Will the Supreme Court Require Evidence to Accompany a Notice of Removal Under the Class Action Fairness Act?
In October 2014, the United States Supreme Court heard arguments in Dart Cherokee Basin Operating Company, LLC v. Owens. The question presented in that case is “[w]hether a defendant seeking removal to federal court is required to include evidence supporting federal jurisdiction in the notice of removal, or is alleging the required ‘short and plain statement of the grounds for removal’ enough?”
Under the removal statute, a defendant seeking removal of a case to federal court must provide a “short and plain statement of the grounds for removal.” 28 U.S.C. § 1446(a). As a result of this language, the First, Fourth, Fifth, Seventh, Eighth, Ninth, and Eleventh Circuits require that a notice of removal contain only allegations of jurisdictional facts supporting removal. Evidence supporting those factual allegations need not accompany the notice of removal itself.
Defendant Dart Cherokee Basin Operating Company sought to remove the case to federal district court under the Class Action Fairness Act.[1] To assert federal jurisdiction under the Class Action Fairness Act, a defendant must show that the amount in controversy exceeds $5 million. The defendants alleged in their notice of removal that the amount in controversy exceeded $8.2 million but did “not offer any documentation or affidavits explaining how they reached this calculation.” Nevertheless, defendants did offer evidence in response to plaintiff’s motion for remand, supporting their assertion that the amount in controversy exceeded $5 million.
The district court determined that defendants’ evidence came too late—“[e]ven assuming that Defendants can now establish the amount in controversy exceeds $5 million, they were obligated to allege all necessary jurisdictional facts in the notice of removal.” Thus, the district court remanded the case to state court.
Defendants appealed to the Tenth Circuit under 28 U.S.C. § 1453(c), but the Tenth Circuit denied permission for the appeal.[2] Defendants then sought for the case to be heard en banc, which was also denied by the Tenth Circuit under a split vote. Defendants then appealed to the United States Supreme Court.
Interestingly, the focus of the oral argument before the high Court addressed whether that Court could reach the merits of the dispute. Until the Supreme Court answers this question—if it does so—class action practitioners seeking to remove cases to federal court under the Class Action Fairness Act should attach evidence supporting their jurisdictional allegations to the notice of removal itself. Only time will tell whether this practice should continue. Dart Cherokee Basin Operating Company, LLC v. Owens is proceeding as cause number 13-719 in the United States Supreme Court.
[1] Owens v. Dart Cherokee Basin Operating Co. LLC, 12-4157-JAR-JPO, 2013 WL 2237740, at *1 (D. Kan. May 21, 2013), vacated, 12-4157-JAR-JPO, 2015 WL 5451441 (D. Kan. Mar. 4, 2015).
[2] Dart Cherokee Basin Operating Co., LLC v. Owens, 730 F.3d 1234 (10th Cir. 2013).