To remove a case to federal court, a defendant must file a notice of removal “containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants,” 28 U.S.C. § 1446(a). This seems like a fairly straightforward proposition, but as the petitioners in Dart Cherokee Basin Operating Co., LLC v. Owens learned, appearances can be deceiving.
In December 2012, Dart Cherokee and its codefendant attempted to remove a putative class action to federal court under the provisions of the Class Action Fairness Act (the “CAFA”). The underlying lawsuit asserted underpayment of royalties on gas produced from wells in which Dart Cherokee had a working interest and sought to define the class as essentially all royalty owners who were paid royalties from these wells between January 1, 2002, and the date of a class notice. In the timely filed notice of removal (the “Notice”), Dart Cherokee explained that (i) Owens and the defendants were diverse (satisfying the minimal diversity requirement); (ii) there were more than 400 royalty owners for the 700 wells involved in the matter (satisfying the numerosity requirement); and (iii) based upon its calculations, the amount of additional royalties that would be due under the putative class claims was at least $8.2 million (satisfying the $5 million amount in controversy requirement). See 28 U.S.C. §1332(d). Although Owens did not dispute the veracity of these jurisdictional allegations, he sought to remand the case to state court on the grounds that Dart Cherokee had failed to prove by admissible evidence in its Notice that the amount in controversy had been met. In opposing the motion to remand, Dart Cherokee provided an affidavit — complete with spreadsheet exhibits — explaining how the damages figure was calculated. (In this affidavit, Dart Cherokee also noted that in the parties’ post-removal mediation, Owens’ damages calculation exceeded $14 million.)
Motivated in part by “the strong presumption against removal,” the district court granted the motion to remand, effectively concluding that a defendant must submit its evidence of jurisdictional facts with its notice of removal. Owens v. Dart Cherokee Basin Operating Co. LLC, No. 12-cv-4157, slip op. at 12 (D. Kan. May 21, 2013). A divided Tenth Circuit declined to hear its appeal of the remand order, so Dart Cherokee sought a writ of certiorari from the Supreme Court. Last month, the Supreme Court granted Dart Cherokee’s petition, taking up the question of “[w]hether 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[.]” Perhaps in answering this question, the Supreme Court will provide insights into the appropriate balance between the traditional “strong presumption against removal” and the more federal-court-friendly CAFA. Moreover, given the generality of the question presented, the Supreme Court’s resolution of this matter is likely to have implications outside the class action context. In any event, it’s worth staying tuned for further developments in this case.
