Janoka, Inc. v. Veolia ES Solid Waste Southeast, Inc.

Filing 15

OPINION. Signed by Honorable Judge Myron H. Thompson on 5/9/12. (scn, )

IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION

JANOKA, INC., d/b/a The
Medicine Shop,
Plaintiff,
v.
VEOLIA ES SOLID WASTE
SOUTHEAST, INC.,
Defendant.

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CIVIL ACTION NO.
2:11cv790-MHT
(WO)

OPINION
Plaintiff Janoka, Inc., d/b/a The Medicine Shop,
began

this

class-action

lawsuit

in

an

Alabama

state

court, and defendant Veolia ES Solid Waste Southeast,
Inc. removed it to this federal court based upon the
Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C.
§§ 1332(d)(2), 1453, which, among other things, requires
a removing party to demonstrate that the class members’
claims exceed $ 5 million in the aggregate, exclusive of
interest

and

costs.

Arguing

that

Veolia

has

not

demonstrated that the value of the class members’ claims

will exceed this figure, Janoka has filed a motion to
remand.
After a review of the evidence, this court is of the
opinion, and so finds factually, that Veolia has not
satisfied its burden.

Accordingly, the remand motion

will be granted.

I.
Article
jurisdiction

III
of

of

the

federal

Constitution

courts

and

limits

thereby

the

requires

statutory authorization for a federal court to hear a
case.

CAFA establishes such authorization, and provides

a right for removal where a defendant can demonstrate (1)
an amount in controversy that exceeds $ 5 million; (2)
minimal diversity; (3) numerosity involving the monetary
claims of 100 or more potential plaintiffs; and (4) the
potential plaintiffs’ claims involve common questions of
law or fact.

28 U.S.C. § 1332(d)(2); see also Thomas v.

2

Bank of America Corp., 570 F.3d 1280, 1282 (11th Cir.
2009).
As mentioned, only the amount in controversy is at
issue here, and Veolia, as the removing party, bears the
burden of demonstrating that the $ 5 million threshold
has been met.

See Lowery v. Alabama Power Co., 483 F.3d

1184, 1208 (11th Cir. 2007).

In addition, as a further

recognition

jurisdiction

of

the

limited

of

federal

courts, “removal statutes are construed narrowly. ...
[W]here plaintiff and defendant clash about jurisdiction,
uncertainties are resolved in favor of remand.”

Burns v.

Windsor Inc. Co., 31 F.3d 1092, 1095 (11th Cir. 1996).
The Eleventh Circuit Court of Appeals has employed
two different burdens of proof for addressing amount-incontroversy disputes.

Where the plaintiff’s complaint

expressly requests an amount in damages that falls below
the jurisdictional amount, the removing defendant must
prove to a “legal certainty that plaintiff’s claim ...
exceed[s]”

the

applicable

3

amount-in-controversy

requirement.

Burns, 31 F.3d at 1095; see also Tapscott

v. MA Dealer Service Corp., 77 F.3d 1353, 1357 (11th Cir.
1996), overruled on other grounds by Cohen v. Office
Depot, Inc., 204 F.3d 1069, 1072 (11th Cir. 2000).

And,

by legal certainty, the Burns court meant that, “if
plaintiff

prevails

jurisdictional

on

amount

permissible awards.”

liability,
would

be

an

award

outside

the

below

the

range

of

31 F.3d at 1096.

Burns distinguished cases where the plaintiff has
affirmatively and expressly limited damages to an amount
below the jurisdictional requirement from cases where
“the

amount

unspecified.”

of

damages

sought

by

plaintiff

[i]s

Id. at 1096 n.6; see also Tapscott, 77

F.3d at 1356-57 (discussing Burns’s distinction between
cases where “a plaintiff has specifically claimed less
than the jurisdictional amount” and those regarding an
“unspecified claim for damages”).

In the latter cases,

it is well-settled that the removing party bears the
burden of establishing the jurisdictional amount by a

4

preponderance of the evidence rather than by a legal
certainty.

