The Supreme Court has held that a notice of removal requires only a “plausible allegation that the amount in controversy exceeds the jurisdictional threshold,” and confirmed that a notice of removal need not include evidence establishing the amount in controversy. In Dart Cherokee Basin Operating Co. v. Owens, the plaintiff alleged that defendants, Dart Cherokee Basin Operating Co. and Cherokee Basin Pipeline, LLC, underpaid royalties owed to putative class members and sought on behalf of the putative class a “fair and reasonable amount” of damages. Invoking CAFA, the defendants removed the case to federal court. The plaintiff sought remand, arguing that the defendants’ notice of removal was deficient because it did not include evidence showing that the amount in controversy exceeded CAFA’s jurisdictional $5 million threshold. The defendants responded by submitting a declaration from an executive officer setting forth a detailed damage calculation indicating an amount in controversy exceeding $11 million. The plaintiff did not contest the defendants’ damage calculation, but instead claimed that the notice of removal could not be cured by evidence submitted after the case was removed.
Relying on Tenth Circuit precedent, the district court accepted the plaintiff’s argument and remanded the case to state court. The Tenth Circuit denied discretionary review of the CAFA remand order, which was sought under 28 U.S.C. § 1453(c)(1). Thereafter, the defendants petitioned for certiorari review by the Supreme Court, seeking resolution of the question: “Whether a defendant seeking removal to federal court is required to include evidence supporting federal jurisdiction in the notice of removal or is alleging a ‘short and plain statement of the grounds for removal’ enough?” The Supreme Court granted review.
The Court began its analysis by noting that the “short and plain statement” language in 28 U.S.C. § 1446(a) was intended to track the same language in Rule 8(a) and that courts should apply the same rules to allegations in a notice of removal as those applied to other pleadings. The Court then explained that, just as a plaintiff’s allegations of amount in controversy should be accepted if made in good faith, so too should a defendant’s allegations. As clarified by 28 U.S.C. § 1446(c)(2)(B), added to § 1446 as part of the Federal Courts Jurisdiction and Venue Act of 2011, it is only when either the plaintiff or the court questions a defendant’s assertion of the amount in controversy that evidence becomes an issue. “In such a case, both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied. . . . [o]f course, a dispute about a defendant’s jurisdictional allegations cannot arise until after the defendant files a notice of removal containing those allegations.”