Lowery v. Alabama Power Co.
| Decision Date | 11 April 2007 |
| Docket Number | No. 06-16325.,No. 06-16324.,06-16324.,06-16325. |
| Citation | 483 F.3d 1184 |
| Parties | Katie LOWERY, Richard Lowery, Johnny Jones, Angela Jones, Dennis Wingo, and other plaintiffs as listed on complaint, Plaintiffs-Appellees, v. ALABAMA POWER COMPANY, Honeywell International, Inc., Hanna Steel Corporation, Certainteed Corp., et al., Defendants-Appellants. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Ed R. Haden, Michael D. Freeman, Spencer M. Taylor, Teresa G. Minor, Balch & Bingham, LLP, Alfred F. Smith, Jr., Sela Stroud Blanton, Bainbridge, Mims, Rogers & Smith, LLP, Joel M. Kuehnert, Bradley, Arant, Rose & White, LLP, Jackson R. Sharman, William Earl Bonner, W. Larkin Kadney, IV, Lightfoot, Franklin & White, L.L.C., James C. Huckaby, Jr., John Winston Scott, Huckaby, Scott & Dukes, P.C., Birmingham, AL, Scott Burnett Smith, Bradley, Arant, Rose & White, Huntsville, AL, for Defendants-Appellants.
Lloyd W. Gathings, II, Honora McKeown Gathings, Richard Warren Kinney, III, Gathings Law, Birmingham, AL, for Plaintiffs-Appellees.
Appeals from the United States District Court for the Northern District of Alabama.
Before TJOFLAT, BARKETT and MARCUS, Circuit Judges.
In these consolidated appeals, we are confronted with the task of interpreting several provisions of the Class Action Fairness Act of 2005 ("CAFA" or the "Act"), Pub.L. No. 109-2, 119 Stat. 4 (). The plaintiffs-appellees (the "plaintiffs") sued the defendants-appellants (the "defendants") in an Alabama circuit court, alleging various tort claims under state law. The defendants removed the case to federal district court, citing CAFA as a basis for removal. The district court, upon motion to remand, found that the defendants did not carry their burden of establishing that the court had jurisdiction under the Act and remanded the case to the Alabama court. CAFA authorizes appeals of remand orders in cases that fall within the Act's ambit; the defendants petitioned this court for leave to take such an appeal, and we granted their petition.
To decide this case, we must unravel some of the mysteries of CAFA's cryptic text. We must also consider existing principles of law governing removal generally — who bears the burden of establishing that removal is proper, how that party can satisfy its burden, and how a district court must proceed in evaluating its jurisdiction after removal.
On January 24, 2003, Katie Lowery and eight other residents of Jefferson County, Alabama1 filed suit in the Jefferson County Circuit Court against twelve corporations2 and 120 fictitious entities for discharging particulates and gases into the atmosphere and ground water. Their complaint framed in six counts,3 alleged that this pollution caused them to suffer personal injuries, physical pain and mental anguish, and the loss of the use and enjoyment of their property; each plaintiff demanded compensatory and punitive damages of $1,250,000. Between January 24, 2003, and June 20, 2006, the plaintiffs amended their complaint three times, adding more than four hundred plaintiffs4 and amending their prayers for relief.5 The amended prayers for relief no longer claimed $1,250,000 on each claim, but instead, sought "compensatory and punitive damages in an amount . . . in excess of the [court's] minimum jurisdictional limit."6 The third and final amended complaint, filed on June 20, 2006, added two defendants: Alabama Power Company ("Alabama Power") and Filler Products Company, Inc. ("Filler Products").
On July 17, 2006, Alabama Power filed a notice of removal under the "mass action" provision of CAFA, 28 U.S.C. § 1332(d)(11), in the United States District Court for the Northern District of Alabama. In its notice of removal, Alabama Power asserted that the district court had jurisdiction over the case because the requisite diversity of citizenship existed, the complaint consisted of the claims of more than 100 persons, each claim was for an amount in excess of $75,000, the claims totaled in excess of $5,000,000, and the claims involved common questions of law or fact.7 Alabama Power attached to its notice of removal copies of the original complaint and the third amended complaint.8
The plaintiffs responded to Alabama Power's notice of removal on August 3, 2006 by filing a motion to remand the case to the Jefferson County Circuit Court. Their motion asserted that Alabama Power had not met its burden of establishing federal jurisdiction because nothing in the notice of removal or the complaint indicated the specific amount of damages the plaintiffs were actually claiming.9 As an alternative ground for remanding the case, the plaintiffs asserted that the case fell within the "local controversy" exception to CAFA, 28 U.S.C. § 1332(d)(4).10
Alabama Power filed a supplement to its notice of removal on August 4, articulating three reasons why it believed the district court had subject matter jurisdiction over the case. First, the case involved claims of more than 100 persons. Second, to reach the required minimum total of $5,000,000 in value, each plaintiff's claims would need to yield only $12,500. Third, plaintiffs in recent mass tort actions in Alabama had received either jury verdicts or settlements for greater than $5,000,000.
