De Aguilar v. Boeing Co.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_______________

No. 93-5333

_______________

ALMA TORREBLANCA DE AGUILAR, et al.,

Plaintiffs-Appellants,

VERSUS

BOEING COMPANY, et al.,

Defendants-Appellees.

_________________________

Appeal from the United States District Court

for the Eastern District of Texas

_________________________

(March 7, 1995)

Before SMITH and EMILIO M. GARZA, Circuit Judges, and STAGG,*

District Judge.

JERRY E. SMITH, Circuit Judge:

Plaintiffs, the relatives of persons who died in an airline

crash in Mexico, appeal the district court's denial of their motion

to remand to state court, the failure of the district court to

strike or sever the third party complaint by defendant Boeing

Company ("Boeing"), and the dismissal on the ground of forum non

conveniens ("f.n.c."). Concluding that the district court did not

err, we affirm.

*

District Judge of the Western District of Louisiana, sitting by

designation.

I.

On March 31, 1986, a Mexicana Airlines jet crashed near Mexico

City, killing everyone on board. An investigation concluded that

a tire exploded in the wheel well while the plane was in flight,

causing an in-flight fire that eventually caused the plane to

explode.

II.

Relatives and personal representatives of the estates of those

who died filed several lawsuits throughout the United States and in

Mexico. In every lawsuit filed in the United States, the action

has been either voluntarily dismissed by the plaintiffs or

dismissed on the basis of foreign sovereign immunity or f.n.c.1

Plaintiffs have been determined to find a United States forum

in which to try their case. In November 1992, they filed this

action in Texas state court, claiming to be the personal represen-

tatives of the estates of each decedent and the legal heirs of the

decedents pursuant to the Texas Survival Statute, TEX. CIV. PRAC. &

REM. CODE ANN. § 71.021 (Vernon 1986). The plaintiffs charged

negligence and products liability against Boeing, B.F. Goodrich,

Goodyear Tire and Rubber, Delta Airlines, and Parker Hannifin

Corporation. Under TEX. R. CIV. P. 47, plaintiffs were not allowed

1

See de Aguilar v. Boeing Co., 11 F.3d 55 (5th Cir. 1993); Compania

Mexicana de Aviacion, S.A. v. United States Dist. Court, 859 F.2d 1354 (9th

Cir. 1988); Rodriguez v. Mexicana de Avion, S.A., (W.D. Tex. 1987), aff'd

mem., 843 F.2d 498 (5th Cir.), cert. denied, 488 U.S. 826 (1988); Wolf v.

Boeing Co., 810 P.2d 943 (Wash. App.), review denied, 818 P.2d 1098 (Wash.

1991).

2

to plead for a specific amount of damages.2

After defendants removed the case to federal court in the

Eastern District of Texas, plaintiffs filed affidavits executed by

certain plaintiffs and by the plaintiffs' attorneys, purporting to

limit the damages they were seeking, and moved to remand on the

ground that the $50,000 jurisdictional amount requirement was not

satisfied. See 28 U.S.C. § 1332. The district court denied

remand, holding that the affidavits were irrelevant because

"jurisdiction attaches at the time of removal, and subsequent

events do not oust the court of jurisdiction." De Aguilar v.

Boeing Co., 790 F. Supp. 693, 694 (E.D. Tex. 1992). Subsequently,

however, this court decided Asociacion Nacional de Pescadores v.

Dow Quimica de Colombia S.A. ("ANPAC"), 988 F.2d 559 (5th Cir.

1993), cert. denied, 114 S. Ct. 685 (1994), concluding that post-

removal affidavits sometimes can be relevant where the jurisdic-

tional amount question is unresolved. Id. at 565.

The district court a quo further noted that, even if it had

considered the affidavits relevant, the complaint named one hundred

unknown plaintiffs who were not bound by the affidavits, and

plaintiffs' counsel could not bind minor beneficiaries (constitut-

ing approximately twenty of the named plaintiffs) to judgments in

wrongful death suits without leave of court. De Aguilar,

790 F. Supp. at 695. The claims later were dismissed on f.n.c.

grounds. De Aguilar v. Boeing Co., 806 F. Supp. 139 (E.D. Tex.

2

The rule states, "An original pleading . . . shall contain . . . (b)

in all claims for unliquidated damages only the statement that the damages

sought are within the jurisdictional limits of the court."

3

1992). The court held that direct estoppel barred the plaintiffs

from relitigating the f.n.c. dismissal. Courts in Illinois,

Washington, and the Western District of Texas had already ruled on

this matter. Id. at 142. Alternatively, the court found that

under traditional f.n.c. criteria, the Eastern District of Texas

would not be a convenient forum. Id. at 142-43.

