DLD-202 NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 21-1500
___________
JOHN C. BERKERY, SR.,
Appellant
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
(“STATE FARM”)
____________________________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 2-20-cv-01910)
Chief District Judge: Honorable Juan R. Sánchez
____________________________________
Submitted on Appellee’s Motion for Summary Action Pursuant to
Third Circuit LAR 27.4 and I.O.P. 10.6
June 17, 2021
Before: JORDAN, KRAUSE and PHIPPS, Circuit Judges
(Opinion filed July 9, 2021)
_________
OPINION*
_________
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
PER CURIAM
John Berkery, Sr., proceeding pro se, appeals from the District Court’s order
dismissing his amended complaint. The appellee, State Farm Mutual Automobile
Insurance Company (“State Farm”) has filed a motion for summary affirmance. Because
the appeal presents no substantial question, we grant State Farm’s motion and will
summarily affirm the District Court’s order (with one modification).
I.
In October 2019, Berkery was involved in a car accident in a Wawa parking lot.
Berkery, who holds a car insurance policy with Government Employees Insurance
Company (“GEICO”), was backing out of a parking spot when his vehicle collided with
Thomas Mooney’s, which was also backing out of a parking spot. Mooney is a State
Farm policyholder. Each driver blamed the other for the accident. Berkery made an
insurance claim with State Farm (Mooney’s insurer). State Farm denied the claim on the
basis that it was unable to determine who was at fault for the accident. See Complaint,
ECF No 2 at 28 (explaining that State Farm’s policy is to assign liability at “word versus
word” when a disputed incident is unsupported by evidence).
Several months later, Berkery filed a complaint in the District Court alleging that
State Farm had failed to conduct a proper investigation into the accident and denied his
insurance claim in bad faith. He raised claims of common law fraud and deceit, bad faith
pursuant to 42 Pa. Cons. Stat. § 8371, violations of the Pennsylvania Unfair Trade
2
Practices and Consumer Protection Law, and violations of the Pennsylvania Unfair
Insurance Practices Act. State Farm moved to dismiss the complaint for failure to state a
claim, after which Berkery amended his complaint to add a claim for “intentional and
negligent interference with this action” by State Farm.1 In his amended complaint,
Berkery requested actual damages of $788.58, an unspecified amount of incidental
damages, costs, fees, expenses, and interest on any monetary damages. He also asked for
a permanent injunction against State Farm. State Farm moved to dismiss Berkery’s
amended complaint, again arguing that he had failed to state a claim.2
After reviewing the record, the District Court sua sponte dismissed Berkery’s
complaint with prejudice pursuant to Federal Rule of Civil Procedure 12(h)(3) for lack of
subject matter jurisdiction. The District Court determined that, although the parties were
completely diverse, Berkery had failed to plead the requisite amount in controversy to
1
Berkery also alleged claims against a State Farm agent, Vinita Deshmukh. However,
Berkery never served Deshmukh with process and Deshmukh is not a party to this
lawsuit.
2
State Farm argued (1) that Berkery’s claims under § 8371, the Pennsylvania Unfair
Trade Practices and Consumer Protection Law, and the Pennsylvania Unfair Insurance
Practices Act were barred because Pennsylvania law permits such claims only from an
insured against his insurer and Berkery did not own a State Farm policy; (2) that his fraud
claim failed because he had not pleaded the claim with particularity; and (3) that
“intentional and negligent interference with this action” is not a valid cause of action.
3
sustain federal diversity jurisdiction. See 28 U.S.C. § 1332.3 Berkery appealed, and
State Farm filed a motion to summarily affirm the District Court’s order.
II.
We have jurisdiction under 28 U.S.C. § 1291 and review de novo the District
Court’s dismissal for lack of subject matter jurisdiction. Metro. Life Ins. Co. v. Price,
501 F.3d 271, 275 (3d Cir. 2007). We construe Berkery’s pro se amended complaint
liberally. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam). We may
summarily affirm the District Court’s decision if the appeal fails to present a substantial
question. Murray v. Bledsoe, 650 F.3d 246, 247 (3d Cir. 2011) (per curiam); 3d Cir.
L.A.R. 27.4; I.O.P. 10.6.
III.
The District Court properly dismissed Berkery’s amended complaint. “It is
fundamental that federal courts must have subject matter jurisdiction before reaching the
merits of a case[.]” GBForefront, L.P. v. Forefront Mgmt. Grp., 888 F.3d 29, 34 (3d Cir.
2018). Accordingly, even when neither party raises the issue of subject matter
jurisdiction, a federal court must raise the issue on its own, as the District Court did here.
See Fed. R. Civ. P. 12(h)(3) (“If the court determines at any time that it lacks subject-
3
Because Berkery’s amended complaint raised only state law claims, the District Court
could not have exercised federal question jurisdiction. Cf. 28 U.S.C. § 1331.
4
matter jurisdiction, the court must dismiss the action.”); Carlsberg Res. Corp. v. Cambria
Sav. & Loan Ass’n, 554 F.2d 1254, 1256 (3d Cir. 1977).
