Cheryl COHEN, on behalf of herself and others similarly situated, Plaintiff-Appellant, v. OFFICE DEPOT, INC., a Florida corporation, Defendant-Appellee.
No. 98-4787.
United States Court of Appeals, Eleventh Circuit.
Feb. 24, 2000.
Appeal from the United States District Court for the Southern District of Florida.(No. 97-03611-CIV-JAL), Joan A. Lenard, Judge. ON PETITION FOR REHEARING AND SUGGESTION OF REHEARING EN BANC
Before BIRCH and CARNES, Circuit Judges, and MILLS*, Senior District Judge.
In our prior opinion in this case, we held that
Relying on Tapscott v. MS Dealer Service Corp., 77 F.3d 1353, 1358-59 (11th Cir.1996), we also held that “in a class action lawsuit punitive damages may be aggregated to satisfy the amount-in-controversy requirement for each class member,” at least “where state law provides that an award of punitive damages is for the ‘public benefit’ or ‘collective good,’ and the award would reflect ‘the wrongfulness of the defendant‘s course of conduct as a whole.’ ” Cohen I, 184 F.3d at 1295 (quoting Tapscott, 77 F.3d at 1358). Combining our two holdings, we concluded that the complaint satisfied the amount in controversy requirement because
In its petition for rehearing, Office Depot has belatedly pointed out the tension between the Tapscott decision, on which we relied in our earlier opinion in this case, and the decision in Lindsey v. Alabama Telephone Co., 576 F.2d 593 (5th Cir.1978). Of course, pre-split or “Old Fifth” decisions such as Lindsey are binding on us, see Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir.1981), and where two prior panel decisions conflict we are bound to follow the oldest one. See United States v. Steele, 147 F.3d 1316, 1318 (11th Cir.1998) (en banc) (“It is the firmly established rule of this circuit that each succeeding panel is bound by the holding of the first panel to address an issue of law, unless and until that holding is overruled en banc, or by the Supreme Court.“) (internal quotation marks and citation omitted); United States v. Dailey, 24 F.3d 1323, 1327 (11th Cir.1994) (where there is an intracircuit conflict of authority, “the earliest panel opinion resolving the issue in question binds this circuit until the court resolves the issue en banc“) (internal quotation marks and citation omitted).
For reasons we will soon discuss, we conclude that Tapscott‘s holding about aggregation of punitive damages is inconsistent with the earlier holding on the same legal issue in Lindsey, and accordingly we must follow Lindsey. Doing so, we conclude that the total of $10,000,000 in punitive damages that was pleaded for the class of 39,000 members in this case is insufficient to satisfy the $75,000 amount in controversy requirement. This conclusion requires us to address plaintiff, class-representative Cohen‘s remaining arguments involving alternative theories for satisfying the amount in controversy requirement, which are that it is satisfied because of the value of the requested injunctive relief, and because of the amount of attorney fees due if the class prevails. We will discuss those issues in a later part of this opinion, but we begin with a discussion of the inconsistency of Tapscott (and our own prior opinion following it) with Lindsey.
I. THE CONFLICT BETWEEN LINDSEY AND TAPSCOTT REGARDING AGGREGATION OF PUNITIVE DAMAGES
Lindsey involved a state law class action suit against two telephone companies alleged to have unlawfully extracted excessive cash deposits from the class. See Lindsey, 576 F.2d at 593. The defendants removed the case to federal court on diversity grounds. See id. at 593-94. The complaint, as construed by the Court, sought: (1) $2,000 compensatory damages for Lindsey, (2) an unspecified sum of compensatory
The Lindsey Court began its analysis by citing Snyder v. Harris, 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969), for the broad proposition that multiple plaintiffs suing in a class may not aggregate any claims for the purpose of satisfying the amount in controversy requirement of diversity jurisdiction. Lindsey, 576 F.2d at 594. The Court then noted that each member of a class must individually satisfy the jurisdictional amount to avoid being dismissed from the class suit. See id. (citing Zahn, 414 U.S. at 300). Because the Lindsey plaintiff had failed to plead a specific number of class members, the Court explained that it could not determine “what dollar amount represent[ed] the ‘amount in controversy’ for each member of the class.” Id. at 595 (emphasis added). Noting that the grounds for removal jurisdiction must be found in the plaintiff‘s complaint itself, the Court explained that “it was not open for [the] defendants to attempt to show that the class was small enough that the claims on its behalf exceeded the sum of $10,000 per capita,” id., which was the amount in controversy requirement at that time, see id. at 593.
