Bartnikowski v. NVR, Incorporated

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 09-1063

NICHOLAS BARTNIKOWSKI, Individually and on behalf of all
persons similarly situated; AIMEE MOORE, Individually and on
behalf of all persons similarly situated; AMBER WILCOX,
Individually and on behalf of all persons similarly
situated,

Plaintiffs – Appellees,

v.

NVR, INCORPORATED,

Defendant – Appellant.

Appeal from the United States District Court for the Middle
District of North Carolina, at Durham. James A. Beaty, Jr.,
Chief District Judge. (1:07-cv-00768-JAB-PTS)

Argued: October 31, 2008 Decided: January 16, 2009

Before WILKINSON and GREGORY, Circuit Judges, and Martin K.
REIDINGER, United States District Judge for the Western District
of North Carolina, sitting by designation.

Affirmed by unpublished opinion. Judge Gregory wrote the
opinion, in which Judge Reidinger joined. Judge Wilkinson wrote
a dissenting opinion.

ARGUED: Barry J. Miller, SEYFARTH & SHAW, L.L.P., Boston,
Massachusetts, for Appellant. Annette M. Gifford, DOLIN, THOMAS
& SOLOMON, L.L.P., Rochester, New York, for Appellees. ON
BRIEF: Lorie E. Almon, Devjani Mishra, SEYFARTH & SHAW, L.L.P.,
New York, New York; Richard L. Alfred, SEYFARTH & SHAW, L.L.P.,
Boston, Massachusetts; Keith M. Weddington, Joshua W. Dixon,
PARKER POE ADAMS & BERNSTEIN, L.L.P., Charlotte, North Carolina,
for Appellant. J. Nelson Thomas, Cristina A. Bahr, DOLIN,
THOMAS & SOLOMON, L.L.P., Rochester, New York; Caitlyn Fulghum,
THE FULGHUM LAW FIRM, P.L.L.C., Durham, North Carolina, for
Appellees.

Unpublished opinions are not binding precedent in this circuit.

2
GREGORY, Circuit Judge:

In this case, we are asked to determine whether NVR, Inc.

(“NVR”) -- the defendant below -- has satisfied the amount-in-

controversy requirement for federal removal jurisdiction under

the Class Action Fairness Act (“CAFA”), 28 U.S.C.A. § 1332(d)(2)

(West 2008). The district court, finding that NVR’s estimates

of the amount in controversy were too speculative to support

removal jurisdiction, granted Appellees’ motion for remand.

Because we agree with the district court that NVR’s estimates

rely on a wholly unsupported assumption that members of the

plaintiff class will claim to have worked an average of five

hours of overtime per week, we affirm the decision to remand to

state court.

I.

This litigation began in federal court in the Western

District of New York, in the case of Patrick Tracy v. NVR, Inc.

(Case No. 04-CV-06541 DGL). NVR is in the business of

constructing and selling new homes. Tracy, who worked as a

Sales Marketing Representative (“SMR”) 1 for NVR, filed a federal

1
SMRs handle lot sales in NVR’s newly developed
communities. SMRs work from a model home in the community,
where they meet with buyers and help them select a design and
finish for their new home. NVR then constructs the home for the
buyer.

3
Fair Labor and Standards Act (“FLSA”) claim against the company,

on behalf of a nationwide class of SMRs, for its failure to

provide SMRs with overtime compensation. At NVR’s request, the

Tracy district court dismissed the various state law claims

brought by class members, declining to exercise its supplemental

jurisdiction over them. To preserve these claims, various Tracy

class members then initiated state law actions in their

respective state courts. 2

On September 21, 2007, Plaintiffs-Appellees Nicholas

Bartnikowski, Aimee Moore, and Amber Wilcox (“Plaintiffs”) filed

an amended complaint against NVR in the Superior Court of Durham

County, North Carolina. Plaintiffs, present and former North

Carolina-based SMRs, claimed that NVR had wrongfully denied them

overtime compensation for the hours they worked in excess of

forty hours per week. In their complaint, Plaintiffs,

individually and on behalf of a class of all current and former

2
In addition to the instant action, state law actions have
also been initiated in Ohio (Geers, et al. v. NVR, Inc., Court
of Common Pleas, Hamilton County, Docket No. 07-6350 (filed on
July 18, 2007)), New Jersey (Gebhardt, et al. v. NVR, Inc.,
United States District Court for the District of New Jersey,
Docket No. 3:07-04456 (filed in Superior Court, Monmouth County
on July 18, 2007, then removed on Oct. 11, 2007)), Maryland
(Hart, et al. v. NVR, Inc., United States District Court for the
District of Maryland, Docket No. 8:07-02744 (filed in the
Circuit Court for Montgomery County on July 18, 2007, then
removed on Oct. 11, 2007)), and Pennsylvania (Graves, et al. v.
NVR, Inc., Court of Common Pleas, Allegheny County,
Pennsylvania, Docket No. 07-015569 (filed on July 18, 2007)).

4
SMRs at NVR’s North Carolina locations who had not been paid

overtime, claimed that NVR’s actions constituted a willful

violation of North Carolina’s wage and hour laws, including N.C.

