F I L E D
United States Court of Appeals
PUBLISH Tenth Circuit
MAY 29 2001
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT PATRICK FISHER
Clerk
JUANA M. MARTIN; GERALD T.
MARTIN, individually and on behalf
of all persons similarly situated,
Plaintiffs-Appellants,
v.
No. 99-2131
FRANKLIN CAPITAL CORPORA-
TION, a Utah corporation;
CENTURY-NATIONAL
INSURANCE COMPANY, a
California corporation,
Defendants-Appellees.
Appeal from the United States District Court
for the District of New Mexico
(D.C. No. CIV-96-1480-LH)
Michael P. Malakoff, Malakoff Doyle & Finberg, P.C., Pittsburgh, Pennsylvania
(Richard N. Feferman, Albuquerque, New Mexico, with him on the briefs), for
Plaintiffs-Appellants.
Jan T. Chilton, Severson & Werson, San Francisco, California (Jay D. Hertz,
Sutin, Thayer & Browne, Albuquerque, New Mexico, with her on the brief) for
Defendants-Appellees.
Before SEYMOUR and MURPHY, Circuit Judges, and KANE, Senior District
Judge. *
SEYMOUR, Chief Judge.
*
Honorable John L. Kane, Jr., Senior District Court Judge, District of
Colorado, sitting by designation.
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Gerald and Juana Martin appeal the district court’s order dismissing their
complaint with prejudice. We conclude that we have jurisdiction over this appeal,
and that the district court lacked subject matter jurisdiction. Accordingly, we
reverse and remand with directions to remand this action to state court.
I
The Martins originally brought this proceeding in New Mexico state court,
individually and on behalf of all persons similarly situated, seeking damages
under state statutory and common law for alleged illegalities with respect to
automotive financing and insurance contracts. The plaintiff class alleged
defendant Franklin Capital Corporation, which purchased their installment sales
contracts from car dealers, deliberately overcharged them for required insurance
coverage purchased through defendant Century National Insurance. Invoking
diversity of citizenship, Century removed the case to federal court with the
consent of Franklin. The Martins then filed a motion to remand to state court for
lack of subject matter jurisdiction, arguing their claims did not meet the $50,000
amount-in-controversy requirement for diversity jurisdiction. 1
1
This action was filed in state court on September 13, 1996. At that time,
28 U.S.C.§ 1332 required the amount in controversy to exceed $50,000. Although
Congress subsequently amended the statute to increase the jurisdictional amount
to $75,000, the amendment applies only to cases filed on or after January 17,
(continued...)
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In orders entered the same day, the district court denied the Martins’
motion to remand, denied the Martins’ motion for class certification, and granted
Century’s motion to dismiss for failure to state a claim. This left the Martins with
an individual case against Franklin in the federal district court. The Martins
subsequently requested that the court certify the order denying remand for
immediate appeal under 28 U.S.C. § 1292(b), which the court denied. The district
court order denying the Martins’ motion to remand contains virtually no comment
or analysis supporting its decision. However, in its memorandum opinion and
order denying the Martins’ section 1292(b) motion, the court addressed the
amount-in-controversy requirement by stating “[i]t does not appear to a legal
certainty that [the Martins’] claims are for less than $50,000 and I conclude that
they are colorable for the purposes of conferring jurisdiction.” Aplt. App., doc.
13 at 3.
It thus appears that, in assessing the evidence, the court required the
Martins to prove to a legal certainty that their claims were below the
jurisdictional amount rather than placing the burden on defendants to show by a
preponderance of the evidence that the amount was met. The court also appears
to have attributed to the Martins all of the attorneys fees requested on behalf of
(...continued)
1
1997. See Federal Courts Improvement Act of 1996, § 205, Pub. L. No. 104-317,
110 Stat. 3847, 3850 (Oct. 19, 1996).
-4-
the class. See id. at 6. The court held that any putative class members whose
claims did not satisfy the jurisdictional amount were irrelevant because they had
already been removed from the case by the court’s order refusing to certify the
class. Id.
