507 F.3d 188 (3rd Cir. 2007), 06-2266, Frederico v. Home Depot

Docket Nº:06-2266.
Citation:507 F.3d 188
Party Name:Janelle FREDERICO, individually and on behalf of a class of similarly situated persons, Appellant v. HOME DEPOT.
Case Date:November 09, 2007
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

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507 F.3d 188 (3rd Cir. 2007)

Janelle FREDERICO, individually and on behalf of a class of similarly situated persons, Appellant



No. 06-2266.

United States Court of Appeals, Third Circuit.

November 9, 2007

Argued July 12, 2007.

Appeal from the United States District Court for the District of New Jersey (D.C. Civil No.05-cv-05579) District Judge: Hon. Joel A. Pisano

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Khalid A. Elhassan (Argued), Eichen Levinson & Crutchlow, LLP, Edison, NJ, for Appellant.

Dwight D. Davis (Argued) S. Stewart Haskins, Tracy Klinger, King & Spalding, LLP, Atlanta, GA, Nicholas Stevens Starr, Gren, Davison & Rubin 103 Eisenhower Parkway, Roseland, NJ, for Appellee.

Before: SLOVITER, ALDISERT and ROTH, Circuit Judges.

ALDISERT, Circuit Judge.

Plaintiff Janelle Frederico, for herself and on behalf of a class of similarly situated persons, appeals a judgment of the United States District Court for the District of New Jersey that dismissed her complaint against The Home Depot, Inc.

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Alleging fraud and breach of contract, the complaint was dismissed without prejudice pursuant to Rules 9(b) and 12(b)(6), Federal Rules of Civil Procedure.

Her action was originally filed in the Superior Court of New Jersey, Law Division, Middlesex County. Home Depot then removed the case to the District Court for the District of New Jersey. Frederico made no motion to remand to state court. The District Court decided that jurisdiction was proper under 28 U.S.C. § 1332(d), pursuant to the Class Action Fairness Act of 2005 ("CAFA"). After the matter reached us, we raised the issue of jurisdiction sua sponte and offered the parties an opportunity to respond by letter to our concerns.

A threshold matter requires our attention: we must first decide whether the District Court's dismissal without prejudice meets the finality requirement of 28 U.S.C. § 1291 to vest this Court with jurisdiction. We will decide that matter in the affirmative and proceed to consider: (1) which party has the burden of establishing federal jurisdiction in the removal process; (2) the extent of that party's burden of proof; and (3) whether diversity jurisdiction is established by the record before us. After finding federal jurisdiction, we will address the merits of the case. For the reasons that follow we will affirm the judgment of the District Court.


On Saturday, August 6, 2005, Frederico rented a flatbed truck from a Home Depot store located in South Plainfield, New Jersey, owned and operated by Defendant. Home Depot regularly provides short-term leases of trucks to customers to assist customers with the transportation of large purchases. During the transaction, Frederico signed a Vehicle Delivery Agreement ("Agreement") that provided "Date and Time Out: 08/06/2005 6:23 pm" and "Date and Time Due In: 08/06/2005 7:38 pm." App. at 80. According to the Agreement, Frederico was to rent the truck for a total of 75 minutes. The District Court summarized other relevant terms of the Agreement:

1. Plaintiff's truck was due back to the store at 7:38 pm on August 6, 2005.

2. The rental rate for the truck was $19.00 for the first seventy-five minutes and $5.00 for each additional fifteen minutes.

3. The vehicle must be returned "to the Home Depot location where rented, on the date and at the time specified . . . IF NOT, A CLEANING CHARGE, DROP CHARGE, AND/OR RATE CHANGE MAY APPLY."


5. The store hours listed were 6:00 - 10:00 on Saturdays.


Id. at 121.

Frederico alleges that she "returned the truck to Home Depot on August 6, 2005, but was informed by Defendant that the rental department was closed, that Home Depot had no after-hours rental facilities or procedures, and to re-return the truck the following morning." Compl. ¶ 8. She

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returned the next morning1 and paid $287.14, of which $269.00 represented the thirteen hours and forty-four minutes that she possessed the vehicle.

Frederico subsequently filed a class action complaint in state court, alleging that Home Depot breached its contract, violated the New Jersey Consumer Fraud Act, N.J.S.A. § 56:8-1 et seq. (2005) ("NJCFA"), and committed common law fraud. Her complaint states:

The proposed class consists of (i) all New Jersey individual consumers (ii) who rented a vehicle from a Home Depot store with no afterhours rental return facilities or procedures, (iii) who were unable to return the vehicle to Home Depot after-hours, and (iv) who were charged 'late' rental return fees for the after-hours period during which no vehicles could have been returned.

