Fiore v. First American Title Ins. Co., No. 05-CV-474, 2005 WL 3434074 (S.D. Ill. Dec. 13, 2005).

In this good walk spoiled (at least for the plaintiff), the Southern District of Illinois issued an opinion denying Mr. Fiore’s motion for remand and holding that the $5 million amount in controversy requirement under the Class Action Fairness Act was satisfied. In this putative class action, plaintiff Peter Fiore filed suit in Illinois state court seeking to represent individuals from a number of states who received title insurance and loan closing services from First American Title Insurance Company. Fiore alleged that First American engaged in a common scheme to overcharge for various title services in violation of the Illinois Consumer Fraud and Deceptive Practices Act and other state consumer fraud statutes. In addition, Fiore claimed that the damages incurred by putative class members outside the State of Illinois were not greater than $5,000,000, and that each class member was entitled to an amount less than $75,000.

First American was not intimidated by Fiore’s pre-round bravado, and chipped the case into federal court invoking the minimal diversity jurisdictional requirements of CAFA. Judge David R. Herndon first recognized that there was minimal diversity of citizenship and more than 100 putative class members. This left the short game of whether the amount in controversy was satisfied. Judge Herndon followed the Seventh Circuit’s recent decision in Brill v. Countrywide Home Loans, Inc., 427 F.3d 446 (7th Cir. 2005), holding that the defendant bears the burden of showing that removal was proper, thus forcing First American to tee off into the wind. (Editor’s Note: See the CAFA Law Blog  summary of Brill posted on November 2, 2005).

Despite placing the burden on First American, the court concluded that the jurisdictional amount was satisfied in this case. The court held that Fiore’s reference to the amount in controversy requirement in the petition was meaningless, as his assertion did not cap the aggregate amount in controversy to less than $5 million, but only limited it to class members outside the State of Illinois. Additionally, Judge Herndon stated that Fiore could not in good faith limit the recovery to $5 million since he did not dispute First American’s contention that there were likely over 8,000,000 class members. The Judge didn’t need a score card to figure out that the recovery for each class member would have to be less than $.58 each for the amount in controversy not to be satisfied – not enough to cover a beverage in the 19th Hole. Therefore, Judge Herndon concluded that First American demonstrated “a reasonable probability that the amount in controversy exceeds $5,000,000.” Based on this finding, the court denied the plaintiff’s motion for remand. First round to First American.

However, First American was out to break the course record, and argued that the complaint should be dismissed due to Fiore’s failure to plead the elements of fraud with particularity as required by Federal Rule of Civil Procedure 9(b). Playing to win, not just to avoid losing, paid off for First American as the court agreed that Fiore’s allegations were insufficient to satisfy Rule 9(b)’s dictates and dismissed the plaintiff’s claim. While the case is not quite “the shot heard ‘round the world” like Gene Sarazen’s 1935 play at The Masters, it qualifies for a Green Jacket and an invitation to the other Major Tournaments of the year.