Case: 09-30993 Document: 00511095969 Page: 1 Date Filed: 04/29/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
April 29, 2010
No. 09-30993 Lyle W. Cayce
Summary Calendar Clerk
PARIS DITCHARO; EUGENE GALLAND; BRETT MAJORIA, and others
similarly situated,
Plaintiffs - Appellants
v.
UNITED PARCEL SERVICE, INC.,
Defendant - Appellee
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:08-CV-3648
Before REAVLEY, DAVIS, and HAYNES, Circuit Judges.
PER CURIAM:*
This is an appeal from the district court's order denying remand. This is
also an appeal from the district court's order denying class certification and
dismissing the case. For the reasons set forth below, we AFFIRM the district
court's orders.
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
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No. 09-30993
I.
Appellants brought the instant suit after losing their positions as full-time
employees for Appellee. Appellants alleged that Appellee promised full-time,
permanent, non-seasonal driver positions to them and seventy other people in
late 2005, only to terminate them or demote them to part-time or non-driver
positions after the 2005-2006 holiday season. Appellants brought claims for
breach of contract, detrimental reliance, and relief under the Louisiana law of
obligations. Appellants also sought class certification for their claims.
This is the second case in which Appellants Ditcharo and Majoria have
brought these claims against Appellee. In the prior case, the plaintiffs filed suit
in federal court, alleging essentially the same facts, praying for the same relief,
and seeking class certification for the same purported group. See generally
Order and Reasons, Majoria et al. v. United Parcel Service, Inc., 2:06-CV-11266
(E.D. La. Jan. 17, 2008) (Doc. No. 45) ("Prior Case"). The district court denied
class certification in the Prior Case, holding that the plaintiffs failed to
sufficiently plead facts to support the required elements of class certification
under Federal Rule of Civil Procedure 23. See id. at 2-3; F ED. R. C IV. P. 23. The
court also noted that the plaintiffs failed to plead the citizenship of the parties
or the requisite jurisdictional amount necessary for federal diversity jurisdiction.
See Order and Reasons 3-4. The court also found that the complaint generally
appeared to seek a fraud claim but failed to allege with any particularity the
facts or circumstances giving rise to fraud, as required by Rule 9(b). See F ED. R.
C IV. P. 9(b). Consequently, the court ordered the plaintiffs to amend their
allegations and provide a more definite statement as to their claims. See Order
and Reasons at 4-5. Rather than do so, however, the plaintiffs moved for
dismissal of their entire case without prejudice, arguing that they could not
satisfy the amount in controversy necessary for federal diversity jurisdiction.
The district court granted the motion to dismiss without prejudice.
2
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Appellants then filed the instant suit in Louisiana state court. This time,
Appellants stated in their complaint and in an attached document that they
were specifically seeking damages of less than $75,000 and would not accept any
award exceeding that amount. Appellee nonetheless removed the case to district
court, citing federal diversity jurisdiction. Appellants moved to remand, arguing
again that their claims did not satisfy the requisite amount in controversy for
federal diversity jurisdiction of damages exceeding $75,000. However, the
district court denied remand, finding both diversity of citizenship and the
amount in controversy to be satisfied.
Appellee then moved to dismiss the case or in the alternative moved for a
more definite statement. The district court held that, once again, Appellants
had failed to adequately allege sufficient facts for class certification. The court
further held that Appellants had failed to adequately state a claim under
Louisiana law. The court then declined to allow Appellants the opportunity to
amend their complaint. Citing the Prior Case, the court noted that Appellants
had been given ample opportunity to amend their complaint but had instead
chosen to nonsuit their claims and re-file a nearly-identical complaint in state
court. When the instant case was removed to federal court and faced with a
motion to dismiss, Appellants again failed to move to amend their complaint.
The court further noted that the defects in Appellants' claims were not likely to
be "easily and quickly remedied" by an amended complaint. Consequently, the
court dismissed the case with prejudice.
On appeal, Appellants argue that the district court erred in denying
remand for lack of jurisdiction. Appellants also argue that class certification is
appropriate and that their complaint adequately states a claim for detrimental
reliance.
3
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II.
Appellants first argue that the district court erred when it denied their
motion to remand. As the issue of remand concerns whether the district court
properly exercised jurisdiction over Appellants' claims, it is the issue we consider
before all others. See, e.g., McDonal v. Abbott Labs., 408 F.3d 177, 182-83 (5th
Cir. 2005). We review a district court's denial of a motion to remand de novo.
See Grant v. Chevron Phillips Chem. Co., 309 F.3d 864, 868 (5th Cir. 2002).
Federal diversity jurisdiction requires complete diversity between all
plaintiffs and all defendants, and the amount in controversy must exceed
$75,000. See 28 U.S.C. § 1332(a). In the instant case, there is no question that
all named Appellants are of diverse citizenship from Appellee. The only issue
on appeal is the amount in controversy.
