Tenth Circuit Provides Guidance On The Evidentiary Requirements Of CAFA Removal


In Dart Cherokee Basin Operating Co., LLC v. Owens, No. 13-603, --- F.3d ----, 2013 WL 5200399 (10th Cir. Sept. 17, 2013) (Hartz, J., dissenting), the 10th Circuit denied a petition for rehearing en banc of a petition to appeal the district court’s order granting remand of a gas royalties class action. Four judges dissented from that denial of rehearing and provided useful guidance on the evidentiary requirements of CAFA removal: “it is important that this court inform the district courts and the bar of this circuit that a defendant seeking removal under CAFA need only allege the jurisdictional amount in its notice of removal and must prove that amount only if the plaintiff challenges the allegation.” Dart Cherokee, 2013 WL 5200399, at *5.

Class plaintiffs argued that remand was required when the complaint was silent as to a damages figure and the notice of removal contained no economic analysis or settlement estimates to support the amount in controversy figure submitted by the removing defendants. The district court agreed with plaintiffs and granted remand.

The ensuing request for permission to appeal and petition for rehearing presented the 10th Circuit with an opportunity to clarify removal practice as it concerns CAFA jurisdiction. The judges of the circuit declined the opportunity, but the dissent did not let the issue pass without comment.

The parties disagreed not over the burden placed on the party seeking removal, but rather over the question of when that burden is triggered. Plaintiffs and the district court took the view that a removing party is required—in the notice of removal—to submit evidence in support of its stated amount in controversy. All agreed that the standard required to prove the amount in controversy is a preponderance of the evidence. But the dissenting judges emphatically stated that the law imposes no requirement that a removing party submit evidence with a notice of removal. The dissent reasoned that it is the challenge to the allegation of jurisdictional facts that triggers the removing party’s obligation to present competent proof in support.

For practitioners, much of the dissent is academic. The key practical takeaway is found near the top of the opinion. Careful practitioners would do well to heed the dissent’s advice by “submit[ting] to the evidentiary burden rather than take a chance on remand to state court.” Dart Cherokee, 2013 WL 5200399, at *2.


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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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