Elliott GRAISER, Plaintiff-Appellee, v. VISIONWORKS OF AMERICA, INC., Defendant-Appellant.
No. 16-3167.
United States Court of Appeals, Sixth Circuit.
April 6, 2016.
819 F.3d 277
VII.
For these reasons, we affirm the district court in Case No. 14-6013. We reverse the district court in Case No. 15-5037, vacate two of defendant‘s
ON BRIEF: John B. Nalbandian, Taft, Stettinius & Hollister LLP, Cincinnati, Ohio, Ronald D. Holman, II, Michael J. Zbiegien, Jr., Taft Stеttinius & Hollister LLP, Cleveland, Ohio, for Appellant. Drew Legando, Jack Landskroner, Landskroner Grieco Merriman, LLC, Cleveland, Ohio, for Appellee.
Before: GUY, MOORE, and McKEAGUE, Circuit Judges.
OPINION
KAREN NELSON MOORE, Circuit Judge.
I. BACKGROUND
On April 30, 2014, Graiser, an Ohio citizen, saw a “Buy One, Get One Free” eyeglasses advertisement at the Beachwood, Ohio location of Visionworks, a Texas eyecare corporation operating in over forty states. R. 1-3 (Am. Compl. at 2) (Page ID #232). According to Graiser, upon entering the store and inquiring about the promotion, a Visionworks salesperson quoted Graiser “a price of $409.93 for eyeglasses, with a second eyeglasses ‘free.‘” Id. Alternatively, the salesperson told Graiser that he could purchase a single pair of eyeglasses for $245.95. Id. From this relatively simple factual background, we now confront two challenging procedural questions.
A. Graiser‘s First State-Court Complaint, Removal, and Remand
Graiser filed a proposed class-action complaint against Visionworks in the Court of Common Pleas of Cuyahoga County, Ohio on June 24, 2014. R. 1-2 (Original Compl. at 1) (Page ID #10). Graiser‘s complaint alleged that Visionworks‘s “Buy One, Get One Free” promotion violated Ohio Administrative Code § 109:4-3-04 and the Ohio Consumer Sales Practices Act,
On July 25, 2014, Visionworks removed the case to the United States District Court for the Northern District of Ohio under diversity jurisdiction,
Following remand, Visionworks filed a motion for judgment on the pleadings, arguing that Graiser also lacked standing to seek an injunction under state law. R. 1-2 (Mot. for J. on Pleadings at 1) (Page ID #151). Thе state court conditionally granted Visionworks‘s motion on April 9, 2015, but provided Graiser with fourteen days to amend his complaint. R. 1-3 (04/9/15 State Ct. Op. at 8) (Page ID #229).
B. Graiser‘s Amended State-Court Complaint and Visionworks‘s Removal Under CAFA
Graiser filed an Amended Complaint on April 23, 2015, adding requests for actual and punitive damages; Graiser also maintained his requests for statutory attorney‘s fees and “[d]eclaratory, equitable, and injunctive relief.” R. 1-3 (Am. Compl. at 5) (Page ID #235). The Amended Complaint sought to certify a class of “[a]ll consumers who purchased eyeglasses from Visionwоrks in Ohio during a ‘Buy One, Get One Free’ promotion since June 24, 2012, but who did not receive any benefit of a truly-free offer.” Id. at 3 (Page ID #233).
Graiser‘s lawyers sent a letter to Visionworks‘s lawyers on September 18, 2015, seeking “to open the door to class-wide settlement negotiations.” R. 6-9 (9/18/15 Letter at 1) (Page ID #1099). The letter stated that Graiser‘s “theory of damages is that consumers who consummated a multi-pair transaction during a ‘buy one, get one free’ promotion actually overpaid by 40%,” and thus “these consumers should recover 40% of the prices paid.” Id. The letter then aрplied this theory of damages to the sales figures that Visionworks provided in response to Graiser‘s first set of interrogatories, calculating that “the total damages as of Jan[uary] 31[, 2015] are $3,940,042.” Id. at 1-2 (Page ID #1099-1100).
