PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
JAMES STRAWN and JAMES STATON,
individually, and on behalf of all
others similarly situated,
Plaintiffs-Appellees,
v.
AT&T MOBILITY LLC, f/k/a
Cingular Wireless LLC, No. 07-2084
Defendant-Appellant,
and
CINGULAR WIRELESS, a foreign
corporation,
Defendant.
Appeal from the United States District Court
for the Southern District of West Virginia, at Charleston.
John T. Copenhaver, Jr., District Judge.
(2:06-cv-00988)
Argued: May 14, 2008
Decided: June 30, 2008
Before WILLIAMS, Chief Judge, NIEMEYER, Circuit Judge, and
Alexander WILLIAMS, Jr., United States District Judge for the
District of Maryland, sitting by designation.
Reversed and remanded by published opinion. Judge Niemeyer wrote
the opinion, in which Chief Judge Williams and District Judge Wil-
liams joined.
2 STRAWN v. AT&T MOBILITY LLC
COUNSEL
ARGUED: Jeffrey Michael Wakefield, FLAHERTY, SENSA-
BAUGH & BONASSO, PLLC, Charleston, West Virginia, for Appel-
lant. William L. Bands, BELL & BANDS, PLLC, Charleston, West
Virginia, for Appellees. ON BRIEF: Scott L. Winkelman, Jennifer N.
Waters, Lynn E. Parseghian, Katherine J. Nesbitt, CROWELL &
MORING, LLP, Washington, D.C., for Appellant. Harry F. Bell, Jr.,
Tim J. Yianne, BELL & BANDS, PLLC, Charleston, West Virginia,
for Appellees.
OPINION
NIEMEYER, Circuit Judge:
After AT&T Mobility LLC, formerly known as Cingular Wireless
LLC, removed a class action from a West Virginia state court to fed-
eral court under the Class Action Fairness Act of 2005, the district
court remanded the case, finding that AT&T failed to show that the
matter in controversy exceeded the sum or value of $5 million, exclu-
sive of interest and costs, the jurisdictional threshold established by
the Class Action Fairness Act.
The class action complaint challenges as unlawful under the West
Virginia Consumer Credit and Protection Act a practice of "bun-
dling," by which AT&T automatically enrolled each new cellular tele-
phone customer in a "Roadside Assistance" program, charging the
customer $2.99 per month if the customer did not opt out of the pro-
gram. The complaint defined the class as all consumers in West Vir-
ginia who purchased cellular telephone service from AT&T and were
charged a $2.99 monthly fee for Roadside Assistance service without
ever having requested the service or having affirmatively enrolled in
the program. AT&T demonstrated that 58,800 of its customers fell
within this definition of the class.
On the plaintiffs’ motion to remand, the district court read the com-
plaint as defining a narrower class consisting of only those customers
who paid the fee "unwillingly." When AT&T could not provide an
STRAWN v. AT&T MOBILITY LLC 3
estimate of how many customers paid the fee but did so unwillingly,
the court held that AT&T had failed to carry its burden of demonstrat-
ing the basis for its allegation that the amount in controversy
exceeded $5 million and remanded this case to state court.
We conclude that the district court either misread or construed too
broadly the issues raised by the complaint and the definition of the
putative class and therefore reverse its order remanding this case to
the state court. We thus remand this case to the district court for fur-
ther proceedings.
I
James Strawn and James Staton commenced this class action
against AT&T Mobility LLC in the Circuit Court of Kanawha
County, West Virginia, alleging violations of the West Virginia Con-
sumer Credit and Protection Act, W. Va. Code § 46A-1-101 et seq.
Strawn and Staton alleged that they were AT&T cellular telephone
subscribers and that in May 2006 they discovered that they were
being assessed a $2.99 monthly charge for the Roadside Assistance
service, which provides jump starts, flat tire assistance, and similar
benefits. They asserted that they "never requested or enrolled for the
service" and therefore were wrongfully charged for it.
Their complaint challenges AT&T’s "pattern and practice" of auto-
matically enrolling new cellular telephone customers in a free trial of
its optional Roadside Assistance service and, when the free trial ends,
charging them $2.99 per month if they do not opt out. It alleges:
Plaintiffs and Class members were not given an option.