District courts have diversity jurisdiction where the parties are citizens of different
states and “where the matter in controversy exceeds the sum or value of $75,000,
exclusive of interest and costs.” 28 U.S.C. § 1332. The plaintiff bears the burden of
proving, by a preponderance of the evidence, that the amount in controversy exceeds
$75,000. Auto-Owners Ins. Co. v. Stevens & Ricci Inc., 835 F.3d 388, 395 (3d Cir.
2016). Typically, the sum alleged by the plaintiff in the complaint controls. See St. Paul
Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1938). However, “if, from the
face of the pleadings, it is apparent, to a legal certainty, that the plaintiff cannot recover
the amount claimed . . . the suit will be dismissed.” Id. at 289.
Here, it is apparent to a legal certainty from the face of Berkery’s amended
complaint that he cannot satisfy the amount-in-controversy requirement. Berkery
requested that he be awarded actual damages of $788.58, “incidental damages as
appropriate,” as well as “costs, fees, expenses, and pre-judgment and other statutory
interest on any incidental monetary damages.” Am. Complaint, ECF No. 9 at 19–20. He
also requested that the District Court enjoin State Farm from “further violations of law”
and “commissions of the [alleged] fraudulent actions.” Id. at 19. These requests fall far
below the $75,000 threshold.
5
As the District Court observed, Berkery did not ask for specific incidental
damages, and no incidental damages can be inferred from the allegations in his amended
complaint. Moreover, interest and costs are excluded from the calculation of the amount
in controversy, see 28 U.S.C. § 1332, and Berkery had no attorney’s fees because he
proceeded pro se and in forma pauperis. And, as the District Court explained, Berkery’s
request to enjoin State Farm from its alleged actions could, at most, amount to the value
of his denied insurance claim. See In re Corestates Tr. Fee Litig., 39 F.3d 61, 65 (3d Cir.
1994) (holding that, for injunctive actions, “the amount in controversy is measured by the
value of the right sought to be protected”). Berkery did not request any other types of
damages. See Mem. Op., ECF No. 15 at 5 (explaining that Berkery did not allege, among
other things, medical or lost-wages damages).4 Thus, it appears to a legal certainty that
the value of enjoining State Farm combined with Berkery’s actual and incidental
damages cannot exceed $75,000.
Berkery argues that the District Court should have permitted him to amend his
complaint a second time to add a demand for punitive damages. This argument is
unavailing because even a liberal reading of Berkery’s complaint does not lead to the
conclusion that he is entitled to recover the necessary amount of damages. As noted
above, Berkery’s damages are based on State Farm’s refusal to pay a claim for a car
4
The police report attached to Berkery’s original complaint states that “[n]o injuries were
reported” following the collision. Complaint, ECF No. 2 at 26.
6
accident in which its insured asserted that Berkery was at fault. Berkery’s alleged actual
damages were less than $800. Assuming for the sake of argument that Berkery could
plead in good faith $1,600 in compensatory damages (over twice the amount of his
alleged actual damages), he would have to plead over $73,400 in punitive damages to get
“over the jurisdictional hump.” Munro v. Golden Rule Ins. Co., 393 F.3d 720, 721 (7th
Cir. 2004).
Such a drastic ratio between punitive and compensatory damages (over 45 to 1)
would almost certainly violate the Constitution. See State Farm Mut. Auto. Ins. Co. v.
Campbell, 538 U.S. 408, 425 (2003) (“[I]n practice, few awards exceeding a single-digit
ratio between punitive and compensatory damages, to a significant degree, will satisfy
due process.”); CGB Occupational Therapy, Inc. v. RHA Health Servs., Inc., 499 F.3d
184, 192–93 (3d Cir. 2007) (determining that a ratio of over 18 to 1 was unconstitutional
where there were no “special circumstances” to justify it); Munro, 393 F.3d at 721–22
(concluding that the district court lacked jurisdiction where the plaintiffs’ punitive
damages would need to be more than 10 times the amount of their alleged compensatory
damages to meet the $75,000 threshold). Berkery’s amended complaint does not include
any allegations suggesting that an unusually high punitive-damages award would be
appropriate here. See generally Packard v. Provident Nat. Bank, 994 F.2d 1039, 1046 (3d
Cir. 1993) (explaining that when a claim for punitive damages “comprises the bulk of the
amount in controversy and may have been colorably asserted solely or primarily for the
7
purpose of conferring jurisdiction, that claim should be given particularly close
scrutiny”). Thus, further amendment of Berkery’s complaint, even including a request
for punitive damages, would be futile. See Grayson v. Mayview State Hosp., 293 F.3d
103, 108 (3d Cir. 2002).
IV.
While we agree with the District Court’s decision to dismiss Berkery’s case for
lack of jurisdiction, the dismissal should have been without prejudice. See N.J.
Physicians, Inc. v. President of U.S., 653 F.3d 234, 241 n.8 (3d Cir. 2011) (explaining
that dismissals for lack of subject matter jurisdiction are “by definition without
prejudice”). Accordingly, we modify the District Court’s order to dismiss the complaint
without prejudice to Berkery’s right to pursue his claims in state court. With that
modification, we grant State Farm’s motion and will summarily affirm the District
Court’s judgment. See 3d Cir. L.A.R. 27.4; I.O.P. 10.6.
8