Defendants in a class action will have a lighter burden in seeking to remove the case from state to federal court under the Class Action Fairness Act, according to the Supreme Court’s 5-4 opinion. Under CAFA, employers seeking removal need only allege that the amount in controversy exceeds the fivemillion-dollar statutory threshold and need not attach evidence proving the amount in controversy. Dart Cherokee Basin Operating Co., LLC v. Owens, No. 13-719 (Dec. 15, 2014).
The plaintiff in the case sought an unspecified “fair and reasonable” amount of damages for unpaid oil and gas lease royalties on behalf of a putative class. The defendants removed the case to the federal trial court under CAFA. In their notice of removal, the defendants alleged that the purported underpayments to the class members totaled more than $8.2 million, but defendants did not submit any evidence to support that amount. Alleging the notice of removal was deficient, the plaintiff then successfully sought to return the case to the state court, and the U.S. Court of Appeals for the Tenth Circuit denied the defendants’ request to review that action.
The Supreme Court noted the requirement for a notice of removal under the statute is “a short and plain statement of the grounds for removal.” A notice of removal need only include “a plausible allegation” that the amount in controversy is met, the Court concluded, and evidence to establish the amount in controversy is required only when the amount in controversy is contested by the plaintiff or questioned by the court.
For more on this decision, see “U.S. Supreme Court Clarifies Procedures for Removal to Federal Court under Class Action Fairness Act” at www.jacksonlewis.com.
Plaintiffs in class action litigation often prefer to bring cases in state courts, where they are more likely to receive favorable treatment. The Class Action Fairness Act was enacted, in part, to force larger class actions into the federal courts, where stricter procedural rules apply. The Court’s decision in this case settled a conflict among the federal appeals courts over a defendant’s burden in removing a case under CAFA. Moreover, the decision makes clear that there is no presumption against removing cases to federal court jurisdiction under CAFA, an argument often made by the plaintiffs when contesting removal.