GRACE v. T.G.I. FRIDAYS, INC. et al

Filing 11

OPINION. Signed by Judge Robert B. Kugler on 7/27/2015. (drw)

NOT FOR PUBLICATION

(Doc. No. 6)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
___________________________________
:
MICHAEL GRACE,
:
:
Plaintiff,
:
Civil No. 14-7233 (RBK/KMW)
:
v.
:
OPINION
:
T.G.I. FRIDAYS, INC., et al.,
:
:
Defendants.
:
___________________________________ :
KUGLER, United States District Judge:
This matter comes before the Court on the Motion for Remand to State Court of Plaintiff
Michael Grace (“Plaintiff”). (Doc. No. 6.) Plaintiff brings what he claims is a state law
consumer fraud class action, filed on behalf of himself and similarly situated plaintiffs who were
harmed by the acts of Defendants, who allegedly violated New Jersey law by failing to list the
price of certain beverages sold at T.G.I. Fridays, Inc. (“TGIF”) and charging patrons an
unreasonable amount for those beverages. In his present Motion Plaintiff claims this case does
not meet the jurisdictional amount in controversy threshold of $5,000,000.00 under the Class
Action Fairness Act of 2005 (“CAFA”). See 28 U.S.C. §§ 1332(d), 1453, 1711-15. For the
reasons set forth below, the Court will deny Plaintiff’s Motion for Remand.
I.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY
Plaintiff is a citizen of New Jersey. (Notice of Removal (“NOR”) ¶ 8.) TGIF is a New

York Corporation with its principal place of business in Carrollton, Texas. (Id.) Sentinel Capital
Partners, LLC (“Sentinel”) and Tri-Artisan Capital Partners, LLC (improperly pled as TriArtisan

Capital Partners) (“Tri-Artisan”) are Delaware limited liability companies with their sole
members residing in Delaware and New York. (Id.)1
TGIF is a restaurant chain that sells food and drinks to patrons on the premises. (Compl.
¶ 8.) Plaintiff claims that since July 14, 2014, TGIF’s New Jersey locations continue to sell beer,
mixed drinks, soft drinks, and other beverages without disclosing the actual price of those items
at the point of purchase via menu or any other form of notice. (Id. ¶¶ 7, 11-12.) He also
contends that it is TGIF’s practice to sell those items without posting prices in order to sell more
beverages at a higher price point than would otherwise be feasible if the prices were disclosed.
(Id. ¶ 13.) The prices for the beverages are only revealed to customer after they have been
consumed. (Id. ¶¶ 18, 21.)
The crux of Plaintiff’s allegations is that TGIF’s practice of knowingly or intentionally
failing to disclose the price of soft drinks, beer, mixed drinks, and other beverages is an
unconscionable commercial practice, and Defendants have engaged in this practice in order to
induce consumers to pay “higher than reasonable prices for those beverages.” (See id. ¶¶ 32-34.)
He cites as an illustrative example his experience patronizing a TGIF location in Evesham, New
Jersey on September 30, 2014, where he ordered an unpriced mixed drink off the menu only to
find later that it was priced “[a]t a staggering $10.39, … far greater than he expected it to be and
in excess of a reasonable price for the beverage.” (Id. ¶ 20.) This was part of TGIF’s alleged
practice aimed at charging “slightly excessive prices on some drinks without losing sales” and
“grossly excessive prices on other drinks.” (Id. ¶ 15.)

