In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 14‐8006
MICHAEL B. JOHNSON, individually and on behalf of all
others similarly situated,
Plaintiff‐Respondent,
v.
PUSHPIN HOLDINGS, LLC, et al.,
Defendants‐Petitioners.
____________________
Petition for Leave to Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 13 C 7468 — Charles P. Kocoras, Judge.
____________________
SUBMITTED MARCH 19, 2014 — DECIDED APRIL 9, 2014
____________________
Before POSNER, ROVNER, and TINDER, Circuit Judges.
POSNER, Circuit Judge. This class‐action suit, which had
been filed in an Illinois state court, accuses Pushpin Hold‐
ings (we can ignore the other defendants—owners and affil‐
iates of Pushpin and entities alleged to have been acting in
concert with it) of having violated the Illinois Consumer
Fraud Act, 815 ILCS 505/2, by operating as a debt collector in
Illinois without an Illinois license, as required by 225 ILCS
2 No. 14‐8006
425/4, and also of having committed common law torts of
abuse of process and malicious prosecution in attempting to
collect debts. Pushpin removed the case to federal district
court under the removal provision of the Class Action Fair‐
ness Act of 2005, 28 U.S.C. § 1453(b). To be allowed to re‐
main and litigate in federal court, Pushpin was required by
other provisions of the Act to show that the amount in con‐
troversy in the litigation exceeded $5 million. §§ 1332(d)(2),
(6). The district court ruled that Pushpin had failed to show
this, and ordered the case remanded to the state court from
which it had been removed. Pushpin asks us for leave to file
an interlocutory appeal from the remand ruling, and we
have decided to grant that leave, as we are authorized to do
by § 1453(c)(1). The petition and response, together with the
record in the district court, adequately illuminate the dis‐
pute, so we dispense with further briefing and proceed to
the merits.
The class action complaint alleges that Pushpin filed in Il‐
linois courts some 1100 small‐claims suits, all fraudulent, but
that the class (which consists of the defendants in those
suits) seeks “no more than $1,100,000.00 in compensatory
damages and $2,000,000.00 in punitive damages,” and “will
incur attorneys’ fees of no more than $400,000.00 in prose‐
cuting the class action counts,” and therefore “the total
amount of compensatory damages plus punitive damages
plus attorney’s fees requested on behalf of all class members
is no more than $3,500,000.00.” Of course $3.5 million is well
below the $5 million threshold for removal of a state‐court
class action to a federal district court under the Class Action
Fairness Act. Class counsel wants the stakes to remain below
that threshold so that the suit will have to be litigated in
state court, class counsel’s preferred forum. Pushpin argues
No. 14‐8006 3
that the potential damages that class counsel could establish
if the substantive allegations of the complaint are proved ex‐
ceed $5 million, and therefore the case should remain in fed‐
eral court.
One might suppose that whatever potential damages the
class might have sought, remand is required because the
complaint forswears any claim for more than $3.5 million.
The district judge said, however, that “once the proponent
[of removal, and hence opponent of remand—Pushpin] has
plausibly suggested that the relief exceeds $5 million, then
the case remains in federal court unless the plaintiff can
show it is legally impossible to recover that much.” The term
we’ve italicized appears in many cases, e.g., ABM Security
Services, Inc. v. Davis, 646 F.3d 475, 478 (7th Cir. 2011);
Blomberg v. Service Corp. Int’l, 639 F.3d 761, 764 (7th Cir.
2011), as does the older formula that to prevent removal the
plaintiff must demonstrate to a “legal certainty” that his
claim is for less than the jurisdictional amount. E.g., St. Paul
Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289 (1938);
Meridian Security Ins. Co. v. Sadowski, 441 F.3d 536, 541 (7th
Cir. 2006). Neither “legal impossibility” nor “legal certainty”
seems descriptive of what is after all just a party’s commit‐
ment not to seek damages above an amount specified by
him, whether to avoid removal or for some other reason.
See, e.g., BEM I, L.L.C. v. Anthropologie, Inc., 301 F.3d 548, 552
(7th Cir. 2002); Workman v. United Parcel Service, Inc., 234 F.3d
998, 1000 (7th Cir. 2000); Bell v. Hershey Co., 557 F.3d 953, 958
(8th Cir. 2009). A court can’t force a plaintiff to accept greater
damages than he wants; and it might seem that class counsel
in this case had made a commitment, in the passages that we
quoted from the complaint, not to seek a judgment for more
than $3.5 million.
4 No. 14‐8006
But we have held that Illinois law, which governed the
litigation before removal, requires, for such a commitment to
be effective, that the plaintiff “fil[e] a binding stipulation or
affidavit with the complaint.” Back Doctors Ltd. v. Metropoli‐
tan Property & Casualty Ins. Co., 637 F.3d 827, 831 (7th Cir.
2011); Oshana v. Coca‐Cola Co., 472 F.3d 506, 511–12 (7th Cir.
2006). Actually all we can find in Illinois statutory and case
law are statements that a plaintiff’s damages are not limited
to the amount sought in the complaint, see 735 ILCS 5/2‐604;
In re Estate of Hoellen, 854 N.E.2d 774, 785 (Ill. App. 2006),
which is not the same as saying that the amount can be lim‐
ited only by binding stipulation or affidavit. But what at
least is clear is that an unattested statement in a complaint
won’t do—and the plaintiff in this case failed to attach a
binding stipulation or affidavit (it’s unclear what the differ‐
ence between “binding stipulation” and “affidavit” is, but
it’s irrelevant in this case), while Pushpin has alleged that
there aren’t 1100 suits against members of the class but 1300
and that the aggregate compensatory damages to which the
class may be entitled are not $1.1 million but $3.3 million.
