Sarah Morgan v. Dennis W. Gay
471 F.3d 469 · Court of Appeals for the Third Circuit · 2006
Facts
Plaintiff Sarah Morgan filed a class action in New Jersey state court against defendants for false advertising of StriVectin-SD, explicitly limiting the total monetary relief for the class to not exceed $5 million. Defendants removed the case to federal court under the Class Action Fairness Act (CAFA), but the District Court granted plaintiff's motion to remand, finding the $5 million amount in controversy requirement was not met. Defendants appealed the remand order.
Issue
1. Did the District Court properly place the burden of proof on the defendants to establish federal subject matter jurisdiction under CAFA? 2. Did the District Court appropriately determine that the defendants failed to prove the plaintiff's claims exceeded CAFA's $5 million amount in controversy requirement?
Holding
1. Yes, the District Court properly placed the burden of proof on the defendants. 2. Yes, the District Court appropriately determined that the defendants failed to prove the claims exceeded $5 million. The Court of Appeals affirmed the District Court's judgment to remand the case to state court.
Rule
Under CAFA, the party seeking to remove a case to federal court bears the burden of proving to a legal certainty that the amount in controversy exceeds the statutory threshold. A plaintiff may limit their claims to avoid federal jurisdiction, but courts will examine actual legal claims to ensure the limitation is made in good faith.
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