The Court notes that “mere residency in a state is insufficient for purposes of diversity.” See Krasnov v. Dinan,
465 F.2d 1298, 1300 (3d Cir. 1972) (citing Sun Printing & Publ’g Ass’n v. Edwards, 194 U.S. 377 (1904)).
However, because diversity jurisdiction exists for class actions where “any member of a class of plaintiffs is a
citizen of a State different from any defendant,” jurisdiction may still be proper under 28 U.S.C. § 1332(d)(2)
because Plaintiff is a citizen of New Jersey and TGIF is a citizen of New York and Texas.
1

2

Plaintiff also alleges that Sentinel and Tri-Artisan own and substantially control TGIF
since July 14, 2014, and that Sentinel and Tri-Artisan each know of, approve of, participate in,
control, and benefit from the above described practice of selling beverages without clearly
marked prices at an unreasonably high price point. (Id. ¶¶ 7, 13.)
On October 6, 2014, Plaintiff filed this putative class action in the Superior Court of New
Jersey, Law Division, Burlington County. (NOR ¶ 1.) In his Complaint Plaintiff seeks damages
on behalf of himself and the class of “hundreds” of plaintiff class members who were “all
customers of New Jersey [TGIF locations]2 … [and] who purchased items from the menu that
did not have a disclosed price from July 14, 2014 onward.” (Compl. ¶ 23.) Despite the size of
the class, the number of transactions covered, and the ongoing nature of the time-period covered,
Plaintiff claims that “[u]pon information and beleif [sic], the class wide amount in controversy is
less than $5,000,000.00 by virtue of the short amount of time.” (Id. ¶ 7.)
Plaintiff’s substantive claims include a claim under the New Jersey Consumer Fraud Act
(“CFA”), N.J. Stat. §§ 56:8-1 et seq., a claim under the New Jersey Truth in Consumer Contract
Warranty and Notice Act (“TCCWNA”), N.J. Stat. §§ 56:12-15 et seq., a breach of contract
claim, and an unjust enrichment claim. (Compl., Counts I-IV.) Plaintiff claims that each class
member is entitled to a minimum of a $100 civil penalty and attorney’s fees and costs under the
TCCWNA, as well as actual damages, treble damages, attorney’s fees, a refund for each
consumer, and injunctive relief under the CFA. (See Compl. ¶¶ 38, 45.) There is also a request
for punitive damages in the breach of contract claim. (Id. ¶ 49.)

2

There are 34 TGIF locations in New Jersey. (NOR ¶ 10.)

3

TGIF was served with a copy of the summons and Complaint on October 22, 2014, and
Defendants timely removed this action pursuant to 28 U.S.C. §§ 1446 and 1453 on November
20, 2014. (Doc. No. 1.)3 Defendants claimed removal was appropriate under 28 U.S.C. §§ 1453
and 1332(d)(2) because the parties are at least minimally diverse (NOR ¶ 12), the “aggregate
amount in controversy … exceeds $5,000,000,” (id. ¶¶ 10-11), and there are more than 100 class
members. (Id. ¶ 13.)
On December 12, 2014, Defendants filed a Motion to Dismiss, (Doc. No. 4), and on
December 17, 2014, Plaintiff filed the present Motion for Remand, arguing that the $5,000,000
amount in controversy requirement could not be shown by Defendants. (Doc. No. 6.) The Court
ordered that Defendants’ Motion to Dismiss was dismissed as moot pending the resolution of the
Motion for Remand. (Doc. No. 7.)
Because the parties have briefed the rather narrow issue presented in this Motion, the
Court is prepared to address the substance of the Motion.
II.

DISCUSSION
Federal Courts are courts of limited jurisdiction and may only decide cases as authorized

by the Constitution. Kokkonen v. Guardian Life Ins., 511 U.S. 375, 377 (1994). A case must be
remanded if, at any time before final judgment, the district court discovers that it lacks subject
matter jurisdiction to hear the case. See 28 U.S.C. § 1447(c). As the parties removing the case,
Defendants have the burden to prove that federal court jurisdiction is proper at all stages of the
litigation. See Samuel–Bassett v. KIA Motors Am., Inc., 357 F.3d 392, 396 (3d Cir. 2004);

3

Neither Sentinel nor Tri-Artisan were served with the Summons and Complaint in the State Court action as of the
filing of the Notice of Removal. (NOR ¶¶ 5-6.)

