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Migis v. Autozone, Inc., Slip Copy, 2009 WL 223711 (D.Or., Jan 29, 2009)(NO. CIV. 08-1394-KI)

Walking through my office, I often find humor watching my fellow attorneys using their fingers to make sure they added four plus three correctly (and for those of you who started counting in your head, and then on your fingers, the answer is seven…I think). And that evening when I begin filling out my billable hour sheet, I find myself doing the same thing. Let’s face it. As attorneys, there is a reason we chose not to enter the engineering profession: We stink when it comes to the field of mathematics. That, however, is no excuse when attempting to remove under CAFA.

In this case, the plaintiff’s counsel stated in his complaint that “the aggregate total of the claims plead herein do not exceed five million dollars.” During the hearing on a motion for class certification, the plaintiff’s counsel multiplied his damages figures by minutes (114,643) instead of hours (1,910), resulting in a damages figure well beyond the requisite five million required for removal under CAFA. Oops.

Shortly after the judge issued a sanction order against the defendant’s counsel for “knowingly and willfully” violating the court’s discovery orders, the defendant’s counsel filed a notice of removal under CAFA, relying on the damages calculation used by the plaintiff’s counsel during the oral argument for class certification. I suppose that is a good strategy…when you are about to be sanctioned by a state trial court judge, see if you can remove to federal court.

The District Court in Oregon, however, was not buying that argument. The court noted that “[t]he party seeking removal must show ‘to a legal certainty that the amount in controversy exceeds the statutory minimum’ when a plaintiff specifically pleads that damages are less than $5,000,000 in the Complaint.” Quoting from Lowdermilk v. United States Bank Nat’l Assoc., 479 F.3d 994, 999 (9th Cir. 2007). (Editors’ Note: See the CAFA Law Blog analysis of Lowdermilk posted on July 30, 2007).

The judge noted that when the math was performed correctly using hours instead of minutes, the damages calculation came out to $1,451,402. And with that number, the judge remanded the case back to state court. 

So next time you attempt to remove under CAFA, learn the important lesson that comes from this case: Make sure to use both your fingers and your toes when calculating damages for removal under CAFA.  You may look a little weird to that associate walking past your office, but at least you will know your calculations are correct.

Posted By McGlinchey Stafford at 07:30 AM | Comments / Questions (2)

I am the Plaintiff's attorney who argued the January 2009 remand hearing, which resulted in the above-refrerenced remand Order.

To update, Defendant filed a second notice of removal in late May 2009, eight business days before start of trial in State Court, and only six business days before the State Court was set to rule on another motion for sanctions against AutoZone for failing to produce all court-ordered class discovery.

Plaintiff moved for remand in response to the second removal. On July 2, 2009 the District Court again remanded to State Court, finding that AutoZone: (a) did not follow the requirements of 28 USC 1446(a); and (b) waived its right to remove by pursuing summary judgment after the date it claimed it received a paper (second paragraph 28 USC 1446(b)) from which AutoZone allegedly first ascertained the case was removable under CAFA.

Defendant had filed a petition for permission to appeal the first remand Order (see 28 USC 1453(c)), and the Ninth Circuit declined to accept that petition.

AutoZone has now filed a petition for permission to appeal the July 2, 2009 remand Order. The Ninth Circuit has not yet indicated whether it will accept it.

Today the Ninth Circuit issued an order denying Defendant AutoZone's petition for permission to appeal the District Court's of Oregon second remand order.