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McALLISTER TOWING & TRANSPORTATION CO. v. OFFSHORE EXPRESS

United States District Court, S.D. New York


June 29, 2004.

McALLISTER TOWING AND TRANSPORTATION COMPANY INC., Plaintiff,
v.
OFFSHORE EXPRESS, INC., Defendant.

The opinion of the court was delivered by: RICHARD HOLWELL, District Judge

Memorandum Opinion and Order

This matter began as a petition by McAllister Towing and Transportation Company Inc. ("McAllister"), pursuant to Section 9 of the Federal Arbitration Act, 9 U.S.C. § 9, to confirm an arbitration award issued August 14, 2002. On September 15, 2003, Offshore Express, Inc. ("OEI") filed an answer similarly requesting "that the Court issue an Order confirming the Arbitration Award". (Answer at 4.) The Court granted the petition to confirm the arbitration award on December 30, 2003.

However, that ruling did not entirely resolve the matter because, when OEI's filed its answer, it also stated a counterclaim alleging that McAllister failed to perform under the terms of the Agreement and Plan of Reorganization, dated July 31, 1998 ("Agreement"). (See Answer at 4.) On March 17, 2004, McAllister moved to dismiss OEI's counterclaim.

  McAllister argues that (1) as a matter of law, OEI cannot assert counterclaims to a petition to confirm an arbitration award beyond those addressing the issue of whether the award should be confirmed and (2) there is no "independent basis for the continued exercise of federal subject matter jurisdiction over OEI's counterclaim following the Court's December 30, 2003 Order confirming the arbitration Award."*fn1 (Mem. of Law in Support of Pet'r's Mot. to Dismiss at 3, 5 (hereinafter "Br.").) OEI responds that the Court has subject matter jurisdiction over the counterclaim pursuant to the diversity statue, 28 U.S.C. § 1332, and pursuant to the Court's power to assert supplemental jurisdiction, 28 U.S.C. § 1367. (See Mem. of Law in Opp'n of Pet'r's Mot. to Dismiss at 4, 6 (hereinafter "Opp'n").) In reply, McAllister argues that the Court should decline to exercise supplemental jurisdiction and that the Court does not have diversity jurisdiction because the amount in controversy requirement of § 1332 is not met.*fn2 (See Reply Mem. of Law in Support of Pet'r's Mot. to Dismiss at 3, 5 (hereinafter "Reply").)

  The Court concludes that McAllister has the better of the arguments. The party asserting subject matter jurisdiction bears the burden of showing by a preponderance of the evidence that subject matter jurisdiction exists. See APWU v. Potter, 343 F.3d 619, 624 (2d Cir. 2003). "[J]urisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to the party asserting it." Id. (citations omitted). In resolving the issue of jurisdiction, the Court may refer to evidence outside the pleadings. See Luckett v. Bure, 290 F.3d 493, 496-97 (2d Cir. 2002).

  To assert jurisdiction under the diversity statute, the amount in controversy must exceed "the sum or value of $75,000 exclusive of interest and costs." 28 U.S.C. § 1332(a) (West 2004). The amount in controversy requirement is met initially if plaintiff's good faith allegations establish that the amount in dispute is more than $75,000. See Ross v. Communication Intelligence Corp., 272 F. Supp.2d 279, 283 (S.D.N.Y. 2003). However, if the jurisdictional facts that support the amount in controversy are challenged, the party asserting jurisdiction must support those facts with "competent proof" and justify its allegations by a preponderance of evidence. See id. (citations omitted). A court cannot dismiss a diversity action because of a jurisdictional amount deficiency unless it appears to a legal certainty that the claim is really for less than the jurisdictional amount. See id.

  OEI's counterclaim seeks the Court to direct McAllister "to promptly produce all correspondence and records of all communications of any nature, including without limitation all telephone records by and between [McAllister] or [McAllister's] counsel and the Saudi claimant or his representatives" and to grant such other relief as the Court "may deem just and proper." (Answer at 4.) This prayer for relief and the allegations on which it is based do not, on their face, appear to meet the $75,000 threshold. OEI notes that "[t]he amount in controversy in the arbitration exceeded $225,000" and that "[t]he amount in controversy in the Saudi Litigation which underlies the [Agreement] and counterclaim is potentially $1 million", Opp'n at 7; however, those points do not establish the value of this dispute because those sums cannot be imputed to the present matter. See Stoller v. Nissan Motor Corp. in USA, 934 F. Supp. 423, 424 (S.D. Fla. 1996) (finding no jurisdiction under § 1332 where "the monetary value of information sought via the pure bill of discovery and the amount that may be in controversy in a subsequent personal injury action are not one and the same"); Reilly Tar & Chem. Corp. v. Burlington N.R.R. Co., 589 F. Supp. 275, 279 (D. Minn. 1984) ("[A] court may not look to the collateral effect of a judgment on matters not directly involved in the suit in issue in determining the amount in controversy"). Indeed, OEI's carefully worded argument stops short of claiming that those amounts actually form part of the present controversy.*fn3 Thus, OEI fails to allege facts sufficient to meet the amount in controversy requirement necessary to sustain subject matter jurisdiction under the diversity statute.

  With respect to supplemental jurisdiction, a court may decline to exercise jurisdiction if the court has dismissed all the claims over which it had original jurisdiction. See 28 U.S.C. § 1367(c)(3) (West 2004). Given that the arbitration award has been confirmed, leaving OEI's counterclaim as the only remaining active controversy in this matter, the Court declines to exercise supplemental jurisdiction over OEI's counterclaim.

  CONCLUSION

  For the reasons stated above, McAllister's motion to dismiss the counterclaim [13-1] is GRANTED. The Clerk shall close this case.

  SO ORDERED.


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