Tucker v. Papa John's International, Inc. et al

Filing 28

ORDER denying 12 Motion to Remand to State Court. Signed by Judge Staci M. Yandle on 03/6/2015. (rlw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
ZACHARY TUCKER, Individually and on
behalf of all others similarly situated,
Plaintiff,
Case No. 14-cv-0618-SMY-PMF
vs.
PAPA JOHN’S INTERNATIONAL, INC.
and PAPA JOHN’S USA, INC.,
Defendants.

MEMORANDUM AND ORDER
This matter comes before the Court on Plaintiff Zachary Tucker’s Motion to Remand
(Doc. 12). Defendants removed this case from the Third Judicial Circuit for Madison County,
Illinois (“state court”) to the U.S. District Court for Southern District of Illinois on May 29, 2014
(Doc. 2) pursuant to the Class Action Fairness Act of 2005 (“CAFA”). Plaintiff alleges lack of
subject matter jurisdiction based on Defendants’ failure to prove the jurisdictional amount in
controversy and requests this Court to (1) remand the case to state court and (2) order Defendants
pay the costs and attorney fees incurred by Plaintiff as a result of the removal. For the reasons
that follow, Plaintiff’s motion is DENIED.
CAFA grants federal subject matter jurisdiction for civil actions where (1) the plaintiff
alleges 100 or more members in the purported class; (2) the plaintiff, as class representative, has
different citizenship from at least one defendant; and (3) the amount in controversy exceeds the
sum of value of $5,000,000 in the aggregate, exclusive of interest and costs. 28 U.S.C. §
1332(d). Defendants are not bound by plaintiff’s estimates of the amount in controversy. Back
Doctors Ltd. v. Metro. Prop. & Cas. Ins. Co., 637 F.3d 827, 830 (7th Cir.2011). Where punitive

damages have not been sought in the complaint, courts must nonetheless consider punitive
damages where they are available. Id. at 830-831.
The standard for determining whether the amount in controversy meets the threshold
requirement is not how much is likely to be recovered, but how much is legally possible. Spivey
v. Vertrue, Inc., 528 F.3d 982, 986 (7th Cir.2008) (“Once the proponent of federal jurisdiction
has explained plausibly how the stakes exceed $5 million… then the case belongs in federal
court unless it is legally impossible for the plaintiff to recover that much.”) Essentially, “the
court has subject matter jurisdiction unless it is clear ‘beyond a legal certainty that the plaintiff
would under no circumstances be entitled to recover the jurisdictional amount.’” Walsh
Chiropractic, Ltd. v. StrataCare, Inc., 752 F. Supp. 2d 896, 902 (S.D. Ill. 2010) (quoting Cadek
v. Great Lakes Dragaway, Inc., 58 F.3d 1209, 1212 (7th Cir.1995)).
Here, only the amount in controversy is disputed. Plaintiff argues that Defendants have
inflated their damages figures and base their estimated amount in controversy on theoretical and
unlikely awards. In particular, Plaintiff accuses Defendants of improperly calculating actual
damages by extending what should be a three-year statute of limitations (under the Illinois
Consumer Fraud Act) to ten years. Plaintiff also points to the fact that punitive damages were
not sought in the Complaint, and even if the court considers them in determining the amount in
controversy, they were improperly calculated at the upper end of the constitutional limit.
Plaintiff also claims that the “legally impossible” standard does not apply to this case,
presumably because Defendants have not met their burden of proving contested facts. Plaintiff
states, “If defendants are unable to prove by a preponderance of the evidence facts that establish
the jurisdictional amount has been met, then they have not satisfied their burden.” However,
whether damages will exceed the threshold amount “is not a fact but a prediction, and with

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respect to that subject the court must decide whether ‘to a legal certainty… the claim is really for
less than the jurisdictional amount.’” Meridian, 441 F.3d at 541 (quoting Rising-Moore, 435
F.3d 813).
Meridian does not create an opportunity to apply an alternate standard as Plaintiff
suggests. In fact, the Seventh Circuit stated,
Although the proponent of jurisdiction may be called on to prove facts that
determine the amount in controversy—such as the economic effect that
compliance with the law would have had on GMAC—once these facts have been
established the proponent's estimate of the claim's value must be accepted unless
there is “legal certainty” that the controversy's value is below the threshold.
Id., referencing Rising-Moore v. Red Roof Inns, Inc., 435 F.3d 813 (7th Cir.2006); Pratt Central
Park Limited Partnership v. Dames & Moore, Inc., 60 F.3d 350 (7th Cir.1995); The Barbers,
Hairstyling for Men & Women, Inc. v. Bishop, 132 F.3d 1203 (7th Cir.1997).
Meridian further clarifies that “the removing defendant, as proponent of federal
jurisdiction, must establish what the plaintiff stands to recover.” Id. One method of doing so is
by presenting affidavits from defendant’s experts or employees as evidence of “how much it
would cost to satisfy plaintiff’s demands.” Id. at 541-542. Then,
Once the estimate has been made—and contested factual allegations that support
the estimate have been established in a hearing under Rule 12(b)(1) by admissible
evidence (that’s what ‘competent’ proof means)—then the St. Paul Mercury
standard comes to the fore, and the case stays in federal court unless it is legally
certain that the controversy is worth less than the jurisdictional minimum.
Id. at 542.
Defendants have filed a declaration of their senior tax director setting forth actual
damages totaling $582,088.27. Defendants argue that it is proper for this calculation to include
money collected from 2004 to 2014 because the statute of limitations on breach of contract,
which Plaintiff included as a cause of action in the complaint, is ten years. Defendants estimate

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injunctive and declaratory relief at a value approaching $3 million, relying primarily on future
cost-savings for consumers and not on foregone profits. Defendants assert that punitive damages
calculated at a 9-to-1 ratio (the uppermost limits) would alone satisfy the jurisdictional
requirement, but with injunctive and declaratory relief included, a multiplier of 2.51 brings the
total amount in controversy above $5 million. Relying on their estimates, Defendants claim
potential damages exceeding $8 million.
Though Plaintiff disputes Defendants’ calculations for each category, the Court finds the
factual allegations that support Defendants’ estimates are uncontested. Plaintiff’s adoption of a
different standard rests on a failure to differentiate between the material factual allegations which
must be proven by Defendants by a preponderance of the evidence if contested, and the ultimate
conclusion that the $5 million jurisdictional amount is satisfied.
Based on Defendants’ estimates, which while uncertain to be awarded, are not legally
impossible as the law would require, this Court cannot deny jurisdiction. Defendants may have
stretched their calculations to include the maximum amounts allowed by law, but without a
showing that such amounts are legally impossible, Plaintiff cannot prevail on its Motion to
Remand. For these reasons, Plaintiff’s Motion to Remand is DENIED in its entirety.
IT IS SO ORDERED.
DATED: March 6, 2015
s/ Staci M. Yandle
STACI M. YANDLE
DISTRICT JUDGE

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