United States District Court, D. Rhode Island
MEMORANDUM AND ORDER
WILLIAM E. SMITH, Chief Judge.
the Court is Plaintiff's Motion for Leave to Amend the
Complaint (ECF No. 7), Plaintiff's Motion to Remand (ECF
No. 8), and Defendant's Motion to Dismiss (ECF No. 13).
For the reasons set forth below, Plaintiff's Motion for
Leave to Amend the Complaint (ECF No. 7) is GRANTED and
Plaintiff's Motion to Remand (ECF No. 8) is DENIED.
Plaintiff is provided fourteen (14) days from the date of
this Order to respond to Defendant's Motion to Dismiss
(ECF No. 13).
factual allegations in this case are uncomplicated. According
to the Complaint, Christopher Laccinole
(“Plaintiff”) is a Rhode Island citizen who
requested a credit report from Whitepages, Inc.
(“Defendant”), a Delaware corporation. Plaintiff
alleges that Defendant initially refused to provide a report
and then provided a report that included false information
about Plaintiff. (Compl. ¶¶ 28-31, ECF No. 1-1.) In
response, Plaintiff filed suit against Defendant in Rhode
Island Superior Court alleging violations of Rhode
Island's Deceptive Trade Practices Act, R.I. Gen. Laws
§ 6-13.1, and Consumer Empowerment and Identity Theft
Prevention Act, R.I. Gen. Laws § 6-48. The relief sought
included actual damages, statutory damages, punitive damages,
costs and attorney fees, as well as declaratory and
injunctive relief. (Compl. ¶¶ 40, 46, ECF No. 1-1.)
removed this action to federal court pursuant to 28 U.S.C.
§ 1332 (diversity jurisdiction). According to Defendant,
there is complete diversity because Plaintiff is a Rhode
Island citizen and Defendant is a Delaware corporation with
its principal place of business in Seattle, Washington.
(Notice of Removal ¶¶ 4-8, ECF No. 1.)
Additionally, Defendant proffers that the amount in
controversy can reasonably be expected to exceed $75, 000, in
large part because Plaintiff asks the Court to permanently
enjoin Defendant from conducting any business in Rhode
Island. (Id. ¶¶ 9-19.)
now seeks to amend the Complaint and remand this action to
state court. Plaintiff's Amended Complaint removes any
request for injunctive relief (see Amended Complaint
¶¶ 41, 47, ECF No. 7-1) and states that
“[t]he total amount in controversy (inclusive of all
costs, fees, damages and relief) will in no circumstances
exceed $50, 000.00” (Id. ¶ 35). With the
amount in controversy now alleged to be less than $75, 000,
Plaintiff argues that the Court no longer has diversity
jurisdiction based on the amount in controversy requirement
of 28 U.S.C. § 1332(a). (See Mot. to Remand 2-3, ECF No.
8.) Plaintiff also argues that Defendant “is not a
diverse party, but rather a Rhode Island entity.”
(Id. at 3.)
Amount in Controversy
as the party seeking removal, has the burden of establishing
diversity jurisdiction by a preponderance of the evidence.
Hogan v. Wal-Mart Stores E., L.P., No. CA 13-603 S,
2014 WL 66658, at *3 (D.R.I. Jan. 8, 2014). The Court has
diversity jurisdiction only if “the matter in
controversy exceeds the sum or value of $75, 000, exclusive
of interest and costs . . . .” 28 U.S.C. §
1332(a). In determining the amount in controversy, the Court
looks to the relief requested by Plaintiff in the original
Complaint, not in Plaintiff's proposed Amended Complaint.
This is because the existence of federal jurisdiction is
determined at the outset of the litigation and “once
jurisdiction attaches, it is not ousted by a subsequent
change of events.” Coventry Sewage Assocs. v.
