Everett v. Verizon Wireless, Inc.

• Decision Date: 28 August 2006
• Docket Number: No. 05-3557.,05-3557.
• Parties: Tom EVERETT, et al., Plaintiffs-Appellants, v. VERIZON WIRELESS, INC., et al., Defendants, Dobson Cellular Systems, Inc., Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

460 F.3d 818

Tom EVERETT, et al., Plaintiffs-Appellants, v. VERIZON WIRELESS, INC., et al., Defendants Dobson Cellular Systems, Inc., Defendant-Appellee.

No. 05-3557.

United States Court of Appeals, Sixth Circuit.

Argued: April 20, 2006.

Decided and Filed: August 28, 2006.

COPYRIGHT MATERIAL OMITTED

ARGUED:

Dennis E. Murray, Sr., Murray & Murray, Sandusky, Ohio, for Appellants. John B. Nalbandian, Taft, Stettinius & Hollister, Cincinnati, Ohio, for Appellee.

ON BRIEF:

Dennis E. Murray, Sr., Donna Jean A. Evans, Murray & Murray, Sandusky, Ohio, for Appellants. John B. Nalbandian, Taft, Stettinius & Hollister, Cincinnati, Ohio, Thomas J. Lee, Michael J. Zbiegien, Taft, Stettinius & Hollister, Cleveland, Ohio, for Appellee.

Before: BATCHELDER and SUTTON, Circuit Judges; FORESTER, District Judge.^*

OPINION

SUTTON, Circuit Judge.

Plaintiffs filed this lawsuit in state court, and defendants removed it to federal court on diversity grounds. Contending that the claims did not satisfy the $75,000 amount-in-controversy requirement, plaintiffs moved to remand the case to state court. The district court denied the remand motion.

After the court rejected plaintiffs' claims on the merits, plaintiffs appealed, insisting that the district court never had jurisdiction over the case. We agree. Each individual claim falls below the $75,000 amount-in-controversy requirement. And Dobson Cellular may not overcome this defect by aggregating plaintiffs' disgorgement claims (because they do not have a common and undivided interest in them) or by aggregating their punitive-damages claims (because they do not have a common and undivided interest in them either). And even if Dobson Cellular may consider the total cost to it of complying with the injunction claim, a point we need not decide, it has not shown that this amount would satisfy the $75,000 requirement.

I.

On November 3, 2000, four plaintiffs from Ohio and Michigan—Tom Everett, Lutricia Bradley, John T. Lunsford and Gregory L. Baker—filed this class action against their respective cellular telephone service providers in the Erie County (Ohio) Court of Common Pleas. None of the defendants—Dobson Cellular Systems, Inc., Verizon Wireless, Inc., Vodafone Airtouch, P.L.C., Airtouch Communications, Inc. or New Par—is based in, or maintains its principal place of business in, either of the two States.

The gist of plaintiffs' claims is that the providers falsely represented to them that they would not charge for unanswered phone calls or those that generated a busy signal. Alleging breach of contract, unjust enrichment and deceptive sales practices, plaintiffs sought an unspecified amount of compensatory damages, injunctive relief, restitution, disgorgement and "[s]uch other and further relief as may be appropriate." JA 66.

On December 11, 2000, invoking the diversity-jurisdiction statute, 28 U.S.C. § 1332, defendants removed the case to the Northern District of Ohio. Plaintiffs moved to remand, arguing that the amount in controversy did not exceed $75,000. The district court denied the motion, holding that the size of the disgorgement claim met this threshold.

Litigation on the merits of the claims proceeded in spurts. The district court dismissed several of the plaintiffs' claims under Michigan law, then stayed the case pending resolution of a similar class action in California that potentially overlapped with the class claims in this case. After the California case settled, plaintiffs dismissed with prejudice their claims against all of the defendants save Dobson Cellular Systems, Inc.

On March 15, 2004, the district court granted Dobson Cellular's motion for summary judgment on the remaining claims. As two of the named plaintiffs were customers only of the voluntarily dismissed providers (John Lunsford and Gregory Baker) and as one of the named plaintiffs filed a petition for bankruptcy (Lutricia Bradley), only one plaintiff and purported class representative (Thomas Everett) remains. On appeal, Everett challenges the district court's resolution of the remand motion, though not its resolution of the merits.

II.

"The district courts of the United States ... are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute." Exxon Mobil Corp. v. Allapattah Servs., 545 U.S. 546, 125 S.Ct. 2611, 2616, 162 L.Ed.2d 502 (2005) (internal quotation marks omitted). While plaintiffs originally filed this case in state court, the removal statute, 28 U.S.C. § 1441, "authorizes" defendants to remove "civil actions from state court to federal court when the action initiated in state court is one that could have been brought, originally, in a federal district court." Lincoln Prop. Co. v. Roche, ___ U.S. ___, ___, 126 S.Ct. 606, 610, 163 L.Ed.2d 415 (2005).

