Marple v. T-Mobile Cent. LLC, No. 11-1490, 2011 U.S. App. LEXIS 10156 (8th Cir. May 19, 2011).
T-Mobile wanted to roll over claim values from one class action to the next, but the 8th Circuit dropped T-Mobile’s call and remanded T-Mobile back to state court.
In Marple v. T-Mobile, the 8th Circuit considered whether multiple, virtually identical class actions could be aggregated to reach CAFA’s $5,000,000.00 amount in controversy threshold (under 28 U.S.C. § 1332(d)). Those class actions arose from a tax dispute between T-Mobile and certain municipalities in the state of Missouri. T-Mobile had paid to those municipalities a “City License Tax” under protest and subsequently filed suit to recoup those taxes.
T-Mobile directly passed those taxes on to consumers, meaning each customer in the specified municipalities was billed and paid a fee for his portion of the taxes paid under protest by T-Mobile. Two of T-Mobile’s customers filed a series of class action lawsuits in state court, seeking damages on account of having paid fees for those now-disputed taxes. The customers, Susan Marple and Stephanie Worrell, filed one class action for each of the tax challenges filed by T-Mobile, ten in all.
T-Mobile removed all ten class actions to Federal Court under CAFA.
While collectively the ten class actions put more than $5,000,000.00 in controversy, no individual class action exceeded that threshold amount. T-Mobile called on the District Court to aggregate the amounts across the ten class actions on the basis that the common factual and legal issues among the class actions meant they should be construed as single class action for purposes of CAFA jurisdiction.
The District Court disagreed and remanded the actions to state court. (Editor’s Note: See the CAFA Law Blog analysis of the district court’s decision of Marple posted on June 2, 2011).
The Eight Circuit accepted T-Mobile’s appeal of the remand order.
The Eighth Circuit noted that CAFA does not expressly contemplate aggregating the amounts sought in separate class actions when determining whether the matter in controversy exceeds the sum of $5 million. CAFA explicitly grants original jurisdiction based on the aggregated claims of class members within “any class action,” but is silent as to aggregating claims of class members between class actions. The Eighth Circuit remarked that the absence of any provisions for aggregating between class actions suggested that the use of the singular tense in the phrase “any class action” meant that its provisions applied to class claims within an individual class action, and not among multiple class actions.
Further, CAFA contains detailed instructions for determining jurisdiction and aggregating class member claims within a class action – and the Eighth Circuit concluded that Congress would have similarly outlined how courts should aggregate between class actions had it intended for courts to do so.
T-Mobile argued that Freeman v. Blue Ridge Paper Products, Inc., 551 F.3d 405, 409 (6th Cir. 2008), dictated a different result. (Editors’ Note: See the CAFA Law Blog analysis of Freeman posted on February 17, 2009). Freeman, involved five nominally separate class action lawsuit that actually covered the same factual and legal basis. Those suits limited the total damages for each class action to just less than $5,000,000.00. Nonetheless, the Sixth Circuit aggregated the amounts in controversy from the separate lawsuits to find that the CAFA threshold was met, concluding that there is no “colorable basis” for dividing up the class actions, “other than to frustrate CAFA.” T-Mobile argued that the plaintiffs here similarly had no legitimate reason to file separate complaints and had only done so to avoid CAFA jurisdiction.
But the Eighth Circuit found the class actions at issue in Freemanand in Marple to be fundamentally different. The Freeman class actions had been initially brought as one suit and were divided for the sole – and express – purpose of avoiding the CAFA threshold. Along those lines, the subdivided class suits in Freeman each asked for only $4,900,000.00, i.e. just below the CAFA threshold.
The Eighth Circuit found that, in contrast to the facts of Freeman, the decision to file ten lawsuits against T-Mobile had the legitimate rationale of mirroring the ten underlying state court suits brought by T-Mobile. In other words, the class actions were structured around T-Mobile’s own litigation decisions. Also, the Court found there was no indication that the plaintiffs artificially divided the class actions to avoid the CAFA. Accordingly, the aggregation among nominally separate class actions undertaken by the Sixth Circuit in Freemandid not provide a basis for related, but legitimately separate class actions in T-Mobile.
Because the class claims could not be aggregated, T-Mobile could not exceed the $5,000,000.00 amount in controversy threshold and, accordingly, the Eighth Circuit affirmed the District Court’s remand order.