In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 22-1087
DONNA SCHUTTE,
Plaintiff-Appellant,
v.
CIOX HEALTH, LLC and PROHEALTH CARE, INC.,
Defendants-Appellees.
____________________
Appeal from the United States District Court for the
Eastern District of Wisconsin.
No. 2:21-cv-00204-LA — Lynn Adelman, Judge.
____________________
ARGUED MARCH 1, 2022 — DECIDED MARCH 16, 2022
____________________
Before HAMILTON, SCUDDER, and JACKSON-AKIWUMI, Cir-
cuit Judges.
HAMILTON, Circuit Judge. This is an interlocutory appeal
under the Class Action Fairness Act (CAFA) from a district
court’s denial of a motion to remand a putative class action to
state court. See 28 U.S.C. § 1453(c). Plaintiff Donna Schutte
asks us to order remand of the case to state court for two rea-
sons. First, she argues that the defendants have failed to pro-
vide a good-faith estimate that the amount in controversy
2 No. 22-1087
exceeds $5 million. Second, she asserts that CAFA’s local con-
troversy exception required the district court to decline juris-
diction. Our court has not yet construed the relevant provi-
sion of that exception, so we accepted this interlocutory ap-
peal. See, e.g., Tri-State Water Treatment, Inc. v. Bauer, 845 F.3d
350, 352 (7th Cir. 2017) (noting that we accepted the appeal to
resolve an unsettled CAFA removal question). To comply
with the 60-day deadline for decision under § 1453(c)(2), we
ordered expedited briefing and argument. We affirm the dis-
trict court’s order denying remand.
I. Facts and Procedural History
Plaintiff Schutte was injured in a car accident in May 2016.
After retaining a law firm to seek compensation, she author-
ized the firm to obtain her health care records. The firm re-
quested electronic—not paper—copies of Schutte’s records
from defendant ProHealth Care, Inc., a Wisconsin health care
provider. ProHealth responded to the request through its
agent, defendant Ciox Health, LLC. Ciox produced the elec-
tronic copies, but it charged Schutte and her lawyers “Per
Page Copy (Paper)” charges of $59.23 and an “Electronic Data
Archive Fee” of $2.00.
A Wisconsin statute regulates the fees that providers may
charge for the release of medical records. As relevant here, the
statute provides that
a health care provider may charge no more than
the total of all of the following that apply for
providing the copies requested under par. (a):
1. For paper copies: $1 per page
for the first 25 pages; 75 cents per
page for pages 26 to 50; 50 cents
No. 22-1087 3
per page for pages 51 to 100; and
30 cents per page for pages 101
and above.
2. For microfiche or microfilm
copies, $1.50 per page.
3. For a print of an X–ray, $10 per
image.
4. If the requester is not the patient
or a person authorized by the pa-
tient, for certification of copies, a
single $8 charge.
5. If the requester is not the patient
or a person authorized by the pa-
tient, a single retrieval fee of $20
for all copies requested.
6. Actual shipping costs and any
applicable taxes.
Wis. Stat. § 146.83(3f)(b).
The statute is silent regarding charges for electronic copies
of medical records. The Wisconsin Court of Appeals has in-
ferred from that silence that health care providers may not
charge any fees for electronic copies of medical records. Ba-
nuelos v. University of Wisconsin Hospitals & Clinics Authority,
966 N.W.2d 78, 87 (Wis. App. 2021) (fees for electronic copies
4 No. 22-1087
are not permitted because they are not enumerated in the stat-
ute). 1
Alleging that she should not have been charged fees for
electronic copies, Schutte filed this putative class action
against Ciox and ProHealth in Wisconsin state court. She pro-
poses to represent a class of patients and others acting for pa-
tients who sought medical records from a Wisconsin health
care provider and were charged and paid “‘paper copies’ fees
for electronic copies, electronic archive data fees, and other
similar impermissible fees.” Schutte alleges that the class in-
cludes “several thousand persons and entities, who likely
possess multiple separate claims.” In addition to compensa-
tory damages, her complaint seeks exemplary damages up to
$25,000 per claimant, as authorized by Wis. Stat. § 146.84(1)(b)
for “knowing and willful” violations.
Ciox removed the action to federal court. The notice of re-
moval asserted that all three of CAFA’s jurisdictional require-
ments are satisfied: (1) Schutte’s proposed class has at least
100 members; (2) there is at least minimal diversity of citizen-
ship between Schutte and the defendants; and (3) based on
the complaint’s allegations, the amount in controversy ex-
ceeds $5 million. See 28 U.S.C. § 1332(d). Ciox’s notice of re-
moval also asserted that CAFA’s local controversy excep-
tion—which would require the district court to decline juris-
diction—does not apply because several class actions involv-
ing similar factual allegations had been filed against both de-
fendants in the preceding three years. Schutte moved to
1 A petition for review of the decision in Banuelos has been filed with
the Wisconsin Supreme Court and remains pending as of the date of this
decision.
