Say it With Flowers…But Not in Federal Court. This Class Action Fairness Act Case Wilted Under the Application of the Jurisdictional Burden of Proof on the Removing Defendant.

By McGlinchey Stafford on January 17, 2007

Gladstone Florist v. TTP, Inc., No.06-0713, CV-W-DW, 2006 WL 3827518 (December 28, 2006).

A dispute between local and a non-local florist regarding telephone directory listings has been delivered (via FTD, maybe) back to state court in Missouri. A district court from within the Eighth Circuit recently granted a motion to remand to state court the claims of a putative class of Missouri florists who were allegedly damaged by directory listings placed by an out-of-state florist masquerading as a local florist.

According to the complaint by Gladstone Florist (of Gladstone, Missouri), TTP, Inc. placed telephone and internet directory listings incorporating the names of communities in Missouri, to give the false impression that TTP, Inc. is a local business. Thus, the essence of Gladstone Florist’s beef is that a rose by any other name does NOT smell as sweet. (Editors’ Note: A Google search of “TTP, Inc. florist” yields a host of articles documenting similar claims against TTP, Inc., apparently a New Jersey floral telemarketer, in other states.)

Gladstone Florist initially filed the case in state court. TTP, Inc. –not content to bloom where it had been planted and clearly seeking to nip the state court litigation in the bud – removed to federal court, alleging diversity jurisdiction under CAFA. In its decision to remand the case, the district court characterized the decisive issue as “whether the removing defendant has the burden of persuasion on federal jurisdiction” and noted there was no binding authority to determine the issue. Then, without any gilding on the lily, not even stopping to smell the roses in the burden of proof thicket, the court adopted the Seventh Circuit’s decision in Brill v. Countrywide Home Loans, Inc., cited Abrego and Miedema, and imposed the burden of proof on the removing party.

(Editors’ Note: See the CAFA Law Blog analysis of Brill posted on November 2, 2005, the CAFA Law Blog analysis of Abrego posted on May 25, 2006, and the CAFA Law Blog analysis of Miedema posted on August 22, 2006. See also the CAFA Law Blog critique of the Miedema decision posted on August 22, 2006).

The court concluded TTP, Inc. had not submitted adequate proof that the putative class had 100 or more members. The class was described as “all Missouri florists who have been damaged by defendant’s fictitious telephone directory or internet listings.” TTP, Inc. relied on a bare bones assertion that the class members numbered in excess of 100, but supplied no evidence in support of this contention. The court was not willing to assume that because there are more than 100 florists in Missouri, there must be more than 100 florists who potentially fit into the class definition. The court further noted that TTP, Inc. had not established the case satisfied CAFA’s amount in controversy requirement. The petition contained an affirmative averment that less than $5 million was at stake. TTP, Inc. argued that the injunction requested by Gladstone Florist would cost more than $5 million. The court rejected this argument, finding it was not supported by anything other than speculation.

So, TTP, Inc.’s hope of litigating this flower fracas in federal court is now pushing up daisies. But, everything may be coming up roses for Gladstone Florist!

We can only hope that the Eighth Circuit takes this opportunity to examine the thorns of the jurisdictional burden of proof decisions of Brill, Abrego, Miediema, and sprays some Roundup on these decisions.

Editors’ Note: The holding regarding burden of proof follows the Brill, Abrego, and Miediema decisions on the subject, but in doing so also overlooks Section 2 of CAFA. As discussed on our law review article, and critique of Miedema, Section 2 of CAFA (codified at 28 U.S.C. 1711), states that one of the Findings and Purposes behind Congressional intent in passing the statute is to “restore the intent of the framers of the United States Constitution” regarding class actions, i.e., to change the existing jurisdictional status quo of the complete diversity jurisdiction rules. Brill and Abrego completely overlooked Section 2 in their analyses, and applied an overly restrictive standard of statutory interpretation. While Miedema did acknowledge the existence of Section 2, it merely said that if Congress really intended to change the threshold removal burden of proof, it would have specifically added a provision saying so in its text, as opposed to in the legislative history. Miedema, however, failed to acknowledge the existence of the ambiguities created by Section 2 with respect to burden of proof which, under any doctrine of statutory interpretation, would have opened wide the door to review of the Senate Judiciary Committee Report and House Sponsor’s Statement.