Aliana v. Ferriss, 11 C 1421 (N.D. Ill. 6/1/2011)
Once upon a time in a galaxy far, far away a comment was made that girls only want boys with great skills. You know, like nunchuck skills, bow hunting skills, computer hacking skills…and cutting fat loss by 300% with a few bags of ice? Apparently, one author in Illinois wanted to capitalize on selling certain skills by writing a book about them for folks in Chicago. The author further promised secret passwords were hidden in the books that could be exchanged online via his website for “bonus material”. Apparently, the only skill purchasers of this guy’s book needed to develop was “how to tell a scam when you read one”. However, this story actually does have a happy ending, at least for the plaintiffs.
Flash forward a few thousand pounds of bush-league readers later, a class action was filed in the Northern District of Illinois against the defendants, the author and the publisher, alleging various offenses including violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, violations of the Illinois Deceptive Trade Practices Act, and unjust enrichment. The plaintiffs sought, among other things, injunctive relief in the form of that oh so elusive bonus material. The defendants subsequently removed the action to federal court pursuant to 28 U.S.C. §1332(d)(2), the CAFA provision authorizing removal.
Now here’s where the plot really thickens. Prior to removing the action to federal court, the defendants made the bonus material available online for free to the public. This rendered as moot a significant portion of plaintiff’s request for injunctive relief. After the case had been removed to federal court, the plaintiffs amended their complaint to reflect this changed amount in controversy and moved to remand to state court.
The defendants argued that federal court should not have considered the proposed amended complaint because the pertinent inquiry of whether or not the amount in controversy requirement is met occurs at the time of removal.
Section 1332 (d)(2) of the CAFA statute provides subject matter jurisdiction to a federal court for any matter in which the amount in controversy exceeds $5,000,000 exclusive of interest and costs and is a class action in which- (A) any member of a class of plaintiffs is a citizen of a State different from any defendant; (B) any member of a class of plaintiffs is a member of a foreign state or a citizen or subject of a foreign state and any defendant is a citizen of a State; or (C) any member of a class of plaintiffs is a citizen of a State and any defendant is a foreign state or a citizen or a subject of a foreign state . However, pursuant to 28 U.S.C. §1447(c), if it is determined that a court loses subject matter jurisdiction before the rendition of a final judgment, the case shall be remanded.
The Seventh Circuit has stated that the general rule is that post-removal amendments to complaints are not considered when assessing whether a court has subject matter jurisdiction. However, it has also stated that there are exceptions to the general rule that the amount in controversy is not assessed by considering an amended complaint filed after a case begins in federal court, most notably when the case becomes moot during the course of litigation.
The plaintiffs attempted to file an amended complaint after the defendants had already removed the action to federal court. The plaintiffs argued the amended complaint should be considered for the amount in controversy assessment since it merely reflected the injunctive relief that had been rendered moot by the defendant’s actions. Most of all, the plaintiffs did not want the court to grant the defendant’s motion to dismiss with prejudice.
On the other hand, the defendants argued the injunctive relief sought by plaintiffs in their original complaint was sufficient to satisfy the amount in controversy requirement. In addition, they argued that the court should consider the costs associated with their own compliance with the injunctive relief, as it made up part of the “amount in controversy”. The defendants went so far as to get a senior vice president of sales to discuss the costs of recalling all the books.
However, the federal court highlighted the flaw in the defendants’ argument. By their own actions- putting the bonus material online for free- the defendants made recall of the book moot. The court noted that this wasn’t a case of game-playing on the part of the plaintiffs. Instead, it was defendants’ own actions that nullified subject matter jurisdiction by rendering moot the injunctive relief originally sought by plaintiffs. Moreover, the defendants made no “good faith” effort to prove the amount in controversy requirement had been met.
Prefer the Cliff Note’s version? The defendants were trying to argue on both sides of the fence- a skill the court looked upon with disfavor. The defendants could not attempt to dismiss the plaintiff’s claims in their entirety with prejudice from federal court on account of mootness while at the same time arguing that their own costs breathed enough life into the amount in controversy requirement to allow the case to remain in federal court. In the end, the federal court remanded the case to state court. And that ends this chapter of skill less in Chicago.
By: Lacy Rochester