Gen. Stat. § 95-25.6 (2007), as well as a breach of contract.

Plaintiffs did not specify damages in their complaint; they

simply stated that they “frequently worked over 40 hours in a

week” (J.A. 12) and asked for the following relief:

(a) that all matters so triable be tried by a jury;

(b) an order preliminarily and permanently restraining
defendant from engaging [in] the aforementioned pay
violations;

(c) an award of the value of plaintiffs’ unpaid wages,
including fringe benefits;

(d) all relief available under North Carolina law;

(e) [a]n award of reasonable attorneys fees, expenses,
expert fees and costs incurred in vindicating
plaintiffs’ rights;

(f) [a]n award of pre- and post-judgment interest; and

(g) [s]uch other and further legal or equitable relief
as this Court deems to be just and appropriate.

(J.A. 13.)

On October 16, 2007, NVR removed the case to federal

district court in the Middle District of North Carolina,

pursuant to 28 U.S.C. § 1441(a) (2000), asserting that CAFA,

codified in relevant part at 28 U.S.C.A. § 1332(d)(2) (West

2008), gave the district court original jurisdiction over the

action. In its notice of removal, NVR alleged that the amount

5
in controversy in the case exceeded $5,000,000, thus satisfying

CAFA’s jurisdictional requirements. Plaintiffs then filed a

motion to remand to state court, questioning NVR’s ability to

prove the amount in controversy since the Plaintiffs’ complaint

had left the amount of damages unspecified.

In its response to Plaintiffs’ motion, NVR attached a

declaration from Dennis Littell, NVR’s payroll director.

Littell stated in the declaration that the average annual

compensation paid to SMRs in North Carolina during the two-year

time period relevant to the statutory claims 3 was $145,892, and

that North Carolina SMRs worked a total of 1174 “person-months”

in those two years. Littell did not define the term “person-

months,” nor did NVR in its memorandum of law opposing the

Plaintiffs’ motion to remand.

NVR used Littell’s estimates to define an amount-in-

controversy in excess of $5,000,000. Based on an average annual

3
NVR has defined this “relevant time period” as being
August 2005 to July 2007 because the statute of limitations for
North Carolina’s unpaid wages statute is two years, see N.C. Gen
Stat. § 95-25.22(f) (2007), and Plaintiffs have not disputed
this definition. While NVR has also separately suggested that
Plaintiffs may seek to recover for a longer period of unpaid
overtime (because their complaint suggests that their claims
have been tolled since being dismissed by the district court for
the Western District of New York), we consider this assertion
speculative and decline to consider a recovery period beyond two
years in assessing the amount in controversy since NVR has
offered no evidence of overtime rates or hours worked during the
suggested extended statutory period.

6
compensation of $145,892, NVR calculated that SMRs in North

Carolina had an average hourly wage of $70.14, which would make

their average hourly overtime wage $105.21 (or one and a half

times their average hourly wage). NVR then assumed that

putative class members will claim to have worked an average of 5

overtime hours per week, creating damages of $2,279.37 per

person-month. 4 With SMRs working a total of 1174 person-months,

NVR estimated damages for the statutory period at about

$2,676,000. Assuming then that Plaintiffs will seek statutory

double damages under the North Carolina unpaid wages statute,

NVR estimated total recovery on the statutory claim at

$5,352,000. Using similar calculations, NVR estimated damages

under Plaintiffs’ breach of contract claim at an additional

$963,855. Claiming that attorneys’ fees were recoverable on top

of these calculations, NVR argued that it easily cleared the

$5,000,000 jurisdictional hurdle.

The district court, unconvinced by NVR’s estimates, granted

Plaintiffs’ motion to remand on June 19, 2008. The court found

that NVR’s calculations were too speculative and that the record

was too bare to allow for a reasonable estimate of the amount in

4
$105.21 per hour x 5 hours per week = $526.05 per person-
week. $526.05 x 4.333 weeks per month = $2,279.37 per person-
month.

7
controversy. As such, the court noted, “the propriety of

federal jurisdiction remains doubtful.” (J.A. 158.)

NVR filed a petition for leave to appeal pursuant to 28

U.S.C.A. § 1453(c) (West 2008) and Federal Rule of Appellate

Procedure 5 on June 30, 2008. We grant that petition as timely

filed 5 and review de novo the district court’s order granting

Plaintiffs’ motion to remand this action to state court. See

Lontz v. Tharp, 413 F.3d 435, 439 (4th Cir. 2005).

