Cleveland v. Ark-La-Tex Financial Services, LLC, No. 07-0444-CG-M, 2007 WL  2460753 (S.D. Ala., Aug. 24, 2007).

The big wheels of justice are carrying Lila Cleveland’s putative class action back home to state court in Mobile County. Cleveland sued over unwanted, unsolicited fax messages under the Telephone Consumer Protection Act, alleging the defendant had sent messages to “thousands.” Cleveland alleged this entitled the class, potentially, to up to $1,500 each in statutory penalties, plus compensatory damages, injunctive relief, fees and costs. However, Cleveland also affirmatively pled that the total awards “shall under no circumstances exceed Five Million Dollars.”

Ark-La-Tex Financial Services, seeking federal court jurisdiction (where the skies are so blue), removed the case alleging diversity jurisdiction under CAFA and federal question jurisdiction based on the TCPA claims. Cleveland missed Alabamy once again and filed a motion to remand, challenging the existence of diversity jurisdiction based on lack of proof that a sufficient amount was in controversy. (She also challenged the existence of federal question jurisdiction, but that does not bother your friendly editors. If your conscience bothers you about skipping over this issue, we’ve got the answer: click on the link and read the opinion.)

The diversity jurisdiction issue hinged on the amount in controversy. The court mentioned two standards of proof of the amount in controversy applicable to removing defendants: preponderance of the evidence when there is an unspecified demand for damages, and legal certainty when the plaintiff specifically alleges less than the jurisdictional amount in the complaint. The Court did not choose between these two standards, finding that the proof failed under either standard.

Ark-La-Tex put down Cleveland’s ability to limit relief awardable to the class. Cleveland, hoping the court would remember, cited two cases in which courts found affirmative allegations to be strong evidence of the amount in controversy. Clearly, the Southern District of Alabama did not need Ark-La-Tex around anyway, because it agreed with Cleveland’s argument.

The court also considered whether the plaintiff’s affirmative allegation of less than $5,000,000 in controversy was borne out by the other allegations. Considering the maximum statutory penalty awardable was $1,500 per class member and the allegation that there were “thousands” of potential class members, the court found there would have to be at least 3,334 class members to bring the total damages to five million dollars. The court found this was possible, but purely speculative in light of the complete absence of evidence from defendants regarding how many faxes it might have sent, if any, and the value of the requested injunctive relief.

Finding there were unresolved doubts regarding the amount in controversy, the court remanded the case. So, the defendant crashed and burned into Alabama state court. We don’t know if Mobile County has the Swampers to pick up Ark-La-Tex now that it is feeling blue over the remand. But we always feel better when, as here, the court does not grant the plaintiff’s request for an award of fees against the removing defendant. Now how about you?