Pretka v. Kolter City Plaza II, Inc., 608

F.3d 744, 752 (11th Cir. 2010); Lowery, 483 F.3d at 1208.
As Burns explained, and other courts have further
elaborated,

the

difference

in

treatment

between

complaints with specified- and unspecified-damage claims
derives from the understanding that the “plaintiff is
still the master of his own claim” and thus that the
defendant’s “right to remove” and the “plaintiff’s right
to choose his forum are not on equal footing,” 31 F.3d at
1095; see also Tapscott, 77 F.3d at 1353 (“The rationale
is that although a defendant has a right to remove in
certain cases, a plaintiff is still master of her own
claim.”).
Thus, the general rule of strict construction of
removal statutes, along with the understanding that the
plaintiff is the master of its claim, has led to the
following burden-of-proof distinction between unspecified
and

specified

damages:

Where

5

the

damages

in

the

plaintiff’s

complaint

are

unspecified,

the

removing

defendant’s burden of proof for the jurisdictional amount
is preponderance of the evidence; and, where the damages
in the plaintiff’s complaint are specified and are below
the

jurisdictional

amount,

the

removing

defendant’s

burden of proof for the jurisdictional amount is legal
certainty.
Here, the complaint specifically limits the amount of
damages

that

can

be

recovered

for

Janoka

and

each

potential class member:
“Plaintiff, individually and on behalf
of the putative class, does not seek
more than $ 4,998,000.00 in total
damages.
The total damages for the
entire
class
would
not
exceed
$ 4,998,000.00, in the aggregate, for
all relief requested herein.”
Complaint (Doc. No. 1-3, at 8).
considered

in

Burns,

this

amount

Like the complaint
is

just

below

the

jurisdictional requirement, and thus, under Burns, Veolia
bears the burden of proving to a legal certainty that the
amount in controversy will exceed $ 5 million.

6

Despite the fact that Janoka in its complaint has
expressly asked for less than the jurisdictional amount,
Veolia asks this court to apply the lower preponderanceof-evidence standard. Veolia argues that Congress passed
CAFA for the purpose of making it easier for defendants
to remove cases to federal court.
Admittedly, the Eleventh Circuit has not confronted
precisely the issue of what the CAFA burden of proof for
removal is where the damages in the plaintiff’s complaint
are

specified

and

below

the

jurisdictional

amount;

nevertheless, it has offered compelling guidance as to
how to resolve the issue.

In rejecting the contentions

that CAFA changed the traditional removal principles that
govern the placement of the burden of proof and the
resolution of doubts in favor of remand, the appellate
court wrote that, “While the text of CAFA plainly expands
federal jurisdiction over class actions and facilitates
their removal, ‘[w]e presume that Congress legislates
against the backdrop of established principles of state

7

and federal common law, and that when it wishes to
deviate from deeply rooted principles, it will say so.’”
Miedema v. Maytag Corp., 450 F.3d 1322, 1329 (11th Cir.
2006) (quoting United States v. Baxter Int'l, Inc., 345
F.3d 866, 900 (11th Cir. 2003)).
court,

“generalized

appeals

Thus, according to the
to

CAFA's

‘overriding

purpose’ are unavailing in the face of CAFA's silence on
the traditional, well-established rules.”

Id.

Here, CAFA is silent on the issue of the level of
burden of proof.

There is absolutely nothing in the

statute to indicate, or even to suggest remotely, that
Congress intended to address how the federal courts of
appeals were resolving (rightly or wrongly) this issue.
In the face of this congressional silence and based on
the

teaching

following

of

Miedema,

well-established

this

court

Eleventh

still obtains under CAFA:

holds

Circuit

that

the

principle

Where the damages in the

plaintiff’s complaint are specified and are below the
jurisdictional amount, the removing defendant’s burden of

8

proof for the jurisdictional amount is legal certainty.
See Lowdermilk v. U.S. Bank National Ass'n, 479 F.3d 994,
998-1000 (9th Cir. 2007) (holding that, where the damages
in the plaintiff’s complaint are specified, the removing
defendant’s burden of proof for the jurisdictional amount
under CAFA is legal certainty); Morgan v. Gay, 471 F.3d
469, 474-75 (3rd Cir. 2006) (same).
Moreover, with this reading of CAFA, this court
preserves

in

CAFA

cases

the

general

rule

of

strict

construction of removal statutes and the understanding
that the plaintiff is the master of its claim, the two
longstanding principles that led to the burden-of-proof
distinction between specified and unspecified damages in
non-CAFA cases.

See Lowdermilk, 479 F.3d at 1000 (“By

adopting ‘legal certainty’ as the standard of proof, we
guard the presumption against federal jurisdiction and
preserve the plaintiff's prerogative, subject to the good
faith requirement, to forgo a potentially larger recovery
to remain in state court.”); Morgan, 471 F.3d at 474 (in

9

adopting the legal-certainty standard, the court observed
that “CAFA does not change the proposition that the
plaintiff is the master of her own claim”).
Also,

with

this

reading

of

CAFA,

this

court

maintains, as much as possible, for ease of application
and understanding, a reasonable parallelism or symmetry
between CAFA and non-CAFA cases.