5
Section 1453(c)(1) of Title 28 of the United States Code
allows an appellate court to accept an appeal from a district
court’s order granting or denying a motion to remand a class
action to state court so long as a petition for appeal is filed
“not less than 7 days after entry of the order.” 28 U.S.C.A.
§ 1453(c)(1) (West 2008). Most circuit courts that have
interpreted this statutory provision have concluded that the
phrase “not less than 7 days” was a typographical error and that
the provision should be read as “not more than 7 days.” See
Estate of Pew v. Cardarelli, 527 F.3d 25, 27-28 (2d Cir. 2008);
Morgan v. Gay, 466 F.3d 276, 277 (3d Cir. 2006); Miedema v.
Maytag Corp., 450 F.3d 1322, 1326 (11th Cir. 2006); Amalgamated
Transit Union Local 1309, AFL-CIO v. Laidlaw Transit Servs.,
Inc., 435 F.3d 1140, 1145-46 (9th Cir. 2006); Pritchett v.
Office Depot, Inc., 420 F.3d 1090, 1093 n.2 (10th Cir. 2005).
At least one circuit, however, has declined to follow this
approach. See Spivey v. Vertrue, Inc., 528 F.3d 982, 983-85
(7th Cir. 2008) (choosing not to read § 1453(c)(1) as requiring
petitions for appeal to be filed “not more than” seven days
after entry of a remand order but agreeing that petitions filed
within seven days should also be accepted rather than
dismissed).

Because NVR filed its petition for appeal exactly seven
days after entry of the district court’s order, excluding
weekends, see Morgan, 466 F.3d at 277 n.1, we do not have to
decide this question of statutory construction. Under either
reading of the statute, NVR’s petition was timely filed.

8
 II.

NVR claims that removal under 28 U.S.C. § 1441(a) (2000) is

proper because, under CAFA’s amendments to 28 U.S.C. § 1332

(2000), the district court has original jurisdiction over this

action. CAFA amended Title 28’s requirements for diversity

jurisdiction and removal in the case of class actions. Section

1332(d)(2) of Title 28 now provides:

The 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 . . . any member of a class of plaintiffs is a
citizen of a State different from any defendant . . .
.6

To determine whether the jurisdictional minimum is satisfied,

the district court looks to the aggregated value of class

members’ claims. 28 U.S.C.A. § 1332(d)(6) (West 2008).

Defendants seeking removal bear the burden of demonstrating

that jurisdiction is proper. See Strawn v. AT&T Mobility LLC,

530 F.3d 293, 296-97 (4th Cir. 2008). This is true even in the

context of removals pursuant to CAFA. In Strawn, this Court

found that, while CAFA was intended to open the doors of the

federal courts to class action litigants, its statutory language

6
Section 1332(d)(5)(B) further limits federal courts’
original jurisdiction under CAFA to those class actions where
the class size is greater than or equal to 100 members.

9
did nothing to reverse the long-settled principle that a

defendant seeking to invoke a federal court’s removal

jurisdiction bears the burden of demonstrating that jurisdiction

would be proper. Id. at 297.

The question then becomes how that burden is to be

satisfied. Generally, the amount specified in the complaint

will determine whether the jurisdictional amount is satisfied

for purposes of removal. See Wiggins v. North Am. Equitable

Life Assurance Co., 644 F.2d 1014, 1016 (4th Cir. 1981).

Determining the amount in controversy becomes more difficult,

however, where, as here, Plaintiffs have left damages

unspecified in their complaint. In this case, both parties

agree that the defendant’s burden in these circumstances is to

establish the jurisdictional amount by a preponderance of the

evidence. 7 We review the evidence as to the amount in

controversy with that standard in mind.

7
A number of our sister circuits have explicitly adopted a
preponderance of the evidence standard as the appropriate burden
to which removing defendants should be held in proving
the amount in controversy where plaintiffs leave damages
unspecified. See, e.g., Smith v. Nationwide Prop. & Cas. Ins.
Co., 505 F.3d 401, 404-05 (6th Cir. 2007); Miedema v. Maytag
Corp., 450 F.3d 1322, 1330 (11th Cir. 2006); Abrego Abrego v.
Dow Chem. Co., 443 F.3d 676, 683 (9th Cir. 2006) (per curiam);
Garcia v. Koch Oil Co. of Tex. Inc., 351 F.3d 636, 638-39
(5th Cir. 2003); McCord v. Minn. Mut. Life Ins. Co. (In re Minn.
Mut. Life Ins. Co. Sales Practices Litig.), 346 F.3d 830, 834
(8th Cir. 2003). This case does not require us to decide
whether a more stringent standard would be appropriate since we
(Continued)
10
 III.

In considering Plaintiffs’ motion for remand, the district

court seemed to find virtually all of NVR’s calculations too

speculative and unsupported to satisfy its burden. We do not

agree fully. A number of NVR’s assumptions and calculations are

reasonable and supported by the record.

For example, NVR assumes that the base amount of overtime

compensation allegedly due under North Carolina’s unpaid wages

statute –- $2,676,000, according to NVR’s calculations -– can be

doubled to determine the amount in controversy because the North

Carolina statute authorizes double damages. Plaintiffs’

complaint does not make any specific claim for liquidated

damages but it does ask for “all relief available under North

Carolina law.” (J.A. 13.) Section 95-25.22(a1) of the North

Carolina General Statutes authorizes an award of liquidated

damages “in an amount equal to the amount found to be due” in

unpaid wages cases, subject only to a good faith defense. Given

that the complaint alleges that NVR “willfully violated its

obligations under North Carolina Law” (J.A. 13 (emphasis

added)), it appears likely that liquidated damages will be

find that NVR has failed to meet even a preponderance of the
evidence burden. See Martin v. Franklin Capital Corp., 251 F.3d
1284, 1290 (10th Cir. 2001).

