Stewart v. Tupperware Corp. ( 2004 )

United States Court of Appeals
For the First Circuit
No. 03-1404
KEITH STEWART and DIANA RAMÍREZ,
Plaintiffs, Appellants,
v.
TUPPERWARE CORPORATION; SUNNY ISLANDS SALES, INC.;
AMERICAN MOTORISTS INSURANCE COMPANY;
RUTH FUENTE-ALICIA AND HER CONJUGAL PARTNERSHIP,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Salvador E. Casellas, U.S. District Judge]
Before
Torruella, Lynch and Howard,
Circuit Judges.
Luis A. Meléndez-Albizu, with whom Law Offices of Luis A.
Meléndez-Albizu, were on brief, for appellants.
Vicente Santori-Margarida, with whom Vicente Santori-Coll,
were on brief, for appellees.
February 2, 2004
TORRUELLA, Circuit Judge. Plaintiffs-appellants, Keith
Stewart and Diana Ramírez (hereinafter jointly referred to as the
"plaintiffs"), brought a diversity action against defendants-
appellees, Tupperware Corporation, American Motorists Insurance
Company, Sunny Islands Sales Inc., Ruth Fuente Alicia ("Fuente")
and her conjugal partner (hereinafter collectively referred to as
the "defendants"). The district court found that the plaintiffs'
damages claims failed to satisfy the amount-in-controversy
requirement of 28 U.S.C. § 1332 and therefore dismissed the case
for lack of subject matter jurisdiction pursuant to defendants'
Fed. R. Civ. P. 12(b)(1) motion. For the reasons stated below, we
reverse.
I. Background
Plaintiffs, recently married, traveled to Puerto Rico
for their honeymoon. On September 12, 2000, plaintiffs went to
Charlie Auto to rent a car. Driving their rental car, plaintiffs
exited Charlie Auto and proceeded eastbound on Magdalena Avenue.
Meanwhile, defendant Fuente was departing from an
engagement arranged by co-defendant Tupperware Corporation. Fuente
drove southbound on Condado Avenue -- a one way street for
northbound traffic only.
When plaintiffs reached the intersection of Magdalena
Avenue and Condado Avenue, they proceeded through the intersection
because they had a green light. Fuente, still driving the wrong
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way down a one way street, drove her car into the left side of
plaintiffs' car. Both plaintiffs were injured in the crash and
were taken by ambulance to a nearby emergency clinic.
As a result of the crash, Diana Ramírez suffered
whiplash, chest trauma, cuts on her leg, and bruising on many parts
of her body. These injuries have allegedly resulted in continuing
chest and neck pain which has inhibited Ramírez's life. For
example, she claims that the chest pain was too severe to allow her
to breast feed her newborn child or have sexual relations with her
husband. Further, Ramírez's injuries limited the amount of work
she could perform at her job.
A medical examination conducted a little less than two
years after the crash reported that Ramírez suffers from a
permanent incapacity of 3% of her bodily functions. A
psychological examination conducted one year after the crash
estimated that Ramírez requires intensive psychotherapy and
medication for one year.
Keith Stewart suffered whiplash as a result of the crash.
A medical examination conducted a little less than two years after
the crash reported that Stewart suffered from cervical
paravertebral muscle strain and that the crash caused Stewart to
have 7% permanent impairment of his total bodily functions.
Stewart alleges that the injuries hinder his ability to work as a
New York policeman and prevented him from having intimate contact
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with his wife for about two to three months. A psychological
examination conducted a year after the crash reported that Stewart
suffered intense emotional trauma. The psychologist recommended
intensive psychotherapy and medication for approximately one year.
II. Analysis
We review the district court's dismissal for lack of
subject matter jurisdiction de novo. Spielman v. Genzyme Corp.,
251 F.3d 1, 4 (1st Cir. 2001). According to 28 U.S.C. § 1332,
federal "district courts shall have original jurisdiction of all
civil actions where the matter in controversy exceeds the sum or
value of $75,000, exclusive of interest and costs," and there is
diversity of citizenship. 28 U.S.C. § 1332(a). Where there are
multiple plaintiffs, each must allege a claim that is in excess of
$75,000. See Clark v. Paul Gray Inc., 306 U.S. 583, 589 (1939).
In this case, there is no question that diversity of citizenship
exists. Rather, the dispute turns on whether the damages exceed
$75,000.
