The Verizon Employees, the New Phone and the Nude Photographs

This post examines an opinion recently issued by a U.S. District Court Judge who sits in the U.S. District Court for the Middle District of Florida:  Zabic v. Cellco Partnership, 2015 WL 5921851 (2015).  She begins by explaining how the case arose:

In September of 2012, Amanda Zabic, who was 18 at the time, sought to upgrade her cellular telephone at a Verizon store in Bartow, Florida. . . . Zabic indicates that a Verizon employee, Joshua Stuart, `provided Ms. Zabic with a new phone and assisted her in transferring data which had been electronically stored in Ms. Zabic's old cellular phone,’ to a new cellular phone. . . . The electronically stored data included `photographs of Ms. Zabic in an undressed, or semi-dressed state.’ . . .
 According to Zabic, Verizon `promised and repeatedly assured that all data would be transferred from her old phone to the new unit without the necessity of displaying any of the photographs and without the photographs or other personal information being seen or viewed by Verizon employees or anyone else.’ . . .  Despite these assurances, Zabic contends that Verizon employees, including Stuart and another employee (Gregory Lambert) viewed the nude photographs of her, saved the photographs to their personal cellular phones, and then shared those images with others. Specifically, Zabic alleges that when one of her acquaintances, Joshua Wingate, came to the same Bartow, Florida Verizon store, Verizon employees showed Wingate `photographs of a nude, semi-nude and partially clothed Amanda Zabic.’ . . .
 Wingate advised Zabic that Verizon employees were displaying her nude photos and, accordingly, Zabic contacted law enforcement. . . . According to the Complaint, Stuart and Lambert `were charged and convicted of Offenses against Computer Uses, Prohibition of Lewd Acts and Theft.’ . . .
 On August 26, 2015, Zabic filed a Complaint against Verizon Wireless Services, LLC and Cellular Sales of Knoxville, Inc. in the Circuit Court of the Thirteenth Judicial Circuit for Hillsborough County, Florida, bringing the following counts: negligence, invasion of privacy, public disclosure of private facts, theft and conversion, civil remedies for criminal practices, intentional infliction of emotional distress, respondeat superior, and vicarious liability. . . .

Zabic v. Cellco Partnership, supra.  You can read a little more about the facts in the case in the news story you can find here.

As noted above, Zabic filed her civil lawsuit in a Florida state court.  The defendants responded, on October 2, 2015, by “removing” the state case to the U.S. District Court for the Middle District of Florida.  Zabic v. Cellco Partnership, supra.  As Wikipedia explains,

[i]n the United States, removal jurisdiction refers to the right of a defendant to move a lawsuit filed in state court to the federal district court for the federal judicial district in which the state court sits. This is a general exception to the usual American rule giving the plaintiff the right to make the decision on the proper forum. Removal occurs when a defendant files a `notice of removal’ in the state court where the lawsuit is filed and the federal court to which the defendant would like to remove the case. Removal is governed by statute, 28 U.S. Code § 1441 et seq. With rare exceptions, a case may be removed only if, at the time of the initial filing, the case could have been filed in federal court. Removal requires an independent ground for subject-matter jurisdiction such as diversity jurisdiction or federal question jurisdiction. A case must be removed to the federal district court that encompasses the state court where the action was initiated. Once removed, the case can be transferred to, or consolidated in, another federal court, despite the plaintiff's original intended venue.

So Zabic’s state suit became a federal lawsuit.  The suit would normally proceed in the usual fashion, with the parties conducting “discovery” with each other, using motions and other filing to attempt to gain certain tactical advantages and, if all else failed, preparing for trial.  Here, though, the U.S. District Court Judge who has the case raised a critical issue sua sponte (on her own).

The issue she raised was the issue of jurisdiction:  Federal question jurisdiction clearly did not exist in this case because, as Wikipedia notes, federal question jurisdiction exists only when “the plaintiff has alleged a violation of the United States Constitution, federal law, or a treaty to which the United States is a party.” Nothing in the case implicates federal law, whether a statute, the Constitution or a treaty.

The only possible basis for the U.S. District Court’s having jurisdiction over this case, therefore, was diversity jurisdiction.  As Wikipedia notes, diversity jurisdiction is created, and governed, by 28 U.S. Code § 1332.  More precisely, 28 U.S. Code § 1332(a)(1) states that

[t[he 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. . . .