4

Boyer v. Snap–On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990); Abels v. State Farm Fire &
Cas. Co., 770 F.2d 26, 29 (3d Cir. 1985).
Defendants rely on the jurisdiction conferred pursuant to CAFA, which vests original
jurisdiction in the federal district courts to hear “class action” lawsuits in which the proposed
class has at least 100 members, “the parties are minimally diverse,” and “the matter in
controversy exceeds the sum or value of $5 million.” Standard Fire Ins. Co. v. Knowles, –– U.S.
––, 133 S. Ct. 1345, 1348 (2013) (quoting 28 U.S.C. § 1332(d)(2), (d)(5)(B)). Plaintiff
challenges both the basis for removal alleged in Defendants’ Notice of Removal and the
sufficiency of the evidence supporting Defendants’ claim that the amount in controversy exceeds
the $5,000,000 threshold, arguing that Defendants’ have not shown the amount is greater than
$5,000,000 to a legal certainty.4 Defendants argue that the allegations in their Notice of
Removal were sufficient to support their good faith belief that the amount in controversy is in
excess of $5,000,000, and that the allegations in the Complaint and the Notice of Removal, as
well as the evidence submitted by Defendants in response to Plaintiff’s Motion, are sufficient to
satisfy the Court by a preponderance of the evidence and to a legal certainty that the amount in
controversy is in excess of $5,000,000.5 Based on the reasons articulated below, the Court finds
that the $5,000,000 amount in controversy has been adequately shown, jurisdiction exists under
CAFA, and removal was proper in this case.

4

Plaintiff does not dispute that there is minimal diversity of citizenship and there are over 100 putative class
members. Therefore, the Court need only address whether CAFA's five million dollar statutory threshold is met.
5

Because the Court finds that the preponderance of the evidence standard, and not the legal certainty standard, is
applicable, it need not consider whether Defendants satisfy the more demanding legal certainty test.

5

a. Sufficiency of Allegations in Notice of Removal
The first issue, whether TGIF’s Notice of Removal contained sufficient detail to support
the allegation that the amount in controversy exceeds $5,000,000, was recently addressed by the
Supreme Court in Dart Cherokee Basin Operating Co., LLC v. Owens, — US —, 135 S. Ct. 547
(2014). The question before the Supreme Court in Owens was whether “a defendant seeking
removal to federal court is required to include evidence supporting federal jurisdiction in the
notice of removal, or is alleging the required ‘short and plain statement of the grounds for
removal’ enough?” Id. at 552-53. The Court held that “a defendant's notice of removal need
include only a plausible allegation that the amount in controversy exceeds the jurisdictional
threshold.” Id. at 554. Thus, the grounds for removal should be made in “a short plain
statement,” just as required of pleadings under Fed. R. Civ. P. 8(a). Id. at 553. No evidentiary
support is required, and the Court should accept a defendant’s amount in controversy allegation
unless it is contested by the plaintiff or questioned by the Court. Id.; see also id. at 554
(“Defendants do not need to prove to a legal certainty that the amount in controversy
requirement has been met. Rather, defendants may simply allege or assert that the jurisdictional
threshold has been met.”) (quoting H.R. Rep. No. 112-10, at 16 (2011)).
It is clear from a review of Defendants’ Notice of Removal that it contains a short and
plain statement alleging a plausible basis that the $5,000,000 amount in controversy requirement
has been met. The Notice of removal states that there 34 TGIF locations in New Jersey, the
proposed class consists of “all customers of [TGIF] who purchased items from the menu that did
not have a disclosed price from July 14, 2014 onward,” all customers who purchased a beverage
without a posted price may be entitled to a minimum $100 civil penalty under TCCWNA for
each purchase made, all customers may be entitled to actual damages, treble damages, attorney’s
6

