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CAPPUCCITTI v. DIRECTV, INC.
RENATO CAPPUCCITTI, on behalf of himself and all others similarly situated, Plaintiff-Appellee,
v.
DIRECTV, INC., a California Corporation, Defendant-Appellant.
No. 09-14107.
United States Court of Appeals, Eleventh Circuit.
July 19, 2010.
Before TJOFLAT, WILSON and EBEL,[ 1 ] Circuit Judges.
TJOFLAT, Circuit Judge.
I.
This is a class action brought under the provisions of the Class Action Fairness Act of 2005 ("CAFA"), Pub. L. No. 109-2, 119 Stat. 4 (codified in scattered sections of 28 U.S.C.).[ 2 ] Renato Cappuccitti and David Ward (together "Cappuccitti"), citizens of Georgia, have sued DirecTV, Inc., a California corporation ("DirecTV"), seeking the recovery, on behalf of themselves and similarly situated DirecTV subscribers in Georgia, of the fees DirecTV charged its subscribers for cancelling their subscriptions prior to the subscriptions' expiration. The fees ranged from $175 to $480. Cappuccitti asserts that the fees are proscribed by Georgia common law and seeks damages for himself and the class in excess of $5,000,000.[ 3 ]
The subscriber agreements between Cappuccitti and the members of his class and DirecTV contain arbitration and class action waiver provisions. In responding to Cappuccitti's complaint, DirecTV moved the district court to compel Cappuccitti to submit to arbitration and, alternatively, to dismiss his claims for damages under Federal Rule of Civil Procedure 12(b)(6). The court denied the motion to compel arbitration,[ 4 ] but granted the motion to dismiss Cappuccitti's claims for damages for failure to state a claim.[ 5 ] DirecTV now appeals the district court's denial of its motion to compel arbitration.[ 6 ] We hold that the district court lacked jurisdiction to entertain the complaint, vacate its order, and remand with instructions to dismiss the case.
II.
We review de novo a district court's denial of a motion to compel arbitration. Becker v. Davis, 491 F.3d 1292, 1297 (11th Cir. 2007). We begin, as we always must, by considering whether the district court possessed subject matter jurisdiction over the action. See, e.g., Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 93—95, 118 S. Ct. 1003, 1012—13 (1998) (explaining "[t]he requirement that jurisdiction be established as a threshold matter"). In doing so, we conclude that subject matter jurisdiction under CAFA was absent from the moment Cappuccitti brought this case.
III.
Congress enacted CAFA in 2005 with an eye toward curbing "abuses of the class action device that have (A) harmed class members with legitimate claims and defendants that have acted responsibly; (B) adversely affected interstate commerce; and © undermined public respect for our judicial system." Pub. L. No. 109-2, § 2(a)(2), 119 Stat. 4, 4 (2005). In particular, Congress perceived that state courts were overly friendly toward class certification, provided insufficient notice to class members, and favored some plaintiffs over others in making class awards. Id., 119 Stat. at 4—5. To remedy these abuses, Congress amended existing sections of the portion of the United States Code governing federal court jurisdiction to situate more class actions in federal court ab initio and to make it easier for defendants in a state court class action to remove the action to federal court. See id. § 2(b)(2), 119 Stat. at 5 (stating that CAFA's purposes include "providing for Federal court consideration of interstate cases of national importance under diversity jurisdiction").
CAFA effectuated Congress's goals largely by adding a new subsection to the diversity jurisdiction statute: 28 U.S.C. § 1332(d).[ 7 ] This subsection provides federal courts with original jurisdiction "over class actions in which the amount in controversy exceeds $5,000,000 and there is minimal diversity (at least one plaintiff and one defendant are from different states)." Evans v. Walter Indus., Inc., 449 F.3d 1159, 1163 (11th Cir. 2006). The subsection defines a "class action" as "any civil action filed under rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of judicial procedure authorizing an action to be brought by 1 or more representative persons as a class action." 28 U.S.C. § 1332(d)(1)(B). The new subsection also simplifies the removal of state court class actions to federal court by establishing only minimal requirements for removal, 28 U.S.C. § 1332(d)(11), while preserving "the traditional rule that the party seeking to remove the case to federal court bears the burden of establishing federal jurisdiction." Evans, 449 F.3d at 1164; see also Miedema v. Maytag Corp., 450 F.3d 1322, 1329 (11th Cir. 2006) ("[T]he text of CAFA plainly expands federal jurisdiction over class actions and facilitates their removal.").
