Dudley v. Eli Lilly & Co.

• Decision Date: 29 December 2014
• Docket Number: No. 14–13048.,14–13048.
• Citation: 778 F.3d 909
• Parties: Leslie Pinciaro DUDLEY, on behalf of herself and all others similarly situated, Plaintiff–Appellee, v. ELI LILLY AND COMPANY, a Foreign For–Profit Corporation, Lilly USA, LLC, a foreign for-profit limited liability company, Defendants–Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

778 F.3d 909

Leslie Pinciaro DUDLEY, on behalf of herself and all others similarly situated, Plaintiff–Appellee,

v.ELI LILLY AND COMPANY, a Foreign For–Profit Corporation, Lilly USA, LLC, a foreign for-profit limited liability company, Defendants–Appellants.

No. 14–13048.

United States Court of Appeals, Eleventh Circuit.

Dec. 29, 2014.

Janet R. Varnell, Brian W. Warwick, Steven T. Simmons, Varnell & Warwick, PA, Lady Lake, FL, William Sumner Scott, Law Offices of William J. Scott, PA, Jacksonville, FL, for Plaintiff–Appellee.

Ellen Elizabeth Boshkoff, Faegre Baker Daniels, LLP, Indianapolis, IN, Stephen M. Brooks, Nelson Mullins Riley & Scarborough, LLP, Atlanta, GA, Thomas William Carroll, Faegre Baker Daniels, LLP Denver, CO, Eric J. Holshouser, Buchanan Ingersoll & Rooney, PC, Jacksonville, FL, D. Lucetta Pope, Faegre Baker Daniels LLP, South Bend, IN, for Defendants–Appellants.

Appeal from the United States District Court for the Middle District of Florida.

Before TJOFLAT, MARCUS and WILSON, Circuit Judges.

MARCUS, Circuit Judge:

In this interlocutory appeal, Appellants Eli Lilly and Company and Lilly USA, LLC (collectively, “Lilly”) appeal from a district court order granting the Appellee Leslie Dudley's motion to remand this class action back to the Circuit Court of Duval County, Florida. Dudley's complaint alleged that Lilly did not make certain incentive payments due to Dudley and other similarly situated individuals who had been employed at the company. Lilly removed the case to the United States District Court for the Middle District of Florida pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). After considering the complaint, the removal petition, and the evidence that had been presented, the district court granted Dudley's motion to remand the case to state court, finding that Lilly had not met its burden of establishing by a preponderance of the evidence that the amount in controversy exceeded $5,000,000, as required for federal subject matter jurisdiction under CAFA. See28 U.S.C. § 1332(d)(2). The court determinedthat Lilly's proffers about the amount in controversy were purely speculative because Lilly had failed to identify a specific number of class participants made up of only those employees who did not receive their promised compensation; and had failed to identify the amount each member was entitled to receive as compensation. We granted Lilly permission to appeal under 28 U.S.C. § 1453(c)(1), and after having considered the matter and taken oral argument, we conclude that on the limited record presented, the district court did not clearly err in determining that Lilly has failed to meet by a preponderance of the evidence CAFA's amount-in-controversy requirement. Accordingly, we affirm.

I.

We review a district court's decision to remand a CAFA case for lack of subject matter jurisdiction de novo. Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 751 (11th Cir.2010). As with all diversity cases, we review for clear error any factual determinations necessary to establish jurisdiction. See, e.g., Texas Acorn v. Texas Area 5 Health Sys. Agency, Inc., 559 F.2d 1019, 1024 (5th Cir.1977)¹ (reviewing for clear error the district court's finding that the amount in controversy had been met); Rexford Rand Corp. v. Ancel, 58 F.3d 1215, 1218 (7th Cir.1995) (“The determination of the amount in controversy is a fact-specific inquiry. Thus, we review the district court's finding that the amount in controversy exceeds $50,000 for clear error.”); McCormick v. Aderholt, 293 F.3d 1254, 1257 (11th Cir.2002) (reviewing for clear error the district court's findings regarding domicile for diversity jurisdiction purposes); Vareka Invs., N.V. v. Am. Inv. Props., Inc., 724 F.2d 907, 910 (11th Cir.1984) (reviewing for clear error factual question of a corporation's principal place of business for diversity jurisdiction purposes). Thus, we review de novo the district court's ultimate legal conclusion that the underlying factual allegations are insufficient to establish CAFA jurisdiction, and we review for clear error the district court's determination that Lilly failed to establish that the amount in controversy exceeded $5 million by a preponderance of the evidence. See Amoche v. Guarantee Trust Life Ins. Co., 556 F.3d 41, 48 (1st Cir.2009) (holding in a CAFA case that it would review for clear error “that portion of the district court's assessment of subject matter jurisdiction composed of factual findings,” and would review de novo its “ultimate assessment of jurisdiction”); accord Watkins v. Vital Pharm., Inc., 720 F.3d 1179, 1181 (9th Cir.2013); Blockbuster, Inc. v. Galeno, 472 F.3d 53, 56 (2d Cir.2006).

“Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). The statute at issue today has expanded considerably the subject matter jurisdiction of the federal courts over class actions that meet certain minimal requirements. Miedema v. Maytag Corp., 450 F.3d 1322, 1327 (11th Cir.2006). Specifically, CAFA grants federal district courts jurisdiction over class actions where (1) any member of the plaintiff class is a citizen of a state different from the state of citizenship of any defendant, (2) the aggregate amount in controversy exceeds $5 million, and (3) the proposed plaintiff class contains at least 100 members. See28 U.S.C. § 1332(d)(2), (5)-(6)(emphasis added); S. Fla. Wellness, Inc. v. Allstate Ins. Co., 745 F.3d 1312, 1315 (11th Cir.2014).

Recently, the Supreme Court decided Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. ––––, 135 S.Ct. 547, 190 L.Ed.2d 495, 2014 WL 7010692 (Dec. 15, 2014), which shed additional light on the jurisdictional requirements found in CAFA. Prior to Dart, this Court had presumed that in enacting CAFA, Congress had not intended to deviate from “established principles of state and federal common law,” Miedema, 450 F.3d at 1328–29 (quoting United States v. Baxter Int'l, Inc., 345 F.3d 866, 900 (11th Cir.2003)), which included “construing removal statutes strictly and resolving doubts in favor of remand,” id. at 1328. In Dart, however, the Supreme Court made clear that “no antiremoval presumption attends cases invoking CAFA, which Congress enacted to facilitate adjudication of certain class actions in federal court.” 135 S.Ct. at 554, 2014 WL 7010692, at *6, slip op. at 912-13. This conclusion was driven, in part, by the legislative history, including language found in Senate Report No. 109–14 (2005), which observed that CAFA's “provisions should be read broadly, with a strong preference that interstate class actions should be heard in a federal court if properly removed by any defendant.” Id. at 43, as reprinted in 2005 U.S.C.C.A.N. 3, 41. Applying this binding precedent from the Supreme Court, we may no longer rely on any presumption in favor of remand in deciding CAFA jurisdictional questions. See United States v. Archer, 531 F.3d 1347, 1352 (11th Cir.2008) (holding that an intervening decision of the Supreme Court will overrule our prior precedent if the Supreme Court decision is clearly on point and undermines our prior precedent to the point of abrogation).

Dart also shed light on the necessary contents of a CAFA defendant's notice of removal. There, Dart's notice of removal had alleged that all three CAFA requirements had been met, among other things, charging an amount in controversy of $8.2 million. 135 S.Ct. at 551–52, 2014 WL 7010692, at *3, slip op. at 910-11. In moving to remand, the plaintiff argued that Dart's notice of removal had included “no evidence” proving that the amount in controversy actually exceeded the $5 million threshold requirement. Id. at 551–52, 2014 WL 7010692 at *3, slip op. at 911. Dart responded with a declaration from one of its executive officers, including a detailed damages calculation indicating that the amount in controversy exceeded $11 million. Id. at 551–52, 2014 WL 7010692 at *3, slip op. at 911. Without challenging Dart's new calculation, the plaintiff claimed that the amount-in-controversy submission came too late because it had not been included in the notice of removal, and the district court agreed. Id. at 551–53, 2014 WL 7010692 at *3–4, slip op. at 911. The Supreme Court did not. It held that “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.” Id. at 553, 2014 WL 7010692 at *5, slip op. at 912. In other words, all that is required is a “short and plain statement of the grounds for removal,” including “a plausible allegation that the amount in controversy exceeds the jurisdictional threshold.” Id. at 551, 554, 2014 WL 7010692 at *3, *6, slip op. at 909, 912-13 (quoting 28 U.S.C. § 1446(a)). That is the end of the matter, unless “the plaintiff contests, or the court questions, the defendant's allegation.” Id. at 554, 2014 WL 7010692 at *6, slip op. at 912-13.

In cases like this, however—where the plaintiff contests the defendant's amount in controversy— Dart recognized that the district court must go further. Citing to the CAFA statute, the Supreme Court observed that when a notice of removal's allegations are disputed, the district court must find “ ‘by the preponderance of the evidence, that the amount in controversy exceeds' the jurisdictional threshold.” Id. at 553., 2014 WL 7010692 at *5, slip op. at 912 (quoting 28 U.S.C. § 1446(c)(2)(B)). We have repeatedly held that the removing party bears the burden of proof to establish by a preponderance of the evidence that the amount in controversy exceeds the jurisdictional minimum. S. Fla. Wellness, 745 F.3d at 1315; Pretka, 608 F.3d at 752; Miedema, 450 F.3d at 1330. We've also observed that, in making this calculation, “[a] court may rely...