Instead, the Roadside Assistance was part of a "bundled"
transaction, whereby the Plaintiff and Class members had to
catch the Roadside Assistance charge, and opt-out of it. Oth-
erwise, if Plaintiff and Class members failed to catch the
charge, [AT&T] automatically enrolled them for the Road-
side Assistance service and imposed a $2.99 monthly
charge.
Compl. ¶ 5. The complaint defines the purported class as:
4 STRAWN v. AT&T MOBILITY LLC
[A]ll consumers who: (1) purchased [an AT&T Mobility
cellular] account in the state of West Virginia; and (2) were
charged a $2.99 monthly charge for the Roadside Assistance
service without ever requesting or enrolling for said service.
Compl. ¶ 20. The definition of the class excludes business customers
and persons affiliated with AT&T. To justify class certification, the
complaint alleges common questions of law and fact that include
"whether [AT&T] engaged in a pattern and practice of imposing a
charge for the Roadside Assistance service without consumers
requesting or enrolling for said service," and "whether [AT&T] vio-
lated the WVCCPA by imposing a charge for the Roadside Assistance
service without consumers requesting or enrolling for said service."
Compl. ¶ 23 (emphasis added).
For relief, the complaint seeks a declaratory judgment that the pat-
tern and practice was deceptive and unlawful under West Virginia law
— specifically, West Virginia Code §§ 46A-6-102(7)(L), 46A-6-
102(7)(M), and 46A-6-104, defining and prohibiting various types of
deception and fraud — and an injunction prohibiting AT&T from
continuing the pattern and practice. The complaint also seeks "dam-
ages of which the individual recoveries do not exceed $75,000 for
Plaintiffs or any member of the Class."
Attached to the complaint are three stipulations, two signed by the
named plaintiffs Strawn and Staton and one signed by counsel for the
named plaintiffs and purported class members. Each of the named
plaintiffs stipulated that he is not seeking damages in excess of
$75,000, and counsel stipulated that their law firm does not seek dam-
ages, including attorneys fees and costs, exceeding $75,000 for each
class member and that the law firm "will not accept an aggregate
award for attorneys fees and costs exceeding $5 million inclusive of
any other damages awarded to each named Plaintiff and Class mem-
ber."
Relying on the Class Action Fairness Act of 2005 ("CAFA"), Pub.
L. No. 109-2, 119 Stat. 4, AT&T filed a notice of removal. See 28
U.S.C. § 1453. In the notice of removal, AT&T alleged minimal
diversity of citizenship, an aggregate amount in controversy exceed-
ing $5 million, exclusive of interest and costs, and a class size greater
STRAWN v. AT&T MOBILITY LLC 5
than 100 persons. See id. § 1332(d). AT&T attached to its notice of
removal an affidavit stating that from the introduction of the Roadside
Assistance program in November 2004 through the filing of the com-
plaint in September 2006, more than 58,800 AT&T customers,
excluding business customers and AT&T employees, remained
enrolled in the Roadside Assistance program beyond their initial free
trial period and thereby were automatically charged the $2.99
monthly fee. The affidavit asserted that based on the minimum statu-
tory damages of $200 for each person, see W. Va. Code § 46A-6-
106(a), the amount in controversy was at least $11,760,000.
In their response, the plaintiffs argued that the class definition
required AT&T to exclude from the number of class members those
customers who willingly remained enrolled in the Roadside Assis-
tance program. They also maintained that based on the stipulations
attached to the complaint, they "effectively limited damages to $5
million or less," which is below the threshold amount for federal
jurisdiction.
In light of the plaintiffs’ response, the district court ordered AT&T
to recalculate the estimated class size by narrowing it from 58,800,
which represented all customers automatically enrolled in the Road-
side Assistance service program beyond the free trial period, to "the
more limited scope of the putative class" — the subset consisting of
just those customers who did not willingly remain enrolled. AT&T
responded that it was not possible to calculate this number, because
it did not, nor could it, "track a hypothetical subset of Roadside Assis-
tance customers who [were] being charged for Roadside Assistance
but allegedly [did] not want it."