Because it could not tell from the complaint the number of class members, the Lindsey Court could not determine whether each member‘s claim satisfied the jurisdictional amount, and it therefore held that the total specified damage claim for the class—$1,002,000—had not been shown to satisfy the amount in controversy requirement. See id. at 595. A necessary part of Lindsey‘s reasoning is the holding that for amount in controversy purposes a class punitive damages claim must be allocated pro rata to each class member. Otherwise, the result in that case would have been different. If the Lindsey Court had concluded that a class claim for punitive damages could be attributed in toto to each class member, i.e., considered in the aggregate, for amount in controversy purposes, the $1,000,000 punitive damages claim clearly would have sufficed, regardless of whether the number of class members in Lindsey had been two or two million. The number of class members would have been irrelevant, instead of the critical factor in the decision. Thus, Lindsey inescapably stands for the proposition that a federal court cannot exercise diversity jurisdiction over
Three years after Lindsey, we split from the Fifth Circuit but retained its decisional law as our own, see Bonner, 661 F.2d at 1207, and fifteen years after the split, this Court decided Tapscott v. MS Dealer Serv. Corp. In that case, we faced another attempt to base diversity jurisdiction on a class claim for punitive damages, but we mistakenly considered the matter as one of first impression.4 See Tapscott, 77 F.3d at 1358.
The plaintiffs in Tapscott brought a state law class action, alleging a class of over 10,000 members. See id. at 1355 n. 2. The class sought statutory damages, injunctive relief, and an unspecified amount of compensatory and punitive damages, based on the defendant‘s allegedly fraudulent conduct in the sale of extended service contracts. See id. at 1355. The defendants removed the case to federal court on diversity jurisdiction grounds. See id.. The plaintiffs contested the removal with affidavits attesting that the individual recovery for each plaintiff would not exceed $50,000, the amount in controversy required for diversity jurisdiction at the time. See id.. The defendants responded that, for jurisdictional purposes, the class claim for punitive damages should be considered in the aggregate. See id. at 1357-59. We agreed and upheld the removal of the case to federal court. See id. at 1359.
In Tapscott, this Court pointed to the Supreme Court‘s discussion in Snyder, which indicated that multiple plaintiffs may aggregate claims if they have “a single title or right in which they have a common and undivided interest.” Id. at 1357 (quoting Snyder, 394 U.S. at 335). We then considered the nature of punitive damages under Alabama law, finding that Alabama awards punitive damages to plaintiffs not “as a matter of right,” but rather as a means to punish and deter wrongful conduct. See id. at 1358.
Attempting to distinguish Tapscott from Lindsey, Cohen points to the analysis in Tapscott addressing whether the punitive damages claim constituted a “single collective right in which [the class members had] a common and undivided interest.” Id. She contends that the “common and undivided interest” issue was never presented to us in Lindsey, and thus, there is no real conflict between our Lindsey and Tapscott decisions. Cohen‘s contention misconstrues the operation of our prior panel precedent rule. The issue in Tapscott was the same as that in Lindsey: whether a class claim for punitive damages can be considered in the aggregate in order to establish diversity jurisdiction over all potential members of a class, or must instead be attributed pro rata to each class member.