This court has extensively interpreted CAFA's jurisdictional requirements in the removal context. Lowery v. Ala. Power Co., 483 F.3d 1184 (11th Cir. 2007). In Lowery, nine named Alabama plaintiffs brought an action in state court, on behalf of a class, against a group of corporations and fictitious entities, alleging that the defendants had polluted the air and ground water. The defendants removed the case under the "mass action" provision of CAFA, 28 U.S.C. § 1332(d)(11), asserting that § 1332(d)(11)'s jurisdictional requirements had been met. Id. at 1187—88. The plaintiffs moved to remand the case to state court, arguing that the defendants had not met their burden of establishing federal jurisdiction by providing evidence of the specific amount of damages the plaintiffs claimed. Id. at 1189. The district court ordered the case remanded, agreeing with the plaintiffs that the removing defendants bore the burden of establishing the jurisdictional amount by a preponderance of the evidence, and that the defendants did not prove that the jurisdictional mounts had been satisfied. Id. at 1192.
Reviewing the district court's decision required this court to wade through the "opaque, baroque maze of interlocking cross-references" in CAFA. Id. at 1198. That examination concluded that "mass actions" removable under CAFA are class actions that meet the requirements of § 1332(d)(2) through (10), the provisions of which "cover a variety of terrain": authorizing district courts to decline jurisdiction over cases with primarily intrastate impact, excepting states and state officials from jurisdiction, and providing guidance on how to treat citizenship for CAFA's purposes. Id. at 1199—1200. Mass actions also include several requirements applicable to class actions invoking CAFA jurisdiction, such as a $5,000,000 aggregate amount in controversy, 28 U.S.C. § 1332(d)(2), (6), and minimal diversity, id. § 1332(d)(2). Lowery, 483 F.3d at 1201. Lowery also concluded that a mass action requires 100 or more plaintiffs, common questions of law or fact, and that it cannot be a class action certified under Federal Rule of Civil Procedure 23. Id. at 1202—03.[ 8 ]
In this case, we face a situation different from that in the cases cited above—Lowery, Miedema, and Evans—as well as from the mine run of CAFA cases heard in federal court, because Cappuccitti initiated this case in federal court; it was not removed from state court. Such cases are relatively rare, which is not surprising given Congress's goals in enacting CAFA—to place more class actions in federal court by lifting barriers to their removal (which would result in most published CAFA cases being heard in a removal posture). We therefore now consider what jurisdictional requirements CAFA imposes on a putative class action originally filed in federal court (an "original CAFA action").[ 9 ]
Two jurisdictional requirements for original CAFA actions are clear from the face of CAFA, which provides that
[t]he district courts shall have original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs, and is a class action in which—
(A) any member of a class of plaintiffs is a citizen of a State different from any defendant;
(B) any member of a class of plaintiffs is a foreign state or a citizen or subject of a foreign state and any defendant is a citizen of a State; or
© any member of a class of plaintiffs is a citizen of a State and any defendant is a foreign state or a citizen or subject of a foreign state.
28 U.S.C. § 1332(d)(2). Thus, § 1332(d)(2) provides two of the requirements for original CAFA jurisdiction: an amount in controversy over $5,000,000 (obtained by aggregating the claims of the individual class members, id. § 1332(d)(6)), and minimal diversity. In addition, the preceding subsection adds a third requirement, which differs from the removable mass action requirement: the class action must have been filed under Federal Rule of Civil Procedure 23.[ 10 ] Id. § 1332(d)(1)(B). Fourth and finally, since "[p]aragraphs (2) through (4) shall not apply to any class action in which . . . the number of members of all proposed plaintiff classes in the aggregate is less than 100," id. § 1332(d)(5), a plaintiff bringing an action under CAFA must allege that there are 100 or more plaintiffs within the proposed class(es).
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