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McQueen v. Woodstream Corp.

December 9, 2009

ROBERT MCQUEEN, PLAINTIFF,
v.
WOODSTREAM CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge

Re Document No. 50

MEMORANDUM OPINION GRANTING THE DEFENDANT'S MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION

I. INTRODUCTION

This matter comes before the court on the defendant's motion to dismiss the plaintiff's fraudulent misrepresentation claim for lack of subject matter jurisdiction. The defendant asserts that the plaintiff cannot recover sufficient damages to satisfy the amount-in-controversy requirement to maintain this diversity action. The court concludes that the plaintiff's compensatory damages are limited to what he specifically gave up in reliance on the defendant's alleged misrepresentations, termed his "out-of-pocket" damages. The plaintiff has made no specific allegations with respect to such damages, instead focusing on damages he cannot recover under District of Columbia law. The plaintiff has also asserted a right to punitive damages. Because the plaintiff cannot recover a sufficient combination of compensatory and punitive damages to satisfy the amount-in-controversy requirement, the court grants the defendant's motion to dismiss.

II. FACTUAL & PROCEDURAL BACKGROUND

As the facts giving rise to the plaintiff's claims have been set forth in prior opinions, the court will not restate them in exhaustive detail here. See Mem. Op. (Mar. 10, 2008); Mem. Op. (Aug. 10, 2007). The plaintiff holds patents to technology used in insect and mouse traps. See Am. Compl. ¶¶ 5-6. In 1992, the defendant requested samples of the plaintiff's patented technology so that it could determine whether it wished to pursue a joint business venture with the plaintiff. Id. ¶ 8. The plaintiff sent the requested samples to the defendant, but negotiations between the plaintiff and the defendant soon broke down. Id. ¶¶ 8-10. The only subsequent contact between the parties consisted of the defendant repeatedly informing the plaintiff that no decision had been made with respect to the prospect of a joint business venture and that it was still assessing the technology for possible licensing and/or future development with the plaintiff. Id. ¶ 10. In 2003, after discovering that one of the defendant's products "incorporated all or most of the technology" that the plaintiff had disclosed to the defendant, the plaintiff commenced the instant suit. Id. ¶ 11.

The court has resolved several motions, including a motion to dismiss the plaintiff's breach of contract claim, which the court granted. See Mem. Op. (Mar. 10, 2008); Mem. Op. (Aug. 10, 2007). The only cause of action now remaining is the plaintiff's fraudulent misrepresentation claim. See Mem. Op. (Aug. 10, 2007). The defendant moves to dismiss that claim for lack of subject matter jurisdiction, alleging that the plaintiff cannot meet the amount-in-controversy requirement. See generally Def.'s Mot. The court turns now to the applicable legal standards and the parties' arguments.

III. ANALYSIS

A. Legal Standard for a Motion to Dismiss Pursuant to Rule 12(b)(1)

Federal courts are courts of limited jurisdiction and the law presumes that "a cause lies outside this limited jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938); see also Gen. Motors Corp. v. Envtl. Prot. Agency, 363 F.3d 442, 448 (D.C. Cir. 2004) (noting that "[a]s a court of limited jurisdiction, we begin, and end, with an examination of our jurisdiction").

Because "subject-matter jurisdiction is an 'Art[icle] III as well as a statutory requirement[,] no action of the parties can confer subject-matter jurisdiction upon a federal court.'" Akinseye v. District of Columbia, 339 F.3d 970, 971 (D.C. Cir. 2003) (quoting Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxite de Guinea, 456 U.S. 694, 702 (1982)). On a motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1), the plaintiff bears the burden of establishing by a preponderance of the evidence that the court has subject matter jurisdiction. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992).

Because subject matter jurisdiction focuses on the court's power to hear the claim, however, the court must give the plaintiff's factual allegations closer scrutiny when resolving a Rule 12(b)(1) motion than would be required for a Rule 12(b)(6) motion for failure to state a claim. Macharia v. United States, 334 F.3d 61, 64, 69 (D.C. Cir. 2003); Grand Lodge of Fraternal Order of Police v. Ashcroft, 185 F. Supp. 2d 9, 13 (D.D.C. 2001). Thus, the court is not limited to the allegations contained in the complaint. Hohri v. United States, 782 F.2d 227, 241 (D.C. Cir. 1986), vacated on other grounds, 482 U.S. 64 (1987). When necessary, the court may consider the complaint supplemented by undisputed facts evidenced in the record, or the complaint supplemented by undisputed facts plus the court's resolution of disputed facts. Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 197 (D.C. Cir. 1992).

B. Legal Standard for Diversity Jurisdiction

A federal district court has subject matter jurisdiction over a suit when the amount in controversy exceeds $75,000 and the parties are diverse in citizenship. 28 U.S.C. § 1332(a); DeBerry v. First Gov't Mortgage & Investors Corp., 170 F.3d 1105, 1106 n.1 (D.C. Cir. 1999); see also Stevenson v. Severs, 158 F.3d 1332, 1334 (D.C. Cir. 1998) (per curiam) (identifying the $75,000 amount-in-controversy requirement for federal diversity jurisdiction under 28 U.S.C. § 1332(a)). The amount in controversy is established at the commencement of the action. 28 U.S.C. § 1335(a). Subsequent events reducing the amount in controversy will not divest the court of its jurisdiction. St. Paul, 303 U.S. at 289-90. If it becomes apparent during the course of litigation that from the outset the maximum conceivable amount in controversy was less than the jurisdictional minimum, the court must dismiss the case for lack of subject matter jurisdiction. Watson v. Blankinship, 20 F.3d 383, 387-88 (10th Cir. 1994); Jones v. Knox Exploration Corp., 2 F.3d 181, 182-83 (6th Cir. 1993). Where the plaintiff has alleged a sum certain that exceeds the requisite amount in controversy, that amount controls if made in ...


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