fees, and a refund under the CFA, and all customers may be entitled to punitive damages under
the breach of contract claim. (NOR ¶¶ 10-11.) Defendants noted that it would take only 50,000
customer transactions subject to the $100 TCCWNA fine to reach the $5,000,000 threshold, and
due to the ongoing nature of the lawsuit that was certain to happen. (Id. ¶ 10.) These allegations
meet Defendants’ burden set forth in Owen, and Plaintiff’s suggestion that Defendants’ Notice of
Removal does not contain enough factually accurate material to meet the plausibility requirement
is off the mark. Plaintiff seemingly misconstrues the standard required for allegations in a notice
of removal with the standard that might apply once a Plaintiff contests the amount in
controversy.
b. Challenged Amount in Controversy
Even though TGIF’s allegations are sufficient, Plaintiff may still contest the grounds for
removal. Here, Plaintiff has done so by attacking the amount in controversy allegation put forth
by TGIF. The parties dispute which test the Court should apply to the amount in controversy
when a named plaintiff expressly limits the amount in controversy in a proposed class action to
less than $5,000,000 in the original state court complaint and challenges the defendant’s amount
in controversy allegations in a subsequent motion for remand.6 Therefore, the Court will address

6

While the Court assumes for purposes of this Opinion that Plaintiff explicitly limited the amount in controversy to
$5,000,000 or less, that assumption rests on shaky ground. As noted above, Plaintiff’s Complaint only averred that
“[u]pon information and belief, the class wide amount in controversy is less than $5,000,000 by virtue of the short
amount of time.” (Compl. ¶ 7 (emphasis added).) This statement could very well be read as equivocating, in light
of the “upon information and belief” language, and simply incorrect in light of the amount in controversy being tied
to the time period covered in the Complaint, which is ongoing in nature. See Frederico v. Home Depot, 507 F.3d
188, 196 (3d Cir. 2007) (holding that allegations in a complaint of the amount in controversy must be specific and
precise, and cannot be made “impliedly” or “inferentially,” if the plaintiff intends to expressly limit the limit the
amount in controversy to below the jurisdictional threshold). However, because the Court finds that the
preponderance of the evidence standard applies even assuming Plaintiff explicitly limited the amount in controversy
in his original Complaint, the end result of the Court’s analysis would be the same were the Court to conclude that
the amount in controversy was not so limited. See Judon v. Travelers Property Cas. Co. of Am., 773 F.3d 495, 504
(3d Cir. 2014) (“[W]here a challenge to the amount in controversy had been raised in the pleadings or the notice of
removal, but ‘no evidence or findings in the trial court addressed that issue,’ ‘the party alleging jurisdiction [is

7

this issue first. Because the Court decides that the preponderance of the evidence standard
applies, it will apply that standard to the allegations in the Complaint and the proofs submitted
by TGIF.
i. Which Standard Applies
Three days before the Supreme Court’s decision in Owens was released, the Third Circuit
presented a cogent and comprehensive analysis of three tests applied by courts in this Circuit
when plaintiffs in proposed class actions challenge the amount in controversy after a Defendant
removes the case to federal court. See Judon v. Travelers Prop. Cas. Co. of Am., 773 F.3d 495
(3d Cir. 2014). Regarding the first tests, the court in Judon noted that in situations where no precertification stipulation had been made regarding the amount in controversy, and where a party
challenged the amount in controversy but “no evidence or findings in the trial court addressed
that issue,” the party alleging jurisdiction has the requirement to justify his allegations by a
preponderance of the evidence. Id. at 504 (citing McNutt v. Gen. Motors Acceptance Corp. of
Ind., Inc., 298 U.S. 178, 179-80, 189 (1936); Samuel-Bassett, 357 F.3d at 397). Conversely,
where jurisdictional facts are not contested, or the trial court already made findings on the issue,
and the amount in controversy is determined in whole or in part by applicable law, the party
challenging the court’s jurisdiction must show that the plaintiff cannot recover more than amount
in controversy threshold to a legal certainty. Judon, 773 F.3d at 505 (citing Samuel-Bassett, 357
F.3d at 397-98). The court in Judon also discussed the so-called “third test” under CAFA, as set
forth in Morgan v. Gay, 471 F.3d 469 (3d Cir. 2006). See Judon, 773, F.3d at 504 n.8.

required to] justify his allegations by a preponderance of the evidence.’”) (quoting Samuel-Bassett, 357 F.3d at 397;
McNutt v. Gen. Motors Acceptance Corp. of Ind., Inc., 298 U.S. 178, 189 (1936)).

