RESPONDENT: Brandon W. Owens
LOCATION: District Court of Wilson County, Kansas
DOCKET NO.: 13-719
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT: United States Court of Appeals for the Tenth Circuit
CITATION: 574 US (2014)
GRANTED: Apr 07, 2014
ARGUED: Oct 07, 2014
DECIDED: Dec 15, 2014
Nowell D. Berreth - for the petitioner
Rex A. Sharp - for the respondent
Facts of the case
On October 30, 2012, Brandon W. Owens filed a class action petition in state court that alleged that Dart Cherokee Basin Operating Company and Cherokee Basin Pipeline underpaid the members on the class on royalties they were owed from wells. The petition alleged that this underpayment constituted a breach of contract and sought damages without specifying an amount.
On December 5, 2012, the defendants removed the case from state court to federal district court and cited that federal jurisdiction existed under the Class Action Fairness Act of 2005 (CAFA). CAFA requires that three elements be established for a class action case to fall under federal jurisdiction: at least one plaintiff and one defendant must be citizens of different states, the class must consist of at least 100 members, and the amount in controversy must exceed $5 million. The defendants in this case claimed that they met the requirements for removal to federal court under CAFA because the amount in controversy exceeded $8 million, but did not include specific evidence in the notice of removal. The federal district court held that defendants had not provided evidence that the amount in controversy exceeded $5 million in the notice of removal and therefore remanded the case back to state court.
The U.S. Court of Appeals for the Tenth Circuit held that the district court should not have remanded the case because requiring the party requesting the removal to produce evidence that the amount in controversy exceeds $5 million creates an evidentiary burden. The Court of Appeals held that that such evidence is wholly unnecessary unless the removal is contested. A party requesting that a case be removed to federal court need only allege that the grounds for removal exist and need only prove those allegations if they are contested.
Is a defendant seeking removal of a case to federal court required to provide evidence supporting federal jurisdiction in the notice of removal?
Media for Dart Cherokee Basin Operating Company LLC v. OwensAudio Transcription for Oral Argument - October 07, 2014 in Dart Cherokee Basin Operating Company LLC v. Owens
Audio Transcription for Opinion Announcement - December 15, 2014 in Dart Cherokee Basin Operating Company LLC v. Owens
John G. Roberts, Jr.:
Justice Ginsburg has our opinion this morning in Case 13-719, Dart Cherokee Basin Operating Company v. Owens.
Ruth Bader Ginsburg:
This case concerns the removal of a civil action from a State Court to a Federal Court.
To launch removal the defendant files in the Federal Court a notice stating the grounds for removal.
When removal is based on the party's diverse citizenship, an amount in controversy requirement must be met.
To meet that requirement does it suffice to allege the requisite amount plausibly or must the defendant incorporate into the notice of removal evidence proving the allegation?
That is the question this case presents.
Brandon Owens, plaintiff below and respondent here, filed a class action in the Kansas State Court alleging that defendants Dart Cherokee Basin Operating Company and a related company (collectively Dart) underpaid royalties owed to class members under certain oil and gas leases.
The complaint sought a fair and reasonable amount to compensate class members for the alleged underpayments.
Invoking federal jurisdiction under the Class Action Fairness Act, Dart removed the case from State Court to the US District Court for the District of Kansas.
To qualify for federal adjudication under that Act the case must involve an amount in controversy exceeding $5 million.
Dart's notice of removal stated that the alleged underpayments totaled more than $8.2 million.
Owens moved to remand the case to State Court.
Dart's notice of removal was deficient, Owens maintained, because it failed to include proof that the amount at stake exceeded $5 million.
In response, Dart submitted a calculation by one of its executive offices estimating that the amount in controversy exceeded $11 million.
Without challenging Dart's calculation, Owens urged that Dart's submission came too late.
The deficient notice of removal, Owens urged, could not be cured by post-removal documentation of the amount in controversy.
Reading Tenth Circuit precedent to require evidence in the notice of removal itself the District Court granted Owens' motion and sent the case back to the State Court.
Ordinarily remand orders may not be appealed.
Congress made an exception to that general rule in the Class Action Fairness Act.
The Act gives the Courts of Appeals discretion to review an order granting or denying a remand motion.
Citing this provision, Dart petitioned the Tenth Circuit for permission to appeal, dividing two-to-one, the Tenth Circuit denied permission.
We granted review to resolve a division among the Circuits on the question whether a notice of removal must include evidence proving the amount in controversy.
We held that no evidentiary submission need be made at the removal notice stage.
The statute in point instructs that a notice of removal shall contain a short and plain statement of the ground for removal.
That language tracks the general pleading requirements stated in Rule 8(a) of the Federal Rules of Civil Procedure.
By borrowing the Rule 8(a) standard, Congress clarified that Courts should apply to removal allegations the same liberal rules they apply to other matters of pleading.
Just at the plaintiff's amount in controversy allegation is accepted if made in good faith, so a defendant's amount in controversy allegation should be accepted when not contested by the plaintiff or questioned by the Court.
An amicus brief filed by Public Citizen asserted a jurisdictional impediment to our review and alleged insurmountable obstacle flagged by neither party.
Because review of a remand order is discretionary, Public Citizen urged, and the Tenth Circuit did not say why it declined review, we have no authority to take up the question presented.
Our close inspection however reveals that the two issues Public Citizen invites us to separate, whether the Tenth Circuit abused its discretion in denying review, and whether the District Court's remand order was erroneous do not pose genuinely discrete inquiries.