This court affirmed the denial of the motion to remand and the

dismissal on estoppel and f.n.c. grounds. De Aguilar v. Boeing Co.

("de Aguilar I"), 11 F.3d 55 (5th Cir. 1993). We held that the

district court had properly disregarded the affidavits because it

was "facially apparent" that the damages sought by each plaintiff

exceeded $50,000. Id. at 57. Alternatively, we noted that the

attorney affidavits were not unrebutted by evidence from the

defendants. Id. at 57-58. These points distinguished de Aguilar I

from ANPAC.

ANPAC involved claims that were not facially likely to exceed

the jurisdictional amount. ANPAC, 988 F.2d at 565. In addition,

in ANPAC, the only "evidence" the defendants produced to rebut the

plaintiffs' attorneys' affidavits was the original notice of

removal, which merely stated that the matter in controversy

exceeded $50,000. Id. The de Aguilar I court noted that the

defendants in that case had produced testimonial evidence and

published precedent that indicated that the matter in controversy

indeed exceeded $50,000. De Aguilar I, 11 F.3d at 58.

In the alternative, the plaintiffs in de Aguilar I argued that

the original notice of removal was invalid because the defendants

4

failed to prove that the amount in controversy exceeded $50,000.

We rejected this argument because defendants had shown that

plaintiffs had pled damages of up to $5,000,000 in other fora for

the same injuries. Id.

In the instant case, shortly after the district court had

dismissed the original claims, plaintiffs' attorneys filed another

petition in state court. In this petition, at issue now, the

plaintiffs dropped forty-two of the heirs, including all of the

minors, and any mention of unnamed "Doe" plaintiffs. More

importantly, plaintiffs, in apparent violation of TEX. R. CIV. P. 47,

described the amount of their claim by specifically alleging that

their damages did not exceed $50,000. Plaintiffs attached to the

original petition an affidavit of attorney Dennis Reich stating

that plaintiffs had agreed to an irrevocable cap on the amount of

damages that could be awarded.

After service, defendants attempted to clarify whether Reich's

affidavit constituted a binding limitation on the respective

estates' damages. Howard Close, counsel for Boeing, sent Reich a

letter asking for an amendment to the affidavit, or a new affida-

vit, in which Reich would attest that the plaintiffs had been

appointed the personal representatives of the estates and had

expressly authorized Reich to make a binding and irrevocable

admission on their behalf.

One of the plaintiffs' attorneys, Mitchell Toups, had a

discussion with Close about the proposed amendments to Reich's

affidavit. The parties appear to dispute exactly what took place,

5

though both sides agree that plaintiffs' counsel refused to say

that the plaintiffs had been appointed by a qualified court as the

personal representatives of the estates. According to defendants,

Toups also said that none of the plaintiffs' American attorneys had

actually talked to the plaintiffs. Plaintiffs claim that the

reason they refused to acknowledge that they had been appointed the

personal representatives of the estates was that they were suing as

heirs, not representatives.

Defendants concluded that the plaintiffs named in the petition

were simply some of the heirs of the decedents and did not have the

authority to limit damages. As a result, defendants once again

removed to federal court in the Eastern District of Texas,

establishing in their notice of removal that the amount in

controversy exceeded $50,000.

Three months after removal, plaintiffs filed a supplemental

motion to remand for lack of jurisdiction and attached an affidavit

from a Mexican lawyer, Guadalupe Bistrain, who was one of the

plaintiffs' attorneys. Bistrain swore that she had received

explicit authority from each of the named plaintiffs to limit

damages to $50,000. The district court determined that the

plaintiffs had not shown the necessary authority to limit damages

and ruled that the amount in controversy exceeded $50,000.

Defendants alleged an additional basis for federal jurisdic-

tion. In December 1992, Boeing filed a third party complaint

against Mexicana Airlines, which on January 15, 1993, filed a

memorandum that claimed status as a "foreign state" under the

6

Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602-1611.

Plaintiffs filed a motion to strike or, in the alternative, sever

Boeing's third party claim. The district court denied this motion

when it denied the motion to remand. Defendants subsequently moved

to dismiss on f.n.c. grounds; the court granted this motion.3

III.

Since the crash, plaintiffs have made repeated attempts to

locate an American forum. There are actions pending in the Mexican

courts also. The Supreme Court of Texas had held that the doctrine

of f.n.c. no longer applied in Texas wrongful death actions. See

Dow Chemical Co. v. Alfaro, 786 S.W.2d 674 (Tex. 1990), cert.

denied, 498 U.S. 1024 (1991). The Texas Legislature then overruled

Alfaro. See TEX. CIV. PRAC. & REM. CODE ANN. § 71.051; "21" Int'l

Holdings v. Westinghouse, 856 S.W.2d 479 (Tex. App.))San Antonio

1993, no writ). The new statute, however, applies only to causes

of action filed on or after September 1, 1993. Thus, plaintiffs

obviously prefer Texas state court to federal court, where f.n.c.

applies.

