Federal Court Remands Georgia Man’s Employment Law Case to State Court Due to Lack of Diversity Jurisdiction

Generally speaking, the person who files an Atlanta employment law case gets choose the court (state or federal) in which the matter will ultimately be tried. However, there are some situations in which this is not so.

For instance, the employee may choose to file his or her lawsuit in state court, only to have the employer remove the case to federal court based on diversity of citizenship jurisdiction. (Sometimes, it is possible to have the federal court send the matter back to state court (although this is the exception, not the rule).)

As for the reasons for choosing state court instead of federal court (or wanting a case removed to federal court after it has been filed in state court), the reasons tend to be very specific to an individual situation. In one case, there may be a belief that one court or the other may yield a result that is more favorable, or it could be that one court has a lengthy backlog of cases such that it will take substantially longer to get to trial. Location and convenience (or the added expense of inconvenience) may also factor in.

Facts of the Case

The plaintiff in a federal district court case began working for the defendant company in late 2017. He alleged that, during the hiring and recruitment process, the defendant employer had made certain representations to him pertaining to his role in the company, his compensation, and his entitlement to stock options. Some of these representations were reduced to writing and included in an offer letter. According to the plaintiff, he performed his job in a satisfactory manner, but the defendant refused to uphold its end of the deal as it pertained to stock options and compensation. The plaintiff also asserted that he had been the victim of certain “salacious conduct” at the hands of two executives employed by the defendant.

The plaintiff’s original complaint was filed in state court in Fulton County, Georgia. An amended complaint, also filed in state court, followed. In total, the plaintiff’s complaint sought to assert four claims: 1) breach of contract, 2) fraud, 3) detrimental reliance/promissory estoppel, and 4) negligent retention. The defendant removed the case to federal court, after which the plaintiff filed a motion to remand the matter back to state court.

Decision of the Court

The United States District Court for the Northern District of Georgia, Atlanta Division, granted the plaintiff’s motion and remanded the case to the Superior Court of Fulton County. The court began by acknowledging that, for diversity jurisdiction to be present, the parties had to have diversity of citizenship and the amount in controversy had to be in excess of $75,000. Although there was no dispute concerning complete diversity of citizenship, there was a disagreement regarding the amount in controversy. Although the plaintiff did not list a particular amount in his complaint, the defendant estimated that the plaintiff was seeking at least $100,000. Furthermore, according to the defendant, the plaintiff had made an oral offer to settle the case for $80,000.

In reviewing the matter, however, the court found that the defendant had failed to show by a preponderance of the evidence that more than $75,000 was in controversy. Notably, the court had held an evidentiary hearing for the purpose of determining the amount at issue, but the defendant had failed to offer any additional evidence, leaving the court to conclude that a remand to state court due to lack of federal jurisdiction based on diversity grounds was appropriate. With regard to the plaintiff’s purported offer to settle the case for $80,000, the court opined that an oral settlement offer was not entitled to significant weight in deciding the issue at hand.

Speak to an Atlanta Attorney Who Can Help with Your Employment Law Case

There are many different types of disputes that can arise between an employer and employee. If you need legal advice about a problem that you are having with the company for whom you are employed (or have previously been employed), the legal team at Parks, Chesin & Walbert are here to help. You can schedule a consultation by calling us at 404-873-8048. You can also use the “contact us” section of this website to contact us. We represent individuals in and around Atlanta in a wide variety of employment law claims, including those relating to compensation, wrongful discharge, discrimination, and sexual harassment.

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