Heather v Air Methods Corporation, 2016 WL 7109675 (W.D. Okla. Dec. 6, 2016).

The Western District of Oklahoma found that a defendant may rely on an estimate of the potential damages from the allegations in the complaint in order to meet its burden to establish the CAFA’s amount in controversy requirement.

In Heather, the plaintiffs brought a putative class action in state court alleging that the defendants charged unreasonable rates for air ambulance services that they provided to the plaintiffs and purported class members.

The defendants removed the action to the federal court on the basis of subject matter jurisdiction under CAFA, and traditional diversity jurisdiction under 28 U.S.C. § 1332(a).  The plaintiffs moved to remand, which the District Court denied finding that it had jurisdiction under CAFA.

The defendants argued that the individual class members’ claims easily aggregated to meet the $5 million CAFA requirement.  The defendants then provided estimates based on the figures the plaintiffs alleged were the average amount overcharged and the alleged number of class members.  The plaintiffs, however, argued that CAFA’s $5 million jurisdictional threshold had not been met.

The District Court noted that to establish the amount in controversy requirement, a plaintiff’s complaint may provide the basis for the amount in controversy if it “demands monetary relief of a stated sum.”  The District Court further noted that when a plaintiff’s complaint does not state the amount in controversy, the defendant’s notice of removal may do so.  Here, the defendants’ notice of removal estimated more than $17 million in controversy.  The District Court found that the defendants’ estimates came from the plaintiffs’ complaint, which was an acceptable method for establishing the amount in controversy requirement.

The plaintiffs argued that the defendants failed to establish with particularity that the amount in controversy had been met.  The District Court, however, held that CAFA does not require particularity. The District Court noted that the defendants, out of an abundance of caution, included in their response an affidavit explaining that over 7,200 patients were billed during the three-year class period which the plaintiffs proposed and that the charges for those 7,200 patients exceeded $5 million.

The District Court therefore found that the presumption of CAFA jurisdiction weighed in defendants’ favor.  Accordingly, the District Court denied the plaintiffs’ motion to remand.

By: T. Dylan Reeves