The Martins reasserted their belief that the court lacked jurisdiction, and
they requested an order dismissing their complaint with prejudice so they could
immediately appeal the jurisdictional issue without expending further time and
money in federal court. Noting that the Martins’ dismissal request was motivated
by their desire to take an immediate appeal and that defendants had failed to file a
response, the district court granted a voluntary dismissal with prejudice.
On appeal, the Martins reassert their contention that the district court
lacked subject matter jurisdiction over this action and therefore should have
granted their motion to remand the case to state court. They contend that neither
the complaint nor the notice of removal establishes by a preponderance of the
evidence that the amount in controversy exceeds $50,000, and that the damages
found by the district court reflect more than the amount claimed in their
complaint. They also contend the court erred as a matter of law by failing to
require each putative class member to independently meet the jurisdictional
amount.
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Defendants counter that the Martins waived their right to object to removal
by failing to seek a remand within thirty days, citing 28 U.S.C. § 1447(c). They
also maintain the Martins’ individual claims satisfied the jurisdictional amount.
Finally, they contend the class’ punitive damages could be aggregated and
attributed to each class member to meet the jurisdictional amount and, in any
event, any failure by putative class members to satisfy individually the
jurisdictional amount was cured by the court’s denial of class certification. We
address each argument in turn.
II
Appellate Jurisdiction
We first address whether we have appellate jurisdiction. We raised the
issue sua sponte, requesting the parties to address whether a voluntary dismissal
with prejudice under these circumstances constitutes a final, appealable order for
purposes of 28 U.S.C. § 1291. In assessing whether appellate jurisdiction exists
in these circumstances, our inquiry is twofold: is the order granting the voluntary
dismissal final; and is there a case or controversy in light of the fact that plaintiff
sought the dismissal. After considering authority from other circuits and the
purposes of the final order rule, we conclude that we have jurisdiction over this
appeal.
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First, we are convinced the dismissal with prejudice here is a final order for
purposes of appeal. Nothing is left pending in the district court and, because the
dismissal is with prejudice, the Martins are precluded from filing another lawsuit.
The dismissal did not reserve the Martins’ right to return to district court to
litigate any remaining issues. If they lose on their appeal of the order denying
remand, the litigation is terminated entirely. We agree with those authorities
holding that a dismissal order is final under these circumstances. See, e.g.,
Woodard v. STP Corp., 170 F.3d 1043, 1044 (11th Cir. 1999) (voluntary dismissal
with prejudice final); John’s Insulation, Inc. v. L. Addison & Assoc., 156 F.3d
101, 107 (1st Cir. 1998) (“most circuits hold that voluntary dismissals, and
especially those with prejudice, are appealable final orders”); Concha v. London,
62 F.3d 1493, 1507 (9th Cir. 1995) (judgment final when it bars claims forever);
see also 15A C HARLES A. W RIGHT , A RTHUR R. M ILLER & E DWARD H. C OOPER ,
F EDERAL P RACTICE & P ROCEDURE § 3914.8 (2d ed. 1992), at 623 (approving rule
that holds judgment final when plaintiff who voluntarily dismisses abandons all
remaining issues).
Viewing such a judgment as final does not undermine the final judgment
rule by encouraging quasi-interlocutory appeals. “[I]f the plaintiff is unsuccessful
in challenging the district court’s action, then the dismissal operates as an
adjudication on the merits and the litigation is terminated.” Concha, 62 F.3d at
-7-
1507. Judicial economy is furthered because when “the appellant voluntarily
dismisses his action with prejudice and loses on appeal, the district court is saved
the time and effort of conducting extended trial proceedings and there is in
addition no possibility of piecemeal appeals.” Id. at 1508 n.8.