IV.

As we have stated, plaintiffs' state court petition averred

that they were seeking no recovery in excess of $50,000. During

3

There is no merit to the plaintiffs' appeal of the f.n.c. dismissal.

We affirmed, in de Aguilar I, 11 F.3d at 58-59, the dismissal on f.n.c.

grounds. Thus, if we decide that there was federal jurisdiction in this case,

the f.n.c. dismissal is law of the case.

7

oral argument, plaintiffs characterized their claim as a plea for

a specific amount of damages. They argue that de Aguilar I was

premised on the fact that the complaint in that case "did not

specify an amount of damages." De Aguilar I, 11 F.3d at 57.

Indeed, strictly speaking, plaintiffs have not alleged a

specific amount of damages, as the amount they claim can range from

$1 to $50,000. We will treat the claim, however, as one for a

specific amount of damages.4 Plaintiffs have labored to specify

one "magic" number in their complaint, i.e. $50,000. We regard

such a complaint as more like a claim for one sum rather than a

claim for an unlimited or an unspecified amount of damages; to

reason otherwise would put form over substance. As a functional

matter, plaintiffs are attempting to avoid federal jurisdiction.

This goal is the same whether they pick a number such as $49,999 or

merely announce a ceiling that, conveniently, is barely within the

statutory limit.

Defendants, as on all previous occasions, seek to retain this

case in federal court. In general, defendants may remove a civil

action if a federal court would have had original jurisdiction.

See 28 U.S.C. § 1441(a). In this particular case, jurisdiction is

asserted on the basis of diversity of citizenship. 28 U.S.C.

§ 1332. The removing party bears the burden of establishing that

federal jurisdiction exists. Gaitor v. Peninsular & Occidental

S.S. Co., 287 F.2d 252, 253-54 (5th Cir. 1961).

"Unless the law gives a different rule, the sum claimed by the

4

This critical distinction renders ANPAC inapposite.

8

plaintiff controls if the claim is apparently made in good faith."

St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288

(1938). Most discussions of jurisdictional amount in removal cases

begin with St. Paul Mercury.

In St. Paul Mercury, the Court announced the now famous "legal

certainty" test for diversity cases: In order for a federal court

to decline jurisdiction, "[i]t must appear to a legal certainty

that the claim is really for less than the jurisdictional amount."

Id. at 289. Many courts have applied the "legal certainty"

language to jurisdictional amount questions in remand cases;5 there

is, however, disagreement as to exactly what a plaintiff has to

show to a legal certainty to defeat federal jurisdiction.

In St. Paul Mercury, the plaintiff originally alleged damages

above the jurisdictional amount in state court but amended the

complaint in federal court to state less than the required amount.

The Court held that the subsequent amendment could not strip the

federal court of jurisdiction, provided that the original claim for

damages was made in good faith. The "legal certainty" test was

articulated in the Court's more general discussion of jurisdiction:

The intent of Congress drastically to restrict

federal jurisdiction in controversies between citizens of

different states has always been rigorously enforced by

the courts. 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 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. The inabil-

5

E.g., Hale v. Billups, Inc., 610 F. Supp. 162, 164 (M.D. La. 1985);

Locklear v. State Farm Mut. Auto. Ins. Co., 742 F. Supp. 679 (S.D. Ga. 1989).

9

ity of plaintiff to recover an amount adequate to give

the court jurisdiction does not show his bad faith or

oust the jurisdiction. Nor does the fact that the

complaint discloses the existence of a valid defense to

the claim. But 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, and that his

claim was therefore colorable for the purpose of confer-

ring jurisdiction, the suit will be dismissed. Events

occurring subsequent to the institution of the suit which

reduce the amount recoverable below the statutory limit

do not oust jurisdiction.

Id. at 288-90 (footnotes omitted).

The above discussion and, hence, the legal certainty test,

contemplate the "typical" diversity situation.6 As one court has

indicated, the legal certainty test "is explicitly premised on the

assumption that the amount in controversy is met by the express

allegations of the plaintiff's complaint and is limited in utility

to cases in which the plaintiff himself has placed the requisite

jurisdictional amount in controversy by requesting damages in

excess of the jurisdictional amount." Garza v. Bettcher Indus.,

Inc., 752 F. Supp. 753, 755 (E.D. Mich. 1990).

