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Youell v. Magellan Health Services of New Mexico, Inc.

United States District Court, D. New Mexico

January 9, 2018



         This matter comes before the Court upon Plaintiff's Motion for Remand, filed on May 30, 2017. (Doc. 10). Defendant Magellan Health, Inc.'s (“Magellan Health”) Response was filed on June 13, 2017, and Plaintiff's Reply was filed on July 3, 2017. (Docs. 15, 17). The Court conducted telephonic hearings on the Motion to Remand on September 21, 2017, and December 7, 2017, in which Timothy L. White represented Plaintiff, and Amelia M. Willis represented Defendant Magellan Health. For the following reasons and those stated in open court, the Court denies Plaintiff's motion.

         I. Procedural History

         Plaintiff alleges claims against Defendant Magellan Health for Retaliation in Violation of the New Mexico Human Rights Act (NMHRA); Discrimination on the Basis of Physical Handicap And/Or Serious Medical Condition in Violation of the NMHRA; Discrimination on the Basis of Race, in Violation of the NMHRA; Breach of Implied Contract; and Breach of Implied Contract to Follow Certain Procedures. (“Original Complaint” Doc. 1-1) at 2-8. The Original Complaint was filed in New Mexico State District Court, First Judicial District, on December 19, 2016. (Doc. 1-1) at 2.

         On April 21, 2017, Defendant Magellan Health, an out-of-state entity, informed Plaintiff, a New Mexico resident, through counsel, of its intent to remove the case to federal court. (Doc. 3-1) at 1, ¶ 3. On April 24, 2017, Plaintiff filed an amended complaint, adding her former supervisor and Magellan employee, Patti Macomber, as a defendant.[1] (Doc. 1-1) at 9-15. Defendant Macomber is a resident and citizen of New Mexico. Id. at 10, ¶ 3.

         On May 1, 2017, Defendant Magellan Health filed a Notice of Removal in this Court, asserting diversity subject-matter jurisdiction, stating the amount in controversy exceeds $75, 000. (Doc. 1) at 2-7. Defendant Magellan Health states it is incorporated in Delaware and has its principal place of business in Arizona, and that Plaintiff is a citizen of New Mexico. Id. at 3-4, ¶¶ 14-17; (Doc. 1-1) at 3, ¶ 6. Defendant Magellan Health argues this Court has jurisdiction because Defendant Macomber, although a non-diverse party, was fraudulently joined into this lawsuit. (Doc. 1) at 4-7.

         On May 30, 2017, Plaintiff filed its Motion for Remand, (Doc. 10), challenging Defendant Magellan's contention that the amount in controversy exceeds $75, 000. On September 21, 2017, this Court held a hearing on the Motion to Remand to consider the amount in controversy. This Court took that issue under advisement and requested further briefing on the question of diversity and, specifically, whether the fraudulent joinder exception to the complete diversity requirement applies. On December 7, 2017, the Court held a second hearing on the Motion to Remand. For the reasons stated on the record and for those set forth below, the Court concludes it has subject matter jurisdiction.

         II. Removal under 28 U.S.C. § 1441(a)

         A defendant can remove a civil case brought in state court if the District Courts of the United States have original jurisdiction. 28 U.S.C. § 1441(a). Removal under Section 1332(a) establishes original jurisdiction in the District Courts in matters between citizens of different states and in which the amount in controversy exceeds $75, 000. The removing party bears the burden of proving jurisdiction under Section 1332(a). See Montoya v. Chao, 296 F.3d 952, 955 (10th Cir. 2002) (“The burden of establishing subject-matter jurisdiction is on the party asserting jurisdiction.”).

         A. Amount in Controversy Requirement

         The amount in controversy requirement is determined by the information before the Court at the time of removal. See Pfeiffer v. Hartford Fire Ins. Co., 929 F.2d 1484, 1488 (10th Cir. 1991) (“the propriety of removal is judged on the complaint as it stands at the time of the removal.”) (citing Pullman Co. v. Jenkins, 305 U.S. 534, 537 (1939)). “[A] defendant's notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold.” Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 554 (2014) (citing 28 U.S.C. § 1446(a)). And “[e]vidence establishing the amount is required by § 1446(c)(2)(B) only when the plaintiff contests, or the court questions, the defendant's allegation.” Id.

         The removing party can use the complaint, interrogatories, affidavits “or other evidence submitted in federal court, ” to determine the amount in controversy. McPhail v. Deere & Co., 529 F.3d 947, 956 (10th Cir. 2008). “Furthermore, a plaintiff's proposed settlement amount ‘is relevant evidence of the amount in controversy if it appears to reflect a reasonable estimate of the plaintiff's claim.'” Id. (citing Cohn v. Petsmart, Inc., 281 F.3d 837, 840 (9th Cir. 2002)). “Attorney's fees can be included in the amount in controversy if the underlying state law on which one or more of the plaintiff's claims is based permits an award of attorney's fees.” Zozaya v. Standard Insurance Company, 2015 WL 11118066, at *4 (D.N.M.) (citing Miera v. Dairyland Ins. Co., 143 F.3d 1337, 1340 (10th Cir. 1998)).

         Defendant Magellan Health argues that Plaintiff's estimation of the case and the prospect of attorney's fees put the amount in controversy in this case beyond $75, 000. (Doc. 15) at 6. This Court agrees. Correspondence between Defendant's counsel and Plaintiff's counsel between March 28, and 29, 2017, set the amount in controversy at least at $75, 000, $50, 000 of which was for compensatory damages for Plaintiff's loss of employment and the rest was for emotional distress damages. See (Doc. 21) at 8.

         Moreover, Plaintiff alleges claims under the NMHRA. Notably, the amount referenced in the correspondence between counsel does not include attorney's fees, which, as explained below, are recoverable for those claims she brings under the NMHRA. Specifically, under the NMHRA, “the court in its discretion may allow actual damages and reasonable attorney's fees and the state shall be liable the same as a private person.” NMSA 1978, § 28-1-13(D) (Repl. Pamp. 2012). Indeed, Plaintiff includes attorney's fees in her request for relief. (Doc. 1-1) at 15. Therefore, the Court concludes, while reserving judgment on the question of attorneys fees, that if Plaintiff succeeds in her NMHRA claims, she could recover reasonable attorney's fees. Such fees “may significantly add to the amount in controversy.” Zozaya 2015 WL 11118066, at *4. Therefore, based on the record existing at the time of removal, Plaintiff has placed more than $75, 000 in controversy.

         Plaintiff, nevertheless, argues that her counsel's affidavit averring to pursue no claim nor seek any amount beyond $75, 000 demonstrates that the amount in controversy does not exceed $75, 000. (Doc. 10) at 3-7. Plaintiff counsel's affidavit states, in relevant part, “[a]s attorney for plaintiff, I represent to the Court that [plaintiff] will not seek, nor will I on her behalf, any recovery with respect to the ...

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