The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ALLIED SHIPYARD, INC. CIVIL ACTION
VERSUS CASE NO. 23-816
OCEAN MARINE SERVICES, LLC et al. SECTION: “G”(2)
ORDER
Before the Court is Plaintiff Allied Shipyard, Inc.’s (“Plaintiff”) “Motion to Remand.”1
Plaintiff contends that the Court does not have diversity jurisdiction over this matter because the
amount in controversy does not exceed $75,000, and therefore moves to remand the case back to
the Seventeenth Judicial District Court for the Parish of Lafourche, State of Louisiana.2 Having
considered the motion, the memoranda in support and opposition, the Court grants the motion
because the amount in controversy does not exceed $75,000.
I. Background
On January 24, 2023, Plaintiff Allied Shipyard, Inc. (“Plaintiff”) filed suit in the
Seventeenth Judicial District Court for the Parish of Lafourche against Ocean Marine Services,
LLC (“OMS”) and Gary D. Murphy, II (“Murphy”) (collectively, “Defendants”) to recover the
balance due under an open account pursuant to their services contract with Defendants (the “Work
Agreement”).3 Plaintiff alleges that it provided marine vessel repair services on an open account
for the benefit of Defendants’ vessel.4 Plaintiff alleges that OMS owes the full open account
1 Rec. Doc. 3.
2 Id. at 2.
3 Rec. Doc. 1-1.
4 Id.
balance of $71,363.04 and Murphy owes a portion of the balance, $67,126.09, “in solido” with
OMS.5 However, the Petition “specifically disclaims any right to recover attorney[’s] fees” under
the Work Agreement from the Defendants in this action, “notwithstanding the provisions of
Louisiana’s open account statute.”6
On March 6, 2023, Defendants removed the action to this Court.7 On March 7, 2023,
Plaintiff filed the instant motion to remand.8 On March 28, 2023, Defendants filed an opposition
to the motion.9 On March 31, 2023, with leave of Court, Plaintiff filed a reply memorandum10 and
accompanying affidavit stipulating that Plaintiff seeks less than $75,000 and will not accept an
award that exceeds that amount.11 On April 6, 2023, the Court granted Defendants leave to file a
sur-reply in opposition to the motion.12
II. Parties’ Arguments
A. Plaintiff’s Arguments in Support of Motion to Remand
In support of the motion to remand, Plaintiff contends that this Court does not have removal
jurisdiction, because the stated amount in controversy of $71,363.04 is below the $75,000.00
threshold required for diversity jurisdiction.13 Plaintiff asserts that the Petition states this demand
5 Id. at 3.
6 Id. at 2–3.
7 Rec. Doc. 1.
8 Rec. Doc. 3.
9 Rec. Doc. 7.
10 Rec. Doc. 10.
11 Rec. Doc. 10-1.
12 Rec. Doc. 13.
13 See Rec. Doc. 3-3.
in good faith and explicitly disclaims any right to attorney’s fees.14 Plaintiff admits that it sent an
email demanding payment of $91,363.04 to Defendants to settle the claims prior to filing suit.15
However, Plaintiff files an affidavit stipulating that Plaintiff received a $20,000.00 wire transfer
from Defendants on December 28, 2022, but Plaintiff’s bank had not yet notified Plaintiff of the
wire transfer at the time it sent the pre-suit demand letter.16 Plaintiff contends that this $20,000.00
payment brought the unpaid balance down to $71,363.04, which was the amount of damages
claimed in the Petition.17 Accordingly, Plaintiff concludes that this case should be remanded due
to a lack of subject matter jurisdiction.18
B. Defendants’ Arguments in Opposition to the Motion to Remand
In opposition, Defendants argue that the Court should deny the motion.19 Defendants assert
that the pre-suit email demanding payment of $91,363.04 should be considered as evidence in
determining the amount in controversy.20 Defendants further assert that, in Johnson v. Regions
Bank,21 this Court previously considered a similar pre-suit demand letter.22
Regardless, Defendants contend that, even assuming the amount owed on the account was
$71,363,04, the $75,000.00 jurisdictional threshold is easily attained because the Court must
