DeCastro v. AWACS, Inc.

• Decision Date: 02 August 1996
• Docket Number: Civil No. 96-1452.
• Citation: 935 F. Supp. 541
• Parties: Wayne DeCASTRO, et al., Plaintiffs, v. AWACS, INC., d/b/a Comcast Metrophone, Defendant.
• Court: U.S. District Court — District of New Jersey

935 F. Supp. 541

Wayne DeCASTRO, et al., Plaintiffs, v. AWACS, INC., d/b/a Comcast Metrophone, Defendant.

Civil No. 96-1452.

United States District Court, D. New Jersey.

August 2, 1996.

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Peter L. Masnik, Kalikman & Masnik, Haddonfield, NJ, Sherrie R. Savett, Kenneth L. Fox, Berger & Montague, Philadelphia, PA, Edward P. Clayman, Philadelphia, PA, for Plaintiffs Wayne DeCastro, Paul Weiss, and John Solano, individually and on behalf of all others similarly situated.

Mary E. Kohart, Seamus C. Duffy, Jeanine M. Kasulis, Mary Catherine Roper, Drinker, Biddle & Reath, Princeton, NJ, for Defendant AWACS, Inc., d/b/a Comcast Metrophone.

KUGLER, United States Magistrate Judge:

Presently before the court is the plaintiffs' motion to remand the above-entitled action to the Superior Court of New Jersey, Law Division, Camden County. As explained below, this Court finds that the plaintiffs' claims are not removable under the complete pre-emption doctrine, nor has the defendant met its burden of demonstrating that diversity jurisdiction exists. For these reasons, the Court holds that it lacks subject matter jurisdiction over the above-entitled action, and the plaintiffs' motion to remand shall be granted pursuant to 28 U.S.C. § 1447(c).

INTRODUCTION

On February 23, 1996, Plaintiffs Wayne DeCastro, Paul Weiss, and John Solano, individually and on behalf of others similarly situated, filed in state court a class complaint against Defendant AWACS, Inc., d/b/a Comcast Metrophone ("Comcast"), alleging consumer fraud and other state law claims for Comcast's alleged failure to disclose to its cellular telephone customers certain billing practices. Specifically, the Complaint alleges that contrary to industry custom and practice, Comcast begins to bill their customers when a call is initiated, rather than when a connection is made. This "non-communication period," for which Comcast charges between $.34 and $.75 per peak air-time minute, is extended by Comcast's practices of requiring its customers to input a personal identification number before a call is connected and charging for time in whole-minute increments, rounded up to the next minute. Count I contains a claim under the New Jersey Consumer Fraud Act, N.J.S.A. § 56:8-1 et seq., alleging that Comcast's knowing failure to disclose this billing practice to its customers constitutes an unfair and deceptive practice and misrepresentation made in connection with the defendant's sale of its telecommunication services. Count II contains a breach of contract claim, alleging that Comcast's failure to disclose this billing practice is inconsistent with a reasonable interpretation of the fee schedule incorporated in Comcast's contracts with its customers. Plaintiffs claim in Count III that the defendant has breached the implied duty of good faith and fair dealing by its use of this billing practice, and Count IV raises a claim for unjust enrichment. Plaintiffs seek money damages, including treble damages and attorneys' fees under the New Jersey Consumer Fraud Act, interest and costs, and an injunction prohibiting the defendant from utilizing this billing practice in the future. The purported class (Comcast provides telecommunications services to approximately 600,000 persons, Compl. para. 17.) consists of all persons who maintained a contract for cellular telephone services with Comcast during the period February 15, 1990 through the present.

On March 25, 1996, Defendant Comcast removed the action to this Court, claiming that jurisdiction is proper on diversity grounds under 28 U.S.C. § 1332, or, alternatively, that the plaintiffs' causes of action are completely preempted by the Federal Communications Act of 1934, 47 U.S.C. §§ 151 et seq., as amended, and federal common law, thereby conferring federal question jurisdiction under 28 U.S.C. § 1331. On May 9, 1996, the plaintiffs filed the instant motion to remand pursuant to 28 U.S.C. § 1447(c), claiming that this Court lacks subject matter jurisdiction over this action.

DISCUSSION

An action removed to federal court may be remanded to state court "if at any time before final judgment it appears that the district court lacks subject matter jurisdiction ..." 28 U.S.C. § 1447(c). When confronted with a motion to remand, the removing party has the burden of establishing the propriety of removal. Packard v. Provident Nat'l Bank, 994 F.2d 1039, 1045 (3d Cir. 1993), cert. denied sub nom. Upp v. Mellon Bank, N.A., 510 U.S. 964, 114 S.Ct. 440, 126 L.Ed.2d 373 (1993). Removal statutes are strictly construed, and all doubts are resolved in favor of remand. Boyer v. Snap-On-Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990), cert. denied, 498 U.S. 1085, 111 S.Ct. 959, 112 L.Ed.2d 1046 (1991).

