January 25, 2015 Practice Points

Ninth Circuit Clarifies Evidentiary Requirements When CAFA Removal Is Challenged

The case is Ibarra v. Manheim Investments, Inc.

by Aaron T. Morris

A month after the Supreme Court’s decision in Dart Basin Operating Co. v. Owens, 135 S. Ct. 547 (2014), the Ninth Circuit has provided further guidance as to the evidentiary requirements that apply when removal pursuant to the Class Action Fairness Act (CAFA) is challenged on a motion to remand.  In Ibarra v. Manheim Investments, Inc., No. 14-56779, 2014 WL 74995131 (Dec. 8, 2014), the Ninth Circuit reiterated that where CAFA’s $5 million amount-in-controversy threshold is disputed, both parties must tender evidence in support of their calculations and rely on reasonable assumptions supported by record evidence.  Although the parties in Ibarra each submitted some evidence in support of their positions, the evidence was insufficient for the court to determine whether CAFA’s amount-in-controversy requirement was satisfied.

The plaintiff in that case had filed a complaint in state court alleging labor law violations and that the amount in controversy did not exceed $5 million. The defendant’s calculation of the amount in controversy differed, and it removed the case to federal court. The district court considered whether removal pursuant to CAFA was appropriate on three occasions—after the plaintiff moved to remand, after the defendant removed for a second time following the Supreme Court’s decision in Standard Fire Insurance Co. v. Knowles, 133 S. Ct. 1345 (2013), and again after the Ninth Circuit vacated the second remand in light of its decision in Rodriguez v. AT&T Mobility Services LLC, 728 F.3d 975 (9th Cir. 2013). On each occasion, the district court determined that the amount-in-controversy requirement was unsatisfied.  After the third remand, the Ninth Circuit granted permission to appeal.

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