Dart Cherokee Basin Operating Co. v. Owens

• Decision Date: 15 December 2014
• Docket Number: No. 13–719.,13–719.
• Citation: 190 L.Ed.2d 495,574 U.S. 81,135 S.Ct. 547
• Parties: DART CHEROKEE BASIN OPERATING COMPANY, LLC, et al., Petitioners v. Brandon W. OWENS.
• Court: U.S. Supreme Court

574 U.S. 81

135 S.Ct. 547

190 L.Ed.2d 495

DART CHEROKEE BASIN OPERATING COMPANY, LLC, et al., Petitioners

v.Brandon W. OWENS.

No. 13–719.

Supreme Court of the United States

Argued Oct. 7, 2014.

Decided Dec. 15, 2014.

Nowell D. Berreth, Atlanta, GA, for Petitioners.

Rex A. Sharp, Prairie Village, KS, for Respondent.

Matthew J. Salzman, Molly E. Walsh, Stinson Leonard Street LLP, Kansas City, MO, David E. Bengtson, Jordan E. Kieffer, Stinson Leonard, Street LLP, Wichita, KS, Nowell D. Berreth, Counsel of Record, Brian D. Boone, Jonathan D. Parente, Alston & Bird LLP, Atlanta, GA, for Petitioners.

Rex A. Sharp, Counsel of Record, Barbara C. Frankland, Gunderson Sharp, LLP, Prairie Village, KS, David E. Sharp, Gunderson Sharp, LLP, Houston, TX, John F. Edgar, Edgar Law Firm, LLC, Kansas City, MO, Grady Young, Coffeyville, KS, for Respondent.

Justice GINSBURG delivered the opinion of the Court.

To remove a case from a state court to a federal court, a defendant must file in the federal forum a notice of removal "containing a short and plain statement of the grounds for removal." 28 U.S.C. § 1446(a). When removal is based on diversity of citizenship, an amount-in-controversy requirement must be met. Ordinarily, "the matter in controversy [must] excee[d] the sum or value of $75,000." § 1332(a). In class actions for which the requirement of diversity of citizenship is relaxed, § 1332(d)(2) (A)–(C), "the matter in controversy [must] excee[d] the sum or value of $5,000,000," § 1332(d)(2). If the plaintiff's complaint, filed in state court, demands monetary relief of a stated sum, that sum, if asserted in good faith, is "deemed to be the amount in controversy." § 1446(c)(2). When the plaintiff's complaint does not state the amount in controversy, the defendant's notice of removal may do so. § 1446(c)(2)(A).

To assert the amount in controversy adequately in the removal notice, does it suffice to allege the requisite amount plausibly, or must the defendant incorporate into the notice of removal evidence supporting the allegation? That is the single question argued here and below by the parties and the issue on which we granted review. The answer, we hold, is supplied by the removal statute itself. A statement "short and plain" need not contain evidentiary submissions.

I

Brandon W. Owens, plaintiff below and respondent here, filed a putative class action in Kansas state court alleging that defendants Dart Cherokee Basin Operating Company, LLC, and Cherokee Basin Pipeline, LLC (collectively, Dart), underpaid royalties owed to putative class members under certain oil and gas leases. The complaint sought "a fair and reasonable amount" to compensate putative class members for "damages" they sustained due to the alleged underpayments. App. to Pet. for Cert. 34a, 35a.

Invoking federal jurisdiction under the Class Action Fairness Act of 2005 (CAFA), Dart removed the case to the U.S. District Court for the District of Kansas. CAFA gives federal courts jurisdiction over certain class actions, defined in § 1332(d)(1), if the class has more than 100 members, the parties are minimally diverse, and the amount in controversy exceeds $5 million. § 1332(d)(2), (5)(B) ; see Standard Fire Ins. Co. v. Knowles, 568 U.S. 588/592 133 S.Ct. 1345, 1348, 185 L.Ed.2d 439 (2013). Dart's notice of removal alleged that all three requirements were satisfied. With respect to the amount in controversy, Dart stated that the purported underpayments to putative class members totaled more than $8.2 million.

Owens moved to remand the case to state court. The notice of removal was "deficient as a matter of law," Owens asserted, because it included "no evidence" proving that the amount in controversy exceeded $5 million. App. to Pet. for Cert. 46a, 53a. In response, Dart submitted a declaration by one of its executive officers. The declaration included a detailed damages calculation indicating that the amount in controversy, sans interest, exceeded $11 million. Without challenging Dart's calculation, Owens urged that Dart's amount-in-controversy submission came too late. "[The] legally deficient [notice of removal]," Owens maintained, could not be cured by "post-removal evidence about the amount in controversy." Id., at 100a.