No. 22-1087 5
remand to state court on two grounds. First, she argued that
Ciox failed to establish that the amount in controversy ex-
ceeds $5 million. Second, she asserted that the local contro-
versy exception applies.
The district court rejected both of Schutte’s arguments.
Judge Adelman concluded that Ciox had put forth a “plausi-
ble good faith estimate” that the amount in controversy ex-
ceeds $5 million. Schutte v. Ciox Health, LLC, — F. Supp.3d —,
—, 2021 WL 5754515, at *2 (E.D. Wis. Dec. 3, 2021). He also
found that the local controversy exception does not apply be-
cause the factual allegations in a recent Montana class action
against Ciox were “identical” to Schutte’s. Id. at *3, citing Dem-
ing v. Ciox Health, LLC, 475 F. Supp. 3d 1160 (D. Mont. 2020),
aff’d mem., No. 20-35744, 2022 WL 605691 (9th Cir. Mar. 1,
2022). The judge denied Schutte’s motion to remand.
Schutte then petitioned this court for permission to appeal
under 28 U.S.C. § 1453(c), which allows interlocutory review
of most orders granting or denying remand in class actions.
We granted the petition and now affirm the denial of remand.
This putative class action is properly in federal court.
II. Amount in Controversy
We begin with CAFA’s amount-in-controversy require-
ment. We review de novo legal questions of subject matter ju-
risdiction. Roppo v. Travelers Commercial Insurance Co., 869 F.3d
568, 578 (7th Cir. 2017). The party asserting federal jurisdic-
tion has the burden of showing that CAFA’s requirements are
satisfied. Id. Here, the parties agree that the class exceeds 100
members and that there is minimal diversity. See 28 U.S.C.
§ 1332(d). The disputed question is whether the amount in
controversy exceeds $5 million.
6 No. 22-1087
Where the amount in controversy is contested, “removal
is proper ‘if the district court finds, by the preponderance of
the evidence, that the amount in controversy exceeds’ the ju-
risdictional threshold.” Roppo, 869 F.3d at 579, quoting Dart
Cherokee Basin Operating Co. v. Owens, 574 U.S. 81, 88 (2014).
The removing party needs to provide only a “good-faith esti-
mate” that is “plausible and adequately supported by the ev-
idence.” Blomberg v. Service Corp. International, 639 F.3d 761,
763 (7th Cir. 2011).
To satisfy the amount-in-controversy requirement, a re-
moving defendant may rely on the complaint’s allegations,
the plaintiff’s informal estimates, affidavits from employees
or experts, or other sources. Roppo, 869 F.3d at 579–80. Once
the removing party meets its burden, “the case belongs in fed-
eral court unless it is legally impossible for the plaintiff to re-
cover that much.” Spivey v. Vertrue, Inc., 528 F.3d 982, 986 (7th
Cir. 2008).
In addressing such issues about amounts in controversy,
it is critical for courts to focus on the phrase “in controversy”
and to remember the difference between even highly unlikely
results and truly impossible results, and to avoid prematurely
trying the merits of the case in deciding jurisdiction. See id.,
citing Saint Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S.
283 (1938) (adopting “legal certainty” standard). Ciox has sat-
isfied the amount-in-controversy requirement through at
least two routes: the allegations in the complaint itself and an
affidavit from a Ciox executive.
A. Schutte’s Complaint
First, the allegations in the complaint alone are enough to
show plausibly that more than $5 million is in controversy.
No. 22-1087 7
Ciox was entitled to take at face value the complaint’s allega-
tion of “several thousand” class members, each with “multi-
ple separate claims.” See Roppo, 869 F.3d at 581 (defendant at-
tempting to satisfy jurisdictional requirements “may rely on
the estimate of the class number set forth in the complaint”).
Also, it is well-settled that punitive damages, which could be
up to $25,000 per claimant here, “factor into the amount-in-
controversy calculation.” Id. at 582; see also Back Doctors Ltd.
v. Metropolitan Property & Casualty Insurance Co., 637 F.3d 827,
831 (7th Cir. 2011) (relying on potential punitive damages to
calculate amount in controversy even where plaintiff “did not
expressly ask for a punitive award”).
Putting these numbers together, 2,000 class members
would need to recover an average of only around $2,501 in
exemplary damages—to say nothing of compensatory dam-
ages—to surpass the $5 million threshold. Or looking at it an-
other way, if each class member’s exemplary damages aver-
aged $1,000, a class with only 5,001 members would reach the
required total. Many other permutations would push the class
over the line, but the point is the same: the complaint’s alle-
gations suffice to show that “‘a fact-finder might conceivably
lawfully award’ in excess of $5 million dollars.” Roppo, 869
F.3d at 583, quoting Hammond v. Stamps.com, Inc., 844 F.3d 909,
912 (10th Cir. 2016).
Schutte’s arguments to the contrary are not persuasive.