8

In Morgan the Third Circuit held that where a plaintiff expressly limited the amount in
controversy in a class action lawsuit filed in state court, the removing defendant was required to
prove, “to a legal certainty,” that the amount in controversy exceeded the statutory minimum. Id.
at 474. In reaching this conclusion, the court noted that the federal courts have long held that
“plaintiffs may limit their claims to avoid federal subject matter jurisdiction,” such as by suing
for less than the jurisdictional amount. Id. (citing St. Paul Mercury Indem. Co. v. Red Cab Co.,
303 U.S. 283, 294 (1938)). Because “CAFA [did] not change the proposition that the plaintiff is
the master of her own claim,” the court found that a plaintiff may limit the monetary claims in a
class action to avoid the amount in controversy threshold just as she could do so in any other
civil suit. Morgan, 471 F.3d at 474 (citing Brill v. Countrywide Home Loans, Inc., 427 F.3d
446, 449 (7th Cir. 2005)).

Thus, a defendant may only remove a case to federal court under the

circumstances by showing that the amount in controversy exceeds $5,000,000 to a legal
certainty, as a means of challenging the “broad good faith requirement” for the amount in
controversy pled in the Plaintiff’s complaint. Morgan, 471 F.3d at 474 (citing Red Cab, 303 U.S.
at 288; Samuel-Bassett v. KIA Motors Am., Inc., 357 F.3d 392, 398 (3d Cir. 2004)).7
The rule announced in Morgan was discussed approvingly a year later in Frederico,
where the Third Circuit distinguished it from the types of cases governed by Red Cab and

The court in Morgan also noted that “because ‘the complaint may be silent or ambiguous on one or more of the
ingredients needed to calculate the amount in controversy,’ ‘[a] defendant's notice of removal serves the same
functions as the complaint would in a suit filed in federal court.’” Morgan, 471 F.3d at 474 (quoting Brill, 427 F.3d
at 449). Under such circumstances, the notice of removal need only contain (plausible) good faith allegations as to
the actual amount in controversy. See Owens, 135 S. Ct. at 553-54. However, in light of the Supreme Court’s
language in Owens, this Court cannot conclude that the role and requirements of a party’s notice of removal differ in
any respect whether the plaintiff expressly limited the amount in controversy in a class action or was silent on the
issue. See id. at 554 (“[A]s specified in § 1446(a), a defendant's notice of removal need include only a plausible
allegation that the amount in controversy exceeds the jurisdictional threshold. Evidence establishing the amount is
required by § 1446(c)(2)(B) only when the plaintiff contests, or the court questions, the defendant's allegation.”); id.
(“[A] dispute about a defendant's jurisdictional allegations cannot arise until after the defendant files a notice of
removal containing those allegations.”) (emphasis in original).
7

9

Samuel-Bassett, which involved those situations where a plaintiff had not specifically averred in
the complaint that the amount in controversy was less than the jurisdictional minimum.
Frederico, 507 F.3d at 195-97. Then in Judon the Third Circuit commented that, while the
Supreme Court’s decision Knowles had held that a plaintiff’s stipulation of an amount in
controversy less than $5,000,000 could not bind the class, and thus could not prevent removal
under CAFA, Knowles may have still been consistent with Morgan, which also acknowledged
that a plaintiff could not prevent removal altogether by expressly limiting the amount in
controversy to below the threshold. Id. However, the court in Judon also acknowledged that it
was not presented with the opportunity to reexamine the holding in Morgan in light of Knowles,
and therefore would not opine on the continuing validity of the legal certainty test. Id.
This Court finds that the Supreme Court’s recent decision in Owens, taken together with
the previous decision in Knowles, calls into question the soundness of the reasoning given by the
court in Morgan for applying the legal certainty test rather than the preponderance of the
evidence test.
As described above, Morgan held that a named plaintiff may limit the amount in
controversy to less than $5,000,000 under the plaintiff-as-master-of-his-complaint reasoning.
471 F.3d at 474 (citing Red Cab, 303 U.S. at 294). Because such a limitation entails a good faith
requirement, the legal certainty test was still available to a defendant wishing to remove the case
to federal court. Id. (citing Samuel-Bassett, 357 F.3d at 398). In other words, a court would
presume the jurisdictional facts had been established by the plaintiff’s stipulation of the amount
in controversy, and the defendant’s only means of challenging this amount was by showing to a
legal certainty the amount in controversy was actually greater than $5,000,000. However, in
Knowles the Supreme Court rejected the idea that a named plaintiff’s stipulation of an amount in
10