“Common and undivided interest” is simply the standard used to decide which, if any, claims by multiple plaintiffs may be considered in the aggregate for jurisdictional purposes, and which must be divided among the class members. See Snyder, 394 U.S. at 335. But we had already decided in Lindsey that a class claim for punitive damages could not be considered in the aggregate for each class member, or at least that such a claim arising under Alabama law could not be. Our conclusion to the contrary in Tapscott, which also involved Alabama punitive damages law, is inconsistent with the result in Lindsey. Because the same state law governed punitive damages in each case, there can be no difference between the two cases insofar as the “common and undivided interest” analysis is concerned.5
Under our reasoning in Lindsey, a punitive damages claim must be divided by the total number of class members with the quotient attributable to each class member for amount in controversy purposes. See id. Our inability to determine the number of class members, or the divisor, was critical not because we could not determine the nature of the defendants’ course of conduct, but because without a divisor we could not do the division necessary. We could not divide the class punitive damages claim by the number of class members without knowing that number. A Fifth Circuit panel recently acknowledged the necessary implication of our Lindsey decision. See Ard, 138 F.3d at 601 (construing Lindsey to “appl[y] Snyder‘s reasoning that compensatory damage claims cannot be aggregated for jurisdictional purposes to the context of punitive damage claims“); see supra at note 6.
Cohen‘s real argument is that the result and holding of Lindsey are wrong because we failed to apply a “common and undivided interest” analysis—she says it was not even considered. Even if we thought Lindsey wrong, the prior panel precedent rule is not dependent upon a subsequent panel‘s appraisal of the initial decision‘s correctness. Nor is the operation of the rule dependent upon the skill of the attorneys or wisdom of the judges involved with the prior decision—upon what was argued or considered. Unless and until the holding of a prior decision is overruled by the Supreme Court or by the en banc court, that holding is the law of this Circuit regardless of what might have happened had other arguments been made to the panel that decided the issue first.
Lindsey held that, for purposes of deciding whether the amount in controversy requirement had been satisfied, the amount of an Alabama punitive damages claim was to be divided by the number of class members and the result attributed to each member of the class. Tapscott decided to the contrary. Because Lindsey predates Tapscott, we must follow Lindsey as the precedent of this Court. See Steele, 147 F.3d at 1318; Dailey, 24 F.3d at 1327.
Accordingly, we rescind that part of our prior opinion in this case that relied upon Tapscott to hold that the $10,000,000 punitive damages claim on behalf of Cohen‘s proposed class satisfied the amount in controversy requirement for diversity jurisdiction over this case. See Cohen I, 184 F.3d at 1294-95. The punitive damages claim does not satisfy the amount in controversy requirement, because when the
We now address Cohen‘s other two grounds for satisfying the requisite amount-in-controversy: (1) the value of the requested injunctive relief, and (2) the amount of attorney fees due if the class prevails.
II. COHEN‘S OTHER GROUNDS FOR DIVERSITY JURISDICTION
A. INJUNCTIVE RELIEF
In addition to requesting compensatory and punitive damages, this lawsuit seeks to enjoin Office Depot from engaging in unfair and misleading advertising regarding the catalogue prices of its products. Cohen claims that Office Depot‘s advertising indicates that the prices for products purchased from its catalogues are the lowest prices available anywhere, but that the truth is some products are less expensive if purchased at Office Depot stores. She argues that enjoining such allegedly misleading advertising would “result[ ] in changes to Office Depot‘s advertising and business practices, thereby benefitting the Plaintiff class, as a whole, by an amount that is clearly in excess of the jurisdictional requirement of Section 1332.” Appellant‘s Br. 44-45.
When a plaintiff seeks injunctive or declaratory relief, the amount in controversy is the monetary value of the object of the litigation from the plaintiff‘s perspective. See Ericsson GE Mobile Communications, Inc. v. Motorola Communications & Elecs., Inc., 120 F.3d 216, 218-20 (11th Cir.1997). In other words, the value of the requested injunctive relief is the monetary value of the benefit that would flow to the plaintiff if the injunction were granted. In this case, Cohen maintains that the class has a “common and undivided interest” in the injunctive relief, and thus, if considered in the aggregate, the monetary value of it to the class—alone or combined with the other claims for relief—would satisfy the $75,000 amount in controversy requirement. However, we need not address whether the monetary value of the requested injunctive relief should be considered in the aggregate, or instead attributed pro rata among the class members, because we
We have little trouble concluding “to a legal certainty” that the value of the injunctive relief does not satisfy the jurisdictional amount in this case, see St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89, 58 S.Ct. 586, 590, 82 L.Ed. 845 (1938), because we doubt that any monetary value at all would accrue to the class plaintiffs upon issuance of the prospective injunction. If the requested injunctive relief were granted, Office Depot would not be required to offer its products at the lowest price available, but instead could simply raise the price of the products in its stores a sufficient amount that its advertising of catalogue prices was no longer false. That result would comply with the injunction the class seeks, but it would be of no monetary benefit to them. Indeed, to the extent class members also buy products in Office Depot stores, the injunction would cost them money under that scenario.
