The Supreme Court granted certiorari on April 7, 2014 in Dart Cherokee Basin Operating Co., LLC v. Owens, 730 F.3d 1234 (10th Cir. 2013), to consider whether a party removing a case to federal court needs to attach proof of jurisdictional facts to the notice of removal itself or can submit the evidence supporting removal later during briefing.
In Dart Cherokee, the plaintiff brought a suit on behalf of a class of royalty owners who were allegedly underpaid oil and gas royalties by defendants. Defendants removed the case to federal court under the “class action” provision of CAFA. 28 U.S.C. § 1332(d). Plaintiff moved to remand on the basis that defendants failed to satisfy CAFA’s US$5,000,000 aggregate amount in controversy requirement. Dart Cherokee, 2013 WL 2237740, at *3 (D. Kan. May 21, 2013). In response, defendants submitted a declaration with detailed calculations as to the amount in controversy. Id. at *2.
Plaintiff did not dispute that defendants’ declaration was sufficient to satisfy CAFA’s amount in controversy requirement; instead, plaintiff argued that remand was proper because defendants failed to submit that evidence with their Notice of Removal. Id. at *2-3. Although the removal notice explained that defendants had calculated the amount in controversy to exceed US$5,000,000 based on the allegations in the complaint, plaintiff argued that this “bare allegation” was insufficient to satisfy a preponderance standard and could not be cured by the subsequent affidavit. Id. The district court granted plaintiff’s remand motion holding that the amount in controversy requirement was not satisfied because defendants failed to incorporate any evidence, such as an economic analysis or settlement estimates, supporting their royalty calculations in the Notice of Removal. Id. at *4. Defendants’ initial and en banc petitions to appeal were denied by divided panels of the United States Court of Appeals for the Tenth Circuit. Dart Cherokee, 730 F.3d at 1234.
The majority of federal Circuit Courts to consider the question have held that, just like a complaint, a removal notice need only include a “short and plain statement” of the jurisdictional facts supporting removal and the submission of evidence is not required until the adequacy of a notice is challenged. But the Supreme Court will decide whether the district court was correct to apply such a rigorous standard to defendants’ factual allegations and require defendants to include evidence supporting federal jurisdiction with the notice of removal. The Supreme Court’s decision in this action could provide valuable guidance regarding a removing defendant’s burden to establish and set forth jurisdictional facts at the time of removal. In the meantime and in light of the uncertainty pending the Supreme Court’s decision, removing parties should consider taking extra care to support removal petitions with appropriate evidence where possible.