The Fact of Removal

In Waters v. Continential Insurance Co., 07-282, Judge Kern denied Plaintiff's Motion for Remand citing evidence in the Notice of Removal that Plaintiff's claims aggregated to more than $75,000.

Plaintiff raised three theories of recovery arising from a bad faith medical claim: 1) Breach of Contract; 2) Tort; and 3) Punitive damages. In the Petition, Plaintiff cited the perfunctory statutory language for each claim, e.g. "damages in excess of $10,000." Defendant, in turn, attached an affidavit from a claims handler incorporating approximately $58,000 in medical bills claimed by Plaintiff in support of the Contract claim.

With the affidavit in hand, the Court proceeded to hold that Defendant had, "by a preponderance of evidence," established the jurisdictional threshold of $75,000. As Judge Kern pointed out, adding a $58,000 Contract claim, plus two additional claims valued at the statutory minimum aggregates in excess of $75,000 and, therefore, the Court retained diversity jurisdiction.

In a separate Order, Judge Eagan arrived at different conclusion. In Madlock v. Farmers Insurance Co., 07-703, the Court held the Defendant failed to support Removal with any "economic analysis" of Plaintiff's claims based upon the "underlying facts." See also Laughlin v. K-Mart Corp., 50 F.3d 871 (10th Cir. 1995).

Unlike the Waters defendant, Farmers simply concluded that invocation of punitive damages alone should suffice to establish the jurisdictional minimum. Of course, Judge Eagan pointed out that conclusory assertions that damages exceed $75,000 will not suffice, nor will reliance upon "the mere invocation of state law limits on punitive damages." Given the absence of any economic analysis of Plaintiff's claims based upon the "underlying facts," Judge Eagan granted the Motion for Remand.

Declaratory Actions Are Not Retalitory

In Shero v. City of Grove, --- F.3d --- (10th Cir. 2007), the Tenth Circuit held, as a matter of law, that "being properly named as a defendant in a declaratory judgment suit, however styled, would not chill a person of ordinary firmness from continuing to engage in constitutionally protected activity."

Shero's plight began when City denied his requests for "Council Packets" in advance of city council meetings. After Shero initially received the packets, the City changed course and began denying his requests. Shero, in turn, threatened suit under the Oklahoma Open Records Act, prompting City to file its own declaratory action against Shero, ostensibly seeking clarification regarding the applicability of the Act to the packets.

Shero eventually prevailed in state court. He then filed suit in federal court arguing, among other things, that City filed the declaratory action in retaliation for Shero exercising his First Amendment right to speak out against the City.

In a 2-1 decision, the Tenth Circuit disagreed. In doing so, the Court held that declaratory actions, even if filed with retaliatory animus, are not actionable under the First Amendment because “'[t]he nature and purpose of a declaratory judgment is to declare rights,' not to attack the opposing party." In support, the Tenth Circuit cited the fact that under Oklahoma's Declaratory Judgment Act, "the state court was prohibited from awarding damages against Mr. Shero."

The dissent argued that such a position might give cold comfort to citizens untrained in the procedural niceties of litigation. For example, the dissent pointed to the fact that litigation forced Shero to expend time and effort in defense of the action utilizing his own assets until awarded attorney's fees. This, argued the dissent, "may alone be enough to dissuade a person from continuing to engage in constitutionally protected speech."

Although litigation may be a "significant matter for private citizens," the Court ultimately concluded the specter of a declaratory action is not significant enough to rise above a de minimus injury and, as such, cannot be actionable under the First Amendment.

At least under federal law, the decision appears to give Oklahoma municipalities a green light to pursue declaratory actions against citizens without fear of violating the First Amendment.