controversy (prior to class certification) could bind the class, 133 S. Ct. at 1349, differentiating
class actions from cases with individual plaintiffs, whose stipulations to damages are binding on
all plaintiffs. Id. at 1350 (citing Red Cab, 303 U.S. at 294). The Court noted that to hold
otherwise would “treat a nonbinding stipulation as if it were binding, exalt form over substance,
and run directly counter to CAFA's primary objective: ensuring ‘Federal court consideration of
interstate cases of national importance.’” Knowles, 133 S. Ct. at 1350 (quoting Class Action
Fairness Act of 2005, Pub. L. No. 109–2, 119 Stat. 4, § 2(b)(2) (2005)); see also Owens 135 S.
Ct. at 554 (“[N]o antiremoval presumption attends cases invoking CAFA, which Congress
enacted to facilitate adjudication of certain class actions in federal court.”) (citing Knowles, 133
S. Ct. at 1350). The holding in Knowles appears to significantly undermine the reasoning
offered by the Court in Morgan for applying the legal certainty test when a plaintiff limits the
amount in controversy to less than the jurisdictional threshold in the original state court class
action complaint. The legal certainty test would not be consistent with the non-binding nature of
any pre-certification stipulation.
Later, the Supreme Court in Owens noted that when a defendant seeks to remove a class
action to federal court, “the defendant's amount-in-controversy allegation should be accepted
when not contested by the plaintiff or questioned by the court.” 135 S. Ct. at 553. “Evidence
establishing the amount is required by § 1446(c)(2)(B) only when the plaintiff contests, or the
court questions, the defendant's allegation.” Id. at 554. The Supreme Court went on to state
unequivocally, “a dispute about a defendant's jurisdictional allegations cannot arise until after the
defendant files a notice of removal containing those allegations.” Id. (emphasis in original).
This leads to the conclusion that a pre-removal stipulation by a named plaintiff of the amount in
controversy does not automatically “contest” the defendant’s amount in controversy allegation.
11

Though the Owens Court was not asked to decide what a defendant’s burden was once
the amount in controversy was challenged by the plaintiff, it assumed that the preponderance of
the evidence standard set forth in 28 U.S.C. § 1446(c)(2)(B), applying to cases removed under §
1332(a), also applied to cases removed under § 1332(d)(2). Id. at 554 n.1 (citing Frederick v.
Hartford Underwriters Ins. Co., 683 F.3d 1242, 1247 (10th Cir. 2012) (“[T]here is no logical
reason why we should demand more from a CAFA defendant than other parties invoking federal
jurisdiction.”) (internal quotation marks omitted)). The Court seemingly agreed that the
reasoning expressed in the House Judiciary Committee Report on the Federal Courts Jurisdiction
and Venue Clarification Act of 2011 (“JVCA”) for using the preponderance of the evidence
standard applied equally to class actions as it did to individual civil actions. See Owens 135 S.
Ct. at 554 (quoting House Judiciary Committee Report on the JVCA, H.R. Rep. No. 112-10, p.
16 (2011)) (“[D]efendants do not need to prove to a legal certainty that the amount in
controversy requirement has been met. Rather, defendants may simply allege or assert that the
jurisdictional threshold has been met. Discovery may be taken with regard to that question. In
case of a dispute, the district court must make findings of jurisdictional fact to which the
preponderance standard applies.”) If the preponderance of the evidence test applies when the
plaintiff disputes the amount in controversy, and disputes may only arise after the notice of
removal is filed, this suggests that the legal certainty test is unnecessary under the present
circumstances.
The Supreme Court’s decision in Knowles, which called into question the reasoning set
forth by the Third Circuit in Morgan for application of the legal certainty standard where a
plaintiff stipulates to the amount in controversy, coupled with the language in Owens clarifying
that a jurisdictional challenge to the defendant’s allegations of the amount in controversy in the
12

