Edward D. Jones & Co., L.P. v. Knapp

Background

Edward Jones Trust Company and Edward D. Jones & Co., L.P. filed an interpleader action in Ramsey County District Court. An interpleader action allows a party holding disputed funds to ask a court to determine which competing claimant is entitled to them. Edward Jones stated that it could not determine whether Cabrini Knapp or the Minnesota Department of Revenue was entitled to $65,843.80 that the Department had levied against individual retirement accounts belonging to Knapp’s deceased husband.

The Department had assessed the husband as personally liable for Minnesota sales and use taxes connected with a sports bar he owned and operated. It later issued the levy to collect $65,843.80. After Edward Jones filed the interpleader action, Knapp removed it to federal court based on diversity jurisdiction, which generally requires complete diversity between the parties and an amount in controversy greater than $75,000.

Arguments and jurisdictional analysis

The Department of Revenue moved to return the case to state court, and Edward Jones joined that request. Knapp moved to transfer the case to the District of North Dakota or dismiss it. The court treated her filing as seeking transfer or dismissal, rather than judgment on the pleadings, because she provided no argument supporting judgment on the pleadings.

The court held that Knapp, as the party who removed the case, had to show by a preponderance of the evidence that more than $75,000 was in dispute. The complaint and levy identified the amount at issue as $65,843.80. Although Knapp pointed to three accounts with a combined value of approximately $360,000, the court explained that the amount in controversy was measured by the value of the right being enforced. The most the Department could obtain through the levy was $65,843.80. The court also stated that costs and interest could not be included in the amount-in-controversy calculation.

Ruling

Judge John R. Tunheim concluded that the federal court lacked subject-matter jurisdiction because the amount-in-controversy requirement was not satisfied. The court granted the Minnesota Department of Revenue’s motion to remand and Edward Jones’s motion for joinder in that motion. It ordered that the case be transferred to the Ramsey County District Court for further proceedings.

The opinion states that Knapp’s alternative motion to transfer or dismiss was denied as moot. The written order specifically lists Cabrini Knapp’s motion to dismiss as DENIED. The opinion does not separately state a final disposition for the transfer request beyond describing the alternative request as moot.