff subsequently amended his complaint in an attempt to eliminate the federal question did not make remand proper" after the case was properly removed to federal court); Griffin v. Holmes, 843 F.Supp. 81, 87 (E.D.N.C.1993) ("[T]he plaintiff . . . may not defeat diversity jurisdiction by filing a post-removal amendment of the complaint which reduces the amount of damages requested by the complaint below the amount in controversy required by 28 U.S.C. § 1332(a)."). The Fourth Circuit does not stand alone, either.
That theory is inapplicable in this case, though, because Hatcher's claim and jurisdictional basis were neither ambiguous nor indeterminate at the time of removal. Rather, Hatcher claimed classic trip-and-fall negligence and alleged a specific dollar amount that exceeded $75,000. As the district court in Gwyn recognized, "if a court can find the amount in controversy from the face of the complaint, the normal rule still applies: a later stipulation by the plaintiff is irrelevant." Gwyn, 955 F.Supp. at 46. Here, Hatcher's complaint unambiguously demanded $3,000,000. Similarly, Lowe's specified in its notice of removal that the claim exceeds $75,000, which further cemented jurisdiction at the time of removal. Had jurisdiction been ambiguous or indeterminate upon removal, the Court likely would have accepted the parties' Consent Order to remand. Indeed, there is an obvious distinction between a court's decision to divest itself of jurisdiction and its finding that it lacks jurisdiction. But because jurisdiction clearly attached upon removal, the Court is under a duty to exercise the jurisdiction conferred on it by Congress unless there is some other reason for the Court to abstain. No such reason appears to exist, nor have the parties offered one.
In sum, Hatcher's Motion to Amend and the parties' Consent Order constitute a post-removal event that does not divest this Court's jurisdiction. Once a district court's jurisdiction attaches at the time of removal—as it did here—post-removal amendments, "which reduce the amount recoverable, whether beyond the plaintiff's control or the result of his volition, do not oust the district court's jurisdiction." St. Paul, 303 U.S. at 293, 58 S.Ct. 586 (footnote omitted). This rule is grounded not only in well over a half-century of precedent, but also in sound policy. If parties were able to defeat jurisdiction by way of post-removal reductions of the amount in controversy, they could unfairly manipulate judicial proceedings. See Purple Passion, Inc. v. RCN
The Federal Rules require that leave to amend shall be freely given when justice so requires. And Hatcher, based on representations made in his briefs and oral argument, believes in good faith that the amount in controversy can no longer exceed $74,500. Accordingly, Hatcher's request for leave to amend the complaint to reduce the damages is GRANTED, but the application to remand to state court is
The Clerk is
It is so