Since plaintiffs seek to invoke federal diversity
jurisdiction, they have the burden of showing that their claims
meet the amount-in-controversy requirement. Spielman, 251 F.3d at
4. The longstanding test for determining whether a party has met
the amount-in-controversy states that:
The rule governing dismissal for want of
jurisdiction in cases brought in the federal
court is that, unless the law gives a
different rule, the sum claimed by the
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plaintiff controls if the claim is apparently
made in good faith. It must appear to a legal
certainty that the claim is really for less
than the jurisdictional amount to justify
dismissal.
St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288-89
(1938) (footnotes omitted). When applying this test, a court must
look at the circumstances at the time the complaint is filed.
Spielman, 251 F.3d at 5. Plaintiffs' "general allegation of
damages that meet the amount requirement suffices unless questioned
by the opposing party or the court." Id. (citing Dep't of
Recreation & Sports v. World Boxing Ass'n, 924 F.2d 84, 88 (1st
Cir. 1991)). If the opposing party questions the damages
allegation, then "'the party seeking to invoke jurisdiction has the
burden of alleging with sufficient particularity facts indicating
that it is not a legal certainty that the claim involves less than
the jurisdictional amount.'" Id. (quoting Dep't of Recreation and
Sports, 924 F.2d at 88) (further citations omitted). Further,
if, from the face of the pleadings, it is
apparent, to a legal certainty, that the
plaintiff cannot recover the amount claimed,
or if, from the proofs, the court is satisfied
to a like certainty that the plaintiff never
was entitled to recover that amount, . . . the
suit will be dismissed.
St. Paul, 303 U.S. at 289 (footnote omitted).
Plaintiffs brought their suit under the diversity
jurisdiction of the federal court alleging Puerto Rican law causes
of action. See Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938).
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Plaintiffs brought claims for (1) past and future physical, mental,
and emotional anguish, pain and suffering; (2) mental and emotional
anguish and distress resulting from witnessing their spouse suffer;
(3) loss of enjoyment of life and loss of consortium; (4) permanent
impairment to total bodily functions; and (5) future medical costs.
Defendants questioned plaintiffs' allegation that the
damages for each plaintiff exceeded $75,000. Thus, plaintiffs had
the burden of alleging facts indicating that it is not a legal
certainty that their individual claims involve less than $75,000.
To meet this burden, Diana Ramírez produced written interrogatories
documenting her injuries and pain, a medical report concluding that
Ramírez suffered a 3% permanent impairment and was at risk of
developing cervical spondylosis as a result of the accident, and a
psychological evaluation documenting her emotional trauma and
recommending intensive psychotherapy and medication for
approximately one year.
Keith Stewart produced written interrogatories
documenting his injuries, pain, and difficulty performing his job
as a New York policeman, a medical report concluding that Stewart
suffered a 7% permanent impairment, and a psychological evaluation
documenting his emotional trauma and recommending intensive
psychotherapy and medication for approximately one year.
The district court, after considering the
interrogatories, medical reports, and psychological evaluations,
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concluded that the plaintiffs failed to submit facts indicating
that it was not a legal certainty that their individual claims
involved less than $75,000. We disagree.
In reaching its conclusions, the district court examined
personal injury cases from the Puerto Rico Supreme Court, most of
which were over forty years old, which awarded damages, adjusted
for inflation, far below $75,000 for injuries similar to those
suffered by the plaintiffs. Relying on the amount of damages
awarded by Commonwealth courts constituted error. Contra Thomas v.
Travelers Ins. Co., 258 F. Supp. 873 (E.D. La. 1966). Although
"federal courts must, of course, look to state law to determine the
nature and extent of the right to be enforced in a diversity case,"
the "determination of the value of the matter in controversy for
purposes of federal jurisdiction is a federal question to be
decided under federal standards." Horton v. Liberty Mut. Ins. Co.,
367 U.S. 348, 352-53 (1961). In our view, the district court's
decision constituted error.
Using Puerto Rico Supreme Court cases to analyze the
amount-in-controversy for diversity purposes is the equivalent of
comparing apples and oranges. Damages in a Puerto Rico civil case
are determined by a judge, not a jury. In contrast, in the federal
courts, "[t]he task of estimating money damages, especially
intangible, noneconomic loss, constitutes a core jury function."
Davignon v. Clemmey, 322 F.3d 1, 11 (1st Cir. 2003). Thus, Puerto
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Rico Supreme Court cases are not an accurate indicator of the
possible damages that a federal jury would award for a claim
brought under Puerto Rico law.
