Delores Lewis v. Verizon Communications, Inc.
627 F.3d 395
| 9th Cir. | 2010Background
- This CAFA removal appeal concerns whether the district court properly remanded for lack of $5,000,000 in controversy.
- Verizon removed to federal court based on an affidavit claiming ESBI-related charges exceeded $5 million in California.
- Plaintiff Lewis alleged unauthorized charges for premium ESBI content billed by Verizon; the complaint did not specify damages.
- The district court remanded, adopting a distinction between unauthorized and authorized charges and rejecting the removal evidence.
- The court of appeals vacated the remand order, holding Verizon’s total billings could establish the amount in controversy.
- This decision aligns with Spivey and Strawn, allowing evidence outside the complaint to determine the amount in controversy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether total ESBI billings can satisfy CAFA's amount in controversy | Lewis argues total billings cannot exceed $5M since unauthorized charges are the only claimed damages. | Verizon contends total billings constitute the amount in controversy since unauthorized charges are in dispute and refunds are possible. | Yes; total billings can establish the amount in controversy. |
| Burden of proof to establish CAFA jurisdiction when the complaint is silent on damages | Plaintiff contends insufficient evidence supports $5M; district court should look to the pleadings only. | Verizon bears burden to show potential damages exceed $5M using evidentiary showing. | Verizon bears the burden; evidentiary record may establish the amount in controversy. |
| Standard of proof applicable when the complaint does not specify damages | Plaintiff urges a pleading-based or lower standard limits the amount in controversy to unauthorized charges only. | Defendant relies on a preponderance-of-the-evidence standard to show stakes exceed $5M. | Preponderance of the evidence applies. |
| Whether district court erred by requiring a distinction between authorized and unauthorized charges | Plaintiff argued such a distinction is not supported by the complaint and lacks evidentiary basis. | District court misapplied law by assuming only unauthorized charges are in controversy. | District court erred; entire billings may be in controversy. |
| Remand order disposition on CAFA removal | Lewis seeks remand based on lack of CAFA-jurisdictional proof. | Verizon meets CAFA jurisdiction with total billings evidence. | Remand vacated; case remanded to district court for further proceedings. |
Key Cases Cited
- Guglielmino v. McKee Foods Corp., 506 F.3d 696 (9th Cir. 2007) (burden on removing party to prove amount in controversy when complaint silent)
- Lowdermilk v. U.S. Bank Nat’l Ass’n., 479 F.3d 994 (9th Cir. 2007) (pre-satisfaction burden to show amount in controversy)
- Spivey v. Vertrue, Inc., 528 F.3d 982 (7th Cir. 2008) (stakes exceed $5M when defendant’s charges exceed threshold)
- Strawn v. AT&T Mobility LLC, 530 F.3d 293 (4th Cir. 2008) (evidence of min. damages can establish jurisdictional amount)
- Abrego Abrego v. Dow Chemical Co., 443 F.3d 676 (9th Cir. 2006) (CAFA burden remains on proponent of federal jurisdiction)
- Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 (U.S. 2005) (amount in controversy concept central to diversity jurisdiction)
- Amalgamated Transit Union v. Laidlaw Transit Services, Inc., 435 F.3d 1140 (9th Cir. 2006) (CAFA-related prompt disposition and appellate timelines)
- McPhail v. Deere & Co., 529 F.3d 947 (10th Cir. 2008) (amount in controversy is an estimate of litigation stakes, not liability)
- Indianapolis v. Chase Nat’l Bank, 314 U.S. 63 (U.S. 1941) (foundational view of diversity jurisdiction's purpose)