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DreamPak, LLC v. Infodata Corp.

United States District Court, N.D. Illinois, Eastern Division

July 29, 2019

DREAMPAK, LCC Plaintiff,


          Honorable Marvin E. Aspen, United States District Court Judge.

         Before us is Defendant InfoData Corporation's (“InfoData”) motion to dismiss Plaintiff DreamPak, LLC's (“DreamPak”) complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. (Mot. (Dkt. No. 29).) In support of our jurisdiction, Plaintiff has submitted a declaration of one of its vice presidents, (Gamay Decl. (Dkt. No. 35-1)), which Defendant has moved to strike. (Mot. to Strike (Dkt. No. 39).) Plaintiff opposes Defendant's motion to strike, and in the alternative moves for leave to supplement the record with a declaration from its Senior Financial Controller. (Mot. for Leave (Dkt. No. 43).) For the reasons stated below, we deny both Defendant's motion to dismiss for lack of subject matter jurisdiction and Defendant's motion to strike the declaration. We likewise deny Plaintiff's motion for leave to supplement the record as moot.


         Our order on Defendant's earlier motion to dismiss sets out the background of this case. (Order (Dkt. No. 26) at 1-5.) Plaintiff is a Virginia limited liability company that manufactures beverage enhancers, milk modifiers, and dietary supplements. (Compl. (Dkt. No. 1) ¶ 1.) Defendant, an Illinois software sales and consulting company, is “an expert in the implementation of Enterprise Resource Planning (‘ERP') software.” (Id. ¶¶ 4, 10.)

         “[A] proponent of federal jurisdiction must, if material factual allegations are contested, prove those jurisdictional facts by a preponderance of the evidence.” Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir. 2006). Plaintiff has submitted four facts in support of our jurisdiction, alongside a declaration of its vice president, Waleed Gamay. (Pl.'s Mem. in Opp. to Def.'s Mot. to Dismiss (“Resp.”) (Dkt. No. 35) at 7-8 (statement of jurisdictional facts); Gamay Decl.) Three of Plaintiff's four jurisdictional facts are uncontested. First, the parties executed a Software Services Agreement and Letter of Understanding (“SSA” (Dkt. No. 1-1)) on September 21, 2015, whereby Defendant agreed to provide and implement ERP software for Plaintiff. (Resp. at 7, ¶ 1; Answer (Dkt. No. 34) ¶ 20 (“Defendant admits that in September of 2015 DreamPak and InfoData executed a Software Service Agreement . . . .”).)[1] Second, in return, Plaintiff paid Defendant $82, 178.00 on or about the date the SSA was executed. (Resp. at 7, ¶ 2; Reply at 11.) Third, on October 28, 2015, Plaintiff paid Defendant an additional $90, 560.16 for consulting application services. (Resp. at 7, ¶ 3; Reply at 12.)

         Plaintiff's fourth jurisdictional fact states, in its entirety, “Defendant failed to implement the Sage X3 ERP software package for Plaintiff, and such failure continues to this day. The software is unusable by Plaintiff for any purpose.” (Resp. at 8 ¶ 4 (citating Gamay Decl. ¶ 6).) Defendant contests this fact, (Reply at 12), and moves to strike the Gamay declaration supporting it as failing to establish Gamay's personal knowledge of the ERP software's present state, implementation, or usefulness to Plaintiff. (Mot. to Strike ¶ 3.)

         In addition, Plaintiff alleges that it spent an additional $33, 000 to license and implement alternative ERP software from another vendor when Defendant's services proved inadequate. (Compl. ¶ 54.)


         A Rule 12(b)(1) motion to dismiss challenges the court's subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). Jurisdiction is the “power to decide” and must be conferred upon the federal court. In re Chi., R. I. & P. R. Co., 794 F.2d 1182, 1188 (7th Cir. 1986). In determining whether jurisdiction exists, we may “look beyond the jurisdictional allegations of the complaint and consider any evidence submitted on the issue.” Farnik v. F.D.I.C., 707 F.3d 717, 721 (7th Cir. 2013). A plaintiff faced with a 12(b)(1) motion to dismiss bears the burden of establishing that the jurisdictional requirements have been met. Lujan v. Def. of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 2136 (1992); Farnik, 707 F.3d at 721.


         Plaintiff's suit is predicated upon diversity jurisdiction. 28 U.S.C. § 1332(a) (“The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs, and is between . . . citizens of different States . . . .”) Defendant challenges only whether Plaintiff's claims exceed the $75, 000 amount-in-controversy threshold. (Mot. ¶ 1.)

         A district court has an independent duty to ensure that it has subject-matter jurisdiction. HSBC Bank USA, N.A. v. Garcia, No. 12 CV 6561, 2014 U.S. Dist. LEXIS 108541, at *5 (N.D. Ill. Aug. 6, 2014) (quoting Hammes v. AAMCO Transmissions, Inc., 33 F.3d 774, 778 (7th Cir. 1994)). The amount in controversy must exceed $75, 000 at the time the claim is filed for this Court to have jurisdiction in a diversity suit. Feliberty v. Unumprovident Corp., No. 03 C 7569, 2003 U.S. Dist. LEXIS 22840 (N.D. Ill.Dec. 15, 2003) (citing 28 U.S.C. § 1332(a); St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289-90, 58 S.Ct. 586, 590-91 (1938)). Amount in controversy is measured from the beginning of the suit and is not affected by subsequent dismissal of individual claims. Clark v. State Farm Mut. Auto. Ins. Co., 473 F.3d 708, 711 (7th Cir. 2004).[2]

         To invoke diversity jurisdiction, a plaintiff must demonstrate “no more than a good faith, minimally reasonable belief” that the claim is for more than $75, 000. Neuma, Inc. v. Amp, Inc., 259 F.3d 864, 881 (7th Cir. 2001) (citing St. Paul Mercury, 303 U.S. at 288-89, 58 S.Ct. at 590). A plaintiff may aggregate the amount in controversy across all claims against a specific defendant to satisfy the jurisdictional minimum. LM Ins. Corp. v. Spaulding Enters. Inc., 533 F.3d 542, 548 (7th Cir. 2008). However, if a defendant contests the plaintiff's material factual allegations concerning the amount in controversy, then the plaintiff must “prove those jurisdictional facts by a preponderance of the evidence.” Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir. 2006). The plaintiff must support contested jurisdictional facts with “competent proof” showing more than merely “the theoretical availability of certain categories of damages.” McMillian v. Sheraton Chi. Hotel & Towers, 567 F.3d 839, 844 (7th Cir. 2009). “It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal.” St. Paul Mercury, 303 U.S. at 289, 58 S.Ct. at 590; see also Meridian Sec. Ins. Co., 441 F.3d at 541 (“Although the proponent of jurisdiction may be called on to prove facts that determine the amount in controversy . . . once these facts have been established the proponent's estimate of the claim's value must be accepted unless there is ‘legal certainty' that the controversy's value is below the threshold.”); Pratt Cent. Park Ltd. P'ship v. Dames & Moore, Inc., 60 F.3d 350, 354 (7th Cir. 1995) (describing the “legal certainty” inquiry).

         Defendant advances three arguments. First, Defendant asserts that we lack jurisdiction because the “wherefore” clause in Plaintiff's complaint did not contain an explicit amount in controversy. (Def.'s Mem. in Support of Mot. to Dismiss (“Mem.” (Dkt. No. 31) at 3-5.) Second, Defendant argues that the SSA contains a limitation of liability clause that limits Plaintiff's claims below the jurisdictional amount. (Id. at 5-9.) Finally, Defendant claims that Plaintiff has not offered competent evidence to ...

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