We also conclude that, even though the Martins requested dismissal, the
appeal presents a case or controversy sufficient to support jurisdiction. Because
the Martins were convinced the district court lacked diversity jurisdiction, they
did not want to expend the resources necessary to proceed in federal court to a
judgment on the merits, only to have the case remanded to state court on appeal
for lack of jurisdiction. While such a dismissal may be technically voluntary, as a
practical matter the Martins did not acquiesce in the judgment but rather were
using dismissal to challenge the underlying ruling. When, as here, a plaintiff
believes a ruling is so prejudicial to his case he is willing to risk losing the right
to litigate completely in order to challenge it, a case or controversy exists and he
should be allowed to appeal. See John’s Insulation, 156 F.3d at 107 (voluntary
dismissal with prejudice proper course of action when interlocutory ruling so
prejudicial that proceeding in district court would waste resources).
Because the Martins appealed a final order in a case or controversy, we
have jurisdiction to address the appeal.
-8-
III
Diversity Jurisdiction
In their motion to remand, the Martins asserted a lack of federal diversity
jurisdiction on the ground their action does not meet the $50,000 amount-in-
controversy requirement imposed by 28 U.S.C. § 1332(a). We review de novo a
district court’s determination of the propriety of removal. See Huffman v. Saul
Holdings Ltd. P’ship, 194 F.3d 1072, 1076 (10th Cir. 1999). In assessing the
district court’s ruling, we bear in mind that “[t]he courts must rigorously enforce
Congress’ intent to restrict federal jurisdiction in controversies between citizens
of different states,” Miera v. Dairyland Ins. Co., 143 F.3d 1337, 1339 (10th Cir.
1998), and that the presumption is therefore “against removal jurisdiction,”
Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir. 1995).
A. The Burden of Establishing the Amount in Controversy.
When a case is originally brought in federal court, the plaintiff’s claimed
amount is presumed to support diversity jurisdiction. See St. Paul Mercury
Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938). The same is not true,
however, when the case has been removed from state court.
In a removed case, unlike a case instituted in federal court, the
plaintiff chose a state rather than federal forum. Because the
plaintiff instituted the case in state court, “[t]here is a strong
presumption that the plaintiff has not claimed a large amount in order
to confer jurisdiction on a federal court or that the parties have
colluded to that end.”
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Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 375 (9th Cir. 1997)
(quoting St. Paul Mercury, 303 U.S. at 290); see also Miera, 143 F.3d at 1340.
Thus in a removed case, “[t]he defendant’s claim that the amount in controversy
exceeds $50,000 does not enjoy the St. Paul Mercury presumption of accuracy
that the plaintiff’s does.” Singer, 116 F.3d at 376.
Defendant’s right to remove and plaintiff’s right to choose his forum
are not on equal footing; for example, unlike the rules applied when
a plaintiff has filed suit in federal court with a claim that, on its face,
satisfies the jurisdictional amount, removal statutes are construed
narrowly; where plaintiff and defendant clash about jurisdiction,
uncertainties are resolved in favor of remand.
Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994).
As the parties invoking the federal court’s jurisdiction in this case,
defendants bear the burden of establishing that the requirements for the exercise
of diversity jurisdiction are present. See Huffman, 194 F.3d at 1079. We have
held that “[t]he amount in controversy is ordinarily determined by the allegations
of the complaint, or, where they are not dispositive, by the allegations in the
notice of removal.” Laughlin, 50 F.3d at 873. In this case, the complaint itself
does not specify the amount of damages requested. Indeed, defendants in their
notice of removal observe that “[t]he amount in controversy, exclusive of interest
and costs, cannot be determined from the face of the complaint.” Aplt. App., doc.