For one, she suggests that exemplary damages in this case are
unlikely to approach the $25,000 maximum. She points out
that the compensatory damages are low—her claim is for
$61—and the Supreme Court has said that “few awards ex-
ceeding a single-digit ratio between punitive and compensa-
tory damages, to a significant degree, will satisfy due
8 No. 22-1087
process.” State Farm Mutual Automobile Insurance Co. v. Camp-
bell, 538 U.S. 408, 425 (2003).
These observations fall well short of establishing a “legal
certainty” that substantial punitive or exemplary damages
could not be awarded here. Even after State Farm, we have
recognized that a higher punitive damages ratio may be war-
ranted in cases where compensatory damages are too low to
provide meaningful deterrence. See Mathias v. Accor Economy
Lodging, Inc., 347 F.3d 672, 674–77 (7th Cir. 2003) (upholding
ratio of 37.2 to 1 where compensatory damages were only
$5,000 per plaintiff).
In addition, “a reviewing court engaged in determining
whether an award of punitive damages is excessive should
‘accord “substantial deference” to legislative judgments con-
cerning appropriate sanctions for the conduct at issue.’” BMW
of North America, Inc. v. Gore, 517 U.S. 559, 583 (1996), quoting
Browning-Ferris Industries of Vermont, Inc. v. Kelco Disposal, Inc.,
492 U.S. 257, 301 (1989) (O’Connor, J., concurring in part and
dissenting in part). Any due-process challenge to a high pu-
nitive damages award in this case would have to overcome
the statute’s express provision that claimants may seek up to
$25,000 for “knowing and willful” violations. Wis. Stat.
§ 146.84(b); see also EEOC v. AutoZone, Inc., 707 F.3d 824, 840
(7th Cir. 2013) (recognizing that statutory cap imposed by
Congress “suggests that an award of damages at the capped
maximum is not outlandish”).
More fundamental, the district court’s task in deciding the
remand motion was not to predict Schutte’s prospects on the
merits. What matters is the amount “in controversy”—not the
amount that plaintiffs are most likely to recover. See, e.g., Back
Doctors, 637 F.3d at 830 (“[T]he question here is not whether
No. 22-1087 9
the class is more likely than not to recover punitive damages,
but whether Illinois law disallows such a recovery.”); Brill v.
Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir. 2005)
(“The question is not what damages the plaintiff will recover,
but what amount is ‘in controversy’ between the parties.”).
Schutte also cites Wisconsin cases holding that punitive
damages are available only where compensatory damages are
awarded. E.g., Tucker v. Marcus, 418 N.W.2d 818, 824 (Wis.
1988) (“[W]here there exists a ‘cause of action,’ but the action
is not one for which the recovery of compensatory damages is
justified, punitive damages cannot be awarded.”). She argues
that Ciox has failed “to establish the average or actual over-
charges suffered by the Class,” so that exemplary damages
are “entirely theoretical.”
The argument overstates Ciox’s burden. To satisfy CAFA’s
requirements, Ciox did not need to “establish” the class’s
losses; it needed to provide only a “good faith estimate” that
the potential recovery exceeds $5 million. Roppo, 869 F.3d at
579; see also Blomberg, 639 F.3d at 763 (“The party seeking re-
moval does not need to establish what damages the plaintiff
will recover, but only how much is in controversy between
the parties.”). Nor is Schutte correct to characterize exemplary
damages in this case as theoretical. Her complaint alleges that
“the defendants intentionally, knowingly, willfully, negli-
gently, and/or otherwise unlawfully imposed fees not al-
lowed by Wis. Stat. § 146.83.” Based on the allegedly “know-
ing and willful violation,” she seeks “exemplary damages of
not more than $25,000.” Schutte put “in controversy” the ex-
emplary damages contemplated by the statute. She cannot
avoid federal jurisdiction by trying to retreat from her own
allegations.
10 No. 22-1087
B. Ciox’s Declaration
Even if the allegations in the complaint were not enough,
Ciox also submitted a declaration from a senior vice president
of operations. The declaration asserted that Ciox had fulfilled
about 727,500 relevant requests for medical records in Wis-
consin from late January 2015 to late January 2021 (a period
based on Ciox’s estimate of the applicable statute of limita-
tions). These were requests “made by Wisconsin residents to
healthcare providers located in Wisconsin for electronic cop-
ies of medical records in which a fee was charged or for copies
of medical records in which an electronic delivery and/or ar-
chive fee was charged.” To reach the $5 million threshold on
compensatory damages alone, these requests would need to
average only around $6.88 in overcharges. Given that
Schutte’s claimed compensatory damages were $61, this esti-
mate is also sufficient to meet Ciox’s burden.
Schutte argues that the declaration is not sufficient. She
says that from 2016 to 2020, requests for records could be
priced under either federal law or Wisconsin law, and that
only requests in the latter category would be relevant to this
action. Since Ciox has not specified how many of the 727,500
requests were priced under Wisconsin law, Schutte argues,
the declaration is overinclusive.
