28 F.4th 850
7th Cir.2022Background
- Plaintiff Donna Schutte sought electronic copies of her medical records from Wisconsin provider ProHealth via vendor Ciox and was charged "Per Page Copy (Paper)" and an "Electronic Data Archive Fee."
- Wisconsin statute enumerates per-page fees for paper copies but is silent on electronic-copy fees; the Wisconsin Court of Appeals (Banuelos) read that silence to prohibit charges for electronic copies.
- Schutte filed a putative class action in Wisconsin state court seeking compensatory and exemplary damages (up to $25,000 per claimant for "knowing and willful" violations) for others charged similar impermissible fees.
- Ciox removed under CAFA, asserting: (1) numerosity and minimal diversity are satisfied, and (2) amount in controversy exceeds $5 million; it also argued CAFA’s local controversy exception did not apply because a similar class action (Deming) had been filed within three years.
- The district court denied remand, finding Ciox offered a plausible good-faith estimate that the amount in controversy exceeds $5 million and that Deming involved the same or similar factual allegations.
- Schutte obtained interlocutory review under 28 U.S.C. §1453(c); the Seventh Circuit affirmed the denial of remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Amount in controversy (CAFA $5M threshold) | Ciox failed to show in controversy > $5M; punitive/exemplary damages unlikely and speculative | Complaint allegations + Ciox declaration (727,500 requests) plausibly put > $5M in controversy; punitive damages count toward threshold | Held: Amount-in-controversy satisfied by complaint allegations and Ciox declaration; good-faith, plausible estimate is enough |
| CAFA local-controversy exception (28 U.S.C. §1332(d)(4)(A)(ii)) | Deming (prior Montana suit) differs because it asserts state-law claims in a different state; geography/legal differences defeat "same or similar factual allegations" | Prior action (Deming) alleged essentially identical facts (charging per-page and archive fees for electronic records); CAFA requires only same or similar factual allegations, not identical legal theories or same-state claims | Held: Exception inapplicable—Deming involves the same or similar factual allegations and was brought on behalf of other persons; geographic/state-law differences do not avoid the exception |
Key Cases Cited
- Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81 (2014) (removal: removing party must provide a plausible good-faith estimate; judge decides by preponderance)
- Roppo v. Travelers Commercial Insurance Co., 869 F.3d 568 (7th Cir. 2017) (de novo review of jurisdictional questions; burden on removing party)
- Blomberg v. Service Corp. International, 639 F.3d 761 (7th Cir. 2011) (removing party need only supply a plausible good-faith estimate of amount in controversy)
- Brill v. Countrywide Home Loans, Inc., 427 F.3d 446 (7th Cir. 2005) (amount in controversy focuses on what is "in controversy," not probable recovery)
- Dutcher v. Matheson, 840 F.3d 1183 (10th Cir. 2016) ("same or similar factual allegations" focuses on factual overlap, not identical legal theories)
- Deming v. Ciox Health, LLC, 475 F. Supp. 3d 1160 (D. Mont. 2020) (prior similar class action alleging fees for electronic records)
- Saint Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283 (1938) (legal-certainty standard for amount in controversy)
- Back Doctors Ltd. v. Metropolitan Property & Casualty Insurance Co., 637 F.3d 827 (7th Cir. 2011) (potential punitive damages may be counted in amount-in-controversy calculus)