Molina v. Lexmark Intern., Inc., No. 2:08-cv-04796, 2008 WL 4447678 (C.D. Cal. Sep. 30, 2008)

“Why does it say paper jam when there is no paper jam? I swear to God. One of these days I just kick this piece of &$@# out the window.” Perhaps sharing Samir Nagheenanajar’s (See a paper jam here)  frustration, the district court kicked out the window (and back to state court) a class action removed by printer manufacturer Lexmark International because a damages analysis exchanged in a mediation two years before removal provided notice of an amount in controversy exceeding the CAFA minimum of $5,000,000.

In 2004, the plaintiff filed a class action in state court seeking four years of unpaid vacation wages. During an unsuccessful mediation in 2006, the plaintiff provided Lexmark with a damages analysis that showed a claim of $4,090,000. A June 2006 amended complaint added claims for punitive damages and unpaid personal days, and expanded the class period to ten years.

Two years later (and two weeks before trial), Lexmark removed the case, contending that it only learned that the amount in controversy exceeded the CAFA jurisdictional minimum when it received the report of plaintiff’s damages expert in July 2008.

In support of his motion to remand, the plaintiff argued that Lexmark had notice of the amount in controversy based on the damages analysis provided at the mediation. That figure included only the claims for four years of unpaid vacation days and statutory penalties. According to the plaintiff, Lexmark could have used the earlier damages calculation upon receipt of the amended complaint to determine that the amount in controversy exceeded $5,000,000.

Despite Lexmark’s efforts to convince the district court that it never received the damages analysis from the mediation, and that the analysis was confidential or privileged, the district court found that the damages analysis was “other paper” that triggered the thirty day period to remove under 28 U.S.C. § 1446(b). Together, the damages analysis and the amended complaint, with its expanded class period and new claims, provided “sufficient information to determine that the amount in controversy exceeded $5 million, and that the action was removable” under CAFA.

The district court, however, did not award any fees, and declined to hold that the time for removal could begin based on oral settlement communications or a party’s ability to investigate the amount in controversy through its own records. If that is not consolation enough, we suggest that anyone dissatisfied with the opinion take the afternoon off to relax and by doing some of this.