But let us assume Office Depot‘s reaction to the requested injunction would be to leave product prices as they are and clarify its advertising to remove any statement that catalogue prices are the same as store prices. That result is the most the class could hope for from the requested injunction, but it is one which would be of little or no monetary value to class members. The benefit of the injunction to the class plaintiffs would be the knowledge that some office products were less expensive when purchased at Office Depot stores than when purchased through the catalogue. However, upon class certification and notice, the class plaintiffs would already have known that, because the allegedly misleading advertising is the very basis of the class action.
Although Cohen‘s complaint seeks class certification under subdivisions (b)(1)(A), (b)(1)(B), and (b)(3) of
The remote possibility—if there be any—that monetary value might somehow flow to the class plaintiffs from the requested injunctive relief is “too speculative and immeasurable to satisfy the amount in controversy requirement.” Ericsson, 120 F.3d at 221-22. In Ericsson, the plaintiff company, Ericsson, claimed that the City of Birmingham improperly handled the bidding process for its purchase of a communications system, resulting in the company losing the communications system contract to Motorola. See id. at 217. Ericsson sought to enjoin the city‘s contract with Motorola and also to have the court declare Ericsson the lowest responsible bidder, entitling it to the contract with the city worth almost $10,000,000. See id.. However, the district court noted that, under Alabama law, the only remedy available to Ericsson was to have the district court enjoin the performance of the city‘s contract with Motorola as void. See id. at 221. Not only did the court lack authority to declare Ericsson the lowest bidder, it could not even require the city to rebid the contract. See id.
Similarly, the injunctive relief in this case involves too many contingencies, such as the manner in which Office Depot might alter its pricing schemes and the extent to which the class members’ purchasing patterns might change. Because of these contingencies, any benefit to the class from the injunction cannot be reduced to a reasonable monetary estimate.8 See id. at 222. We therefore conclude that any monetary value to Cohen‘s class from the injunction is either non-existent, or at least too tenuous of a foundation for diversity jurisdiction. In reaching this conclusion, we also note that the policy underlying
Because the class claim for injunctive relief is too speculative to satisfy the amount in controversy requirement, we turn now to the question of whether the potential recovery of attorney fees, alone or in combination with the damages claims, can establish the jurisdictional amount in controversy.
B. ATTORNEY FEES
On behalf of the class, Cohen brought claims under Florida statutes that prohibit deceptive business practices, see
Cohen also contends that the attorney fees in this case will clearly surpass the $75,000 threshold for the amount in controversy; and she argues that the amount of fees she anticipates will be awarded either should be (1) attributed to her as the prevailing party, with jurisdiction over the other class plaintiffs established under
First, we find no basis for attributing the potential award of attorney fees to Cohen, either individually or as the class representative. The claim for attorney fees in this case is based on two Florida statutes:
In addition, as an individual class member, Cohen stands to recover no more than $260 in damages. In her first proposed amended complaint, Cohen indicated that over $100,000 in reasonable attorney fees would be incurred in the litigation. Attributing to one plaintiff an anticipated attorney fees award that is over 384 times greater than that plaintiff‘s stake in the litigation could raise serious questions about the
Cohen maintains that the class members share a “common and undivided interest” in the anticipated award of attorney fees, and thus, the claim for those fees should be viewed in the aggregate, with the total amount attributed to each class member. Office Depot responds that, like the class claim for punitive damages, the amount of the claimed attorney fees should be divided pro rata among each individual class member. In light of a recent decision by this Circuit and the relevant Florida case law, we conclude that the claim for attorney fees is not “a single title or right in which [the class members] have a common and undivided interest.” See Snyder, 394 U.S. at 335. Therefore, for amount in controversy purposes, the estimated total attorney fees award should be divided among all of the class members.