The argument does not defeat CAFA jurisdiction. There is
at best for Schutte some room to argue about the relevant time
for class members’ claims. At the risk of digging a little too
deeply into the merits at this stage, federal regulations known
collectively as the HIPAA Privacy Rule provide that a covered
entity fulfilling a request for medical records “may impose a
No. 22-1087 11
reasonable, cost-based fee.” 45 C.F.R. § 164.524(c)(4) (2020). 2
Another regulation clarifies how this provision interacts with
state laws regulating fees: “When a State law provides a limit
on the fee that a covered entity may charge for a copy of pro-
tected health information, this is relevant in determining
whether a covered entity’s fee is ‘reasonable’ under
§ 164.524(c)(4).” Modifications to the HIPAA Privacy, Secu-
rity, Enforcement, and Breach Notification Rules, 78 Fed. Reg.
5566, 5636 (Jan. 25, 2013). If state law limits the permissible
charges to 25 cents per page, for example, then the covered
entity may not charge more than that amount even if its costs
are higher. Id. So Wisconsin’s prohibition on fees for elec-
tronic copies of medical records, see Banuelos, 966 N.W.2d at
87, would at least arguably apply to requests that were priced
under federal law. This question about the interplay of federal
and state limits on record fees need not be resolved on the
merits at this stage, however. The question here, we repeat, is
the extent of the controversy, not its likely resolution. 3
2 The relevant regulations refer only to “covered entities,” not “busi-
ness associates,” and Ciox falls in the latter category. Ciox Health, LLC v.
Azar, 435 F. Supp. 3d 30, 39 (D.D.C. 2020). As the Ciox Health court ob-
served, however, “HHS’s regulations all but ensure that business associ-
ates will limit the fees they charge in a manner consistent with HHS’s in-
terpretation of the [restrictions imposed by the regulations]. The regula-
tions expressly make covered entities liable for their business associates’
violations.” Id. at 49; see also id. at 49–50 (noting that covered entities
“have structured their contracts to require their business associates to fol-
low the regulations” and that Ciox’s contracts “include provisions requir-
ing Ciox to indemnify the covered entity for any violation … that is at-
tributable to the covered entity for Ciox’s actions” (citation omitted)).
3 Schutte suggests that some charges for electronic records—such as
retrieval fees or certification fees—might still be permissible, pointing out
that only per-page paper copy charges were directly at issue in Banuelos.
12 No. 22-1087
Even if we accepted Schutte’s theory that we should disre-
gard four of the six years covered by the Ciox declaration, her
argument would still fail. Assuming the requests were evenly
distributed over the six years, the last two years would have
included more than 200,000 requests. Those requests would
have needed to average only $25—less than half of Schutte’s
alleged damages—to surpass the $5 million threshold with
compensatory damages alone, and we may not disregard
Schutte’s demand for exemplary damages. These estimates
are also sufficiently plausible to satisfy the amount-in-contro-
versy requirement.
Schutte’s other fundamental objection to the declaration is
that it offers “no evidence” about the average charge for the
727,500 requests. Again, however, Schutte exaggerates Ciox’s
burden. All Ciox needed to do at this stage was come forward
with a plausible, good-faith estimate that the stakes exceed $5
million, which it did by offering the estimate of 727,500 re-
quests. Even where there is “more that [the defendant] could
have done,” we accept such an estimate “unless it is legally
impossible for the plaintiff to recover that much.” Blomberg,
639 F.3d at 764 (finding amount-in-controversy requirement
satisfied even though defendant could have provided more
See 966 N.W.2d at 80. This argument is another invitation to confuse the
merits with the amount that plaintiff has put in controversy by her own
allegations. Schutte’s complaint defines the class in terms of charges for
“‘paper copies’ fees for electronic copies, electronic archive data fees, and
other similar impermissible fees.” (Emphasis added.) That language puts re-
trieval fees and certification fees for electronic records “in controversy”
regardless of how these issues might ultimately be resolved as a matter of
Wisconsin law. See also id. at 83 (“[A] health care provider that complies
with a request to provide electronic copies of a patient’s health care rec-
ords may not charge a fee for doing so.”).
No. 22-1087 13
specific estimates about the damages at issue); see also Brill,
427 F.3d at 448 (“Once the proponent of jurisdiction has set
out the amount in controversy, only a ‘legal certainty’ that the
judgment will be less forecloses federal jurisdiction.”). De-
fendants have satisfied CAFA’s amount-in-controversy re-
quirement.
III. The Local Controversy Exception
Schutte’s second attempt to win remand is based on
CAFA’s local controversy exception. Again, our review of le-
gal questions is de novo. Roppo, 869 F.3d at 578.
Even where CAFA’s jurisdictional requirements are met,
the mandatory local controversy exception requires a district
court to decline jurisdiction under certain circumstances. 28
U.S.C. § 1332(d)(4)(A). 4 The exception has several require-
ments, but only one is disputed here. The exception applies
only if “during the 3-year period preceding the filing of that
class action, no other class action has been filed asserting the
same or similar factual allegations against any of the defend-
ants on behalf of the same or other persons.”
