Laffin v. National Football League, No. 3:11-CV-0345-M (Consolidated with No. 3:11-CV-248), 2011 WL 1396887 (N.D. Tex. April 12, 2011).
After official review, the Northern District of Texas confirms the NFL crossed CAFA’s $5,000,000.00 goal line and denies motion to remand.
Laffin v. N.F.L. arises from Super Bowl XLV, held in the state-of-the-art Cowboy Stadium in 2011. The Laffin class alleges that the N.F.L. (along with a variety of co-defendants including the Dallas Cowboys Football Club and related entities) denied, relocated, or delayed the seating of over 2000 Super Bowl XLV ticket holders, and sued in Texas state court, alleging fraud, breach of contract, fraudulent inducement, negligence and negligent misrepresentation.
The defendants removed the class action to the Northern District of Texas under CAFA, specifically alleging that the amount in controversy exceeded $5 million.
The plaintiff class moved to remand, which the District Court denied.
At the outset, the Court discussed the appropriate procedure to determine whether the amount-in-controversy requirement is satisfied. First, a court can determine that removal was proper if it is facially apparent that the claims are likely more than the jurisdictional amount. If not, a removing attorney may support federal jurisdiction by setting forth the facts in controversy – preferably in the removal petition, but sometimes by affidavit – that support a finding of the requisite amount. Finally, under any manner of proof, the jurisdictional facts that support removal must be judged at the time of the removal, and any post-removal affidavits are allowable only if relevant to the time of removal.
When the complaint does not allege a specific amount of damages, the removing defendant must prove by a preponderance of the evidence that the amount in controversy exceeds the requirement. Upon such proof by a removing defendant, the burden shifts to the plaintiff to show that it is a “legal certainty” that he or she will not be able to recover the jurisdictional amount.
In support of removal, the defendants provided a post-removal declaration, which established the face value of the relevant Super Bowl tickets and approximate number of affected ticket holders in the putative class. According to this declaration, 3296 ticket holders were affected, and the face value of their tickets was $2,542,300.
The plaintiffs contended that the approximate number in the putative class was speculative because other class members may have settled with the N.F.L.
However, the Court discounted that contention because the NFL solicited settlement offers in a mass mailing only two days before the defendants filed the notice for removal and, thus, it was unlikely that a significant number of putative class members settled with the defendants.
The Court further addressed the potential for recovery beyond the face value of the tickets. Specifically, the Court found that the class members might recover consequential damages, including costs for travel, hotel, and restaurant expenses. In addition, because the plaintiffs alleged fraud, they might be entitled to punitive damages under Tex. Civ. Prac. & Rem. § 41.003. In Texas, punitive damages are limited to the greater of two times the amount of economic damages; plus an amount equal to any noneconomic damages found by the jury, not to exceed $750,000; or $200,000. Given a base calculation of economic damages of $2,542,300, plus punitive damages of at least that amount, plus reasonable, and conservative attorney’s fees of 20% (roughly $1,000,000), the Court concluded that the defendants established by a preponderance of the evidence that the amount in controversy was over $5 million.
In the face of the Court’s findings concerning potential consequential and punitive damages, the plaintiffs were unable to show that it was legally certain they would recover less than $5,000,000.00. Since the plaintiffs could not rebut the presumption of $5,000,000 in controversy established by the defendants, the Court denied the plaintiffs’ motion to remand.