A. Diversity Jurisdiction

Diversity jurisdiction requires complete diversity among the parties and an amount in controversy in excess of $50,000, exclusive of interest and costs. 28 U.S.C. § 1332(a). Plaintiffs, while conceding that diversity exists among the parties, claim that the amount in controversy is not satisfied for each class member. Under the New Jersey Consumer Fraud Act, the plaintiffs seek recovery of "their actual damages or $100.00, whichever is greater for each violation." (Compl. para. 29.) As damages for unjust enrichment, the plaintiffs seek recovery of all amounts collected by Comcast as a result of its alleged unlawful and unfair business practice. (Compl. para. 40 and p. 12 para. (c)). Finally, the plaintiffs seek treble damages and attorneys' fees under the New Jersey Consumer Fraud Act.

Putative class actions, prior to certification, are to be treated as class actions for jurisdictional purposes. In re School Asbestos Litig., 921 F.2d 1310, 1317 (3d Cir. 1990), cert. denied sub nom. U.S. Gypsum Co. v. Barnwell Sch. Dist. No. 45, 499 U.S. 976, 111 S.Ct. 1623, 113 L.Ed.2d 720 (1991); Garcia v. General Motors Corp., 910 F.Supp. 160, 162 (D.N.J.1995). It is well-established that members of a class may not aggregate their claims in order to reach the $50,000 amount in controversy requirement; each member must individually claim at least the jurisdictional amount. Zahn v. Int'l Paper Co., 414 U.S. 291, 301, 94 S.Ct. 505, 512, 38 L.Ed.2d 511 (1973); Packard v. Provident Nat'l Bank, 994 F.2d at 1045.

It is the defendant's "heavy burden," as the removing party asserting that federal jurisdiction is proper, to show that the amount in controversy is satisfied. Packard v. Provident Nat'l Bank, 994 F.2d at 1045. In an action removed to federal court where no specific damages are claimed, there is a "strong presumption" that the plaintiffs have not claimed an excessive amount of damages in order to obtain federal jurisdiction. St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 290-91, 58 S.Ct. 586, 591, 82 L.Ed. 845 (1938); Spellman v. Mellon Bank, ___ F.3d ___, 1995 WL 764548 (3d Cir.1995) ("In assessing the amount claimed where the defendant seeks removal, we place great confidence in the allegations of the plaintiff's complaint, because we presume that the plaintiff has not claimed an excessive amount in order to obtain federal jurisdiction"), amended, 1996 WL 20762 (3d Cir. Jan. 12, 1996), reh'g en banc granted, opinion vacated (Feb. 16, 1996).¹

The Garcia court set out the general rule for determining whether the amount in controversy reaches the jurisdictional minimum upon removal:

Several standards have emerged for deciding the amount in controversy when a defendant removes a complaint seeking an unspecified amount of damages.... The Third Circuit has not decided the appropriate standard to apply in these circumstances. It has simply indicated that where a complaint does not request a precise monetary amount, the district court must make an independent inquiry into the value of the claims alleged. Further, "the general Federal rule is to decide the amount in controversy from the complaint itself." In such cases, the amount in controversy should be measured "by a reasonable reading of the value of the rights being litigated."

Garcia, 910 F.Supp. at 165 (citations omitted).

Defendant argues that at least one member of the class has a claim that exceeds $50,000. Comcast identifies Customer No. 90744095, who was billed for 85,000 calls between October, 1995 and May, 1996, and completes a mathematical equation which results in likely damages to this customer of either $86,700, $191,250, or $25,500,000, based on three sets of assumptions. (Def.Brief, at 32.) Comcast also submits the affidavit of Thomas C. Maguire, Jr., controller of Comcast, who states that based upon a limited investigation he conducted, confirmed by Comcast's customer billing services provider, four subscribers were identified who maintained a contract for cellular telephone services with Comcast during the period February 1990 to the present and who could assert claims for damages in excess of $50,000, assuming the truth of the allegations in the Complaint and the plaintiffs' entitlement to the damages demanded. Moreover, because of the limited nature of the investigation, more customers will likely be found whose claims would satisfy the amount in controversy under the allegations in the plaintiffs' complaint. (Maguire Aff.) Thus, according to Comcast, since at least one class member and likely several others will meet the jurisdictional minimum, the court may exercise supplemental jurisdiction over the remaining claims under 28 U.S.C. § 1367(a).

In support of this contention, Comcast recognizes the Supreme Court's holding in Zahn v. Int'l Paper Co., 414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973), that diversity jurisdiction exists over class actions only when the claim of each plaintiff exceeds the amount in controversy requirement, but Comcast argues that the adoption of 28 U.S.C. § 1367(a) overruled Zahn and allows for the exercise of supplemental jurisdiction over class claims that do not...