Strawn v. At & T Mobility, Inc.

• Decision Date: 26 September 2007
• Docket Number: Civil Action No. 2:06-0988.
• Court: U.S. District Court — Southern District of West Virginia
• Parties: James STRAWN and James Staton, individually and on behalf of all others similarly situated, Plaintiffs, v. AT & T MOBILITY, INC., f/k/a Cingular Wireless LLC<SMALL><SUP>1</SUP></SMALL>, Defendant.

513 F.Supp.2d 599

James STRAWN and James Staton, individually and on behalf of all others similarly situated, Plaintiffs, v. AT & T MOBILITY, INC., f/k/a Cingular Wireless LLC¹, Defendant.

Civil Action No. 2:06-0988.

United States District Court, S.D. West Virginia, at Charleston.

September 26, 2007.

Harry F. Bell, Jr., Tim J. Yianne, William L. Bands, Bell & Bands, Charleston, WV, for Plaintiffs.

Evan M. Tager, Jack L. Wilson, Mayer Brown Rowe & Maw, Jennifer N. Waters, Lynn E. Parseghian, Crowell & Moring, Washington, DC, Jeffrey M. Wakefield, Flaherty Sensabaugh & Bonasso, Charleston, WV, Seamus C. Duffy, William M. Connolly, William M. McSwain, Drinker Biddle & Reath, Philadelphia, PA, for Defendant.

MEMORANDUM OPINION II. AND ORDER

JOHN T. COPENHAVER, JR., District Judge.

Pending is a motion to remand filed by plaintiffs on December 1, 2006.

I.

According to the class action complaint, defendant AT & T Mobility, Inc. f/k/a Cingular Wireless LLC ("Cingular") imposed a $2.99 monthly charge for a "roadside assistance" service plan which plaintiffs never requested. (Compl. ¶¶ 1, 5). The customer had to identify the charge and affirmatively opt out in order not to be billed the $2.99 monthly fee. (Id. ¶ 5). The benefits of the roadside assistance plan "include towing service, ... [dead] battery service, flat tire assistance, fuel delivery service, lockout assistance, and key replacement." (Id. ¶ 4).

On September 12, 2006, the plaintiffs filed this class action in Kanawha County Circuit Court alleging the unauthorized $2.99 monthly fee violated the West Virginia Consumer Credit and Protection Act ("WVCCPA"), W. Va.Code § 46A-1-101, et seq. (Compl. ¶¶ 40-45). The complaint alleges a single cause of action which more specifically contends that the unauthorized $2.99 fee was an unfair or deceptive act or practice in violation of W. Va.Code § 466-104, as defined by W. Va.Code §§ 466-102(7)(L) and (M). (Id. at ¶¶ 43, 45), On November 21, 2006, defendant removed the action based on jurisdiction conferred by the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332(d). (Not. of Rem. ¶¶ 4, 10-12). Plaintiffs respond that federal jurisdiction is lacking because the amount in controversy does not exceed $5,000,000. (Mot. to Rem. at 2).

II.

A. CAFA

CAFA's key provision is its sweeping amendment of the federal diversity jurisdiction statute, 28 U.S.C. § 1332. The amendment to 28 U.S.C. §§ 1332(d)(2), (d)(5) provides:

(2) The district courts shall have original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs, and is a class action in which —

(A) any member of a class of plaintiffs is a citizen of a State different from any defendant;

(B) any member of a class of plaintiffs is a foreign state or a citizen or subject of a foreign state and any defendant is a citizen of a State; or

(C) any member of a class of plaintiffs is a citizen of a State and any defendant is a foreign state or a citizen or subject of a foreign state.

. . .

(5) Paragraphs (2) through (4) shall not apply to any class action in which —

(A) the primary defendants are States, State officials, or other governmental entities against whom the district court may be foreclosed from ordering relief; or

(B) the number of members of all proposed plaintiff classes in the aggregate is less than 100.

And so, the four CAFA prerequisites giving federal courts original jurisdiction in class actions consist of: (1) the aggregate amount in controversy must exceed $5,000,000; (2) any member of the plaintiff class must be a citizen of a state different from any defendant ("minimal diversity"); (3) the primary defendants must not be states, state officials, or other government entities against whom the district court may be foreclosed from ordering relief; and (4) the number of the plaintiff class must be 100 or more.

Both plaintiffs and defendant agree minimal diversity is present inasmuch as plaintiffs are West Virginia citizens and defendant is incorporated in Delaware with its principal place of business in Georgia. (Mot. to Rem. at 1; Compl. ¶ 9; Not. of Rem. ¶ 3). Cingular is clearly not a state, state official, or government entity. Plaintiffs do not dispute that the putative class would be substantially larger than 100. (Mot. to Rem. at 1-2). Plaintiffs challenge only the amount-in-controversy requirement. (Id. at 1).

