Recently, a split panel of the Sixth Circuit Court of Appeals reversed a district court’s remand order in a nuisance suit brought by three-hundred landowners who own property downriver from a Blue Ridge paper mill in North Carolina. In Freeman v. Blue Ridge Paper Products, Inc., the plaintiff’s attorney attempted to avoid federal jurisdiction by dividing the suit into five separate suits covering six distinct time periods. The plaintiffs limited total damages in each suit to just below the $5 million requirement contained in 1332(d)(2). The complaint stated the following:
The amount in controversy as to the Plaintiff and each member of the Proposed Class does not exceed Seventy-four Thousand Dollars ($74,000.00) each, exclusive of interest and costs. The Plaintiff, therefore, disclaims any compensatory damages, punitive damages, declaratory, injunctive, or equitable relief greater than seventy-four thousand dollars ($74,000.00) per individual Class member, and Plaintiff and the Proposed Class limit their individual compensatory damage claims to Seventy-four Thousand Dollars ($74,000.00) per Class member, and limit their total class wide claims to less than Four Million Nine Hundred Thousand Dollars ($4,900,000.00).
The district court remanded the case to state court because the defendant "failed to show that it was ‘more likely than not the plaintiff’s claims meet the amount in controversy requirement for each suit." The Court of Appeals held that the $5 million CAFA requirement was met because the $4.9 million sought in each suit requires aggregation. The court explained that "the complaints are identical in all respects except for the artificially broken up time periods. Plaintiffs put forth no colorable reason for breaking up the lawsuits in this fashion, other than to avoid federal jurisdiction." The dissenting justice argued that multiple actions filed in state court with firm limits on the amount of damages in controversy should not be subject to removal under CAFA.
Read the full opinion here.
-Counseller/ps