Newport v. Dell, Inc., CV-08-00096 (D. Az. 2008).

Everyone know that plaintiffs’ lawyers have some basic math skills – they are usually virtual savants about some things, who can instantly calculate their 1/3rd or 40% contingency fees in their heads, down to the fifth digit, always rounding up where possible. And they’re real good in stringing zeros together while writing out their damages on the chalkboard in closing arguments. But sometimes, some of them sort of forget their basic math skills. Now, come closer, children, and listen to this tale of simple multiplication and federal jurisdiction.

Once upon a time, in the faraway land of Arizona, there was a case filed in state court involving a famous computer manufacturer, Dell. (You’ve heard of them, I know, and almost certainly have received their brochures. You might have even owned one or two of their machines. But I digress.) Anyway, the plaintiff sued Dell and a couple of other lesser known companies, Qualxserv and Bantec, in Arizona state court for allegedly failing to honor various warranty and service obligations promised to Arizona consumers who purchased Dell computers. The complaint asserted class claims against the defendants for all sorts of evil, including consumer fraud, false advertising, breach of express warranty, breach of contract, fraud, fraud by nondisclosure, restitution for unjust enrichment, and declaratory relief, and probably for various other unspeakable acts directed towards small animals and gingerbread people.   In the complaint, the plaintiff alleged that each poor, afflicted member of the class had suffered a loss of “typically less than $100-$300” (that’s about what Jack paid for his magic beans, adjusted for inflation). Dell then removed the case to federal court under CAFA. 


In support of its removal, Dell asserted that it had issued over 260,000 standard warranties and over 100,000 extended warranties to Arizona customers (that’s a lot of warranties in any event) since January 1, 2004, which, Dell computed (pun intended), resulted an amount in controversy well in excess of $5,000,000 (that’s more than Jack paid for his magic beans, adjusted for inflation – it’s closer to the cost of the goose who laid the golden eggs – sorta like the mass action plaintiffs’ lawyers before tort reform) when multiplied by the plaintiff’s per-class-member damages estimate of $100-$300. (Editor’s Note: we here at the CAFA Law Blog did the math last night using our trusty abacus over a bottle of wine, and came up with similar numbers. More when we redid them over the second bottle of wine.) Dell’s calculation seem, at first glance, simple enough, but the plaintiff apparently didn’t understand (remember, the calculation didn’t involve 33 and 1/3% or 40%) and still sought remand, arguing that Dell hadn’t met its burden of proof in establishing the requisite $5,000,000 in controversy. 


Now children, Dell was well and truly incensed that the plaintiff didn’t understand their math – after all, they’re computer whizzes. In response to the motion to remand, Dell provided an affidavit laying out the number of warranties provided and sold in Arizona, multiplied by the plaintiff’s own damage calculations to establish that the amount in controversy was far more than $5,000,000. The magistrate judge, who obviously passed 5th grade math (and then some), did the math himself (we don’t know know whether an abacus and a bottle of wine was involved, and decline to speculate) and agreed with Dell that it had succeeded in establishing that more than $5,000,000 was at issue, and thus, Dell got to stay in federal court, where it may or may not live happily ever after.


Now, if the case ever reach the settlement stage, the class members might consider letting Dell install a calculator on their start-up menus rather than asking for money.  Those coupons would be the subject of another interesting fairy tale post here.


In the meantime, we’ll lend them a pocket calculator if they want, so they can double check the Court’s math–           

Extra credit for anyone who makes it through the whole thing. Double extra credit if it makes you want to boogie. (Though we seriously doubt it will – unless you’re a math student, and if so, why are you reading the CAFA Law Blog in the first place?)