§ 1332(d)(4)(A)(ii). A plaintiff seeking to remand an action to
state court must establish by a preponderance of the evidence
that the local controversy exception applies. Roppo, 869 F.3d
at 584. In the context of a different requirement, we have said
that the exception is “narrow.” Id. 5
4 We refer to the “mandatory” local controversy exception under
§ 1332(d)(4)(A) to distinguish it from the discretionary home state excep-
tion under § 1332(d)(3).
5 Cf. Evans v. Walter Industries, Inc., 449 F.3d 1159, 1163–64 (11th Cir.
2006) (explaining that local controversy exception is narrow and all doubts
should be resolved “in favor of exercising [federal] jurisdiction over the
14 No. 22-1087
CAFA was the product of years of debate in Congress. The
end result was a complex and fragile balance of compromises.
See S. Rep. No. 109-14, at 1–3 (2005), as reprinted in 2005
U.S.C.C.A.N. 3, 3–5 (describing years of hearings and negoti-
ations before CAFA’s enactment in 2005); 151 Cong. Rec.
2071–96 (2005) (remarks of many Senators on final day of de-
bate and vote on passage). When dealing with such a statute,
courts should not put a thumb on the scale in either direction
but should try to respect the compromises struck in Congress.
“Compromises draw unprincipled lines between situations
that strike an outside observer as all but identical. The limita-
tion is part of the price of the victory achieved, a concession
to opponents who might have been able to delay or block a
bill even slightly more favorable to the proponents.” Chicago
Professional Sports Ltd. Partnership v. National Basketball Ass’n,
961 F.2d 667, 671 (7th Cir. 1992); see also id. (noting that
“[w]hen special interests claim that they have obtained favors
from Congress, a court should ask to see the bill of sale”);
case”), citing S. Rep. No. 109-14, at 39, 42 (2005), as reprinted in 2005
U.S.C.C.A.N. 3, 38, 40. The advice to resolve “all doubts” in favor of fed-
eral jurisdiction calls for skepticism. It lacks support in the statutory text
and is based on language addressing a different CAFA exception in a com-
mittee report filed after CAFA had been passed in Congress and signed by
the President. See Brill, 427 F.3d at 448 (criticizing reliance on one passage
in the same Senate report because it did “not concern any text in the bill
that eventually became law”). A closer look at the Act’s passage shows
that the local controversy exception was part of a critical compromise
reached in the Senate during the prior Congress. See 151 Cong. Rec. 1636–
39 (2005) (remarks of Sen. Dodd) (describing addition of local controversy
exception as element of key compromise that permitted bipartisan sup-
port ultimately leading to passage). We are guided by the text of the criti-
cal exception and try to apply it accurately, without trying to aim for a
broad or narrow interpretation.
No. 22-1087 15
Victoria Nourse, Misreading Law, Misreading Democracy 79–83
(2016) (explaining that courts need to pay close attention to
compromises needed to win passage of bills, particularly in-
cluding substitute bills offered to avoid Senate filibuster).
In this case, the district court held that the mandatory local
controversy exception does not apply because a class action
involving “identical” factual allegations had been filed
against Ciox within the relevant three-year period. Schutte,
2021 WL 5754515, at *3. In the earlier case, the plaintiffs al-
leged that Ciox had violated Montana law by charging per-
page and other fees for electronic copies of medical records.
See Deming v. Ciox Health, LLC, 475 F. Supp. 3d 1160, 1162 (D.
Mont. 2020), aff’d mem., No. 20-35744, 2022 WL 605691 (9th
Cir. Mar. 1, 2022). We agree with the district court that Deming
involved “the same or similar factual allegations” as Schutte’s
case and that it was brought “on behalf of the same or other
persons.” § 1332(d)(4)(A)(ii). Accordingly, Deming precludes
application of the local controversy exception. 6
A. “Similar Factual Allegations”
First, we agree with the district court that this case and
Deming involve “the same or similar factual allegations.”
§ 1332(d)(4)(A)(ii). Our court has yet to construe that statutory
provision, but the Tenth Circuit addressed its scope in Dutcher
v. Matheson, 840 F.3d 1183 (10th Cir. 2016). There, purchasers
of Utah properties alleged that the defendants had conducted
wrongful, non-judicial foreclosures unauthorized by Utah
6 In both the district court and on appeal, Ciox also cited other prior
class actions to defeat the local controversy exception. Because Deming is
sufficiently similar to Schutte’s case, we do not address whether any of
those other class actions would also be sufficient to deny remand.
16 No. 22-1087
law. In a case filed several months earlier, however, another
group of plaintiffs also alleged that the defendants had car-
ried out non-judicial foreclosures in Utah. The two complaints
alleged, “in nearly identical language, the same acts of wrong-
doing by the same defendant.” Id. at 1191. To avoid federal
jurisdiction under CAFA, the plaintiffs relied on the fact that
the two cases alleged violations of different statutes. The
Tenth Circuit rejected that theory, emphasizing that CAFA’s
language requires “the same or similar factual allegations,”
not the same legal theories or causes of action. See id. at 1191–
92. Because the two cases relied on essentially the same fac-
tual allegations, despite the different legal theories, the local
controversy exception did not apply.
