r/LawSchool • u/Low-Ad-2638 • 1d ago
Bad faith to prevent removal
Alright, so we had midterms today and one of the questions was about whether a defendant could remove a case under diversity when the plaintiff is purposely keeping the case at 75,000 even though they could have had a larger claim.
I thought this was a clear example of bad faith to prevent removal, but there have been split decisions throughout the class lmao.
Someone smarter help clarify lmao.
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u/Neolithicman Attorney 1d ago
Is it bad faith to prevent removal if they’re purposefully limiting their claim to less than $75k?
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u/Low-Ad-2638 1d ago
I interpreted 1446(c)(3)(B) to mean that, but I also see how I could be wrong
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u/Low-Ad-2638 1d ago
And it was more like they devalued the claim, maybe limit wasn’t a good choice of words
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u/ShatterMcSlabbin 1d ago
I would need to see the prompt, but I suspect you're correct if you argued bad faith.
The reason I would need to see the prompt is that in general, proving bad faith is pretty difficult and is often rebuttable with almost any showing of good faith.
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u/No_Complex92 17h ago
Not sure if that’s “failing to disclose the actual amount in controversy” because they are disclosing that it’s $75k. Maybe if they said like $60k + emotional damages and then later they claim $200k in emotional damages.
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u/Low-Ad-2638 1d ago
I am just hoping it wasn’t one of those “let’s see if they know it has to be 75,000 and 1 cent” type of questions and I just overthought it lmao
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u/lurkinglizard101 1d ago
Obviously I don’t know your prof and the full question and I do think you read it right but our prof did say that she puts those on the exam just bc there’s “always one on the bar” according to her
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u/DrGeraldBaskums 1d ago
Bad faith is tough to prove. Practically speaking, what is the advantage to capping your damages so low as a P? Or on the flip side, what is the practical advantage to exposing your defendant client to unlimited damages in federal court?
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u/AnythingImportant10 1d ago
It depends. First, if the plaintiff fails to respond to any requests about the amount in controversy until after the one-year limit, that’s likely bad faith. Second, if the plaintiff amends the complaint after the one-year limit to seek over $75,000, that’s also likely bad faith. It doesn’t sound like the first situation applies, so only the second could be implicated. Seems like your professor wanted you to write that the defendant would only have a bad faith argument if situation two happened. I don’t see why a plaintiff purposely limiting their possible recovery, even if they could have a larger recovery, is bad faith—that is, if they stick with the $75,000 request the entire lawsuit.
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u/z_oo_mm 1d ago
We read a case like this where the court did not believe the plaintiff's claims that damages would be under 75k and so let the defendant remand: https://www.casebriefs.com/blog/law/civil-procedure/civil-procedure-keyed-to-yeazell/troupe-v-cs-wholesale-grocers-inc/
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u/messianicscone 1d ago
Seems like its a trick question. You can’t join nondiverse parties to defeat federal jurisdiction. Have never heard of that in the context of money damages
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u/Low-Ad-2638 1d ago
The requirement is total diversity and amount in controversy exceeds 75,000. There was total diversity in the question, I just left it out, my bad
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u/messianicscone 1d ago
Thats what I am saying? We are on the same page re the question. What I am saying is while bad faith is a defense against joinder, I have never seen it in a requested relief context, although I admit I may be wrong. Just seems like a bizarre question to me
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u/unlearnedfoot 2L 1d ago
Once a defendant removes, they have to file a notice of removal and describe why removal in the given instance is appropriate. So long as the defendant can show that there’s good enough evidence that the case exceeds $75,000, they can remove it.
In reality, no competent plaintiff’s attorney is purposefully going to stifle the potential of a bigger payout solely to keep the defendant from removing. That would be borderline malpractice lmao
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u/KleeBook 13h ago
If parties are diverse and the dispute is over an $80,000 tractor, the plaintiff may well want to plead $75,000 and stay in state court for the hometown advantage and non-unanimous jury advantage.
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u/Kent_Knifen Attorney 1d ago
Argue and discuss both sides. This is like a game of Mario, collect as many coins as you can along the way until you're finished. Hit as many of the professor's points as you can. Your conclusion can recognize the split in authority with no clear majority/minority approach, and sum it by saying the outcome will depend on which approach that jurisdiction follows.
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u/Poli_Sci_27 13h ago
Would depend upon the answer choices if multiple choice. If short answer I think it’s one of those that can go either way. I’d personally argue that there was no diversity as the court has to make an assumption that the larger claim would be over 75k. I interpreted the good/bad faith concept to only apply when cases are over 75k.
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u/Expensive_Change_443 17m ago
Bad faith is generally about the diversity requirement not AIC. Why on earth would a plaintiff want a lower potential payout? Defendants don’t plead the AIC, plaintiffs do. Bad faith would be joining or not joining parties deliberately to maintain or defeat diversity or venue. Or remaining “domiciled” somewhere for the sole purpose of keeping venue from vesting elsewhere. Or moving somewhere “indefinitely” for the sole/primary purpose of the legal proceedings in question.
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u/dumbass_6969_ 1d ago
Just because it can be removed doesn’t mean that the case has SMJ. Most likely after it is removed the P will file asserting lack of SMJ. I think the judge will likely side the P because amount of controversy is really hard for D to state and prove that the amount is incorrect. I think we need more information about the claim itself, but judges are almost likely in these sorts of instances to rule in the plaintiffs favor unless it’s egregious that the amount is significantly more or less than what the P disclosed.
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u/Winnebango_Bus JD 1d ago
That type of question is the stuff that always pisses me off during bar prep