notice of removal cannot be made until after the notice of removal is filed, and the dicta in
Owens indicating that the preponderance of the evidence standard should apply in all situations
where the amount in controversy is challenged after a notice of removal is filed, suggests that
this Court must apply the preponderance of the evidence standard in this case. Accordingly, the
Court will proceed to analyze the allegations in the Complaint and TGIF’s submitted proofs in
deciding whether the amount in controversy exceeds $5,000,000 by a preponderance of the
evidence.
ii. Applying the Preponderance of the Evidence Standard in this
Case
To “determine whether the matter in controversy” exceeds the $5,000,000 jurisdictional
threshold a district court must aggregate “the claims of individual class members.” § 1332(d)(6).
In other words, CAFA “tells the District Court to determine whether it has jurisdiction by adding
up the value of the claim of each person who falls within the definition of [the] proposed class
and determine whether the resulting sum exceeds $5 million.” Knowles, 133 S. Ct. at 1348.
This entails examining both “the dollar figure offered by the plaintiff” and Plaintiff's “actual
legal claims” to determine whether “the amount in controversy exceeds the statutory threshold,”
see Morgan, 471 F.3d at 474–75, as well as considering the proofs offered by both sides and
deciding, “by a preponderance of the evidence, whether the amount-in-controversy requirement
has been satisfied.” Owens, 135 S. Ct. at 554.
The Court agrees with Plaintiff that TGIF could have made the job of determining the
amount in controversy easier by attaching more detailed information regarding sales of different
beverages, beverage sales per customer, beverage prices, and other relevant figures. However,
based on the period of time covered to date in Plaintiff’s Complaint, the amount of one type of
13

beverage sold in a three-month period as certified by TGIF, and the damages available for each
of Plaintiff’s claims, the Court finds that the amount in controversy exceeds the jurisdictional
threshold by a preponderance of the evidence.
First, Plaintiff’s Complaint has no expiration date, and seeks damages for all items sold to
customers without clearly disclosed prices at TGIF locations in New Jersey since July 14, 2014.
Thus the damages would, at the very least, include transactions for beverages, including mixed
drinks, beer, soft drinks, and more, sold over the course of the last year. The parties also have
not indicated that TGIF has ceased the alleged offending practice of selling items without clearly
marked prices, so the Court cannot assume that the relevant period will end on the date of this
Opinion. Accordingly, the Court finds that the claims in the Complaint cover damages over the
course of at least one year.
Secondly, even a conservative estimate of the items sold at the TGIF locations yields a
significant number of transactions. If the mixed drink transactions at the New Jersey TGIF
locations between July 15, 2014, and October 6, 2014, totaled 93,773, (see Ex. B to Schultz
Cert., Decl. of Suzanne Carpenter (“Carpenter Decl.”) ¶¶ 2-3), the transactions from July 15,
2014, to July 15, 2015, would likely total about 350,000. If the Court were to assume only onethird of the 350,000 transactions were made in a situation where the mixed drink prices were not
clearly indicated, there would still be approximately 115,000 “offending transactions” over the
course of the last year for mixed drinks alone. The Court need not speculate about how many
other beverage or food transactions occurred that are subject to this lawsuit, because this
conservative 115,000 figure brings the damages above the jurisdictional threshold.
The CFA permits customers to recover a full refund for all offending transactions, N.J.
Stat. § 56:8-2.11, as well as treble damages for any actual damages, and attorney’s fees. N.J.
14

