United States District Court, D. Rhode Island
MEMORANDUM AND ORDER
J. MCCONNELL, JR., UNITED STATES DISTRICT JUDGE.
Insurance Brokers West, Inc., ("IBW") brought this
suit against Defendant Liquid Outcome, LLC, f/k/a Astonish
Results, LLC, d/b/a INTYGRAL ("Astonish"), alleging
that Astonish breached its contract to provide IBW with
digital marketing products and services as set forth in a
marketing agreement ("Agreement") and a subsequent
amendment to the marketing agreement ("Amendment").
Pursuant to Fed.R.Civ.P. 12(b)(1), Astonish moved to dismiss
IBW's First Amended Complaint (ECF No. 7) for lack of
jurisdiction, arguing that IBW does not meet the
amount-in-controversy requirement. ECF No. 9-1 at 5-11.
Astonish also moved to strike the jury demand because IBW
agreed to a jury-waiver provision in the Agreement.
Id. at 11-15. Because the Court finds that the
Amendment precludes IBW from seeking damages in excess of
$22, 500, IBW fails to meet the amount-in-controversy
requirement for diversity jurisdiction.
an insurance agency based in California, and Astonish is a
Delaware marketing services provider based in Rhode Island.
ECF No. 7 at ¶ 1-2. IBW and Astonish entered into the
Agreement in December of 2010. ECF No. 9-2 at 14-15. IBW
alleges that, according to the Agreement, Astonish agreed to
provide digital marketing services, including website design
and development, and IBW agreed to pay Astonish for those
services. ECF No. 7 at ¶ 8-9. In December of 2014, IBW
and Astonish executed the Amendment, where Astonish agreed to
"complete a website theme-based redesign and website
content re-optimization." ECF No. 9-2 at 35. The payment
provision in the Amendment ("Reduction Provision")
provided for thirteen payments of $1, 350 and five payments
of $1, 000, thus totaling $22, 550. ECF No. 9-2 at 35.
Agreement included a jury-waiver provision, id, at
15, and the Amendment contained a release
("Release") for "any and all claims, actions,
damages, and losses" that occurred before IBW and
Astonish executed the Amendment, id. at 34.
Following the execution of the Amendment, Astonish sold its
assets to Zywave in July of 2015, ECF No, 7 at ¶ 12.
Zywave and Astonish agreed that Zywave would provide services
to Astonish's then-clients, but IBW was not a party to
this agreement. Id. at ¶ 14-15. Moreover, IBW
asserts that Zywave did not provide IBW with the products and
services in the Agreement or Amendment. Id., at
filed this suit against Astonish seeking damages, declaratory
judgment, and attorneys' fees under a breach of contract
cause of action. ECF No. 1 at ¶ 61-71. Astonish
originally moved to dismiss for lack of jurisdiction and, in
the alternative, to strike IBW's demand for a jury trial.
ECF No. 6-1. In response, IBW filed its First Amended
Complaint, alleging $140, 000 in damages. ECF No. 7 at ¶
66. Claiming that IBW does not meet the amount-in-controversy
requirement and waived its right to a jury trial, Astonish
again filed its Motion to Dismiss and Motion to Strike the
First Amended Complaint. ECF No. 9-1. According to its
Motion, Astonish disputes IBW's ability to claim damages
in excess of $75, 000 because the Amendment limits damages to
conduct that occurs after the Amendment. And even if IBW
meets the amount-in-controversy requirement, Astonish submits
that IBW is not entitled to a jury trial given the contracted
jury waiver. ECF No. 9-1 at 11-15. IBW filed its Objection to
Defendant's Motion to Dismiss and Motion to Strike. ECF
No. 12. In its objection, IBW contends that, because the
Amendment was breached, the Release does not limit damages to
post-Amendment conduct. Id. at 3. Additionally, IBW
posits that jury waivers remain unenforceable under the Rhode
Island Constitution because Rhode Island does not have
legislation that permits jury waiver. Id., at 5.
Astonish filed its Reply. ECF No. 14.
court of limited jurisdiction, this Court may not-absent
subject matter jurisdiction-proceed with an action.
Belsito Commons, Inc. v. Decker, 845 F, 3d 13, 21
(1st Cir. 2016). The party invoking jurisdiction bears the
burden of establishing the jurisdictional requirements.
Wal-Mart P.K, Inc. v. Zaragoza-Gomez, 834 F.3d 110,
116 (1st Cir. 2016).
ruling on a challenge to the sufficiency of jurisdictional
facts, the Court "must credit the plaintiffs well-pled
factual allegations and draw all reasonable inferences in the
plaintiffs favor." Merlonghi v. United States,
620 F.3d 50, 54 (1st Cir. 2010) (citing Valentin v. Hosp.
Bella Vista, 254 F.3d 358, 363 (1st Cir. 2001)). In
contrast, when ruling on the accuracy of jurisdictional
facts-that is, a "factual challenge"-the Court
provides "no presumptive weight" to the
jurisdictional allegations, but instead "address[es] the
merits of the jurisdictional claim by resolving the factual
disputes between the parties." Valentin, 254
F.3d at 363. The Court retains broad discretion "to
order discovery, consider extrinsic evidence, and hold
evidentiary hearings in order to determine its own
Amended Complaint seeks $140, 000 in damages because Astonish
allegedly failed to provide digital marketing services as set
forth in the Agreement and Amendment. ECF No. 12-1 at 2-3.
Astonish argues that IBW's Amended Complaint does not
meet the amount-in-controversy requirement for diversity
jurisdiction because the Reduction Provision in the Amendment
provides for a maximum of $22, 500 in damages. ECF No. 9-1 at
7. And to the extent that IBW seeks damages for pre-Amendment
damages, the Amendment, Astonish contends, releases Astonish
from those claims. Id. at 6. The Release provides:
From and after the date hereof [IBW] agrees it will not sue
for any reason and hereby releases and forever discharges
Astonish from any and all claims, actions, damages, and
losses whatsoever known and unknown as of the date of this
Amendment, except those claims which occur in the future as a
result of a material default in Astonish's performance of
ECF No. 9-2 at 34. IBW reasons that, because Astonish
breached the Amendment, IBW can recover pre-Amendment
damages. ECF No. 12-1 at 4.
party seeking to invoke jurisdiction . . . has the burden of
showing that [it] has met the statutory requirements."
Spielman v. Genzyme Corp.,251 F.3d 1, 4 (1st Cir.
2001). Generally, the amount of damages alleged by the
invoking party "will control the amount in controversy
for jurisdictional purposes" as long as the claim is
made "in good faith." Coventry Sewage Assocs.
v. Dworkin Realty Co.,71 F.3d 1, 6 (1st Cir. 1995). An
invoking party demonstrates good faith by showing that
"'to anyone familiar with the applicable law this
claim could objectively have been viewed as worth more than