Antitrust Law Daily Wrap Up, ADVERTISING—S.D. Ohio: Nursing home’s false ad dispute did not meet amount-in-controversy requirement, (Apr 9, 2015)

By Michael Menzhuber, J.D., LL.M.

A skilled nursing facility’s motion to remand claims for violations of the Ohio Deceptive Trade Practices Act was granted by the federal district court in Dayton, Ohio, because the court could only speculate whether the amount-in-controversy requirement, necessary for subject matter jurisdiction, was satisfied (Heartland of Urbana, OH, LLC v. McHugh Fuller Law Group, PLLC, April 8, 2015, Rice, W.).

Heartland of Urbana, OH, LLC filed an action against McHugh Fuller Law Group, PLLC in state court after the law firm placed advertising in a local newspaper that the nursing facility alleged were false and deceptive.

The nursing facility’s complaint sought injunctive relief and attorney fees but did not request monetary damages. A motion for temporary restraining order enjoining further publication of the advertisement was granted. The law firm subsequently filed a Notice of Removal after which the nursing facility filed a Motion for Remand to the County Court.

Amount-in-Controversy. Because federal courts are court of limited jurisdiction, they have only the power authorized by the Constitution and by statute. A means of removing a claim to federal court is to assert that the amount-in-controversy exceeds $75,000. If the amount-in-controversy allegation is contested, proof that the amount in controversy exceeds $75,000 must be established by a preponderance of the evidence. Since the nursing facility’s request for relief was limited to injunctive relief and attorney fees, the law firm was required to prove, by a preponderance of the evidence, that the monetary amount of that relief exceeded $75,000.

Injunctive relief. With respect to the value of the injunctive relief, the law firm presented documents which stated the cost of nursing home care both in Ohio and local areas and asserted that these costs exceeded the amount-in-controversy requirement. This type of evidence was of “limited utility.”

The court further determined that the annual cost of nursing home care was irrelevant to the determination of the value of the injunctive relief requested, which was based on lost profits, and no evidence was presented concerning the value of the nursing home’s alleged harm of irreparable reputational and stigmatic harm, loss of contractual and business relationship, and immediate harm to its goodwill.

The law firm could also have met the amount-in-controversy requirement if it could have established that its costs in complying the nursing home’s injunction exceeded $75,000. However, the law firm merely claimed that it would lose profits of over $75,000 and cited two cases in which jury verdicts exceeding $75,000 were awarded to nursing homes.

Attorney fees. Although the nursing home’s complaint sought reasonable attorney fees, they could not be considered in connection with satisfying the amount-in-controversy requirement because the law firm could not provide evidence that would enable the court to make a reasonable estimate of an attorney fee award.

The case is No. 3-15-cv-004.

Attorneys: J. Randall Engwert (Anspach, Meeks, Ellenberger LLP), and Robert M. Anspach (Robert M. Anspach Associates) for Heartland of Urbana Ohio, LLC. Thomas Paul Mannion (Mannion Gray Law) for McHugh Fuller Law Group PLLC.

Companies: Heartland of Urbana, OH, LLC; McHugh Fuller Law Group, PLLC.

Cases: Advertising StateUnfairTradePractices OhioNews