CAFA Removal Petition Need Only Plausibly Allege – Not Prove – An Amount in Controversy, Holds Ninth Circuit

In Salter v. Quality Carriers, Inc., No. 20-55709 (9th Cir. Sept. 8, 2020), the Ninth Circuit holds that the district court erred in holding that a defendant seeking to remove a matter from state court under the Class Action Fairness Act (CAFA), 28 U.S.C § 1332(d), had to factually prove that amount in controversy was in excess of $5 million.

Salter alleged that “Quality failed to provide truck drivers with meal breaks, rest periods, overtime wages, minimum wages, and reimbursement for necessary expenditures as required by California law. The crux of Salter’s claim is that Quality misclassified the truck drivers as independent contractors rather than employees.” The defendant filed for removal under CAFA, but the district court remanded, finding “that the declaration submitted by Quality failed to adequately show that the amount in controversy exceeded $5 million.”

In particular, Quality “submit[ed] a declaration by Cliff Dixon, its Chief Information Officer,” stating that based on his personal knowledge and company data, “between October 2015 and November 2019 it deducted over $14 million from the truck drivers’ weekly settlements, including a total of $11,512,642.46 for fuel purchases alone.” The district court rejected the declaration as “conclusory” and uncorroborated by corporate records.

The Ninth Circuit vacates and remands. It cites Dart Cherokee Basin Operating Sys. Co., LLC v. Owens, 574 U.S. 81 (2014) – a case involving an analogous federal officer removal statute, 28 U.S.C. § 1442(a)(1) – as holding that for removal jurisdiction, “[a] statement ‘short and plain’ need not contain evidentiary submissions” and plausible allegations are enough.

“This appeal focuses on what a defendant must show for removal of a class action under CAFA when the amount in controversy is not clear from the complaint.” Plaintiff Salter argued that a declaration submitted to support removal “must satisfy the ‘best evidence rule,’ which requires that a party provide ‘the original of a writing, recording, or photograph’ to ‘prove the contents thereof.’ Salter argues that because the best evidence rule applies whenever the contents of a document are sought to be proved, a declarant may not simply testify to the contents of a document, he must actually produce the document for it to be considered.”

But the Ninth Circuit holds that for a facial attack on the defendant’s showing for removal, where the plaintiff does not challenge the truth of the plausible allegations but only their sufficiency, it is unnecessary for the removing party to submit factual proof of the amount in controversy. “The district court faulted Quality’s presentation as relying on the ‘unsupported and conclusory statements in Dixon’s declaration.’ But that is the inherent nature of ‘plausible allegations’: they rely on ‘reasonable assumptions.’ …. Salter, however, has not challenged any of Quality’s essential assumptions or shown that any one was unreasonable. Accordingly, because Quality only needed to ‘include a plausible allegation that the amount in controversy exceeds the jurisdictional threshold,’ … the district court’s remand order is vacated and this matter is remanded to the district court.”

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