Based on AT&T’s response, the district court entered a "Judgment
Order" dated September 26, 2007, in which it remanded the case to
the state court for lack of subject matter jurisdiction. In its supporting
"Memorandum Opinion," the court rejected as ineffective the plain-
tiffs’ effort to limit the amount in controversy through the stipulations
attached to the complaint. Strawn v. AT&T Mobility, Inc., 513 F.
Supp. 2d 599, 602 (S.D. W. Va. 2007). But the court also held that
AT&T bore the burden of establishing the predicates under CAFA for
federal jurisdiction, including the $5-million amount in controversy,
id. at 604, and that AT&T failed to carry this burden because it did
6 STRAWN v. AT&T MOBILITY LLC
not "explain how many of the 58,800 eligible consumers who paid the
[$2.99] fee did so unwillingly," id. at 606. The court reasoned, "the
class alleged in the complaint includes only those consumers who
were charged a fee without their authorization," and "[a] group that
includes all of the consumers charged the $2.99 fee extends beyond
the scope of the class sought in the complaint." Id. at 608. On that
basis it granted the plaintiffs’ motion to remand for lack of federal
jurisdiction.
Under the authorization of 28 U.S.C. § 1453(c), AT&T filed this
appeal, raising the issues of (1) "[w]hether the district court erred by
imposing the burden of proof on [AT&T]" and (2) whether the district
court erred in "finding the amount in controversy requirement of
CAFA not satisfied." The plaintiffs did not cross-appeal to challenge
the district court’s ruling on the ineffectiveness of their effort to limit
by stipulation the amount in controversy.
II
We begin with the undergirding principle that federal courts, unlike
most state courts, are courts of limited jurisdiction, created by Con-
gress with specified jurisdictional requirements and limitations. See
generally 13 Charles Alan Wright, et al., Federal Practice & Proce-
dure § 3522 (2d ed. 1984 & Supp. 2008). Accordingly, a party seek-
ing to adjudicate a matter in federal court must allege and, when
challenged, must demonstrate the federal court’s jurisdiction over the
matter. Id. If a plaintiff files suit in state court and the defendant seeks
to adjudicate the matter in federal court through removal, it is the
defendant who carries the burden of alleging in his notice of removal
and, if challenged, demonstrating the court’s jurisdiction over the
matter. See Ellenburg v. Spartan Motors Chassis, Inc., 519 F.3d 192,
200 (4th Cir. 2008) ("[T]he party seeking removal bears the burden
of demonstrating that removal jurisdiction is proper") (quotation
marks omitted); In re Blackwater Security Consulting, LLC, 460 F.3d
576, 583 (4th Cir. 2006) (same); Lontz v. Tharp, 413 F.3d 435, 439
(4th Cir. 2005) (same); Mulcahey v. Columbia Organic Chems. Co.,
29 F.3d 148, 151 (4th Cir. 1994) (same). While a defendant filing a
notice of removal under 28 U.S.C. § 1446(a) need only allege federal
jurisdiction with a short plain statement — just as federal jurisdiction
is pleaded in a complaint — when removal is challenged, the remov-
STRAWN v. AT&T MOBILITY LLC 7
ing party bears the burden of demonstrating that removal jurisdiction
is proper. Ellenburg, 519 F.3d at 200.
AT&T argues that CAFA reversed this long-settled principle that
places the burden of proof on the removing party by "plac[ing] this
burden of proof on the party seeking to avoid federal court." While
acknowledging that CAFA contains no statutory text reversing this
near-canonical rule, AT&T contends that "Congress explained in the
legislative history [of CAFA] that any uncertainty with respect to
jurisdiction should be resolved in favor of finding federal jurisdic-
tion." (Emphasis added). In making this argument, AT&T relies on
the statement made by the House Sponsor of CAFA that if a class
action is removed under CAFA, "the named plaintiff(s) should bear
the burden of demonstrating that the removal was improper," 151
Cong. Rec. H727 (daily ed. Feb. 17, 2005) (statement of Rep. Sensen-
brenner), and statements to the same effect in the Senate Judiciary
Committee Report, S. Rep. No. 109-14, at 42-43 (2005), as reprinted
in 2005 U.S.C.C.A.N. 3, 40-41.