On September 28, 2015, counsel for Graiser requested “that Visionworks provide it with up-to-date sales figures” prior to participating in mediation. R. 11-1 (Zbiegien Decl. at 1) (Page ID #1143); see also R. 11-1 (9/28/15 Legando Letter) (Page ID #1145-46). Visionworks “compiled the specific sales information requested by counsel for Plaintiff, up to and including October 15, 2015, as the cut-off date,” and sent this sаles data to Graiser as “supplemental interrogatory answers.” R. 11-1 (Zbiegien Decl. at 1-2) (Page ID #1143-44). According to Visionworks, it then applied Graiser‘s “proposed damage formula“—the formula sent by letter on September 18, 2015—to the October 15,
Visionworks removed the case to the United States District Court for the Northern District of Ohio on November 10, 2015, asserting jurisdiction under CAFA. R. 1 (Notice of Removal at 1, 4) (Page ID # 1, 4). According to the Nоtice of Removal, “Visionworks was able to first ascertain that this case became removable after the receipt of the October 15, 2015 sales figures,” and thus the Notice of Removal was timely filed within thirty days of ascertaining removability, as required by
Graiser moved to remand on November 13, 2015, arguing that Visionworks‘s removal was untimely. R. 6 (Mot. to Remand) (Page ID #1049). According to Graiser, the Amended Complaint was removable under diversity jurisdiction, and thus the Notice of Removal—filed over six months later—was far outside of the thirty-day window. Id. at 1-2 (Page ID #1049-50). Moreover, Grаiser claimed that Visionworks “sat upon the sales figures in its possession for months” and could have first ascertained removability under CAFA by applying its own sales figures earlier, particularly given that Graiser informed Visionworks on September 18th that, under January sales data, the damages were $3,940,042, and that this “figure would have to be brought current for sales” occurring afterwards. Id. at 2, 9 (Page ID #1050, 1057). Visionworks opposed Graiser‘s motion on December 17, 2015, R. 11 (Def. Opp. to Pl. Mot. to Remand) (Page ID #1117), and Graiser replied on January 4, 2016. R. 12 (Pl. Reply to Opp. to Mot. to Remand) (Pagе ID #1155).
The district court granted Graiser‘s motion to remand on January 11, 2016. R. 13 (01/11/16 D. Ct. Order) (Page ID #1168). The district court noted that Graiser made “persuasive arguments” that the Amended Complaint was originally removable under diversity jurisdiction, and thus Visionworks should have removed within thirty days of the amended complaint. Id. at 2-3 (Page ID #1169-70). Moreover, the district court found that Visionworks “possessed its own sales data at the time the Amended Complaint was filed,” and thus “was able to ‘ascertain’ CAFA jurisdiction” from the filing of the Amended Complaint or from Graiser submitting his September 18, 2015 damages formula. Id. at 2 (Page ID #1169). “Undеr either theory,” the district court concluded, Visionworks‘s removal was untimely under
Visionworks petitioned to appeal the district court‘s order of remand pursuant to
Visionworks contends on appeal that the district court erred in holding that its notice of removal was untimely filed. We “review [] determinations of subject mattеr jurisdiction de novo,” including a district court‘s order remanding a case to the state court from which it was removed. Smith v. Nationwide Prop. & Cas. Ins. Co., 505 F.3d 401, 404 (6th Cir. 2007).
Visionworks removed this case under CAFA. Congress enacted CAFA in 2005, “provid[ing] the federal district courts with ‘original jurisdiction’ to hear a ‘class action’ if the class has more than 100 members, the parties are minimally diverse, and the ‘matter in controversy exceeds the sum or value of $5,000,000,‘” aggregating the claims of individual members of the proposed class. Standard Fire Ins. Co. v. Knowles, 568 U.S. 588, 592 (2013) (quoting
Defendants removing under CAFA must comply with the time limits of the general removal statute,
This case requires us to address two imрortant questions regarding the thirty-day windows of
A. When, If Ever, Did the 30-Day Removal Window Begin for Visionworks to Remove Under CAFA?
Visionworks first contends that the district court erred in finding that it could have first ascertained that the case was remоvable under CAFA from the Amended Complaint or, alternatively, from Graiser‘s September 18, 2015 letter. We agree with Visionworks.
Our Circuit has not had the opportunity to consider when the thirty-day removal clock begins for a defendant seeking to remove under CAFA. Moreover, our published case law regarding the thirty-day removal clocks in non-CAFA cases is extremely limited. Accordingly, we take this
Both parties rely on Holston v. Carolina Freight Carriers Corp., No. 90-1358, 1991 WL 112809 (6th Cir. June 26, 1991), as establishing the standard for determining when the thirty-day removal period began for Visionworks. See Appellant Br. at 13; Appellee Br. at 6. Holston involved a dispute over when thе defendant first ascertained that the plaintiff‘s complaint stated a federal question—as opposed to a purely state-law claim—such that the removal window began to run. Id. at *2. Carolina Freight argued that, given the statutory language of
For several reasons, we respectfully disagree with Holston‘s rule, and decline to follow it here. Holston is unpublished, and is accordingly not binding precedent. See TriHealth, Inc. v. Bd. of Comm‘rs, Hamilton Cty., Ohio, 430 F.3d 783, 789 (6th Cir. 2005). Moreover, Holston is not controlling because it did not involve removal under CAFA. This is significant because Holston explicitly grounded its holding in the principle that courts are to construe removal statutes “strictly” and ambiguities “must be resolved in favor of remand to the state courts.” Holston, 1991 WL 112809, at *3. As the Supreme Court recently clarified, however, “no antiremoval presumption attends cases invoking CAFA.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 89 (2014). Accordingly, the reasoning underlying Holston‘s holding is not applicable here.
