United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT June 5, 2003
_____________________________________
Charles R. Fulbruge III
No. 02-30836 Clerk
MICHAEL L. SCHWARTZ
Plaintiff - Appellant
v.
AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY INC.
Defendant - Appellee
__________________________________________________
Appeal from the United States District Court
For the Eastern District of Louisiana
(01-CV-646)
__________________________________________________
Before DAVIS, BENAVIDES, Circuit Judges, and RESTANI,* District
Judge.
PER CURIAM:**
Michael L. Schwartz (“Schwartz”) appeals the district
court’s grant of summary judgment in favor of American Express
Travel Related Service Company, Inc. (“AETRS”) in his suit for
damages associated with AETRS’s alleged unlawful cancellation of
his lines of credit. Schwartz contends that the district court’s
*
Judge, U.S. Court of International Trade, sitting by
designation.
**
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this opinion should not be published and is not precedent except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.
judgment must be vacated for lack of subject matter jurisdiction
and the suit remanded to state court.
Schwartz filed a petition in the Civil District Court for
the Parish of Orleans seeking relief for the “severe anxiety,
emotional distress, humiliation and embarrassment both past,
present and future” he suffered, as well as past and present
medical expenses incurred as a result of AETRS’s termination of
his credit. Schwartz also asserted an independent claim for
intentional infliction of emotional distress. AETRS removed the
suit to federal court on March 21, 2001, without objection.
AETRS filed a counterclaim seeking payment of the balances on
Schwartz’s cards, and Schwartz filed an amended complaint
alleging that he also suffered “substantial financial loss as a
result of American Express’s misrepresentation.” In his
deposition testimony, Schwartz alleged that as a result of his
mental instability he lost a potential sale of his restaurant,
the Camellia Grill in New Orleans. AETRS filed a Motion for
Summary Judgment, and the district court granted summary judgment
in favor of AETRS.
The appellate court reviews the question of subject matter
jurisdiction de novo. Hussain v. Boston Old Colony Insurance.
Co., 311 F.3d 623, 629 (5th Cir. 2002).
A state court action may be removed to federal court under
28 U.S.C. § 1441. That statute provides in relevant part:
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(a) Except as otherwise expressly provided by
Act of Congress, any civil action brought in
a State court of which the district courts of
the United States have original jurisdiction,
may be removed by the defendant or the
defendants, to the district court of the
United States for the district and division
embracing the place where such action is
pending. For purposes of removal under this
chapter, the citizenship of defendants sued
under fictitious names shall be disregarded.
(emphasis added). “The removing party bears the burden of
showing that federal jurisdiction exists and that removal was
proper.” Manguno v. Prudential Property and Cas. Insurance. Co.,
276 F.3d 720, 723 (5th Cir. 2002) (citing De Aguilar v. Boeing
Co., 47 F.3d 1404, 1408 (5th Cir. 1995).
“To determine whether jurisdiction is present for removal,
we consider the claims in the state court petition as they
existed at the time of removal.” Manguno at 723 (citing Cavallini
v. State Farm Mut. Auto Insurance. Co., 44 F.3d 256, 264 (5th
Cir. 1995)). “Any ambiguities are construed against removal
because the removal statute should be strictly construed in favor
of remand. “ Manguno at 723 (citing Acuna v. Brown & Root, Inc.,
200 F.3d 335, 339 (5th Cir. 2000)). However, the Supreme Court
has explained that:
where after removal a case is tried on the
merits without objection and the federal
court enters judgment, the issue in
subsequent proceedings on appeal is not
whether the case was properly removed, but
whether the federal district court would have
had original jurisdiction of the case had it
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been filled in that court.
Grubbs v. General Electric Credit Corp., 405 U.S. 699, 702
(1972). In such a case, the appellate court should review the
pleadings as they existed at the time the district court entered
judgment. Kidd v. Southwest Airlines, Co., 891 F.2d 540, 546
(5th Cir. 1990) (internal citations omitted).
In Caterpillar, Inc. v. Lewis, the Supreme Court held that
“a district court’s error in failing to remand a case improperly
removed is not fatal to the ensuing adjudication if federal
jurisdictional requirements are met at the time judgment is
entered.” 519 U.S. 61, 66 (1996). In that case, complete
diversity was lacking at the time Caterpillar removed the case to
federal court. One of the plaintiffs objected to the removal and
moved to have the case remanded to state court. The district
court denied the motion to remand. Prior to trial, the non-
diverse parties settled. Following a jury trial, the district
court entered judgment in favor of Caterpillar. The Court read
Grubbs to say that “an erroneous removal need not cause the
destruction of a final judgment, if the requirements of federal
subject-matter jurisdiction are met at the time the judgment is
entered.” Id. at 73.
AETRS removed this case based on diversity jurisdiction.
Both parties concede that diversity exists, and that the
jurisdictional issue on appeal is whether the case meets the
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$75,000 requirement for jurisdiction. Schwartz argues that AETRS
did not prove that the amount in controversy met the $75,000
threshold. Although Grubbs and Caterpillar dealt with cases
where subject-matter jurisdiction was lacking at the time of
removal due to a lack of complete diversity, the same reasoning
should apply to cases where the $75,000 threshold is not met
before the case is removed.
A reviewing court should refer to the State court petition
to determine the amount in controversy. See St. Paul Reinsurance
Co. Limited. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998).
However, Louisiana prohibits the specific pleading of damages.
LA. CODE CIV. PROC. Art 893(A)(1). This court held in Manguno,
that “where, as here, the petition does not include a specific
monetary demand, [the removing party] must establish by a
preponderance of the evidence that the amount in controversy
exceeds $75,000." 276 F.3d at 723. “This requirement is met if
(1) it is apparent from the face of the petition that the claims
are likely to exceed $75,000, or, alternatively, (2) the
defendant sets forth ‘summary judgment type evidence’ of facts in
controversy that support a finding of the requisite amount.” Id.
Viewing the pleadings as they existed at the time of
judgment, it is apparent that the claims were likely to exceed
$75,000. Schwartz sought damages for his past and future mental
suffering and medical expenses. Additionally, he alleged that
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AETRS caused him intentional infliction of emotional distress and
“substantial” financial losses. Thus, at the time the district
court rendered judgment, the court would have had original
jurisdiction had the suit been filed there. Therefore,
Schwartz’s jurisdictional argument is without merit, and we
AFFIRM the district court’s grant of summary judgment in favor of
AETRS.
AFFIRMED.
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