United States District Court, D. Idaho
TODD ALLEN TULLETT and TODD TULLETT LLC, an Oregon Limited Liability Company, Plaintiffs,
BRIAN PEARCE, SUSAN PEARCE, PORTER PEARCE, and AURORA PEARCE, Defendants.
LYNN WINMILL, U.S. DISTRICT COURT JUDGE
December 19, 2018, United States Magistrate Judge Candy W.
Dale issued a Report and Recommendation, recommending that
Plaintiffs' Motion to Remand be granted and this matter
be remanded to the District Court of the Fourth Judicial
District of the State of Idaho. Dkt. 14. Any party may
challenge a magistrate judge's proposed recommendation by
filing written objections within fourteen days after being
served with a copy of the Magistrate Judge's Report and
Recommendation. See 28 U.S.C. § 636(b)(1)(C).
The district court must then “make a de novo
determination of those portions of the report or specified
proposed findings or recommendations to which objection is
made.” Id. The district court may accept,
reject, or modify in whole or in part, the findings and
recommendations made by the Magistrate Judge. Id.;
see also Fed. R. Civ. P. 72(b).
filed a timely objection challenging the Report and
Recommendation's conclusion that Plaintiffs' Motion
to Remand should be granted, that the case be remanded back
to state court, and that Plaintiffs be awarded their attorney
fees and costs. Dkt. 15. The Court has considered the
Defendants' contentions and conducted a de novo
review of the record and adopts the magistrate judge's
report and recommendation in full.
magistrate judge recommended granting Plaintiffs' motion
to remand because Defendants' notice of removal failed to
allege a jurisdictional amount in excess of $75, 000.
See 28 U.S.C. §§ 1332, 1446; Dkt. 14 at 2.
Defendants objected that the Court mistakenly neglected to
consider their counterclaims in calculating the amount in
controversy. Dkt. 15 at 5. As justification, Defendants point
the Court to dictum in an unpublished, non-precedential Ninth
Circuit decision to suggest that “the well-pleaded
complaint rule does not apply to counterclaims in the context
of diversity jurisdiction.” See Id. at 3-4,
citing Pozez v. Clean Energy Capital, LLC, 593
Fed.Appx. 631, 632 (9th Cir. 2015). The Court therefore
considers de novo whether counterclaims count toward
the jurisdictional amount when a case is removed from state
court on the basis of diversity jurisdiction.
the magistrate judge applied the correct standard to
calculate the jurisdictional amount, and Defendants'
objection is inapposite, the Court will grant the motion to
remand and will fully adopt the magistrate judge's
recommendation. When calculating the jurisdictional amount in
a case removed on the basis of diversity, the Ninth Circuit
has clearly stated that “the amount in controversy is
determined by the value of the object plaintiff is seeking,
which may include punitive damages and attorney fees.
Kroske v. U.S. Bank Corp., 432 F.3d 976, 980 (9th
Cir. 2005); Dkt. 14 at 4. Furthermore, the removal statute is
“strictly construed” and there is a strong
presumption that the plaintiff has not claimed an amount that
satisfies the removal threshold. Corral v. Select
Portfolio Servicing, Inc., 878 F.3d 770, 773-74 (9th
Cir. 2017). Compulsory counterclaims can satisfy the amount
in controversy, but only when the case was originally filed
in federal court. See Fenton v. Freedman, 748 F.2d
1358, 1359 (9th Cir. 1984). This case comes to federal court
on removal, so the exception for compulsory counterclaims
does not apply. In their objection Defendants cite no cases
in the Ninth Circuit or elsewhere that use counterclaims when
calculating the jurisdictional amount for a case removed on
diversity jurisdiction. The Court has found no such
authority, and is not persuaded by Defendants'
parties do not dispute that Plaintiffs seek $5, 653, well
below the $75, 000 jurisdictional requirement. Dkt. 14 at 5.
Because Defendants' objection is unfounded, and Judge
Dale correctly calculated the amount in controversy, this
matter will be remanded to the state court where the parties
can raise and resolve their arguments as to the sufficiency
of the complaint and the merits of the claims. Furthermore,
because the Defendants' objection did not raise any new
basis to justify removal, the Court will also adopt the
magistrate judge's recommendation that fees be awarded
pursuant to 28 U.S.C. § 1447(c).
Having conducted a de novo review of the Report and
Recommendation, the Court finds that Magistrate Judge
Dale's Report and Recommendation is well founded in law
and consistent with the Court's own view of the evidence
in the record. Therefore, acting on the recommendation of
Magistrate Judge Dale, and this Court being fully advised in
the premises, IT IS HEREBY ORDERED that the
Report and Recommendation entered on December 19, 2018,
(Dkt.14), shall be, and is hereby,
INCORPORATED by reference and
ADOPTED in its entirety.
Plaintiffs' Motion to Remand (Dkt. 5) is
GRANTED, and this matter remanded to the
District Court of the Fourth Judicial District of the State
of Idaho, in and for the County of Payette, for all further
Plaintiffs' request for costs and ...