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the amount of controversy contained in the complaint. (Lowdermilk v. United States Bank National Association (9th Cir. 2007) 479 F.3d 994, 998-100.) Where a com- plaint sets forth an amount in controver- sy less than CAFA’s $5 million jurisdiction- al threshold, a removing defendant must show to “a legal certainty” that the amount in controversy is more than $5 million. (Ibid.) The Lowdermilk court rea- soned that “[b]y adopting ‘legal certain- ty’ as the standard of proof, we guard the presumption against federal jurisdiction and preserve the plaintiff’s prerogative, subject to the good faith measurement, to forego a potentially larger recovery to remain in state court.” (Id. at 999.) However, where a complaint is silent
as to the amount in controversy, the removing defendant has a lesser burden, but must still prove by a “preponderance of the evidence” that the amount in con- troversy exceeds $5 million. (Abrego Abrego, supra, 443 F.3d at p. 685.) To dis- charge its burden, the defendant must “provide evidence establishing that it is more likely than not that the amount in controversy exceeds that amount.” (Id., internal citations and quotations omit- ted.) Alternatively, where the complaint alleges damages in excess of the federal amount in controversy requirement, then the amount in controversy requirement is presumptively satisfied unless “it appears to a ‘legal certainty’ that the claim is actu- ally for less than the jurisdictional amount. (Id. at 683.) To make a determination that the
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30— The Advocate Magazine APRIL 2011
amount in controversy has been met by a preponderance of the evidence, which defendants often fail to do, courts should consider, in addition to the complaint itself, “facts in the removal petition and…summary-judgment-type evidence relevant to the amount of controversy at the time of removal.” (Id. at 690.) In fact, the Ninth Circuit has established that assertions, without proper corroboration, fail to prove by a preponderance of the evidence that the amount in controversy meets CAFA’s jurisdictional threshold. (Lowdermilk, supra, 479 F.3d at p. 1002.) Moreover, the evidence and testimony a
removing defendant provides must be based on more than just information and belief, but instead must demonstrate actual facts supporting the amount in controversy. (Valdez v. Allstate Ins. Co. (9th Cir. 2004) 372 F.3d 1115, 1117; Rao v. Tyson Foods, Inc. (E.D. Cal. 2009) 2009 U.S. Dist. LEXIS 35187.) For instance, defendant cannot simply provide a decla- ration based on “information and belief” that the total amount in controversy exceeds $5 million in wages due under the Labor Code – if it does not provide adequate evidence to support that figure. (See Jayme v. Checksmart Financial, LLC (
E.D.Cal. 2010)) 2010 WL 2900333, *1[“However, after [t]aking a close look at Defendant’s ... figures ... there is a con- spicuous lack of evidentiary support for these numbers.”].) Thus, a plaintiff can avoid removal
by limiting the request for recovery in the complaint to less than $5 million (i.e., “seeking damages not to exceed $4,999,999”). If the defendant removes the class action to federal court based on the amount in controversy, a plaintiff seeking remand should clearly assert the burden which defendant must carry and carefully scrutinize the information sub- mitted by defendant in support of removal and ensure that the evidence is the summary-judgment type evidence required to support removal of the action.
The “home controversy” and “local controversy” exceptions
In addition to pleading damages less
than the $5 million threshold, CAFA has two exceptions to federal jurisdiction. The first exception, known as the “local controversy” exception (28 U.S.C. § 1332(d)(4)(A)), requires a federal court to decline jurisdiction over a class action in which: (1) more than two-thirds of the members of the proposed plaintiff class are citizens of the state in which the action was originally filed; (2) at least one “significant” defendant is a citizen of the state in which the action was originally filed; and (3) the principal injuries from the alleged conduct were incurred in the
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