Holston‘s rule is also not administrable. Determining the date upon which a defendant ascertained removability through “receiving” necessary documents within its exclusive possession—documents that the defendant may have possessed from the beginning of litigation but only “reviewed” at a later point in time—requires guesswork and involves ambiguity. This case is illustrative. Visionworks argued in its Notice of Removal that the thirty-day clock began only when it reviewed its up-to-date
This absence of clarity is not beneficial to plaintiffs, defendants, or district courts. For this reason, “[e]very circuit to have addressed this issue has ... adopted some form of a bright-line rule that limits the court‘s inquiry to the clock-triggering pleading or other paper” provided by the plaintiff to the defendant. Id. at 74 (internal quotation marks omitted). For example, in Cutrone, the Second Circuit held “that, in CAFA cases, the removal clocks of
This rule is substantially similar to the tests adopted by the First, Seventh, and Ninth Circuits. See Romulus, 770 F.3d at 75; Walker v. Trailer Transit, Inc., 727 F.3d 819, 824 (7th Cir. 2013); Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d 1136, 1140-41 (9th Cir. 2013). In adopting a bright-line rule, these circuits have each addressed the same important policy concerns. As explained by the First Circuit, “[i]n the absence of something like a bright-line approach, plaintiffs would have no incentive to specify estimated damagеs early in litigation,” and thus “[d]efendants would protectively remove when faced
We find this reasoning persuasive. Accordingly, we join our sister circuits and hold that, in CAFA cases, the thirty-day clocks of
Applying this rule here, we hold that the thirty-day window of
We are mindful of the concern that, under this rule, a defendant could ignore information in its possession that supports removability, and—with no removal clock ticking—delay litigation in state court unless and until the federal forum proves more desirable. See Roth, 720 F.3d at 1126. Indeed, Graiser warns of these tactics here. Appellant Br. at 18-19. As the Ninth Circuit reasoned, however, “plaintiffs are in a position to protect themselves” from this рossibility. Roth, 720 F.3d at 1126. “If plaintiffs think that their action may be removable and think, further, that the defendant might delay filing a notice of removal until a strategically advantageous moment, they need only provide to the defendant a document from which removability may be ascertained.” Id. Once a plaintiff has done so, ”
B. Could Visionworks Remove Under CAFA Jurisdiction Even if the Thirty-Day Window to Remove Under a Different Theory of Federal Jurisdiction Had Expired?
Having determined that
On appeal, Visionworks argues that, even if the Amended Complaint were originally removable under diversity jurisdiction, the presence of an earlier ground for removal “has no bearing on the timeliness of ... CAFA removal.” Appellant Br. at 25-26. In support of this argument, Visionworks relies on the Ninth Circuit‘s recent decision in Jordan v. Nationstar Mortgage LLC, 781 F.3d 1178 (9th Cir. 2015), which held that “a defendant may remove a case from state court within thirty days of ascertaining that the action is removable under CAFA, even if an earlier pleading, document, motion, or order or other paper revealed an alternative basis for federal jurisdiction.” Id. at 1180. Jordan extended to CAFA a rule that the Ninth Circuit previously recognized in the context of the federal-officer removal statute,
We are persuaded by the Ninth Circuit‘s reasoning. Federal jurisdiction under CAFA, like federal jurisdiction over federal officers, serves different policy purposes than federal jurisdiction over ordinary diversity cases or cases arising under federal-question jurisdiction. Congress enacted CAFA “to facilitate adjudication of certain class actions in federal court.” Dart Cherokee, 135 S.Ct. at 554. A defendant may choose to litigate a case in state court even if diversity jurisdiction exists, believing that the state is nonetheless a hospitable forum; this same defendant may mаke a different calculation if later developments show that the case is a CAFA class action. Because Congress clearly “intended [CAFA] to expand substantially federal court jurisdiction over class actions” and directed that CAFA‘s “provisions should be read broadly, with a strong preference that interstate class actions should be heard in a federal court if properly removed by any defendant,” S. Rep. 109-14, at 43 (2005), we read
Accordingly, we hold that once a defendant ascertains that a case is removable under CAFA, a defendant may remove the case—within the time constraints of
III. CONCLUSION
For the foregoing reasons, we VACATE the district court‘s order remanding the case to state court and we REMAND back to the district court for further proceedings.