In Darden v. Ford Consumer Finance Co., 200 F.3d 753 (11th Cir.2000), the defendant attempted to remove a class action to federal court on diversity grounds, arguing that the class plaintiffs’ claim for attorney fees under the Georgia RICO statute should be considered in the aggregate for amount in controversy purposes. We rejected that argument. Following the principles laid down by the Supreme Court in Snyder, we concluded that the claimed attorney fees did not constitute a “single title or right” in which the class members had a “common and undivided interest.” See id. at 756-59. In reaching that conclusion, we noted that each class plaintiff could have recovered his attorney fees in individual suits under the RICO statute. See
We construe Darden to hold that a statutory claim for attorney fees may not be considered in the aggregate for amount in controversy purposes, at least not when both of these factors are present: (1) the class members have a “separate and distinct” right to recover attorney fees under the relevant statute; and (2) state law provides that the statutory attorney fees serve to compensate the class members for their injuries.15 Applying that holding to the facts of this case, we conclude that the claimed attorney fees may not be considered in the aggregate to establish the requisite amount in controversy.
As for the first factor, the class members in this case could recover their individual attorney fees incurred in separate, individual suits under Florida‘s consumer protection statutes. See
The second factor is also present. Like the attorney fees award under the Georgia RICO statute in Darden, an attorney fees award under Florida consumer protection statutes serves an important compensatory purpose. In BMW of North Amer., Inc. v. Krathen, 510 So.2d 366, 368 (Fla. 4th Dist.Ct.App.1987), the District Court of Appeals for the Fourth District noted that “the obvious purpose of the ‘Little FTC Act’ [which includes
Because the attorney fees authorized by the Florida statutes in this case serve to compensate plaintiffs for losses resulting from allegedly unlawful business practices, and because claims for those fees could be asserted by the class plaintiffs in individual suits, we conclude that the claimed fees do not constitute “a single title or right in which [the class members] have a common and undivided interest.” Snyder, 394 U.S. at 335. It follows that the amount of claimed attorney fees may not be considered in the aggregate—may not be attributed in whole to each class member—but instead, like the class claim for punitive damages, it must be divided out among the total number of class members for amount in controversy purposes. Because each class member‘s damages claim approximates $260, and the claimed attorney fees must be divided pro rata among 39,000 class members, an astronomical amount of attorney fees would have to be recovered in order to satisfy the amount in controversy requirement.16 Such a recovery is not possible, and therefore, neither is diversity jurisdiction.
III. CONCLUSION
Because we conclude that Cohen has failed to allege a sufficient amount in controversy to establish jurisdiction under
AFFIRMED.
* Honorable Richard Mills, Senior U.S. District Judge for the Central District of Illinois, sitting by designation.
Notes
Unfortunately, our analysis in Lindsey forecloses that potential distinction between that case and Tapscott. In Lindsey, we stated that if the plaintiff had alleged a specific number of class members, that allegation “would have permitted the court to ascertain what dollar amount represents the ‘amount in controversy’ for each member of the class.” Lindsey, 576 F.2d at 595 (emphasis added). Significantly, our analysis in Tapscott suggests that the aggregation of punitive damages is proper when the defendant‘s course of conduct affects a large number of individuals. See Tapscott, 77 F.3d at 1359. But according to our prior analysis in Lindsey, a “large” class is exactly what would have prevented the amount in controversy requirement from being satisfied. Our concern in Lindsey was that the number of class members, or the divisor, might be so large that the $1,000,000 punitive damages claim, when divided by the number of class members, would result in an amount less than $10,000 (the requisite amount in controversy at the time). We indicated in Lindsey that the class would satisfy the amount in controversy requirement if the complaint alleged a total number of members that “was small enough that the claims on its behalf exceeded the sum of $10,000 per capita.” Lindsey, 576 F.2d at 595 (emphasis added). Thus, while our opinion in Lindsey does not
