The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court
Plaintiff commenced this action on March 15, 2013 by filing a Summons and Complaint in the Supreme Court for the State of New York, Erie County, alleging, among other things, that Defendant Ron Hish violated a non-compete agreement. Defendants removed the matter to this Court on March 27, 2013. Presently before this Court is Plaintiff's motion to remand. The Court finds the matter fully briefed and oral argument unnecessary, and for the reasons discussed below, concludes that the motion should be denied.
Plaintiff provides professional grade inspection, maintenance, and restoration services to utility companies. (Compl. ¶ 7, Notice of Removal Ex A, Docket No. 1.) Defendant Ron Hish was employed by Plaintiff until May 2012 as a field supervisor whose responsibilities included customer communications and day-to-day operations for Plaintiff's customers in Arizona, New Mexico, and California. (Id. ¶¶ 8-11.) Hish entered into a Non- disclosure, Non-competition, Non-solicitation and Intellectual Property Agreement ("non-compete agreement") with Plaintiff in September 2007 that, among other things, precluded Hish from competing with Plaintiff following the termination of his employment for two years in Arizona and for one year in California. (Compl. Ex. A ¶¶ 3-4.)
Defendant Arizona Utility Inspection Services, Inc. ("AUIS") was incorporated in September 2013 by Defendant Linda Hish, Ron Hish's wife. (Decl. of Linda Hish ¶ 3, Docket No. 9; Compl. ¶ 5.) Shortly thereafter, Plaintiff became aware that Ron Hish was performing utility inspection services for AUIS and informed Hish that he was in violation of the non-compete agreement. (Compl. ¶¶ 23-24.) Based on the belief that Defendants are soliciting Plaintiff's customers and preparing to compete with Plaintiff in providing utility inspection and other services, Plaintiff commenced the instant action in New York state court in March 2013.
In light of the limited jurisdiction of federal courts and out of respect for states' rights, removal jurisdiction is strictly construed, with all doubts resolved against removal. In re Methyl Tertiary Butyl Ether ("MTBE") Prods. Liab. Litig., 488 F.3d 112, 124 (2d Cir. 2007). A defendant may remove an action to federal court based upon diversity of citizenship where all adverse parties are citizens of different states and there is a reasonable probability that the amount in controversy exceeds $75,000. 28 U.S.C. §§ 1332 (a); 1446 (a); Herrick Co., Inc. v SCS Commc'ns, Inc., 251 F.3d 315, 322-23 (2d Cir. 2001). The removing party bears the burden of establishing proper jurisdiction. United Food & Commercial Workers Union v. Centermark Props. Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir. 1994); Mehlenbacher v. Akzo Nobel Salt, Inc., 216 F.3d 291, 296 (2d Cir. 2000).
Plaintiff asserts that remand, as well as an award of costs and fees, is warranted here because (1) Defendants failed to sufficiently allege that this case meets the amount in controversy threshold of $75,000; (2) Defendant Ron Hish contractually agreed to suit in Erie County Supreme Court and the other Defendants are also bound by that agreement; and (3) removal was ineffective where Defendants failed to include with their notice all papers served upon them in the state court action. This Court disagrees and concludes that remand is unwarranted.
Plaintiff correctly asserts that the amount in controversy is not established by the state court complaint nor alleged with any particularity in Defendant's notice of removal. "Where the pleadings themselves are inconclusive as to the amount in controversy, however, federal courts may look outside those pleadings to other evidence in the record." United Food & Commercial Workers Union, 30 F.3d at 305. "A party invoking the jurisdiction of the federal court has the burden of proving that it appears to a 'reasonably probability' that the claim is in excess of the statutory jurisdictional amount." Scherer v. Equitable Life Assurance Society of U.S., 347 F.3d 394, 397 (2d Cir. 2003) (quoting Tongkook Am. Inc. v. Shipton Sportswear Co., 14 F.3d 781, 784 (2d Cir. 1994)); see Untied Food & Commercial Workers Union, 30 F.3d at 305 (a challenge to jurisdictional facts must be met with competent proof). The amount in controversy is measured as of the date of the complaint. Scherer, 347 F.3d at 397.
Defendants respond that an amount in controversy in excess of $75,000 can be established because Plaintiff seeks, among other things, compensatory damages including "disgorgement of any profits earned by Defendants and/or profits lost by [Plaintiff]." (Compl. at 11; Def's Mem of Law at 5-6.) Defendant Ron Hish avers that AUIS has successfully bid on one project with an Arizona company since his termination which resulted in profits in excess of $100,000. (Decl. of Ron Hish ¶¶ 13-15, Docket No. 9-1.) Further, Hish avers that the last payment on this project was received in December 2012, three months prior to the date of the Complaint.
Plaintiff does not raise in its reply memorandum any specific challenge to the averments that a single project could net over $100,000 in profit. (Pl's Reply Mem of Law at 6.) Further, the Complaint alleges that Defendants are preparing additional bids in violation of the non-compete agreement. (Compl. ¶¶ 27, 40.) Defendants have therefore established that it is reasonably probable that ...