This is the only one of the options for diversity jurisdiction set out in 28 U.S. Code § 1332(a) that could apply to this case.  In her opinion, the Judge explains that the parties have provided “detailed information about their citizenship, such that the Court is satisfied that the parties are completely diverse.”  Zabic v. Cellco Partnership, supra.  That, though, only established one of the requirements for diversity jurisdiction; the amount in controversy also had to exceed $75,000.  28 U.S. Code § 1332(a)(1).

The judge began her analysis of this issue by explaining that

[r]emoval is proper if the complaint makes it `facially apparent’ that the amount in controversy exceeds $75,000. Williams v. Best Buy, Co., 269 F.3d 1316, 1319 (U.S. Court of Appeals for the 11th Circuit 2001). `If the jurisdictional amount is not facially apparent from the complaint, the court should look to the notice of removal and may require evidence relevant to the amount in controversy at the time the case was removed.’ Williams v. Best Buy, Co., supra.
 In this case, it is undisputed that the parties are of diverse citizenship. The only question is whether the amount in controversy exceeds the $75,000 jurisdictional threshold. In both the initial Complaint and the Amended Complaint, Zabic has not specified the precise amount of relief sought in the lawsuit, instead alleging damages `in excess of $15,000.’ . . .
 Where, as here, `damages are unspecified, the removing party bears the burden of establishing the jurisdictional amount by a preponderance of the evidence.’ Lowery v. Ala. Power Co., 483 F.3d 1184 (U.S. Court of Appeals for the 11th Circuit 2007). `[R]emoval statutes are construed narrowly; where plaintiff and defendant clash about jurisdiction, uncertainties are resolved in favor of remand.’ Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (U.S. Court of Appeals for the 11th Circuit 1994). . . .

Zabic v. Cellco Partnership, supra. 

The Judge then began her analysis of whether the amount in controversy requirement was satisfied in this case, noting that 

[a]s previously stated, the Complaint alleges damages in excess of $15,000. Without any further specificity on damages, Defendants, as the removing parties, bear the burden of proving, by a preponderance of the evidence, that the amount in controversy is in excess of $75,000. See Lowery v. Ala. Power Co., supra.
In the Notice of Removal, Defendants indicate: `Plaintiff's counsel has demanded $150,000 to settle the case’ and `[t]herefore, the amount in controversy exceeds $75,000.00, exclusive or interest and costs, as required for diversity jurisdiction in Federal Court.’ . . . No further information regarding the amount in controversy is provided in the Notice of Removal.The Court has evaluated the demand letter mentioned in the Notice of Removal; however, a number of federal courts, including the present Court, have held that settlement offers do not automatically establish the amount in controversy for purposes of diversity jurisdiction. Lamb v. State Farm Fire Mut. Auto. Ins. Co., (U.S. District Court for the Middle District of Florida 2010); Piazza v. Ambassador II JV, L.P.,  2010 WL 2889218 (U.S. District Court for the Middle District of Florida 2010) (`A settlement offer is relevant but not determinative of the amount in controversy’).

Zabic v. Cellco Partnership, supra. 

She went on to explain that

[i]nstead, courts have analyzed whether demand letters merely `reflect puffing and posturing,’ or whether they provide `specific information to support the plaintiff's claim for damages’ and thus offer a `reasonable assessment of the value of [the] claim.’ Lamb v. State Farm Fire Mut. Auto. Ins. Co., supra (quoting Jackson v. Select Portfolio Servicing, Inc., 651 F.Supp.2d 1279 (U.S. District Court for the Southern District of Alabama 2009)); Piazza v. Ambassador II JV, L.P., supra (`a settlement demand provides only marginal evidence of the amount in controversy because the ‘plaintiff's letter is nothing more than posturing by plaintiff's counsel for settlement purposes and cannot be considered a reliable indicator of the damages' sought by the plaintiff’).

Zabic v. Cellco Partnership, supra. 