4 at 2. When, as here, the plaintiff’s damages are unspecified, courts generally
require that a defendant establish the jurisdictional amount by a preponderance of
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the evidence. See, e.g., St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250,
1253 (5th Cir. 1998); Singer, 116 F.3d at 376; United Food & Commercial
Workers Union, Local 919 v. CenterMark Prop. Meridan Square, Inc., 30 F.3d
298, 305 (2d Cir. 1994); Gafford v. General Elec. Co., 997 F.2d 150, 158 (6th
Cir. 1993); Varella v. Wal-Mart Stores, East, Inc., 86 F. Supp.2d 1109, 1111 (D.
N.M. 2000); see also McNutt v. General Motors Acceptance Corp., 298 U.S. 178,
189 (1936) (party asserting jurisdiction must prove jurisdictional prerequisites by
a preponderance of evidence). 2
Although this court has not expressly adopted the preponderance standard
in these circumstances, we have stated that the requisite amount in controversy
“must be affirmatively established on the face of either the petition or the removal
notice.” Laughlin, 50 F.3d at 873 (emphasis added). The italicized language
requires at a minimum that the jurisdictional amount be shown by a
preponderance of the evidence. Because, as we discuss below, we conclude that
defendants have failed to meet this burden, we need not decide whether a more
stringent one should be applied.
2
A few courts have placed greater or lesser burdens on defendants
asserting removal jurisdiction based on diversity. See generally 14C C HARLES A.
W RIGHT , A RTHUR R. M ILLER & E DWARD H. C OOPER , F EDERAL P RACTICE &
P ROCEDURE § 3275 (3d ed. 1998), at 89-95 (discussing standards).
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B. Determination of Amount in Controversy
We turn to a de novo review of the district court’s conclusion that diversity
jurisdiction is present here. 3 The complaint does not in any of its counts request a
specific dollar amount. Nonetheless, the district court adopted defendants’
construction of the Martins’ pleading and concluded that the complaint itself
established the requisite amount in controversy. 4 We have carefully reviewed the
3
We give short shrift to defendants’ argument that the Martins waived
federal diversity jurisdiction by failing to challenge the amount in controversy
within thirty days. The governing statute expressly provides to the contrary: “If at
any time before final judgment it appears that the district court lacks subject
matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). As the
Supreme Court has noted:
section [1447(c)] differentiates between removals that are
defective because of lack of subject-matter jurisdiction and
removals that are defective for some other reason . . . . For the
latter kind of case, there must be a motion to remand filed no
later than 30 days after the filing of the removal notice. For
the former kind of case, remand may take place without such
a motion and at any time.
Wisconsin Dep’t of Corr. v. Schacht, 524 U.S. 381, 392 (1998) (citations
omitted). In Laughlin v. Kmart Corp., 50 F.3d 871 (10th Cir. 1995), for example,
we raised the issue of diversity jurisdiction on appeal and concluded it was
lacking, even though the plaintiff “neither objected to removal nor questioned the
amount in controversy.” Id.
4
We have held that a defendant’s economic analysis of the plaintiff’s
claims for damages, “prepared after the motion for removal and purporting to
demonstrate the jurisdictional minimum, does not establish the existence of
jurisdiction at the time the motion was made. . . . [T]he requisite amount in
controversy . . . must be affirmatively established on the face of either the petition
or the removal notice.” Laughlin, 50 F.3d at 873. At the hearing below, the
(continued...)
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complaint and we agree with the Martins that it does not demonstrate by a
preponderance of the evidence claims in excess of $50,000. For example, it
appears defendants simply viewed every dollar amount mentioned in the
complaint as an item of damages claimed by the Martins without regard to
allegations making clear the Martins were not in fact seeking all those amounts. 5
In addition, while the Martins did seek treble damages under one state statute,
defendants have failed to establish what specific damages were recoverable under
that statute and instead merely assumed that all amounts mentioned in the
complaint were subject to trebling.
