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

Contents of Business Records Are Admissible As Evidence To Establish CAFA Jurisdiction

Posted in Case Summaries

Bradford v. The George Washington University, 2017 WL 1383653 (D.C. April 18, 2017)

In a consumer class action, the United States District Court for the District of Columbia declined to remand the action to the state court finding that the contents of the business records relied upon by the defendants adequately provided the evidentiary basis for CAFA jurisdiction.

The plaintiffs filed a putative class action in the Superior Court alleging that they each paid over $28,000 in tuition to participate in what they believed would be a specialized online education program provided by the defendant.  The online education program on Security and Safety Leadership (“SSL”) was allegedly marketed as substantially identical to the same course offered in a traditional classroom setting.   The plaintiffs, however, alleged that the online SSL program was not equivalent to the classroom version, and that the defendant made a series of misrepresentations both on the program website and through the program’s admissions advisors.  The plaintiffs further alleged that the online SSL program instructors did not prepare any course material and were hardly involved at all in any actual online instruction.  Although several students complained to the defendant about the quality of the program, the defendant allegedly continued to promise that the program would improve but no improvements were made.  Alleging violation of the Consumer Protection Act, the plaintiffs filed this action and sought monetary damages and disgorgement of unjust profits obtained by the defendant, statutory damages, treble damages, punitive damages and reasonable attorneys’ fees.

The defendant removed to federal court, asserting that jurisdiction under CAFA because over 300 individuals were members of the proposed class.  The defendant further asserted that the CAFA amount-in-controversy requirement was satisfied because the plaintiffs sought restitution of all tuition payments as well as statutory damages, treble damages, punitive damages, reasonable costs and attorney’s fees, which in the aggregate could exceed $5 million.

The plaintiffs filed a motion to remand the case to the state court alleging that the defendant provided no evidentiary basis for its barebones assertions that this action met the requirements of CAFA jurisdiction.

The District Court, however, held that the defendant had established by a preponderance of the evidence that the putative class contained at least 248 plaintiffs.  The defendant submitted the declaration of its Director of Institutional Research and Planning, who stated, after the review of the University’s business records, that at least 248 students paid some tuition for the online SSL course, and that the aggregate tuition and fee charges for these 248 students totaled $5,911,464.02.  Of that sum, the 248 students actually paid—either from their own funds or using loan proceeds—$4,390,805.99.

The plaintiffs challenged the defendant’s evidence as inadmissible under the Federal Rules of Evidence, arguing that statements in the declaration did not satisfy the business records exception to the prohibition on hearsay and that the statements violate the best evidence rule.  The District Court, however, did not agree with the plaintiffs.  The District Court noted that the University Director had declared under the penalties of perjury and based on his personal knowledge that, in his professional capacity, he had access to regularly utilized the University’s records related to enrollment, tuition, payment, and other attendance matters, and that he analyzed those records to determine the number of potential plaintiffs and amount of tuition paid to the University for the SSL course.  While the declaration did not recite the precise language of an exception to the hearsay rule, the District Court was persuaded that the information contained in the University’s enrollment, tuition payment, and attendance records would be admissible at trial.

Further, given that the students paid over $4,000,000 for the online SSL course, and in light of the plaintiffs’ request for treble and punitive damages and reasonable attorney’s fees, the District Court concluded that the defendant had also established by preponderance of the evidence that the amount in controversy exceed the CAFA’s $5,000,000 threshold.

Accordingly, the District Court denied the plaintiff’s motion to remand.