11
sought. Cf. Morgan v. Gay, 471 F.3d 469, 475 (3d Cir. 2006)

(finding punitive damages not properly includable in amount-in-

controversy calculation where defendants conclusorily alleged

that millions of dollars in punitive damages would be sought and

where plaintiffs had specifically claimed that damages would not

exceed $5 million). Statutory liquidated damages are properly

includable in the calculation of the jurisdictional amount here,

and we do not consider them too speculative in this case to be

factored into that calculation. See 28 U.S.C.A. § 1332(d)(2)

(West 2008) (excluding only “interest and costs” from

calculation of aggregate amount in controversy); see also Wall

v. Fruehauf Trailer Servs., Inc., 123 F. App’x 572, 577 (4th

Cir. 2005).

NVR also argues that the “average annual compensation” and

average number of “person-months” worked, as provided in the

Littell declaration, are adequate measures from which the amount

in controversy can fairly be calculated. Plaintiffs themselves

have proffered no information about their expected damages, nor

have they explained why accepting the declaration of NVR’s

Payroll Director as to average annual SMR compensation would be

speculative or an improper means of estimating SMRs’ average

hourly wage and expected hourly overtime rate. We have no

difficulty accepting these figures.

12
 The use of the “person-months” statistic is more

troublesome since NVR left the term undefined in its brief

before the district court. However, NVR has made clear in its

brief to this Court that a “person-month” is the monthly

equivalent of a “man-hour,” meaning a unit of one month’s work

by one person. According to the Littell declaration, SMRs in

North Carolina collectively worked a total of 1174 person months

during the statutory period of two years. 8 Multiplying this

number of months by the expected monthly amount of overtime pay

due to employees (if this number was discernible) would yield a

reasonable estimate of the amount of unpaid wages at stake under

the statutory claims in this case.

NVR’s ultimate estimate of the amount in controversy,

however, is fatally undermined by the wholly unsupported

assumption on which its calculations ultimately rest -- that

Plaintiffs and class members will each claim to have worked an

average of five hours of overtime per week. NVR concedes that

it has kept no records of the number of overtime hours worked by

8
The district court correctly points out that dividing 1174
by 24 months gives us approximately 49 as the average number of
SMRs working per month during the statutory period, which is far
short of the class-size minimum of 100 persons. See supra note
6. But, neither party contests that the 100-member class
requirement has been met. Moreover, a turnover rate of about
two SMRs per month would suffice to double the class.

13
class members, 9 and the Plaintiffs themselves have offered no

evidence on the issue either. The only evidence in the record

to which NVR can point for support is an affirmation from

Patrick Tracy, the named plaintiff in the FLSA action being

litigated in district court in New York. 10 Tracy, a New York-

based SMR, made vague references in his affirmation to working

55-hour weeks. According to NVR, this shows that its assumption

of five hours of overtime is, if anything, a conservative

estimate, since Tracy, who is supposed to be representative of a

nationwide class of SMRS including Plaintiffs, suggests that he

works fifteen hours of overtime per week. There are two

significant problems with this argument.

First, Tracy is located in New York. While it is true that

Plaintiffs are members of the Tracy class, Tracy is a completely

separate action. Tracy’s “representativeness” of the nationwide

class in the federal FLSA action does not make him, a New York-

9
According to NVR, it did not see any need to maintain such
records because it understood that the SMR position was exempt
from overtime pay.
10
It is worth noting that the Tracy affirmation was not
even a part of the record when, on December 10, 2007, NVR filed
its brief in opposition to Plaintiffs’ motion for remand, in
which it first articulated the “five hours per week” assumption.
The affirmation was only filed with the district court for the
Western District of New York on December 12, and NVR then
submitted a motion for leave to submit it as “additional”
evidentiary support on December 14.

14
based SMR, representative of a class of North Carolina-based

SMRs bringing state law claims. Second, even if Tracy could be

considered representative of the class in this case, his

affirmation does not actually state that he worked an average of

55 hours per work week. Instead, it states as follows:

Thus, visiting two lots, in one month, equates to 40
minutes a month. If working four 55-hour weeks in a
month (or 220 hours = 13,200 minutes in a month) my
lot visits outside the model took less than 1% of the
time. Even if I had worked only 40 hours a week
(equating to 160 hours per month = 9600 minutes), such
visits still took less than 1% of my time in a month.

(J.A. 96 (emphasis added).) The statement was made in the

context of explaining what percentage of time Tracy spent on lot

visits away from the model home in a given month. Tracy was not

giving an estimate of the number of overtime hours he worked per

week.

Tracy’s affirmation is the only piece of evidence NVR

offers to anchor its assumption that plaintiff class members

worked an average of five overtime hours per week, making the

assumption highly speculative. Cf. Brill v. Countrywide Home

Loans, Inc., 427 F.3d 446, 449 (7th Cir. 2005) (“Thus part of

the removing party’s burden is to show not only what the stakes

of the litigation could be, but also what they are given the

plaintiff’s actual demands.”) (emphasis in original).