Dutcher is persuasive and helpful here. Schutte relies on
the fact that the Deming complaint alleged violations of Mon-
tana law while her own complaint alleges violations of Wis-
consin law. We agree with the Tenth Circuit, however, that
differences in the legal theories asserted do not place two
complaints with similar factual allegations outside the provi-
sion’s sweep. See Dutcher, 840 F.3d at 1191–92; see generally,
e.g., R3 Composites Corp. v. G&S Sales Corp., 960 F.3d 935, 941
(7th Cir. 2020) (“Plaintiffs need only plead facts, not legal the-
ories, in their complaints.” (citation omitted)). And here, the
factual allegations are nearly identical. The Deming plaintiffs
alleged that they had to pay per-page charges, electronic data
archive fees, and other fees for electronic copies of medical
records. Likewise, Schutte alleges that class members had to
pay “paper copies” fees, electronic archive data fees, and
other fees for electronic copies of medical records. That over-
lap easily falls within any reasonable definition of “similar
factual allegations.”
No. 22-1087 17
Schutte is correct that Dutcher differs from this case in at
least one respect. The allegations in both complaints involved
unlawful foreclosures on Utah property and different provi-
sions of Utah law, see 840 F.3d at 1191, whereas here Ciox’s
alleged misconduct occurred in two different states. In
Schutte’s view, “the fact that the actions concern unlawful
charges in different states is enough to differentiate the two.”
That difference does not govern application of CAFA’s
mandatory local controversy exception. Both the Deming and
Schutte complaints assert “the same basis of wrongdoing,”
Dutcher, 840 F.3d at 1191, by Ciox—namely, charging imper-
missible fees for electronic copies of medical records. If geo-
graphic differences could render two otherwise identical
complaints dissimilar for CAFA’s purposes, then plaintiffs
would be able to avoid federal jurisdiction by filing individ-
ual actions based on the same kind of misconduct in all fifty
states.
There is no basis in the statutory text for that proposed
limit, and the text’s specific reference to “the same or similar
factual allegations” weighs heavily against it.
§ 1332(d)(4)(A)(ii) (emphasis added). As the Senate commit-
tee’s post-passage report explained, one purpose of that crite-
rion was “to ensure that overlapping or competing class ac-
tions or class actions making similar factual allegations
against the same defendant that would benefit from coordi-
nation are not excluded from federal court by the Local Con-
troversy Exception and thus placed beyond the coordinating
authority of the Judicial Panel on Multidistrict Litigation.” S.
Rep. No. 109-14, at 41, as reprinted in 2005 U.S.C.C.A.N. at 39;
see also, e.g., Davenport v. Lockwood, Andrews & Newnam, Inc.,
854 F.3d 905, 910 (6th Cir. 2017) (citing the same Senate report
18 No. 22-1087
and noting that “Congress did intend to prevent copycat suits
in multiple forums, enabling class actions to be consolidated
to promote judicial efficiency.”); Carter v. CIOX Health, LLC,
260 F. Supp. 3d 277, 285 (W.D.N.Y. 2017) (similar). 7
Consistent with that reasoning, a number of district courts
have rejected Schutte’s theory that actions arising in different
states cannot involve “similar factual allegations.” E.g., Brown
v. Saint-Gobain Performance Plastics Corp., Nos. 16-cv-242 & 16-
cv-243, 2016 WL 6996136, at *4 (D.N.H. Nov. 30, 2016) (deny-
ing remand; factual allegations deemed similar where case in-
volved harm to plaintiffs in New Hampshire, while prior class
actions alleged that same pollutant harmed different plaintiffs
in New York and Vermont); Torres v. CleanNet, U.S.A., Inc.,
No. 14-2818, 2014 WL 5591037, at *8–10 (E.D. Pa. Nov. 4, 2014)
(denying remand; factual allegations deemed similar where
case involved Pennsylvania law and was limited to Pennsyl-
vania plaintiffs, while prior action was brought under Illinois
law); Brook v. UnitedHealth Group Inc., No. 06 CV 12954, 2007
WL 2827808, at *4 (S.D.N.Y. Sept. 27, 2007) (denying remand;
7 Unlike the suggestion discussed above in note 5 that all doubts
should be resolved in favor of federal jurisdiction, the explanation of the
reasons for the statute’s “factual allegations” phrasing to allow MDL co-
ordination fits the statutory text and does not try to impose a new sub-
stantive rule. We do not mean to imply here that this and similar electronic
record fee cases should in fact be consolidated through the MDL process.
We do not know enough about those cases, the parties have not been
heard on that significant procedural decision, and that would not be our
decision in any event. Our broader point is only that Congress drafted the
local controversy exception so as to enable the Judicial Panel on Multidis-
trict Litigation to consolidate similar class actions arising under state law
in multiple states, using the Panel’s usual standards and judgments. The
Senate report makes explicit that consequence of the statutory language.