B. Plaintiffs' Attempts to Limit Amount in Controversy

1. Stipulations of Putative Class Representatives and Counsel

The plain language of the stipulations of both putative class representatives Strawn and Staton simply do nothing to limit the aggregate amount in controversy to $5,000,000 or less. (Strawn Stipulation on Limitation of Damages, attached as Ex. A to Compl.; Staton Stipulation on Limitation of Damages, attached as Ex. B to Compl.). They merely make statements about their individual damages such as "I will not accept an award exceeding $75,000.00 ..." (Strawn Stipulation on Limitation of Damages ¶ 3, attached as Ex. A to Compl.; Staton Stipulation on Limitation of Damages ¶ 3, attached as Ex. B to Compl.). They do not purport to limit recovery of the other putative class members. (Id.).

The stipulation of plaintiffs' counsel states, in relevant part, the following: "Bell & Bands, PLLC will not accept an aggregate award for attorney fees and costs exceeding $5,000,000, inclusive of any other damages awarded to each named Plaintiff and Class member." (Bell Stipulation ¶ 5, attached as Ex. C to Compl.).

Although courts have recognized binding stipulations under certain circumstances can amount to an agreement not to seek damages equal to or in excess of the jurisdictional amount, De Aguilar v. Boeing Company, 47 F.3d 1404, 1412 (5th Cir. 1995); McCoy v. Erie Ins. Co., 147 F.Supp.2d 481, 485-486 (S.D.W.Va.2001); Hicks v. Herbert, 122 F.Supp.2d 699, 701 (S.D.W.Va.2000), the stipulations in this case do not rise to that level.

2. The Complaint

Paragraph 17 of the complaint states "[t]he aggregate damages for all purposes, exclusive of interest and costs, do not exceed $5,000,000 in this action." In the ad damnum clause the following relief is requested:

4. That this Court award Plaintiffs and all Class members damages of which the individual recoveries do not exceed $75,000 for Plaintiffs or any member of the Class, inclusive of interest and attorneys' fees and all relief of any nature sought herein;

. . .

6. That this Court award Plaintiffs and all Class members all attorney fees and costs incurred in the prosecution of this action, not to exceed $75,000 for each named Plaintiff and Class member, inclusive of any other damages awarded to each named Plaintiff and Class member.

(Wherefore Cl. ¶¶ 4, 6).

The United States Supreme Court, in dicta, has stated that a plaintiff can "resort to the expedient of suing for less than the jurisdictional amount, and though he would be justly entitled to more, the defendant cannot remove." St., Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 294, 58 S.Ct. 586, 82 L.Ed. 845 (1938). "Many courts have seized on the ... Red Cab dicta as a bright-line rule compelling remand where a specific sum less than the jurisdictional amount is stated." McCoy, 147 F.Supp.2d at 484. The statement in Red Cab was premised on, the notion that plaintiffs would be bound by the amount alleged in the ad damnum clause of the complaint. See De Aguilar, 47 F.3d at 1410.²

No fewer than four West Virginia district court cases have held that the ability of plaintiffs in West Virginia to retract any restriction on damages made in a complaint requires West Virginia courts to depart from the general rule set forth in Red Cab. Asbury-Casto v. GlaxoSmithKline, Inc., 352 F.Supp.2d 729, 733 (N.D.W.Va. 2005); Virden v. Altria Group, Inc. 304 F.Supp.2d 832, 847 (N.D.W.Va.2004) ("In general, courts treat the amount requested by the plaintiff in the state court as the amount in controversy. 14C Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3725 (3d ed.1998). This rule can be problematic, however, in states, such as West Virginia, where recovery in the courtroom is not limited to the amount demanded in the complaint."); McCoy, 147 F.Supp.2d at 484-485 ("Many state court systems, including West Virginia, have interpreted their civil rules amendments in a way that encourages an adroit plaintiff to deny a diverse defendant access to the federal forum and yet, later, expose that defendant to a damage award that would have supported exercise of federal jurisdiction."); Hicks, 122 F.Supp.2d at 701.

The Supreme Court of Appeals of West Virginia explained that under Rules 15(b) and 54 of the West Virginia Rules of Civil Procedure it is "not the amount stated in the ad damnum clause but the actual proof of the plaintiffs damages which will control the issue." Berry v. Nationwide Mut. Fire Ins. Co., 181 W.Va. 168, 177, 381 S.E.2d 367, 376 (1989). In West Virginia, the propriety of the verdict is tested by the evidence to support the recovery and not by the amount of the ad damnum clause. Id.

The cases cited by plaintiffs in support of their position that limitations in ad damnum clauses preclude removal are not helpful inasmuch as all those cases are from jurisdictions outside West Virginia. For example, in Chavis v. Fidelity Warranty Services, Inc., 415 F.Supp.2d 620, 627 (D.S.C.2006), the federal district court used the general rule from Red Cab regarding the plaintiffs ability to choose to seek less than the amount-in-controversy to avoid federal jurisdiction. However, that case was applying South Carolina law where, unlike West Virginia,

[p]laintiffs could have limited the damages alleged in their complaint to escape possible removal to federal court under CAFA. See S.C. R. of Civ. P. 8(a)(3) (allowing a party to plead the total amount in controversy and limit the claim ...