4
(...continued)
district court recited and adopted the amounts set out by defendants’ briefs in
support of jurisdiction. See Aplt. App., doc. 20 at 46. The record on appeal does
not include these briefs and it is arguable, given our holding in Laughlin, that
they should not have been considered by the district court. We need not decide
whether the court erred in this regard, however, in view of our conclusion that the
Martins’ complaint does not support the construction defendants placed upon it in
those briefs.
5
Defendants apparently included in their calculation finance charges of
over $8000 and insurance premiums of over $7000 despite allegations in the
complaint that because the Martins defaulted on their installment contract, they
made only a few payments on the finance charges and no payments on the
insurance premiums, and sought to recover only the charges they actually paid.
Defendants included two repossession charges as items of damages although the
Martins did not allege that the first of these, in the amount of $420, was illegal.
Defendants likewise included a down payment of almost $4000 which the Martins
were not attempting to recover. On appeal, defendants also argue that the entire
amount of the sales contract is to be included, notwithstanding that the Martins,
while seeking rescission of the contract, sought as damages only the amounts they
had actually paid under it.
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Because we conclude that the amount-in-controversy requirement is not
satisfied on the face of the complaint, we turn to the notice of removal. As
mentioned above, defendants conceded in their removal notice that the amount in
controversy could not be determined from the face of the complaint. Aplt. App.,
doc. 4 at 2. In contending that the requisite amount was nonetheless satisfied,
defendants began by summarizing the allegations and the requested relief asserted
by the Martins. This mere summary, of course, does not provide the requisite
facts lacking in the complaint. Defendants also asserted that jurisdiction was
satisfied because the attorneys fees and the punitive damages claimed by the
entire class could be aggregated and attributed to the Martins in determining the
amount in controversy, and that so long as the Martins as class representatives
met the jurisdictional amount, the other class members fell within the court’s
supplemental jurisdiction regardless of the value of their claims. As we discuss
below, none of these assertions supports the existence of diversity jurisdiction.
1. Aggregation of Punitive Damages
We turn first to defendants’ contention, both in their removal notice and on
appeal, that the punitive damage claims of the putative class members may be
aggregated and attributed to the Martins and to each class member, and that these
aggregated damages satisfy the jurisdictional amount with respect to each member
of the putative class. In support of this argument, defendants rely on the cases of
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Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353 (11th Cir. 1996), and Allen v. R
& H Oil & Gas Co., 63 F.3d 1326 (5th Cir. 1995), both of which have been
disapproved by the circuits that decided them. See Cohen v. Office Depot, Inc.,
204 F.3d 1069, 1073-77 (11th Cir. 2000) (explaining Tapscott not valid precedent
because it conflicts with earlier ruling on same issue); Ard v. Transcont’l Pipe
Line Corp., 138 F.3d 596, 601-02 (5th Cir. 1998) (Allen decision due to
peculiarity of Mississippi law and does not represent precedent for any other
state). Indeed, all of the circuits considering the issue now hold that punitive
damages cannot be aggregated and attributed in total to each member of a putative
class for purposes of satisfying the amount-in-controversy requirement of
diversity jurisdiction. See, e.g., Morrison v. Allstate Indem. Co., 228 F.3d 1255,
1264-65 (11th Cir. 2000); Ard, 138 F.3d at 600-02; Gilman v. BHC Securities,
Inc., 104 F.3d 1418, 1430-31 (2d Cir. 1997); see also Anthony v. Security Pac.
Fin. Servs., Inc., 75 F.3d 311, 315 (7th Cir. 1996) (implicitly rejecting
aggregation of punitive damages by concluding that “[t]he plaintiffs in this case
would have to recover on average at least $47,118.36 in punitive damages to
satisfy 28 U.S.C. § 1332”).
Although this court has not ruled directly on the matter, we have pointed
out that the Supreme Court has historically interpreted section 1332 “to require
plaintiffs who have separate and distinct claims, but unite together in a single
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suit, to each meet the jurisdictional amount in controversy.” Leonhardt v.
