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

Are You Ready for Some Football?

Posted in Case Summaries, Jurisdictional Amount

Greco v. Jones, 2014 WL 177410 (N.D. Tex. Jan. 16, 2014).

In this case, the plaintiffs, 237 ticket holders to Super Bowl XLV, brought an action alleging that they were denied, relocated, delayed seating, and/or, redirected to seats with obstructed views.  The plaintiffs asserted claims for breach of contract, fraudulent inducement and concealment, negligent misrepresentation, violations of the Texas Deceptive Trade Practices Act (“DTPA”), and negligence.

The defendants removed the action from state court to federal court as a mass action under CAFA.  The plaintiffs then moved to remand arguing that the defendants failed to establish that each plaintiff sought damages in excess of $75,000.  The plaintiffs also argued that remand was appropriate because the matter fell within the “event or occurrence” exception to the mass action provision.

28 U.S.C. § 1332(d)(11)(B)(i) defines a mass action as any civil action in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact.  Further, CAFA provides that jurisdiction shall exist only over those plaintiffs whose claims in a mass action exceed $75,000.  Thus, to be removable as a mass action under CAFA, a civil action must, satisfy CAFA’s minimal diversity requirement; have an amount in controversy exceeding $5,000,000; and involve claims of monetary relief of at least 100 persons that involve common questions of law or fact.

Here, the plaintiffs argued that the defendants had to establish that each of the 237 plaintiffs sought damages in excess of $75,000.  Defendants, on the other hand, maintained that they only had to make a threshold showing that at least one plaintiff brought claims in an amount exceeding $75,000.  The District Court observed Hamilton v. Burlington N. Santa Fe Ry. Co., 2008 WL 8148619 (W.D. Tex. Aug. 8, 2008) and sided with defendants.  In Hamilton, the court dismissed the plaintiffs’ argument that their claims were not subject to mass action removal because the defendants had failed to show that each plaintiffs’ claims exceeded $75,000.

Hamilton had relied on Lowery v. Alabama Power Company, 483 F.3d 1184 (11th Cir. 2007), which held that requiring a showing that each plaintiff holds claims exceeding $75,000 would fail to give effect to every word and clause in CAFA and render the $5,000,000 aggregate amount in controversy threshold mere surplusage.  Accordingly, finding the language of § 1332(d)(11)(B)(i) to refer to individual plaintiffs and their claims, not to the civil action as a whole, Lowery opined that the $75,000 provision, when read in the broader context of the statute, did not bar district courts from asserting jurisdiction over the entire case if each individual plaintiff’s claims do not exceed $75,000.

Thus, keeping in mind the above precedents, the District Court stated that although the defendants must show that the plaintiffs’ claims exceed $5,000,000 in the aggregate to establish jurisdiction, they do not also bear the burden of establishing that each plaintiff seeks recovery in excess of $75,000.

Although the plaintiffs in their Original Petition had alleged that no individual plaintiff sought recovery in excess of $74,000, the District Court remarked that this statement did not constitute a binding judicial admission or stipulation that actually served to limit recovery to that amount, and it did not irrevocably demonstrate that all plaintiffs waived the right to recovery in excess of that amount.  The District Court also observed that jurisdiction would be lacking unless the defendants demonstrated that the plaintiffs’ disclaimer of recovery exceeding the jurisdictional minimum was inconsistent with the facts with respect to at least one plaintiff.

The plaintiffs repeatedly alleged that the defendants had caused them substantial damages including but not limited to the cost of their tickets, travel-related expenses, loss of vacation time, and other expenses in a total amount exceeding $5,000,000 to be determined according to proof at trial.  Consequently, the District Court noted that it was apparent from the face of the Original Petition that, on average, each plaintiff sought compensatory damages of least $21,097.00.  Assessing treble damages and conservative attorney’s fees on this amount showed that at least one Plaintiff brought claims greater than $75,000.

The plaintiffs also argued that the “event or occurrence” exception barred jurisdiction over this action.  According to § 1332(d)(11)(B)(ii)(I), the “event or occurrence” exception excludes from the definition of mass actions any civil action in which all of the claims in the action arise from an event or occurrence in the State in which the action was filed, and that allegedly resulted in injuries in that State or in States contiguous to that State.

The plaintiffs’ claims undeniably shared similar facts, but the District Court found that they did not arise from a single event or occurrence.  Rather, the plaintiff’s claims were based on numerous separate ticket purchases and/ or acquisitions and different problems that occurred.

Accordingly, the District Court opined that the defendants had shown, by a preponderance of the evidence, that the $75,000 individual amount in controversy was met as to at least one plaintiff, and the “event or occurrence” exception did not apply.