Bohnenstiehl et al v. McBride, Lock & Associates, LLC
Filing
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ORDER GRANTING 8 Motion to Remand to State Court. This action is hereby REMANDED to the Circuit Court for St. Clair County, Illinois. In light of the remand, the Court DECLINES to address 12 Motion to Dismiss Case for Lack of Jurisdiction; it is DENIED as moot, subject to refiling in the state court following remand, if appropriate. The Court also DECLINES to award Plaintiffs costs and fees under 28 U.S.C. § 1447(c). Signed by Judge Nancy J. Rosenstengel on 11/22/16. (klh2)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
JENNIFER BOHNENSTIEHL and
TIMOTHY BOHNENSTIEHL,
Plaintiffs,
vs.
MCBRIDE, LOCK, and ASSOCIATES,
LLC,
Defendant.
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Case No. 16-CV-306-NJR-DGW
MEMORANDUM AND ORDER
ROSENSTENGEL, District Judge:
Plaintiffs Jennifer and Timothy Bohnenstiehl filed a putative class action on
January 25, 2016, in the Circuit Court of St. Clair County, Illinois, against Defendant
McBride, Lock, and Associates, LLC (“McBride”). McBride is a certified public
accounting firm retained by the Department of Justice to perform audits of bankruptcy
petitions, including Plaintiffs’ Chapter 13 bankruptcy petition filed in the United States
Bankruptcy Court for the Southern District of Illinois. In November 2015, a McBride
email account was hacked, which Plaintiffs believe compromised the security of
personal information on file with McBride, most notably social security numbers. After
being notified of the breach, Plaintiffs filed their putative class action asserting a
common law negligence claim for failure to exercise reasonable care in safeguarding and
protecting social security number information from unauthorized access, as well as
claims under the Illinois Personal Information Protection Act, 815 ILL. COMP. STAT.
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530/1, et seq., and the Missouri Personal Information Protection Act, MO. REV. STAT.
§ 407.1500, for failure to disclose the breach in the most expedient time possible.
McBride removed this case to federal court on March 21, 2016, under the Class
Action Fairness Act of 2005, 28 U.S.C. § 1332(d)(2) (“CAFA”) (Doc. 1). Plaintiffs filed a
timely motion to remand, arguing that the amount in controversy does not exceed the
statutory threshold (Doc. 8). McBride filed a response in opposition to the motion to
remand (Doc. 16), as well as a motion to dismiss, which sets forth a number of
arguments related to personal jurisdiction, standing, and failure to state a claim (Doc.
13).
The motion to remand (Doc. 8) and the motion to dismiss (Doc. 13) are both
currently before the Court. For the reasons explained below, the motion to remand is
granted, and this case is remanded to the Circuit Court of St. Clair County, Illinois. In
light of the remand, the Court declines to address the motion to dismiss.
DISCUSSION
Under CAFA, a federal district court has original jurisdiction over a putative class
action if the class has more than 100 members, the parties are minimally diverse, and the
matter
in
controversy—determined
by
aggregating
the
claims
of
all
class
members—exceeds $5 million, exclusive of costs and interest. Standard Fire Ins. Co. v.
Knowles, 133 S. Ct. 1345, 1348 (2013); 28 U.S.C. § 1332(d)(2), (d)(5)(B). Plaintiffs alleged in
their original complaint that the class at least 100 members (Doc. 1-1, ¶12); McBride
agreed and alleged that the class actually has somewhere around 227 members (Doc. 1).
It is undisputed that minimal diversity exists because Plaintiffs are citizens of Illinois
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while McBride is a citizen of Missouri (Doc. 1; see Doc. 8). Thus the only issue for the
Court is whether the amount in controversy exceeds the statutory threshold of
$5 million.
McBride alleged in the notice of removal that the amount in controversy was at
least $7.5 million and possibly as high as $17 million. To reach the low figure, McBride
relied on allegations in the original complaint that the class consisted of at least 100
members “with individual monetary claims not in excess of $75,000.00, exclusive of
interest and costs” (Doc. 1; Doc. 1-1, ¶¶11, 12). McBride interpreted those allegations to
mean that each of the 100 class members had a possible claim of up to $75,000 (Doc. 1,
p. 6). Thus, according to McBride, simple math dictates that the amount in controversy
as pleaded by Plaintiffs is potentially $7.5 million (100 members x $75,000 = $7,500,000)
(Doc. 1, p. 6). To reach the high figure, McBride used its own estimate regarding the size
of the class—227 putative members—multiplied by $75,000, which increases the amount
in controversy to over $17 million (227 members x $75,000 = $17,025,000) (Doc. 1, p. 6).
Plaintiffs dispute that each class member has a possible claim of up to $75,000 (see
Doc. 8). They argue that McBride’s assertion to that effect is based on nothing more than
the simple fact that persons with claims over that amount are excluded from the
proposed class (Doc. 8, p. 1). Plaintiffs go on to point out that in order to exceed the
jurisdictional limit of $5 million, each of the 227 class members would have to have
damages of more than $22,026, which they claim is “so exceedingly unlikely as to be
comical to suggest it” ($5,000,000 / 227 members = $22,026.43) (Doc. 8, p. 3). They further
claim that makes McBride’s suggestion that the amount in controversy might possibly be
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over $17 million is “so frivolous as to raise serious questions about the good faith of
Defendant” (Doc. 8, p. 3).