On top of Plaintiffs’ statutory claims, they have also

raised a breach of contract claim for their unpaid overtime.

15
According to NVR, the statute of limitations on Plaintiffs’

contract claim is three years, giving them one additional year

for which they can recover. Using a similar calculation to that

used for the statutory claim, NVR estimates that the contract

claim puts an additional $963,855 at stake. 11 But this estimate

relies on the same unsupported “five hours of overtime per week”

assumption. 12

11
The average annual compensation for SMRs in North
Carolina from August 2004 to July 2005 was $127,742, yielding a
regularly hourly rate of $61.41 and an overtime rate of $92.11.
Assuming class members averaged five hours of overtime per week,
NVR estimates that Plaintiffs’ damages would be $1,995.56 per
month. SMRs worked 483 person-months during the relevant time
period, thus total damages available under the contract claim
would be $963,855.48.
12
NVR also suggests that attorneys’ fees are properly
includable in the calculation of the amount in controversy since
North Carolina’s unpaid wages statute authorizes their award.
See N.C. Gen. Stat. § 95-25.22(d) (2007). CAFA specifies that
the amount in controversy should be calculated “exclusive of
interests and costs.” 28 U.S.C.A. § 1332(d)(2) (West 2008).
However, since the North Carolina statute provides for the
recovery of attorneys’ fees as a substantive right, they are
properly includable in the amount in controversy estimate. See
Mo. State Life Ins. Co. v. Jones, 290 U.S. 199, 202 (1933). At
this stage of litigation, however, an estimate of attorneys’
fees is pure speculation, and thus, on this record, cannot be
used to augment the amount-in-controversy calculation.

Similarly, NVR suggests in passing that since “Plaintiffs’
complaint includes a demand for injunctive relief, the value of
that injunction is included in the calculation of the relief.”
(Appellant’s Br. at 9 n.11.) Neither party has attempted to
give us any estimate of the value of the injunctive relief
sought, and thus we will not consider it in assessing the amount
in controversy.

16
 The “five hours of overtime” assumption is in fact quite

crucial to NVR’s calculations of the amount in controversy. If

the actual amount of overtime claimed was only one to three

hours per week, NVR, using its own calculation methods, could

not satisfy the jurisdictional minimum. 13 At four hours, NVR

would clear the jurisdictional hurdle only by a hair. 14 Given

the centrality of the “five hours” number to NVR’s claims, we

cannot simply take NVR’s word that this is really a

“conservative” estimate (Appellant’s Br. 12) of the overtime

hours that will be claimed by Plaintiffs.

The dissent contends that NVR has carried its burden of

proof by presenting credible evidence on the “five hours” issue,

and that therefore the burden of production should shift to

Plaintiffs to show that the jurisdictional amount has not been

13
Assuming the class averaged only one hour of overtime per
week, the amount in controversy on the statutory claims would be
$105.21 per hour x 1 hours per week x 4.333 weeks per month x
1,174 person-months x 2 = $1,070,394.34. The amount in
controversy on the contract claim would be $92.11 per hour x 1
hour per week x 4.333 weeks per month x 483 person-months =
$192,771.40. The total amount in controversy then is
$1,263,165.74. At two hours, the total becomes $2,526,331.47
($2,140,788.67 in statutory damages + $385,542.80 in contract
damages). At three hours, the total becomes $3,789,497.21
($3,211,183.01 in statutory damages + $578,314.20 in contract
damages).
14
At four hours, the total becomes $5,052,662.94
($4,281,577.34 in statutory damages + $771,085.60 in contract
damages).

17
satisfied. But NVR has put forth no evidence of its own to

support the number; rather, it has presented only a conjectural

argument. Plaintiffs have no burden in these circumstances and

are under no obligation to put forth any evidence. See

Birkenbuel v. M.C.C. Constr. Corp., 962 F. Supp. 1305, 1306

(D. Mont. 1997) (“MCC complains that ‘Birkenbuel offers no

evidence regarding the amount of his interim earnings, or indeed

any evidence that he has or ever will earn interim income.’

However, it is MCC, not Birkenbuel, which has the burden of

proof.”). Even if, as NVR contends, Plaintiffs are the “sole

custodians” of information about the amount of overtime they

worked (Appellant’s Reply Br. at 13), this does not give NVR

license to pull numbers from thin air in determining the amount

in controversy. See Morgan, 471 F.3d at 474 (“CAFA does not

change the proposition that the plaintiff is the master of her

own claim”); Brill, 427 F.3d at 449 (noting that “a removing

defendant can’t make the plaintiff’s claim for him”). Because

NVR has presented no credible evidence to support the “five

hours” assumption, NVR simply cannot satisfy its burden of

demonstrating that jurisdiction would be proper.

We note that this case is readily distinguishable from that

of Strawn, 530 F.3d 293, where this Court reversed the district

court’s grant of a motion to remand. Indeed, this case is much

18
more reminiscent of the facts of the Eleventh Circuit case

Miedema v. Maytag Corp., 450 F.3d 1322 (11th Cir. 2006).

In Strawn, the plaintiffs claimed that AT&T had illegally

used an opt-out policy for its “Roadside Assistance” program,

under which it charged its West Virginia cellular customers

$2.99 per month automatically unless they affirmatively asked to

be removed from the program after an initial free-trial period.

