United States District Court, D. Delaware
F. BATAILLON, SENIOR UNITED STATES DISTRICT JUDGE
matter is before the Court on the objections of the
plaintiffs, Filing No. 17, to the report and recommendation
of the magistrate judge, Filing No. 16, denying
plaintiffs' motion to remand to state court, Filing No.
6. This case involves an action for breach of contract and
alleged residential construction defects.
standard of review is governed by 28 U.S.C. §
636(b)(1)(C) and Federal Rule of Civil Procedure 72(b). The
district court “shall make a de novo determination of
those portions of the report or specified proposed findings
or recommendations to which objection is made” and
“may also receive further evidence or recommit the
matter to the magistrate judge with instructions.” 28
U.S.C. § 636(b)(1)(C). Similarly, Rule 72(b)(3) requires
de novo review of any recommendation that is dispositive of a
claim or defense of a party.
Supreme Court has construed the statutory grant of authority
conferred on magistrate judges under 28 U.S.C. § 636 to
mean that nondispositive pretrial matters are governed by
§ 636(b)(1)(A) and dispositive matters are covered by
§ 636(b)(1)(B). Gomez v. United States, 490
U.S. 858, 873-74 (1989); see also Fed.R.Civ.P.
72(a). Under subparagraph (B), a district court may refer a
dispositive motion to a magistrate judge “to conduct
hearings, including evidentiary hearings, and to submit to a
judge of the court proposed findings of fact and
recommendations for the disposition.” 28 U.S.C. §
636(b)(1)(B); see EEOC v. City of Long
Branch, 866 F.3d 93, 99-100 (3d Cir. 2017). The product
of a magistrate judge, following a referral of a dispositive
matter, is often called a “report and
recommendation.” Id.“Parties ‘may
serve and file specific written objections to the proposed
findings and recommendations' within 14 days of being
served with a copy of the magistrate judge's report and
recommendation.” Id. (quoting Fed.R.Civ.P.
a party objects timely to a magistrate judge's report and
recommendation, the district court must ‘make a de novo
determination of those portions of the report or specified
proposed findings or recommendations to which objection is
made.'” Id. (quoting 28 U.S.C. §
substantial disagreement regarding whether this case needed
to be arbitrated, the district court determined that it
indeed must be arbitrated. Following arbitration, the arbitrator
concluded that the arbitration clause in the Warranty was
valid and enforceable. Petitioners filed an action in state
court to vacate the award. Thereafter, the petitioners moved
to dismiss in this Court arguing that the amount in
controversy is less than $75, 000 and remand it to state
court. The defendants disagree, contending that the amount in
controversy in a motion to vacate the arbitration award is
determined by the total financial consequences if the
arbitration award is vacated.
magistrate judge discussed the two approaches to make this
determination, the demand approach and the award approach.
The magistrate judge concluded that although the Third
Circuit had not directly addressed this issue, the practice
in this Circuit is consistent with the demand approach.
See Benhenni v. Bayesian Efficient Strategic
Trading, LLC, 2016 WL 5660461 *2 (D.N.J. Sept. 29,
2016), aff'd, 2017 WL 2422862 (3d Cir. June 5, 2017). The
magistrate judge also noted that it would make no sense to
say this Court is divested of jurisdiction when in fact it
originally ordered these claims to arbitration.
argue that they only asked for declaratory relief and not a
monetary award in their demand for arbitration. Regarding
that argument, the magistrate judge stated: “However,
when no monetary award is sought by a party in the
arbitration proceeding, the court should determine the amount
in controversy by the underlying cause of action that would
be arbitrated and the value of such claims, not just the
amount sought in the demand for arbitration. United
States Olymic Comm. V. Ruckman, 2010 WL 2179527, at *7
(D.N.J. May 28, 2010).” Filing no. 16, at 7. "In
actions seeking declaratory or injunctive relief, it is well
established that the amount in controversy is measured by the
value of the object of the litigation." Hunt v.
Wash. State Apple Advertising Comm'n, 432 U.S. 333,
347 (1977); Columbia Gas Transmission Corp. v.
Tarbuck, 62 F.3d 538, 541 (3d Cir. 1995).
careful review of the law and the facts, the Court agrees
with the magistrate judge. The Court previously determined in
this case that the action exceeded $75, 000.00. See Home
Buyers Warranty Corp. v. Jones, 2016 WL 2350103, at *3
(D. Del. May 4, 2016); Home Buyers Warranty Corp. v.
Jones, 2016 WL 3457006, at *2 (D. Del. June 21, 2016).
Diversity exists under 28 U.S.C. § 1332(1) as the
petitioners are residents of Pennsylvania, and the
respondents are Colorado corporations. For the reasons set
forth by the magistrate judge, the Court also concludes that
the amount in controversy exceeds $75, 000.00. Thus, removal
IT IS ORDERED THAT:
1. Petitioners motion for remand, Filing No. 6, is denied;
2. Petitioner's objection, Filing No. 17, is overruled;
3. The report and recommendation of the magistrate judge,
Filing No. 16, is ...