Johnson v. Pushpin Holdings, LLC
2014 U.S. App. LEXIS 6554
| 7th Cir. | 2014Background
- Class action originally filed in Illinois state court alleging Pushpin Holdings operated as an unlicensed debt collector and committed abuse of process and malicious prosecution in ~1,100 small-claims suits.
- Plaintiffs’ complaint stated aggregate damages cap: $1.1M compensatory + $2.0M punitive + $0.4M attorneys’ fees = $3.5M, below the CAFA $5M removal threshold.
- Pushpin removed the case under the Class Action Fairness Act (CAFA); as proponent of removal it must show more than $5M in controversy.
- District court remanded, applying precedent that a party opposing remand need only plausibly show >$5M and remand is required only if plaintiff shows it is legally impossible to recover that amount. District court also relied on Rooker–Feldman as barring many class claims.
- Seventh Circuit granted interlocutory appeal, held plaintiffs’ unattested complaint statement does not bind the class for CAFA purposes, rejected Rooker–Feldman bar as applied, and reversed remand for further factual determination of amount in controversy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Effect of complaint’s stated damages cap on CAFA removability | Plaintiffs: the complaint’s express cap ($3.5M) limits recovery and requires remand. | Pushpin: the complaint’s unattested statement is not binding; actual potential damages may exceed $5M so removal is proper. | Unattested complaint language does not bind class for CAFA; plaintiffs did not irrevocably limit recovery. |
| Standard for defeating removal when defendant plausibly alleges >$5M | Plaintiffs: if defendant merely plausibly alleges >$5M, plaintiff must show legal impossibility to recover more. | Pushpin: plausibility of defendant’s estimate suffices to keep case in federal court unless plaintiff has a binding limitation. | Court rejected requiring plaintiffs to prove “legal impossibility” to avoid remand; but held here plaintiff made no binding limitation, so defendant’s plausible estimate can prevent remand. |
| Validity of pre-certification stipulation or affidavit limiting damages under Illinois law | Plaintiffs: complaint statements or stipulations limit class recovery. | Pushpin: Illinois law requires a binding stipulation or affidavit to limit damages; mere complaint language insufficient. | Seventh Circuit: Illinois requires an attested, binding stipulation/affidavit to limit damages; unattested complaint language insufficient. |
| Applicability of Rooker–Feldman to bar class claims based on allegedly fraudulent state-court judgments | Plaintiffs: many class claims are barred by Rooker–Feldman because they seek to overturn state judgments. | Pushpin: Rooker–Feldman does not bar federal claims for damages based on underlying fraud that produced the state judgment; only direct attack on state judgment is barred. | Court: Rooker–Feldman did not bar the fraud/damages claims; district court erred relying on Rooker–Feldman to remand. |
Key Cases Cited
- Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345 (U.S. 2013) (pre-certification stipulation by named plaintiff does not prevent federal removal under CAFA)
- Back Doctors Ltd. v. Metropolitan Property & Casualty Ins. Co., 637 F.3d 827 (7th Cir.) (Illinois requires binding stipulation/affidavit to limit damages for removal purposes)
- ABM Security Servs., Inc. v. Davis, 646 F.3d 475 (7th Cir.) (plausibility standard discussed in CAFA amount-in-controversy context)
- St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (U.S.) (traditional ‘‘legal certainty’’ test for amount-in-controversy disputes)
- Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (U.S. 2005) (federal jurisdiction evaluated at time of removal)
- Oshana v. Coca-Cola Co., 472 F.3d 506 (7th Cir.) (plaintiff’s complaint amount does not control jurisdiction absent binding limitation)