530 F.3d at 294. In its notice of removal, AT&T included an

affidavit stating the following to show the jurisdictional

amount had been satisfied: (1) that approximately 58,800

consumers in West Virginia were automatically enrolled in the

Roadside Assistance program after the trial period, and (2) that

under the West Virginia Consumer Credit and Protection Act, the

minimum statutory damages per person were $200. Id. at 295.

Because plaintiffs offered no evidence to suggest that the

58,800-customer figure was inaccurate, this Court found that

AT&T had met its burden. Id. at 299.

Likewise, we can accept NVR’s evidence on average annual

compensation and the number of person-months worked by SMRs

during the statutory period because Plaintiffs have offered no

contradictory evidence. But its “five hours of overtime per

week” estimate is not evidence; it is an assumption. It is

nothing like the affidavit produced by AT&T showing that 58,800

customers had been automatically enrolled in the roadside

19
assistance program. Nor is it even an assumption that finds

some support in the record; at this point, it seems the “five

hours of overtime per week” was nothing more than the result of

some strategic guesswork on NVR’s part, and Plaintiffs are under

no obligation to rebut this bare assertion.

NVR’s calculations are more like the ones rejected as being

too speculative in Miedema. In that case, the named plaintiff

filed a class action involving negligence, breach of express

warranty, and state statutory claims against Maytag for a defect

found in the motorized door latch of its ranges/ovens sold in

Florida. Miedema, 450 F.3d at 1324-25. Maytag then removed to

federal court. Id. at 1325. Affirming the district court’s

grant of a motion to remand, the Eleventh Circuit found that

Maytag had failed to establish the amount in controversy

required under CAFA by a preponderance of the evidence. Id. at

1331. Maytag’s notice of removal had included an affidavit of

one of its information analysts that stated that a total of

6,279 ranges/ovens had been sold in Florida, with a total value

of $5,931,971. Id. at 1325. However the 6,279 figure was not

based on actual sales data, but was merely a guess extrapolated

from the fact that Maytag had received a total of 2,493 product

registrations from Florida consumers. Id. at 1332. The court

found that “great uncertainty” remained about the amount in

20
controversy and that such uncertainty needed to be resolved in

favor of remand. Id. (internal quotations omitted).

NVR’s “five hours of overtime a week” assumption is even

more speculative than Maytag’s extrapolations in Miedema. In

Miedema, Maytag at least had data on the number of product

registrations in Florida and an estimate of nationwide

registration rates to anchor its estimate of the number of units

sold. Here, by contrast, NVR’s estimate of overtime hours is

pure guesswork, and leaves significant uncertainty about the

actual amount in controversy.

While NVR suggests that CAFA mandates that we resolve any

such uncertainties in favor of federal jurisdiction, the long-

standing tradition of strictly construing removal jurisdiction

suggests otherwise. See, e.g., Strawn, 530 F.3d at 297

(rejecting the argument that CAFA’s legislative history

demonstrates that the statute intended to flip the presumption

that doubts about jurisdiction are resolved in favor of remand

to state court); Miedema, 450 F.3d at 1328-29 (same).

We reach our decision to affirm the district court not

unmindful of the difficulty that CAFA defendants face in

demonstrating that the amount in controversy is met when

plaintiffs have left their damages unspecified. Plaintiffs may

well use their pleadings in state court tactically, leaving

damages unspecified to block removal without foreclosing an

21
ultimate recovery of more than the federal jurisdictional

minimum. See Lowdermilk v. U.S. Bank Nat’l Assoc., 479 F.3d

994, 1002 (9th Cir. 2007). We are reassured, however, by the

fact that a CAFA defendant who cannot meet his burden for

removal at the early stages of litigation may still have

recourse to the federal courts later, as Congress has eliminated

the one-year time limit on CAFA removal actions. 15 See 28

U.S.C.A. § 1453(b) (West 2008); Lowdermilk, 479 F.3d at 1002-03.

NVR argues that it is contrary to the purpose of CAFA to

subject defendants to this kind of “wait and see” approach in

state court. But CAFA is quite explicit about how it relaxes

the jurisdictional requirements for bringing a class action in

federal court. To the extent that Congress sought to relax a

CAFA defendant’s burden for removal, it has done so explicitly.

See, e.g., 28 U.S.C.A. § 453(b) (West 2008). Where Congress has

not spoken directly to the issue, we must fall back on our long-

standing view that, because federal courts are courts of limited

subject matter jurisdiction, our removal jurisdiction must be

strictly construed. See Md. Stadium Auth. v. Ellerbe Becket

15
Although CAFA eliminates the one-year time limit on
removal actions, a defendant must still file a notice of removal
“within thirty days after receipt by the defendant . . . of a
copy of an amended pleading, motion, order or other paper from
which it may first be ascertained that the case is one which is
or has become removable.” 28 U.S.C. § 1446(b) (2000); see also
28 U.S.C.A. § 1453(b) (West 2008).