Or, to put it another

way from a more practical perspective, the court sees no
need, absent an appellate or statutory directive, to make
removal law more complex than it already is.
This reading of CAFA is also consistent with, if not
reinforced
finding

by,

that

applies,

have

Eleventh
the

Circuit

CAFA

cases

preponderance-of-evidence

expressly

and

carefully

that,

in

standard

limited

their

language to those instances where the damages in the
plaintiff’s complaint were unspecified.

For example, in

the CAFA case Lowery v. Alabama Power Co., the appellate
court

wrote:

“Because

CAFA

does

not

disturb

the

long-established rule that a removing defendant bears the

10

burden

of

proving

federal

jurisdiction,

upon

the

plaintiffs’ motion to remand in this case, the defendants
bear

the

burden

requirements

of

for

a

establishing
CAFA

mass

the

jurisdictional

action.

Furthermore,

because this case involves a complaint for unspecified
damages, the defendants must establish jurisdiction by a
preponderance of the evidence.”

438 F3d. At 1211.

And,

in another CAFA case, Pretka v. Kolter City Plaza II,
Inc., the appellate court reaffirmed these governing
principles: “‘CAFA does not change the traditional rule
that the party seeking to remove the case to federal
court

bears

the

burden

of

establishing

federal

jurisdiction.’” 608 F.3d at 752 (quoting Evans v. Walter
Indus., Inc., 449 F.3d 1159, 1164 (11th Cir. 2006)).

And

“‘[w]here, as here, the plaintiff has not pled a specific
amount of damages, the removing defendant must prove by
a

preponderance

of

the

evidence

that

the

amount

in

controversy exceeds the jurisdictional requirement.’” Id.

11

(quoting Williams v. Best Buy Co., Inc., 269 F.3d 1316,
1319 (11th Cir. 2001)).
Veolia’s reliance on Bell v. Hershey Co., 557 F.3d
953 (8th Cir. 2009), is misplaced.

The Eighth Circuit

Court of Appeals wrote that a “party seeking to remove in
the non CAFA context ... has the burden to prove the
requisite amount by a preponderance of the evidence ...
regardless of whether the complaint alleges no specific
amount of damages or an amount under the jurisdictional
minimum.”

557 F.3d at 956 (quoting Advance Am. Servicing

of Ark., Inc. v. McGinnis, 526 F.3d 1179, 1173 (8th Cir.
2008), and In re Minn. Mut. Life Ins. Co. Sales Practices
Litig., 346 F.3d 830, 834 (8th Cir. 2003) (internal
quotation marks omitted)).

Given this pre-CAFA rule, the

appellate court then reasoned that, imposing a legalcertainty test for CAFA cases would “force [it] to depart
from

[its]

non

CAFA

precedent

where

[it

had]

only

required a removing party to establish jurisdictional
facts by a preponderance of the evidence.”

12

Id. at 957.

Indeed, the Eighth Circuit’s approach is fully consistent
with this court’s.

As the Eighth Circuit did not alter

its general non-CAFA standard of proof in addressing CAFA
cases, this court has not departed as well.

II.
In some ways, the foregoing could be viewed as much
ado about nothing, for, regardless as to the applicable
standard (preponderance of evidence or legal certainty),
the court is convinced, and so finds factually, that
Veolia has not met the removal burden.
Janoka’s complaint includes only one cause of action
against

Veolia:

breach

of

contract.

The

complaint

alleges that Janoka and other putative class members
entered into written service agreements with Veolia for
the provision of solid waste services.

The contracts set

forth a “service rate” and indicate that they will be
automatically
customer

renewed

opts-out.

after
The

three

contracts

13

years
also

unless
provide

the
that

Veolia may increase the service rate, but they limit
annual increases to “adjust the rates to reflect the
percentage increase in the U.S. City Average Consumer
Price Index For All Urban Consumers (CPI-U), published by
the U.S. Department of Labor Statistics.”
(Doc. No. 1-3, at 6).

Complaint

Janoka’s claim is specific: Veolia

“has breached the agreements by increasing the service
Id. at 6-7.

rates by more than CPI-U.”

