Nelson v. PeoplePC Inc., ____ F. 3d ____, 2007 WL 1574765 No. C 07-1386 PJH, (N.D. Cal. May 30, 2007).

In a decision providing little factual detail regarding the underlying class action, Judge Phyllis J. Hamilton of the Northern District of California remanded a class action case to California state court that had been removed under the Class Action Fairness Act. In fact, the lack of detail regarding the “peoples” claims seem to be the reason PeoplePC’s removal of the class action under CAFA failed.

The court of appeals noted that PeoplePC had the burden to establish removal jurisdiction (citing Abrego v. Dow Chem. Co). (Editors’ Note: see the CAFA Law Blog analysis of Abrego posted on May 25, 2006 ).

One of the requirements for federal court jurisdiction under CAFA is that the amount in controversy must exceed $5,000,000. The court further stated that when the plaintiffs’ complaint does not specify the amount of damages sought, the defendant seeking removal must establish by a preponderance of the evidence that the amount in controversy requirement is met.

In this case, the plaintiffs’ complaint did not set forth the amount in controversy. The court found that PeoplePC did not establish through its removal pleadings that the amount in controversy was “more likely than not” more than $5,000,000. Accordingly, PeoplePC did not meet its burden of proof and the case was remanded to state court.

The court did throw PeoplePC a bone. The court found that because PeoplePC had an objectively reasonable basis for seeking removal, the plaintiffs were not entitled to attorney’s fees and costs.