Fielder v. Penn Station, Inc., 2013 WL 1869618 (N.D. Ohio May 3, 2013).

In this case, the plaintiff made a purchase at Penn Station, Inc., a shop located in Rocky River,Ohiousing his credit card.  The defendant Heartland Payment Systems, Inc. processed credit card purchases for Penn Station, Inc.  The plaintiff alleged that as a result of the defendants’ negligence and/or breach of contract, the plaintiff’s credit card information ended up in the hands of a third party, causing the plaintiff and the proposed class injury.  The plaintiff sought compensatory damages, punitive damages, and two years of credit monitoring services for each class member.

The defendant removed the action to the District Court arguing that CAFA governed the action.  CAFA, 28 U.S.C. 1332(d), confers federal jurisdiction over class actions in which the matter in controversy exceeds $5 million, there is minimal diversity of citizenship, and the proposed class includes at least 100 members.  The parties agreed that the potential class included at least 100 members and that minimal diversity was present.  However, the plaintiff moved for remand arguing that the defendants could not meet their burden to show that the amount in controversy exceeded $5 million.

The plaintiff claimed that the defendants’ argument that the amount in controversy exceeded $5 million was speculative because the defendants assumed that every customer who used a credit or debit card during the class period was a class member.  The plaintiff also argued that the defendants failed to offer evidence that all of their stores were affected by the alleged breach and failed to offer evidence that the breach was continuous for the entire time of the alleged class period.

The defendants relied on the declaration of Lois Ault, Senior Compliance Analyst with Heartland, who stated that during the proposed class period Heartland processed 1.4 million unique credit and debit card transactions made at Penn Station locations.  The defendants also presented the declaration of Craig N. Dunaway, President of Penn Station, Inc., who stated that he reviewed the cost of credit monitoring services, and they ranged from $6.99 to $24.00 per month.  Based on his calculations, the cost per individual class member for a two year period of monitoring, as requested by the plaintiff, would result in $168 to $576 cost per class member.

The District Court explained that a defendant can meet its evidentiary burden to show the jurisdictional amount in controversy in numerous ways.  For example, a defendant can utilize contentions, interrogatories or admission in state court, calculations derived from the complaint’s allegations, references to the plaintiff’s informal estimates or settlement demands, or by introducing evidence, in the form of affidavits from the defendant’s employees or experts, about how much it would cost to satisfy the plaintiff’s demands.

Here, the plaintiff described the putative class as customers of Penn Station stores from February 1, 2012, through June 1, 2012, who completed a credit card or debit card transaction with the defendants.  Based on this description, the defendants produced unrefuted evidence that the class size, based on unique credit and debit card purchases, was over 1 million persons.  Further, based on the relief sought by the plaintiff of credit monitoring services for a two year period, the defendants again produced evidence that the costs of such services ranged from $168 to $576 per class member.

The District Court therefore found that the defendants met their burden to show the amount in controversy exceeded $5 million, and accordingly, denied the plaintiff’s motion to remand.