C and E, Inc. v. Friedman’s Jewelers, Inc., 2008 WL 64632 (S.D. Ga. Jan. 4, 2008)

The plaintiffs originally brought this action in a Georgia state court, asserting a class action claim against the defendant for the mass transmission of unsolicited facsimile advertisements to “hundreds, if not thousands” of recipients in violation the Telephone Consumer Protection Act (“TCPA”). The plaintiffs sought to recover for each member of the putative class the actual damages suffered from the receipt of the unsolicited faxes or not more than $1,500 per putative class member (this was the maximum amount allowable for each violation under the TCPA).

The defendants removed the case on diversity grounds to federal court, to which the plaintiffs moved to remand, arguing that the requisite amount in controversy for diversity jurisdiction was not met. While the defendants’ initial removal was based on diversity jurisdiction under 28 U.S.C. § 1332(a), in response to the plaintiff’s motion to remand, the defendants asserted federal jurisdiction under 28 U.S.C. § 1332(d), also known as the Class Action Fairness Act (“CAFA”) (of course you know this already or you wouldn’t be on the CAFA Law Blog), which was subject matter jurisdiction over class actions when the amount in controversy exceeds $5 million. 

The defendants alleged that the $5 million jurisdictional amount was readily met from the face of the plaintiffs’ complaint. In particular, because the plaintiffs were seeking a minimum of $1,500 per violation and alleged that the faxes were sent to hundreds and maybe thousands of recipients, it would easily be possible to aggregate the claims to reach over $5 million.

However, the court pointed to a 2007 opinion – Lowery v. Ala. Power Co., 483 F.3d 1184 (11th Cir. 2007) – where the Eleventh Circuit found a similar argument made by the defendants in that case to be “too speculative to support a finding of jurisdiction” under CAFA. (Editors’ Note: See the CAFA Law Blog analysis of Lowery posted on May 15, 2007). 

Therefore, relying on Lowery, the court found that because the defendants had not offered evidence to show the number of faxes sent that could be deemed violations and the plaintiffs’ complaint did not specify the amount of violations, the defendants failed to show, by a preponderance of the evidence, that the amount in controversy exceeded the $5 million threshold required by CAFA. Accordingly, the court found removal to be improper and granted the plaintiffs’ motion to remand the case by to state court.