These allegations, which if accepted push the total potential
damages above the $5 million threshold, are as plausible as
the plaintiff’s.
Even if there were a binding stipulation, there would re‐
main a question whether a named plaintiff (class representa‐
tive) should be allowed to discard, without explanation or
notice to the other members of the class, “what could be a
major component of the class’s recovery,” merely to “ensure
that the stakes fall under $5 million.” Back Doctors Ltd. v.
Metropolitan Property & Casualty Ins. Co., supra, 637 F.3d at
830–31. Class counsel doubtless consider it a sensible trade
in this case: give up some damages in exchange for being
No. 14‐8006 5
able to litigate the case in what class counsel must believe is
a more favorable forum—otherwise why insist that their
damages would not reach $5 million? Some members of the
class, however, might think it better to gamble on the out‐
come of the suit if it is litigated in federal court than to give
up what might be millions of dollars in damages. Or maybe
not; spread over more than 1000 class members, an addi‐
tional $1.5 million in damages (though it might be of course
be more) would yield an average of less than $1500 in addi‐
tional damages per class member—much less, since class
counsel would take a big bite of the damages as an addition‐
al attorneys’ fee.
But tugging against this type of objection to obtaining a
remand in exchange for surrendering part of the class dam‐
ages claim is the lack of realism in thinking that the class
members can make an informed decision on whether the
case should be litigated in federal or state court. What is re‐
quired for such a decision is an expert legal judgment, and
that is something that class counsel can provide but not class
members—at least in a case like this; for remember that the
members of the class are just small debtors who happen to
have been sued by Pushpin and many of whom, for lack of
legal sophistication or lack of resources or because the
amount of the alleged debt was too small to justify the ex‐
pense of a lawyer, simply defaulted.
But however this issue should be resolved as an original
matter, the Supreme Court has now resolved it for us in its
year‐old decision in Standard Fire Ins. Co. v. Knowles, 133 S.
Ct. 1345 (2013), seemingly unbeknownst to the parties in our
case, as they have not cited it. The Court held that a stipula‐
tion by the named plaintiff in his complaint—even though
6 No. 14‐8006
accompanied by an affidavit signed by him—if made before
the class is certified doesn’t limit the amount of potential
damages that the class would be able to recover and so does
not affect removability under the Class Action Fairness Act.
Id. at 1349. What is surprising about the decision is that the
Court’s opinion makes no reference to Arkansas law, the law
under which the suit had been filed. If Arkansas limits dam‐
ages by a procedural rule, the limitation would not affect
removability under the Class Action Fairness Act; but if the
limitation is substantive, it might. See the opinions (none a
majority opinion) in Shady Grove Orthopedic Associates v. All‐
state Ins. Co., 130 S. Ct. 1431 (2010).
The Court in Knowles also did not discuss the tradeoff be‐
tween class counsel’s giving up a part of the class damages
claim and, by doing so, being able to litigate in a forum be‐
lieved to be more favorable to the class. No matter; the Court
has spoken and we are bound.
But this does not end the appeal, because class counsel
advance another ground for a remand—the Rooker‐Feldman
rule: that the Supreme Court is the only federal court that
can entertain an appeal from a decision by a state court. This
may seem rather a desperate argument, since if the default
judgments stand, the amount of damages that the class seeks
will be greatly diminished. But remember that the aim of
class counsel is to get this case back into state court, and
maybe there they’ll be able to get the default judgments set
aside. No matter; for they’re wrong about the Rooker‐Feldman
rule. (This is apart from the fact that it is disputed how many
of the judgments were entered before removal—for what may
have happened later would not affect federal jurisdiction,
Exxon Mobil Corp. v. Saudi Basic Industries Corp., 544 U.S. 280,
No. 14‐8006 7
284 (2005); Back Doctors Ltd. v. Metropolitan Property & Casual‐
ty Ins. Co., supra, 637 F.3d at 830; Bergquist v. Mann Bracken,
LLP, 592 F.3d 816, 818 (7th Cir. 2010), since federal jurisdic‐
tion would have attached at the time of removal.) The rule
does not bar a federal suit that seeks damages for a fraud
that resulted in a judgment adverse to the plaintiff. E.g.,
Nesses v. Shepard, 68 F.3d 1003, 1004 (7th Cir. 1995), and other
cases cited in Truong v. Bank of America, N.A., 717 F.3d 377,
383–84 (5th Cir. 2013). Such a suit does not seek to disturb
the judgment of the state court, but to obtain damages for
the unlawful conduct that misled the court into issuing the
judgment. It’s true that the plaintiff is also asking that the
default judgments be vacated, and that is relief that would
violate the Rooker‐Feldman rule; but that claim can be rejected
without affecting the damages claim.
What we are left with to guide our decision is that the
plaintiff did not irrevocably commit to obtaining less than $5
million for the class, and Pushpin’s estimate that the damag‐
es recoverable by the class if it prevails on the merits may
well equal or exceed that amount may be reliable enough to
preclude remanding the case to the state court. The only
ground on which the district judge rejected Pushpin’s esti‐
mate and so decided to remand the case was that most of the
claims on behalf of the class are barred by the Rooker‐Feldman
rule. That was a mistake; and the judge was also mistaken in
saying that “there is a strong presumption in favor of re‐
mand” when a case has been removed under the Class Ac‐
tion Fairness Act. There is not. Back Doctors Ltd. v. Metropoli‐
tan Property & Casualty Ins. Co., supra, 637 F.3d at 830. The
judge will have to determine anew whether the amount in
controversy reaches the statutory minimum, thus barring
remand, or does not, thus requiring remand. We don’t have
8 No. 14‐8006
enough information to be able to make that determination
ourselves.
REVERSED AND REMANDED.