Western Sugar Co., 160 F.3d 631, 637(10th Cir. 1998). We observed that the
Court has therefore only permitted aggregation when “a single plaintiff seeks to
aggregate . . . his own claims,” or when “two or more plaintiffs unite to enforce a
single title or right in which they have a common and undivided interest.” Id. As
we discuss below, we now hold, in light of the language in Leonhardt and the
analysis of our sister circuits, that punitive damages may not ordinarily be
aggregated and attributed in total to each member of a putative class for purposes
of satisfying diversity jurisdiction.
The court in Gilman explained the reasoning supporting this conclusion.
As one court expressed the principle, the “paradigm cases”
allowing aggregation of claims “are those which involve a single
indivisible res, such as an estate, a piece of property (the classic
example), or an insurance policy. These are matters that cannot be
adjudicated without implicating the rights of everyone involved with
the res.”
Gilman, 104 F.3d at 1423 (quoting Bishop v. General Motors Corp., 925 F. Supp.
294, 298 (D. N.J. 1996)). The court pointed out that even though a class claim
for punitive damages may create a single pool of recovery, “a common interest in
a pool of funds is not the type of interest that permits aggregation of claims under
the ‘common fund’ doctrine.” Id. at 1430. Each class member could sue
separately for punitive damages and have his right to recovery determined without
implicating the rights of every other person claiming such damages. Id. Because
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a class member’s right to punitive damages is separate, distinct, and independent
from those of other class members, the class claim for such damages does not
seek to enforce a single right in which the class has a common and undivided
interest. Punitive damages therefore may not be aggregated in a class action and
attributed in total to each member of the class. We agree with Gilman and the
other courts, and we reject defendants’ argument that the jurisdictional amount
with respect to the Martins is satisfied on the basis of the aggregated claims of the
class members to punitive damages.
2. Aggregation of Attorney Fees
In their removal notice, defendants also assert that “[t]he attorney fees of
the entire class are attributable to the named plaintiffs for purposes of satisfying
the jurisdictional amount.” Aplt. App., doc 4 at 3. Although defendants do not
present this argument directly on appeal, they contend that all of the fees
requested by the Martins should be considered in determining whether their
claims satisfy the amount in controversy, in effect attributing all the fees that will
potentially be recovered in this putative class action to the class representatives.
Courts have generally held, under the same rationale applied to preclude the
aggregation of puntive damages, that attorneys fees cannot be aggregated for
purposes of diversity jurisdiction. See, e.g., Morrison, 228 F.3d at 1266-68 (when
each class member could recover attorneys fees if he sued separately, right to
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recover fees was separate and distinct and could not be aggregated); see also
Goldberg v. CPC Int’l, Inc., 678 F.2d 1365, 1367 (9th Cir. 1982) (aggregation of
attorneys fees would conflict with Supreme Court authority requiring plaintiffs
with separate and distinct claims to each meet jurisdictional amount). 6 We agree
and conclude that potential attorneys fees requested on behalf of the class may not
be aggregated and attributed entirely to the Martins in assessing whether they
meet the amount in controversy. 7
In view of our conclusions that neither the face of the complaint nor the
removal notice demonstrate that the Martins’ claims will exceed $50,000, and that
neither the punitive damages nor the attorneys fees sought by the class can be
attributed entirely to the Martins as class representatives, we hold defendants
have failed to show by a preponderance of the evidence that the Martins’ claims
6
In their removal notice, defendants cited In re Abbott Laboratories, 51
F.3d 524 (5th Cir. 1995), as support for their contention that attorneys fees can be
aggregated. As the Fifth Circuit has observed, however, the holding in Abbott
Laboratories is peculiar to a Louisiana statute and “[t]he standard approach to
awards of attorney’s fees in a class action context is to distribute them pro rata to
all class members, both named and unnamed.” Coghlan v. Wellcraft Marine
Corp., 240 F.3d 449, 455 n.5 (5th Cir. 2001).