This court has indicated that the legal certainty test does

not apply in a remand situation where the plaintiff has alleged an

indeterminate amount of damages. In de Aguilar I, we stated that

"[w]hen the plaintiff's complaint does not allege a specific amount

of damages, the removing defendant must prove by a preponderance of

the evidence that the amount in controversy exceeds $50,000." 11

F.3d at 58 (citing Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th Cir.

6

In a typical diversity situation, the plaintiff files a suit in

federal court alleging damages in excess of the jurisdictional amount.

10

1992); Garza, 752 F. Supp. at 763). See also Burns v. Windsor Ins.

Co., 31 F.3d 1092, 1094 (11th Cir. 1994) (noting that in the

"typical" removal case "defendant can remove to federal court if he

can show, by a preponderance of the evidence, facts supporting

jurisdiction").

The question in this case is different from that in both the

typical diversity situation and the typical removal situation.

Here, the plaintiffs, in a bold effort to avoid federal court, have

specifically alleged that their respective damages will not exceed

the jurisdictional amount.

Plaintiffs have correctly cited the provision in St. Paul

Mercury that a plaintiff who does not "desire to try his case in

federal court . . . may resort to the expedient of suing for less

than the jurisdictional amount, and though he would be justly

entitled to more, the defendant cannot remove." 303 U.S. at 294.

The inquiry, however, does not end merely because the plaintiff

alleges damages below the threshold. The face of the plaintiff's

pleading will not control if made in bad faith.

Moreover, the above statement from St. Paul Mercury plainly

was premised on the notion that the plaintiff would not be able to

recover more in state court than what was alleged in the state

court complaint. So, for example, in Woods v. Massachusetts

Protective Ass'n, 34 F.2d 501 (E.D. Ky. 1929), cited in St. Paul

Mercury in support of the above-quoted passage, the plaintiff sued

for an amount under the jurisdictional limit. Under the state

provision in that case, "if there had been no removal and an answer

11

had been filed, plaintiff would not have been entitled to judgment

for more than [the amount for which plaintiff sued]." Id. at 504.7

The majority of states now, however, have followed the example

of FED. R. CIV. P. 54(c) and do not limit damage awards to the amount

specified in the ad damnum clause of the state pleading. See

Burns, 31 F.3d at 1097 n.11. In fact, many states, like Texas,

have enacted rules that strictly prohibit plaintiffs from pleading

for specific amounts in cases of unliquidated damages.

These new rules have created the potential for abusive

manipulation by plaintiffs, who may plead for damages below the

jurisdictional amount in state court with the knowledge that the

claim is actually worth more, but also with the knowledge that they

may be able to evade federal jurisdiction by virtue of the

pleading. Such manipulation is surely characterized as bad faith.

See Boelens v. Redman Homes, Inc., 759 F.2d 504, 507 (5th Cir.

1985) (stating that "tactical manipulation [by the] plaintiff

cannot . . . be condoned") (quoting Austwick v. Board of Educ., 555

F. Supp. 840, 842 (N.D. Ill. 1983)). Likewise, as one treatise has

indicated,

7

See also Iowa Cent. Ry. v. Bacon, 236 U.S. 305, 309 (1915) (state

pleading for less than jurisdictional amount approved where "[t]he state court

had authority to determine the effect of the prayer to the petition and it

decided that, under the petition, no more than the amount prayed for could be

recovered in the action"); Harley v. Firemen's Fund Ins. Co., 245 F. 471, 476

(W.D. Wash. 1913) (noting that "the initial pleading, and the only pleading

filed in the state court . . . fixes the amount in controversy in this case at

[an amount below the jurisdictional amount] and no greater sum can be recov-

ered"); Maine v Gilman, 11 F. 214, 215 (C.C.D. Me. 1882) ("In the mode of

pleading adopted in Maine the ad damnum binds the plaintiff as a maximum, and

a judgment for more is erroneous, or, at least, if not technically erroneous

would be irregular and improper."); 1A JAMES W. MOORE ET AL., MOORE'S FEDERAL PRACTICE

¶ 0.157[6], at 133-34 (2d ed. 1993) (stating that plaintiff "may prevent

removal by the expedient of suing for less than the jurisdictional amount

unless his attempted waiver of the balance is legally ineffective").

12

if the prayer for relief must be ignored under applicable

principles of law and plaintiff can, therefore, recover

more on his state claim than the jurisdictional minimum,

the case is removable; and, where plaintiff's cause of

action and the relief actually sought clearly involve a

controversy in excess of the required amount, removal is

not defeated by a monetary prayer for less than the

amount.