22
Inc., 407 F.3d 255, 260 (4th Cir. 2005) (“We are obliged to

construe removal jurisdiction strictly because of the

significant federalism concerns implicated.”) (internal citation

and quotations omitted). Where federal jurisdiction is

doubtful, a remand to state court has traditionally been

considered the proper course of action. Mulcahey v. Columbia

Organic Chems. Co., Inc., 29 F.3d 148, 151 (4th Cir. 1994).

This is no less true in the context of CAFA than in other

removal actions. See Strawn, 530 F.3d at 297; Miedema, 450 F.3d

at 1328-29.

IV.

On the record as it stands, we find that NVR has not

satisfied its burden of showing that the amount in controversy

is sufficient to meet CAFA’s jurisdictional requirements. As

such, we affirm the order of the district court remanding this

case to state court. 16

AFFIRMED

16
Plaintiffs have also filed a motion to strike certain
documents from the joint appendix, and we deny this motion as
moot.

23
WILKINSON, Circuit Judge, dissenting:

Petitioner put forth a prima facie case establishing that

the damages at issue in this action meet the jurisdictional

threshold under the CAFA. In response, respondent offered

nothing to rebut petitioner’s claims; it merely charged that the

claims are too speculative. In accepting this argument, the

majority conflates burdens of proof with burdens of production.

Moreover, the majority’s holding – that petitioner has failed to

meet its burden of proof despite presenting a prima facie case

that respondent has not contradicted – is in some tension with

circuit precedent in Strawn v. AT&T Mobility LLC, 530 F.3d 293

(4th Cir. 2008). I therefore respectfully dissent.

I.

The party seeking removal in a CAFA case has the burden of

alleging federal jurisdiction and establishing it if challenged.

Strawn, 530 F.3d at 298. But once petitioner has set forth a

prima facie case establishing jurisdiction, the onus is on

respondent to offer something of its own. See id. at 298-99.

Strawn held that the petitioner in that case had met its burden

by identifying the number of class members (based on the terms

of the respondent’s complaint) and by calculating the minimum

statutory damages due each member of the class, where the

respondent “offered nothing to suggest that the [figure put

24
forth by the petitioner] is not an accurate number.” Id. The

court thus held for the petitioner based on the petitioner’s

calculations and the facts presented in the complaint, even

though respondent’s counsel even went so far as to stipulate

that they would not accept an award over $5 million. See id. at

295, 299.

The case before us is strikingly similar. NVR, the

petitioner here, met its initial burden by offering a prima

facie case based on the terms of respondents’ complaint and

petitioner’s own calculations of overtime pay. In the

complaint, the class action plaintiffs (respondents here) raised

a statutory claim for overtime pay that had a statute of

limitations period of two years. They also asserted a breach of

contract claim that reached back three years. Both claims

sought overtime pay of one-and-a-half times the regular rate of

pay; further, the statutory claim asserts that petitioner acted

willfully, which under North Carolina law would allow a court to

award double damages. See 28 U.S.C. § 1332(d)(2) (excluding

only “interest and costs” from the amount in controversy under

the CAFA); N.C. Gen. Stat. §§ 95-25.22(a1) (providing for the

award of liquidated damages in an amount equal to the damages

due). Finally, respondents claim attorneys’ fees, which are

recoverable under North Carolina wage and hour laws. See N.C.

Gen. Stat. § 95-25.22(d); see also 28 U.S.C. § 1332(d)(2).

25
Based on these claims, petitioner estimates that respondents

will seek damages of $5,352,000 on the statutory claim alone,

and that the total amount of damages could exceed $6 million

even without attorneys’ fees.

To support its calculations, petitioner submitted a

declaration from its payroll director, Dennis Littell. Mr.

Littell reviewed the payroll records of the relevant category of

employees, Sales and Marketing Representatives, for two time

periods: August 2004 to July 2005 (for the breach of contract

claim), and August 2005 to July 2007 (for the statutory claim).

Based on this review, Mr. Littell computed the average annual

compensation paid to the employees and the number of person-

months worked during each time period. NVR then looked at

respondents’ claims in this and other proceedings and estimated

that respondents would claim they had worked an average of five

overtime hours per week. This figure yielded petitioner’s

estimates of respondents’ total damages.

The majority does not suggest that someone other than the

payroll director would be better fit to put forth this

information. It does not suggest what information petitioner

could offer that would meet its burden under the CAFA. Although

petitioner bears the ultimate burden of proving by a

preponderance of the evidence that the jurisdictional amount is

in controversy, it need not produce reams of personnel records

26
simply to present a prima facie case. To require more would

lead to voluminous discovery requests and document production at

the preliminary stages of what is itself a preliminary

jurisdictional issue. Encouraging this sort of deluge adds more

litigiousness to already litigious class action undertakings.