We have previously held that a federal district court, in
determining whether a damage award is excessive, should not compare
damages awarded in a federal diversity case with damages awarded by
the Supreme Court of Puerto Rico. See Grajales-Romero v. American
Airlines, Inc., 194 F.3d 288, 300 (1st Cir. 1999) (quoting Mejías-
Quirós v. Maxxam Property Corp., 108 F.3d 425, 427 n.1 (1st Cir.
1997)). The fact that judges in the commonwealth courts frequently
award lesser sums than juries in the federal court "does not
override the general rule that a federal jury . . . is not bound in
making its determination by the amount that the Commonwealth courts
have awarded or approved." Correa v. Hosp. San Francisco, 69 F.3d
1184, 1198 (1st Cir. 1995) (quoting LaForest v. Autoridad de las
Fuentes Fluviales, 536 F.2d 443, 446-47 (1st Cir. 1976)). We
likewise hold that in determining the amount-in-controversy, a
federal district court should not be constrained by the amounts
awarded by the Supreme Court of Puerto Rico.
We believe, based on the evidence, that the plaintiffs
met their burden of alleging facts indicating that it is not a
legal certainty that their claims involve less than $75,000. This
becomes clear after examining cases, affirmed by this court, in
which federal juries in Puerto Rico returned verdicts for injuries
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similar to plaintiffs'. Taking notice of amounts recovered by
plaintiffs in similar cases in a similar locality is but one way to
assess whether a plaintiff can recover the jurisdictional amount.
See, e.g., Felton v. Greyhound Lines, Inc., 324 F.3d 771 (5th Cir.
2003). It should be noted, however, that this method is not always
conclusive. The fact that no prior plaintiff has recovered the
jurisdictional amount for a certain injury does not indicate, to a
legal certainty, that the plaintiff could not recover that amount.
In this case, however, federal juries in Puerto Rico have returned
verdicts far in excess of the jurisdictional amount for injuries
similar to plaintiffs'.
In Havinga v. Crowley Towing and Transp. Co., 24 F.3d
1480 (1st Cir. 1994), we upheld awards ranging from $200,000 to
$450,000 per plaintiff for pain and suffering and loss of capacity
for enjoyment of life. In Havinga, the plaintiffs' boat was struck
by a barge, forcing plaintiffs to abandon ship and await rescue at
night in shark-infested waters. The plaintiffs presented their own
testimony regarding their pain and suffering, supplemented with the
testimony of a psychologist. Though the plaintiffs did not suffer
physical injury, we upheld the damage awards. See also Grajales-
Romero, 194 F.3d at 288 (holding that an award of $150,000 was not
excessive where plaintiff produced medical evidence of neck pains
and loss of cognitive functions resulting from a sign falling on
plaintiff's head); Smith v. Kmart Corp., 177 F.3d 19 (1st Cir.
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1999) (holding that an award of $500,000 was not excessive where
plaintiff produced medical and psychological evidence of trauma and
continued pain resulting from a cooler falling on plaintiff's
head); Mejías-Quirós, 108 F.3d at 425 (holding that an award of
$200,000 for pain and suffering was not excessive where plaintiff
produced medical testimony about continuing headaches, mild
depression, low self-esteem, and post-traumatic stress). These
cases are not on all fours with this case, but demonstrate that it
is not legally certain that a jury could not make an award of
$75,000.
Both plaintiffs suffered physical injuries from the
accident that resulted in permanent impairment to their total
bodily functions. In addition, they had to cope with the mental
anguish of spending their honeymoon in a hospital, Ramírez being
unable to breast feed their first child, and being unable to have
intimate contact with one another during the first three months of
marriage. Medical reports indicate that the plaintiffs may require
future medical and psychological care. These facts, when compared
to comparable federal jury cases, indicate that it is not a legal
certainty that their individual claims involve less than $75,000.1
1
Defendants also argue that part of plaintiffs' complaint was
made in bad faith because it incorrectly claims that the couple cut
their honeymoon short to receive medical treatment and that they
lost time from work to receive medical treatment when, in fact,
they never received the additional treatment. We do not find it
necessary to address this issue because plaintiffs reach the
jurisdictional amount without considering the additional medical
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III. Conclusion
For the foregoing reasons, we vacate the judgment of the
district court and remand for further proceedings consistent with
this opinion.
Vacated and Remanded.
treatment they may or may not have had. See St. Paul, 303 U.S. at
289-90 (discussing that a suit will be dismissed for bad faith
damage allegations only when such claims are essential to reach the
jurisdictional amount).
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