The difficulty with AT&T’s position is that it seeks, without tex-
tual support, to reverse the established rules for alleging and demon-
strating jurisdiction on removal. The relevant portions of CAFA were
enacted to amend the requirements for diversity jurisdiction and to
amend the rules for removing cases to federal court, and while CAFA
expressly altered certain requirements for asserting diversity jurisdic-
tion and removing class actions, it did not reverse the established
principles for alleging and demonstrating jurisdiction on removal. To
the contrary, the removal provision in CAFA specifically refers to and
comports with the general removal provision in § 1446, subject to a
few express exceptions, thus confirming that Congress considered
which rules of the existing removal procedures to keep and which to
reject. See 28 U.S.C. § 1453(b). In the absence of any statutory text
reversing the burden of proof, we presume that Congress legislated
consistently with existing law and "with the knowledge of the inter-
pretation that courts have given to [the] existing statute." United
States v. Langley, 62 F.3d 602, 605 (4th Cir. 1995) (en banc); see also
DiTolla v. Doral Dental IPA of N.Y., LLC, 469 F.3d 271, 275 (2d Cir.
2006) ("We presume that Congress, when it enacted CAFA, knew
where the burden of proof had traditionally been placed. By its
silence, we conclude that Congress chose not to alter that rule").
8 STRAWN v. AT&T MOBILITY LLC
While AT&T is correct in noting that there are statements in the
legislative history indicating the desire of some members of Congress
to alter the traditional burden, those statements simply "do[ ] not con-
cern any text in the bill that eventually became law." Brill v. Country-
wide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir. 2005). As the
court in Brill observed, "[W]hen the legislative history stands by
itself, as a naked expression of ‘intent’ unconnected to any enacted
text, it has no more force than an opinion poll of legislators." Id.; see
also Miedema v. Maytag Corp., 450 F.3d 1322, 1329 (11th Cir. 2006)
("Statements in CAFA’s legislative history, standing alone, are [an]
insufficient basis for departing from this well-established rule").
We thus conclude that in removing a class action based on diver-
sity jurisdiction under 28 U.S.C. §§ 1453 and 1332(d), the party seek-
ing to invoke federal jurisdiction must allege it in his notice of
removal and, when challenged, demonstrate the basis for federal juris-
diction. In so holding, we join the six other circuits that have consid-
ered this issue. See Smith v. Nationwide Prop. & Cas. Ins. Co., 505
F.3d 401, 404-05 (6th Cir. 2007); Morgan v. Gay, 471 F.3d 469, 473
(3d Cir. 2006); DiTolla, 469 F.3d at 275; Miedema, 450 F.3d at 1329-
30; Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 685-86 (9th Cir.
2006); Brill, 427 F.3d at 447-48.
III
AT&T contends that even if it has the burden of demonstrating fed-
eral jurisdiction, it nonetheless properly alleged federal jurisdiction
and, when challenged on the jurisdictional amount, demonstrated the
amount specified in 28 U.S.C. § 1332(d). In its notice of removal,
AT&T alleged minimal diversity, the matter in controversy, and the
class size — all as specified by § 1332(d), which confers federal juris-
diction over specified class actions. The plaintiffs challenged only
AT&T’s allegation of the amount in controversy, arguing (1) that the
class should consist of only those persons who were unwillingly
charged the $2.99 for Roadside Assistance service; and (2) that in any
event, the stipulations they filed limiting their damages claims should
control the amount in controversy. Because the district court rejected
the plaintiffs’ second point and the plaintiffs did not appeal, we are
left with the question of whether AT&T demonstrated that the amount
in controversy should be based on the 58,800 customers who were
STRAWN v. AT&T MOBILITY LLC 9
automatically enrolled in the Roadside Assistance service and paid a
$2.99 fee for it.
AT&T contends that the district court erred in reading the com-
plaint to include only "customers who were ‘unwillingly’ enrolled in
[AT&T’s] Roadside Assistance program," rather than reading it to
include all of the 58,800 West Virginia customers who were automat-
ically enrolled in the program and paid the $2.99 fee. It argues that
plaintiffs’ complaint, fairly read, defines the class as all of AT&T’s
West Virginia customers who were automatically enrolled in the
Roadside Assistance program, inasmuch as all those customers were
allegedly victims of AT&T’s "pattern and practice" of automatically
enrolling the customers in the program without their request. It
claims, therefore, to have demonstrated that the minimum amount of
class damages, if the plaintiffs were to succeed on the merits, would
be $11,760,000 (the minimum statutory damages of $200 per cus-
tomer x 58,800 customers).