Plaintiffs who file suit in Louisiana state courts are prohibited by law from
stating the amount of damages in their complaint. See L A. C ODE C IV. P ROC. A NN.
art. 893 A.(1) (2005). Accordingly, to survive a motion to remand, "the removing
defendant must prove by a preponderance of the evidence that the amount in
controversy exceeds $75,000." Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880, 882
(5th Cir. 2000) (citing Luckett v. Delta Airlines, Inc., 171 F.3d 295, 298 (5th Cir.
1999)). "The defendant may prove that amount either by demonstrating that the
claims are likely above $75,000 in sum or value, or by setting forth the facts in
controversy that support a finding of the requisite amount." Id. at 882-83 (citing
Luckett, 171 F.3d at 298 (additional cites omitted)). Such facts should be set
forth either in the removal petition (the preferred method), or by subsequent
affidavit. See Grant, 309 F.3d at 868.
In the instant case, Appellee has alleged facts in its notice of removal, and
it has included an affidavit setting forth corresponding evidence, that wages and
benefits for a new UPS employee for the first eighteen months of employment
4
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exceed $75,000.1 Based on these submissions, the district court found the
amount in controversy requirement satisfied for at least one plaintiff in
Appellants' putative class. While the court noted that statistical evidence may
show that few plaintiffs in Appellants' putative class would remain with
Appellee for eighteen months, the court found that Appellants had provided no
evidence whatsoever regarding the damages sought by other putative class
plaintiffs in the class. Accordingly, the district court saw Appellee's evidence as
sufficient to find that "at least one plaintiff's claimed recovery likely exceeds
§75,000, exclusive of costs and interest."
Appellants argue that the district court erred in considering lost wages
and benefits as potential damages because Appellee hired Appellants and
purported class plaintiffs as at-will employees. See L A. C IV. C ODE A NN. art. 2747
(2005).2 Because Appellants could have been terminated at any time for any
reason by Appellee, Appellants argue that they and putative class plaintiffs can
only seek consequential damages for Appellee's "fraud in the inducement."
However, Appellants never characterized their case as seeking only
consequential damages before the district court, nor did they raise Louisiana's
at-will statute as a basis for limiting damages before the district court.3 Nor
have Appellants stated any claim for "fraud in the inducement" in their
1
All the Plaintiffs were allegedly terminated or demoted in December 2005 or January
2006. The instant suit was brought in June 2008.
2
"A man is at liberty to dismiss a hired servant attached to his person or family,
without assigning any reason for so doing. The servant is also free to depart without assigning
any cause." LA . CIV . CODE ANN . art. 2747.
3
Indeed, as we will explain later, it is unclear how Appellants can assert any claim at
all against Appellee that they were unlawfully terminated under the alleged facts, given their
concession that they were at-will employees and thus subject to termination at any time.
5
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complaint.4 Therefore, we will not consider these arguments raised for the first
time on appeal. See, e.g., Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337,
344 n.3 (5th Cir. 2007) ("It is well settled that we do not consider issues raised
for the first time on appeal.").
Looking to the actual language of the complaint, Appellants' allege that
they and other unnamed plaintiffs were "denied the benefit of [the] . . . bargain
with UPS," which included "holding the status of permanent, non-seasonal
drivers with UPS [who] typically enjoy high wages, comprehensive employment
benefits and long periods of stable employment." Nowhere in the complaint do
plaintiffs seek to limit their class action to seeking only consequential damages.
Accordingly, inasmuch as Appellants' complaint states a claim for loss of their
status as permanent employees, the district court did not err in finding that a
class plaintiff would likely seek damages exceeding $75,000.
Appellants further argue that the amount in controversy requirement was
not satisfied because Appellants specifically limited their damages to less than
$75,000 in their pleadings. "[I]f a defendant in a Louisiana suit can produce
evidence sufficient to constitute a preponderance showing that, regardless of the
style or wording of the demand, the amount in controversy actually exceeds
§ 1332's jurisdictional threshold, . . . [t]he plaintiff can defeat diversity
jurisdiction only by showing to a 'legal certainty' that the amount controversy
does not exceed $75,000."5 Grant, 309 F.3d at 869 (citing De Aguilar v. Boeing
Co., 47 F.3d 1404, 1412 (5th Cir. 1995) (quoting St. Paul Mercury Indem. Co. v.
4
We note once again that in the Prior Case, the district court ordered Appellants
Ditcharo and Majoria to replead any fraud claim that they may have brought, since their prior
complaint failed to meet the elements under Rule 9(b). Rather than do so, however,
Appellants moved for dismissal and refiled their case in state court with almost identical
allegations.
