Miedema v. Maytag Corp., No. 06-12430, (11th Cir. June 5, 2006).

The Eleventh Circuit refused to follow the argument of the "dependability people" on the issue of who bears the threshold burden of proof under the Class Action Fairness Act.  In October 2005 Leslie Miedema filed a class action against Maytag in Florida state court alleging some of Maytag’s ovens had a defective door latch that allowed heat to escape and damage the components of the oven.   Maytag removed the action to federal court pursuant to CAFA. Maytag asserted that the models identified in Miedema’s description of the putative class contained a total of 6,729 ovens alleged to have been sold in Florida which totaled $5,931,971.  There is no doubt that if Jesse White and Gordon Jump were still alive, they would have jumped at the chance of having something to do other than wait for repair calls that never seemed to come and gone to federal court. 

Miedema moved to remand for lack of jurisdiction.  She argued that Maytag had the burden of establishing subject matter jurisdiction at the threshold, and had failed to carry that burden as to the amount in controversy.  The district court noted the disagreement among the courts as to which party bears the burden of proof for minimal diversity under CAFA and requested additional briefing.   After discovery, the court remanded the case to Florida state court holding that the removing defendant bears the burden of establishing the existence of minimal diversity and Maytag did not meet that burden. 

Maytag appealed the ruling to the Eleventh Circuit Court of Appeals before Circuit Judges Carnes, Wilson and Pryor. Judge Wilson rendered the opinion. The Eleventh Circuit opinion began with a discussion of the 7 day appeal application rule.  Citing the Seventh Circuit’s opinion in Pritchett v. Office Depot, the court held that CAFA’s literal “not less than 7 days” rule was a typographical error in the statute and Maytag had filed its permission to appeal within seven days.  (Editors’ Note:  See the CAFA Law Blog analysis of Pritchett posted on October 23, 2005).

Next, the opinion quickly turned to the 60 day review limit holding that the 60 day period begins to run from the date when the court of appeals grants the appellant’s application to appeal and files the appeal. 

The bulk of the opinion then focused on the threshold burden of proof issue under CAFA.  Maytag argued that the district court incorrectly applied the traditional rule in non-CAFA (what we call decaffeinated) cases that the removing defendant bears the burden of establishing federal subject matter jurisdiction.  Maytag conceded that the text of CAFA is silent as to the burden of proof, but pointed to the legislative history and the clear intent to change the burden of proof under CAFA.  Maytag specifically noted the Senate Report and its language placing the burden on the named plaintiff to show that the removal was improvident.

The Eleventh Circuit, however, followed the Seventh Circuit opinion in Brill and the Ninth Circuit opinion in Abrego for the proposition that “CAFA’s silence, coupled with a sentence in the legislative committee report untethered to any statutory language, does not alter the longstanding rule…”   (Editors’ Note:  See the CAFA Law Blog’s analysis of Brill posted on November 2, 2005 and the CAFA Law Blog analysis of Abrego posted on May 25, 2006). 

Also, the court cited authority for the proposition that “courts have no authority to enforce principles gleaned solely from legislative history that has no statutory reference point.”  In footnote 5 the Eleventh Circuit disregarded Maytag’s citation of Corning Glass Works. The Eleventh Circuit stated that Corning Glass Works “does not actually stand for the proposition Maytag urges – that legislative history, coupled with statutory silence, is sufficient to override an already existing, well-established rule allocating the burden of proof to a removing defendant.”

The court held in line with the Seventh and Ninth Circuits that the rule of construing removal statutes strictly and resolving doubts in favor of remand is well-established and the statements in CAFA’s legislative history “ are an insufficient basis for departing from this well-established rule.”

Maytag pointed the court to Section 2 of CAFA and its express findings and purposes and that support Maytag’s position. The court seemed to contradict itself that there is no language connected to the legislative history when it stated: “While the text of CAFA plainly expands federal jurisdiction over class actions and facilitates their removal, ‘we presume that Congress legislates against the backdrop of established principles of state and federal common law, and that when it wishes to deviate from deeply rooted principles, it will say so.’” 

The Eleventh Circuit held “thus, Maytag’s generalized appeals to CAFA’s ‘overriding purpose’ are unavailing in the face of CAFA’s silence on the traditional, well-established rules that govern the placement of the burden of proof and the resolution of doubts in favor of remand.”

Finally, the court examined the standard of proof as to the amount in controversy element for establishing minimal diversity.  Again, following traditional rules, the court foudn the amount needed to be proven must be shown under a preponderance of the evidence standard.  The Eleventh Circuit agreed with the district court that Maytag had not established that the amount in controversy exceeded $5 million and affirmed the remand of the class to Florida state court.

Editors’ Note:  For a variety of reasons, the Editors believe that the Eleventh Circuit in Miedema  erred by not placing the threshold minimal diversity burden of proof on the party opposing jurisdiction.  See our Special Report:  Editors’ Critique of Miedema Ruling on Threshold Burden of Proof by clicking here.