Manson v. GMAC Mortgage, LLC, 602 F.Supp.2d 289 (D. Mass. 2009)
The plaintiffs in this case thought there was no way that the amount in controversy could reach $5 Million, I mean, that’s a LOT of change . . . they were wrong.
In this case, the plaintiffs filed a putative class action in state court. The proposed class members were Massachusetts residents and were said to be 1,000 in number. Members of the putative class fall into one of two subclasses. The first subclass consisted of class members whose primary residence was foreclosed by a power of sale in the past 4 years by a defendant that did not possess a written assignment of the underlying mortgage at the time the notice of sale was served. The second subclass consisted of class members who faced a pending foreclosure initiated by a defendant that did not have a written assignment of the underlying mortgage when the notice of sale was served and/or when a right to cure notice was sent.
The case was removed to the District Court of Massachusetts based on CAFA jurisdiction. As all our readers know by now, CAFA provides that federal courts have jurisdiction over class actions based on state law when: (1) there is minimal diversity; (2) the amount in controversy exceeds $5,000,000; and (3) the action involves at least 100 class members. The parties in this matter did not dispute the first and third elements of removal, but disagreed, however, over the amount in controversy.
The court identified the defendant’s burden of demonstrating to a “reasonable probability” that the aggregate amount of the plaintiffs’ class was greater than $5,000,000 at the time of removal. The plaintiffs argued that the primary relief sought was injunctive and declaratory – not monetary. Therefore, according to the plaintiffs’ calculations, they only claimed an amount in controversy of approximately $1.2 Million.
The defendants provided declaration testimony of an in-house litigation analyst who identified: (1) the number of referrals that ultimately resulted in a foreclosure sale; and (2) the number of properties that were sold to third parties. According to the declaration testimony, a total of 3,934 loans were referred for foreclosure in the relevant time period, and that, of the 3,934 referrals, 1,048 resulted in foreclosure sales. At those sales, 48 properties were sold to third parties. The total pay for the 48 properties was $15,000,022.58.
The court, satisfied that the defendants had met their burden of demonstrating to a “reasonable probability” that the amount in controversy exceeded $5,000,000, stated that the plaintiffs must therefore demonstrate that another jurisdictional exception under CAFA applies if they are to succeed on their motion to remand.
After finding that no such exception existed, the court denied the motion to remand.
Sometimes it is all about the numbers . . .