14 Id. at 3–4.
15 Rec. Doc. 3 at 2.
16 Id.
17 Id.
18 Id.
19 Rec. Doc. 7 at 8.
20 Id. at 5–6.
21 No. 20-533, 2020 WL 2190696 (E.D. La. May 6, 2020) (Brown, C.J.).
22 Rec. Doc. 7 at 5–6.
consider Plaintiff’s recovery of attorney’s fees either under the Work Agreement or under
Louisiana’s open account statute.23 Specifically, Defendants argue that it is reasonable to expect
that the potential attorney’s fees in this case will exceed $3,637.96, which will bring the amount
in controversy above the threshold jurisdictional amount.24
Defendants further assert that Plaintiff’s argument that it has waived the recovery of
attorney’s fees in the Petition is contrary to Fifth Circuit precedent.25 Defendants contend that
Plaintiff was required file a binding stipulation or affidavit with the Petition stating that it
affirmatively seeks less than the jurisdictional threshold and that it will not accept an award that
exceeds that threshold.26 Furthermore, Defendants argue that any belated attempt by Plaintiff to
file a stipulation must be rejected because litigants must file this binding stipulation with the
Petition.27 Accordingly, Defendants conclude that the motion to remand should be denied.28
C. Plaintiff’s Arguments in Further Support of the Motion
In its reply, Plaintiff files an affidavit of stipulation wherein Plaintiff states that it
affirmatively seeks less than the jurisdictional threshold of $75,000.00 in this matter and that
Plaintiff will not accept an award that exceeds that threshold.29 Plaintiff argues that this post-
removal affidavit should be considered because “Defendants’ arguments regarding Plaintiff’s
waiver of attorney[’s] fees implicitly suggest that [] Defendants do believe that the waiver language
23 Id. at 6.
24 Id. at 6-7.
25 Id. at 7.
26 Id. at 8.
27 Id.
28 Id.
29 Rec. Doc. 10-1 at 1.
is . . . ambiguous.”30 Plaintiff avers that “Defendants’ assertion that Plaintiff failed to accomplish
[the waiver of attorney’s fees] suggests some ambiguity in the waiver language.”31 Thus, Plaintiff
concludes that this post-removal affidavit should be considered by the Court.32
Plaintiff also explains that it seeks $4,236.95 less from Murphy than it does from OMS
because its open account with OMS includes a separate $4,236.95 invoice for work that Murphy
did not personally sign for.33 Nevertheless, Plaintiff asserts that Murphy is liable in solido with
OMS for the remaining $67,126.09.34
D. Defendants’ Sur-Reply in Further Support of the Motion
In the sur-reply memorandum, Defendants reiterate the same arguments made in the initial
opposition to the motion.35
III. Legal Standard
A defendant may remove a state civil court action to federal court if the federal court has
original jurisdiction over the action.36 A federal court has subject matter jurisdiction over an action
“where the matter for controversy exceeds the sum or value of $75,000” and the action “is between
citizens of different states.”37 “When removal is based on diversity of citizenship, the diversity
must exist at the time of the removal.”38 The removing party bears the burden of demonstrating
30 Rec. Doc. 10 at 2.
31 Id.
32 Id.
33 Id. at 3.
34 Id.
35 See Rec. Doc. 13.
36 28 U.S.C. § 1441(a); Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 34 (2002).
37 28 U.S.C. § 1332(a)(1).
that federal jurisdiction exists.39 In assessing whether removal was appropriate, the Court is guided
by the principle, grounded in notions of comity and the recognition that federal courts are courts
of limited jurisdiction, that “removal statute[s] should be strictly construed in favor of remand.”40
Remand is appropriate if the Court lacks subject matter jurisdiction, and “doubts regarding whether
removal jurisdiction is proper should be resolved against federal jurisdiction.”41
Pursuant to Fifth Circuit precedent, a removing defendant’s burden of showing that the
amount in controversy is sufficient to support federal jurisdiction differs depending on whether
the plaintiff’s complaint alleges a specific amount of monetary damages.42 When the plaintiff
alleges a figure in excess of the required amount in controversy, “that amount controls if made in
good faith.”43 If the plaintiff pleads less than the jurisdictional amount, this figure will also
generally control, barring removal.44
Louisiana law ordinarily does not allow a plaintiff to plead a specific amount of damages.45
A Louisiana plaintiff is required, however, to state “a general allegation that the claim exceeds or
is less than the requisite amount” if he wishes to establish “the lack of jurisdiction of federal
courts.”46 Even then, a general allegation that a plaintiff's claims are above or below the federal
38 Texas Beef Grp. v. Winfrey, 201 F.3d 680, 686 (5th Cir. 2000) (citing 14B Charles Alan Wright, Arthur R.
Miller, & Edward H. Cooper, Federal Prac. and Proc. § 3723 (1998 ed.)).
