In Armstead v. Multi-Chem Group, LLC., No. 6:11-2136, 2012 U.S. Dist. Lexis 71543 (W.D. La. May 21, 2012), 855 plaintiffs brought suit against a chemical company and two of its employees for personal injuries and property damage allegedly sustained as a result of an explosion and fire at the company’s nearby facility.  The complaint contained the following stipulation: “each plaintiff specifically alleges and stipulates that he/she has not sustained individual damages, including punitive damages, in excess of $75,000, exclusive of interest and costs; that he/she does not seek damages that would meet or exceed the jurisdictional amount in controversy of a federal court sitting in diversity; and that he/she will not amend the Petition to request class certification.” 

Defendants removed the case, arguing that it was a class action under CAFA, and that none of CAFA’s exceptions applied. The plaintiffs moved for remand, asserting that the case was neither a class action, nor a mass action under CAFA.  Looking to the definition of class action in 28 U.S.C. §1332(d)(1)(B), the court agreed that the case was not a class action because it had not been brought as a representative action authorized by a statute or rule of procedure that authorizes class actions.  Furthermore, no class allegations had been asserted, and the plaintiffs had stipulated that they would not amend their pleadings to request class certification. 

The court also concluded that the action was not removable as a mass action under CAFA.  Mass action is defined in 28 U.S.C. §1332(d)(11)(B)(i) as “any civil action in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact, except that jurisdiction shall exist only over those plaintiffs whose claims in a mass action satisfy the jurisdictional amount requirements under subsection (a)” i.e., exceeds the sum or value of $75,000, exclusive of interest and costs.  In order for an action to be a mass action, the claims also must satisfy CAFA’s other requirements of minimal diversity and claims with an aggregate value in excess of $5 million dollars, exclusive of interests and costs.  The plaintiffs argued for remand, relying on the stipulation in their pleading that no plaintiff had sustained damages in excess of $75,000.  The defendants argued that the stipulation was ineffectual, and that the plaintiffs had not met their burden of establishing to a legal certainty that their claims did not meet the $75,000 threshold. 

First, the court analyzed whether in a mass action a federal court can remand the claims of just those plaintiffs with claims below the jurisdictional threshold.  The court determined that it could, relying on language from the Ninth Circuit in Abrego v. Dow Chemical Co., 443 F.3d 676, 689 (9th Cir. 2006) that a “case cannot go forward unless there is at least one plaintiff whose claims can remain in federal court.”  The court then examined the defendants’ evidence of amount in controversy against the following standard.  Where a plaintiff affirmatively alleges an amount in controversy below the diversity jurisdiction threshold, that amount is controlling if made in good faith.  The party seeking to establish jurisdiction must then show by a preponderance of the evidence that the jurisdictional amount has been met.  “A defendant satisfies this burden either by showing that it is facially apparent that the plaintiff’s claim exceed the jurisdictional amount or by setting forth the facts in dispute supporting a finding that the jurisdictional amount is satisfied.”  Id. at *30-31.  Once the removing party has met its burden, only then must the plaintiff show to a legal certainty that his recovery will not exceed the amount pled.  In this case, the court concluded that the defendants had not met their burden of showing by a preponderance of the evidence that even one plaintiff’s claim exceeded $75,000.  The defendants could not rely just on the types of damages sought to meet this burden.

The court also noted that even if the defendants had demonstrated that at least one of the plaintiff’s claims satisfied the jurisdictional threshold, the case still was subject to remand under the event or occurrence exclusion for mass actions under 28 U.S.C. §1332(d)(11)(B)(ii)(I) which provides that the term “mass action” excludes any civil action in which “all of the claims in the action arise from an event or occurrence in the State in which the action was filed, and that allegedly resulted in injuries in that State . . . .”