Stat. § 56:8-19. Plaintiff does not include the average cost of offending mixed drink transactions
in the Complaint, and TGIF has not included such a number in the Declaration of Ms. Carpenter.
However, even if the Court assumes the illustrative $10.39 transaction price cited by Plaintiff in
his Complaint was above average, and chooses instead a $7.00 average mixed drink price for
offending transactions, the refund provision alone brings the damages to over $800,000. It is
challenging to calculate the actual damages without knowing what Plaintiff believes a reasonable
drink price should be, but assuming anything at or above a 40% up-charge is unreasonable, and
thus a $7.00 drink should have been priced as a $5.00 drink, class members would suffer an
average of $2.00 in actual damages per offending transaction. Because this results in actual
damages of about $230,000, the trebled actual damages would equal about $690,000 for the CFA
claim alone. Including refunds, this brings the compensatory damages for the CFA claim to
approximately $1,490,000 for just the offending mixed drink transactions.
Pursuant to the TCCWNA, Plaintiff seeks actual damages, a refund for all transactions,
attorney’s fees, and a civil penalty of not less than $100 for each Plaintiff. See N.J. Stat. §
56:12-17. As discussed above, the refund and actual damages total approximately $1,030,000
when combined. The total number of class members is unknown at this time, but Plaintiff
estimates it in the “hundreds.” Even if there were only 100 class members, the civil penalty
could be at least $10,000. See United Consumer Fin. Servs. Co. v. Carbo, 410 N.J. Super. 280
(App. Div. 2009) (calculating the civil penalty for violations of the TCCWNA at $100 per class
member in a purported class action). Accordingly, TGIF may be liable for at least $1,040,000
under the TCCWNA.
Under Plaintiff’s breach of contract theory, he seeks actual damages, punitive damages,
and attorney’s fees. Relying on the earlier calculation of actual damages, where each customer
15

paid on average $2.00 more than was reasonable on each of the 115,000 offending transactions,
the actual damages for the breach of contract claim would be $230,000. Because punitive
damages are estimated at five times the compensatory damages, see Frederico, 507 F.3d at 199
(calculating punitive damages at five times the compensatory damages) (citing N.J. Stat. §
2A:15-5.14(b)), punitive damages for the breach of contract claim alone would equal
$1,150,000. This leads to a liability of as much as $1,380,000 for breach of contract.
Finally, because Plaintiff seeks attorney’s fees in each of the claims, the Court must
determine the possible judgment total and estimate as much as thirty percent of that amount in
fees. Frederico, 507 F.3d at 199 (“Fees could be as much as thirty percent of the judgment.”)
(citing In re Rite Aid Corp. Sec. Litig., 396 F.3d 294, 303 (3d Cir. 2005)). If the CFA claim
could reach $1,490,000, the TCCWNA claim could reach $1,040,000, and the contract claim
could reach $1,380,000, the judgment total may reach $3,910,000. That means attorney’s fees
could amount to $1,173,000, and the overall damages amount could be as much as $5,083,000.
Bearing in mind this amount does not include any beverage transactions other than mixed
drinks, assumes only one third of the beverage transactions qualify as “offending transactions,”
does not account for the cost of the injunctive relief sought by Plaintiff,8 and is limited to only
one year despite the fact that the period covered by the Complaint is still open and ongoing, the
Court finds by a preponderance of the evidence that the amount in controversy exceeds
$5,000,000.

8

The Court may generally quantify the value of injunctive relief when determining the amount in controversy. See
In re Corestates Trust Fee Litig., 39 F.3d 61, 65 (3d Cir. 1994).

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Because the proposed class has more than 100 members, the parties are minimally
diverse, and the amount in controversy exceeds the jurisdictional threshold, jurisdiction exists
pursuant to § 1332(d)(2). Accordingly, Plaintiff’s Motion for Remand must be denied.
III.

CONCLUSION
For the foregoing reasons, Plaintiff’s Motion for Remand will be DENIED. An

accompanying Order shall issue.

Dated:

7/27/2015

s/ Robert B. Kugler
ROBERT B. KUGLER
United States District Judge

17