39 See Allen v. R&H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995).
40 Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002).
41 Acuna v. Brown & Root Inc., 200 F.3d 335, 339 (5th Cir. 2000) (citing Willy v. Coastal Corp., 855 F.2d
1160, 1164 (5th Cir. 1988)).
42 See Allen, 63 F.3d at 1335.
43 Id. (citing St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938)).
44 Id.
45 See La. Code Civ. P. art. 893.
46 Id.
jurisdictional requirement is not dispositive of whether the amount in controversy requirement is
met because these general allegations “will not be binding on [a plaintiff’s] recovery under
Louisiana law.”47 Courts treat such general allegations as stating an “indeterminate amount of
damages.”48
When the plaintiff has alleged an indeterminate amount of damages, the Fifth Circuit
requires the removing defendant to prove by a preponderance of the evidence that the amount in
controversy exceeds $75,000.49 A defendant satisfies this burden either: “(1) by demonstrating that
it is facially apparent that the claims are likely above $75,000, or (2) by setting forth facts in
controversy—preferably in the removal petition, but sometimes by affidavit—that support a
finding of the requisite amount.”50 The defendant must do more than point to a state law that might
allow the plaintiff to recover more than the jurisdictional minimum; the defendant must submit
evidence that establishes that the actual amount in controversy exceeds $75,000.51
If the amount in controversy is ambiguous at the time of removal, the Court may consider
a post-removal stipulation, but only to determine the amount in controversy at the time of
removal.52 If the amount in controversy is clear from the face of the complaint, post-removal
47 Thompson v. Acceptance Indem. Ins. Co., No. 14-1424, 2014 WL 7369733, at *3 (E.D. La. Dec. 29, 2014)
(Brown, J.) (citing McCord v. ASI Lloyds/ASI Underwriters, No. 13-126, 2013 WL 1196671, at *2 (E.D. La. Mar. 22,
2013) (Vance, J.)).
48 Id.
49 Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880, 882 (5th Cir. 2000); see also Simon v. Wal-Mart Stores,
Inc., 193 F.3d 848, 850 (5th Cir. 1999); Allen, 63 F.3d at 1335.
50 Simon, 193 F.3d at 850 (quoting Luckett v. Delta Airlines, Inc., 171 F.3d 295 (5th Cir. 1999)); see also
Allen, 63 F.3d at 1335.
51 See De Aguilar v. Boeing Co., 47 F.3d 1404, 1412 (5th Cir. 1995).
52 Gebbia, 233 F.3d at 883 (citing Associacion Nacional de Pescadores v. Dow Quimica de Colombia S.A.,
988 F.2d 559, 565 (5th Cir. 1993)).
affidavits reducing the amount do not deprive the district court of jurisdiction.53
IV. Analysis
In the Petition, Plaintiff alleges that OMS is indebted to Plaintiff “for the full open account
balance of [$71,363.04]” and Murphy is indebted in solido with OMS to Plaintiff “for a portion of
the open account balance” equal to $67,126.09.54 Furthermore, although the Work Agreement may
entitle Plaintiff to recover attorney’s fees, “Plaintiff specifically disclaims any right to recover
attorney[’s] fees from [] Defendants in this action.”55 Therefore, Plaintiff argues that the amount
in controversy is plainly less than $75,000.56
However, Plaintiff's disclaimer of the right to collect attorney’s fees in the Petition is
insufficient to establish that attorney’s fees must be excluded from the calculation of the amount
in controversy. Attorney’s fees authorized by statute or contract may be included in the amount in
controversy.57 The Petition suggests that attorney’s fees may be authorized by the Work
Agreement, and Louisiana state courts “shall grant the relief to which the party in whose favor
[judgment] is rendered is entitled, even if the party has not demanded such relief in his
pleadings.”58 Thus, Plaintiff’s “purported waiver of attorney’s fees is ineffective” because the Fifth
Circuit “has expressed concern about the possibility of ‘abusive manipulation by plaintiffs, who
may plead for damages below the jurisdictional amount in state court with the knowledge that the
