UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK
August 18, 2006
NEW SKETE FARMS, INC. A/K/A THE MONKS OF NEW SKETE, PLAINTIFF,
MATTHEW MURRAY, INDIVIDUALLY AND D/B/A ATMOSPHERE ENTERTAINMENT, DEFENDANT.
The opinion of the court was delivered by: Gary L. Sharpe U.S. District Judge
MEMORANDUM-DECISION AND ORDER
The Monks of New Skete (New Skete) allege that Matthew Murray, through his company, breached an agreement to pay film royalties. See Dkt. No. 1. Pending is plaintiff's motion to remand pursuant to 28 U.S.C. § 1447(c). See Dkt. No. 5. For the reasons that follow, the motion to remand is denied.
II. Procedural History
On April 19, 2006, Murray filed a notice of removal with this court. See Dkt. No. 1. On May 18, New Skete filed the instant motion seeking remand to the Supreme Court of New York, Washington County. See Dkt. No. 5.
In September 1994, New Skete and Murray formed a contract to memorialize the production and distribution rights for a dog training film.*fn1
See Compl, ¶4; Dkt. No. 1. The agreement stated that New Skete would provide the training instruction, while Murray was given the film rights. See id. The agreement also provided that New Skete "was to receive no less than twenty percent of the net profits after the initial investment and applicable costs are recouped." See id. at ¶5. Since the distribution of the training series began in 1996, New Skete has not received any royalties from the sale of the series except for an initial advance of $5,000.00. See id. at ¶16.
New Skete argues that remand is proper because this court lacks subject matter jurisdiction. 28 U.S.C. § 1447(c) "authorizes a remand on the basis of any defect in removal procedure or because the district court lacks subject matter jurisdiction." LaFarge Coppee v. Venezolana De Cementos, S.A.C.A., 31 F.3d 70, 72 (2d Cir. 1994) (internal quotation marks and citation omitted). "On a motion to remand, the party seeking to sustain the removal, not the party seeking remand, bears the burden of demonstrating that removal was proper." Wilds v. UPS, Inc., 262 F. Supp. 2d 163, 171 (S.D.N.Y. 2003) (internal quotation marks and citation omitted). "Unless that burden is met, the case must be remanded back to state court." Id. (internal quotation marks and citation omitted).
B. Amount in Controversy
There is no dispute that diversity of citizenship exists. See Dkt. No. 5. However, New Skete contends that Murray cannot show with "reasonable probability" that the amount in controversy exceeds $75,000.00. In response, Murray offers estimates on the full value of the film, including its estimated profits from broadcast rights and production costs. The court concludes that the amount in controversy exceeds the statutory amount.
It is well established that "[t]he district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000...between citizens of different states[.]..." 28 U.S.C. § 1332(a)(1). "A party invoking the jurisdiction of the federal court has the burden of proving that it appears to be a 'reasonable probability' that the claim is in excess of the statutory jurisdictional amount." Scherer v. Equitable Life Assurance Soc'y of U.S., 347 F.3d 394, 397 (2d Cir. 2003) (citation omitted). Moreover, "[i]n actions seeking declaratory or injunctive relief...the amount in controversy is measured by the value of the object of the litigation." Davies v. Belden & Blake Corp., 00-CV-0245E(F), 2001 WL 210471, at *6 (W.D.N.Y. Feb. 20, 2001) (citing Hunt v. Wash. Apple Adver. Comm'n, 432 U.S. 333, 347 (1977)). "Where the plaintiff seeks injunctive relief, the value of his claim is generally assessed with reference to the right he seeks to protect and measured by the extent of the impairment to be prevented by the injunction." A.F.A. Tours, Inc. v. Whitchurch, 937 F.2d 82, 87-88 (2d Cir. 1991). "In calculating that impairment, the court may look not only at past losses but also at potential harm." Id. at 88.
Here, as part of its complaint, New Skete seeks to enjoin all future film "production, manufacturing, publication and sales[.]..." See Compl, Dkt. 1. New Skete also seeks to enjoin future broadcasts and have Murray turn over all materials, including video tape and film stock. See id. Given the relief sought by New Skete, Murray contends that the amount in controversy must be determined by considering the full value of the film, in addition to the contractual damages. In support of this contention, he points out that: (1) the value of future broadcast rights is estimated to be over $100,000; (2) future loss of profit is estimated to be more than $100,000 per year; and (3) the film itself cost $500,000 to produce. Because New Skete seeks injunctive relief, the calculations are relevant to the amount in controversy requirement, and consequently the court concludes that the amount exceeds the statutory threshold. Accordingly, removal was proper, and plaintiff's motion to remand is denied.
WHEREFORE, for the foregoing reasons, it is hereby
ORDERED that New Skete's motion to remand (Dkt. No. 5) is DENIED, and it is further
ORDERED that the Clerk provide a copy of this Decision and Order to the parties.
IT IS SO ORDERED.