865 F.3d 189
4th Cir.2017Background
- Plaintiff Michael Scott filed a putative class action in Maryland state court alleging Cricket sold CDMA-locked Samsung Galaxy S4 phones that became useless after Cricket shut down its CDMA network; class limited to Maryland citizens who purchased such phones between July 12, 2013 and March 13, 2014.
- Scott alleged breach of express and implied warranties and MMWA claims; he was the sole named plaintiff.
- Cricket removed under CAFA, asserting minimal diversity, more than 100 class members, and an amount in controversy exceeding $5,000,000.
- In its removal notice and declarations, Cricket produced records showing ~50,000 CDMA handsets shipped/activated in Maryland (later revised to 47,760 purchasers who listed Maryland addresses) and used a conservative $200 per-phone estimate to assert >$9,500,000 in controversy.
- Scott moved to remand, arguing Cricket’s evidence was overinclusive because listing a Maryland address does not prove Maryland citizenship/domicile; the district court granted remand, finding Cricket had not proven jurisdiction by a preponderance.
- The Fourth Circuit vacated and remanded, holding the district court applied the wrong legal standard in rejecting Cricket’s overinclusive evidence and instructing how to assess CAFA jurisdictional proof on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Cricket met its CAFA pleading burden in the notice of removal | Scott: removal notice was defective because Cricket alleged purchasers shipped/activated in Maryland rather than Maryland citizens domiciliary to class definition | Cricket: Dart Cherokee permits a short-and-plain plausible allegation; initial figures suffice to allege jurisdiction | Held: Cricket’s notice plausibly alleged jurisdiction under Dart Cherokee; initial pleading adequate |
| Whether Cricket proved CAFA jurisdiction by a preponderance after remand motion | Scott: Cochran declaration overinclusive (addresses ≠ citizenship); district court must not infer domicile from residency | Cricket: Cochran declaration plus conservative per-phone value makes it more likely than not the CAFA thresholds are met; exact domicile proof not required | Held: District court erred by rejecting overinclusive evidence categorically; defendant may use reasonable estimates but must prove by preponderance that enough Maryland domiciliaries are in class; remand for factual findings |
| Standard for using overinclusive corporate records to establish domiciliary-based amount in controversy | Scott: Residency evidence insufficient; requires individualized domicile proof | Cricket: Definitive domicile proof is often impossible; reasonable inferences and available public records can suffice | Held: Overinclusive evidence is permissible but must provide factual detail enabling a court to determine (not speculate) that it is more likely than not CAFA thresholds are met; courts may consider which party has better access to info |
| Burden and evidentiary consequences when only one party submits evidence after a remand challenge | Scott: Failure to rebut should defeat defendant’s proof | Cricket: Unrebutted removal evidence should carry the day | Held: Unrebutted evidence is accepted as uncontroverted but the proponent still must meet the preponderance burden; single-sided proof does not automatically satisfy it |
Key Cases Cited
- AU Optronics Corp. v. South Carolina, 699 F.3d 385 (4th Cir.) (standard of review for CAFA jurisdictional allegations)
- Strawn v. AT & T Mobility LLC, 530 F.3d 293 (4th Cir.) (defendant bears burden to allege CAFA jurisdiction)
- Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547 (Sup. Ct.) (removal pleading need only contain plausible amount-in-controversy allegation; when challenged, defendant must prove by preponderance)
- Brown v. Keene, 33 U.S. (8 Pet.) 112 (U.S.) (citizenship requires domicile; residency alone insufficient)
- Pullman-Standard Co. v. Swint, 456 U.S. 273 (U.S.) (remand for further proceedings when district court fails to make necessary factual findings)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S.) (plausibility standard for factual allegations)