53 Id. (citing St. Paul Mercury Indem. Co., 303 U.S. at 292)).
54 Rec. Doc. 1-1 at 2–3.
55 Id. at 3.
56 See Rec. Doc. 3-3 at 3–4.
57 Graham v. Henegar, 640 F.2d 732, 736 (5th Cir. 1981).
58 La. Civ. Code art. 862; see also Manguno v. Prudential Prop. And Cas. Ins. Co., 276 F.3d 720, 724 (5th
Cir. 2002).
claim is actually worth more.”59 Only a binding stipulation filed with the petition stating that
Plaintiff “affirmatively seek[s] less than the jurisdictional threshold, and further stating that [it]
will not accept an award that exceeds that threshold” could have constituted an effective waiver at
the time of filing the Petition.60 Given that Plaintiff failed to file such a stipulation, the amount in
controversy is not less than $75,000 to a legal certainty and rather Plaintiff alleges an indeterminate
amount of damages in the Petition.
Defendants argue that the amount in controversy is actually greater than $75,000 based on
Plaintiff’s pre-suit demand letter of $91,363.04.61 Defendants cite Johnson v. Regions Bank, where
this Court considered the plaintiff’s pre-suit demand letter in determining the amount in
controversy.62 In Johnson, the plaintiff’s pre-suit demand letter requested over $1,300,000.00 in
damages.63 However, the plaintiff’s subsequent petition failed to allege any “specific amount of
damages.”64 There, the Court concluded that the $1,300,000.00 pre-suit demand letter established
that the jurisdictional amount exceeded $75,000.00.65
However, unlike in Johnson, Plaintiff attached to the Petition an affidavit stipulating that
only a $71,363.04 balance remained on the open account.66 Plaintiff also further attaches an
affidavit to the instant motion explaining that it became aware of a $20,000.00 wire transfer from
59 Manguno, 276 F.3d at 724 (quoting De Aguilar v. Boeing Co., 47 F.3d 1404, 1412 (5th Cir. 1995)).
60 Ditcharo v. United Parcel Serv., Inc., 376 Fed. Appx. 432, 437 (5th Cir. 2010).
61 Rec. Doc. 7 at 5-6.
62 See Johnson, 2020 WL 2190696 at *4.
63 Id. at *2–*4.
64 Id. at *1, *3.
65 Id. at 4.
66 Rec. Doc. 1-1 at 5.
Defendants after sending the demand letter but before filing suit, thus bringing the open account
balance down to $71,363.04.67 Therefore, although the Court may consider the pre-suit demand
letter to determine the amount in controversy, it is not dispositive in this case.
Rather, the amount in controversy was ambiguous at the time of removal given the
inconsistency between the alleged open account balance in the Petition and the demand letter, and
given the uncertainty surrounding the amount of attorney’s fees to which Plaintiff may be entitled
under the Work Agreement. Therefore, the Court may consider post-removal stipulations to
determine the amount in controversy at the time of removal.68 Here, Plaintiff stipulates post-
removal that the amount in controversy is less than $75,000, and he renounces the right to recover
in excess of $75,000 in the event he is awarded above that amount in state court.69 The affidavit is
binding because Plaintiff waives any right to accept compensation in this matter exceeding
$75,000. Therefore, remand of this case to state court is appropriate.
V. Conclusion
Based on the foregoing, because the Court finds that the amount in controversy is less than
$75,000, it lacks subject matter jurisdiction in this case and must remand the matter to state court.
Accordingly,
67 Rec. Doc. 3-2.
68 Gebbia v. Wal-Mart Stores, Inc., 233 F.3d 880, 883 (5th Cir. 2000).
69 See Rec. Doc. 10-1.
IT IS HEREBY ORDERED that Plaintiffs “Motion to Remand”’”? is GRANTED and
this matter is remanded to the Seventeenth Judicial District Court for the Parish of Lafourche, State
of Louisiana.
NEW ORLEANS, LOUISIANA, this 3! — day of May, 2023.
NANNETTE J Deb BROWN
CHIEF JUDGE
UNITED STATES DISTRICT COURT
® Rec. Doc. 3.
11