Lowe v. Revenue Management Group, Inc.
2:22-cv-00112
S.D.W. VaJun 2, 2022Background
- Plaintiff filed a putative class action in Boone County, WV (May 12, 2021) alleging violations of the West Virginia Consumer Credit and Protection Act and the Collection Agency Act, seeking statutory penalties ($1,000 per violation) for a class of roughly 9,314 members.
- Defendants received the complaint and discovery in May 2021, then filed a motion to dismiss (June 2021), sought stays of discovery, and litigated in state court through hearings and briefing.
- The state court denied Defendants’ motion to dismiss on January 24, 2022; Defendants filed an answer and a protective-order motion on January 31, 2022.
- Plaintiff sent a demand letter on February 7, 2022 stating an approximate $9.3 million demand; Defendants removed the action to federal court under CAFA on February 28, 2022.
- Plaintiff moved to remand, arguing removal was untimely and waived and that the amount in controversy was ascertainable earlier; Defendants argued removal was timely upon receipt of the demand and that earlier investigation was not required.
- The district court granted remand, concluding Defendants waived their right to remove by litigating in state court and retreating to federal court after an unfavorable ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver / timeliness of removal | Defendants "slept on" removal rights and only removed after losing motion to dismiss | Removal was timely under §1446(b)(3) once Defendants received an "other paper" (demand) showing removability | Court: Waiver — Defendants' state-court litigation and post-denial removal show testing the waters; removal untimely |
| Amount in controversy / "other paper" under CAFA | Complaint + discovery made class size and statutory penalty apparent, so amount was ascertainable earlier | No unambiguous amount until Plaintiff's Feb. 7 demand; defendants not required to independently investigate earlier | Court: Amount-in-controversy met, but defendant had duty to apply reasonable intelligence; appearance of gamesmanship supports waiver finding |
| Whether state-court actions were "compelled" (affirmative relief) | Defendants actively sought relief (dismissal, stays, hearings) and thus waived removal | Defendants say motions were necessary to protect defenses and avoid default | Court: Not convinced actions were compelled; filing motions and stay requests were voluntary and weigh toward waiver |
Key Cases Cited
- West Virginia ex rel. McGraw v. CVS Pharm., Inc., 646 F.3d 169 (4th Cir. 2011) (sets out CAFA jurisdictional elements)
- Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547 (2014) (no anti-removal presumption for CAFA cases)
- Strawn v. AT & T Mobility LLC, 530 F.3d 293 (4th Cir. 2008) (defendant bears burden by preponderance to establish federal jurisdiction)
- Graiser v. Visionworks of America, Inc., 819 F.3d 277 (6th Cir. 2016) (defendant must apply reasonable intelligence to plaintiff’s pleadings when assessing removability)
- Romulus v. CVS Pharmacy, Inc., 770 F.3d 67 (1st Cir. 2014) (reasonable calculations from plaintiff materials can establish CAFA amount)
- Mulcaney v. Columbia Organic Chemicals Co., Inc., 29 F.3d 148 (4th Cir. 1994) (authority on waiver and consequences of active participation in state court)