1A MOORE, supra, ¶ 0.158, at 204-05 (footnotes omitted).8

Accordingly, we hold that if a defendant can show that the

amount in controversy actually exceeds the jurisdictional amount,

the plaintiff must be able to show that, as a matter of law, it is

certain that he will not be able to recover more than the damages

for which he has prayed in the state court complaint. Such a rule

is necessary to avoid the sort of manipulation that has occurred in

the instant case.

The exact extent of the burden on the defendant in this

situation was addressed by a panel majority of this court in

Kliebert v. Upjohn Co., 915 F.2d 142, 147 (5th Cir. 1990), vacated

for reh'g en banc, 923 F.2d 47 (5th Cir.), appeal dism'd per

8

The Seventh Circuit has stated:

St. Paul held that a plaintiff may not obtain a remand by amending

the complaint to seek less than the jurisdictional amount. This

principle has led some courts to hold that removal is proper, although

the complaint asks for less than the jurisdictional amount, when state

law permits a court to award more and the court is likely to do so if it

decides in the plaintiff's favor.

In re Shell Oil Co., 966 F.2d 1130, 1131 (7th Cir. 1992) (citing Cole v.

Freightliner Corp., 1991 U.S. Dist. LEXIS 3408 (N.D. Ill.); Garza; Johnson v.

Core-Vent Corp., 1990 U.S. Dist. LEXIS 4225 (N.D. Ill.); Locklear v. State

Farm Mut. Auto. Ins. Co., 742 F. Supp. 679 (S.D. Ga. 1989); Mutual First, Inc.

v. O'Charleys, Inc., 721 F. Supp. 281 (S.D. Ala. 1989); Corwin Jeep Sales &

Serv., Inc. v. American Motors Sales Corp., 670 F. Supp. 591 (M.D. Pa. 1986);

Steele v. Underwriters Adjusting Co., 649 F. Supp. 1414 (M.D. Ala. 1986); Hale

v. Billups, Inc., 610 F. Supp. 162 (M.D. La. 1985)). But see Burns v. Windsor

Ins. Co., 31 F.3d 1092, 1097 (11th Cir. 1994) (stating that permitting removal

where the plaintiff is not bound by his state pleading but pleads an amount of

damages below the jurisdictional amount "would allow state rules of procedure

to determine when federal jurisdiction existed" and "could lead to inconsis-

tent application of federal jurisdictional rules") (footnote omitted).

13

stipulation of settlement, 947 F.2d 736 (5th Cir. 1991). Having

been vacated, Kliebert is no longer precedent in this court, but

its analysis is useful.

In Kliebert, the plaintiffs alleged a specific dollar amount

of damages that was less than the federal jurisdictional amount.

The panel majority held that to remove, the defendants would have

to show that it was legally certain that plaintiffs would recover

more than the jurisdictional amount. Id. at 146. Thus, the

defendants would have to show that "if a jury awarded less than

[the jurisdictional amount] the court would be required to grant a

new trial." Id.

The onerous nature of this burden stands in direct contrast to

the analysis of several district courts that have stated the

removal inquiry as a type of "converse legal certainty test."

Under this formulation, defendant "has the burden of proving that

it does not appear to a legal certainty that the claim is actually

for less than the requisite amount." Hale, 610 F. Supp. at 164.

Courts elsewhere have restated the test and required that the

defendant show "'that there is a probability that the value of the

matter in controversy' exceeds the jurisdictional amount." Corwin

Jeep Sales, 670 F. Supp. at 595 (quoting Cunningham v. Ford Motor

Co., 413 F. Supp. 1101, 1103 (D.S.C. 1976)).

In the present case, the district court held that the removing

defendant had to establish that there is "some possibility" that

the plaintiff could recover over $50,000. This formulation is

supported by language from Foret v. Southern Farm Bureau Life Ins.

14

Co., 918 F.2d 534, 537 (5th Cir. 1990), in which we held that it

was not error for the district court to exercise jurisdiction over

a case where "the plaintiffs could have recovered more than

$50,000."

Both sides argue that the preponderance of the evidence

standard announced in de Aguilar I should apply in this case. We

agree. As the dissenting judge indicated in Kliebert, the strict

test adopted by the Kliebert majority "seems to conflict with our

past decisions that have stated that the standard for determining

jurisdictional amount should favor 'those parties seeking to invoke

the jurisdiction of a federal district court.'" Kliebert, 915 F.2d

at 148 (Jolly, J., dissenting) (quoting Opelika Nursing Home v.

Richardson, 448 F.2d 658, 663 (5th Cir. 1971)).

