A recent Ninth Circuit decision highlights the importance of the defendant clearly pleading the basis for alleging the amount in controversy in a notice of removal under the Class Action Fairness Act (CAFA). In this case, after the defendant prevailed on a summary judgment motion and the plaintiff appealed, the Ninth Circuit vacated and remanded for the district court to determine the amount in controversy.

In Moe v. GEICO Indemnity Co., — F.4th –, 2023 WL 4483690 (9th Cir. July 12, 2023), the plaintiff filed a putative statewide class action in Montana against GEICO. He alleged that GEICO improperly failed to pay him, and other third-party claimants injured in accidents for which GEICO drivers were determined to be responsible, collection fees and interest on medical bills, and lost wages. In removing to federal court, GEICO’s notice of removal relied on a declaration from an employee stating “that he ‘generated data and can state that the claims paid by GEICO Indemnity Co., and the damage exposure, not liability, to the potential members of the putative class proposed by Plaintiff exceeds the sum or value of $5 million in the aggregate.’” No further explanation of the data and no calculations were provided. At the district court level, neither the plaintiff nor the district court challenged the propriety of removal. The district court granted summary judgment on the named plaintiff’s claim, and he appealed.

On appeal, the Ninth Circuit questioned sua sponte whether the $5 million threshold for the amount in controversy was satisfied. While the Supreme Court has held in Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81 (2014), that evidence supporting the amount in controversy is not required to accompany a notice of removal, a “plausible assertion of the amount at issue” is required. Here, the Ninth Circuit found GEICO’s notice of removal and accompanying declaration to be lacking. It explained that the plaintiff’s “claimed damages in his individual claim are under $1,000,” “there is little indication what the average amount of damages the purported class members may have suffered,” and “it is unclear how large the purported class may be.” 2023 WL 4483690, at *3. The Ninth Circuit therefore vacated the summary judgment ruling (without addressing its merits), and remanded for the district court to determine whether the amount in controversy requirement was satisfied.

As I see it, a key practice pointer here for defense counsel is to include enough allegations in the notice of removal (and if desired, although not required, an accompanying declaration) to demonstrate how the amount in controversy is being estimated. Here, a conclusory assertion that data existed to support it was not enough. Some specifics as to the nature of the data and what it reflected might have been enough to avoid a remand, and then presumably another appeal. Sometimes it can be helpful to offer the court more than one method of calculation.

Photo of Wystan Ackerman Wystan Ackerman

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you…

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you have something to say.  For those looking for my detailed law firm bio, click here.  If you want a more light-hearted and hopefully more interesting summary, read on:

People often ask about my unusual first name, Wystan.  It’s pronounced WISS-ten.  It’s not Winston.  There is no “n” in the middle.  It comes from my father’s favorite poet, W.H. (Wystan Hugh) Auden.  I’ve grown to like the fact that because my name is unusual people tend to remember it better, even if they don’t pronounce it right (and there is no need for anyone to use my last name because I’m always the only Wystan).

I grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state.  I’ve always had strong interests in history, politics and baseball.  My heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox).  I think it was my early fascination with Lincoln that drove me to practice law.  I went to high school at The Williams School in New London, Connecticut, where I edited the school newspaper, played baseball, and was primarily responsible for the installation of a flag pole near the school entrance (it seemed like every other school had one but until my class raised the money and bought one at my urging, Williams had no flag pole).  As a high school senior, my interest in history and politics led me to score high enough on a test of those subjects to be chosen as one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified my interest in law and government.  One of my mentors at Williams was of the view that there were far too many lawyers and I should find something more useful to do, but if I really had to be a lawyer there was always room for one more.  I eventually decided to be that “one more.”  I went on to Bowdoin College, where I wrote for the Bowdoin Orient and majored in government, but took a lot of math classes because I found college math interesting and challenging.  I then went to Columbia Law School, where I was lucky enough to be selected as one of the minions who spent their time fastidiously cite-checking and Blue booking hundred-plus-page articles in the Columbia Law Review.  I also interned in the chambers of then-Judge Sonia Sotomayor when she was a relatively new judge on the Second Circuit, my only connection to someone who now has one-ninth of the last word on what constitutes the law of our land.  I graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole, one of the largest Connecticut-based law firms.  At the end of 2008, I was elected a partner at Robinson+Cole.

I’ve worked on class actions since the start of my career.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and most of the class actions I’ve defended have been brought against insurance companies. I’ve also handled some involving products liability, managed care, health care, utilities, financial services, higher education and environmental issues.

My insurance class action practice usually takes me outside of Connecticut.  I’ve had the pleasure of working on cases in various federal and state courts and collaborating with great lawyers across the country.  While class actions are an increasingly large part of my practice, I don’t do exclusively class action work.  The rest of my practice involves litigating insurance coverage cases, often at the appellate level.  That also frequently takes me outside of Connecticut.  A highlight of my career thus far was working on Standard Fire Ins. Co. v. Knowles, the U.S. Supreme Court’s first Class Action Fairness Act case.  I was Counsel of Record for Standard Fire on the cert petition, and had the pleasure of working with Ted Boutrous on the merits briefing and oral argument.

I started this blog because writing is one of my favorite things to do and I enjoy following developments in class action law, writing about them and engaging in discussion with others who have an in interest in this area.  It’s a welcome break from day-to-day practice, keeps me current, broadens my network and results in some new business.

When I’m not at work, you might find me running lines or watching a musical with my teenage daughter who hopes to be a Broadway star (or taking her to voice or dance lessons) or reading a good book.