The Eleventh Circuit Court of Appeals has determined on rehearing that it erred by interpreting the Class Action Fairness Act of 2005 (CAFA) as requiring at least one plaintiff in a class action to meet the amount-in-controversy requirement for diversity jurisdiction. Cappuccitti v. DirecTV, Inc., No. 09-14107 (11th Cir., decided October 15, 2010). The matter arose in a case challenging the $420 early cancellation fee charged by a satellite TV provider. The plaintiff brought the suit in federal court on behalf of a putative class of DirecTV subscribers in Georgia. The California-based company sought to compel arbitration under its customer agreement or to dismiss two of the claims because the named plaintiff had not paid the cancellation fee. The trial court denied the motion to compel arbitration and granted the motion to dismiss the claims seeking to recover the fee. DirecTV appealed the part of the order denying arbitration.
In July 2010, the Eleventh Circuit issued an opinion in which it ruled that the district court lacked subject matter jurisdiction to consider the matter. In response to the parties’ petitions for rehearing en banc, the court vacated its earlier opinion and replaced it with the current opinion.
According to the court, “There is no requirement in a class action brought originally or on removal under CAFA that any individual plaintiff’s claim exceed $75,000.” CAFA simply requires that district courts “shall have original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs, and is a class action in which (A) any member of a class of plaintiffs is a citizen of a State different from any defendant.” The putative class must also contain at least 100 members. “To determine whether the amount in controversy requirement is met ‘[i]n any class action, the claims of the individual class members shall be aggregated to determine whether the matter in controversy exceeds the sum or value of $5,000.000, exclusive of interest and costs.’”
Because the matter came within these parameters, the appeals court held that it was properly before the federal court under CAFA and ruled on the merits of the dispute over arbitration. According to the appeals court, the district court erred by concluding that the plaintiff would not be able to recover his attorney’s fees and costs if he prevailed individually in arbitration. Apparently, that was a remedy available under Georgia law when the plaintiff filed his suit, even though he did not plead a cause of action providing that remedy. The court reversed the order denying arbitration and remanded the case for further proceedings.