Reading Tenth Circuit precedent to require proof of the amount in controversy in the notice of removal itself, the District Court granted Owens' remand motion. Dart's declaration, the District Court held, could not serve to keep the case in federal court. The Tenth Circuit, as the District Court read Circuit precedent, "has consistently held that reference to factual allegations or evidence outside of the petition and notice of removal is not permitted to determine the amount in controversy." Id. at 26a, and n. 37 (citing Laughlin v. Kmart Corp., 50 F.3d 871, 873 (1995) ; Martin v. Franklin Capital Corp., 251 F.3d 1284, 1291, n. 4 (2001) ; Oklahoma Farm Bureau Mut. Ins. Co. v. JSSJ Corp., 149 Fed.Appx. 775 (2005) ).

Ordinarily, remand orders "[are] not reviewable on appeal or otherwise." § 1447(d). There is an exception, however, for cases invoking CAFA. § 1453(c)(1). In such cases, "a court of appeals may accept an appeal from an order of a district court granting or denying a motion to remand." Ibid. Citing this exception, Dart petitioned the Tenth Circuit for permission to appeal. "Upon careful consideration of the parties' submissions, as well as the applicable law," the Tenth Circuit panel, dividing two#to#one, denied review. App. to Pet. for Cert. 13a–14a.

An evenly divided court denied Dart's petition for en banc review. Dissenting from the denial of rehearing en banc, Judge Hartz observed that the Tenth Circuit "[had] let stand a district-court decision that will in effect impose in this circuit requirements for notices of removal that are even more onerous than the code pleading requirements that ... federal courts abandoned long ago." 730 F.3d 1234 (2013). The Tenth Circuit was duty bound to grant Dart's petition for rehearing en banc, Judge Hartz urged, because the opportunity "to correct the law in our circuit" likely would not arise again. Id., at 1235. Henceforth, Judge Hartz explained, "any diligent attorney ... would submit to the evidentiary burden rather than take a chance on remand to state court." Ibid.

Dart filed a petition for certiorari in this Court requesting resolution of the following question: "Whether 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?" Pet. for Cert. i. Owens' brief in opposition raised no impediment to this Court's review. (Nor, later, did Owens' merits brief suggest any barrier to our consideration of Dart's petition.) We granted certiorari to resolve a division among the Circuits on the question presented. 572 U.S. 1045 134 S.Ct. 1788, 188 L.Ed.2d 757 (2014). Compare Ellenburg v. Spartan Motors Chassis, Inc., 519 F.3d 192, 200 (C.A.4 2008) (a removing party's notice of removal need not "meet a higher pleading standard than the one imposed on a plaintiff in drafting an initial complaint"), and Spivey v. Vertrue, Inc.,

528 F.3d 982, 986 (C.A.7 2008) (similar), with Laughlin, 50 F.3d, at 873 ("the requisite amount in controversy ... must be affirmatively established on the face of either the petition or the removal notice").

II

As noted above, a defendant seeking to remove a case to a federal court must file in the federal forum a notice of removal "containing a short and plain statement of the grounds for removal." § 1446(a). By design, § 1446(a) tracks the general pleading requirement stated in Rule 8(a) of the Federal Rules of Civil Procedure. See 14C C. Wright, A. Miller, E. Cooper, & J. Steinman, Federal Practice and Procedure § 3733, pp. 639–641 (4th ed. 2009) (" Section 1446(a) requires only that the grounds for removal be stated in ‘a short and plain statement’—terms borrowed from the pleading requirement set forth in Federal Rule of Civil Procedure 8(a)."). The legislative history of § 1446(a) is corroborative. Congress, by borrowing the familiar "short and plain statement" standard from Rule 8(a), intended to "simplify the ‘pleading’ requirements for removal" and to clarify that courts should "apply the same liberal rules [to removal allegations] that are applied to other matters of pleading." H.R.Rep. No. 100–889, p. 71 (1988). See also ibid. (disapproving decisions requiring "detailed pleading").

When a plaintiff invokes federal-court jurisdiction, the plaintiff's amount-in-controversy allegation is accepted if made in good faith. See, e.g., Mt. Healthy City Bd. of Ed. v. Doyle, 429 U.S. 274, 276, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977) (" ‘[T]he sum claimed by the plaintiff controls if the claim is apparently made in good faith.’ ) (quoting St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct. 586, 82 L.Ed. 845 (1938) ; alteration in original). Similarly, when a defendant seeks federal-court adjudication, the defendant's amount-in-controversy allegation should be accepted when not contested by the plaintiff or questioned by the court. Indeed, the Tenth Circuit, although not disturbing prior decisions demanding proof together with the removal notice, recognized that it was anomalous to treat commencing plaintiffs and removing defendants differently with regard to the amount in controversy. See McPhail v. Deere & Co., 529 F.3d 947, 953 (2008) (requiring proof by defendant but not by plaintiff "bears no evident logical relationship either to the purpose of diversity jurisdiction, or to the principle that those who seek to invoke federal jurisdiction must establish its prerequisites").

If the plaintiff contests the defendant's allegation, § 1446(c)(2)(B) instructs: "[R]emoval ... is proper on the basis of an amount in controversy asserted" by the defendant "if the district court finds, by the preponderance...