Last year, I wrote about the United States District Court’s remand of a class action that alleged that AT&T had improperly enrolled thousands of customers in a roadside assistance program and charged them $2.95 per month, in violation of the West Virginia Consumer Credit and Protection Act. Strawn v. AT&T Mobility , Inc., 513 F.Supp.2d 599 (S.D.W.Va. 2007).
The court remanded the case because AT&T could not establish to the court’s satisfaction that the amount in controversy exceeded the Class Action Fairness Act’s threshold of $5 million, exclusive of interest and costs, for federal jurisdiction. AT&T appealed the remand under 28 U.S.C. § 1453(c), which permits appellate review of remand orders in class actions.
In Strawn v. AT&T Mobility LLC, 2008 WL 2575871 (4th Cir. 2008), which was decided on June 30, 2008, the Fourth Circuit concluded that “the district court either misread or construed too broadly the issues raised by the complaint and the definition of the putative class and therefore reverse[d] its order remanding this case to the state court.”
AT&T first argued before the Fourth Circuit that CAFA shifted the burden of proof in a removal from the party asserting federal jurisdiction to the party opposing it. The court acknowledged that CAFA’s legislative history contained language supporting that view, but found that the statute itself gave no indication that Congress intended to place the burden of proof on the party opposing removal.
The court did hold that “in removing a class action based on diversity jurisdiction under 28 U.S.C. §§ 1453 and 1332(d), the party seeking to invoke federal jurisdiction must allege it in his notice of removal and, when challenged, demonstrate the basis for federal jurisdiction.” The court noted that it was joining six other circuit courts that have considered the issue – the Second, Third, Sixth, Seventh, Ninth, and Eleventh.
AT&T challenged the class size on the basis that the plaintiffs claimed that AT&T violated West Virginia law by automatically enrolling all customers in the roadside assistance program for a trial period, then charging them $2.99 per month if they did not opt out.
The court agreed with AT&T that the plaintiffs’ complaint defined the class as all of AT&T’s customers who were enrolled in the roadside assistance program, regardless of whether they were in the program willingly or unwillingly:
“Such subjective inquiries about a customer’s “willingness’ or ‘unwillingness’ in continuing to pay the charge might relate to a limitation of damages by ratification, but it does not diminish the class defined in the complaint: those who were at the outset automatically enrolled in the program without their request-those who ‘were not given an option.’ At that point, none of the customers were ‘willing’ or ‘unwilling’; rather, all were unaware.
(Emphasis in original.)
The court found that the plaintiffs failed to rebut AT&T’s estimate that 58,500 customers remained enrolled in the roadside assistance program after the initial trial period expired and paid the monthly charge. Therefore, AT&T established that the amount in controversy, exclusive of interest and costs, exceeded $5 million and satisfied CAFA’s jurisdictional requirement.
The court noted in a couple of places that the plaintiffs had not appealed the district court’s ruling that the plaintiffs could not rely upon stipulations to limit their damages and thereby establish the amount in controversy. As a result, the only issue before the Fourth Circuit was AT&T’s appeal of the remand based on the amount in controversy.