Walker v. Trailer Transit, Inc., No. 13–8015.

• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)
• Writing for the Court: SYKES
• Citation: 727 F.3d 819
• Parties: Hubert E. WALKER, on behalf of himself and all others similarly situated, Plaintiff–Petitioner, v. TRAILER TRANSIT, INC., Defendant–Respondent.
• Docket Number: No. 13–8015.
• Decision Date: 23 August 2013

727 F.3d 819

Hubert E. WALKER, on behalf of himself and all others similarly situated, Plaintiff–Petitioner,
v.
TRAILER TRANSIT, INC., Defendant–Respondent.

No. 13–8015.

United States Court of Appeals,
Seventh Circuit.

Submitted July 17, 2013.
Decided Aug. 23, 2013.

[727 F.3d 820]

Richard E. Shevitz, Attorney, Cohen & Malad, Indianapolis, IN, for Plaintiff–Petitioner.

Robert L. Browning, Attorney, Scopelitis, Garvin, Light, Hanson & Feary, P.C., Indianapolis, IN, for Defendant–Respondent.

Before BAUER, CUDAHY, and SYKES, Circuit Judges.

SYKES, Circuit Judge.

Hubert Walker petitions for permission to appeal the district court's denial of his motion to remand this case to state court. See28 U.S.C. § 1453(c)(1). Representing a class of truck owner-operators, Walker sued Trailer Transit, Inc., a broker of trucking services, for breach of contract in Indiana state court. Trailer Transit removed the suit to federal court under the Class Action Fairness Act (“CAFA”), id. § 1332(d)(2). Walker moved to remand, contending that the removal was untimely.

The rules of procedure provide two different removal windows. First, a defendant has 30 days after receiving the's initial pleading to file a notice of removal (or 30 days after receiving the summons if the initial pleading is not required to be served). Id. § 1446(b)(1). However,

if the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt ... of ... an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.

Id. § 1446(b)(3). Under CAFA federal courts have original jurisdiction over class actions on behalf of more than 100 class members if the parties are minimally diverse and the amount in controversy exceeds $5 million. Id. § 1332(d)(2), (d)(5)(B). Walker argued that the notice of removal was untimely because it was filed more than 30 days after Trailer Transit “first ascertained” that the class's theory of damages could result in recovery of

[727 F.3d 821]

more than $5 million. The district judge disagreed and denied the motion to remand. Walker petitioned for permission to appeal.

We have never addressed the standard for determining when the 30–day time period for removal begins to run. Accordingly, we grant Walker's petition to appeal. On the merits we affirm the district court's ruling. The 30–day removal clock is triggered by the defendant's receipt of a pleading or other paper that affirmatively and unambiguously reveals that the case is or has become removable. Here, Trailer Transit never received a pleading or other paper from Walker specifically disclosing the damages demand. Trailer Transit based its notice of removal on its own estimate of damages after Walker introduced a new theory of damages into the case in response to requests for admission. Because the removal clock never started to run, the district court properly denied the motion to remand.

I. Background

This lawsuit concerns a lease agreement between Walker, who owns and operates a long-haul truck, and Trailer Transit, a broker of trucking services. Under the agreement Trailer Transit leased Walker's equipment, and Walker picked up and delivered shipments arranged by Trailer Transit. Trailer Transit was obligated to pay Walker 71% “of the gross revenues derived from use of” the truck, less “all items intended to reimburse [Trailer Transit] for special services.” There are other exceptions to Trailer Transit's responsibility to share revenues, but they are not at issue here.

Walker filed a class-action complaint in Indiana state court asserting that Trailer Transit violated its lease agreements with him and hundreds of other truckers. Walker alleged that Trailer Transit charged “add-on fees” to customers that exceeded the cost of providing special services. Because those fees were allegedly not “intended to reimburse” Trailer Transit, Walker contended that the truckers were entitled to a portion of the fees under the lease agreement. The complaint repeatedly maintains that the truckers are entitled to 71% of Trailer Transit's “profits” from the fees. For example, Walker alleged that “Trailer Transit billed the customer $1665 for truck ‘escort services' ... that cost Trailer Transit only $200 (a profit of $1465), yet Trailer Transit retained 100% of the charge.”

The state court certified the case as a class action, and the case proceeded to briefing on Trailer Transit's motion for summary judgment. In its motion Trailer Transit argued that the plaintiffs' theory of damages tied to a percentage of “profits” was untenable. According to Trailer Transit, there were only two feasible options for recovery: either a fee was “intended to reimburse” Trailer Transit so it could keep the whole fee, or a fee was not “intended to reimburse” Trailer Transit so the truckers would be entitled to 71% of the entire fee. But the complaint alleged that truckers were entitled to 71% of the profits from the fee. The language of the lease agreement, Trailer Transit argued, could not support an interpretation entitling the class to that measure of damages.

Walker's response, filed on November 19, 2012, included this explanation of how a jury could award damages based on either Trailer Transit's “profits” or based on the entire “fees”:

A reasonable jury could draw at least two conclusions from the circumstance where Trailer Transit charged an Add–On Fee in an amount that grossly exceeded its costs: (A) the jury could conclude that the entire fee was a scam fee that was not ‘intended to reimburse’

[727 F.3d 822]

Trailer Transit, and therefore that 71% of the entire fee should have been paid to the Drivers; or (B) the jury could conclude that the portion of the fee that exceeded Trailer Transit's costs was a scam fee that was ‘not intended to reimburse’ it, and therefore that 71% of that excess should have been paid to the Drivers. The Plaintiff has never limited his theory of recovery to a single one of these two possibilities, and both are consistent with the language of the Lease Agreement.

Soon after this response was filed, Trailer Transit's attorney sent an e-mail to Walker's attorney seeking to clarify whether the class was seeking 71% of the entire fees, rather than just 71% of Trailer Transit's profits from the fees. Walker's attorney responded by copying and pasting the above passage from the summary judgment response. Trailer Transit then served requests for admission on Walker formally requesting clarification of the theory of damages. On December 21, 2012, Walker responded, admitting that the class was seeking 71% of the entire fees.

Within 30 days of receiving Walker's response to the requests for admission, Trailer Transit filed a notice of removal under CAFA.¹See28 U.S.C. § 1453(b). The notice of removal included an affidavit from a Trailer Transit executive estimating the total damages at stake. According to the executive, the possible damages could exceed $5 million if the class sought 71% of the entire amount of the disputed fees, but not if the class sought 71% of the profits from those fees. Walker did not contest this analysis and acknowledged that CAFA's amount-in-controversy requirement was satisfied. But he moved to remand on timeliness grounds, arguing that Trailer Transit became aware earlier in the litigation that the class sought 71% of the entire amount of the disputed fees and thus satisfied the amount-in-controversy requirement. Specifically, Walker argued that the 30–day clock started when he filed his summary-judgment response, or at the...