In this case, the district court held that defendants failed to establish CAFA’s amount-in-controversy requirement by citing state-court cases in which plaintiffs alleged similar invasion of privacy claims. According to the district court, the damages awarded in those state cases were not illustrative of what class members could potentially recover in this case.
The named plaintiff brought a putative class action on behalf of West Virginia residents whose confidential information was allegedly accessed in violation of West Virginia Code Section 23-4-7(b). W. Va. Code § 23-4-7(b). In particular, plaintiff claimed that Capinvad, LLC obtained medical information unrelated to the class members’ occupational injuries and then disclosed that information to the defendant-employer, Broadspire Services, Inc. Plaintiff also asserted various common-law tort claims, including invasion of privacy. In response, defendants filed a notice removal, and plaintiff moved to remand on the grounds that defendants failed to establish CAFA’s amount-in-controversy requirement. The district court granted plaintiff’s motion to remand.
The district court first noted that plaintiff’s complaint stipulated that no individual claim would exceed $75,000, and that the aggregate class damages would not exceed $5,000,000. But under the Supreme Court’s holding in Standard Fire Insurance Company v. Knowles, a stipulation is not conclusive of the amount in controversy under CAFA. Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345, 1348 (2013). Therefore, the district court was required to conduct a further analysis into the amount-in-controversy question.
In opposing plaintiff’s remand motion, defendants cited two West Virginia state-court cases to support their contention that CAFA’s $5 million threshold was met. See Tudor v. Charleston Area Med. Ctr., Inc., 506 S.E.2d 554 (W. Va. 1997); Slack v. Kanawha County Hous. and Redevelopment Auth., 423 S.E.2d 547 (W. Va. 1992). Defendants argued that these cases established a quantum for the class members’ alleged injuries, which ranged from $30,000 for an invasion of privacy claim to $500,000 for emotional distress damages. Moreover, defendants claimed that the conduct alleged in plaintiff’s complaint was more severe than the invasion of privacy claims in Tudor and Slack, and thus, the class members’ potential damages here would likely exceed those recovered in the state cases.
The district court was unpersuaded that the state cases provided an appropriate quantum for assessing plaintiff’s potential damages. First, the court remarked that, although Slack and the instant case both involved serious allegations, Slack was factually distinguishable. Also, the district court observed that a jury could find plaintiff suffered an invasion of privacy, yet award only nominal damages. And any potential award of punitive damages must bear a reasonable relationship to plaintiff’s compensatory damages. In light of these considerations, the district court concluded that the $60,000 verdict in Slack was not illustrative of what plaintiff – or other class members – might recover here.
Likewise, the district court found Tudor distinguishable. There, the plaintiff filed suit against her former employer for constructive retaliatory discharge and interference with employment opportunities. Here, in contrast, the defendant-employer’s conduct was not retaliatory in nature and thus was unlikely to result in such an exorbitant damages award.
Given these factual and substantive dissimilarities, the district court held that Slack and Tudor were not appropriate analogues for estimating plaintiff’s damages. Accordingly, defendants could not establish CAFA’s amount in controversy by a preponderance of the evidence by citing these cases, and the district court remanded this action. The district court, however, declined to award plaintiff attorneys’ fees under 28 U.S.C. § 1447(c), finding that, despite these differences, defendants had an objectively reasonable basis for seeking removal under CAFA. See Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005).