Pazol v. Tough Mudder Incorporated
2016 U.S. App. LEXIS 7519
1st Cir.2016Background
- Four named plaintiffs brought a Massachusetts class action after the Mudderella event was moved twice from Haverhill, MA to Westbrook, ME, causing some registrants to miss the event and plaintiffs to seek refunds and other relief under state law (breach of contract, 93A, unjust enrichment, etc.).
- The complaint sought to represent a class of: (a) persons who paid registration fees and did not participate after the move; and (b) persons who participated but incurred added travel expenses (gas, food, lodging). Relief sought included damages, treble damages under Mass. Gen. Laws ch. 93A, attorneys’ fees, restitution, and injunctive relief.
- Defendants removed under CAFA, asserting minimal diversity and that the amount in controversy exceeded $5 million; plaintiffs moved to remand, arguing defendants failed to show the $5 million threshold.
- The district court denied remand, finding a "reasonable probability" the amount in controversy exceeded $5 million, and granted defendants’ motion to compel mediation/arbitration; plaintiffs appealed the remand ruling.
- On de novo review, the First Circuit analyzed whether defendants met their burden to show a reasonable probability that more than $5 million was in controversy, focusing on defendants’ estimates for registration fees, travel (gas and food), and lodging expenses, including trebling under chapter 93A and attorneys’ fees.
- The court held defendants’ lodging estimates were unsupported and speculative (defendants had access to registrants’ addresses but did not use them), so defendants failed to meet their burden; the case was remanded to state court for lack of CAFA jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants proved by a "reasonable probability" that >$5M is in controversy under CAFA | Plaintiffs: defendants’ calculations are speculative and overbroad; class limited to non-attendees for refunds, and expenses claims unsupported | Defendants: registration fees + trebled 93A damages + attorney fees + estimated gas, food, lodging for registrants push aggregate over $5M | Held: Defendants failed to meet burden; remand required. |
| Whether registration fees of all registrants are in controversy | Plaintiffs: only fees of non-attendees are claimed | Defendants: all registrants’ fees should count | Held: Only fees of those who did not participate are plausibly at issue; complaint links "registration fees" to non-participants. |
| Whether travel (gas/food) estimates are reasonably probable | Plaintiffs: no basis to assume each attendee incurred the assumed extra costs | Defendants: per-person estimates (e.g., $35 gas, $56 food) multiplied by attendees yield large aggregate | Held: Gas/food estimates not persuasive but could be considered; gas/food plus registration fees still fall short of $5M without lodging. |
| Whether lodging expenses can be reasonably estimated to push total over $5M | Plaintiffs: many registrants likely local or could cancel hotels; defendants have data but failed to use it | Defendants: use federal per diem rates and assume lodging incurred by registrants (either all registrants or all attendees) to reach >$1M lodging figure | Held: Lodging assumptions are speculative and unsupported; defendants had access to registrants’ addresses and other data but failed to present it, so lodging cannot be presumed. |
Key Cases Cited
- Amoche v. Guar. Trust Life Ins. Co., 556 F.3d 41 (1st Cir. 2009) (defendant bears burden to show a reasonable probability that CAFA amount-in-controversy is met; consider which party has access to information)
- Romulus v. CVS Pharmacy, Inc., 770 F.3d 67 (1st Cir. 2014) (CAFA removal timing; defendant need not search beyond plaintiff’s papers to determine removability)
- United States v. Moon, 802 F.3d 135 (1st Cir. 2015) (court may take judicial notice of geographic distances)