Ruling that the Class Action Fairness Act (CAFA) permits an appeal from a district court’s sua sponte remand order, a divided Ninth Circuit Court of Appeals panel has determined that declarations filed by the defendant as to the amount in controversy were sufficient to establish that CAFA’s $5-million jurisdictional threshold had been met. Watkins v. Vital Pharm., Inc., No. 13-55755 (9th Cir., decided July 2, 2013).
On behalf of a putative nationwide class, the plaintiff alleged in state court that the defendant deceived consumers by claiming that its ZERO IMPACT® protein bars have “little to no impact on blood sugar.” The complaint states that “the aggregate damages sustained by the Class are likely in the millions of dollars” and seeks damages, restitution, disgorgement, and attorney’s fees and costs.
The defendant removed the action to federal court under CAFA and, according to the court majority, filed two declarations to support its assertion that CAFA’s $5-million amount-in-controversy requirement is met. Trial counsel’s declaration recited the complaint’s allegation about aggregate damages and concluded, because the product had been sold to thousands of consumers, that the amount in controversy exceeded $5 million to “a legal certainty.” Company accountant Richard Cimino declared that nationwide sales for the product in the preceding four years exceeded $5 million.
Without discussion, the Ninth Circuit agreed that the undisputed Cimino declaration was sufficient to meet CAFA’s requirement. A concurring and dissenting jurist, finding that it was unclear whether the district court had seen the Cimino declaration and that the declaration was insufficient as a matter of law to establish that the company had met its burden, would have remanded the matter for the district court “to determine in the first instance, in light of the Cimino declaration, whether Vital met its burden of proving that the amount in controversy exceeds $5 million.” According to this judge, “I cannot endorse Vital’s paltry showing as the new standard for meeting CAFA’s heretofore more demanding requirement.”