Amount-in-controversy factual allegations: make sure they’re specific and in the notice of removal
To remove a case under CAFA, we all know that a defendant must establish that the amount in controversy exceeds $5 million exclusive of interest and costs (plus there must be minimal diversity and at least 100 putative class members).
What are some other tips for preparing the notice of removal under CAFA in the District of Kansas?
Develop the necessary jurisdictional facts. There are several methods for developing the factual allegations to include in the notice of removal, including:
- by contentions, interrogatories, or admissions obtained in state court prior to removal
- by calculation from the allegations in plaintiff’s complaint
- by reference to plaintiff’s informal estimates or settlement demands
- by introducing affidavits about how much it would cost to satisfy plaintiff’s demands
See Frederick v. Hartford Underwriters Ins. Co., 683 F. 3d 1242, 1247 (10th Cir. 2012).
Put them in the notice of removal. The District of Kansas recently held that defendants are obligated to allege all necessary jurisdictional facts in the notice of removal; the court rejected defendants’ attempt to use an opposition to plaintiff’s motion for remand as a vehicle for alleging the requisite jurisdictional facts. Owens v. Dart Cherokee Basin Operating Co. LLC, 2013 WL 2237740 (D. Kan. May 21, 2013) (J. Robinson).
Make them specific. In Owens, the notice of removal was deficient; the Defendants alleged in their notice of removal that they calculated that the putative class sough over $8.2 million in additional royalties, but according to the court, “Defendants do not offer any documentation or affidavits explaining how they reached this calculation.” Id.
Consider limited discovery. If you have no information from which to establish the amount of damages, it appears that the Tenth Circuit has carved out an exception allowing a party to seek limited discovery to determine the amount in controversy. See McPhail v. Deere & Co., 529 F. 3d 947, 953-54 (10th Cir. 2008).