No. 22-1087 19
“Plaintiffs cannot simply evade federal jurisdiction by defin-
ing the putative class on a state-by-state basis, and then pro-
ceed to file virtually identical class action complaints in vari-
ous state courts.”).
Schutte seeks support from two district court cases, but
both are distinguishable. First, in Anderson v. Hackett, 646 F.
Supp. 2d 1041 (S.D. Ill. 2009), the court granted remand under
the local controversy exception where a prior class action in
New York had alleged that Monsanto should not have pro-
duced and distributed certain products. Those allegations
were not sufficiently similar to the Anderson plaintiffs’ claims
that Monsanto should have used greater care in producing
and handling its products in Illinois: “Boiled down, the
[prior] action says, ‘Don't produce;’ the instant action says,
‘Don’t spill.’” Id. at 1051.
The Anderson court went on to say that even if the defend-
ants had contaminated the environment in the same way in
both cases, “the fact that the actions concern the contamina-
tion of different environments is enough to differentiate the
two.” 646 F. Supp. 2d at 1051. Schutte takes this dictum to
mean that geography should always be a differentiating fac-
tor. We do not read it nearly so broadly. Applying the local
controversy exception to cases alleging pollution of specific
properties in different states may pose significant challenges.
Compare, e.g., Anderson, with Brown, 2016 WL 6996136, at *4
(denying remand where plaintiffs in prior actions also alleged
that defendant had released same pollutant in their own
states). But those challenges are not present in a case like this
one, where only the plaintiffs themselves—rather than any
real property—are in different states.
20 No. 22-1087
Second, Schutte relies on Rasberry v. Capitol County Mutual
Fire Insurance Co., 609 F. Supp. 2d 594 (E.D. Tex. 2009). The
proposed class there sought declaratory and injunctive relief
against an insurer for its use of unlicensed adjusters to calcu-
late insurance claims. By contrast, the plaintiffs in a prior class
action had requested money damages based on the insurer’s
refusal to include contractor overhead and profit when calcu-
lating the value of their claims. Although both cases involved
insurance claims after the same hurricane, the court con-
cluded that the “essential contours” of the actions were
“wholly dissimilar.” Id. at 605. One group of plaintiffs wanted
only equitable relief because of who was calculating their
claims. The other group wanted damages because their claims
were being undervalued. No such differences are present in
this case, where both Schutte and the Deming plaintiffs pri-
marily seek money damages because Ciox charged them im-
permissible fees for electronic copies of medical records.
While the similarities between Schutte’s allegations and
those in Deming are quite clear, harder cases are sure to arise.
For instance, Ciox acknowledged at oral argument that the in-
quiry would be more difficult here if a prior class action had
alleged that plaintiffs were charged for the wrong number of
pages or that the records were sent to the wrong recipients. In
other words, not every prior class action involving requests
for medical records from Ciox would necessarily be similar to
Schutte’s allegations. As the Rasberry court observed, the local
controversy exception generally will not be defeated where
the relevant actions are similar only in “incidental respects,
such as arising out of the same event and including a common
defendant.” 609 F. Supp. 2d at 605. Here, however, the nearly
identical nature of the factual allegations makes clear that
No. 22-1087 21
Schutte’s case and Deming are factually similar for CAFA’s
purposes.
B. “On Behalf Of”
Schutte’s other textual argument is also not persuasive.
Recall that the provision at issue applies if a prior class action
was brought “on behalf of the same or other persons.” 28
U.S.C. § 1332(d)(4)(A)(ii). According to Schutte, this language
necessarily implies some limitation on the prior class actions.
She contends the phrase must require that there be “some
connection between the two class actions.” The first problem
with this argument is that Schutte offers no meaningful guid-
ance about what sort of connection should suffice. Nor does
she offer a basis in the statutory text or even the history of
CAFA’s enactment for answering that question. The “some
connection” standard would have no basis in law and would
be impossible to apply fairly. Cf. Sedima, S.P.R.L. v. Imrex Co.,
473 U.S. 479, 493–95 (1985) (rejecting similarly elusive and
amorphous proposal to require “racketeering injury” under
civil RICO statute).
Still, Schutte argues, if some connection between the clas-
ses were not required, the “on behalf of the same or other per-
sons” language would be rendered surplusage because all
class actions are, by definition, brought on behalf of other per-
sons. See Fed. R. Civ. P. 23(a); 28 U.S.C. § 1332(d)(1)(B) (defin-
ing “class action” for CAFA); see generally, e.g., Yates v. United
States, 574 U.S. 528, 543 (2015) (plurality opinion) (relying on
canon against surplusage to avoid rendering superfluous an
entire provision of the relevant statute).