The complaint

also points out that the CPI-U is meant to include
increases in fuel prices, but notes that Veolia has a
separate “fuel surcharge” that it charged Janoka and
putative class members.

This additional fee, Janoka

alleges, makes Veolia’s “arbitrary and inflated rate
increases
contract.”

...

even

greater

Id. at 7.

than

what

is

allowed

by

In short, the complaint alleges

that (1) a written agreement exists between Janoka and
Veolia and (2) Veolia’s improper practices constitute a
breach of contract by causing Janoka “and putative class
members to pay more for services than agreed.”

14

Id. at 7.

Veolia’s argument that the amount in controversy
exceeds $ 5 million comes in two parts.

First, Veolia

argues that the complaint is not a breach-of-contract
action for just “service rate” increases but actually
“put[s] at issue ... the entirety of rate increases
assessed and collected during the putative class period.”
Veolia Resp. (Doc. No. 12, at 2) (emphasis added).

The

complaint does not support this reading, however.

Read

naturally, the complaint alleges that Veolia increased
the service rate above the permissible CPI-U amount, not
that all raises were unfair or that every rate increase
was in violation of the contract.

For example, Janoka

alleges that the annual CPI-U change for 2008 was 3.8 %,
but that Veolia increased the service rate by 8.5 %,
which means that Veolia should be liable for the 4.7 %
increase above the CPI-U amount.
The reference to the fuel surcharge is an argument
about

double-counting:

Janoka

alleges

that

the

impermissible rate-hikes are even more troubling if they

15

were based upon fuel prices because the increased price
of fuel is covered by the CPI-U figure.

In essence, by

charging a fuel surcharge and by failing to take that out
of the service-rate increases, Janoka alleges, it has
been twice taxed for a singular increase in the price of
fuel.

Keeping in mind the rule that Janoka is the master

of its complaint, the court will not stretch the language
of the complaint in such a manner as to include all rate
increases when Janoka has not defined its claim in such
a manner.

The court, therefore, agrees with Janoka’s

reasonable reading of its own complaint that “the measure
of damages sought ... is the amount of the increase above
and beyond the CPI-U percentege and not the total service
charge

increase.”

Janoka

Mo.

(Doc.

No.

8,

at

6)

(emphasis in original).
Veolia’s second argument, which relies on the first,
is no more convincing.

In a declaration, the Chief

Financial Officer of Veolia, “determined that Veolia’s
Alabama

customers

received

16

total

base

service

rate

increases in the approximate amount of $5,541,231” for
the time period covered in the complaint.
(Doc. No. 1-2, at 2).

Declaration

Though this amount “does not

include base service rate increases for Alabama customers
invoiced

from

agreement,”

Veolia’s

which

Columbus,

supports

Veolia’s

Georgia,

billing

contention,

the

declaration further admits that this figure does not
apply solely to putative class members.

Instead, the

“total base service price increase amount ($5,541,231)
does

not

differentiate

between

customers,

and

would

include, for instance, customers covered by contracts
that may contain different terms than alleged in the
Complaint.”

Id.

By its terms, therefore, Veolia’s “base service rate”
amount is too high because it does not separate out the
rate increases above the CPI-U amount, which is the basis
for the breach-of-contract claim.

The amount is also too

high because it does not exclude non-class members; the
putative

class

is

limited

17

to

those

with

municipal-

franchise

agreements

customers

with

and

does

residential

written contracts.

not

include

subscriptions

Alabama

instead

of

Based upon these deficiencies, the

court finds, factually, that Veolia has not demonstrated
by

a

preponderance

of

the

evidence

or

to

a

legal

certainty (that is, “if [Janoka] prevails on liability,
an award below the jurisdictional amount would be outside
the range of permissible awards.” Burns, 31 F.3d at 1096)
that the amount in controversy meets the jurisdictional
amount.
In addition, the fact that Veolia has failed to
report some service rate increases from those who could
be putative class members (those who are invoiced in
Columbus, Georgia), but then attempts to sweep in the
rate increases from those Veolia admits are not putative
class members (those with residential subscriptions),
does

little

to

help

its

contention.

Instead,

this

inadequacy of evidence only increases the uncertainty as
to the amount of damages and thus reinforces the court’s

18

conclusion that Veolia has not proven by a preponderance
of the evidence or to a legal certainty that the amount
in controversy exceeds $5 million.
An appropriate order will be entered.
DONE, this the 9th day of May, 2012.

/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDG