Johnson v. Service Corp. International, No. CIV-10-1368-C, 2011 WL 1219340 (W.D. Okla. March 31, 2011).
A District Court in Oklahoma held that under CAFA’s burden shifting standard, once a defendant established the jurisdictional facts by a preponderance of the evidence, a plaintiff has to do something more than a mere denial to show that it is ‘legally certain’ that less than the jurisdictional amount is at stake.
The plaintiffs filed a class action petition in Oklahoma state court, alleging that the defendants encouraged certain hourly employees who worked as funeral directors, embalmers, and family service counselors to perform community work in order to increase revenue for the defendants but did not compensate the employees for their time spent engaging in this work outside regular hours. (Editors’ Note: We imagine that they did not volunteer at blood banks or at hospitals. That would have been a little too ghoulish.)
(Editors’ Second Note: Wow! Who would have thought that embalmers are so litigious. This is the third putative class action brought by the people who work on dead bodies. See the CAFA Law Blog analysis of Anthony posted on July 1, 2011 and the analysis of Dudley-Baton posted on July 11, 2011).
The state court petition alleged violation of 40 Okla. Stat. § 165.1 et seq., breach of contract, fraud, unjust enrichment, breach of implied covenant of good faith and fair dealing, conversion, and misrepresentation.
The defendants removed the action to the federal court, asserting jurisdiction under CAFA, 28 U.S.C. § 1332(d). Seeking remand, the plaintiffs argued that the defendants had failed to show that the total amount in controversy exceeded $5 million. The District Court disagreed, and denied the plaintiffs’ motion.
The defendants argued that under a broad reading of the state court petition, there were potentially 10,000 class members. The defendants then offered a detailed explanation for establishing the potential damages of these class members and thereby demonstrated that the jurisdictional amount was met. In the alternative, the defendants focused on two narrower groups of potential class members (both of which met the numerosity requirement of §1332(d)), and offered a detailed explanation for the potential recovery of these class members and again demonstrated the jurisdictional amount was satisfied even with the smaller class.
Disputing that the potential class action could include the defendants’ all 10,000 employees, the plaintiffs argued that the allegations in the petition sought damages only arising under Oklahoma law and that the defendants failed to establish that those employees who worked or lived outside of Oklahoma could recover damages in this action.
Disagreeing with the plaintiffs, the Court observed that even accepting the plaintiffs’ argument that the class was limited to the workers in Oklahoma, the defendants had come forward with evidence demonstrating that those numbers were between 157-372 plaintiffs. In addition, the defendants demonstrated that the amount of damages these plaintiffs sought to recover exceeded the damages claimed by the Virginia Plaintiffs in a similar action. Indeed, the defendants had shown that when the five named plaintiffs were examined, those claims far exceeded the necessary figure to establish jurisdiction.
Accordingly, the Court concluded that the defendants came forward with jurisdictional facts which, by a preponderance of evidence, proved the requisite amount was in controversy. The Court noted that “once those underlying facts are proven, a defendant (like a plaintiff) is entitled to stay in federal court unless it is ‘legally certain’ that less than the jurisdictional amount is at stake. If the amount is uncertain then there is potential controversy, which is to say that at least the jurisdictional amount is in controversy in the case.”
Because the Court found that the defendants had proven the jurisdictional facts by a preponderance of the evidence, the burden shifted to the plaintiffs to refute that showing. The Court found that the plaintiffs, however, failed in this obligation, as they offered no evidence to demonstrate that the defendants’ calculations were improper. Rather, the plaintiffs simply asserted that the defendants’ calculations were incorrect. The Court, however, concluded that such conclusory assertions were insufficient to overcome the defendants’ proof.
Accordingly, the Court denied the plaintiffs’ motion to remand the action to state court.