7
The result might be different if the state statute under which fees are
sought expressly awards those fees solely to the class representatives. See, e.g., H
& D Tire & Automotive-Hardware, Inc. v. Pitney Bowes, Inc., 227 F.3d 326, 330-
31 (5th Cir. 2000). Defendants have made no showing that the statutes at issue in
this case do so.
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meet the amount in controversy necessary to the exercise of diversity
jurisdiction. 8
Because the Martins’ claims do not meet the jurisdictional amount, the
disposition of the class claims by the district court is irrelevant. Although we
therefore need not address the remaining arguments with respect to the class, we
make the following observations. This court has specifically rejected defendants’
contention that so long as the class representatives meet the jurisdictional amount,
all class members fall within the court’s supplemental jurisdiction. See
Leonhardt, 160 F.3d at 638-41 (rejecting argument that “the enactment of 28
U.S.C. § 1367, concerning supplemental jurisdiction, altered the historical
aggregation rules under § 1332 for class actions,” and concluding enactment of §
8
We reject the argument based on Caterpillar, Inc. v. Lewis, 519 U.S. 61
(1996), that diversity jurisdiction exists nonetheless because the district court
refused to certify the class and the resulting deletion of the putative class
members cured any jurisdictional defect their presence might earlier have created.
Although the Supreme Court held in Caterpillar that “a district court’s error in
failing to remand a case improperly removed is not fatal to the ensuing
adjudication if federal jurisdictional requirements are met at the time judgment is
entered,” id. at 64, the Court also observed that “if, at the end of the day and case,
a jurisdictional defect remains uncured, the judgment must be vacated,” id. at 76-
77 (italics deleted). Because defendants failed to establish that diversity
jurisdiction is present with respect to the Martins, the jurisdictional defect
remained at the time of judgment. See Gilman, 104 F.3d at 1421 (when removing
defendant fails to establish subject matter jurisdiction by the time judgment is
entered, judgment must be vacated and remanded with instructions to remand to
state court).
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1367 did not overrule preexisting authority holding “each plaintiff in a diversity-
based class action must meet the jurisdictional amount in controversy under §
1332”). 9 In any event, because the class representatives here do not meet the
jurisdictional amount, supplemental jurisdiction over class members would not be
available. 10
In sum, we hold that we have appellate jurisdiction over this final,
appealable order. Defendants have failed to establish the requisite amount in
controversy, and the district court therefore lacked subject matter jurisdiction.
9
In Abbott Laboratories, 51 F.3d 524, the Fifth Circuit reached a result
directly contrary to our holding in Leonhardt. The Supreme Court granted
certiorari in Abbott Laboratories to address whether the supplemental jurisdiction
statute, 28 U.S.C. § 1367, overruled the authority upon which this court relied in
Leonhardt, see Free v. Abbott Labs., Inc., 528 U.S. 1018 (2000), and affirmed the
Fifth Circuit’s decision by an equally divided Court, see Free v. Abbott Labs.,
Inc., 529 U.S. 333 (2000) (per curiam). An unexplained affirmance by an equally
divided court is not entitled to any precedential weight. See Rutledge v. United
States, 517 U.S. 292, 304 (1996). Leonhardt accordingly remains controlling law
in this circuit.
10
The only allegations in the complaint relevant to the putative class
members are assertions that their individual damages “are too small in number to
justify the expense and effort required to bring suit separately,” Aplt. App., doc. 2
at 14, and that the “Martins claims are not only typical but identical to the claims
of the members of the Class,” id. at 16. These allegations do not establish
individual claims in excess of $50,000, particularly given our holding that neither
attorneys fees nor punitive damages may be aggregated and attributed in total to
each class member. Accordingly, we conclude that defendants have failed to
establish the amount in controversy with respect to any of the putative class
members.
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Accordingly, we REVERSE the judgment of the district court and REMAND
with directions to remand this action to state court.
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