The Kliebert standard also fails adequately to protect

defendants from plaintiffs who seek to manipulate their state

pleadings to avoid federal court while retaining the possibility of

recovering greater damages in state court following remand. This

court has spoken adamantly of "preventing the plaintiff from being

able to destroy the jurisdictional choice that Congress intended to

afford a defendant in the removal statute." Boelens, 759 F.2d at

507.

We regard, however, the "some possibility" standard applied by

the district court and the "converse legal certainty" test, which

essentially require that the defendant merely show that plaintiff

could recover more than the jurisdictional amount, as too permis-

sive. See Burns, 31 F.3d at 1092 ("The possibility that plaintiff

15

may in the future seek or recover more damages is insufficient to

support federal jurisdiction now.") (emphasis added). Plaintiff

is, to some extent, still the master of his own claim. See, e.g.,

Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 & n.7 (1987); 14A

CHARLES A. WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3702, at 22 (2d

ed. 1985).

Consequently, the plaintiff's claim remains presumptively

correct unless the defendant can show by a preponderance of the

evidence that the amount in controversy is greater than the

jurisdictional amount. The preponderance burden forces the

defendant to do more that point to a state law that might allow the

plaintiff to recover more than what is pled.9 The defendant must

produce evidence that establishes that the actual amount in

controversy exceeds $50,000.

Our court has already said, in the instant case, that it is

facially apparent that the damages rise to a level above $50,000.

De Aguilar I, 11 F.3d at 57. As a result, despite the fact that

the district court imposed the wrong burden, there is no question

that the preponderance burden, had the district court applied it,

easily would be met by these defendants. In fact, in accordance

with the law of the case principle, this court is bound by what we

held in de Aguilar I.

So, once a defendant is able to show that the amount in

controversy exceeds the jurisdictional amount, removal is proper,

9

Such a holding would render the jurisdictional amount all but meaning-

less in states with rules analogous to FED. R. CIV. P. 54(c). See 14A WRIGHT,

supra, § 3725, at 426.

16

provided plaintiff has not shown that it is legally certain that

his recovery will not exceed the amount stated in the state

complaint. Thus, once the defendant has pointed to an adequate

jurisdictional amount, the situation becomes analogous to the

"typical" circumstances in which the St. Paul Mercury "legal

certainty" test is applicable: The defendant has established, by

a preponderance, that federal jurisdiction is warranted. At this

point, "[i]t must appear to a legal certainty that the claim is

really for less than the jurisdictional amount to justify dis-

missal." St. Paul Mercury, 303 U.S. at 289.

We emphasize that this is not a burden-shifting exercise. In

light of St. Paul Mercury, plaintiff must make all information

known at the time he files the complaint.

Plaintiff's "legal certainty" obligation might be met in

various ways; we can only speculate, without intimating how we

might rule in such case. Plaintiff's state complaint might cite,

for example, to a state law that prohibits recovery of damages that

exceed those requested in the ad damnum clause and that prohibits

the initial ad damnum to be increased by amendment. Absent such a

statute, "[l]itigants who want to prevent removal must file a

binding stipulation or affidavit with their complaints; once a

defendant has removed the case, St. Paul makes later filings

irrelevant." In re Shell Oil Co., 970 F.2d 355, 356 (7th Cir.

1992) (per curiam).10

10

The Eleventh Circuit has expressed reluctance to allow state rules of

procedure to determine when federal jurisdiction exists. See Burns, 31 F.3d

(continued...)

17

V.

The state complaint in this case was filed in Texas, which has

the following procedural provision: "An original pleading . . .

shall contain . . . (b) in all claims for unliquidated damages only

the statement that the damages sought are within the jurisdictional

limits of the court." TEX. R. CIV. P. 47(b). Plaintiffs acknowl-

edged during oral argument that their filing violated rule 47(b).

Accordingly, there is no state provision that limits the amount of

damages plaintiffs are seeking, or can recover, to the amount they

have asked for in the complaint, i.e., an amount not to exceed

$50,000. In summary, therefore, a plaintiff, in a case for

unliquidated damages, cannot, absent a further showing, avoid

removal by pleading for damages under the jurisdictional amount

where a state rule prevents such pleading and where defendants are

able to show that it is facially apparent that the amount in

controversy exceeds $50,000.

In the case sub judice, plaintiffs also attached to the

original state court petition an attorney affidavit that purported

to limit the amount of damages recoverable. The federal district

court reasoned, however, that the plaintiffs could not effectively

(...continued)

at 1097. We note, however, the cases that we have cited, especially those

mentioned by the St. Paul Mercury Court, which expressly reference state

procedural rules in the context of removal.