Id. ¶ 18.


Sua sponte, we raised the question of whether this court has jurisdiction over the District Court's judgment here entered "without prejudice2 Frederico invoked the jurisdiction of this Court pursuant to 28 U.S.C. § 1291, which grants this Court jurisdiction over appeals from final decisions of district courts. Appellant's Br. at 1.

We conclude that the District Court's March 9, 2006 Order granting Home Depot's motion to dismiss, from which Frederico appeals, is a final order, notwithstanding its "without prejudice" modifier. "Guided by the Supreme Court's directive that we employ a 'practical rather than a technical construction' of § 1291's finality requirement," we have held that a dismissal with leave to amend will be treated as a final order if the plaintiff has elected to "stand upon the original complaint." Shapiro v. UJB Financial Corp., 964 F.2d 272, 278 (3d Cir. 1992) (quoting Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949)); see also Berke v. Bloch, 242 F.3d 131, 135 (3d Cir. 2001) (concluding that it is "well-settled" in the Court of Appeals for the Third Circuit that an order dismissing a complaint without prejudice is final if the plaintiff has elected to stand on his complaint). Proceeding with appellate review here is consistent with the goal of the final judgment rule - -to prevent piecemeal litigation - -because, "if plaintiff cannot or will not bring a second action, there is no risk of multiple litigation." Trevino-Barton v. Pittsburgh Nat'l Bank, 919 F.2d 874, 878 (3d Cir. 1990).

Under this standard, the dismissal of the complaint is final and appealable because Frederico clearly indicated an intent to stand on the original complaint. At no time during the District Court's consideration of Home Depot's motion to dismiss, which included initial and supplemental briefing as well as oral argument, did Frederico offer or seek to amend the complaint to address the pleading deficiencies noted by Home Depot. Instead, she repeatedly asserted that the allegations contained in the complaint were legally sufficient. See, e.g., Plaintiff's Memorandum in Law in Opposition to the Defendant's Motion to Dismiss, Frederico v. Home Depot, 2:05-cv-00579JAP, at 2, 2006 WL 385368 (D.N.J. January 3, 2006) ("The claims contained in Plaintiff's Complaint are sufficient as a matter of law, and should not be dismissed.").

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After the District Court dismissed the complaint and the clerk's office officially terminated the action, Frederico did not seek to amend the complaint. Her only response was to file a notice of appeal. On appeal, she continues to argue that the factual allegations contained in her complaint are sufficient. See, e.g., Appellant's Br. at 9 ("The lower court's opinion is premised on the mistaken assumption that the Appellant/Plaintiff should have pled the evidence and facts underlying her Complaint."). Because Frederico has elected to stand on her original complaint rather than amend or refile it, the order dismissing the complaint without prejudice is final. See, e.g., Lucas v. Township of Bethel, 319 F.3d 595, 600 (3d Cir. 2003) (dismissal without prejudice was final and appealable because plaintiff chose to stand on the complaint); Batoff v. State Farm Ins. Co., 977 F.2d 848, 851 n.5 (3d Cir. 1992) (holding that plaintiff elected to stand on complaint by failing to amend within specified time period); Tiernan v. Devoe, 923 F.2d 1024, 1031 (3d Cir. 1991) (finding appellate jurisdiction over dismissal without prejudice based on statements made in letter brief filed after appeal was initiated); Letter from William O. Crutchlow, Counsel for Appellant Janelle Frederico, to the Office of the Clerk, United States Court of Appeals for the Third Circuit (July 3, 2007) ("In the instant matter, Appellant/Plaintiff stands by her complaint.").


We now must decide whether this class action case removed to a federal court as a diversity matter properly meets the requisite amount in controversy set by CAFA. It is now settled in this Court that the party asserting federal jurisdiction in a removal case bears the burden of showing, at all stages of the litigation, that the case is properly before the federal court. Samuel-Bassett v. KIA Motors America, Inc., 357 F.3d 392, 396 (3d Cir. 2004); see also Morgan v. Gay, 471 F.3d 469, 473 (3d Cir. 2006) ("Under CAFA, the party seeking to remove the case to federal court bears the burden to establish that the amount in controversy is satisfied."). Our standard of review for issues of subject matter jurisdiction, including cases arising under CAFA, is plenary. Morgan, 471 F.3d at 472.


We are aware that the quantum of proof to be used in ascertaining the requisite amount in removal cases sounding in diversity has caused some disagreement among the district courts of this circuit3 We...

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