Moreover, the five-hour estimate is not so speculative as

to not even require a response from respondents. The

affirmation of Patrick Tracy, the named plaintiff in a parallel

proceeding in the Western District of New York, states that “in

many weeks [Tracy] worked beyond the model home open hours on

[his] scheduled days” and that he also came to work on his days

off. (JA 99.) He not only refers to working four 55-hour weeks

in a month (JA 96), but states that he “frequently worked over

forty hours in a week” because of his extra hours during the

week and “the extra hours” on his days off. (JA 100)

Therefore, Tracy’s statements buttress the petitioner’s argument

that an estimate of five hours per week is not only a credible

estimate, but a very conservative one. And there is no reason

to believe that Tracy’s experience in New York differs from that

of SMRs in North Carolina: the named plaintiffs in the North

Carolina action are part of the class that Tracy represents, and

respondents have stated that NVR kept “very regimented policies”

and followed the same sales model “at all of its locations.”

Pl’s Mem. of Law in Support of Mot. for Class Certification,

27
Tracy v. NVR, Inc., No. 04-CV-06541 (W.D.N.Y. filed on Jan. 11,

2008).

Finally, the majority acknowledges that respondents would

reach the jurisdictional amount if they claimed just four hours

per week of overtime. Maj. Op. at 17. Four hours overtime per

week is precious little to seek in a class action suit brought

to recover overtime pay. And petitioners can reach this

jurisdictional threshold without counting attorneys’ fees and

the value of injunctive relief, which the majority notes

constitute part of the amount in controversy. See Maj. Op. at

16, n.12.

These calculations, along with the Littell Declaration,

make up petitioner’s prima facie case and put a burden on the

respondents to offer something in response. See Strawn, 530

F.3d at 299. If the five-hour estimate was indeed too

speculative or inaccurate, it would make the response even

easier to tender. The respondents, who are in possession of all

information regarding their pay claims, could shoot down an

inaccurate estimate without breaking a sweat. But then

respondents have never claimed that they are requesting less

than $5 million in damages. In fact, respondents have been

litigating class action overtime pay cases against petitioner

since 2004, but have passed on every opportunity to submit an

affidavit or even make a declaration as to the likely amount of

28
damages they will claim. See, e.g., Tracy v. NVR, Inc., No.

6:04-06541 (W.D.N.Y. filed on Oct. 29, 2004). To be sure,

respondents may be under no obligation to do so, but the court

is likewise under no obligation to relieve them of the

consequences of inaction.

Requiring some sort of minimal response in no way shifts

the ultimate burden of proof to respondents, but recognizes that

respondents have some modest role to play in making the

adversary process function. In ruling otherwise, the majority

confuses the burden of proof with the burden of production when

it states that respondents “are under no obligation to put forth

any evidence.” Maj. Op. at 18. Our cases in the Title VII

context are instructive. As we noted when discussing the

McDonnell Douglas framework in Burns v. AAF-McQuay, Inc., 96

F.3d 728, 731 (4th Cir. 1996), the burden of proof throughout a

Title VII proceeding remains with the plaintiff. But once the

plaintiff puts forth a prima facie case of discrimination, the

burden of production shifts to the defendant to show a

nondiscriminatory motive for its actions. Burns, 96 F.3d at

731-32.

Similarly, in the CAFA context, the burden of proof remains

with the party seeking to invoke federal jurisdiction –

typically, the class action defendant (petitioner here). See

Strawn, 530 F.3d at 297-98. But once petitioner has put forth

29
credible evidence on the jurisdictional question, the burden of

production shifts to the respondent to offer something in

response. E.g., Strawn, 530 F.3d at 298-99. Thus, the burden

of production may switch without diminishing or reallocating in

any way the burden of proof. The majority seems to recognize

this burden-shifting when it notes that it “accept[s] NVR’s

evidence on average annual compensation and the number of

person-months worked . . . because [respondents] have offered no

contradictory evidence.” Maj. Op. at 19.

Finally, not requiring any response from respondents lets

them have their cake and eat it too – avoiding federal

jurisdiction without being bound by any declaration of damages

that might haunt them in state court. See, e.g., Morgan v. Gay,

471 F.3d 469, 477 (3d Cir. 2006) (“[P]laintiffs in state court

should not be permitted to ostensibly limit their damages to

avoid federal court only to receive an award in excess of the

federal amount in controversy requirement.”). Further, not

requiring even so much as a response invites a game of judicial

ping-pong. At this point, the case will proceed with discovery

in state court, but petitioner will surely renew its notice of

removal if respondents later claim, as no doubt they will, over

$5 million in damages. See 28 U.S.C. § 1446(b) (stating that

the defendant may remove a case from state court by filing a

notice of removal within 30 days of receiving an amended

30
pleading or other document indicating that federal jurisdiction

is proper); see also 28 U.S.C. § 1453(b) (noting that the one-

year limitation on removals under § 1446 does not apply to class

actions). The parties will then be litigating this case once

again in federal court.

I recognize that CAFA cases may turn on questions of state

law and there is a policy argument, with which I have some

sympathy, for having these cases resolved at the state level.

But we are not at liberty to assign cases to forums where we,

not Congress, think they belong. Congress has enacted CAFA and

no one is claiming that CAFA is beyond the congressional power

to establish the jurisdiction of the federal courts. Here,

petitioner offered a prima facie case for federal jurisdiction

and respondents offered absolutely nothing in response. Strawn

does not permit this very situation, and it gives rise to gaming

the system. I would reverse the judgment and let the case

proceed in district court.

31