Another federal district court decision I have wanted to write about is one that Judge John T. Copenhaver, Jr. entered on September 26, 2007 in Strawn, et al. v. AT&T Mobility, Inc. f/k/a Cingular Wireless LLC, Civil Action No. 2:06-CV-0988.
The plaintiffs filed a class action in the Circuit Court of Kanawha County (Charleston), West Virginia against Cingular (now AT&T), alleging that its decision to enroll them in its roadside assistance program and charge $2.99 per month without their consent constituted an unfair trade practice under the West Virginia Consumer Credit and Protection Act.
Cingular removed the action to federal court based on the Class Action Fairness Act’s requirement that a class action with an amount in controversy in excess of $5 million, exclusive of interest and costs, is subject to federal jurisdiction. CAFA has other jurisdictional requirements, but only the amount in controversy was in dispute.
The court found that Cingular had the burden of establishing federal jurisdiction, but that the class representatives’ stipulations that the amount in controversy was less than $5 million were not persuasive (because in West Virginia, a jury can return a verdict in excess of the amount in controversy, thereby rendering such a stipulation meaningless).
The parties argued about the size of the class, which was critical to the court’s jurisdiction. Under the Consumer Credit and Protection Act, each plaintiff would be entitled to $200 in damages, so a class of 25,001 members, at $200 each, would exceed $5 million. Cingular initially asserted that the class consisted of 62,000 members, which the plaintiffs disputed. Cingular reduced the number to 58,800 members (after eliminating its employees and business customers), but that number included individuals who had become enrolled in Cingular’s roadside assistance program and continued to pay the monthly fee. Because the suit was filed on behalf of those who had been enrolled and charged the amount without their consent, the court found that the putative class “was much narrower.”
The plaintiffs challenged Cingular’s estimate of 58,800 in their reply, so the court gave Cingular an opportunity to reply and to “narrow its response to the more limited scope of the putative class and calculate the amount defendant believes to be in dispute.” Cingular’s reply was to inform the court that its “concerns cannot be resolved at the removal stage.” Cingular then made three arguments that did not remotely answer the court’s questions. Consequently, the court concluded there was no record “to support a finding that the amount-in-controversy exceeds $5,000,000.”
Even though the decision was in the plaintiffs’ favor, they didn’t win; Cingular lost. It astounds me that Cingular would offer such a cavalier response to the court, especially when the court specifically gave Cingular an opportunity to reply to the plaintiffs about the size of the class and the amount in controversy.
There is no way of knowing why Cingular did not provide the requested information in its sur-reply, although the obvious answer is that the information would not have helped its position. Cingular did argue that if, at the remand stage of the litigation, it had to determine who had been charged the roadside assistance fees without their consent, it would impose a hardship. But the court reasoned that if such a determination presented a hardship, it was because of Cingular’s “own deficiencies in internal record-keeping,” and reminded Cingular of its burden in establishing federal jurisdiction.
Cingular intends to appeal the decision to the Fourth Circuit. Such an appeal is discretionary, and if accepted, proceeds on an expedited basis (judgment must be rendered within 60 days of the date the appeal was filed, unless the parties agree to an extension or the court grants an extension for ten days for good cause). Interestingly, if a final judgment is not rendered within such time period, the appeal "shall be denied."