5
We have emphasized that this is not a burden-shifting exercise, as "plaintiff must
make all information known at the time he files the complaint." De Aguilar, 47 F.3d at 1412
(citing St. Paul Mercury)).
6
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Red Cab Co., 303 U.S. 283, 289, 58 S. Ct. 586 (1938)). Plaintiffs may attempt to
establish such "legal certainty" by submitting a "'binding stipulation or
affidavit'" with their complaint, stating that they affirmatively seek less than the
jurisdictional threshold, and further stating that they will not accept an award
that exceeds that threshold. See De Aguilar, 47 F.3d at 1412 (quoting In re Shell
Oil Co., 970 F.2d 355, 356 (7th Cir. 1992) (per curiam)). Appellants have
attempted to do so here.6
However, inasmuch as these assertions limit Appellants' willingness and
ability to accepting an award below the jurisdictional threshold, they do not
provide Appellants with the authority to deny other members of their putative
class action the right to seek an award greater than $75,000. See, e.g., De
Aguilar, 47 F.3d at 1415 (named plaintiffs could not limit recovery to less than
the jurisdictional amount because they lacked authority to speak for unidentified
plaintiffs); see also Manguno v. Prudential Prop. and Cas. Ins. Co., 276 F.3d 720,
724 (5th Cir. 2002) ( "[I]t is improbable that Manguno can ethically unilaterally
waive the rights of the putative class members to attorney's fees without their
authorization."). Because the district court did not err in finding that unnamed
plaintiffs in the class would likely seek damages in excess of $75,000 if this class
were certified and the case were to move forward, we hold the district court did
not err in denying Appellants motion to remand.7
6
Appellants have affirmatively stated in their complaint that they do not seek an
award exceeding $75,000. Appellants also state in their complaint that they will not accept
an award exceeding $75,000. Appellants have signed and attached a "Verification and
Certification" to their complaint with similar language.
7
Because we hold that the district court did not err in finding by a preponderance of
the evidence that individual plaintiffs' claims for lost wages and benefits would likely exceed
the jurisdictional threshold for federal diversity jurisdiction, we need not consider Appellee's
additional argument that Appellants' claims for attorneys fees provide additional damages
under Louisiana law that should be considered in determining the amount in controversy.
7
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No. 09-30993
III.
Appellants next argue that even if the district properly exercised federal
jurisdiction over the case, the court nevertheless erred by failing to grant class
certification. We review a district court's denial of class certification for abuse
of discretion. See Maldonado v. Ochsner Clinic Found., 493 F.3d 521, 523 (5th
Cir. 2007) (citing Bell Atl. Corp. v. AT&T Corp., 339 F.3d 294, 301 (5th Cir.
2003)). “Implicit in this deferential standard is a recognition of the essentially
factual basis of the certification inquiry and of the district court's inherent power
to manage and control pending litigation.” Id. (quoting In re Monumental Life
Ins. Co., 365 F.3d 408, 414 (5th Cir. 2004)) (additional cites and quotes omitted).
Because "a court abuses its discretion when it makes an error of law, we apply
a de novo standard of review to such errors." O'Sullivan v. Countrywide Home
Loans, Inc., 319 F.3d 732, 737 (5th Cir. 2003) (citing Stirman v. Exxon Corp., 280
F.3d 554, 561 (5th Cir. 2002)).
Parties seeking class certification bear the burden of showing that they
meet the four requirements of Rule 23(a): (1) numerosity, (2) commonality, (3)
typicality, and (4) adequacy of representation. See F ED. R. C IV. P. 23(a). The
parties must then show that they meet the requirements of Rule 23(b). See F ED.
R. C IV. P. 23(b). "The district court must 'conduct a rigorous analysis of the Rule
23 prerequisites before certifying a class.'" Maldonado, 493 F.3d at 523 (quoting
O'Sullivan, 319 F.3d at 738).
In the instant case, the district court held that Appellants "offer[ed] no
factual support for their conclusory assertion that they are 'adequate
representatives' of the proposed class . . . ." We agree. Appellants' complaint
simply states that "they can fairly and adequately protect the interests of the
class." However, by specifically attempting to limit the amount of damages
available to each member the class, Appellants demonstrate that the potential
interests of certain class members – particularly those seeking more than
8
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No. 09-30993
$75,000 in damages – would not be well-represented. In addition, Appellants
have not alleged that all seventy employees were terminated at or even near the
same time, making the calculations for each plaintiff's damages an
individualized issue of fact. Indeed, Appellants allege that some plaintiffs were
only demoted or changed to non-driver positions, making any issue of damages
based on a claim of "detrimental reliance" even more individualized and fact
specific. "Where the plaintiffs' damage claims focus almost entirely on facts and
issues specific to individuals rather than the class as a whole, the potential
exists that the class action may degenerate in practice into multiple lawsuits
separately tried. In such cases, class certification is inappropriate." O'Sullivan,
319 F.3d at 744-45 (inner cites and quotes omitted).
Given Appellants' failure to allege facts showing that they could
adequately represent the class as a whole, we hold the district court did not
abuse its discretion in denying class certification.
