Standard Fire Ins. Co. v. Knowles, No. 11–1450.

• Court: United States Supreme Court
• Writing for the Court: Justice BREYER delivered the opinion of the Court.
• Citation: 185 L.Ed.2d 439,568 U.S. 588,133 S.Ct. 1345
• Parties: The STANDARD FIRE INSURANCE COMPANY, Petitioner v. Greg KNOWLES.
• Docket Number: No. 11–1450.
• Decision Date: 19 March 2013

568 U.S. 588
133 S.Ct. 1345
185 L.Ed.2d 439

The STANDARD FIRE INSURANCE COMPANY, Petitioner
v.
Greg KNOWLES.

No. 11–1450.

Supreme Court of the United States

Argued Jan. 7, 2013.
Decided March 19, 2013.

Theodore J. Boutrous, Jr., Los Angeles, CA, for Petitioner.

David C. Frederick, Washington, DC, for Respondent.

Stephen E. Goldman, Wystan M. Ackerman, Robinson & Cole LLP, Hartford, CT, Lyn P. Pruitt, Mitchell, Williams, Selig, Gates & Woodyard PLLC, Little Rock, AR, Theodore J. Boutrous, Jr., Counsel of Record, Theane Evangelis Kapur, Joshua S. Lipshutz, Gibson, Dunn & Crutcher LLP, Los Angeles, CA, Amir C. Tayrani, Gibson, Dunn & Crutcher LLP, Washington, DC, for Petitioner.

Jonathan S. Massey, Massey & Gail, LLP, Washington, DC, David C. Frederick, Counsel of Record, Brendan J. Crimmins, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Washington, DC, Michael B. Angelovich, Brad E. Seidel, Christopher R. Johnson, Nix Patterson & Roach, LLP, Austin, TX, Matt Keil, John C. Goodson, Keil & Goodson, P.A., Texarkana, AR, Richard E. Norman, R. Martin Weber, Jr., Crowley Norman LLP, Houston, TX, for Respondent.

Justice BREYER delivered the opinion of the Court.

568 U.S. 590

The Class Action Fairness Act of 2005 (CAFA) provides that the federal "district courts shall have original jurisdiction" over a civil "class action" if, among other things, the "matter in controversy exceeds the sum or value of $5,000,000." 28 U.S.C. § 1332(d)(2), (d)(5). The statute adds that "to determine whether the matter in controversy exceeds the sum or value of $5,000,000," the "claims of the individual class members shall be aggregated." § 1332(d)(6).

The question presented concerns a class-action plaintiff who stipulates, prior to certification of the class, that he, and the class he seeks to represent, will not seek damages that exceed $5 million in total. Does that stipulation remove the case from CAFA's scope? In our view, it does not.

I

In April 2011 respondent, Greg Knowles, filed this proposed class action in an Arkansas state court against petitioner, the Standard Fire Insurance Company. Knowles claimed that, when the company had made certain homeowner's insurance loss payments, it had unlawfully failed to

568 U.S. 591

include a general contractor fee. And Knowles sought to certify a class of "hundreds, and possibly thousands" of similarly harmed Arkansas policyholders. App. to Pet. for Cert. 66. In describing the relief sought, the complaint says that the "Plaintiff and Class stipulate they will seek to recover total aggregate damages of less than five million dollars." Id., at 60. An attached affidavit stipulates that Knowles "will not at any time during this case ... seek damages for the class ... in excess of $5,000,000 in the aggregate." Id., at 75.

133 S.Ct. 1348

On May 18, 2011, the company, pointing to CAFA's jurisdictional provision, removed the case to Federal District Court. See 28 U.S.C. § 1332(d) ; § 1453. Knowles argued for remand on the ground that the District Court lacked jurisdiction. He claimed that the "sum or value" of the "amount in controversy" fell beneath the $5 million threshold. App. to Pet. for Cert. 2. On the basis of evidence presented by the company, the District Court found that that the "sum or value" of the "amount in controversy" would, in the absence of the stipulation, have fallen just above the $5 million threshold. Id., at 2, 8. Nonetheless, in light of Knowles' stipulation, the court concluded that the amount fell beneath the threshold. The court consequently ordered the case remanded to the state court. Id., at 15.

The company appealed from the remand order, but the Eighth Circuit declined to hear the appeal. Id., at 1. See 28 U.S.C. § 1453(c)(1) (2006 ed., Supp. V) (providing discretion to hear an appeal from a remand order). The company petitioned for a writ of certiorari. And, in light of divergent views in the lower courts, we granted the writ. Compare Frederick v. Hartford Underwriters Ins. Co., 683 F.3d 1242, 1247 (C.A.10 2012) (a proposed class-action representative's "attempt to limit damages in the complaint is not dispositive when determining the amount in controversy"); with Rolwing v. Nestle Holdings, Inc., 666 F.3d 1069, 1072 (C.A.8 2012) (a precertification "binding stipulation limiting damages

568 U.S. 592

sought to an amount not exceeding $5 million can be used to defeat CAFA jurisdiction").

II

CAFA provides the federal district courts with "original jurisdiction" to hear a "class action" if the class has more than 100 members, the parties are minimally diverse, and the "matter in controversy exceeds the sum or value of $5,000,000." 28 U.S.C. § 1332(d)(2), (d)(5)(B). To "determine whether the matter in controversy" exceeds that sum, "the claims of the individual class members shall be aggregated." § 1332(d)(6). And those "class members" include "persons (named or unnamed) who fall within the definition of the proposed or certified class." § 1332(d)(1)(D) (emphasis added).

As applied here, the statute tells the District Court to determine whether it has jurisdiction by adding up the value of the claim of each person who falls within the definition of Knowles' proposed class and determine whether the resulting sum exceeds $5 million. If so, there is jurisdiction and the court may proceed with the case. The District Court in this case found that resulting sum would have exceeded $5 million but for the stipulation. And we must decide whether the stipulation makes a critical difference.

In our view, it does not. Our reason is a simple one:...