This surplusage argument is not persuasive. As this court
has recognized, “the presence of some redundance is rarely
22 No. 22-1087
fatal on its own to a statutory reading.” White v. United Air-
lines, Inc., 987 F.3d 616, 622 (7th Cir. 2021); see also Territory of
Guam v. United States, 141 S. Ct. 1608, 1615 (2021) (rejecting
effort to try to “avoid surplusage at all costs” (citation omit-
ted)); Rimini Street, Inc. v. Oracle USA, Inc., 139 S. Ct. 873, 881
(2019) (“Sometimes the better overall reading of the statute
contains some redundancy.”). An important empirical study
found that drafters of legislation often “intentionally err on
the side of redundancy” as a precautionary measure and as a
response to political demands. Abbe R. Gluck & Lisa Schultz
Bressman, Statutory Interpretation from the Inside—An Empiri-
cal Study of Congressional Drafting, Delegation, and the Canons:
Part I, 65 Stan. L. Rev. 901, 934 (2013); see also Nourse, Mis-
reading Law, at 92–93 (explaining how Senate rules encourage
redundant statutory language); Matthew R. Christiansen &
William N. Eskridge, Jr., Congressional Overrides of Supreme
Court Statutory Interpretation Decisions, 1967–2011, 92 Tex. L.
Rev. 1317, 1448, 1469 (2014) (citing evidence that “repetition
(i.e., surplusage) is typically what supporting institutions and
groups want from the legislative process” and arguing that
the anti-surplusage canon is “antidemocratic in a serious
way”); William N. Eskridge, Jr., The New Textualism and Nor-
mative Canons, 113 Colum. L. Rev. 531, 579 (2013) (book re-
view) (“[T]he rule against surplusage ... is especially problem-
atic because the legislative process operates under the oppo-
site assumption and so that canon will often thwart legislative
deals rather than enforce them.”); Brett M. Kavanaugh, The
Courts and the Administrative State, 64 Case W. Rsrv. L. Rev.
711, 718 (2014) (observing that “members of Congress often
want to be redundant” because they want “to make doubly
sure about things,” so courts “should be more careful” in ap-
plying the canon); Richard A. Posner, Statutory
No. 22-1087 23
Interpretation—in the Classroom and in the Courtroom, 50 U. Chi.
L. Rev. 800, 812 (1983) (“[A] statute that is the product of com-
promise may contain redundant language as a by-product of
the strains of the negotiating process.”).
This case illustrates the limits of the anti-surplusage
canon. Schutte is correct that class actions are, by definition,
brought on behalf of other persons. See § 1332(d)(1)(B) (defin-
ing a class action as any civil action filed under a statute or
rule “authorizing an action to be brought by 1 or more repre-
sentative persons”). But suppose that Congress had omitted
the “on behalf of” language from the local controversy excep-
tion. The exception would then apply only if “during the 3-
year period preceding the filing of that class action, no other
class action has been filed asserting the same or similar factual
allegations against any of the defendants.” In applying that
language, courts and litigants might reasonably wonder
whether a prior class action needed to involve the same class
representatives or members to qualify—especially given the
express requirement that it involve at least one of the same
defendants.
That issue would have been easy to anticipate, and Con-
gress chose statutory language that made its meaning crystal
clear: a prior class action that is factually similar qualifies re-
gardless of whether it was brought “on behalf of the same or
other persons.” § 1332(d)(4)(A)(ii) (emphasis added); see also
Brown, 2016 WL 6996136, at *3 n.13 (“If serving no other pur-
pose, this language emphasizes that an action need not be
24 No. 22-1087
filed by or on behalf of the same purported class of plaintiffs
to meet the criteria set forth in this section.”). 8
The practical implications of our reading of the mandatory
local controversy exception are evident. A series of class ac-
tions making similar factual allegations against a defendant
in different states can fall outside the exception, allowing re-
moval and perhaps making possible pretrial coordination un-
der the federal multidistrict litigation process. See 28 U.S.C.
§ 1407. The first such class action would not be removable, for
there would be no prior class action. But as noted, CAFA re-
flects a complex and delicate balance of compromises, and we
do our best to enforce it as written.
The district court’s order denying remand is AFFIRMED.
8If the text of the provision were not considered sufficiently clear, we
could look to the Senate committee’s post-passage report on the final bill
for further confirmation. See Hart v. FedEx Ground Package System Inc., 457
F.3d 675, 681 (7th Cir. 2006) (addressing CAFA’s legislative history “for
the sake of completeness”); see also Brill, 427 F.3d at 448 (“When a law
sensibly could be read in multiple ways, legislative history may help a
court understand which of these received the political branches’ imprima-
tur.”). The report said: “The inquiry is whether similar factual allegations
have been made … regardless of whether the same causes of action were
asserted or whether the purported plaintiff classes were the same (or even over-
lapped in significant respects).” S. Rep. No. 109-14, at 41, as reprinted in 2005
U.S.C.C.A.N. at 39 (emphases added). Unlike the advice discussed above
in note 5, that statement fits comfortably with the statutory language. It
weighs further against Schutte’s contention that some connection between
the two classes is required.