In addition to supplementing its notice of removal, Alabama Power moved the district court for leave to engage in discovery, attaching to its motion a proposed request for admissions, which we reproduce in the margin.11 Alabama Power requested leave for discovery in the event the court felt that the $5,000,000 jurisdictional amount was not established by Alabama Power's notice of removal and supplement. On August 9, the plaintiffs responded to Alabama Power's discovery request by moving the district court "for leave to take ... depositions of defendant corporations that [were] citizens of the state of Alabama." The plaintiffs sought leave to take these depositions in order to obtain evidence to support their invocation of CAFA's "local controversy" exception.
Two days later, on August 11, the district court held a hearing regarding its jurisdiction. The court did not limit its consideration to its jurisdiction over the claims of Alabama Power, but rather considered its jurisdiction over the action as a whole.12 At the hearing, plaintiffs' counsel orally withdrew their motion to remand the case and conceded jurisdiction.13 The court pressed plaintiffs' counsel on the issue, inquiring, "Lloyd, you and Bill seriously think that one or more of your 400 plaintiffs is going to have a shot at more than $75,000?" Plaintiffs' counsel responded, Despite the plaintiffs' withdrawal of the motion to remand, the court concluded that it would take under advisement the issue of its subject matter jurisdiction. To that end, on August 16, the court ordered the plaintiffs to file, under the constraints of Federal Rule of Civil Procedure 11,14 the names of all plaintiffs whose claims could reasonably be expected to exceed $75,000.15 In its order, the court reserved ruling on Alabama Power's motion to engage in limited discovery.
The plaintiffs responded to the district court's August 16 order the same day it was issued, stating that they lacked sufficient information to admit or deny that each claim was worth $75,000. The next day, they moved the court to set aside its August 16 order or accept their response to that order as adequate. Then, at a hearing held on August 22, plaintiffs' counsel orally moved the court to reinstate their motion to remand, contending that they never conceded federal jurisdiction and that it was Alabama Power's burden to show that each plaintiff's claims amounted to more than $75,000 (as Alabama Power itself had asserted in its notice of removal). Although Alabama Power objected to the plaintiffs' attempt to reinstate their motion to remand, the district court reinstated the motion. Then, before adjourning the hearing, the court queried whether it had jurisdiction to litigate the claims against the defendants who had been made parties to the case prior to CAFA's effective date (the "pre-CAFA defendants") and asked counsel to brief the issue.
On August 29, Alabama Power filed a response to the plaintiffs' motion for reconsideration of the August 16 order. It contended that CAFA's $75,000 provision is an exception to the exercise of the court's jurisdiction, rather than a threshold jurisdictional requirement. In other words, Alabama Power argued that jurisdiction attaches upon a showing of at least 100 plaintiffs and a total amount in controversy exceeding $5,000,000 (after which the court must dismiss individual plaintiffs whose claims do not meet the $75,000 exception).16 The plaintiffs replied to Alabama Power's response on September 11, contending that Alabama Power bore the burden of establishing that the claims of each individual plaintiff exceeded $75,000. The plaintiffs further asserted that Alabama Power had not demonstrated that the claims of even one plaintiff exceeded $75,000, or that the total amount in controversy exceeded $5,000,000. Finally, the plaintiffs — expanding upon the court's concerns about its power to entertain the claims against the pre-CAFA defendants — argued that the court lacked jurisdiction over the entire case because the action was originally filed prior to CAFA's effective date.
On October 12, 2006, the district court granted the plaintiffs' motion for reconsideration of its August 16 order and entered an order remanding the case to the Jefferson County Circuit Court. Alabama Power moved the court to reconsider its decision, pointing out that some of the factual assertions in the memorandum opinion accompanying the October 12 order were incorrect.17 The court granted the motion and issued a substitute order and accompanying memorandum opinion on October 24, 2006. Lowery v. Honeywell Int'l Inc., 460 F.Supp.2d 1288 (N.D....
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