Because Plaintiffs have contested McBride’s allegation that the amount in
controversy exceeds the jurisdictional threshold, McBride “has the burden of showing
by a preponderance of the evidence facts that suggest the amount-in-controversy
requirement is met.” Oshana v. Coca-Cola Co., 472 F.3d 506, 511 (7th Cir. 2006) (citing
Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 543 (7th Cir. 2006)); Blomberg v. Serv. Corp.
Int’l, 639 F.3d 761, 763 (7th Cir. 2011) (“If the party opposing federal jurisdiction contests
the amount in controversy, the proponent must prove those jurisdictional facts by a
preponderance of the evidence.”) (internal quotation marks and citation omitted). Of
course, “[t]hat is easier said than done when the plaintiff . . . does not want to be in
federal court and provides little information about the value of her claims.” Oshana, 472
F.3d at 511. “In such a case, a good-faith estimate of the stakes is acceptable if it is
plausible and supported by a preponderance of the evidence.” Id.; accord Blomberg, 639
F.3d at 764.
To that end, McBride “does not need to establish what damages the plaintiff will
recover, but only how much is in controversy between the parties.” Blomberg, 639 F.3d at
764; Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 449 (7th Cir. 2005) (“The
demonstration concerns what the plaintiff is claiming (and thus the amount in
controversy between the parties), not whether plaintiff is likely to win or be awarded
everything he seeks.”). If McBride plausibly explains how the stakes exceed $5 million,
“then the case remains in federal court unless the plaintiff can show it is legally impossible
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to recover that much.” Johnson v. Pushpin Holdings, LLC, 748 F.3d 769, 771 (7th Cir. 2014)
(emphasis in original); ABM Security Services, Inc. v. Davis, 646 F.3d 475, 478 (7th Cir.
2011); Blomberg, 639 F.3d at 764.
Here, the complaint does not make a specific demand for damages (see Doc. 1-1).
McBride nevertheless contends that the complaint is sufficient on its face to establish the
amount in controversy because the class definition excludes any individuals with
damages over $75,000 (Doc. 16). McBride contends this exclusion makes it “plausible
that each putative class member could have damages up to the maximum sum of
$75,000, exclusive of interest and costs” (Doc. 16, p. 4). Therefore, according to McBride,
whether the class consists of 100 members or 227 members, the aggregate amount in
controversy as pleaded by Plaintiffs clearly exceeds the $5 million jurisdictional
threshold (Doc. 16).
However, just because the class definition excludes individuals with damages
over $75,000, it does not automatically follow that $75,000 is the amount of damages each
class member is claiming. Furthermore, because Plaintiffs have contested that each class
member is claiming $75,000 in damages, it is incumbent on McBride to actually establish
by a preponderance of the evidence the amount that each class member, or the class as a
whole, stands to recover. The Seventh Circuit has suggested several ways in which this
can be done. See Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 541 (7th Cir. 2006)
(explaining that a removing defendant can establish amount in controversy by
contention interrogatories or admissions in state court; calculations of the potential
damages based on facts and theories of recovery alleged in the complaint; reference to
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the plaintiff’s informal estimates or settlement demands; or affidavits from defendant’s
employees or experts about how much it would costs to satisfy the plaintiff’s demands);
McMillian v. Sheraton Chi. Hotel & Towers, 567 F.3d 839, 845 (7th Cir. 2009) (explaining
that amount in controversy can be established from “cases in which the plaintiffs had
suffered similar injuries, and the jury awarded pain and suffering damages in amounts
that would satisfy the jurisdictional requirements”).
But McBride did none of those things. Instead, it relied solely on a bald assertion
and completely ignored its obligation to support its assertion with facts. And given the
nature of the relief sought by Plaintiffs—“the cost of credit monitoring and time and
expense in safeguarding their identities and personal information” plus attorney fees
(Doc. 1-1)—the Court finds it difficult to believe that the various forms of relief could
reach $75,000 per class member or $5 million in the aggregate. See, e.g., Barel v. Bank of
Am., 255 F.R.D. 393, 402 (E.D. Pa. 2009) (approving a class-action settlement that
provided non-customers, whose credit reports had been improperly accessed by the
defendant, with four months of credit monitoring and other relief that amounted to
approximately $52 for each class member); In re TJX Companies Retail Sec. Breach Litig.,
584 F. Supp. 2d 395, 400 (D. Mass. 2008) (approving class settlement for victims of retail
security breach in which it was estimated that three years of credit monitoring would
cost $390); Vincent R. Johnson, Credit-Monitoring Damages in Cybersecurity Tort Litigation,
19 GEO. MASON L. REV. 113, 116, n.18 and 19 (2011) (noting that “[b]asic credit monitoring
is not expensive” and discussing options ranging from approximately $9 per month to
$30 per month).
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In conclusion, the Court finds that McBride failed to support its prediction
regarding the amount in controversy with any evidence or plausible explanation.
Therefore, subject matter jurisdiction is lacking, and this case must be remanded.
Additionally, Plaintiffs tacked on to the end of the motion to remand a request for costs
and fees incurred as a result of the removal pursuant to 28 U.S.C. § 1447(c) (Doc. 8). This
cursory request is denied because it is unsupported by sufficient argument or
documentation.
CONCLUSION
The motion to remand (Doc. 8) is GRANTED, and this action is REMANDED to
the Circuit Court for St. Clair County, Illinois. In light of the remand, the Court
DECLINES to address the motion to dismiss; it is DENIED as moot, subject to refiling in
the state court following remand, if appropriate. The Court also DECLINES to award
Plaintiffs costs and fees under 28 U.S.C. § 1447(c).
IT IS SO ORDERED.
DATED: November 22, 2016
s/ Nancy J. Rosenstengel
NANCY J. ROSENSTENGEL
United States District Judge
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