Dworkin Realty Co., 71 F.3d 1, 7 (1st Cir. 1995); see
also In re Carter, 618 F.2d 1093, 1101 (5th Cir. 1980)
(“It is a fundamental principle of law that whether
subject matter jurisdiction exists is a question answered by
looking to the complaint as it existed at the time the
petition for removal was filed. . . . Indeed, it has often
been stated that the plaintiff cannot rob the district court
of subject matter jurisdiction by electing to amend away the
grounds for federal jurisdiction.”), cert. denied, 450
S.Ct. 949 (1981).
original Complaint does not provide for a specific damages
claim. Therefore, because “the jurisdictional amount is
not facially apparent from the complaint, the court may look
to the notice of removal and any other materials submitted by
the parties.” Hogan, 2014 WL 66658, at *3. As a
starting point, both sides seemingly agree that, putting
aside the cost of injunctive relief, the potential damages in
this case likely add up to less than $75, 000. While
Defendant does not provide a specific estimate of potential
damages, Plaintiff states that “[t]he total amount in
controversy (inclusive of all costs, fees, damages and
relief) will in no circumstances exceed $50, 000.00.”
(Amended Complaint ¶ 35.).
Court is therefore left with the task of estimating the
potential cost to Defendant of the injunctive relief
requested by Plaintiff. See Richard C. Young & Co. v.
Leventhal, 389 F.3d 1, 3 (1st Cir. 2004) (“Courts
have repeatedly held that the value of the matter in
controversy is measured not by the monetary judgment which
the plaintiff may recover but by the judgment's pecuniary
consequences to those involved in the litigation.”).
The Complaint requests injunctive relief “to
permanently restrain and enjoin Defendant from conducting any
business in the State of Rhode Island.” (Compl.
¶¶ 40, 46, ECF No. 1-1.) If granted, the evidence
before the Court suggests that such broad injunctive relief
would cost Defendant more than $75, 000. As Plaintiff himself
noted, Defendant “sells information about hundreds of
thousands of Rhode Island citizens” and is
“profiting from the information of so many Rhode
Islanders.” (Mot. to Remand 3, ECF No. 8.)
Additionally, Defendant has provided evidence that the
requested injunctive relief would cost Defendant a minimum of
$10, 000 per month. (See Schmitt Decl. ¶ 5, ECF No. 12.)
The Court therefore finds that Defendant has met its burden
of establishing, by a preponderance of the evidence, that the
amount in controversy is in excess of $75, 000.
Complete Diversity of the Parties
jurisdiction attaches only where the parties are citizens of
different states. See 28 U.S.C. § 1332(a)(1). Plaintiff
is a citizen of Rhode Island and argues that Defendant
“is not a diverse party, but rather a Rhode Island
entity.” (Mot. for Remand 3, ECF No. 8.) However,
Plaintiff provides no evidence to support this claim. The
rule governing corporate citizenship is clear: “a
corporation shall be deemed to be a citizen of every State
and foreign state by which it has been incorporated and of
the State or foreign state where it has its principal place
of business.” 28 U.S.C. § 1332(c)(1). Plaintiff
concedes that Defendant is incorporated in Delaware, not
Rhode Island. (Compl. ¶ 10, ECF No. 1-1.) Furthermore,
Defendant has provided evidence that it operates principally
out of its office in Seattle, Washington. (See Schmitt Decl.
¶ 4, ECF No. 12.) Absent evidence to the contrary, the
Court finds that there is complete diversity among the
Proposed Amended Complaint
moves to amend his Complaint. (Mot. for Leave to Amend
Compl., ECF No. 7.) Plaintiff is permitted to amend his
Complaint “once as a matter of course” where, as
here, the motion is filed before Defendant filed either a
responsive pleading or motion under Rule 12 of the Federal
Rules of Civil Procedure. Fed.R.Civ.P. 15(a)(1); see also
Taite v. Peake, No. CIV 08-CV-258-SM, 2009 WL 94526, at
*1 (D.N.H. Jan. 9, 2009) (“The district court has no
discretion to reject an amended pleading filed before a
responsive pleading is served, even if the court considers