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Lil' Man In Boat Inc v. Auk Ta Shaa Discovery LLC

United States District Court, W.D. Washington

April 25, 2017

LIL' MAN IN THE BOAT, INC., Plaintiff,
v.
AUK TA SHAA DISCOVERY, LLC, Defendant.

          ORDER TO SHOW REGARDING AMOUNT IN CONTROVERSY

          JAMES L. ROBART United states District Judge

         I. INTRODUCTION

         The court has reviewed Plaintiff Lil' Man in the Boat, Inc.'s ("Lil Man") complaint (Compl. (Dkt. #1)) and is concerned that the jurisdictional amount in controversy is not met. The court thus orders Lil' Man to show cause within 10 days of the date of this order why the court should not dismiss this case for lack of subject matter jurisdiction.

         II. BACKGROUND

         This is a contract dispute about a vessel called the Queen of Seattle, (Id. at 20.) Lil' Man alleges that Defendant Auk Ta Shaa, LLC ("Auk Ta Shaa") breached a contract to sell the boat and brings an action to enforce that alleged contract.[1] (Id. at 29.) Lil' Man makes three allegations regarding the amount in controversy. First, Lil' Man alleges that the "amount in controversy exceeds $75, 000.00." (Id. at 2.) Additionally, Lil' Man seeks a declaratory judgment regarding the duty to transfer title to the boat. (Id. at 29.) In the alternative, Lil' Man seeks $1, 000, 000.00 in compensatory damages.[2] (Id.)

         Lil' Man alleges that the parties concluded a contract for the sale of the Queen of Seattle and seeks to enforce that contract. (Id. at 21.) Although the original asking price for the vessel was $250, 000.00 (id. at 4), Lil' Man expresses concern that the vessel may not be able to receive a Certificate of Inspection ("COI"), which Lil' Man alleges is necessary for commercial use of the vessel (id. at 14 (alleging that the expiration of the COI "may well make it difficult if not impossible to financially return the boat into [sic] operating conditions"), 15 (alleging that if Lil Man "was to purchase the vessel and could not get a COI for it, it would become a liability to have it scrapped"), 18 (describing the allegedly unsatisfactory inspection of the vessel that took place on December 8th, 2015)). In light of these concerns, the parties allegedly agreed upon a purchase price of $12, 500.00 for the vessel. (Id., Ex. 3.)

         III. ANALYSIS

         A. Legal Standards for the Amount in Controversy

         Lil' Man invokes the court's subject matter jurisdiction pursuant to 28 U.S.C. § 1332. (Compl. at 2.) Section 1332 provides that the district courts "shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000 ... and is between citizens of different states." 28 U.S.C. § 1332.

         Although courts typically accept a plaintiffs alleged damages as prima facie evidence of the amount in controversy, this court has an obligation to confirm that it has subject matter jurisdiction over the case and to address the issue of jurisdiction sua sponte if necessary. See Snell v. Cleveland, Inc., 316 F.3d 822, 826 (9th Cir. 2002). In general, a plaintiff need only include a plausible allegation that the amount in controversy exceeds the jurisdictional threshold, see Pachinger v. MGM Grand Hotel-Las Vegas, Inc., 802 F.2d 362, 363-64 (9th Cir. 1986), unless it appears to a legal certainty that the plaintiff cannot recover that amount, see First Nat 7 Bank v. La. Highway Comm 'n, 264 U.S. 308, 310 (1924). The legal certainty test applies "when a rule of law or limitation of damages would make it virtually impossible for a plaintiff to meet the amount-in-controversy requirement." Pachinger, 802 F.2d at 364. If the plaintiff alleges a sum that will, as a legal certainty, fall below the jurisdictional threshold, then the court must dismiss the case. Naffe v. Frey, 789 F.3d 1030, 1040 (9th Cir. 2015) (adopting the "legal certainty" standard).

         If the jurisdictional amount is challenged, then the party invoking the jurisdiction of the federal court has the burden to support its allegations through the submission of "summary-judgment type evidence relevant to the amount in controversy" as it existed at the time of filing. See Singer v. State Farm Mut. Auto. Ins. Co., 116F.3d373, 377 (9th Cir. 1997); see also Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 403 (9th Cir. 1996 (quoting Hale v. Billups of Gonzales, Inc., 610 F.Supp. 162 (M.D. La. 1985)). The court questions whether the amount in controversy is met as measured by the value of the Queen of Seattle and the availability of compensatory damages for lost profits.

         B. The Measure of Damages in Actions for Replevin

         In actions for declaratory or injunctive relief, the amount in controversy is the value of the object of the litigation. Hunt v. Wash. State Apple Advert. Comm 'n, 432 U.S. 333, 347 (1977). In actions for replevin, the amount in controversy typically equals the replacement value of the disputed goods. Stengel v. Black, No. 03 Civil No. 0495 (GEL), 2004 WL 1933612, at *2 (S.D.N.Y. Aug. 30, 2004) (citing Satterwhite v. Harriman Natl. Bank & Trust Co., 13 F.Supp. 493, 499 (S.D.N.Y.1935). Lil' Man effectively seeks a declaratory judgment compelling Auk Ta Shaa to transfer title to the Queen of Seattle upon full payment. (Compl. at 29.) Thus, the value of the Queen of Seattle appears to best reflect the amount in controversy. Stengel, 2004 WL 1933612, at *5.

         As in Stengel, the court places significant weight on the arms-length negotiations between the parties in determining the value of the goods in question. Id. The parties allegedly negotiated a purchase price of $12, 500.00 for the Queen of Seattle. (Compl. at 21.) This amount is well below this court's jurisdictional threshold. 28 U.S.C. ยง 1332(a). Thus, the court orders Lil Man ...


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