Moreover, while the Eleventh Circuit fears the "inconsistent application

of federal jurisdictional rules," we observe that the same "rule" will now

hold throughout the circuit. The general principle is that plaintiffs will

have to show that they are bound irrevocably by their state pleadings in these

situations. Certainly, plaintiffs who plead for specific damages and who are

in states that have procedural rules binding them to their pleadings will

satisfy their burden more easily. Others will have the same opportunity to

avoid federal court but will have to choose another method to show their

commitment to recovery below the federal threshold.

18

limit the amount of damages they could obtain unless they had the

authority to bind the estates by limiting damages. In order to do

so, they had to be the legal representatives or legal heirs of the

estates.

On this issue, plaintiffs' initial argument is that Mexican

law rather than Texas law should apply. Specifically, they assert

that under Mexican law, they are the lawful heirs of the decedents

and have lawful authority to limit the damages sought by the

estates.

In a diversity action, a federal court must apply the choice-

of-law rules of the state in which it sits. Klaxon v. Stentor

Elec. Mfg. Co., 313 U.S. 487, 496 (1941). According to Texas law,

"in all choice-of-law cases, except those contract cases in which

the parties have agreed to a valid choice-of-law clause, the law of

the state with the most significant relationship to the particular

substantive issue will be applied to resolve that issue." Duncan

v. Cessna Aircraft Co., 665 S.W.2d 414, 421 (Tex. 1984).

Texas follows RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 6, which

provides:

(1) A court, subject to constitutional restrictions, will

follow a statutory directive of its own state on choice

of law.

(2) When there is no such directive, the factors relevant to

the choice of the applicable rule of law include

(a) the needs of the interstate and international

systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states

and the relative interests of those states in the

19

determination of the particular issue,

(d) the protection of justified expectations,

(e) the basic policies underlying the particular field

of law,

(f) certainty, predictability and uniformity of result,

and

(g) ease in the determination and application of the

law to be applied.

Furthermore, section 145 lists the factual matters that a Texas

court will consider when applying section 6:

(1) The rights and liabilities of the parties with

respect to an issue in tort are determined by the

local law of the state which, with respect to that

issue, has the most significant relationship to the

occurrence and the parties under the principles

stated in § 6.

(2) Contacts to be taken into account in applying the

principles of § 6 to determine the law applicable

to an issue include:

(a) the place where the injury occurred,

(b) the place where the conduct causing the

injury occurred,

(c) the domicile, residence, nationality,

place of incorporation and place of business

of the parties, and

(d) the place where the relationship, if any,

between the parties is centered.

These contacts are to be evaluated according to their relative

importance with respect to the particular issue.

RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 145 (1971); Crisman v. Cooper

Indus., 748 S.W.2d 273, 276-77 (Tex. App.))Dallas 1988, writ

denied).

Furthermore, the application of the significant relationship

test does not "turn on the number of contacts, but more importantly

20

on the qualitative nature of those contacts as affected by the

policy factors enumerated in Section 6." Gutierrez v. Collins, 583

S.W.2d 312, 318 (Tex. 1979).

Defendants apparently relied upon only Texas cases when

arguing before the district court that Texas law should apply, as

plaintiffs did not argue that Mexican law should apply on this

issue until they filed their motion to remand two months after

removal. The district court, however, did address and reject the

choice-of-law argument in its memorandum opinion, and we follow

suit.

We will first identify all relevant contacts as a Texas court

would. Duncan, 665 S.W.2d at 421. All defendants conduct business

in Texas, the forum is Texas, and the underlying cause of action is

based upon Texas law. All of the plaintiffs are from Mexico, all

decedents were from Mexico, and the crash itself and the injuries

took place in Mexico. There is no particular relationship between

the plaintiffs and the defendants.

The matter at issue is whether Texas or Mexican law will be

used to determine the extent of plaintiffs' authority to limit

damage recoveries for the estates. As noted, plaintiffs plainly

are seeking damages under the Texas Survival Statute.

This "particular substantive issue" has nothing to do with the

actual alleged tort itself. Duncan, 665 S.W.2d at 421 (the law of

the place with the "most significant relationship to the particular

substantive issue will be applied to resolve that issue"). In

other words, the choice-of-law question in this case is unrelated

21

to the conduct and injury underlying the cause of action in the

same way that, for example, the choice of the substantive products

liability law of one of the places would be.11 See, e.g., Perry v.

Aggregate Plant Prods. Co., 786 S.W.2d 21 (Tex. App.))San Antonio

1990, writ denied) (products liability law of Indiana applies to

conduct and injury occurring in Indiana); Crisman (products

liability law of Florida applies to conduct and injury occurring in

Florida).

