Just two weeks after the Supreme Court’s decision in Dart Cherokee Basin Operating Co., LLC v. Owens, the Eleventh Circuit affirmed a CAFA-based remand order where the defendant failed to establish by a preponderance of the evidence that the amount in controversy exceeded the jurisdictional threshold for a CAFA removal. Plaintiff, a former Lilly employee, alleged that Lilly failed to make certain incentive payments due her and other similarly situated individuals who had been employed at Lilly. She sought to represent a class of:
All Lilly Fixed Duration Employees (“FDEs”) who, during the class period, did not receive: (1) a sales incentive (“VOB”), and/or (2) a Customer Value Metric (“CVM”), and/or (3) a Service Value Chain (“SVC”), and/or (4) the value of a Reward Recognition Trip (“RRT”), payments as a result of their scheduled termination date occurring before the completion of the time period used for calculating said amounts.
Plaintiff alleged that each former employee was entitled to one or more of the incentive payments and that each of the categories of payments was calculated using different timeframes. During plaintiff’s employment, for example, the payout periods for VOB and CVM changed from quarterly to bi-annual, the SVC was calculated annually, and RRTs, although valued at $5,000 each, were based on individual performance. Plaintiff claimed that Lilly failed to pay her the incentives she earned because her employment ended before the calculation periods for the incentives ended and that no other former FDEs were paid the incentives for work performed before their employment ended.
Lilly removed the case to federal court pursuant to CAFA. Plaintiff moved to remand arguing that Lilly had failed to establish the amount in controversy by a preponderance of the evidence because its allegations were based on speculation and conjecture. Lilly filed two affidavits – one with its notice of removal and one with its opposition to remand – that set forth the number of incentive eligible FDEs and incentive compensation target ranges over various timeframes. Lilly then estimated that all former FDEs could have forfeited more than $9 million. Plaintiff argued that Lilly’s calculations erroneously assumed that all former FDEs were legible for all benefits and damages without offering any supporting proof.
The district court found, and the Eleventh Circuit agreed, that Lilly failed to establish by a preponderance of the evidence the total amount of incentive compensation the class members were allegedly denied. In particular, Lilly failed to provide estimates of incentive payments that corresponded to the categories of such payments identified in the complaint, failed to recognize and build into the calculus that not all of the FDEs were alleged to have been denied all of the incentive payments, and failed to provide any meaningful guidepost for the payment estimates. Lilly’s affidavits revealed only how many FDEs were terminated on certain dates and the range of compensation a FDE theoretically could have received. As a result, the Eleventh Circuit concluded the district court did not clearly err because it was unable to make any reasonable inferences and deductions from Lilly’s evidence to determine whether Lilly had carried its burden to establish the amount in controversy by a preponderance of the evidence.