Frederick v. Hartford Underwriters Insurance
2012 U.S. App. LEXIS 13285
| 10th Cir. | 2012Background
- Frederick filed a putative class action against Hartford in Colorado state court alleging undisclosed information in policies.
- Hartford removed to federal court, arguing CAFA jurisdiction because the amount in controversy could exceed $5,000,000.
- The district court remanded, accepting Frederick’s face-value pleadings of under $5,000,000 and rejecting Hartford’s evidence.
- The district court acknowledged circuit split on the proper removal burden under CAFA but adhered to the face-value approach.
- This court held that a CAFA removal defendant may present its own estimate of stakes and must prove by a preponderance that the amount in controversy exceeds $5,000,000, including potential punitive damages.
- The opinion reverses and remands to apply the preponderance standard; punitive damages may be included only if possible under state law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What standard governs CAFA removal burden? | Frederick | Hartford | Preponderance standard applies; defendant must show by preponderance. |
| Can punitive damages count toward the CAFA amount in controversy? | Frederick | Hartford | Punitive damages may be counted if possible under state law and total could exceed $5,000,000. |
| Should the district court have remanded based on plaintiff’s face-value damages? | Frederick | Hartford | No; evidence and removal facts must be evaluated; plaintiff’s pleadings are not dispositive. |
Key Cases Cited
- McPhail v. Deere & Co., 529 F.3d 947 (10th Cir. 2008) (preponderance-of-evidence standard for jurisdictional facts)
- Bell v. Hershey Co., 557 F.3d 953 (8th Cir. 2009) (post-McPhail adoption of preponderance standard for CAFA)
- Back Doctors Ltd. v. Metro. Prop. & Cas. Ins. Co., 637 F.3d 827 (7th Cir. 2011) (preponderance standard; punitive damages considered if possible)
- Laughlin v. Kmart Corp., 50 F.3d 871 (10th Cir. 1995) (burden on removing party to show underlying facts supporting amount)
- Huffman v. Saul Holdings Ltd. P’ship, 194 F.3d 1072 (10th Cir. 1999) (burden for removal is generally light when plaintiff claims exceed threshold)
- St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (1938) (purpose of amount-in-controversy inquiry; jurisdictional threshold)
- Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536 (7th Cir. 2006) (jurisdictional facts proven by contested assertions; not merits)