IV.
Finally, Appellants argue that even if the court has jurisdiction, and even
if class certification was properly denied, the district court erred by dismissing
Appellants' case for failure to state a claim. We review a court's decision to
dismiss a case on the pleadings de novo. See Reliable Consultants, Inc. v. Earle,
517 F.3d 738, 742 (5th Cir. 2008). To survive a motion to dismiss based on a
failure to state a claim, a plaintiff need only provide "a short and plain
statement of the claim showing that the pleader is entitled to relief." Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 1964 (2007) (quoting F ED.
R. C IV. P. 8(a)(2)). While the "[f]actual allegations must be enough to raise a
right to relief above the speculative level," id., to survive a motion to dismiss, a
plaintiff need only plead "enough facts to state a claim to relief that is plausible
on its face." Id. at 570, 127 S. Ct. at 1974.
9
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Appellants only remaining claim is one for detrimental reliance.8 "To
recover when asserting a cause of action for detrimental reliance, a plaintiff
must prove three elements: (1) a representation by conduct or work; (2)
justifiable reliance thereon; and (3) a change of position to one's detriment
because of the reliance." Butler v. Sudderth, 784 So. 2d 125, 131 (La. Ct. App.
2001) (citing John Bailey Contractor, Inc. v. State DOTD, 439 So. 2d 1055, 1059
(La. 1983)).
In the instant case, the district court held that Appellants failed to allege
any "change in position" in their complaint. We agree. Nowhere in the
complaint have Appellants alleged facts showing they changed position in
reliance on Appellee's promise of permanent employment to their detriment.
While Appellants attempt to allege such facts in later submissions to this court
and the district court, these allegations are outside our consideration. See Great
Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 327 (5th
Cir. 2002) ("We decline to allow plaintiffs to rely on the contents of their
appellate brief as a surrogate for allegations that are missing from their
complaint.").
Even if Appellants could show that they materially changed their positions
to their detriment in order to accept Appellee's offer of employment, their claims
of detrimental reliance still fail. Appellants do not allege that Appellee failed to
hire them, nor do they allege Appellee failed to pay them for the work they
8
Appellants have abandoned their claim for breach of contract by failing to argue it
here or before the district court. Morever, while Appellants cite the "Louisiana law of
obligations" in their complaint as a basis for their claim, they make no reference to it in their
appellate briefs or in their opposition to Appellee's motion to dismiss before the district court.
Accordingly, we consider this issue abandoned as well. Finally, Appellants raise the Louisiana
"abuse of rights doctrine" in their appellate reply brief, but they do not raise it in their original
appellate brief or as an issue before the district court. We will therefore not consider it here.
See Carmona v. Southwest Airlines Co., 536 F.3d 344, 347 n.5 (5th Cir. 2008) (noting that "we
do not generally consider issues raised for the first time in a reply brief"); Turner, 476 F.3d at
344 n.3.
10
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performed. Rather, Appellants allege in their complaint that their harms stem
from Appellee's promise of permanent employment. However, "[a]ny contract for
permanent employment is void as against public policy and is unenforceable in
Louisiana. Such a contract must be read as having an indefinite term, and is
therefore, terminable at will by either party." May v. Harris Mgmt. Corp., 928
So. 2d 140, 146 (La. Ct. App. 2005) (citing, e.g. Pitcher v. United Oil & Gas
Syndicate, 139 So. 760, 761 (La. 1932)); see also L A. C IV. C ODE A NN. art. 2747
(2005). Accordingly, any detrimental reliance Appellants may have suffered
based on a promise of permanent employment is unreasonable as a matter of
law. See May, 928 So. 2d at 146-147.
We therefore hold that the district court did not err in holding that
Appellants failed to state a claim.9
AFFIRMED.
9
Appellants also argue that the district court erred in denying them the opportunity
to amend their complaint or provide a more definite statement. See FED . R. CIV . P. 12(e). We
review orders made pursuant to Rule 12(e) for abuse of discretion. Old Time Enters., Inc. v.
Int'l Coffee Corp., 862 F.2d 1213, 1220 (5th Cir. 1989). We agree with the district court that
the defects in Appellants' claim for detrimental reliance are not likely to be remedied by
additional allegations. Moreover, Appellants had ample notice and opportunity to amend their
complaint in this suit and in the Prior Case. They declined to do so when faced with a 12(e)
order in the Prior Case and have not sought leave of the court to amend in the instant case.
We therefore find no abuse of discretion.
11