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Last week the Eleventh Circuit issued a truly bizarre class action decision in Cappuccitti v. DirectTV, Inc., holding that in a class action originally filed in federal court, at least one of the plaintiffs must allege an amount in controversy greater than $75,000. In so doing, the court significantly narrowed federal jurisdiction in the Eleventh Circuit and has set up a circuit split that could easily find its way to the Supreme Court if not vacated by the Eleventh Circuit sitting en banc.
The plaintiff in Cappuccitti filed a lawsuit in federal district court under the provisions of the Class Action Fairness Act of 2005, seeking to recover, on behalf of themselves and similarly situated class members, fees charged by DirecTV when the class members cancelled their subscriptions prior to the subscriptions' expiration date. Individually, the fees charged by DirecTV allegedly ranged from $175 to $480; however, the aggregate value of the contested fees was in excess of $5,000,000.
The plaintiff alleged federal jurisdiction under 28 U.S.C. § 1332(d)(2), which provides that federal district courts "shall have original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs, and is a class action in which—
(A) any member of a class of plaintiffs is a citizen of a State different from any defendant;
(B) any member of a class of plaintiffs is a foreign state or a citizen or subject of a foreign state and any defendant is a citizen of a State; or
(C) any member of a class of plaintiffs is a citizen of a State and any defendant is a foreign state or a citizen or subject of a foreign state.
Despite pleading that the matter in controversy exceeds $5,000,000 CAFA minimum amount in controversy, the Eleventh Circuit held that the federal courts lacked jurisdiction to consider the case because no single class member claimed damages in excess of $75,000.
Although the court recognized that CAFA was enacted to significantly expand federal class action jurisdiction, it acted instead to narrowly restrict federal class action jurisdiction. After noting that no other federal court of appeals case has ever held that any plaintiff must individually satisfy the $75,000 amount in controversy requirement contained in 28 U.S.C. § 1332(a), the Eleventh Circuit chose to create this additional requirement. The court reasoned that "while § 1332(d) may have altered § 1332(a) to require only minimal diversity in CAFA actions, there is no evidence of congressional intent in § 1332(d) to obviate § 1332(a)'s $75,000 requirement as to at least one plaintiff."
The consequence for class action litigation is uncertain. Certainly, this rule is now binding in the Eleventh Circuit. The question is whether the Eleventh Circuit will act to vacate it. If it does not, expect to see this issue soon come before the Supreme Court.
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