In addition to giving federal district courts original jurisdiction over cases arising under federal law, see 18 U.S.C. § 1331, Congress "has granted district courts original jurisdiction in civil actions between citizens of different States, between U.S. citizens and foreign citizens, or by foreign states against U.S. citizens," "to provide a neutral forum for what have come to be known as diversity cases," Exxon Mobil, 125 S.Ct. at 2617; see 18 U.S.C § 1332. "To ensure that diversity jurisdiction does not flood the federal courts with minor disputes, § 1332(a) requires that the matter in controversy in a diversity case exceed a specified amount, currently $75,000." Exxon Mobil, 125 S.Ct. at 2617.

To satisfy the amount-in-controversy requirement at least one plaintiff's claim must independently meet the amount-in-controversy specification. See id. at 2620. While a single plaintiff may aggregate the value of her claims against a defendant to meet the amount-in-controversy requirement, even when those claims share nothing in common besides the identity of the parties, see Snyder v. Harris, 394 U.S. 332, 335, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969), the same is not true with respect to multiple plaintiffs. "[F]rom the beginning," the courts have refused to permit "the separate and distinct claims of two or more plaintiffs" to "be aggregated in order to satisfy the jurisdictional amount requirement." Id. Only when "two or more plaintiffs unite to enforce a single title or right in which they have a common and undivided interest" may federal courts rely on the aggregate amount of these claims to satisfy this requirement. Id.; see also Zahn v. Int'l Paper Co., 414 U.S. 291, 294, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973), superseded on other grounds by statute, Judicial Improvements Act of 1990, Pub.L. No. 101-650, 104 Stat. 5089, § 310, as recognized in Exxon Mobil Corp., 125 S.Ct. at 2622; Clark v. Paul Gray, Inc., 306 U.S. 583, 589, 59 S.Ct. 744, 83 L.Ed. 1001 (1939), superseded on other grounds by statute, Judicial Improvements Act of 1990, Pub.L. No. 101-650, 104 Stat. 5089, § 310, as recognized in Exxon Mobil Corp., 125 S.Ct. at 2622; Troy Bank v. G.A. Whitehead & Co., 222 U.S. 39, 40-41, 32 S.Ct. 9, 56 L.Ed. 81 (1911).

A defendant wishing to remove a case bears the burden of satisfying the amount-in-controversy requirement. Gafford v. Gen. Elec. Co., 997 F.2d 150, 155 (6th Cir.1993). Normally, "the sum claimed by the plaintiff[s] controls," id. at 156, but where plaintiffs seek "to recover some unspecified amount that is not self-evidently greater or less than the federal amount-in-controversy requirement," the defendant satisfies its burden when it proves that the amount in controversy "more likely than not" exceeds $75,000, id. at 158. In gauging the amount in controversy, courts view the claims from the vantage point of the time of removal. Claims present when a suit is removed but subsequently dismissed from the case thus enter into the amount-in-controversy calculation. See St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 293, 58 S.Ct. 586, 82 L.Ed. 845 (1938).

No one argues that any individual plaintiff's claims in this case exceed $75,000, which is not surprising given the improbability of individual phone users running up large bills for unanswered or busy-signal calls. And in debating this jurisdictional question, no one invokes the Class Action Fairness Act, which Congress enacted after plaintiffs filed this lawsuit and which amended § 1332 to provide federal-court jurisdiction in class actions "in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interests and cost." Class Action Fairness Act, Pub.L. No. 109-2, 119 Stat. 4, 9 (Feb. 18, 2005) (codified at 28 U.S.C. § 1332(d)(2)); see Exxon Mobil, 125 S.Ct. at 2628 (the Act's amendments to § 1332 are not retroactive).

A.

In contending that the federal courts never had jurisdiction over this dispute, Everett argues that the district court erred in aggregating plaintiffs' disgorgement claims. As a remedy for their unjust enrichment claim, plaintiffs asked the court to require the defendants "to disgorge all amounts received as a result of charging for calls that were not answered or were busy." JA 66. In assuming jurisdiction over the case, the district court concluded that the value of each of these claims could be aggregated because they "derive[d] from a common and undivided interest." D. Ct. Op. at 4.

From the first Congress to the present, there has been an amount-in-controversy requirement for diversity cases, one that started at $500, see Judiciary Act of 1789, 1 Stat. 73, 78 (diversity jurisdiction exists "where the matter in dispute exceeds, exclusive of costs, the sum or value of five hundred dollars"), and one that presently rests at $75,000, see 28 U.S.C. § 1332 (diversity jurisdiction exists "where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs"); Federal Courts Improvement Act of 1996, Pub.L. No. 104-317, 110 Stat. 3847, 3850.

The Supreme Court has matched Congress's commitment to this jurisdictional limitation by consistently...