The fact that the accident took place in Mexico, or that there

was an accident at all, is fortuitous and simply not relevant to

our particular choice-of-law decision. Rather, the important fact

is that the plaintiffs chose to file a suit in Texas under Texas

law. Whether the plaintiffs could effectively limit the damage

recovery to the estates of the decedents relates more directly to

the "procedural" aspects of the suit and not to the substantive

portions of the cause of action.12

11

Obviously, in a tort case, the locus of the conduct has a greater

interest in seeing that its standard of care is applied, because it affects

the way that parties tailor their conduct in that state. See RESTATEMENT (SECOND)

OF CONFLICT OF LAWS § 145, cmt. d, at 417-18:

Experience and analysis have shown that certain issues that recur

in tort cases are most significantly related to states with which

they have particular connections or contacts. So, for example, a

state has an obvious interest in regulating the conduct of persons

within its territory and in providing redress for injuries that

occurred there. Thus, subject only to rare exceptions, the local

law of the state where the conduct and injury occurred will be

applied to determine whether the actor satisfied minimum standards

of acceptable conduct and whether the interest affected by the

actor's conduct was entitled to legal protection (see §§ 146-147).

The particular issue in our case is more akin to the situation where "a court

under traditional and prevailing practice applies its own state's rules to

issue involving process, pleadings, joinder of parties, and the administration

of the trial . . . ." Id. at 417.

12

Strictly speaking, this is not a procedural issue; otherwise, the

(continued...)

22

Mexico has no underlying interest in the application of its

law to determine who can bring a cause of action or bind the estate

in a Texas cause of action. Texas certainly has an interest in

requiring those who seek to take advantage of Texas law to meet

certain requirements. In addition, uniformity and predictability

in Texas courts would be promoted when deciding who has the

authority to pursue actions on behalf of estates. This is a false

conflict, and Texas law applies. See Duncan, 665 S.W.2d at 422.

In this situation, we have no doubt that a Texas court would choose

to apply Texas law.

Plaintiffs originally claimed to be the personal representa-

tives and legal heirs of the decedents' estates. Boeing's attempt

to amend the Reich affidavit, and the conversations which followed,

however, have called this claim into substantial doubt. In fact,

plaintiffs appear essentially to have abandoned their claim as

personal representatives and instead purport to be plaintiffs'

legal heirs.

The plaintiffs can pursue their claims as the individual heirs

of the estates under TEX. CIV. PRAC. & REM. CODE ANN. § 71.021

(Vernon's 1986). Legal heirs can sue on behalf of an estate if

they allege that "there is no administration [of the estate]

pending and no necessity for same and that they are the only heirs

(or devisees) of the deceased." Lozano v. Smith, 718 F.2d 756, 773

n.38 (5th Cir. 1983); see also Frazier v. Wynn, 472 S.W.2d 750, 752

(...continued)

federal procedural rules would apply.

23

(Tex. 1971); Johnson v. Holly Farms, Inc., 731 S.W.2d 641, 647

(Tex. App.))Amarillo 1987, no writ).

Plaintiffs have not alleged any of these elements. They now

argue that the district court erred in not requiring the defendants

to offer evidence that the above elements could not be satisfied.

Plainly, though, the rule is that the plaintiffs must affirmatively

allege the above elements. See Johnson, 731 S.W.2d at 647.

In any event, defendants did offer evidence that the plain-

tiffs in this case are not the sole heirs. Forty-two persons

alleged in de Aguilar I to be heirs of the decedents, as well as

twenty minors, were dropped as plaintiffs. It appears that known

heirs were deleted from this case because plaintiffs knew that they

would not be able to limit the damage claim with these heirs as

part of the action.13 The one hundred "Doe" plaintiffs from the

first action were also eliminated. The inclusion of "Doe"

plaintiffs in de Aguilar I suggests that the plaintiffs' attorneys

were not aware of who all of the heirs were, and the plaintiffs

have contended nothing that appears to change this circumstance.

In fact, plaintiffs' attorney acknowledged at oral argument

that he does not represent all of the legal heirs. Defendants also

argue that in a previous complaint, all of the present plaintiffs

and all of the plaintiffs from de Aguilar I were included, and the

plaintiffs still said that this was only a partial listing and that

additional survivors would be named. Plaintiffs plainly have

13

For example, a court must approve the limiting of a claim when

minors are involved.

24

failed to meet the requirements of Texas law to limit the damages

recoverable to the estates in this case. As a result, plaintiffs

have failed to defeat removal jurisdiction.14

The judgment of the district court dismissing the complaint is

AFFIRMED.

14

As this issue is dispositive, we find it unnecessary to address the

issue of Boeing's third party complaint.

25