Last May, we introduced you to the Dart Cherokee Basin Operating Co., LLC v. Owens case and the interesting possibilities it presented for Supreme Court review. On Monday, a divided Supreme Court issued its decision in this matter, and it did not disappoint. To briefly recap, this case arose from the attempted removal of a putative class action to federal court under the Class Action Fairness Act (the “CAFA”). In their notice of removal, the defendants (collectively, “Dart Cherokee”) asserted that the amount in controversy was $8.2 million, satisfying CAFA’s $5 million threshold. The plaintiff, Brandon Owens, sought to remand the case on the grounds that the removal notice was legally defective because it did not contain admissible evidence proving that the amount in controversy had been met. In response to Owens’ remand motion, Dart Cherokee provided an affidavit supporting its damages calculation. Relying on Tenth Circuit precedent and the “presumption” against removal, the district court remanded the case to state court. Dart Cherokee sought leave to appeal the remand order to the Tenth Circuit. See 28 U.S.C. § 1453(c)(1) (providing that “a court of appeals may accept an appeal from an order of a district court granting or denying a motion to remand a class action”). After a divided Tenth Circuit denied Dart Cherokee’s request for appellate review, the Supreme Court granted certiorari to determine if a notice of removal must include jurisdictional evidence.
The Supreme Court quickly disposed of this question: “The answer, we hold, is supplied by the removal statute itself. A statement ‘short and plain’ need not contain evidentiary submissions.” Dart Cherokee Basin Operating Co. v. Owens, No. 13-719, slip op. at 2, 574 U.S. ___ (2014). In reaching this conclusion, the Supreme Court noted that the removal statute tracks the pleading requirements of Federal Rule of Civil Procedure 8(a) and emphasized that the “notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold,” Dart Cherokee, slip op. at 7. As for the district court’s reliance on the “purported ‘presumption’ against removal,” the Supreme Court concluded, “[i]t suffices to point out that no antiremoval presumption attends cases invoking CAFA.” Id. In so ruling, the Supreme Court has brought some clarity to the removal process under CAFA.
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If you are one of our readers who enjoys more esoteric issues, you’ll want to keep reading. The Dart Cherokee case provoked two dissenting opinions, but the dissenting justices appear to agree with the majority’s answer to the question of whether jurisdictional evidence is required with a notice of removal. See Dart Cherokee, slip op. at 1-2 (Scalia, J., dissenting) (“Eager to correct what we suspected was the District Court’s (and the Tenth Circuit’s) erroneous interpretation of § 1446(a), we granted certiorari to decide whether notices of removal must contain evidence supporting federal jurisdiction.”). Where the justices split, however, was on the propriety of reviewing the merits of an order remanding a class action to state court when the court of appeals denies leave to appeal under Section 1453(c)(1). In last year’s Standard Fire Insurance Co. v. Knowles decision, a unanimous Supreme Court considered the merits of a case in precisely that procedural posture: the Eighth Circuit had denied a defendant’s request for leave to appeal a remand order under Section 1453(c)(1). Unlike in Knowles, an amicus brief in this case argued that because Section 1453(c)(1) provides for discretionary appellate review, the only issue before the Supreme Court was whether the Tenth Circuit abused its discretion in denying Dart Cherokee’s leave-to-appeal application. The dissenting justices agreed with this argument and concluded that, because they could not determine the reasons why the Tenth Circuit denied Dart Cherokee’s request, the case should have been dismissed as improvidently granted. Failing that, most of the dissenting justices would have affirmed the Tenth Circuit’s ruling. Justice Thomas, however, would have dismissed the case for lack of jurisdiction under 28 U.S.C. § 1254. According to Justice Thomas, because the Tenth Circuit denied Dart Cherokee’s application for leave to appeal, “no ‘case’ ever arrived ‘in the court of appeals’” for the Supreme Court to review. Dart Cherokee, slip op. at 2 (Thomas, J., dissenting). By contrast, the majority concluded that jurisdiction was proper under Section 1254, explaining, “The case was ‘in’ the Court of Appeals because of Dart’s leave-to-appeal application, and we have jurisdiction to review what the Court of Appeals did with that application.” Id. at 8 (majority opinion). The majority further concluded that, “[f]rom all signals one can discern…, the Tenth Circuit’s denial of Dart ’s request for review of the remand order was infected by legal error.” Id. at 11. In the majority’s opinion, whether the Tenth Circuit erred in denying review and whether the district court erred in remanding the case “depends on the answer to the very same question: What must the removal notice contain?” Id. at 13.
Given this division among the justices, it will be interesting to see how the Supreme Court resolves the next case where a defendant seeks review of a remand order after the Court of Appeals denies leave to appeal under Section 1453(c)(1).