The judge then went on to outline her ruling in this case, explaining, initially, that

[u]pon review, this Court finds that Zabic's demand reflects mere posturing rather than a reasonable assessment of the value of her claim. The demand letter is factually detailed, but contains no analysis of why her claim is worth $150,000.00, or any other amount. Zabic's counsel correctly indicates in the demand letter: `This is not a claim in which the loss and damages suffered by Ms. Zabic can be quantified with any degree of precision.’ . . . . Rather than trying to zero-in on the amount of the loss, Zabic's counsel discusses only one other case, as follows: `With respect to damages and what constitutes a reasonable amount, I commend your attention to the reported case styled In re Thomas, 254 B.R. 879 (U.S. District Court for the District of South Carolina Bankruptcy Court 1999), a case arising in the context of a bankruptcy proceeding in which the debtor's finance [sic] – both private, non-celebrity citizens—was awarded $300,000 in compensatory damages, together with an additional $125,000 in punitive damages for the mailing of private, sexually explicit photographs of a girlfriend and the threat of publication.’ The facts in the Thomas case were egregious and bear little resemblance to those presented here. To summarize, Ms. Hardy had a sexual relationship with Mr. Thomas and allowed Mr. Thomas to take photographs during various sexual acts. . . . Ms. Hardy ended the relationship with Mr. Thomas and began a new romantic relationship with Mr. Prezioso, which led to an engagement to be married. . . . Thereafter, Mr. Thomas mailed a copy of some of the sexually explicit photographs of Ms. Hardy to Mr. Prezioso and demanded money from Mr. Prezioso as well as the opportunity to have sex with Ms. Hardy once again. . . . Unless these conditions were met, Mr. Thomas threatened to send the sexually explicit photos to Ms. Hardy's employer. . . . Mr. Thomas was found guilty of criminal extortion and, in a trial brought by Mr. Prezioso, the court awarded $300,000 for intentional infliction of emotional distress as well as punitive damages. . . . While the present case also involves provocative photographs, there are no other similarities.

Zabic v. Cellco Partnership, supra. 

She then took up the issue of the amount in controversy in this case, noting that Zabic's

January 15, 2015, demand letter—as attached to the Notice of Removal—fails to explain how Zabic arrived at the $150,000.00 figure and does not provide a discussion of the economic or non-economic damages she may be seeking with any particularity. See Johnson v. Liberty Mut. Ins. Co.,  2013 WL 1503109 (U.S. District Court for the Middle District of Florida 2013) (finding that the pre-suit demand letter was a general demand as it contained no specific information as to the amount of damages sustained by plaintiff); Standridge v. Wal–Mart Stores, 945 F.Supp. 252 (U.S. District Court for the Northern District of Georgia 1996) (holding that a pre-suit demand letter was `nothing more than posturing by plaintiff's counsel for settlement purposes and cannot be considered a reliable indicator of the damages plaintiff is seeking’). That Zabic offered to settle her case for more than $75,000.00 does not establish by a preponderance of the evidence that the amount in controversy requirement is met. See Daniel v. Nationpoint, 2007 U.S. Dist. LEXIS 93367 (U.S. District Court for the Middle District of Alabama Dec. 19, 2007). In addition, that the demand letter was presented months in advance of the initiation of this suit further erodes its value for the purposes of determining the amount in controversy. A number of courts have indicated that pre-suit demand letters (as opposed to offers to settle after the filing of the complaint), are often worthy of very little consideration. See, e.g., Elder v. TFAL, Inc., 2007 U.S. Dist. LEXIS 82123, at *8 (U.S. District Court for the Northern District of Georgia Oct. 31, 2007) (in the context of determining amount in controversy, giving `little weight’ to a demand letter submitted prior to the filing of the complaint);  Saberton v. Sears Roebuck & Co., 392 F.Supp.2d 1358 (U.S. District Court for the Middle District of Florida 2005) (`Although case law permits the use of post-suit demand letters in determining the amount in controversy requirement, [a] pre-suit demand letter will not be considered’).

Zabic v. Cellco Partnership, supra. 

The judge therefore held that,

[g]iven that `uncertainties are resolved in favor of remand,’ Burns v. Windsor Insurance Co., 31 F.3d 1092 (U.S. Court of Appeals for the 11<sup>th</sup> Circuit 1994), the Court finds that
Defendants have failed to prove that the amount in controversy exceeds $75,000.
 Consequently, the Court determines that it lacks subject matter jurisdiction, and this case must be remanded to state court. See 28U.S. Code § 1447(c) (`If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded’).

Zabic v. Cellco Partnership, supra. 

She therefore entered an order to that effect, directing the  Court Clerk to “CLOSE THIS CASE.”  Zabic v. Cellco Partnership, supra.  So the case will, presumably, go forward in state court.