Header graphic for print
CAFA Law Blog Information, cases and insights regarding the Class Action Fairness Act of 2005

Certain claims carry a presumption as to amount-in-controversy that will lead directly to federal court

Posted in Case Summaries

Robertson v Exxon Mobil Corp., 2015 WL 9592499 (5th Cir. Dec. 31, 2015).

In a personal injury and a property damage action, the Fifth Circuit reversed the district court’s order remanding the action finding that the defendants had by preponderance of evidence shown that at least one plaintiff’s claim exceeded $75,000. Specifically, the Fifth Circuit found that when a plaintiff claims that he/she contracted cancer, or a claims damages for wrongful death, the Fifth Circuit precedent has always held that such claims more likely than not exceeded federal jurisdictional threshold even when the amount-in-controversy is not alleged in the complaint.

The plaintiffs brought an action in a Louisiana state court alleging claims of personal injury, and property damage arising from the alleged exposure to contamination from oil field pipe. The plaintiffs alleged that the nearby cleaning of pipes used in the oil industry produced harmful radioactive material that injured health and property.  The plaintiffs were 189 natural persons who currently and formerly lived, worked, or owned property in certain part of Harvey, Louisiana.  The defendants were several oil companies, contractors, and the owners of property on which the pipe cleaning took place.  According to the plaintiffs, the dirty pipes were covered with “pipe scale” that accumulated during drilling and production operations and contained radioactive and otherwise hazardous compounds known to present serious health risks.  The plaintiffs alleged that when the defendants removed the pipe scale, they produced radioactive dust that became airborne and settled onto the plaintiffs’ properties, where some of it was absorbed into the ground and surface water.  The plaintiffs sought compensation for a wide variety of harms including physical injuries, contracted diseases, medical expenses and lost wages.

The defendants removed the action to federal court under the mass action provisions of the CAFA. The plaintiffs moved to remand arguing that the defendants had not met their burden of proving CAFA’s basic jurisdictional requirements, and, in the alternative, that three exclusions to CAFA jurisdiction applied.  The district court remanded the action concluding that neither the complaint, nor the evidence showed that any of the plaintiffs’ claim satisfied the $75,000 individual amount-in-controversy requirement.  This appeal to the Fifth Circuit followed.

At the very outset, the Fifth Circuit noted that the complaint alleged no amount-in-controversy, in fact, Louisiana law prohibits it. The defendants alleged satisfaction of the aggregate and individual jurisdictional amounts in their notice of removal, which the plaintiffs challenged.  In such a case, the Fifth Circuit noted that the court must decide by a preponderance of the evidence whether the amount-in-controversy was met as specified in Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547 (2014).  (Editor’s NoteSee Article by Rollo, Ferachi and Crowson posted here).

The Fifth Circuit observed that in Defendant Aguilar v. Boeing Co., 11 F.3d 55 (5th Cir. 1993), it had found it facially apparent that the claims for “wrongful death, terror in anticipation of death, loss of companionship, and funeral expenses” exceeded $50,000 per plaintiff (the individual amount-in-controversy for diversity at that time was $50,000), even though the complaint did not specify an amount of damages and the plaintiffs’ attorney had submitted affidavit stating that no plaintiff’s damages exceeded $49,000.  Similarly, in Allen v. R & H Oil & Gas Co., 63 F.3d 1326 (5th Cir. 1995), the Fifth Circuit found that hundreds of plaintiffs who sought punitive damages for a wide variety of harm allegedly caused by wanton and reckless conduct, would collect more than $50,000 if they were successful.

With this in mind, the Fifth Circuit remarked that whether or not the amount-in-controversy is facially apparent in the plaintiffs’ complaint in this case, the defendants had submitted evidence that satisfied their burden of showing that at least one plaintiff’s claim exceeded $75,000. Here, the Fifth Circuit noted that in response to the defendants’ one interrogatory, plaintiffs produced a chart detailing each individual plaintiff’s claimed damages.  The plaintiffs asserted that the defendants’ conduct had caused them to suffer a wide variety of specific harms, some of which, common sense dictated, placed more than $75,000 at stake.  For example (i) the plaintiff Eddie Ashley claimed that she suffered from emphysema and wrongful death of her husband from lung cancer; and (ii) plaintiff Tommie Jones averred that he developed prostate cancer and a host of other ailments.  The Fifth Circuit held that it was more likely than not that these plaintiffs sought more than $75,000.  In fact, the plaintiffs’ counsel acknowledged at oral arguments that for the plaintiffs who contracted cancer, he would be asking the jury for a whole lot more than $75,000.

For these reasons, the Fifth Circuit found that the district court erred in its finding that the defendants had failed to establish amount-in-controversy. Accordingly, the Fifth Circuit reversed the district court’s order, and held that the defendants satisfied the amount-in-controversy requirement for federal court jurisdiction.  –JR