Responding to this argument, the plaintiffs argue in their papers
that the proposed class includes only "unwilling" customers and
excludes customers who, even though automatically enrolled in the
program, chose to retain the service after being charged the $2.99 fee.
The plaintiffs’ argument, however, amounts to a post hoc character-
ization of the pattern and practice that they are challenging in the
complaint as illegal, as their characterization is inconsistent with the
descriptions they give in the complaint of the pattern and practice and
of the class of persons described as victims.
The complaint makes clear that what the plaintiffs are challenging
as unlawful under West Virginia law is AT&T’s allegedly deceptive
practice of "bundling" the Roadside Assistance service with new cel-
lular telephone service, such that all customers were automatically
enrolled in a free trial period and then charged $2.99 per month at the
end of that period if they did not opt out. The class is not defined as
those willing or unwilling to retain the program, but rather as those
who "were not given an option." As the complaint alleges:
Plaintiffs and Class members were not given an option.
Instead, the Roadside Assistance was part of a "bundled"
transaction, whereby the Plaintiff and Class members had to
10 STRAWN v. AT&T MOBILITY LLC
catch the Roadside Assistance charge, and opt-out of it. Oth-
erwise, if Plaintiff and Class members failed to catch the
charge, [AT&T] automatically enrolled them for the Road-
side Assistance service and imposed a $2.99 monthly
charge.
Compl. ¶ 5 (emphasis added). Thus, the complaint challenges the ini-
tial transaction in which customers were automatically given both
telephone service and Roadside Assistance service, even if the cus-
tomers opted out later after discovering the charge. That the
automatic-enrollment transaction is the essence of the alleged viola-
tion is also reflected by the definition of the class, which is alleged
to include:
all consumers who: (1) purchased [an AT&T cellular]
account in the state of West Virginia; and (2) were charged
a $2.99 monthly charge for the Roadside Assistance service
without ever requesting or enrolling for said service.
Compl. ¶ 20 (emphasis added). This class definition includes any
AT&T customer who was charged $2.99 after being automatically
enrolled in Roadside Assistance, "without ever requesting or enrolling
for said service." The proposed class makes no distinction between
automatically-enrolled customers who, upon eventually discovering
the $2.99 charge, chose to ratify it and retain the service and those
who, upon discovering the charges, became "unwilling" customers.
Rather, the wrong from the allegedly deceptive practice is described
as having occurred at the time of the automatic enrollment, and the
wrong was not undone after the fact merely because the particular
customer decided, after discovering the charge, that he or she liked
the service and therefore "willingly" retained it. Such subjective
inquiries about a customer’s "willingness" or "unwillingness" in con-
tinuing to pay the charge might relate to a limitation of damages by
ratification, but it does not diminish the class defined in the com-
plaint: those who were at the outset automatically enrolled in the pro-
gram without their request — those who "were not given an option."
At that point, none of the customers were "willing" or "unwilling";
rather, all were unaware.
AT&T submitted an affidavit stating that approximately 58,800
individual consumers "in West Virginia have remained enrolled in the
STRAWN v. AT&T MOBILITY LLC 11
Roadside Assistance program beyond the initial free trial period and
thus have paid [AT&T’s] $2.99 per month charge." And the plaintiffs
have offered nothing to suggest that the 58,800-customer figure is not
an accurate number.
Therefore, taking (1) the challenged practice as alleged in the com-
plaint, (2) the definition of the class consisting of persons who were
victims of the challenged practice, and (3) AT&T’s data about the
number of persons fitting that class, which were established by affida-
vit and remained unchallenged, AT&T demonstrated that the matter
in controversy exceeds the sum or value of $5 million, exclusive of
interest and costs, and therefore that the jurisdictional amount under
CAFA is satisfied. See 28 U.S.C. § 1332(d)(2).
Accordingly, we reverse the district court’s order remanding this
case to state court and remand to the district court for further proceed-
ings.
REVERSED AND REMANDED